This post is part of “Liberate Philanthropy,” a new blog series curated by Justice Funders to re-imagine and practice philanthropy free of its current constraints — the accumulation and privatization of wealth, and the centralization of power and control — to one that redistributes wealth, democratizes power and shifts economic control to communities. Over the next few months, we will be sharing stories from some of our most forward thinking, transformational leaders in philanthropy about how they are facilitating a Just Transition for philanthropy.
What does it take to transition American capitalism from a system for the 1% to an economy for all?
Like all disruptive and lasting social change, such a transition will require a sweeping shift in attitudes toward capitalism, the courage and leadership of frontline communities, and a new, radical imagination among progressive movements to build a vision for true alternatives to our dominant economic regime.
Guided by thriving Solidarity Economy movements in the Global South, an increasing number of U.S. social justice organizations are aligning behind the banner of Just Transition to fight the old economy while also building the new. The sector uplifts principles of collective ownership and democratic control, and is expressed through a diversity of practices including worker cooperatives, community land trusts, peer to peer lending circles, mutual aid projects, and participatory budgeting.
A growing segment of progressive funders have heeded this call by integrating Just Transition into their grantmaking strategy. But a true transition demands more than just grants to the field, it also implores philanthropy to embody the outcomes of that transition.
At Center for Economic Democracy, we are helping to envision and test a more radical practice for philanthropy. Specifically, we seek to embody the role of capital stewardship as it would exist in a flourishing solidarity economy. We call this effort Solidarity Philanthropy.
To be clear, we are articulating a North Star that may seem unrealistic or even inappropriate for some institutions.
But as our community and movement partners are waging some of the most essential political struggles of their lifetimes, we must consider the possibility that our way of working is not only incongruent with the demands of our collective survival, but potentially part of the problem.
Developed through the insights from Massachusetts Solidarity Economy Initiative — a funder collaborative and pooled fund for Just Transition projects — we offer some lamp posts on our pathway towards a new philanthropy.
Foundations of Solidarity Philanthropy
The present value of labor extracted from enslaved Black people is estimated to be $5.9–14.2 trillion. The value of stolen land from Indigenous Americans is inestimable, as nearly all original wealth creation was capitalized by the “subsidies” secured through genocide and land theft. And the systematic undervaluing of “women’s work” has allowed for the accumulation of extreme wealth by corporations that rely on a labor force sustained with minimal costs to their bottom lines.
These genocides and thefts formed the financial base of a white male ownership class that structured American civil society to allow for the accumulation and generational transfer of wealth. Regardless of our specific sources of capital, this system enables the philanthropy that we direct.
From an ethical and even spiritual perspective, we are left grappling with the position that the philanthropic dollars we manage are not “our money.”
The reparations principle begins with directing us to fund in communities most harmed through historic extraction, and explicitly fund Black and Indigenous organizations driving actual reparations campaigns. But this alone is insufficient. We also invest in communities to reorient their relationship to capital, control their own assets and break dependence from the dominant, extractive economy.
As examples, the D.C. based startup TightShift Labor Co-op provides moving, cleaning and landscaping services, and is owned and operated by a majority Black, formerly incarcerated workforce. The Sogorea Te Land Trust in the Bay Area is an Indigenous women led urban Community Land Trusts working to reclaim Chochenyo and Karkin Ohlone land back to Indigenous stewardship.
Imagination, wisdom and direction from the field is abundant, but financing for many of these transformative projects is notably scarce.
Rather than being hamstrung by mandates for “market returns,” a reparations frame would encourage foundations to reallocate their endowments toward building community wealth and financial independence.
Investment risk would be the worthwhile cost for restoring asset ownership back to the communities from which it was extracted.
A key prerogative of capitalism is to empower the owner of capital — however that capital was accumulated — to decide how their funds are invested or spent. In many ways, the culture of traditional philanthropy reinforces this sector, where sophisticated foundation staff and benevolent trustees direct surplus capital on behalf of the public.
Solidarity Philanthropy embraces the growing practices of Trust Based Philanthropy and Participatory Grantmaking as a self aware response to the pathologies of this power dynamic. Through the Solidarity Economy Initiative in Massachusetts, we manage a pooled fund governed by a cohort of 11 grassroots movement organizations, empowered to design and allocate spending to build the Solidarity Economy ecosystem.
While these grantmaking approaches are nascent, the application of democracy and trust to our investment dollars is nearly nonexistent. In part, this is because community based infrastructure to democratically allocate investment dollars is scarce, at best.
One response is the Boston Ujima Project which is building an investment fund that is democratically governed by historically divested communities. Borrowing from the growing global trend towards the “participatory budgeting” of public tax dollars, every member has an equal vote on the fund’s investment priorities, loans and equity deals. Working class members contributing as little as $50 will, in fact, have more control than accredited investors who will be invited as non-voting “solidarity members.”
Ujima’s Fund will also offer forgivable debt products for Program Related Investment and Donor Advised Fund lending to build a philanthropic backstop that secures lower income and working class investors from portfolio risk.
Our dignity as people, in part, is defined by our ability to self-determine our futures. Solidarity Funders recognize frontline organizing, coalition building, grassroots policy advocacy, and electoral mobilization as essential expressions of this right to participate in our own governance.
Our investments should similarly resource the non-profit and for-profit enterprises that build community power through democratic expressions in the management of the workplace, the stewardship of land and resources, and the allocation of capital.
Philanthropy helped create the impact investing field to apply capital for the production of social good. As a learning edge, Solidarity Philanthropy also asks how investment capital can help to build independent political power in frontline communities. We are exploring investments to the emergent field of “Social Justice Enterprises,” an evolution of the “Social Enterprise,” which activates mission-driven business owners and their employees to see their businesses as sites for movement building, community engagement and progressive political mobilization.
A common recant by professional community organizers is the goal to “put ourselves out of business.”
For Solidarity Philanthropy, this commitment would drive us to uproot the causes of injustice so that philanthropy is no longer needed, and our foundation in extreme wealth concentration is no longer possible.
Reaching this reality, if ever, requires a generational conviction to nurture and resource the field. So as philanthropy persists as a sector, we seek a radical reconstitution in our roles as stewards of capital. In a Just Transition towards Solidarity Philanthropy, we rely on the guideposts of Reparations, Democracy and Power to help us inhabit that future.
Aaron Tanaka is the director of the Center for Economic Democracy, a social movement intermediary that supports grassroots and philanthropic leaders to advance visionary strategies for a post capitalist economy. Aaron is the former startup manager for the Boston Impact Initiative, former executive director of the Boston Workers Alliance, and former fellow with Echoing Green and BALLE. He serves on several boards including the Asian American Resource Workshop, Neighborhood Funders Group and the New Economy Coalition.