Caroline Grossman:
Hello, and welcome to the first day in this year's virtual On Board Conference on Nonprofit Board Service hosted by the Rustandy Center for Social Sector Innovation.
I'm Caroline Grossman, Executive Director of the Rustandy Center and Adjunct Assistant Professor of Strategy here at the University of Chicago Booth School of Business.
Now it's in its eighth year, which makes me pinch myself because I haven't missed one yet. The On Board Conference is built on the belief that nonprofits and their boards of directors have the potential to drive social and environmental change. Today's event is bringing together university, alumni, nonprofit leaders, current students, people around the city of Chicago, the country, and the world interested in making an impact on the issues that they care about.
As Chicago Booth's Social impact hub the Rustandy Center also believes that serving on a board is a meaningful way to give back. That's why a tenet of on-board remains helping to connect would be board members with nonprofits. And as with all of our work, On Board elevates insights from research and from practice, encourages innovation and using business fundamentals to tackle pressing challenges and aims to develop that people and practices with the potential to truly change the world. But because this is not been a typical year this will not be our typical On Board. This year force many nonprofits to change their approaches whether by rethinking service models scaling existing efforts in either direction growth or scaling back or revisiting missions.
As we designed On Board 2021 we wanted to respond to these challenges by offering sessions that provided insights on topics like learning to lead through the lens of inclusion, understanding which fundraising strategies are unique to COVID-19 and the climate in which we're living and which ones will persist well into the future. Nonprofits have thought about how to leverage board members to manage multilayered crises when they arise and so much more.
Before we jump into today's eventI'd like to extend special thanks to our platinum sponsor, William Blair for helping to bring this year's conference to life, William Blair is such a strong partner of the Rustandy Center supporting the On Board Conference our impact investing programs and community-based initiatives. Through this support William Blair demonstrates a deep commitment to developing the people and practices necessary to strengthen the social sector and our communities. Truly thank you.
So today we'll lay the groundwork for the topics that we'll explore throughout On Board. We'll kick things off with our keynote featuring an impressive panel of social impact leaders, sharing insights on the challenges nonprofits have faced this past year and how they plan to apply learnings to their future work. We'll then transition into our breakout sessions. I hope to see many of you there. I will be in at least one of them. So if you registered for the finding your right
fit On Board workshop you'll kickstart your nonprofit board search. If you registered for a networking session you'll have the opportunity to connect in small groups. And if you didn't register for either you can still do so by navigating to the All Sessions page on the Cvent Attendee Hub and selecting Add Session. And if you have questions you can message any of the organizers.
So with that, let's dive into today's keynote. This discussion will provide helpful framing for the sessions to come by exploring the donor response to the pandemic. And this year's racial reckoning, how nonprofits and their supporters can adapt, the role that boards can play in helping nonprofits push forward racist missions and really how the nonprofit sector is transforming. As a result of this year's events. After our panelists discussed a series of questions we'll leave some time to take questions from all of you. So please feel free to submit a question anytime using the Q&A feature on the right side of your browser. And we'll try to get to as many questions as time allows. I'm going to just quickly introduce our speakers but I encourage you to check out their full profiles on the Speakers Page of the Cvent Attendee Hub.
So our moderator is a dear friend of mine, Julia Stasch currently the philanthropy Executive in Residence at the Rustandy Center for Social Sector Innovation and the immediate past president of the John D and Catherine T MacArthur Foundation. Julia was also chair of the board of the MacArthur Affiliate Lever for Change and is just an incredible partner to the Rustandy Center to the city of Chicago, to any organization she touches as she really helps advance all of our work towards even more good.
So thank you, Julia for joining us and moderating this session we're also joined by Gloria Castillo. Currently the Director of We Rise Together and also the previous past president and CEO of Chicago United. Bradford Smith is the president of Candid and also serves on the boards of the Tinker Foundation and the International Center for Transitional Justice and Kevin Washington the president and CEO of the YMCA of the USA the 14th person to lead the organization and the first African American to lead the way in the US and is also on the boards of Springfield College the Congressional Black Caucus Foundation and the Chicago Land Chamber of Commerce.
I am truly honored to be introducing this panel this keynote, this conference, thank you to my team who has put together this wonderful set of events. And with that, I will turn it over to Julia Stasch.
Julia Stasch:
Well, thank you, Caroline. Thank you so much. It's an honor for the four of us to kick off the conference this year, and I'm excited to join Brad and Kevin and Gloria in conversation. So let's just, as Caroline said, let's dive right in.
So the fact is, and I'm sure that each and every one of you listening in today knows this that non-profit board members and their leaders face an enormous challenge that develops that requires many things but five things come to mind for me first and foremost, a demand for really critical self-reflection a demand for agility, a demand for openness to new ways and new alliances a willingness to experiment and re-imagine. And then for me, one of the most important things is an exquisite, absolutely exquisite, understanding of the changing environment, how and where resources come from how the lives and livelihoods of customers, clients, and constituents have been altered, sometimes even disordered and dislocated. And what this moment in American history is demanding with respect to race.
Caroline described the three themes that animate this conversation, the first is how donors are responding to the pandemic and the demand for racial reckoning. So let's start with you, Brad. Overall, why don't you tell us a little bit about what the donor response to the COVID 19 pandemic and to the demand for attention to racial disparities. Tell us about the donor response to these seminal events in our history.
Bradford Smith:
Okay well, thanks, Julia. Just real quickly Candid for those of you who don't recognize the name immediately, we're not that dental supply company that you sometimes see with Candid. We're actually an 80 year old startup that was created through the merger of what was the Foundation Center and what was GuideStar into essentially information service for the social sector. We track information about nonprofits about foundation giving, and we follow the money and the flows of money throughout the sector. Who's giving it, who's getting it and to what issues and what populations it's going.
Since the onset of the COVID-19 pandemic we've been tracking in real time as much information as we could about donor response. In the case of COVID today, beginning February of last last year, we've been able to track nearly $23 billion of grants and pledges that have been made around the world.
What's really fascinating about this is when we first started tracking this there was very activity in the United States. It was all China. It was Chinese corporations and Chinese foundations providing COVID relief resources in China. Then the world map moved to Italy and Spain and parts of Europe. As the COVID pandemic hit Europe then it came to the US. Now the US giving is eclipsed. We're giving an all of the countries. So $23 billion in grants and pledges that we've tracked so far.
After George Floyd was murdered in Minneapolis immediately within weeks, actually within a week, corporations and celebrities were very quick to step up and make pledges-- seemed the minimum amount of a pledge was about a hundred million dollars on up. Then we began to see foundations come in and we have tracked, since George Floyd's murder, $16.2 billion in racial equity, pledges, and grants. Now, what's really interesting about that is since I'm sorry we tracked 12.6 billion. Since 2011 the total we've been able to track is 16.2 billion. So 12.6 of that 16.2 has come since George Floyd was murdered.
So there's a tremendous influx of resources into the field. And maybe as we get into discussion there's a lot of hope with that but there's also some patterns that we're seeing in terms of where the money is going. And who's benefiting that look more like old philanthropy than a revolution or a new approach to addressing inequality in our society.
Julia Stasch:
Well, thank you for kicking that off the I think we'll want to dig in a little bit more into exactly where the money is going and whether or not it actually signals a real inflection point in American history, but Gloria We Rise Together in the rest of that title is for an equitable and just recovery. That is an initiative. That's a forward-looking initiative. That's born out of the Chicago Community Trust COVID-19 Response Fund. But what were some of the lessons from the pooling and distribution of resources of the Response Fund that are fueling the recovery effort?
Gloria Castillo:
Well, Julia first, let me say it's wonderful to be with you. And I'm so thrilled to have an opportunity to talk to people who are interested in board service. The Rapid Response Fund taught us a great deal. First of all, in just six months over 6,000 generous donors raised more than $35 million and a hundred percent of those dollars went back into the community in this response effort. And that was for emergency services and basic needs.
What we learned in this process was that and you spoke to this is that leaders must be agile and they were very agile in this effort. And we brought together the Chicago Community Trust and United Way of Metropolitan Chicago. Those two CEOs, Helene Gayle and Sean Garrett were able to work collaboratively. And what's critical about this is we understand that the board must have confidence in their leaders in order to be agile. So it's really an important part of collaboration is that you have a strong relationship between the leaders of an organization and the board. We also learned that we can collaborate across organizations because we had professionals from many foundations working side by side to leverage their knowledge and their systems in order to make the grants that really moved $35 million out in a matter of weeks.
We also found that those hyper-local organizations who received the dollars it was important that they were proximate to those who were most in need. And it was, because we were able to work collaboratively as a foundation community with a deep knowledge of those nonprofit organizations and the communities they served that we were able to be effective in this kind of emergency and very, very critical response time.
And then finally, the fact that the philanthropic community has become very agile in utilizing data was also a very important factor in this particular moment because we needed to understand where the impact of COVID-19 was having its kind of worst effects. So we knew that the black and Latinx communities in Chicago had higher infection rates higher morbidity rates, they were more economically fragile. They had higher rates of business closure and they were struggling to get the kind of federal support that they needed. So they needed help with that infrastructure. So there was a good deal to be learned but that really showed us how important it was to have agile leadership and a cohesive community in order to respond in a moment of crisis.
Julia Stasch:
So Brad, Gloria is talking about this in the local concentrated geography of greater Chicago land from your vantage point, your national vantage point tell us about some other funder experimentations. What are some of the things that funders did that were real that revealed that they could work in different ways to support nonprofits? Tell us about some of those experiments and whether or not you think some of them are here to stay.
Bradford Smith:
Yeah, no for sure. And our organization, we track foundation and nonprofit activity across the entire United States and around the world. So we look at the whole sector and there are lots of interesting examples we're seeing one of the big trends we're seeing is last year especially a lot of foundation funders got in touch with the organizations they were supporting and said the grant that we have with you it has restrictions. Can we ease those restrictions or totally eliminate those restrictions and turn this into general operating support because the demand and the need was so great for nonprofits that foundations were very quick to realize that they didn't need more conditionality on the grant. They didn't need more restrictions. They didn't need a bureaucratic process that could get them funds in six to 10 months. What they needed was the freedom to be able to use the resources that they'd already received to maximum benefit. So that's one of the things we're seeing.
The other is just a renewed interest in foundations in making general operating support grants. General operating support is not the majority of grant support made by foundations most grant report is restricted for certain outcomes. There is a mismatch between the demand for general operating support and the supply of general operating support. And we're beginning to see an uptake in general operating support.
And then I think the other thing we're seeing is just sort of new forms of philanthropy that have arisen. Gloria talked about this kind of very closely coordinated collaborative effort working at speed and under pressure that's something new and the foundations aren't really known for speed. So when foundations are able to do something like that it's really worth noting.
And then we see things like McKenzie Scott, who didn't create a foundation. Basically she hired a bunch of consultants. She did a lot of client work behind the scenes to examine which organizations were delivering the most vital surfaces in a crisis, and then came public with a blog piece saying that I'm giving away $5 billion to the following organizations. And most, all of that funding as far as we know, was for institutional support in general operating support. So this idea, somehow that to meet with current needs as well as long-term social environmental challenges you need viable organizations and viable organizations need flexible support. I really hope that's the trend that's here to stay.
Julia Stasch:
And maybe flexible institutional support reflects a higher degree of trust in the relationship between a grantor and a grantee. But Gloria, you talked about organizations actually being really challenged by the economic consequences of the pandemic but let's turn to Kevin for a second. Many YMCAs were actually forced to suspend traditional operations or close facilities, but as I understand that they pivoted quickly to continue serving their communities. What did that look like in different places across the country?
Kevin Washington:
Well, thank you for having me just so you know 97% of our facilities and so to give you some concept of what that means for many folks, we're in 10,000 communities we have 2,700 facilities across the country and that's not only local facilities, but 97% of them were closed or temporary close 75% of staff were furloughed or laid off. And just to give you an example I collected revenue losses across the network. So for 2019, we did 8.4 billion across the network. For that time we exceeded the losses exceeded over $3 billion for the YMCA. So it was devastating for us.
And despite that we turn to really become what I would say is a vital community asset and really highlighted some of the things that Brad just talked about. We had childcare for our healthcare workers and emergency response. We had over 1300 sites set up across the country to deal with those issues. Few distribution became a significant issue because with schools being closed and opportunities for kids to get access to food YMCAs supported that network with over 1100 sites, we did hundreds of thousands of wellness checks for senior citizens across the country blood drives and even sheltering the homeless in some of our places in Chicago, in Los Angeles we worked with the city government to house some of the homeless folks to ensure that they were not exposed to some of the issues of COVID.
I've worked for the organization for 43 years. I know I look young, don't worry about it. I have never been proud of the work that was going on. It was really the vital community asset going to work, partnering with hospitals the American Red Cross, Food Banks and as a highly collaborative organization we know that our ability to collaborate really reinforces the opportunity to provide access. And those areas that we talked about food children and things of that nature. And the final thing, Brad, you really talked about it several of our donors that we were close to relieve the restrictions so that we can use those resources in an unrestricted way to support much of the work that talked about. That was of key to helping us get through some of the times that we're currently in it was we pivoted and had to and had to endeavor.
Julia Stasch:
But I think what both of you are talking about is a degree of agility, both on the part of donors and on the part of nonprofits that the time's really required. And so that is a characteristic I'm hopeful is something that boards really try to engender going forward on both parts. But Kevin one follow up for you the non-profit sector worked closely together to advocate for support from the federal government. How did that collaboration come about and what did it achieve?
Kevin Washington:
Well we were fortunate to be able to collaborate collectively and I will tell you, I had a phone call with Neil Denton. Who's my senior officer in Washington, DC. And it was clear to me while philanthropy has done a great job. I knew and all of us knew that it wouldn't be enough to close the gap that nonprofit organizations were gonna face during this. And the only entity that could do that was the federal government. So collectively all of us very rarely do nonprofits work as collaborative we had under these circumstances, but they did. And it really formed what I would call a trade group. Some of the, what the airlines was doing in the restaurants and others were doing nonprofits got together to do that.
And one of the things we learned, one we could open any door, any door. We had access to all 50, a hundred senators all state representatives because of the nature of the work that we were doing. And that's how the relief charities act was happening. All the major national nonprofits got together and it's been quite a year. We were eligible for the payroll Protection Program eligible for the ERTC which is employee tax credit program, for many nonprofits they do what's self-insured a reimbursement for unemployment compensation. The federal government picked up 75% of that tab, 75%. And just to give you an example, one of our larger YMCAs New York, $800,000 a quarter for unemployment compensation. So this was really a significant issue for them. Historic investments in childcare came out of the American rescue effort. So it really was a saving grace for nonprofit organization.
Not that it really closed all the financial holes but what it did was give organizations time to what I would say, revitalize and innovate because they knew during this crisis this was what they needed to give access to capital to give them an opportunity to think about what's gonna happen post COVID. And I think that was one of the great outcomes of this our ability to work collaboratively to help save the industry
Julia Stasch:
But it was truly a proof of concept of the power of collaboration and maybe a little bit of the submerging of individual ego and identity for the benefit of the larger whole Gloria one followup for you too, though. One of the distinctive aspects of We Rise Together is that it really centers community voice, like you said but here in resource allocation decisions, talk a little bit about the shift in power and whether or not you think this is something that may be sustained.
Gloria Castillo:
Well, I would say that Kevin made a really important point in that philanthropy can't do everything. And so that's the first recognition that we need to make. And so when we think about We Rise Together for an equitable and just recovery making sure that we are multi-sector is really important bringing together philanthropy, business, local government as well as community voice. What generally happens when we think about big decisions, big infrastructure decisions big decisions in terms of revitalizing neighborhoods. Very often it is, does not include those who it most effects the power decisions generally lay outside of those who it most effects.
So what we've done with We Rise Together for an equitable and just recovery is created a true multi-sector approach with community voice at the center. So as we look at major investments and so we're looking at three areas of investment, we're looking at our kind of cornerstone neighborhood investments which we would expect to see in the built environment. We would expect to see business practices, which are a kind of investment because business can bring capital to the table and they can bring job creation and add procurement opportunities. And then we're looking at the city resources as well, public policy.
The way that you bring that together is to make sure that that multi-sector approach comes together in unison rather than in siloed approaches. And that we're doing through working groups where we can actually have members of community participate in the decisions as to where the resources will be invested and how they will be deployed. It's we are in very early stages of this, but it's important that we start, we begin with this approach very often we've seen approaches where decisions are made and then the community voice is brought in later to let us know how you feel about the decisions that we've already made. Well, once you've done that you've taken agency out of the community. What we wanna do is put agency back into community so that they are part of the early decision making process. Then as we move forward in making the investments and working with business and working with the city we are really informed by those who are most affected by the decisions.
What we have found in taking this approach is that there is a great deal of funder interest. And the reason there is funder interest is because we know that we need to approach our work differently at the Chicago Community Trust part of our mission is to close the racial and ethnic wealth gap in order to do that we need to, again, bring together philanthropy business and government in a unified manner we found that funders are really interested in making sure that we have a different and new approach. They see that in Chicago we've had this long standing racial wealth gap. And what that has done is that has actually slowed the growth of the city both in terms of economic growth and population growth. And so in terms of economic health of the region, we know that when we can close that racial and ethnic wealth gap we're actually going to strengthen the entire city in the entire region. So putting community voice at the center has become a kind of attraction for funders who really want to see change in a significant and sustainable manner. And so that's, it's both the process but it's also the attraction.
Julia Stasch:
So Brad that'll probably be a trend that should be worth watching over time and on the Candid front. So the next sort of segment of the conversation I call the anti-racist imperative. And so this is the moment in time in our history where many commitments are being made and much narrative has changed about past complicity and future participation in changing the dynamics of inequities. But let's talk about it how that sort of anti-racist imperative is playing out in organizations, Kevin, you are a national network of really diverse local organizations but how is The Y overall responded to this moment in time?
Bradford Smith:
Well, thank you, Julia. The Y has been working intentionally around diversity, around race and equity for well over 20 years. But like most of us the George Floyd murder really was a tipping point for how we need to intensify that work. And we're having a reckoning in our organization.
So what I say is we're an American institution we're dating back to 1851 and we are a reflection of our country in good ways and in bad ways. Racism has been a part of our past and unfortunately it's a part of our present. So we have to deal with that internally. We know that as an organization if we wanna be effective at that we have to start with ourselves, start with ourselves. And that's where we're going.
What I say is we're on a journey to become an anti-racist multicultural organization. And it is a journey. We meet communities where they are, and clearly some communities are much further ahead than others but we meet them where they are. If we're gonna be effective at this tool we have to confront ourselves first.
And so we've been working on all kinds of fronts, operational, bias training, staffing leadership pipeline, skill, and competency development. In fact, we've been working with an organization out of New Orleans called the People's Institute that really helps us understand and frame, what does it take to become an anti-racist multicultural organization?
We don't want people to feel guilty about privilege. We want them to leverage it to move forward in this process. And that's been the conversations we've been having internally. They've been difficult. Some of them have been very difficult but I firmly believe you can't face change. You can't have change in an organization unless you face the past and understand that interpret it and move forward. And so that's what we're doing. It's going to be a journey. It's not going to be quick, just like we didn't get here in 10 days, we got to in 400 years it's gonna take time for us to do that. But it has to be the commitment of the organization and the intensity and the consistency. It's gonna make the changes we want internally and then for our community and hopefully for our society as we move forward. That's our plan.
Julia Stasch:
So in that context, Gloria, what is the role of the board in the journey of an organization from an organization today to an anti-racist organizations?
Gloria Castillo:
Well, it is really it is a point of decision recognizing as Kevin said, recognizing that we have this history but we have a choice about the future that we will create. And sitting on the board of the Field Foundation, for example, four years ago we went through a process of educating ourselves both those self exploration and jointly as a board to think about how we could become more focused on racial justice in our philanthropy. When I sat on the board of the Chicago Community Trust again we made a decision and we went through a process of really exploring what would it mean for us as a board to work together, to close the racial wealth gap?
So I think the point of the individual introspection is critical but also understanding that this is a decision to be made and it goes through a process of change management like every other process of change management. And we have to treat it as an imperative. It is really how we have to think about moving forward and put the proper resources into it. So you can't simply say we're going to change our attitude but when you go into a process of change you always have to put resources into it. Which means that not only is the board going to go through training but executive level staff is going to go through training. Mid-level staff is going to go through training. We're going to cascade that down to all staff so that people start to come together with a common vision a common language a common set of practices. It's not going to change overnight but certainly we have to bring everyone along.
And then we need to think about how do we interact with our stakeholders? How do we bring that racial justice lens in our interactions with our stakeholders? How do we, and on the philanthropic side how do we have a conversation with our funders those who have a donor advised funds, how do we help them make good decisions that are anti-racist decisions?
So you can see that this is not simply something that the board engages in for themselves, but it is really how the board engages in a way that transforms the organization transforms stakeholders, transform the larger community. And I will say sometimes it takes particular actions. So for example, very often we don't think about where we put our dollars. How do we invest our dollars? Who do we invest our dollars with? How many minority investment advisors are we utilizing? So we need to put action where there where it intersects with the economy, because if we're really going to be an anti-racist organization we affect the economy as well.
Julia Stasch:
So before I asked Brad to sum it up with some global comments, I just wanna remind everyone in the audience there to submit questions. We'll have time for a few of them via the Q&A feature on the right of their browser.
So Brad, to sum it up with special relevance here for board members and leaders and what they need to know to function effectively in this new world that everyone is describing just in a couple of global comments how do you see the nonprofit sector as a whole transformed by the extraordinary events of 2020 and the aftermath?
Bradford Smith:
Okay nothing like an easy question, right? So again, when we talk about the sector in the aggregate we have to realize we're talking about an enormously diverse and highly segmented sector over 1.7 million Non-profits in the US and they're slightly over 100,000 foundations. Now everybody knows the Gates Foundation the MacArthur Foundation and the Ford Foundation the big names, but the vast majority of foundations are in many cases, a husband and wife, and a checkbook.
So, and the same with nonprofits you have very large nonprofits with budgets of in the billions or well, over a hundred million the long tail of nonprofits are very small organizations. So we're dealing with a tremendously heterogeneous sector but as much as I can hazard a guess I actually think boards need to be prepared for this year being a much more difficult year than they expected. I think because of the government intervention that Kevin talked about the foundation response that Gloria talked about there were a surprising volume of resources available to non flexible resources available to nonprofits that they didn't expect to have in 2020. It's not as certain that those will be available in 2021. And some of the problems, underlying problems of nonprofits with problems with their business models, the facts that they really didn't have enough revenue to cover. Their expenses were sort of masked by having this injection of capital. But those problems will come back to roost at a time. I think because of the racial reckoning we're talking about there's a high degree of internal and external pressure on leadership and boards of organizations. So I think one thing boards are gonna have to do is really pay attention to the viability of the long-term finances of the organization and not sort of surviving for relief packages, relief package.
The second thing I think is to find the right balance between the inward focus that's needed to get your house in order when it comes to anti-racism and anti-sexism and the incredible demand that exists in the outside world. We're in a kind of a strange moment. It's very different than 2008. I remember that vividly 2009 when there was an economic recession there's actually the stock market's very strong foundations have a lot of resources. And these corporate pledges I mentioned this $12.6 billion of resources for racial equity, since the murder of George Floyd the bulk of that coming from corporations in some ways this money chasing use cases a lot of these corporations are saying we want to devote a hundred billion dollars to black led or organizations led by people of color.
I can't tell you how many phone calls we're getting from mid-level staff in these corporations are saying, "hey how do we know which of the organizations led by people of color?" So if you're a national, there's no national registry of organizations led by people of color. So there's a lot of surveying going on. There's a lot of local intelligence and how you aggregate that up when you're a corporation dealing in multiple markets. So there's a lot of information needs.
And one thing I would urge boards to do, please we have something there are GuideStar transparency seals, gold platinum, silver, bronze seals which organizations provide information about themselves. And they get a seal of transparency. There's organizational demographic component of that, about the demographics of the leadership the board, the staff, internal equity practices. That's all been voluntary. We're beginning to make parts of that mandatory.
So far out of 80,000 foundations or non-profits that have received those seals only 7,000 have provided demographic information on themselves. So one thing boards need to be able to do is to encourage their organizations to also divulge information about their own internal diversity and demographics and foundations need to foundations are sending out unilateral surveys. Foundations are serving their grantees independently and that information is not being coalesced into sort of a national data system that would make the transaction cost of moving resources to organizations led by people of color, much more frictionless.
Julia Stasch:
Okay Kevin, how about this question for you? One of the questions from an audience member question is many nonprofits are stretched thin serving their communities, addressing the financial implications of the pandemic, supporting staff, redefining the workplace examining their DEI efforts and more how can leadership and boards set priorities
Kevin Washington:
A couple of ways. One is as you assess your community and finding out specifically what it is that community needs but more importantly, one of the things, the traps that a lot of nonprofits get caught up in and I can say loud, I mean, I can improve the why in that scope is we try to do too many things narrowing the focus to figure out what you do well and putting your efforts behind that.
And thirdly, I would say the other area is particularly as they expand themselves and find those resources being thin, what we're approaching now in many of our YMCAs that are varied in size is what we're calling. We're putting together a management service organization. Because I think that there is the replication of administrative costs across many of our smaller nonprofits, if we can coalesce that. And which we're trying to do in The Y is to ensure that we're spending most of our resources on delivering program and services and collating ourselves together, save on some of the administrative overhead that really kills our ability to be as effective as we wanna be on the ground. So I would say that's one of the areas that smaller nonprofits should think about as they move forward 'cause you really want to spend your time and energy doing the programmatic things that you know is gonna make a significant difference in your community.
Julia Stasch:
While still paying attention to what are the practices and the infrastructure you need to be viable.
Kevin Washington:
Correct.
Julia Stasch:
Brad is talking about question for you, Gloria what do you think can be done to sustain unrestricted giving to nonprofits as a long-term way of doing business?
Gloria Castillo:
Well, it's part of a mindset and it is really getting to know. I think Brad mentioned this sort of really getting to know the organizations that you serve that are your stakeholders and really becoming knowledgeable about them in a way when you have those kind of unrestricted grants those general operating grants you know what is being done.
So part of the reasons we've had restricted grants is it was it gave us a way of having confidence that the work that is being done. And so I think it's really becoming much more relationship based and less RFP based. And I think that is part of the process that's happened when I said that we became more knowledgeable about those hyper-local organizations in the response effort, we really had confidence that they understood their communities and could operationalize those relationships were critical. So I really think it is part of the relationships between the philanthropy community and the nonprofit community. That's gonna create that environment for sustainability.
Julia Stasch:
Maybe only one downside to what you said was as it becomes more and more relationship-based you risk the exclusive club nature of relationships and you sort of close some doors to organizations that you might not know that something to balance.
Kevin, you said something interesting here. You said what you stated that you encourage people to leverage their privilege to create change how do you make that happen while still supporting equity?
Kevin Washington:
Well, because I do think that as people think about that, oftentimes is from a guilt perspective and we wanna take the guilt away because we want them to use that to leverage opportunities moving forward. So that's part of the conversation you have with folks 'cause in many of the groups that they're feeling guilty, well fine, you maybe the privilege was given to you. So how can you use it to further advance causes of equity and work in that particular perspective? And I think that's the way we approach that. And then too often some of the conversations we have creates anger and jealousy, and we got to get rid of that if we want to continue to move forward in this equitable work that we wanna do.
Julia Stasch:
So, Brad here's an interesting question from a participant, they say the 2020 pandemic has left the resource divide wider than ever with the wealthy enjoying unprecedented wealth. How much of this increase in recent funding stems from that spike? And can we expect the same level of support to continue? How can we encourage sustained higher level giving?
Bradford Smith:
Yeah, I think another way to look at what's going on now is this is a crisis which has brought home to roost a series of long-term trends. I mean, there is the pandemic itself is related to climate issues among public health. A lot of other issues, the growing concentration of income in the US economy and the global economy is something that's been going on for decades and both Democratic and Republican administrations, racial reckoning, race, racism in this country was not invented when George Floyd was murdered. It goes way back in this country and around the world. So these are long-term trends we're seeing. So there's a long-term trend and concentration of income.
We are seeing a larger proportion of that going to philanthropy I think largely because of the efforts of things like Bill and Melinda Gates and the giving pledge where they have actually created a movement. I mean, it's kind of strange to think it was talking to the staff of the giving pledge last night and said what you guys are doing is you're creating a billionaire social movement social movement made of a billionaires that have each other as resources that meet, that have placed a positive value on spending a significant amount of their wealth on philanthropy. And then you're seeing people like Jeff Bezos is now getting on board Mackenzie Scott and this is a global trend we're seeing. So I think we'll continue to see this. This is one it's part of the volume of the resources.
I've worked for a billionaire in a Swiss Foundation for a number of years. And it is inconceivable to all of us to realize what that kind of wealth is. You can give $50 million for all of your kids to set them up for life. You can buy a condo in Ibiza a chalet in Gastaut and a home in Oahu and you still have so much more money left over. You can't figure out what to do with it in your life. And increasingly we're seeing that the answer to this is philanthropy.
Now there's lots of problems with this. There's problems about taxation. There's a legitimate discussion about how much of that should go through to government for higher taxes and how much should it be left to accumulate for private ends? And of course there's no central planning agency or ministry for philanthropy philanthropists are very individual in their approaches. And you can't create, you can't replace. As a lot of us have said, large government systems like education, health infrastructure with philanthropy. And even with all this money, philanthropy has about a little over US Philanthropy has a little over a trillion dollars in assets and spends around $90 billion a year in grants. Compare that to the size of the stimulus packages that are coming out. And it gives you some idea. So I think what you're gonna see is that philanthropy will increasingly be a niche funder emergency support long-term innovation sometimes going against the grain funding, basic science when the government was shutting down funding for basic science. And then risk-taking that I think is the appropriate role for philanthropy going forward, not to replace it
Julia Stasch:
Think of all the questions we're not able to answer. Like how should nonprofits be thinking about the source of the money that philanthropy has to dispose? How do we think about nonprofit mergers? How do we think about the different kind of workplaces that are emerging from this period of dislocation? There's so much for board and nonprofit leadership to think about. And I wanna thank each of you for your contribution to this kickoff conversation for this conference.
And I want to say to those of you who are listening in if you're joining us for one of our breakout sessions from 12.30 to 1.30, we'll take a quick five minute break and then you can join your next session by navigating to the My Schedule page and selecting Join Session. Last we'd love to hear your feedback on today's sessions. You can take a survey for each session by navigating to the My Event tab and selecting Take Survey to share your feedback. We appreciate it. If you would take a few to do this so we can incorporate your feedback into future sessions. Thank you so much for your interest in helping your organization make this a better world. And we hope to see you at our next On Board sessions on Thursday, April 22nd. Thank you again.
