In part one of this post, I explored the paradox of false public philanthropic commitments to racial justice amid growing trust-based shifts in philanthropic practices, and the ongoing tension between a charity versus a justice approach to philanthropy, affirming the need for explicit racial equity commitments for sustainable culture change. Particularly when considered in the context of philanthropy’s historical embrace of harmful race-neutral approaches, it is clear that a new philanthropic mindset is needed to meet the existential socio-economic and planetary crises facing humanity.

Outdated Mindset

A keystone of outdated and harmful thinking is philanthropy’s obsession with a narrow and myopic understanding of fiduciary responsibility as growing and protecting assets at all costs. This narrow but pervasive view is undermining the field’s ability to grow up, become more fully realized, embrace the complexity of its own existence, and engage in truly reparative actions. This contracted understanding and application of fiduciary responsibility along with the sector’s profound deference to positional authority and wealth-as-wisdom doctrine is like a rusty, oversized anchor that drags and stymies transformative energy. Good intentions are not enough.

The fiduciary responsibility of mission-driven organizations is to responsibly enlist assets in service of moving the mission forward. For organizations benefiting from the tax status of being a nonprofit entity, mission must come before asset protection. Yes, it is a dance, a dynamic relationship, but when protecting assets (and endowments) is held above all else, we lose our line of sight and abandon the values and purpose that earned the organization its nonprofit tax status. The binary of spend-down versus perpetuity shows limited imagination and prevents moving our missions forward.

When this mindset pervades, a sort of cultural homeostasis of traditional philanthropic power maintains the status quo, keeping even those who believe in equity and justice from truly disrupting the internal systems of the protected network of extreme wealth philanthropy. This harmful status quo mindset was abundantly evident to me as I read a 2023 piece co-authored by multiple U.S. philanthropic leaders, in which the respected authors heavily imply that all philanthropic approaches are good and that we should “assume that those involved in philanthropy have the best intentions, even if they take a different approach.” Beyond this, the article asserts the undisputed power of wealth to lead and influence society, stating that they “affirm the right and prerogative of foundations and philanthropists to take programmatic or public stances in accordance with their best judgment.”

Read the full article about shedding old ways by Gabriela Alcalde at The Center for Effective Philanthropy.