Reducing Inequality: Can Social Justice Philanthropy Play a Useful Role?

Can philanthropy, an institution rooted in the accumulation of wealth, be an effective agent to meaningfully reduce inequality? For decades, while some in philanthropy have supported efforts to change policies and practices to improve people’s lives, philanthropic money has too often reinforced existing power structures, perpetuating inequality in the process.

The numbers illustrate the problem: philanthropy has grown to roughly $1.5 trillion in assets today, up from $330 billion at the turn of the millennium. According to a 1999 Harvard Business Review article, that level represented a 1,100 percent increase over the assets held by foundations only 20 years earlier. Yet during the same period that philanthropy enjoyed extraordinary growth, economic inequality climbed rapidly, negatively impacting the wellbeing of millions. Even in areas where there have been gains toward equality, such as LGBTQ+ rights, progress has been mixed at best.

What is going wrong?

Where Funders Have Fallen Short

Power concentrates around those who have it; those who have it create systems and values that reinforce and justify their legitimacy. My colleagues in philanthropy know this well, particularly as it relates to government, the economy, and culture, which are all places where those with power easily keep it and those on the margins struggle to gain access.

Foundations seeking to reduce inequality can have a sustained impact only when they pay attention to those historically most ignored.

Unfortunately, power imbalances are prevalent in civil society, the very actors set up to challenge inequality. Organizations with access and power are also more likely to have the staffing, governance, and budgeting structures to navigate the complex processes funders put in place to make grants. When funders, who often come from elite backgrounds, choose which organizations and leaders to invest in, they often choose leaders and organizations from similar backgrounds of privilege.

In every category of identity, there is a hierarchy; with hierarchy, there are people on the margins. Yet those on the margins repeatedly remind funders that unless foundations pay attention to who is excluded, philanthropy will only end up further exacerbating their marginalization. This requires critical analysis and reflection on how power plays out in society. This means funders wishing to reduce inequality must ask explicit questions about the interplay among race, gender, LGBTQ+, disability, caste, religion, education, geography, ethnicity, class, and other forms of inequality.

Below are examples of the repeated lessons philanthropy has had to learn. They remind us that foundations seeking to reduce inequality can have a sustained impact only when they pay attention to those historically most ignored.

Philanthropy’s Mixed Record on Marriage Equality 

In the United States, the fight for marriage equality was, by most measures, a resounding success, winning US Supreme Court approval as a constitutional right faster than many predicted. But, within the diverse LGBTQ+ community, marriage as the central goal was not without controversy, as many saw it as a reflection of the priorities of well-educated, White, gay, cisgender men (who represented much of the movement leadership at the time).

For many queer and trans people of color (largely on the margins), the focus on marriage equality seemed to come at the expense of more urgent and immediate needs they had around job discrimination, housing, and personal safety. However, when it came to funding, donors were slow to come along. As recently as 2018, funders devoted only 12 percent of their investments to queer organizations of color, although that number has since risen to 31 percent in 2021.

Today, tremendous backlash has emerged around many LGBTQ+ rights, making clear the need for a more multifaceted and representative approach to advancing justice. The push to focus on economic justice and intersections with race and disability came from those on the margins.

Criminal Justice: A Hit and a Miss

Another sector in which these dynamics play out is in the US criminal justice movement. Funders have increasingly recognized that the field should be centered on the experiences of formerly incarcerated Black and Latino men (as opposed to legal advocates). Recent shifts in investments have been vital in reshaping policy; for example, more significant funding has begun to go to bail reform and policies that discouraged employers from asking about past convictions.

In recent years, disabled people, women, and LGBTQ+ people have increasingly pushed to have a greater voice in advocacy around criminal justice reform to ensure their interests also inform policy. Their priorities and perspectives have helped reshape the advocacy agenda, with greater attention to alternatives to police responses to mental health crises, better prenatal care for incarcerated pregnant people, and greater support and protections for incarcerated LGBTQ+ people.

Again, funder attention has been slow and is starting to shift after significant advocacy from those who have historically been on the margins of the field.

Ignoring Rural America

Philanthropy has too often ignored rural people—White, Indigenous, Black, and Latinx—in ways that have come to undermine broader societal wellbeing. This even happens within issues. Take economic inequality. Too often, foundation grants have emphasized economic inequality in urban areas, even though 91 of the 100 most disadvantaged communities in the United States are rural. All told, of the nation’s 395 persistently poor counties—counties that have had more than 20 percent poverty for three consecutive decades—80 percent are rural, and 60 percent of residents are people of color.

Even though rural areas contain 20 percent of the population, only 7 percent of funds from the top 1,200 major foundations have gone to rural areas. While much of the discussion about rural America has been on the implications of a political shift toward the Republican Party, the more consequential shift has likely been toward distrust of government more generally and the ways democracy has not delivered.

Missing the Roots of Climate Justice

For decades, funding concentrated on organizations led by White Americans that focused on “the environment” with little to no attention to the impacts on people. This is despite the fact, for instance, that the worst effects of environmental pollution in the United States were experienced in low-income communities, particularly those of color. Yet, even in 2017, environmental justice organizations with budgets less than $1 million and those most often representing marginalized communities received only 4 percent of environmental funding.

Those who have been systematically excluded from philanthropy are pushing funders to rethink their approach to disrupting inequality.

There is also an international angle to these funding disparities. Even as the evidence shows that the climate crisis is most excruciatingly felt in the Global South, funding lags. In 2021, two-thirds of all philanthropic climate justice grants went to organizations in the United States, Canada, or Europe, with Latin America and Africa receiving only 10 percent of all foundation funding. What little money lands in the Global South most often lands with male leaders, excluding the priorities and needs of women. As a result, the importance of land and property rights for women and girls has often been overlooked as a vital strategy in environmental work, even as women and girls experience the greatest impacts of climate change.

Ignoring sets of people on the margins ultimately is not just bad for those furthest from power, it is bad for all of us. Funders are not passive actors in this. Foundations choose who and what to fund, which further legitimizes or disrupts power dynamics. In doing so, funders can undermine their own stated goals. Greater inclusivity can lead to more impactful grantmaking, but only if foundation program officers learn to listen to those voices on the margins of the fields they support.

Rethinking the Philanthropic Approach

Those who have been systematically excluded from philanthropy are pushing funders to rethink their approach to disrupting inequality. To help shift deeply rooted power dynamics, foundations must ensure that historically marginalized communities set the agenda. They also need to make clear to established groups that they share or cede power to more diverse voices, just as funders must diversify their own ranks.

It is worth stating the obvious: this work demands that foundations move beyond the typical “add and stir” approach to women or people of color or rural or disabled or LGBTQ+ people, which imagines that simple (and often symbolic) inclusion is all it takes to solve a deep-seated problem.

Instead, funders must make explicit what change looks like. For example, when increased advocacy of women—especially women of color, disabled people, and LGBTQ+ people within the labor rights movement—started leading the charge, the inclusion of the care economy and the need for paid family and sick leave began to get the attention it deserved.

Being attentive to power can be complicated, but some parts are straightforward. Funders can think about how they structure convenings and be intentional about who is invited and who is speaking. Foundation staff can compare their grants: Who gets more money? Who gets less? Who gets none? And foundations can build these considerations into their strategic work. Finally, foundations must hire people with less elite backgrounds and more diverse experiences to become program officers.

At the Ford Foundation, where I work, we have recently added the following questions to our strategy development guidance:

• Who is on the margins of this issue and discussion? Who is not there?
• What is their critique of the priorities set forth by the social justice advocates who are getting resources?
• What would the impact be, for those communities on the margins if their interests and voices were incorporated into advocacy asks and policy implementation in that field?
• What has prevented those on the margins from influencing the social justice field in the first place?
• How might policy and practice look different if the critiques and priorities of those on the margins were incorporated into the broader field’s advocacy?

To dismantle inequality, funders must work differently. This means funders must work to hold themselves accountable and employ an equity lens to determine both which nonprofits can get funding and who gets hired as foundation staff.

By changing how foundations see and assess themselves and the people they fund, philanthropy can become more representative and, critically, more effective at reducing inequality—ultimately improving the lives not only of those most on the margins but all of us.