The philanthropic-nonprofit model is often an anathema for many well-intentioned leaders in their racial equity journey. Many nonprofits mimic the management and governance structure of the corporate sector, with a small group of “C-suite” leaders holding decision-making powers, which doesn’t promote equity and inclusion of everyone, including the communities that they serve. In this environment, courageous conversations about racism in the organizations are often suppressed due to fear of retaliation or “toxic politeness,” as described by Anouska Bhattacharyya at YWCA Boston.
In public, many nonprofit leaders are wary about taking political stances that they might deem too partisan or controversial, lest they jeopardize the organization’s nonprofit status or alienate supporters. Referencing noted law professor john a. powell's targeted universalism, Cynthia Silva Parker at Interaction Institute for Social Change says, “If you can really target very specifically the needs of the folks furthest away from power and opportunity, the odds are you’re going to build a society that’s better for everyone.” But too often, leaders do not want to take that “design for the margins” approach and risk being accused of advancing partisan ideas or “reverse racism.” “There’s no such thing as reverse racism,” she adds. “And leaders need to deprioritize their own comfort and be willing to speak and act publicly. We put too many limits on ourselves because we think the prohibition against lobbying and partisan work prohibits a lot more than it actually does. There’s a lot more we could do, even as [501](c)3s, if we clearly understood the rules.”
Funding models for nonprofits—mostly through foundation grants or government contracts—make matters worse. These funding sources do not leave much room for organizations to do the inner work. The “compliance” focus on deliverables, or even outcomes, misses the boat on deep transformation. At best, funded activities are bandages to social ills without the possibility of eliminating the root causes. Heidi Lopez at LREP goes even further to suggest the nonprofit industrial complex was “created to disrupt the movement.” Funding processes do not encourage equity and collaboration, but silos and competition instead.
Lopez says, “I feel that getting lost in that legalese, the paperwork…that and grant writing, sinks an organization’s creativity and risk-taking. This is still the case in 2023, but if you don’t establish yourself under this code of the IRS [nonprofit 501(c)3 status], you don’t get the money.”
As Lisa Weiner-Mahfuz at RoadMap Consulting observes, even when organizational leaders are open to taking more risks, many do not find a lot of support from the inside. She says, “We see this all the time: EDs who have not had the experience of actually developing workplace culture and policies and compensation approaches that are radical and liberatory. And there’s not a massive amount of people in the HR [human resources] field that can help EDs grapple with this.” Or, as Weiner-Mahfuz notes, they run into conflicts with board members who may be more averse to risk-taking, partly because these board leaders do not often come from the most impacted communities or because they hold fiduciary responsibilities and liabilities.
If you can really target very specifically the needs of the folks furthest away from power and opportunity, the odds are you’re going to build a society that’s better for everyone. But too often, leaders do not want to take that “design for the margins” approach.
Cynthia Silvia Parker, Interaction Institute of Social Change
The hypocrisy of the nonprofit industrial complex compromises the effectiveness of any organization with a social change mission. RE practitioners, like those in the REACH cohort, support equity-minded leaders to be brave, creative, and ambitious in going beyond the limitations of, or in the words of J. Miakoda Taylor at Fierce Allies, “decolonizing” the philanthropic-nonprofit industrial complex. Taylor says, “We need to be moving towards a cooperative economy for the field itself.”
The area of employee compensation is one way some RE practitioners are decolonizing the nonprofit industrial complex. Mala Nagarajan at Vega Mala Consulting says she no longer supports organizations interested only in staying competitive by replicating mainstream labor market dynamics “because those practices simply continue to widen the wealth gap. We’re just taking the inequities in the market and putting them right into our systems.” With her collaborator Richael Faithful, Nagarajan, as demonstrated in the case study below, is helping nonprofit organizations find a more equitable and liberatory way. Challenging long-held practices in human resources, Nagarajan and Faithful are supporting organizations who are ready to “lean into risk and hug the edge of the [legal] border,” recognizing these client partners are “pathmakers” charting a new norm for the field.
Ultimately, many RE practitioners believe we have to transcend the limits of the philanthropic-nonprofit model and imagine other possibilities for organizing movements. As Elissa Sloan Perry at Change Elemental says, “Individual 501(c)3’s can’t make up for all of the failures of the state. We can’t provide childcare for everyone, full health insurance for your entire family at a hundred percent coverage, and all the things that would support us living fully, while we contribute meaningfully to the liberating practices of the world. Maybe there are some ways we can come together and do that as bands of organizations.” Sloan Perry and other RE practitioners are focusing on movement outcomes not just at the organizational level, but also at the individual and ecosystem levels. In fact, as a later section demonstrates, many practitioners in the REACH Fund organize or support networks and cohorts of movement leaders or organizations as another liberatory practice.