To the Editor:
Leslie Lenkowsky’s recent op-ed, How the Generosity Commission Report Could Redefine Philanthropy (October 10), makes some interesting observations but does not address an important point: that the Generosity Commission focuses on the wrong problem entirely.
Unfortunately, the commission’s emphasis on low- and middle-income individuals sidelines a badly needed inquiry into philanthropy’s own shortcomings. This foundation-funded report throws up a smokescreen, directing attention away from how foundations too often evade meaningful, sustained giving.
While the economy has deteriorated for everyday Americans, it has improved for the ultra-rich, with income inequality hitting staggeringly high levels in recent years. The report notes that nonprofit donations come from an increasingly small pool of wealthy donors. This is consistent with the country’s increasing wealth concentration and the economic struggles of low- and middle-income families. Although the report acknowledges this, by focusing on ways to increase giving of everyday Americans, it effectively places the responsibility of America’s giving crisis on their overburdened shoulders instead of pointing to foundations’ bloated assets.
From 2018 to 2022, for example, foundation assets grew from $969 billion to $1.3 trillion, according to FoundationMark. While giving has increased to accommodate that asset growth, the fact remains that foundations’ payout rates haven’t increased much higher than the mandatory 5 percent.
The support of private foundations is crucial for BIPOC-led nonprofits, whose endowments are significantly smaller than white-led organizations’ endowments. In recent years, the communities these nonprofits serve have been devastated by the intersecting crises of Covid-19, climate change, and systemic racism. While BIPOC-led nonprofits face surging demand and dwindling resources, tax-advantaged charitable donations sit warehoused in donor-advised funds.
When will philanthropy have accumulated enough wealth to increase its payout beyond 5 percent in response to the needs of BIPOC communities? How many reports must blame nonprofit fundraisers or the dwindling middle class before philanthropy looks to its own coffers for the obvious solution?
The Generosity Commission asks why nonprofits aren’t getting the support they need from everyday Americans. The real question is why nonprofits aren’t getting the support they need from foundations.
Andrea Caupain Sanderson, Jodi Nishioka, and Victoria Santos
Co-Executive Directors
BIPOC ED Coalition