11 Engaging Philanthropy

There are people and organizations in your community who are also invested in the community change work you are involved in or leading. They may not be directly impacted by the issue but they care about the community and are motivated to support endeavors that will have a positive impact. They likely include:

• Business owners and community leaders
• Non-profit leaders
• Social service agencies
• Elected officials
• Philanthropy

According to the organization Giving USA, Americans provided more than $471 Billion to charity in 2020, a 5% increase from the year before. The top donor group were individuals and the second was philanthropic foundations, providing $88.5 Billion, a 17% increase from the previous year.^[1]

Philanthropy

It is important to focus on the role of philanthropy which will likely play a critical role in community change work as the funders of the work.  The term is used to describe either a person or organization that contributes financial resources towards efforts that benefit the community.^[2] Contemporary philanthropy is provided either by individual people who possess financial resources and motivation to invest those in the capacity of others, or organizations whose mission is to distribute financial resources to benefit the community. Most of us refer to these organizations as ‘foundations’, which are designated by the IRS as either private or community foundations that distribute financial resources for charitable purposes ^[3]. The first foundation in the US was created in 1907 in order to contribute to the growing social welfare needs as well as to protect financial earnings of some of the largest corporations.^[4]

Within the first decade, however, the US Commission on Industrial Relations filed a report raising concern about the impact of the concentration of wealth and power and called on Congress to regulate the newly formed foundations.^[5] The regulation was quite minimal until the passing of the 1969 Tax Reform Act, which included a requirement for a foundation to spend 6% of its net investment income (which is now at 5%).^[6]

Whether or not you are likely to need financial resources for your community change work, it is important to be familiar with the philanthropic resources in your community and consider representatives as stakeholders in your work. It also may be that you will need financial resources at some point, particularly if community planning and development becomes your community change strategy at some point in your work. In that case, it would be valuable to have already engaged with the foundations or philanthropists in your community to determine if possibly seeking their support would be beneficial to your endeavors. Before proceeding, however, you need to be aware of the benefits and challenges.

Benefits and Challenges of Philanthropy

Due to the nature of philanthropy as a tool to both contribute to charitable purposes as well as shield financial assets from being taxed, there are definite cautions to consider when engaging with philanthropy. According to the 2021 Giving USA Annual Report, contributions to ‘public society benefit organizations’ received the largest increase in donations compared to other categories of recipients, at a 15.7% increase from the previous year.^[7] This represents a benefit to organizations engaged in community change work, such as community development organizations, human and civil rights organizations, and United Ways.^[8]

Since the invention of philanthropy, cautions have been expressed about the impact that reliance on philanthropic resources can have on the ability of an organization to carry out its mission and on the drift of accountability to constituents. If organizations rely on philanthropy for their existence, they are likely to direct their proof of viability and effectiveness to the sources of funding rather than to the constituents they are designed to serve—a well-documented phenomenon of social justice organizations.^[9] So, organizations should be considerate of the extent to which philanthropic resources can benefit their stakeholders but be cautious about any potential mission drift or impacts on accountability.

Engaging Philanthropy through Grant Writing

The financial resources of either private or community foundations are typically accessed by submitting a grant, which is essentially a compelling written explanation of a community need, the intentional ways in which your organization intends to address the need, and the resources needed to complete the work. The Common Grant Application (2014), a nationally accepted format for grant writing includes six sections for a general operating grant, which is relevant to most non-profit organizations:

1. Organizational background
2. Statement of need
3. Project goal and design
4. Timeline and strategies
5. Funding plan
6. Evaluation plan^[10]

Since grant writing is a framework for this book and my community change teaching, each grant section is referenced in the part of the text where it is relevant.