Democracy is under attack around the world, and many foundations are rallying to its defense. Yet at the same time, many foundations in their mode of operations are practicing and reinforcing the anti-democratic ideology of the attackers. By preaching democracy externally but practicing oligarchy internally, funders undermine their investments and our democracy.
To confront the crisis of democracy, directing external funding to pro-democracy groups and causes is not enough. Funders must also undo their internal anti-democratic practices. This means ending top-down decision-making by a small ruling elite. It also requires shifting power to communities. Fortunately, we already have models for how to do this.
Democracy or Oligarchy?
The recent attack on the US Capitol was one of the most dramatic results—so far—of a growing movement to replace democracy (rule by the people) with oligarchy (rule by a small elite), in the United States and elsewhere. While this insurrection failed, the broader movement has been wildly successful at eroding democratic norms and institutions. It has scaled back voting rights and opportunities, made it easier for the wealthy to influence elections, consolidated the power of ruling minorities through gerrymandering, and widened the income and wealth gap by undoing progressive taxation and limiting social support programs and the minimum wage.
This revolution has been funded. For half a century, right-wing funders have directed billions of dollars to think tanks, university centers, media, and organizations to build a broad movement against democracy, as documented in Nancy MacLean’s Democracy in Chains and Jane Meyer’s Dark Money.
This movement, known as “neoliberalism” by its critics and “public choice” by its supporters, advocates an ideology of individual liberty over majoritarian rule. In practice, this has mostly meant the liberty of privileged white men to maintain their supremacy at others’ expense, dressed up in prettier language. It seeks to overturn democratic institutions, practices, and norms—to prioritize individual interest over the public good.
Ingeniously, neoliberal advocates rationalize their anti-democratic actions in the name of democracy. As we saw at the US Capitol, their movement justifies attacks on democracy as efforts to reclaim government “by the people” (understood as “the historically privileged minority”). It aims to Make Democracy Great Again.
The Capitol insurrection was possible because this movement has been deeply successful. It has implanted its ideology in influential policy organizations, universities, media, political parties, and the police. These institutions have trained us to distrust democracy. And foundations have reinforced this training.
It’s an inconvenient truth, but foundations are one of the most durable bastions of oligarchy. They are generally governed by a small group of benefactors and professionals, who are disproportionately white, wealthy, and male. Like the public choice movement, they staunchly defend the right of this ruling elite to make funding decisions that affect us all. Each year, they teach thousands of employees and grantees to accept oligarchic rule as common sense. Like the Capitol insurgents, they justify anti-democratic practices in the name of democracy.
This massive anti-democracy training undermines grants to promote democracy. For every grant aiming to lay a stronger democratic foundation, funders tear out a brick from this foundation by practicing and promoting oligarchy.
Such contradictions are not new for philanthropy. Foundations have funded climate change advocates while investing endowments in fossil fuels. They have pledged support for racial justice while maintaining internal racial hierarchies. And social movements have pushed back, calling on funders to divest from fossil fuels and tear down internal racial inequities. The same must happen for democracy: pro-democracy foundations need to abandon anti-democratic decision-making.
How Philanthropy Can Be Pro-Democracy
A growing movement is calling for the democratization of philanthropy. Advocates of “participatory grantmaking” call on foundations to cede decision-making power to the communities impacted by funding decisions. These calls are gaining traction even if what qualifies as a participatory process varies. Some examples include Grantcraft’s Deciding Together, Cynthia Gibson’s Participatory Grantmaking—Has Its Time Come?, Hannah Paterson’s Grassroots Grantmaking: Participatory Approaches, and Ben Wrobel and Meg Massey’s Letting Go: How Philanthropists and Impact Investors Can Do More Good by Giving Up Control.
Like demands for climate action and racial justice, calls to democratize philanthropy have met mixed reactions, which often fall short of real democratization. Many funders have done nothing. Others have offered token responses, publishing blog posts about the importance of listening to communities, without changing practices. Some have taken more meaningful steps toward engagement, such as consultations or feedback processes, but without shifting power. And several funders have indeed shared decision-making power, paving a path forward.
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It’s time for all funders to heed the calls to democratize philanthropy. To address our crisis of democracy, we need funders to serve as schools of democracy, not defenders of oligarchy. This means embracing democracy for both external grants and internal practices. It means teaching boards, staff, grantees, and communities to practice democracy, to build up our democratic muscles and mindsets. In other words: grantmaking not just for the people, but of and by the people.
This will require a deeper investment in participatory grantmaking, moving beyond information sharing and consultation. Being pro-democracy requires more than poetic blog posts and earnest listening sessions. Participation without power is tokenism. It’s time for funders to share real power over real decisions.
No Need to Reinvent the Wheel
Fortunately, foundations need not invent new ways for communities to make funding decisions. In addition to the growing number of participatory grantmaking experiences, funders can draw on the 30-plus year global practice of participatory budgeting (PB). First used in Brazil in the late 1980s, PB, as NPQ has covered, is a multi-step democratic process in which community members directly decide how to spend public funds. Residents first brainstorm ideas, then they turn the ideas into concrete spending proposals (working with technical experts and staff), and, ultimately, they vote to decide which proposals to fund.
PB has spread to over 7,000 cities around the world, including dozens of US cities, such as New York and Chicago. PB began as a method for allocating funds from city budgets, but it has also been used by hundreds of counties, states, nations, schools, universities, and other agencies. PB has spread so widely because it helps fix systemic dysfunctions of democracy while delivering better on-the-ground outcomes. Funds are more likely to go to low-income neighborhoods, public health outcomes like infant mortality rates are improved, and participants become more likely to vote in traditional elections and engage in their communities.
- “Current public budget and revenue policy and processes are not designed to ensure racial and economic justice and human rights for Black communities.”
- “There is a lack of community control over budget and revenue decisions, and a lack of a values-based framework for justice against which to make budget and revenue decisions.”
- “As a result, revenue measures are often inequitable, placing greater burdens on Black people, and public spending fails to meet the fundamental needs of Black communities.”
Similar observations could be made about philanthropic grantmaking. Now, I’ve spent nearly 20 years supporting PB around the world, and I’ll admit that democratic work, in any of its forms, is not easy and often messy. But hard-won movement experience offers invaluable lessons for how to democratize philanthropy:
- Share power and support: If you share power, people will step up. If you don’t also share support, they will fall down.
- Combine technical and community expertise: Don’t ask people to decide without technical expertise.
- Institutionalize participation: Make it part of official decision-making processes, not a one-off event or special funding stream.
- Meet people where they are: Rather than asking people to come to your institutional spaces, engage them in their existing community spaces.
Scaling Up Democratic Grantmaking
So, what would it look like for foundations to meet people where they are, at scale? It would have to evolve beyond current participatory grantmaking, beyond asking people to participate in separate processes for each funder. Otherwise, the grantmaking would leave no time for grant-doing. One promising solution is to redirect money to pooled community funds, run by and for existing geographic, demographic, or issue-based communities.
The participatory fund FundAction demonstrates how this can work. It is a European community of social justice organizers and activists that allocates funds to European social justice organizing and activism. FundAction is not a foundation, but it allocates foundation funds. In 2016, four foundations (Open Society Initiative for Europe, European Cultural Foundation, Charles Leopold Mayer Foundation, and Guerrilla Foundation) decided to pool funding, and shift power over the pooled fund to the community it was meant to benefit. That community then built FundAction, setting up democratic processes for managing the fund and making grants.
We’re taking a similar approach at my organization, People Powered. We set up a pooled fund for the issue-based community of organizations working on participatory democracy around the world. First, we convened over 60 organizations and advocates from 30 countries, all working to expand people’s power to make government decisions. Each year, they then develop and vote on funding proposals, allocating foundation funds to projects that address their common needs.
At scale, this model would become a network of democratically run funds, where people decide how to invest philanthropic money in their own communities. Some funds could be run through the government, where public institutions are already allocating money (e.g., a city or school). Where there is no corresponding government (e.g., a transnational social movement), new or existing networks could run the funds.
If you’re part of a foundation board or leadership, this vision may sound scary. But if you can’t model democracy, how can you expect politicians—or citizens—to practice it?
There’s a better path forward. Step back as decision-makers, and step up as conveners, advisors, and facilitators. Abandon elite rule, and let the people decide. Give democracy a try.