TJFP is dedicated to supporting local, grassroots groups organizing for trans justice. It’s important to us that these groups center trans leadership. That they’re accountable to the communities they serve. That they think about how racism, economic injustice, transmisogyny, ableism, immigration, incarceration, and other oppressions intersect. But how important is it that they incorporate with the government as 501c3 non- profits or find fiscal sponsors? Does non-profit status help trans justice groups succeed? Or does it make it harder for them to stay true to their missions? (For example, see The Revolution Will Not Be Funded for stories about how becoming a 501c3 and applying for foundation funding has gotten in the way of many groups’ radical work.)
We believe groups should have the freedom to choose for themselves what financial structure works best, based on their own goals. This means we’ve had to answer a similar question for ourselves: what structure works best for a fund that grants money to grassroots groups regardless of whether or not they have non-profit status?
As a non-charitable trust, we have the freedom to cut checks directly to our grantees, regardless of their non-profit status. Trusts are usually a way for the wealthy to preserve and pass on their assets to the next generation. But we are hoping that a structure that was created to preserve wealth, when guided instead by community leadership, can also become a powerful means of redistributing it.
Non-charitable means we do not claim any charitable deduction for our giving, so our grantees don’t need to have non-profit status. Our tax burden will also remain equally low. And because it’s a trust, the IRS expects us to be giving away money instead of making it.
We knew this structure was a risk because it meant that donations to the non-charitable trust would not be tax deductible. What if no one wanted to contribute without a tax deduction? But the support we’ve received for this new model has been off-the-charts.
Donors who need their contribution to be tax-deductible can still give to TJFP via our Collective Action Fund at Tides Foundation.
Although the majority of our donors chose to give through our non-charitable trust, donors may make tax-deductible contributions to Tides Foundation to support TJFP’s work. TJFP established a Collective Action Fund at Tides Foundation in 2012. This Collective Action Fund can accept contributions from a variety of funding sources, such as private foundations, corporations, and individuals, and allows their donations to be tax deductible because Tides Foundation is a 501(c)(3) public charity.
Creating a new structure isn’t easy. Some have wondered why we’re trying to re-invent the wheel when institutional philanthropy is meant to make being charitable simpler. But we believe that a closer look at institutional philanthropy reveals plenty of reasons to try something new. We’ve written more about this in our 2015 Annual Report (or skip straight to an excerpt here) but it bears repeating: like most American institutions, philanthropy in the United States was designed to protect privilege and property and to shelter assets. For example, until 1969, private foundations weren’t even required to give any money away! And today, foundations only have to spend 5% of their assets a year from which they can also deduct their operating expenses.
The power to decide where grant money goes and who is eligible to receive it has a serious impact on social justice movements. Institutional philanthropy says that the government and wealthy funders get to decide what legitimacy and accountability look like. We think that trans communities are the real experts in trans justice and should have the power to decide for ourselves what gets funded and why.
Another reason to look outside of institutional philanthropy: all the restrictions and requirements it takes for a group to maintain non-profit status and apply for foundation funding keep folks busy. Too busy. Who benefits from this? It seems to us that the answer is people with power who’d like to make sure things stay just as they are.
These are only a few of the questions we are wrestling with and we certainly don’t claim to have all the answers. Since we’re trying something new, there’s still lots for us to learn, and we look forward to sharing all the twists and turns on the road ahead with you. Hopefully together we can begin to build new models that move resources—and the decision-making power over those resources—to the communities that need them most.
Our account is at the Self Help Credit Union, based in North Carolina. Their mission is “to create and protect ownership and economic opportunity for all, especially people of color, women, rural residents, and low-wealth families and communities.” This way everyone’s dollars will be doing important work even before that money makes its way to our grantees.
We were inspired by the Fire This Time Fund. They were a Chicago-based giving circle which for five years supported small, local, creative social change projects and developed a similar funding model. We don’t know of anyone who has tried this on a larger, national scale yet. (Please get in touch with us if you’re out there!) We hope our experiment will help open the door for more conversations about alternative funding models that allow grassroots work to flourish.
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So much more is possible when we collectively pool our love and resources together to show up for our communities who fight on behalf of all of us. Whether it's one dollar or a million, every dollar counts! We invite you to join us in supporting the community-led solutions we wish to see, today and into the future.