The Huge Value of Blank Checks and General Support


Pearl River      The Economist is a conservative magazine masking as liberal, which underlines how confusing the liberal designation in politics is these days.  Nonetheless, an editorial of sorts entitled “Start Writing Checks” under a cutline saying “charity” surprised me.  They were coming down foursquare in favor of philanthropists, largely the megarich, their foundations and giving offices, writing blank checks, rather than sitting on money and larding on piles of staff, bureaucracies, reports, and so-called deliverables to the grantees.  They also correctly noted that this was a trend in the wrong direction over the last 15 or 20 years.  Hear, hear!

I’m not saying it was ever easy or pretty to raise money from foundations, but it definitely seemed different back in the day.  Fifty years ago, when I made my first foray to New York and San Francisco to raise money, maybe we handed over a proposal, and maybe we didn’t, but for sure all we were asking for was for “general support.”  They could fund ACORN or not, but either way, all they were doing is simply making a bet that we would deliver because we, not they, knew what we were doing.  A story I have often shared involved the pathbreaking foundation, the Stern Fund, directed by David Hunter.  He had visited ACORN in Arkansas with one of the family members.  They were considering funding the organization.  After the visit, he invited me to come down to New Orleans to the family-owned Sonesta Hotel in the French Quarter where the board was meeting to make a presentation.  I declined to go, telling David, “…you are the director, if you can’t sell them the organization and get the board to fund ACORN on your recommendation, how crazy is it to believe that I could do better?”  We got that grant, and when the foundation pulled up its line and when out of business, ACORN had been the largest grantee over its storied history.  I would meet with David for an hour or so every April and update him on the work, and the grants were all for general support, because both of us believed the work we were doing was transformative.

I no longer make those rounds much, and from the story above, it should be clear that I was perhaps never really suited for that work, but talking to colleagues in recent decades, the philanthropic process seems to have become transactional.  One organizer told me about having to guarantee a certain number of bottoms on the bus for actions that a foundation was funding on a campaign it was supporting.  Some years ago, I was working with a coalition of organizations trying to put together a big action on immigration reform on a march that foundation supporters pulled out of at the last minute.  They seemed to think it was their campaign rather than the organizations of immigrants demanding urgent change, so they wanted to call the shots.  Fifteen years later, there’s probably still a lesson there, given where we are now.

The Economist claims there is a new movement returning to the older days led by MacKenzie Scott, the former wife of Amazon’s Jeff Bezos, and what they call the “no-strings crowd.”  Scott has been a philanthropic revolutionary pushing billions out the door annually, since she came into her fortune.

They also make two unassailable points.

The first is that “The 400 richest Americans have given away just 6% of their combined fortunes, according to Forbes.  At the last count in 2022, almost $1.2 trillion was sitting in America’s private foundations and $230 billion in donor-advised funds, a sort of savings accounts for philanthropists.”

The other is that “…megadonors do not have to make all the decisions.  Many big-shot philanthropists spend a lot of time and money crafting projects and strategizing about how exactly the money should be used.  Unrestricted donations, by contrast, allow nonprofit groups to judge where funds are most needed.  That makes sense.  The people working on the front lines are likely to have the better ideas on how to solve a problem.”

There’s a chance some of these folks with the deepest pockets read The Economist.  We should hope they all get the message and get the money out the door so it can do some good and make change.