Laura Cronin is a regular contributor to PhilanTopic. Recently, she chatted with Kimberleigh Smith, board president of the New York City-based Paul Rapoport Foundation, about the foundation's decision to spend down by 2015, what the foundation is doing to help grantees navigate that transition, and Smith's advice for other foundations that may be considering spend-down scenarios.
Philanthropy News Digest: As a founder of two of the most important nonprofit organizations in New York City the Lesbian and Gay Community Services Center and Gay Men's Health Crisis —and as the donor who created one of the first foundations to make grants in support of LGTB communities of color — Paul Rapoport left not only a financial legacy but a substantial legacy as an innovator in the nonprofit sector. How has that legacy shaped the Rapoport Foundation's giving program?
Kimberleigh J. Smith: Unfortunately, I never knew Paul, but from what I've been told, he was sharply intelligent, funny, and a generous human being who sought to give to and support communities that were marginalized, including the LGTB and queer community. That has always been at the core of PRF's giving and it has not changed in the years since Paul's passing. But the foundation has adapted with the times, and today we pursue this vision in a slightly different way in order to continue to reach those least likely to access resources from mainstream sources — those being communities of color, young people, seniors, and gender-non-conforming folks. This shift in the foundation's mission is, in and of itself, a reflection of Paul's original innovative spirit. Furthermore, we don't just confine this legacy to our giving. Our board of directors, for example, reflects the racial diversity we promote in our giving. I wonder whether Paul could have ever imagined that one day his foundation's board would be led by an African-American lesbian! We're very proud of how Paul's life as a gay, Jewish, attorney, lover of culture and the arts, and philanthropist has impacted our foundation and its giving today.
PND: In 2009, as the recession was beginning to bite hard, the board of the foundation decided to concentrate its funding over a five-year spend-down period ending in 2015. Can you describe the thinking behind that decision and tell us how the foundation is helping its grantees to navigate what has been a stubbornly difficult funding environment?
KJS: The decision to spend down was a difficult one for the board and staff of PRF to make. It had become clear, however, that the foundation's endowment could no longer support or sustain the foundation's existing grantmaking and staffing levels. So we decided to turn the economic downturn into an opportunity by pivoting our focus and making larger grants to fewer grantees with the idea of generating deeper, longer-term reach and impact. We really wanted to help our grantees rise to the challenges they are facing but continue our years of innovative and responsive grantmaking as long as we could.
To help us navigate these difficult decisions, we engaged two sets of consultants through a competitive process. We used Rockefeller Philanthropy Advisors to help us crunch the numbers and Marta Siberio to guide us through creating and revising our program guidelines. Both were excellent choices.
We have since developed funding guidelines designed to help our grantees survive and thrive in this difficult funding environment. We are purposefully focusing on grants that promote and espouse racial and economic equity, that generate sustainable programming and service, and that have the potential to drive impact even after our support has ended.
And we're really proud to have recently launched the Paul Rapoport Cash/Operating Reserve Fund Project, which will combine intense fiscal technical assistance with actual reserve funds for eligible organizations in order to help some of our grantees cover gaps in their cash flow. The Nonprofit Finance Fund is assisting us in selecting and training eligible groups from our pool of existing grantees. How cool is that?
PND: The board has been engaged in the implementing the decision to spend down for some time now. What have you learned, what positive outcomes are you seeing, and what concerns do you have? And what advice do you have for other foundations considering a similar approach?
KJS: I think I can speak for the board and staff in saying the implementation of the decision to spend down has been an ongoing learning process. And I think we all feel pressure to do it right. But while, as a team, we've always been disciplined and driven, having an end date really keeps us focused and on our toes. Among other things, we've learned that the concepts of "sustainability," "impact," and "racial and economic equity" are big, complicated ideas that are continually evolving. We continue to learn how to be flexible and nimble and manage risks and challenges within a shorter amount of time. It's hard, but I'm confident we're on the right track. There's also something humbling about speaking to grantees and potential grantees about the notion of sustainability when our own decision to spend down reflects how challenging sustainability is these days. I like to think this dissonance gives us a deeper understanding of what organizations are going through and eliminates some of the guess work when asking difficult questions like, "Should this organization or program continue in perpetuity?"
My practical advice for other foundations considering this approach is to be transparent with your grantees about your decision. It's important to give grantees real notice before funding is shifted or ends. My philosophical advice is to work closely with staff in order to ground any decision of a possible spend down in your foundation's values and beliefs. And try to do that kind of "generative" thinking — a term I learned at a conference a few years back — separately but in conjunction with your strategic and fiduciary planning.
PND: Can you give readers an example of a recent grant that demonstrates how increased funding during difficult financial times can make a real difference for a small nonprofit?
KJS: You might get a different answer to this question depending on which member of the PRF board or staff you asked. I feel good that all our recent grants have made a real difference. But one example that rises to the top for us is the Ali Forney Center, whose mission is to protect lesbian, gay, bisexual, transgender, questioning youth from the harm of homelessness and to support them in becoming safe and independent as they move from adolescence to adulthood. Just prior to the recession, AFC had experienced significant growth, so it needed to develop its own in-house development department. After our decision to spend down was made, we awarded the organization an infrastructure development grant that has enabled it to develop individual donor and special events income streams at a time when government funding has been constrained. In fact, the new dollars today comprise nearly 12 percent of the organization's revenues. This is precisely the kind of forward-looking thinking and planning we want our organizations to be able to do with our funding.
PND: What should funders not currently focused on LBGT issues know about the groups that the Paul Rapoport Foundation has supported? And how can other grantmakers — especially those serving youth and seniors in communities of color — be more responsive to LBGT issues?
KJS: Funders should know that LGTB communities are resilient but that we still need their money! I'm only half-kidding. LGTB-serving and -run institutions are an integral part of the human service and social justice landscape in New York City, and they should be treated and respected as such. Community-based organizations that serve communities of color, queer, and gender-non-conforming communities are vital in addressing a host of needs — and they have a host of needs. They need funding to keep their lights on, to operate their programs, to raise hell and bring about change. There are far too few beds for homeless young people. LGTB seniors of color in mainstream senior centers are hard pressed to speak up about their needs for, or access, quality health care or get support as caregivers. Transgender people of color are shut out of quality health care because of ignorance and a lack of competence. Yes, our communities are resilient, but too often the institutions that support and serve our health and well-being needs are cast aside as not necessary or important. Deep and meaningful support for the groups that serve our communities equals an investment in a just, dignified, and equitable society.
— Laura Cronin