Giving Compass' Take:
- Mallory SoRelle summarizes research cautioning donors to be mindful of the philanthropic limitations to mobilizing policy change.
- How can you work to tactfully impact important policy, from climate change to criminal justice reform?
- Read about how one criminal justice initiative is opening avenues for driving policy change.
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While millions of Americans struggled to pay their bills and provide for themselves and their families during the Covid-19 pandemic, the wealthiest Americans saw their finances flourish. Indeed, the collective wealth of American billionaires grew by 55% during the past year.
One consequence of this “K-shaped” recovery is that nearly 9 in 10 affluent households maintained or expanded their rates of charitable giving during the pandemic.
Philanthropy has long played an important role in the United States during times of economic distress. In response to the Covid-19 pandemic, hundreds of foundations across 38 states signed a pledge outlining how they would work to address the effects of the global health crisis though their grantmaking.
A key element of the pledge is to “Support, as appropriate, grantee partners advocating for important public policy… includ[ing] lending our voices to calls to action led by grantee partners.” This explicit charge to use grantmaking to support policy reform reflects a key tension for private foundations: many seek to affect broad policy change, but they are prohibited by law from funding political activities that are necessary for that change.
The federal government regulates how philanthropies can spend their money. Most importantly, the 1969 Tax Reform Act prohibited private foundations from funding lobbying, political campaigns, or other overtly political activities.
Despite these restrictions, foundations — as exemplified by the pandemic response pledge — remain interested in shaping public policy. So, how do philanthropies exert their policy influence without engaging in explicitly political activity?
As philanthropies continue to play a significant role in addressing major policy challenges — from the response to Covid to climate change to criminal justice reform, our research suggests that they, along with recipients of foundation support, must be mindful of the limitations of philanthropic support to drive critical policy reform efforts.
Read the full article about philanthropic limitations to driving policy change by Mallory SoRelle at Medium.