Wednesday, February 8, 2023
A Foundation's Final Grant
About a month ago, the Chronicle of Philanthropy wrote about the Lillian Holofcener Charitable Foundation. The short of it is, the foundation took essentially its last $1 million and made a single grant to support a free newspaper written by Black journalists primarily for Black residents of Baltimore. The family's reasoning?
The move is an attempt to counter the idea that “any giving is good giving,” Holofcener says. If the foundation, named after his grandmother, had distributed grants over several years to select nonprofits, the philanthropy would still maintain control over the city’s nonprofits competing for the funds. he says. A better way to give, he says, was for the foundation to give up control of how the money was used and leave those decisions to the Baltimore Beat staff.
“It was very important that not only were we giving all the money away but that we were losing the money,” he says. “It’s as important to disempower ourselves as it is to empower them.”
This move runs counter to the common narrative (and practice) of charitable foundations. The tax law requires foundations to spend at least five percent of their assets annually, basically because foundations seem to want to exist (and grow) forever, and Congress feared that without some minimum distribution amount, they would continue to grow their money, making few if any grants.
This represents a massive departure from that philosophy, and also from the (still trendy?) effective altruism. Rather than saving charitable dollars for some future life-changing moonshot, rather than believing they could manage their money better than a charitable organization, the Holofcener Foundation found a current organization addressing a current issue and trusted it to use the money in an effective way.
While I have no illusions that this represents the start of a sea change in donor behavior, it is exciting to see a move that runs contrary to conventional practices, with a focus on now rather than some distant and uncertain future.
Samuel D. Brunson