Spectrum of Extractive to Restorative to Regenerative Philanthropy

A Just Transition for philanthropy will require individual philanthropic organizations to shift their practices away from extraction towards regeneration. The vision that we have put forth is our North Star, and recognizes that individual institutions will make these shifts in their own way, at their own pace and via their own entry points.

The way to begin your philanthropy’s Just Transition – whatever your starting point – is to identify ways to operationalize your values within all aspects of your organization. You can begin with the goal of being less extractive and more regenerative across the various functions of your organization. We outline what this might look like below.

As you think about how to facilitate a Just Transition in your own philanthropic practice or institution, individual leadership styles and organizational cultures may prefer to start at the meta level, while others prefer to engage by workflow:

At an investment level, this might mean divesting from companies that exploit their workforce, contribute to ecological degradation and exacerbate wealth inequality, and reinvesting in worker cooperatives that help to build community wealth and well-being.
At a grantmaking level, this might mean discontinuing grants to improve police relations (based on a recognition that current systems of law enforcement cannot dismantle oppression and state violence) and instead providing grants for communities to identify and design alternative, collective structures for community safety.
In your operations, this might mean spending less time on due diligence (which is rooted in fear and a distrust of grantees) and spending more time building relationships with grantees, movements and the broader community.

Whether your journey towards a Just Transition is aspirational or practical, we invite you to begin with the belief that it is possible to reorient how your philanthropic resources are managed. Our colleagues at Movement Generation often say, “The heart learns what the hands do.” It is a simple way to acknowledge that it is through practice that our values become realized. We share this phrase as an invitation to boldly re-imagine your philanthropic practices.

The following spectrum contains examples of practices that range from extractive to regenerative, to help you imagine what shifts you can make towards a Just Transition. It is a work in progress and we hope to continue learning with our philanthropic allies as more funders embrace a Just Transition.

Download a printable version of the Spectrum of Extractive to Regenerative Philanthropy

Transforming Our Individual & Institutional Worldview

Underlying Assumptions on the Role of Capital

More Extractive

Individuals and institutions have the right to endlessly accumulate capital and make decisions on how it should be allocated for the public good. The preservation of wealth and power must be prioritized over the needs of people and the environment.

Less Extractive

Individuals and institutions have the right to accumulate capital, but also have the responsibility to give away wealth for the public good. The preservation of wealth and power can occur alongside making positive social and environmental impacts.

Restorative

Individuals and institutions have a moral obligation to redistribute their accumulated capital in support of communities most impacted by economic inequality. Positive social and environmental impact must be prioritized over preserving wealth and power.

Regenerative

Rather than being accumulated by individuals and institutions, capital must support the collective capacity of communities most impacted by economic inequality to produce for themselves, give to and invest directly in what their communities need, and retain the returns generated from these investments. All aspects of collective well-being must be prioritized over the wealth and power of a few.

Transformation!

Wealth is redistributed, power is democratized and economic control is shifted to communities in a way that is truly regenerative for people and the planet.

Relationship to Communities

More Extractive

Foundations wield power over grantees in paternalistic and controlling ways that are based in risk-aversion, scarcity and fear.

Less Extractive

Grantees are expected to be responsive to foundations’ desires for programmatic activities and requests for time, knowledge and other resources.

Restorative

Grantees’ knowledge, expertise and lived experiences are acknowledged and respected.

Regenerative

Authentic partnership where grantees retain the right to design the solutions for their lives rather than have approaches imposed on them.

What it looks like in practice:

The Peery Foundation employs a “Grantee-Centric” approach to philanthropy that addresses the power imbalance in typical funding relationships. They acknowledge their privilege as a funder and work to lessen the burden on grantees, e.g. by traveling to grantee offices for meetings rather than making grantees come to them. They recognize the time constraints of their grantees and aim to reduce grantee workload by accepting materials that already exist rather than requiring a brand new grant proposal. They build authentic relationships and trust the expertise of their grantees in making decisions about how funds should be spent, which strengthens their grantees’ ability to achieve their outcomes by focusing on impact rather than diverting their time and energy addressing funder requests. Says Executive Director Jessamyn Shams-Lau, “Philanthropy can and should do better. I think we fail nonprofits in many ways, and because nobody holds us accountable on those failings, they perpetuate. We have a responsibility to hold ourselves to a higher standard and in order to do that, philanthropy needs to discover its humility.”

Leadership

More Extractive

Leadership reinforces a culture and systems in which those in organizational positions of power uphold the status quo.

Less Extractive

Leadership creates mechanisms for decision-making to be informed by the communities impacted by extractive systems, but those in organizational positions of power are the ultimate decision-makers.

Restorative

Leadership supports the belief that communities can effectively steward assets, and transfers some resources to be managed by community-based grantmaking and investment vehicles.

Regenerative

Leadership views its role as one that helps to facilitate the effective stewardship of all philanthropic resources into community control.

What it looks like in practice:

Solidaire Network is a community of people with wealth, over 90% of whom are white, committed to supporting progressive social movements by responding to urgent needs while also making long-term sustained commitments to build movement infrastructure. Several years ago, the Movement for Black Lives (M4BL) made a call to philanthropy to fund Black organizing like never before. The Solidaire community responded by creating an Aligned Giving Strategy to coordinate impact and ensure the long-term financial sustainability of organizations on the frontlines of addressing systemic racism. Recognizing that much of the inherited wealth of white donors was extracted from the labor of enslaved Black people, they approach their support of Black-led social change as reparations that are necessary in transforming systemic oppression. Says Program Director Janis Rosheuvel, “We are answering the call of the Movement for Black Lives that demands we all take risks and make sacrifices to ensure that all Black Lives Matter.”

Operations

More Extractive

Operational processes prioritize “serving wealth” by carrying out the wishes of the donor, family, trustees. Organizational systems focus on due diligence in order to “prove” that a potential grantee is worthy of support.

Less Extractive

Operational processes are primarily oriented around how to serve the wishes of the donor, family or trustees while being cognizant not to cause undue harm to grantees and communities.

Restorative

Operational processes are considerate of making sure that the needs of grantees and communities are prioritized just as much as the needs of the foundation.

Regenerative

Operational processes are primarily oriented around how to best support grantees and communities in achieving their vision of social change.

What it looks like in practice:

General Service Foundation seeks to apply justice principles to all of their work, from how they fund to how they use their voice to how they invest. They invest early in emerging organizations and their leaders, and sustain long-term relationships as grantees take thoughtful risks. Their Board recently revisited and revised the spending policy for determining their annual grants and operations budget, which was previously determined by financial criteria such as the endowment amount and perpetuity goals. Their new policy adopts a multi-factor approach that includes assessment of the needs of the field and opportunities to advance their values in a particular moment. In revising the spending policy, the Board also noted that while a 5% payout is the legal minimum, it should not be considered the maximum. They have also shifted away from a siloed, issue-based funding approach to a single portfolio, Building Voice and Power, that supports movement building work at the intersection of racial and gender justice. Says Executive Director Dimple Abichandani, “We recognize that justice can only be achieved if we operate in a way that is responsive to the needs and realities of the field. We are working to craft a spending policy that reflects justice as a north star so that all aspects of the foundation’s work are a reflection of justice principles.”

Endowment

More Extractive

Endowments are invested in for-profit companies that cause social, economic and environmental devastation to communities around the world in order to maximize financial returns for the foundation.

5% payout rule for grantmaking is the standard.

Less Extractive

Endowments are invested in companies, organizations, and funds that generate positive social or environmental impact, but maximizing financial returns for the foundation is prioritized over community benefit.

Payout rates are increased depending on what the foundation deems necessary to make the impact it seeks. 5% payout rule for grantmaking is considered the floor, not the ceiling.

Restorative

Endowments are invested in companies, organizations, and funds that generate positive social or environmental impact, while prioritizing community benefit as much as financial returns for the foundation.

Grantmaking payout is set to a rate at which the foundation no longer continues to accumulate additional wealth (i.e., holds steady).

Regenerative

Endowments are invested in local and regional efforts that replenish community wealth and build community assets – like worker cooperatives and community land trusts – in ways that emphasize transformative impact while rejecting the need to maximize financial returns for the foundation.

Grantmaking payout is set to a rate at which the foundation actively reduces its accumulated wealth (i.e., spends down).

What it looks like in practice:

Swift Foundation supports leaders and organizations that are protecting and defending biocultural diversity and community-based resilience systems, including many Indigenous Peoples. When they realized that many of the companies in which they invested were engaged in industries such as oil, mining and agribusiness that were undermining the well-being and self-determination of their grantee partners, they undertook a process of deep internal reflection and learning. They articulated new No Buy Guidelines, rewrote their investment policy and fundamentally changed their orientation to the role of capital. They now have a screened investment portfolio that includes a broad range of funds and investments focusing on sustainable businesses, access to credit and banking, food systems and renewable energy. Says Executive Director Jen Astone, “Swift Foundation knows we are on a journey to liberate philanthropy and are working to deeply integrate capital throughout our work and deploy all of our assets towards our mission.”

Grantmaking Strategy

More Extractive

Foundations have their own unique grantmaking strategies according to donor interests rather than addressing community needs or causes of systemic injustice. Grants are siloed into program or issue areas.

Less Extractive

Grantmaking strategy takes community needs into consideration as well as current social, political and economic conditions, but is ultimately decided by the foundation’s leadership.

Restorative

Grantmaking strategies are deeply informed by community needs and movement priorities, and are developed in collaboration with other grantmakers to create a shared strategy.

Regenerative

Grantmaking strategies are developed by movement leaders who are accountable to an organizing base (i.e., residents and community members).

What it looks like in practice:

The Novo Foundation has a deep commitment to listening to, learning from and designing their grantmaking initiatives around the leadership of communities most impacted by injustice. Their largest operational program, Move to End Violence (MEV) is a 10- year strategic and holistic initiative conceived in response to interviews with 200 advocates in order to understand what they felt the movement to end violence against girls and women would require to achieve enduring social change. Based on the strengths and challenges that were identified, the foundation designed an initiative that honors the wisdom and expertise of the stakeholders, stays true to the needs of the movement and builds a powerful movement ecosystem to ignite long-term, transformative change to end violence against girls and women long after the program’s tenure. Says Executive Director Pamela Shifman, “Our job is not to dictate change to others. Our job is to create the conditions for change to happen.”

Grantmaking Process

More Extractive

Restricted, one-year grants with burdensome application and reporting procedures.

Less Extractive

One-year general operating grants with funder- specified application and reporting procedures.

Restorative

Multi-year general operating grants that accept existing proposals and reports produced for other funders.

Regenerative

Grantmaking processes are determined by movement leaders who are accountable to an organized base.

What it looks like in practice:

The Whitman Institute approaches their grantee relationships from a place of trust, rather than suspicion. In practice, this means they always provide unrestricted, multi-year funding to allow grantees to determine the best use of their resources. They take on the burden of proof in determining whether a leader and organization is a good fit for their portfolio. They minimize application requirements by accepting proposals and reports written for other funders. They enter collaborations with humility by listening first and responding directly to the needs of grantees, including soliciting and acting on feedback. This model continues to be refined in collaboration with a growing network of funders committed to advancing Trust-Based Philanthropy. Says Co-Director Pia Infante, “These perilous times call for emergent, complex thinking which we believe is better cultivated in the context of long-term relationships and long-term grantmaking than in single- year, silver bullet grants.”

Grantmaking Decision

More Extractive

Foundation trustees, executives and staff have full decision-making power with no transparency to grantees and communities.

Less Extractive

Movement leaders/organizations give input but decisions ultimately rest with foundation staff in positions of power.

Restorative

Grant recommendations are made by movement leaders/organizations (e.g., participatory grantmaking).

Regenerative

Decision-making power about grants has been transferred completely to movement leaders/organizations who are accountable to an organized base.

What it looks like in practice:

Groundswell Fund is a public grantmaking organization that mobilizes new funding and capacity building resources to grassroots efforts led by women of color, transgender people and low income women. Their Board of Directors is comprised of grassroots leaders shaping strategy alongside funders and donors. Their Liberation Fund, which supports the strongest grassroots organizing efforts led by women of color and transgender people of color across social justice sectors, awards grants at the recommendation of 15 advisors who are prominent women of color (including trans women of color) leaders from various U.S. social justice movements from environmental, racial, and economic justice to immigrant, Native and transgender rights. Says Executive Director Vanessa Daniel, “The people most impacted by injustice often see most clearly the path to justice for all people. Their leadership is critical to the success of movements on the ground and following their advice about how movements should be funded is critical to the success and relevance of philanthropy.”

Next Section: Stories of Regenerative Philanthropy