Rethinking Political Giving: A Holistic Approach to Philanthropy

By Stephanie Ellis-Smith

Demonstrators at a protest waving American flags.

For years, the IRS's tax regulations have inadvertently compartmentalized charitable giving and political contributions in many donors' minds. At Phīla, we challenge this separation, advocating for a more integrated approach to social impact across various giving avenues, including direct donations, foundation grants, and even investment strategies. Our focus is to help individuals align their wealth deployment with their values, extending to political giving as well.

In January, when we surveyed our readers on philanthropic giving trends, engagement in democracy emerged as a top priority. Respondents expressed a strong desire for access to expertise and learning opportunities for effectively allocating their political giving in this very consequential election year. Responding to this demand, Janell Turner and Sofia Michelakis organized Political Giving for Progressive Donors, a webinar and companion handbook offering a comprehensive overview of the political giving landscape and strategies for a donor to make a difference. As I watched the webinar live, I was struck by just how much knowledge is out there but inaccessible to the average donor. With deep thanks to our panel of experts (Alexandra Acker-Lyons, Dionne Foster, Kevin Geiger, and Jamie Van Horne Robinson), the information is out there. Here’s a very high-level overview of what you can expect.

The webinar begins with practical advice on setting a budget for political giving and strategically allocating funds. Panelists address common client queries such as integrating political giving with philanthropic goals, determining budgetary allocations, and navigating the choice between local and national contributions. Additionally, they shed light on the nuances of utilizing different giving structures, including c3, c4, or PAC dollars.

Moving forward, they delve into the impact of investing in candidate races and supporting key local ballot initiatives and election infrastructure projects. Dispelling doubts about the efficacy of individual contributions, the panelists assure that every donation counts and share insights on maximizing impact.

Further, we highlighted top considerations for donors, including core candidates, critical initiatives, and organizations deserving of support in the current election cycle. Addressing questions about donation limits and defining major gifts, we provided clarity to empower donors in their decision-making process.

As we look beyond the 2024 election, our panelists provide valuable advice for preparing for the future of democracy, emphasizing the need for long-term investments to fortify our democratic systems for generations to come. While they may have only scratched the surface, understanding the ongoing reform efforts and strategic focus areas is crucial for shaping a resilient democracy.

At Phīla, we advocate for a holistic approach to philanthropy, recognizing that political engagement is integral to effecting systemic change. We're committed to breaking down silos and fostering a more integrated approach to philanthropy and political engagement. By aligning values with actions, we can collectively drive positive change and safeguard the principles of democracy for all. Thank you for joining us in redefining the boundaries of philanthropy and shaping a brighter future for generations to come.

2024: Noteworthy Trends in Philanthropy, Part One

By Sofia Michelakis

My 8th grade school photo with my “bi-level” (aka mullet) cut

I refuse to accept that the mullet is back. For me, that hairstyle will forever be associated with awkward middle school dances. Maybe that’s why I always view the onslaught of New Year predictions and trends with a healthy dose of skepticism. 

At Phīla, we serve a wide range of high net wealth individuals, couples, and families. We are discerning about separating meaningful trends from fads which, like my 80s mullet, are best quickly forgotten. In this post, we share the first three of the top themes we’ve been noticing and how givers wanting to have a deeper social impact could apply them. In future segments, we will share additional relevant trends. 

Trend #1: The Rise of Financially Independent Women

Whether because they earned it themselves or came into financial abundance through divorce, death of a spouse, or other inheritance, women are increasingly holding the reins of large amounts of wealth. In 2020, McKinsey & Company predicted a massive wealth transfer in this decade, with White women baby boomers as the biggest recipients. According to Fast Company, women currently control $11 trillion in assets, and that figure is expected to nearly triple by 2030. We see this growing trend in our client base as well. 

However, even when they have financial power, women can sometimes second guess themselves and their decisions about how they deploy their wealth or have their priorities minimized. We have observed that women–especially those over 60 in that baby boomer demographic–often defer to the men in their families and others who are so-called “experts”, even when those men are of similar age, education, and intelligence. 

To be sure, the finance industry is in need of an overhaul to better serve the philanthropists of today and tomorrow, as has been aptly written about elsewhere. Over the past few years, we have increasingly engaged with our clients and like-minded wealth managers and other advisors with a common goal of helping women gain more confidence in determining the purpose of their wealth and becoming more effective financial stewards. 

What to make of this trend: To our women readers, we want to support you to step into your financial power with confidence. When it comes to where to invest your philanthropic dollars, you likely know more than you think you do. Whether it’s cheering you from the sidelines, coaching you behind the scenes, creating space in meetings for your voice, or connecting you to fellow women travelers in philanthropy, we have your back! To our male readers, we are looking for allies. Support the women you know–your spouse, your mother, your sister, your colleagues, etc. Validate them, support their decisions, advocate for them to be recognized in leadership roles, ask questions to understand and learn, and be willing to listen.

Trend #2: Engaging In Democracy Is Social Impact

Regardless of your politics or whether you have a political giving strategy, this year’s election will have huge consequences for every sector and every cause about which you care. You will no doubt be asked repeatedly to give to candidates, but that is certainly not the only way to be active in this year’s election cycle.

Some people reflexively believe that their political giving is not part of their social impact strategy. We think differently. We do not cede the final say on defining social impact to the IRS, which simply defines rules for what can be considered tax deductible or not. Political giving and engaging in democracy can be part of a holistic social impact plan.

Several of our clients have begun exploring the connection between unions and democracy. Indeed, the Democracy Alliance has noted strong evidence that “Labor unions are the countervailing force the United States needs against nearly every trend eroding democracy, including rising political polarization and extremism, partisan pressure on the electoral process, harmful immigration policies, and growing wealth disparities.” 

Other clients are asking their current grantees about how they are engaging in advocacy activities at the local and national levels, either as a 501(c)(3) or through an aligned 501(c)(4) entity. In addition, we are currently supporting a few of our clients to bring in political advisors when needed to develop a specific, targeted giving strategy for the 2024 election cycle, integrated with their overall social change vision.

What to make of this trend: Don’t silo your political and philanthropic giving. Be sure that the staff and advisors with whom you work are informed about your goals and interests in democracy and elections so that they can better harmonize your giving strategy. You may find out that you can use philanthropy as a tool to advance many of your interests in supporting a healthy democratic society.

Trend #3: How Philanthropy and AI Intersect

The potential threat of AI to society and the social causes you care about is less about machines run amok ala the Terminator films, and more about what the government and your fellow humans might do. Think of AI as a ridiculously powerful tool – in the right hands, it may provide unique ways to speed scientific innovation and create social good; but in the wrong hands and without appropriate guardrails, it can be misused and lead to greater inequality, oppression, and other harmful consequences.

Common concerns about AI include future disruptions in the labor force, potentially putting millions out of work. But the impacts are not just theoretical. Crucially, we are already witnessing significant harms today. AI technology is already responsible for cutting safety net benefits, placing kids with loving parents into foster care, and falsely accusing Black and brown people of crimes.

There are huge ethical questions about this new technology, both in who benefits and who makes decisions. Philanthropy can play a significant role in ethical approaches to AI, as we know that under-resourced populations are less able to advocate against well-financed corporate interests. Several field-building initiatives are already emerging to foster more shared intelligence and agency around the philanthropic response to AI. For example, through a network of philanthropic advisors in which we are actively engaged called “P150,” we have been exposed to some of the leading thinkers who are exploring the big questions for philanthropy and AI. One of these experts, the Effective Institutions Project, has put together a funder’s guide to AI governance and strategy, which offers both a broad framework for thinking about philanthropic opportunities in AI and examples of specific organizations doing impactful work. 

What to make of this trend: Consider how AI will impact the social issues you care about as well as the implications for your own philanthropic organizations. We can help you identify nonprofits engaged in areas such as policy development, research, advocacy, talent development, technical assistance, and field-building that could benefit from additional funding. We can also facilitate family / board meetings to discuss ways to align the implications of AI to your philanthropic organization’s values.

We would love to hear your thoughts about these and other trends that are top of mind heading into the new year via this two minute, confidential survey. We’ll check back soon to share survey results along with trends 4 and 5. Stay tuned! 

Resources

Women Becoming Confident Financial Stewards


Ideas for Engaging in Democracy


Learning More About AI and Society

A Philanthropic Response to Threats Against Democracy

By Lauren Janus

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With a more divided electorate than any time in recent memory, an incumbent president who’s refused to commit to the most basic of democratic norms—a peaceful transition of power—and the proof and pain of racial injustice from coast to coast, you’d be forgiven for thinking these are dark days for democracy in America.  We at Phīla have certainly thought so. But we also know that as Americans, we have a fundamental responsibility to stand up for our democratic institutions and way of life—now and after November.

 The good news is that there are some fantastic people and organizations already working tirelessly on these issues. Giving Compass, a valuable resource for news of the giving world, has compiled a substantial directory of organizations working on defending the media, registering people to vote and strengthening democracy.

 Below is our own brief round-up of selected organizations committed to these crucial issues. Some of the below are partisan, some are non-partisan, some are 501c3 organizations, and some are organizations to which donations are not tax deductible. All stand with us in this struggle to ensure democracy and our rights as citizens are protected, regardless of who is in office. 

 Please consider giving or volunteering today.

Region or BIPOC-Specific Organizing Groups

 We know that the best people to help specific communities exercise their right to vote are organizations within those communities. Fortunately, grassroots organizations across the country are mobilizing voters and making noise in 2020. Here are a few stand-out groups.

1.     Texas Organizing Project. TOP, as the Texas Organizing Project calls itself, was formed in 2009. The group organizes Black and Latino communities in Dallas, Harris and Bexar counties in Texas, with the goal of transforming the state into one where people of color have the power and representation they deserve. The 100,000- member group leads direct-action organizing, grassroots lobbying and electoral organizing, while providing leadership development to interested Black and Latino residents. 

2.     Voces de la Frontera ActionCalled “The Most Valuable Grassroots Organization in the US” by The Nation magazine in 2012, Voces de la Frontera and its Action Fund use their relational voter program to build a network of low wage and immigrant workers.

3.     EquisLabs. Founded by two veterans of Latino political research and organizing, Equis Labs calls itself a research and experimentation hub working to build Latinx power. The small 501c4 organization supports leaders and organizations that are working to increase Latinx civic participation by focusing on data, digital and leadership development.

4.     Black Leaders Organizing for Communities (BLOC). BLOC is a Milwaukee-based organization focused on using community-based organizing and face-to-face conversations to lift up Black citizens and build stronger communities throughout Wisconsin. BLOC has been working to register Black Wisconsin residents, and provides information on safe voting for everyone. 

5.     Nuestro PAC. A partisan Super PAC, Nuestro PAC was formed to continue a model of Latino outreach they say was instrumental in delivering early victories to Senator Bernie Sanders. The super PAC is focused on mobilizing and turning out Latinos in key states in the 2020 election. So far, Nuestro PAC has invested in targeted outreach to Latinos in Arizona, Florida, Michigan, North Carolina and Pennsylvania.

6.     Movement Voter Project (MVP). MVP is a bit like a mutual fund for donors. The nonprofit uncovers small grassroots groups that are making waves and combines them into giving opportunities like the Black-led Organizing Fund or the Defend the Election Fund.

  

Get Out the Vote Groups

Few acts are as fundamentally patriotic as casting your vote for our country’s leaders. This fall, a large number of organizations are focused on Get Out the Vote, or GOTV, efforts. Here are a few that do this from a 100% non-partisan position. 

7.     Vote Save America. Vote Save America is singularly focused on getting Americans to vote. Their slick website has easy-to-access resources on registering to vote, signing up to be a poll worker and donating to organizations that support free and fair elections.

8.     When We All Vote. When We All Vote is a non-profit, nonpartisan organization working to increase voter participation in every election. They have a star-studded list of co-chairs, including Michelle Obama and Tom Hanks. But they also have a downloadable app, called OutVote, which allows volunteers to text eligible voters, reminding them when and where to vote, and urging them to make a plan for getting their ballot cast. 

 

Voting and Civil Liberty Defense Groups

Of course elections aren’t the only times our civil liberties matter. There are well-established, proven organizations working on these issues from a number of angles all of the time. 

9.     The Brennan Center for Justice. Staffed by lawyers, researchers and advocacy experts, the Brennan Center for Justice is an independent, nonpartisan law and policy organization based in Washington DC, and at the Brennan Center for Justice at NYU Law School. Their work is focused on fair elections, ending mass incarceration and preserving American liberties.  

10.  Democracy Docket. Democracy Docket was founded by political lawyer Marc Elias, who served as general counsel for the Hillary Clinton 2016 presidential campaign and John Kerry 2004 presidential campaign. Marc and his team at Democracy Docket work to fight voter suppression laws in court. Marc’s written a lot lately on how Americans can protect their right to vote and democracy in general. 

11.  ACLU. The ACLU works to protect a wide range of civil liberties, including prisoners’ rights, immigration and voting rights. Their team of values-driven lawyers have brought hundreds of cases, including some before the Supreme Court.

12.  The Southern Poverty Law Center. Founded in 1971, the Southern Poverty Law Center works with communities in the American South to counter white supremacy and advance the human rights of all people. Their list of national hate groups is a highly respected tool of those working to expose and counter these dangerous groups.   

 

 Postcard writing/phone and text banking opportunities

If you’re itching to roll up your sleeves and urge fellow voters to the polls, there are several groups that allow you to do just that. 

13. Vote Forward. With Vote Forward, you can sign up to “adopt” likely voters from the Vote Forward database, download a letter template and add your own message to nudge them to the polls. So far volunteers have already written letters to over 10 million likely voters.  

14.  Blue Wave Postcard Movement. This organization allows you to sign up to send personalized postcards to likely voters in key battle ground states. The postcards come complete with websites, phone numbers and QR codes to help people get answers on where and how to vote in their state. 

 15. Postcards to Swing States. Volunteers with Postcards to Swing States have already signed up to send 15 million postcards to voters in 15 key states. But you can still donate to help pay the cost of postage, which Postcards to Swing States asks their postcard writers to cover themselves.

 16. Clean Energy for BidenClean Energy for Biden is a network of clean economy business leaders and advocates working to elect Joe Biden as President, as well as advance policies, technologies and investments to address climate change in general. They are hosting a range of virtual volunteer opportunities, including regular phone banking, which can be done from wherever you happen to be at the moment.

However you stand up for democracy this November, be sure to tell your friends, your network and your community and invite them to join you. VOTE. It’s the only way we can look forward to a more peaceful, just and generous 2021.