Zaineb Mohammed argues that a "scarcity mindset" is holding philanthropy back, and shares how the Kataly Foundation have designed their grant-making from a place of abundance.
Resources are scarce — they must be protected and guarded, even above the mission. To preserve scarce resources for hypothetical future needs, foundations must opt for the required [in the U.S.] annual five percent distribution of their endowments as the ceiling instead of the floor. When resources are scarce, they must be disbursed with a high level of discretion and discernment.
Does this logic sound familiar, even in part? One of the most dominant — and damaging — narratives that shapes progressive philanthropy today is this fundamentally false notion that resources are scarce. Many of the harmful practices that funders commonly employ are rooted in such a mindset of scarcity.
When we look for these rationales in how most foundations are designed, we can easily find the “scarcity mindset” influence in everything from board composition to investment practices to grant criteria to proposal and reporting processes. A recognizable example is the fact that grantmaking decisions within foundations are often framed as either/or: If we choose to fund this group, we are also choosing not to fund that group. If we increase funding for this issue, we have to decrease funding for that issue. The result is that organizations are positioned as competitors that must vie for funders’ attention, prove themselves over and over again, and never endure failure.
Not only does this create an untenable situation for the nonprofits competing for scarce funding, but it also ensures no foundation’s mission will ever succeed because the change ecosystem in any given issue area, locality, or system is not being funded as a whole, collaborative entity capable of collective impact. It also reinforces another common myth about how change is made, which is that a single funder has the ability to solve a complex problem independently.
These scarcity-based rationales are deployed so often in philanthropy that many accept them unquestioningly. Of course, as wealth inequality grows to levels unseen since the Gilded Age and foundation assets now exceed $1.6 trillion in the United States, it’s getting more and more difficult to ignore their obvious contradictions. Examining the narrative of scarcity raises many questions: Who benefits from the myth of philanthropic scarcity? What gets lost when making money, not giving money, is the priority? Is it even philanthropy when that is the case?
However you answer those questions, the scarcity narrative is holding progressive philanthropy back from the change we want to see, and one way funders can meaningfully intervene is by choosing to design the way we do things with an abundance mindset instead.
At the Kataly Foundation, one of the ironies of our embracing an abundance mindset is the fact that we are a spend-out foundation — as our spend-out date gets closer, we have to say “no” to more requests. However, we see this as a welcome challenge rather than a limitation. Kataly was founded in 2018 with the intentional goal of redistributing our assets over a span of 10-15 years. Within that context, you might be wondering: what does it look like to operate from a place of abundance?
In order to thrive themselves and create the changes they are seeking, organizations need their partners to also be strong, strategic, and thriving.
To actively push back on scarcity thinking in our work, Kataly designed our grantmaking approach so that we give big grants and do so from the very beginning of our partnership with grantees. In philanthropy, one of the ways scarcity shows up is by making small grants first, as a trial balloon to test out how an organization performs with a small amount of money. If their impact is deemed significant with a small investment, the logic goes, then the organization proves themselves worthy of a greater level of investment.
The problem with this approach is that small grants do not allow for long-term strategies or bold experimentation. In addition, the impact funders expect to see from small, short-term investments are often unreasonable and unrealistic, particularly when it comes to funding aspects of political, social, and economic transformation.
Recognizing the faulty logic and seeking to build a case for abundance thinking, Kataly began by making larger, catalytic investments in organizations that we hoped would allow our grantee partners to make progress in exponential ways. We also provided these grants without prescribed expectations or predetermined outcomes that dictated what the result of the investment should be, which was a deliberate demonstration of trust and our faith in the group’s abilities and expertise.
Another drawback of applying a scarcity mindset to philanthropy is that, rather than supporting a robust social movement ecosystem to operate with a thriving infrastructure, funders that believe resources are few and far between tend to instead focus on grantmaking strategies that enable individual groups to excel and expand, without regard to how that may weaken the collective. Building and sustaining strong and resilient movements requires attending to the full ecosystem and recognizing the valuable role each part of the whole plays in ensuring that the collective continues to operate effectively.
This is why we habitually ask our grantee partners: who else do we need to fund in order for your work to be successful? It is an important and illuminating question because it shows us a fuller picture of the ecosystem our grantees are operating within and allows us to strengthen the work of our partners by funding the groups that add value and with whom they collaborate.
This is what it looks like to fund movements like we want them to win. In order to thrive themselves and create the changes they are seeking, organizations need their partners to also be strong, strategic, and thriving.
Another practice we apply in our work is to come from a place of ‘yes’. This means we push ourselves to try to fulfill the requests we receive from our grantees, consider and clearly articulate what may be driving a ‘no’, and ask ourselves what it would take if we were to say ‘yes’ before we get to ‘no’. Doing this has helped us to see resources differently and think about our value as more than the grants we make. This does not mean that every request results in a ‘yes’, but by approaching a conversation from an affirmative place, we keep an open line of communication and inquiry. This approach also pushes us to lean into creativity and possibility. If we can’t do something in one way, what might be another path to get there?
Ultimately, the narrative of scarcity that remains dominant in philanthropy reflects an unending quest for relevance and longevity. By trickling resources down, funders can live forever. Some rationalize this by pointing out the slew of injustices that exist in society, and asking: if foundations spend out their resources, who will be around to support the fights that lie ahead of us?
The solution is not for every foundation to spend out all of their assets right now, but philanthropy does need fundamental shifts in our thinking about the purpose of and process for wealth redistribution. If we fund social movement partners in expansive ways, without restrictions, how does that allow organizations to build upon those resources and continue to regenerate wealth that is held within their communities for the long-term?
A truly liberatory future is one where social movements are not permanently dependent on philanthropy to achieve their goals. An abundance vision for philanthropy should not be defined by an attempt to live forever in relationships of supplication, but rather to create the conditions where philanthropy is no longer needed because we live in a world of shared prosperity.
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The Myths of Philanthropy series is being published in collaboration with the Center for Effective Philanthropy, Elemental, and VITA.
The Myths of Philanthropy
This article is part of the Myths of Philanthropy series curated by Elemental, a funder collaboration focused on cultivating conditions to resource narrative power.
The Funders Collaborative Hub publishes a range of perspectives. The views expressed here are those of the authors, not necessarily those of ACF.
