Who’s Going to Pay for It?

This piece is part of the Prospect's series on progressives' strategy over the next 40 years. To read the introduction, click here.

What people remember about Powell's memo is his plan to establish a conservative infrastructure to combat what he perceived to be left-wing and liberal bias in every sector of American life.

But his real success was in convincing the business community to pay for it.

There are many strategies we could choose from to turn the tables on conservative institutions like the Chamber of Commerce. None of those strategies, though, will mean much if we don't have an ongoing source of revenue to take us to scale and keep us there.

Businesses came around in part because spending money on Powell's strategy was good for their bottom line. Fewer regulations meant bigger profits. Weaker unions meant less in payroll and benefits. Tax breaks meant reduced expenditures.

Forty-one years ago, union dues and other fees allowed the labor movement to match or exceed the total funds provided by business. But union membership has declined precipitously since then-the ultimate indication that Powell's plan has succeeded-and along with it, union resources. Less than 3 percent of charitable giving in the United States goes to progressive social change. Foundations currently committed to social-change philanthropy simply do not have the capacity to take their work to scale.

So where will the money come from?

First, we need to grow the number of social-change funders. Foundations can live within themselves, making grants and patting themselves on the back, but if we stop there, our movement will never compete. It is imperative that foundations expand their missions to include aggressive outreach to others in the philanthropic field. Foundations devote considerable staff resources to develop our dockets but few resources to collaborative ventures with others. In addition, while much attention is paid to the larger, more established foundations, the 10,000 family foundations, which are newer to their philanthropic endeavors, provide a huge opportunity for new ideas, new resources, and new collaborations.

Second, we need to take risks. Ideas that might sound outlandish, like growing employee-owned businesses, community-development credit unions, and other forms of progressive wealth building, require a sustained and significant commitment. If we use our philanthropic dollars to build new business models, we might in turn generate new revenue streams. Some innovators in the social-change sector have spent years encouraging institutions with significant investment portfolios to put some of their money in community development financial institutions. These CDFIs then provide loans to individuals, nonprofits, and small businesses in struggling neighborhoods that have long been exploited or ignored by the big banks. When our investing decisions match our values and advance our strategies, we could ultimately create new revenue streams and shift the balance of power.

Finally, we have to recognize the need for alternatives to conventional philanthropy. There will never be enough foundations endowed by liberal millionaires and billionaires to compete. The labor movement has a model that works: union dues. But only a handful of liberal groups are mostly self-funded. Avaaz and Credo Action provide useful models: The first is wholly member-led and supported, the second is underwritten by a for-profit phone company.

We will need to be creative and test the boundaries of how we have imagined funding our work, but if we are serious about winning the next 40 years, let's make sure every ambitious strategy comes with an equally ambitious funding plan. 

Read the other pieces in this series: