Smarter grant-making

What our nation needs more than anything else from its grant-making foundations in 2011 is an evolution in thinking and practice related to funding policy advocacy and grass-roots community organizing.

Research shows that advocacy, community organizing and civic engagement by nonprofit groups make a substantial, measurable difference in the lives of families and communities. Whether in red states or blue states, rural areas or major cities, when foundations invest in such policy engagement efforts, the return on investment is tremendous.


For example, from 2004-2008, 15 organizations in Los Angeles County won more than $6.8 billion in benefits for underserved communities, including new public school construction, a statewide minimum wage increase and the replacement of dirty diesel trucks, reducing poor health outcomes for residents and associated public health costs. Foundations and other donors contributed $75.5 million to these efforts, which means their investments generated a return of $91 for every dollar spent.

"Advocacy" does not mean influencing elections, and it does not usually include lobbying. Instead, most nonprofit advocacy involves policy research and public education that help create a public-opinion climate in which the root causes of social problems get treated — not just their symptoms.


Here's how it works: A foundation concerned with homelessness might choose to make a $250,000 grant to a homeless shelter to provide food and shelter for a few hundred people. But if that same foundation instead or in addition gives a $250,000 grant to a nonprofit advocating with or on behalf of homeless people, the grant offers the potential to help leverage millions of dollars in government funding for affordable housing programs, thereby assisting thousands permanently instead of hundreds temporarily.

Yet, despite strong evidence of impact and the potential for transformative results, grant-makers still provide very little funding for these kinds of activities. Some worry about controversy. Others have persistent misconceptions about what they're legally allowed to fund.

Surprisingly, research shows that nonprofits receiving the highest percentages of their budgets from foundations are among the least likely to be engaged in advocacy. Some foundations forbid their nonprofit grantees from engaging in advocacy or lobbying by including prohibitions in grant agreements. Others simply make it clear in more subtle ways that their preference is to fund direct services rather than reform of inequitable systems.

Why do so many foundations make such unstrategic choices?

Consider the two largest foundations in the Baltimore region. Both — admirably — have an explicit, unwavering focus on helping underserved people, such as those who are lower-income, nonwhite or elderly. These two foundations should be commended for that focus because not all foundations share their commitment to helping those who are marginalized.

But the two foundations take very different approaches in their grant-making.

The Harry and Jeanette Weinberg Foundation, with almost $2 billion in assets, allocates most of its $100 million in annual giving to direct services. It provides less than 6 percent of its grant dollars for advocacy and grass-roots organizing.

In contrast, the Annie E. Casey Foundation, with more than $2.5 billion in assets, designates between 30 and 60 percent of its $170 million annual grants budget for funding policy engagement. It is one of the leaders in the nation in this regard, and it is able to leverage its grants for lasting social change. For example, its work has contributed to significant policy improvements in the juvenile justice systems in more than 20 states, saving taxpayer dollars, reducing racial bias and improving public safety.


With government budgets under intense pressure these days, what's needed is to bring the voices of everyday Americans back into the policy process so that decision-makers at the federal, state and local levels do a better job meeting the needs of local communities.

Banks, insurance companies and millionaires are amply represented in the public arena. Foundations have an opportunity to help level the playing field and make certain that ordinary citizens also get a hearing. They can help ensure government is efficient, and that our public dollars are spent wisely and in ways that promote long-term solutions to pressing problems.

Yes, the Weinberg Foundation and other funders have every right not to fund advocacy. And it's true that foundation grants for direct services are vitally important.

But unless supporting policy engagement contradicts the founding donor's intent (as is the case with Weinberg), trustees should consider seriously the critical role that funding advocacy and community organizing can play in helping them achieve their institution's goals.

My challenge to foundation executives and trustees is this: Mark the year 2011 with leadership and courage by creating opportunities for our underserved communities to be part of efforts to find lasting solutions to the social problems that disproportionally affect them.

Aaron Dorfman, a Hyattsville resident, is executive director of the National Committee for Responsive Philanthropy. His e-mail is