Advancing racial equity and wellbeing is hard work, especially for on-the-ground organizations that are leading the work.

Endowment grantmaking is a tool that foundations can use to ensure that these organizations not only survive but thrive.

For us at the Robert Wood Johnson Foundation (RWJF), endowment grants are another tool in the philanthropic toolbox for creating social change. They are not meant to replace project grants or general operating support, but to help ensure the long-term financial stability of organizations that share our vision of health and racial equity.

A new report from the Center for Effective Philanthropy (CEP) shows that few foundations — just under a third — make endowment grants. Endowment philanthropy is not on the radar of most foundations, because they don’t see it as connected to what they do.

It is, however, something for philanthropies to consider, especially those that are willing to allow grantees the flexibility to invest and spend grant funds over the long term to achieve sustainability and meet their missions.

RWJF is dedicated to taking leaps to transform health in our lifetime. To get there, we must work to dismantle structural racism and other barriers to health. Through funding, convening, advocacy, and evidence-building, we work side by side with communities, practitioners, and institutions to reach health equity faster and pave the way together to a future where health is no longer a privilege, but a right. Endowment grantmaking is one way we support this mission.

Taking a Long-Term View

Achieving health and racial equity requires long-term work. Philanthropy has the unique opportunity and privilege of taking a long view of how they support the organizations leading this work. At RWJF, we became interested in exploring endowment grantmaking as one lens for that long view, specifically with organizations working to advance health equity.

Embracing a Cross-Foundation Approach

One aspect of our process that we think is especially worth emphasizing is the cross-foundation approach that RWJF took. For us, this was critical, because so many elements must be considered when designing a strategy for endowment funding, and different departments have different areas of expertise. Our workgroup for this effort included staff from the programming, law, and finance departments. (We were all part of the workgroup, representing our respective departments.)

There Is No One-Size-Fits-All Approach

Our efforts to create a uniform process for endowment grant due diligence ran up against the truth that nonprofit organizations vary widely. Not all nonprofits are structured to accept endowments. Others would benefit more from a larger grant up front, as opposed to having access only to the interest earned from an endowment grant.

Read the full article about endowment funding and racial justice by Marjorie Paloma, Daniela Phayme, and Kelly Simone at The Center for Effective Philanthropy.