Social justice funding declines

Funding for social justice nonprofits has seriously declined since the economic collapse in 2008, according to a new report.

Social justice organizations work for systemic social change based on principles of equality, solidarity, and human rights. They include groups focused on progressive taxation and legislation and the rights of vulnerable and marginalized populations. They strive to eliminate disparities in areas such as health, housing, and education, and to create a level playing field for social and economic opportunity.

The report, published by the Foundation Center, analyzed the giving of 54 foundations that actively support social justice organizations. Grants from these foundations fell to below 2007 levels in 2009, the researchers say, and they’re unlikely to bounce back until at least 2015.

Social justice funding was on the rise in the first part of the decade, spurred in part by a “sense of optimism for the future with the start of the Obama administration,” according to a previous Foundation Center study published in 2009.

The new report, Diminishing Dollars, found that smaller foundations suffered the biggest losses and were most likely to have decreased giving for social justice. Grantees in the field are also typically small, community-based or member-led organizations without substantial financial resources. They have small, dedicated funder bases and high vulnerability to funding cuts. The report’s authors write that these groups “often lack the capacity to compete with larger nonprofits for public funds or for funding from more ‘mainstream’ foundations as the environment becomes both increasingly competitive (due to scarce resources) and focused on scalability and outcomes.” They rely on the funders that are struggling most to recover in the current economy. According to projections, foundations in the field with less than $50 million in assets will have 17 percent less in 2015 than they did before the crash.

The report notes that in response to the downturn, many foundations in the field have changed their processes and policies. They are spending less, either by changing review criteria, refusing unsolicited proposals, or funding only existing grantees. For this reason, the authors write, newer organizations and those seeking new funders will have a tough time securing grants in the next few years.

It’s no secret that the wealth gap is increasing, along with the social disparities it creates. Given the grim outlook for grants, social justice organizations will likely have to turn to non-foundation funding if they intend to stick around. It will become even more critical for most to build a solid base of individual donors who support their goals and means. At the same time, other mission-driven nonprofits will need to incorporate social justice advocacy and organizing into their work, and bring their funders along.

Read the Foundation Center report, Diminishing Dollars, here.

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