WHY I SIGN
America is in an unprecedented crisis. The world of philanthropy must step up and do more, faster.
“In this crisis, what we need is to ramp up our giving—not ramp down—and support nonprofits to fulfill their missions when we need them most. So many nonprofits are worried about the slowed economy and where their next grants will come from. This isn’t the year for foundations to worry about their 5 percent spending cap.
The purpose of the Innovo Foundation is to make a difference in the climate crisis. There won’t be a point in saving for the future, if we don’t make a huge dent in the issue within the next decade, because there won’t be a future to protect. Investment up front, right now, is what will make the difference.
Similarly, we’re seeing the repercussions of the pandemic: but this is not the end, this is only the beginning in terms of the suffering that we will see. One benefit we have in the U.S. is our strong nonprofit sector—communities are willing to step up to solve community problems.
We as foundations have to react to crises when we can make the biggest impact. That’s why I support the emergency charity stimulus.”
Executive Director, Innovo Foundation
“All tax policy in America is written for the wealthy—I should know, as I’m part of the 1 percent and Vice-Chair of the Patriotic Millionaires, a group of high-net worth people who want to see more equitable tax policy.
Rich people say we’re going to give some of our profits away to philanthropy in order to “give back”—but we do it in a miniscule fashion compared to what the working-class and poor people need. We are giving a fraction of what we should, while reaping the tax benefits.
After I sold two companies, I set up my own donor-advised fund (DAF). It allowed me to maximize the amount of money I could donate to charity, as 100 percent of the dollars I deposit are protected from taxes. The profits I had earned were long-term capital gains, so my DAF allowed me to save 23 percent in taxes upfront.
But I’m not required to donate that money. It could sit in my DAF forever. I choose to give about 20 percent each year, and due to the covid crisis, this year I plan to give out more. But I, and the other hundreds of thousands of DAF owners, are under no obligation to move that money.
We have to restructure the system. Tax laws regarding DAFs and private foundations have given us a golden parachute, but we don’t ever have to deploy it. Requiring a 10 percent payout would go a long way to help ensure the wealthy are putting their money where their mouths are.
I signed the charity stimulus because I believe it is an important component of the policy that this country needs to reduce wealth inequality and ensure the rich are paying their fair share.”
Entrepreneur, Vice-Chair of the Patriotic Millionaires
“At the Mary Reynolds Babcock Foundation, we believe strongly in meeting the urgency of crisis times like now to step up and invest in our grantees. Our board came together in late March to consider what we might do in response to some of the stories our staff had been hearing from grantees about the impact of the pandemic. At that time, we didn’t think about it in terms of what was the impact on our payout—but what were the actions we could take. We sent our grantees unrestricted emergency grants and automatically added an extra year to multi-year grants. And we don’t normally fund direct service nonprofits, but we sent grants to community funds directly combatting the fallout from this health and economic crisis.
The net impact is we effectively doubled our payout for 2020. We weren’t thinking we were going to do that—we just looked at what we thought were smart steps to take to respond to the crisis, and we took those steps.
When I heard about the charity stimulus campaign, I thought it was such a great idea—because it would mandate other foundations to step up and do the same thing and invest in grantees when they need it most.
One of the beauties of philanthropy is that different foundations invest in widely different nonprofits. By increasing foundation payout, philanthropies will be making more grants across a wide array of causes. We’ll be keeping nonprofit workers employed, and we’ll also be increasing funding across diverse areas like arts and culture, social justice, and direct services.“
Trustee, Mary Reynolds Babcock Foundation
“There is a fundamental tension in philanthropy between maintaining assets and moving money to make social change. This tension is driven home in a moment of great social need and transformation such as we are in, and to be constrained by an arbitrary payout limit undermines our ability to respond at the scale that is necessary. This is why the charity stimulus effort is so critical.
Foundations exist to move resources to advance the social good. That needs to be our primary focus and the driver of our efforts. I am impatient with the status quo in the philanthropy community, which places undue importance on sustaining assets versus investing deeply in social change.
At the Compton Foundation, we’ve made a decision to spend down. When our board looked at the issues we’re engaged in—climate, women’s rights, world peace—there was no way we could justify maintaining our assets. We needed to spend as much as we could now to make progress on the future.
The nonprofit sector is a critical player in what comes next after we come out of the pandemic and the uprisings against police brutality—and we as philanthropic leaders must take advantage of this moment by supporting communities, health, arts and culture, democratic participation, anti-racism, and fighting voter suppression.
What are we waiting for?”
Director, Compton Foundation
“For too long, the conversation about “transforming philanthropy” has been limited to our scrutinizing the behavior of individual foundations and major donors. While compelling examples are clearly helpful – even necessary – they remain woefully insufficient in the absence of the larger structural reforms necessary to change the rules for the entire philanthropic sector.
Now is the time to push for these reforms. But it is up to us, as members of the donor class, to do the pushing. This is our fight, and we cannot expect our grantees to do it for us. We’re the only ones who can assume the risk inherent with directly challenging the philanthropic sector.“
President, The Chorus Foundation