The Short and Happy Life of the Fund for Democratic Communities

We're spending ourselves out of existence. (photo: 401(k) 2012)
We're spending ourselves out of existence. (photo: 401(k) 2012)
We’re spending ourselves out of existence. (photo: 401(k) 2012)

Here’s something you may not have known about F4DC: we don’t plan on being around after 2020. No, we haven’t subscribed to any end-of-the-world doomsday scenarios. In fact, quite the opposite: we’re thinking that the chance of human survival past 2020, perhaps even into the next century, will be improved if we go out of existence!

At this point, you may be thinking, “Whoa! These folks have a curious view of their destructive potential, not to mention their own importance!”

Let me explain.

The vast majority of charitable foundations come into existence under an assumption that they’ll exist forever — “in perpetuity,” is the legal term of art. Under this model, foundations put their money resources — “financial principal” (never to be confused with “financial principles!”) — into investments that deliver interest or dividends or capital appreciation at a level that allows them to give away some money each year, while preserving or even growing the underlying principal.

By law, foundations have to give away or otherwise spend on charitable purposes 5% of their assets each year. Thus, if a foundation has $8 million in assets (about what F4DC’s assets are valued at these days), the US tax code requires it to put $400,000 each year toward charitable purposes.

Here’s the deal. The world is in a real pickle, and dribbling out $400,000 per year just isn’t going to have transformational impact. And we need some transformation!

The global financial crisis is just one of several deeply disruptive, linked crises that together portend a level of environmental, economic, and social collapse that is already radically altering how we live. Whether we want to change or not, big changes are coming — some of them are here already (Hurricanes Katrina and Sandy!) — due to the intersection of climate change, peak oil, and the non-sustainable nature of a global, corporate capitalism that has driven the world toward the greatest wealth inequality ever experienced by humanity. People are hurting, struggling to support their families and communities, as jobs disappear and wages stagnate. Catastrophic weather events escalate in number and severity, pushing communities past the breaking point. Our representative democracy is under siege from corporate interests who are unelected and unaccountable. And our grasp of direct democracy (that is, our community capacity to dialogue about our needs and decide on collective action to meet them) is shaky at best.

In the face of the failing economy, many people are recognizing the need to build a new economy to take its place: one where people and planet come before profits. Where the rewards of productivity go to the people who do the work. Where communities are enriched, not stripped, by businesses that are rooted in place. An economy built on the principles of cooperation, sustainability and solidarity, not competition and exploitation. At the same time, people around the globe and at home in the U.S. are coming together to demand that the voices of the 99% be heard, and in the process are relearning and inventing from scratch new democratic forms.

We’re at a pivotal moment, a time of opportunity on the one hand and real danger on the other. F4DC is striving to put its resources — both money and people power — in service to the massive project of building a just, sustainable and democratic economy in this critical period. It’s a big project, and it’s sure to last way past 2020. But we think F4DC’s greatest impact—our shot at transformational impact—is in these next eight years.

If you’re wondering where this “eight years” figure comes from: Ed and I actually came to this idea of spending down our resources a couple of years ago. At that time, we gave ourselves a ten-year horizon line. Seemed like that was enough time to hatch and work on some serious projects, but also a short enough time frame to concentrate the mind. We’re two years in now, and believe me, the 2020 deadline does indeed concentrate the mind. Our entire staff is struggling to define what it would look like for us to leave a lasting legacy and evaluating whether our program and grant-making activities are on track to achieve it.

Stay tuned: we’ll have more to say about the legacy we hope to leave in later blog posts. For now, just know we’re working with growing numbers of people in our city, North Carolina, and the Southeast (link to the Federation of Southern Coops and SGEP) in ways that we hope position us all to be around a whole lot longer, even if F4DC is no more.

We picture a web of strong people, versed in democratic arts, who are able to work together to rebuild their communities. We see organizations, institutions, and networks across the Southeast that link and nurture democratically-minded economic and political projects that flow from communities that are usually pushed to the margins: Black folks, poor whites, Native Americans, women, immigrants, young people. Imagine a growing pool of autonomous people and organizations who understand that their well-being is tied to the well-being of all, and have a pretty clear idea of how to build a new economy anchored in vibrant democratic communities. We think of F4DC and its resources as part of the “seed capital” for this new venture.

Marnie’s Remarks at the North Carolina Center for Nonprofits Annual Conference

The 2010 Annual Conference of the North Carolina Center for Nonprofits was recently held in Raleigh. I was asked to serve on a panel called Foundations and Operating Nonprofits Working Together in a New Reality, to contribute information about F4DC’s approach to various aspects of our grantmaking, given the current economic crisis. Below are the remarks I made in response to two questions I was provided in advance of the event. (Believe me, I don’t speak this coherently off-the-cuff!) I tried to fit in as much as I could within the five minutes I was allotted.

How does our work with nonprofits differ from more mainstream foundations?

Ed and I sort of stumbled into starting a foundation because of the opportunity and responsibility that came from my family circumstances. I don’t think if you’d asked us five years ago what we’d be doing in 2010, either of us would have said, “leading a foundation.” We, and the people we work with most closely, are primarily anchored in the world of social justice activism, not philanthropy. To tell you the truth, we’re kind of suspicious about philanthropy as a social change mechanism, and we wonder a lot about the utility of money in transforming society. So one way I think we’re different is that we bring into all our relationships with nonprofits a whole bunch of questions about our role, as well as their roles.

Have we changed any of our grantmaking strategies because of the economic crisis?

Yes, the economic crisis has led us to change our approach to grantmaking in significant ways.

First, the primary source of F4DC’s funds is my father’s estate. The economic downturn has slowed down the liquidation of that estate, and that’s hurt our cash flow. Like all nonprofits, we’ve confronted some hard decisions. We ultimately decided that in the face of economic hardship, our greatest obligation was to move as much money as we could into the community, in the form of grants. To accomplish that, we cut our overhead drastically. We laid off our staff and experimented with being an all-volunteer organization. After eight months, we realized that wasn’t a sustainable way to operate, so now we’re operating with two part-timers. We’ve dropped from three full-time-equivalents to one full-time equivalent. We also closed our office and now work out of our homes, coffee shops, and the public library (a bastion of grassroots democracy!). These changes have allowed us to move up our grantmaking from $50 to $60,000/year to $100,000 this year. We hope to give away closer to $200,000 next year.

Second, we launched a matching grants program that is intended to do two things: 1) leverage every dollar we grant for greater impact, and 2) encourage grassroots groups to build their capacity for self-support. Basically, for projects and organizations that align with our mission, we’ll match dollars raised through grassroots fundraising. Were emphasizing a style of fundraising that was prevalent in the Civil Rights Movement, before there was foundation or major donor money available to that movement. The idea is to focus fundraising right in the communities most affected, because these are the folks that have the greatest stake and know-how in solving their own problems. We’re talking pass-the-hat and spaghetti dinners. Phone ten allies and ask them to each commit ten dollars. Never hold an event or a gathering where you don’t make “the ask,” and make sure that ask is compelling.  These approaches consciously build a group’s base of support and strengthen stakeholders’ level of commitment, building an insurance policy against the day that foundation monies are no longer available.

Third, we see this economic downturn as just one of several deeply disruptive, linked changes that may well portend a level of environmental, economic, and social collapse that will radically alter how we live in the not-too-distant future. Whether we want to change or not, big changes are coming—some of them are here already—due to the intersection of global climate change, peak oil, and the non-sustainable nature of a global, corporate capitalism that has driven the world toward the greatest wealth inequality ever experienced by humanity. This combo sounds scary, because it is. Almost too scary to handle. So what to do?

F4DC’s response to this scary scenario is two-fold. First, we’re more committed than ever to our mission of nurturing grassroots democracy. We’re convening folks to think about what it means to be a citizen in a society that aspires to democracy—surely it is more than voting and paying taxes! And we’re helping the groups we work with to think through what democratic dialogue, decision-making, and action looks like. Being intentional about democracy at the grassroots level prepares communities for collective problem-solving, which is needed as rapid changes descend upon us.

We humans have the capacity to react to scary changes with fear and greed-based responses. We also have the capacity to react with cooperative, reasoned responses. Democracy feeds the latter.

The other thing we’re doing in the face of possible social collapse is exploring ways to nurture sustainable economic development based on cooperative economic models, like those used so successfully in the Basque region of Spain. There, worker-owned coops constitute fully 60% of the employment and have weathered the Spanish economic crisis far better than traditional corporate models.

Closer to home, one of our recent grantees, the North Carolina Housing Coalition, is launching a program of cooperative land ownership for families living in mobile home communities. We’re also partnering with Project South in Atlanta and Highlander Research and Education Center in New Market, Tennessee on an effort we call the Southern Grassroots Economies Project.

We’re looking for ways to nurture what some have called the “Solidarity Economy,” all across the Southeast. Through education, networking, and policy changes, we’re hoping to expand cooperative ventures in housing, manufacturing, farming, and health care. Our emphasis is on the producer side, not so much on the consumer side, because as the old economy collapses and jobs get scarce, people are often denied ways to be productive. Think of all the hardworking students who graduate, and then are unable to find jobs. Think of all the people my age who are experiencing years of unemployment despite looking daily for work. Think of the growing number of prisons, where we warehouse more people every year, particularly men and people of color, locked away from any chance of being useful to themselves, their families, or communities.

People long to be productive, to be useful—it seems to be part of our human makeup. So let’s start to build a new economy where that urge to create, to make, to be part of the solution, is taken as the premise. That’s what the Southern Grassroots Economies Project is all about.

My dad, the money, and me

About 14 months ago, I quit my more-than-full-time job as an educational researcher. The theory was to lead a life that involves less work and more play. Less than two months later, that change was followed by another big change: In January 2007, my dad, W. Hayden Thompson, of Cleveland, Ohio, died at the age of 79.

I was lucky to have been able to arrange my life even before I quit my job to have work-related reasons to be in Cleveland on a regular basis (a project in the Cleveland Municipal School District). So, I got to spend more than usual amounts of time with Dad and Mom, my brothers, and sister in the three years before Dad died. This was enormously gratifying and certainly cuts the sting of losing him.

Nevertheless, Dad’s death was, and is, a big deal to me. A lot of people my age are going through this right now — losing our parents. It’s a big deal even if it’s expected.

Now, besides being my dad, W. Hayden Thompson was a wealthy man. When I was very young, I didn’t understand this, but as I grew older, I came to see that our family had lots more money than most families.

Long before my dad died (15-20 years earlier), I began processing what it meant to be the daughter of a very rich man. The more I thought about it, the more I thought three things:

  1. The day I lost my dad, I did not want to also have to deal with another huge change in my own life – I did not want his death to forever be associated with a huge influx of money. Because inheriting a lot of money does exactly that to the person who inherits it at a time when they should probably be feeling and thinking lots of other things, more human-focused things.
  2. Though I believe my dad was a very good, very smart man, I did not share his appreciation for capitalism and the accumulation of wealth in the hands of a small number of people. While he worked very hard almost every day of his life, I knew many other people who worked as hard and who were as smart, but did not experience the same results – largely by virtue of where they were born in US society. “Wrong” skin color, “wrong” school, “wrong” neighborhood, “wrong” class, sometimes “wrong” gender. The wealth that my dad had accumulated was not only a product of his work and brilliance, it was leveraged off of the wealth, education, and connections that he inherited by being born into the “right” family in the “right” neighborhood and attending the “right” schools.
  3. I certainly don’t need a lot of money to lead a happy, engaged, productive life. True, too little money is definitely a problem. But I have many times had the distinct experience of life being richer and more meaningful when I have NOT had access to an excess of resources, and I was forced to figure things out in ways that relied on a mix of my wits and character as well as the depth, density, and diversity of my friendships. I have seen in my own life and in the lives of others that the “perks” of being rich often come with costs — isolation, insecurity about why your friends really like you, fear of someone taking your stuff, obliviousness about how the world really works, and so on. My partner Stephen and I, like most US-ers, use too great a share of this world’s resources to support our “way of life,” and in no way do we need even more! In other words, we do just fine on what we can earn going to work like most folks. We can even do just fine working a little less if we decide to live a little differently.

Through this line of thinking I came to a pretty early conclusion that if my dad willed me an inheritance, I would give it back — not to his estate, but rather to the wider world from which it had come. I knew of some other people who had made and acted on similar decisions, and that was helpful. But in most places I talked about this, it was viewed, at best, as pretty weird or irresponsible, and at worst disrespectful of my dad. “A slap in the face of your father’s hard work and generosity” was one sentiment I heard.

As far back as the late 80s or early 90s, I started talking with my dad about my idea, not because I wanted to (in fact, I mostly dreaded these conversations), but because I thought staying silent was chicken, in its own way disrespectful, and a barrier to any hope of closeness between him and me.

I broached it whenever he made mention of my inheritance, which he would do in concrete terms every few years. I’d be visiting in Cleveland, and he’d ask me to come down to his office. He’d push a piece of paper across his desk at me with a 7-digit figure on it — my “share” of what his estate was worth at the time. This number always felt very abstract, disconnected from whatever struggles or interests or passions I had for myself or my family. The number would vary a bit from occasion to occasion, in an upward direction.

I was uncomfortable telling him my intentions, and I am sure I was not articulate. The most difficult thing was that I was afraid he’d hear my decision as a critique of how he lived, and what he did to “make” the money. In truth, I thought and continue to think very highly of my dad as a moral person, but yes, this difference between us about what extreme wealth means, where it comes from, and what money is good for sure felt personal. How could it not have?

He was not pleased to hear my decision, and sometimes would put some effort into talking me out of it. “This is not just about you, think about your daughter ” was one argument, along with “You never know what kind of medical or financial crisis might befall you, and you can’t count on the government or anyone else to look after you.” Also, “Why do you always have to be so weird?” Sometimes he would just kind of sigh.

I suspect he occasionally thought about cutting me out of the will, or setting up some kind of trust I couldn’t touch. I went along year to year trying not to instigate any “extra” conversations about this topic, but fulfilling my periodic obligation to tell him I was sticking with my decision. It got easier over time as I became grateful for the chance to show him a little bit of who I really am and what I believe in.

A year after my dad’s death, I am only beginning to feel how far he and I were able to come, and understand the gift he gave me, when he decided to trust my thinking about this.

About three years ago, I was visiting in Cleveland, sitting in the kitchen with my dad. Out of the blue he said, “You’re serious, aren’t you? You’re really going to give your inheritance away.” I answered Yes, I was more committed than ever. He then said, “Well, I have been thinking about this, and here is what we are going to do. I am not going to pay estate taxes on money that is going to be given away.” (In fact, he might have said “death taxes,” which would be just like his fiscal Republican self.) “So we’ll set up my estate document so that your share will be treated as a charitable contribution. You should think about setting up some kind of foundation or something.”

So that’s what we did, and that’s what I have been working on since he died: Establishing the Fund for Democratic Communities (or f4dc, as we have come to call it). More about that in a bit, because there is more to this story of me, my dad, and the money. As a further sign of his decision to trust my thinking, my dad went on to amend his estate document so that the value of the estate taxes that didn’t have to be paid on what became known in the trust as “Martha’s Charitable Share” was added to my “regular” share. All this amounts to about $5 million.

I cry weekly or more often about this amazing sign of trust between my dad and me. I don’t want to paint my dad as a shallow, materialistic person — he was not, he was much more complicated. But you gotta understand what this pile of money meant to my dad — in many ways he saw it as his life’s work. And to trust me with it, with my outlandish ideas about money and sharing, when he knew it would be used to do things he could hardly understand, was an incredible gift, especially coming at the end of his life.

So almost every day I stand in very close proximity to my dad, as I go about the business of putting his money back into the control of regular folks. I have him in my heart and mind in a way I seldom have since the time I was a little kid. And for that I am really grateful.

I am also grateful that he set things up like this, so that on the day he died, and in the hard days that followed immediately after, I was not distracted or confused by the money. I did not have to spare a moment’s thought to what I might want or need to do with that money — because it wasn’t mine, and never had been.

Sure, I have more than a few thoughts about what f4dc should do with the money. And I voice them regularly in conversation with Stephen and my life-long community activist friend and colleague Ed Whitfield. Ed’s the first person I called when I got home from the trip in which Dad laid out his plan for “Martha’s Charitable Share.” We’ve been raising hell together for years, especially in the realm of public education, and I knew he was the partner I wanted in this venture.

Ed and I spent 2007 getting the legal identity for f4dc established, laying out our thinking in some founding documents, and most importantly, gathering a powerful group of 14 activists, artists, gardeners, musicians, labor leaders, librarians, teachers, writers — hell raisers all — to form our Board. Oh yes, and a psychometrician – that’d be Stephen – every board needs a psychometrician! Six of our board members are under 30, one of the aspects of this work I am most proud of.

It’s in this company that the decisions about what to do with the money get dealt with. I am one voice among many vibrant voices, each of which is committed to authentic grassroots democracy as a fundamental basis for any kind of decent life.

You can read all about these ideas and these amazing people at our website — You can also read about the launch of our first grant cycle. We don’t have much money yet from the estate, and besides, we are just learning about what this money is good for inside of a democratically focused movement. So we’re giving away $20,000 this spring, and we’ll be practicing how to make collective decisions about it. We’re new to this big time philanthropy thing, and frankly a little suspicious of it. So we’re starting small to see what we can learn.

Plus, it isn’t just money on offer from f4dc — it’s also technical assistance for new groups struggling with how to get organized and how to move forward. And, a thing that really excites me personally, we’re going to be teaching regular folks who are interested lots of research skills so they can set the questions and do the research that answers those questions themselves. And then use that research, that new knowledge, to make the case/push the cause/understand the next steps/persuade/figure out the next question.

Two Saturdays ago, more than 50 people showed up at our office at the HIVE (a collective community space in Greensboro that nurtures cool groups, ideas, and people) to learn about the possibilities. We expected, oh, about a dozen. All kinds of people, young and old, lots of colors (in fact mostly people of color), with lots of good ideas (okay, a few off-the-wall ideas too). Ideas about how they want to work with their neighbors or co-workers or fellow students to turn this crazy unsustainable system into something more beautiful, caring, fair, and sustainable.

Ed was brilliant in his explication of what we mean by authentic democracy. I was pretty good too – talking about what you can do with $500, $1,000, $2,000, or $3,000 – when you join it with people talking/thinking/doing together. The other founding board members were brilliant as well, taking questions, finding room for more people when the room looked too full, and on and on.

The best part had to be when we went all around the room, and people stood up one at a time to say what community they were connected with and what they wanted to do. And again and again, something beautiful would happen: from across the room someone would yell, “I’ll help you with that!” or “Can I work with you?” or “I know how to do that, I’ll teach you.” This was so unbelievably hopeful to me, to all of us. The meeting “ended” at 11:30, and at 12:30 I had to go — there will still 15 people in the HIVE getting to know one another, exchanging ideas.

And the whole time, I kept thinking, “Whew, Dad, what do you think??? Look what we did!”