Unrestricted Funding Means Power

I am excited to share that Common Future has received an unrestricted, seven figure gift from trailblazing philanthropists MacKenzie Scott and Dan Jewett, the largest such donation in our organization’s history. Their remarkable investment further enables Common Future to incubate, co-create, and fund equitable and impactful community wealth building opportunities.

More than the monetary value of this gift, we are grateful for the terms under which it was given: none.

Through their commitment to help rectify and repair injustice, Mackenzie Scott and Dan Jewett understand the importance of turning power and decision-making over to communities which have been so often denied self-determination.

It’s a lesson that we’ve learned ourselves — and uplifted — throughout my 3.5 year tenure as CEO of Common Future. Unrestricted funding is a measure of trust. It acknowledges that those closest to the problems best know the solutions, and deserve the autonomy to act directly upon their communities’ needs. Unrestricted funding also facilitates the shifting of capital, and ultimately power.

As a Black-led, multiracial, and majority BIPOC organization, Common Future has leveraged unrestricted funding to make our own decisions, not directed by our funders and others further removed from the work, about an equitable allocation of funds. As a fledgling organization here for the long haul, it allowed us to not only build out our operating reserves, but establish an additional reserve dedicated to capitalizing upon unforeseen circumstances and opportunities. Unrestricted funding has allowed us to launch additional bodies of work over the past year that are new to our organization but critical to our mission, such as capital strategies, knowledge management, and policy influence. It has also enabled us to invest in our operational infrastructure by hiring more staff to bring in additional expertise and capacities that strengthen us at all levels of the organization. Importantly, unrestricted funding has allowed us to experiment, innovate, and maintain agility, three pillars that are foundational to our organizational success.

For example, early in the pandemic, as our country shut down overnight, locking many out of an economy that already marginalized them, Common Future decided to act fast on behalf of our closest collaborators. At the time, as a $2.5M organization, we deployed 10 percent of our operating budget as COVID-19 rapid response grants. Frankly, we were hopeful but not sure we could recover that funding; we only understood our duty to act. The funding reflected us living out our very own practice of shifting capital and power to those organizations providing critical support for food and farming communities, Native-owned businesses, entrepreneurs, artists and creatives, immigrants, undocumented people, and more.

Yet I know gifts of this kind are rare in our industry. When I became CEO at Common Future, I envisioned building a multi-racial, majority BIPOC institution with economic and reputational power, and I understood that unrestricted funding was pivotal to achieving this vision. Unfortunately, I’ve long observed and experienced that the social sector had a severe racial funding gap. As revealed by Echoing Green and Bridgespan Group in their report “Racial Equity and Philanthropy: Disparities in Funding for Leaders of Color Leave Impact on the Table,” Black-led organizations that applied to Echoing Green’s prestigious social entrepreneur fellowship and made it to the semifinalist round have revenues 24 percent smaller on average than the revenues of their white-led counterparts. The disparity in unrestricted net assets is even more startling: Black-led organizations are 76 percent smaller than their white-led counterparts.

As unnerving as this data is, I’ve directly experienced these disparities as a Black social entrepreneur, funder, and impact investor who has spent a good portion of my career working to close the racial funding gap for social entrepreneurs of color. Conversely, I’ve also witnessed white-led institutions grow and build economic power on the strength of unrestricted funding. It’s not that BIPOC-led organizations don’t have solutions — it’s that they don’t receive the same investment, trust, and power to be able to implement those solutions, even though they are often very rooted in the communities with which they partner.

Discussions about the importance of unrestricted funding often overlook or understate what it really represents: power. At Common Future, we sometimes describe our work as shifting capital to shift power, and unrestricted funding is an opportunity for funders to shift power to their grantees. Unrestricted funding gives power and control to nonprofit organizations.

Specifically, BIPOC-led and majority institutions like Common Future deserve more power and control. Our strength isn’t just that we are a BIPOC-led and majority institution, it’s that our work is more powerful and meaningfully impacted because of the voices and lived-experiences of those on our team. Notably, we find ourselves among many of our peers and other incredible organizations. Institutions such as Race Forward (of which I am a board member), Decolonizing Wealth Project, and Solidaire Network, who also understand the importance of shifting power. Not only does the philanthropic investment from MacKenzie Scott and Dan Jewett represent a radical act of trust, it is an act of sharing and shifting power to BIPOC leaders.