August 2024 — Moving the Needle // Woods Fund Chicago
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President Michelle Morales on Increasing Our Payout —
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Wood Fund Chicago (WFC) has made significant strides over the past year, including the announcement of multiyear grants in July. As many in our sector aim to do, we wanted to commit to continuous support to organizations endeavoring to reimagine our city. While multiyear grants are not a new practice in our sector, it is unprecedented to provide multiyear grants to the majority of organizations in a foundation’s portfolio. These multiyear grants were made possible thanks to our Board's approval of an increased payout rate — 11% in 2023 and 13% in 2024. But what does increasing our payout mean? In philanthropy, the payout refers to the percentage of a foundation's net investment assets distributed via grants or other eligible expenses. By law, foundations must make a minimum annual payout of 5%. Most foundations adhere closely to this 5% figure, which often limits their ability to adequately fund grantee partners and make critical investments such as general operating and multiyear support. This practice is often adhered to so the foundation can exist perpetually.
August is designated as Black Philanthropy Month, a time to recognize Black-led organizations in the nonprofit sector. These organizations often face both external and internal obstacles. Externally, their missions frequently center on social change, with a strong focus on racial justice. Internally, Black leaders in the nonprofit sector encounter discrimination and preconceived notions about their qualifications and values due to entrenched white supremacy in the field, resulting in inadequate resources. Smaller and underfunded organizations operate at capacity and must exhibit extraordinary nimbleness to carry out their transformative missions.
In honoring our commitment to trust-based philanthropy and racial justice, WFC partnered with the Board to mirror the nimbleness of our grantee partners by creatively considering our finances and evaluating how our financial management approach might reinforce disparities between funders and nonprofits. We reflected on our commitment to trust-based philanthropy and supporting nonprofits that are historically underfunded, particularly Black-led, community-based organizations. During this reflection process, we determined that we wanted to turn the concept of being fiduciarily responsible on its head, reframing our definition of “responsible” spending of the Foundation’s corpus (available capital). Traditionally, fiduciary responsibility emphasizes adherence to a minimal payout, protecting the corpus so that it can continue perpetually. At WFC, we believe we are fiduciarily responsible to the community and prioritize impact over returns. This means that we are committed to supporting our grantee partners in a myriad of ways that prioritize their perpetual existence over ours. WFC is proud to exceed the sector standard and uphold a payout of 13% in 2024. This allows us to confidently provide multiyear support to nearly 100 organizations, coalitions, pooled funds, and initiatives, with priority given to funding organizations whose leadership and board are at least 51% BIPOC and who center racial equity and/or justice in their practices.
We are often asked if we are spending down, which is always the question that is asked if a foundation increases its payout. It’s important to note that while we increased our payout to 11% in 2023, the foundation has not dipped into its corpus! By prioritizing impact, we have focused on paying out the entirety of our investment returns (which have been 11%) rather than banking a percentage of our returns to grow our corpus. Additionally, WFC approved its first multiyear budget last year to honor our long-term commitment to supporting the sustainability of our partners. It’s important to us that we utilize the entirety of our investment returns to support the organizing and advocacy sector.
We hope our peers in the sector will take this moment — particularly during Black Philanthropy Month — to evaluate how their giving can better address the needs of grantee partners and focus on supporting organizations that are historically undervalued and underfunded yet are doing transformative work in their communities with little resources.
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| President, Woods Fund Chicago
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There's no doubt that as the 2024 Democratic National Convention approached in Chicago, many minds thought back to 1968, the brutal police response to protestors, and the subsequent trial that sought to criminalize grassroots organizers and punish them in the public eye. This year, all eyes were on the DNC Chicago once again. A decade after Ferguson, four years since the 2020 uprisings, a year since the criminalization of organizers in Atlanta, and mere months since the police response to student protestors this past spring reminded us in the lead-up to the DNC that police brutality and attempts to undermine the right to protest dangerously persist — but strength and solidarity in these movements is stronger than ever.
Woods Fund Chicago's grantmaking supports both community organizing and public policy advocacy, and that is because we believe both are necessary (and often work hand in hand) in righting the wrongs of white supremacy embedded into this country since its inception. Racial and economic inequities are not contained within party lines, and the gains that have been won throughout history have often been possible through persistent community organizing, protest, and public policy that centers and listens to the communities that make up a constituency.
Woods Fund Chicago supports our dedicated grantee partners and recognizes the risks they take to stand up for their beliefs and communities. Woods Fund Chicago also condemns acts of violence (which consistently and disproportionately harm people of color) and illegal undermining and abuse of those exercising their right to protest to ensure these communities are heard and that the true path to justice is achieved — regardless of which party or administration is in office.
We stand firm in our belief that community organizing and policy advocacy are cooperative practices, not oppositional ones. We monitor any instances where those who hold power abuse that power to oppress those who have been historically harmed, and will continue our close communication with our grantee partners to ensure we are supporting them in the most effective ways possible through their advocacy.
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The Woods Fund Chicago Website Has a New Look!
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We are excited to unveil a new look for our website that showcases our grantee partners and their advocacy in action. In addition to updating the look and feel of our website, we’ve also streamlined information so that our mission, values, and grantmaking process are more transparent and accessible. Check out our new and improved website at woodsfund.org and explore sections like our Grantmaking page, where you can learn more about our process and funding priorities, our News page for past newsletters, grantee partner spotlights, and updates, or our History page to learn about the origin of Woods Fund Chicago and how our foundation has evolved while remaining committed to supporting organizing and social justice.
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WFC President Michelle Morales to be Honored with Philanthropy Award
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Congratulations to Woods Fund Chicago President Michelle Morales for being named an honoree of the 48th Annual Philanthropy Awards held by the Association of Fundraising Professionals Chicago Chapter. On Friday, October 18, 2024, Michelle will be presented with the Professional Grantor Award which honors a corporate or foundation giving officer for their professionalism and support to the nonprofit community. We are proud of Michelle and our foundation's work supporting, centering, and amplifying our grantee partners. Congratulations to Michelle and to our peers in the sector who will be recognized for their leadership.
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What to Read in Black Philanthropy Month
Why We're Reading It: For Black Philanthropy Month, Nonprofit Quarterly put together a robust list of articles from their archives that explore how philanthropy can and should challenge white supremacy and support Black-led and racial justice organizations and philanthropic peers.
Nonprofit Quarterly // Read now
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Scene on Radio, Season 7: Capitalism
What We're Listening To: This season of the Peabody-nominated podcast examines the history of capitalism "from its emergence in Europe 500 years ago up to the present." As philanthropy is a sector that was born from capitalism and benefits from capitalistic practices, it's important that we understand the origin and consequences of this economic framework that has shaped this country.
Scene on Radio // Listen now
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