Welcome to the first issue of Kataly’s newsletter, After Philanthropy!
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Para la traducción al español, haga clic aquí.
As we have shared this year, Kataly is about halfway through our lifespan as a foundation. We began in 2018 with the intention to redistribute our assets within 10-15 years. The political realities of the past few years have led us to spend out faster than we anticipated, and we plan to conclude our grantmaking and investing by 2028.
Now, we are re-committing ourselves to documenting our work, sharing our victories and failures transparently, and demystifying philanthropy however we can—which leads us to this newsletter.
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The purpose of this newsletter is to take a question, submitted by our partners, for each issue and answer it as honestly as possible. Philanthropy often seems like a fortress: inaccessible and mysterious. But this opacity is unnecessary. Lots of decisions and processes, big and small, are ones we can share openly.
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For our first issue, we wanted to answer a question that we hear a lot from our partners: why is Kataly a spend out? (This question might seem like a softball— but it’s what we are most often asked, and it defines so much of who we are).
To understand our decision, we first have to recognize that the growing philanthropic sector is a result and beneficiary of an extractive and exploitative racial capitalist economic system. So, Kataly was founded to reinvest resources back into communities that have suffered the consequences of growing economic inequality and racial injustice.
The business model of philanthropy is that foundations receive tax credits in return for charitable contributions of 5% of their earnings each year. It is not financially feasible for a foundation to exist into perpetuity unless we rely on ever increasing financial returns on investments that come from the extraction of natural resources and the exploitation of labor.
In order to be in values alignment between both our investment strategy (how foundations invest to make market rate returns that allow them to exist into perpetuity) and our grantmaking strategy, we knew we would have to design a strategy that did not prioritize returns over serving our grantees. This math equation meant that we might be making smaller amounts of 1-2% year after year on our returns—enough to fulfill our mission, but not market rate returns that would sustain us into perpetuity.
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The challenges of spending out
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Of course, being a spend-out foundation has its challenges. As we get closer to spending out, our grants and investments will likely become smaller, and we’ll be saying “no” more than we would like. But, we are doing our best to make sure that the visionary, power-building work of our grantees continues for the long haul by supporting infrastructure to scaffold their work, and by investing in such a way that allows these groups to continue to regenerate wealth within their communities.
As someone who has organized within social movements, I am deeply aware of the inherent contradictions of the so-called “non-profit industrial complex.” Social movements fight against the racial injustices of capitalism, while being forced to rely upon dollars from foundations that originate from a racist, capitalistic system. At Kataly, we believe that investing at scale in social movements can create pathways of being less reliant on foundations in the future. That's why we are calling this newsletter After Philanthropy—because we know the perpetual existence of philanthropy is not the end goal.
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We want you to ask us tough questions!
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For the next issue, we want to invite you, our community, to share a question with us—feel free to make it a hard one! What is something you have wanted to know about philanthropy that no one has been willing to answer honestly? Maybe it’s about how we select grantees. Or why we don’t have calls for proposals. Or how we choose capacity building partners. Share your questions with us, and we’ll do our very best to answer as candidly as we can.
In solidarity,
Nwamaka Agbo
CEO of the Kataly Foundation, and Managing Director of the Restorative Economies Fund
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Rendering of the affordable housing development.
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For the past two and a half years, Ayudando Latinos A Soñar (ALAS) and community partners have been organizing to win an affordable housing development in Half Moon Bay for low-income senior farmworkers, who have faced inhumane and undignified living conditions. In June, they won a major victory when the City Council denied all appeals to block the apartment complex at 555 Kelly from moving forward. The development, to be located in downtown Half Moon Bay, is centrally located near vital services, churches, stores, etc., and the first floor of the building will house a farmworker resource center providing services from ALAS. This represents a beautiful, powerful opportunity for senior farmworkers to live out their lives with dignity. More recently, ALAS has come into an opportunity to buy a permanent home for their organization, to ensure their work continues. If you would like to learn more, please contact Veronica Rodriguez (veronica@alasdreams.com), and join the Funders Briefing webinar on October 1st at 3pm PT.
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Detroit Black Community Food Sovereignty Network
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Celebrating the grand opening of Detroit Food Commons and the Detroit People’s Food Co-op. Photo credit: Khary Frazier, Detroit is Different.
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This May, the Detroit Black Community Food Sovereignty Network (DBCFSN) birthed the Detroit People's Food Co-op (DPFC), a project that had been in the works for 14 years. The co-op is a Black-led and community-owned grocery cooperative, located in the historic North End of Detroit. Owned by residents who are primarily Black and from Detroit, the opening of the co-op represents a major step forward in creating a self-determining food economy for the community. Some of the crops sold at the store are grown at D-Town Farm, the largest urban farm in Detroit. The co-op is located in the Detroit Food Commons (DFC) building which is also home to the Mama Imani Humphrey Banquet Hall and the Kujichagulia commercial kitchens where culinary vendors can rent space. DBCFSN co-owns the DFC with Develop Detroit, a local real estate development organization. If you would like to learn more, please contact shakara tyler (STyler@dbcfsn.org).
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Three Creeks Collective & Owens Valley Indian Water Commission
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Farmer-to-farmer exchange on rematriated ancestral land. Photo credit: Teena Pugliese.
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One year after rematriating ancestral land in Payahuunadü (the place of flowing water) currently called Three Creeks, the Three Creeks Collective is carrying forward their vision for the land in transformative ways. A partnership between Owens Valley Indian Water Commission (OVIWC), Teena Pugliese, and Radicle Wellness (Jen Schlaich), the Three Creeks Collective is stewarding and caring for this 5-acre sanctuary. During the first Tribal Environmental youth camp on the land, one young person described the feeling of safety that was created for them. By caring for the land, water, gardens, and orchards the collective is facilitating healing through reconnection to traditional knowledge, food sovereignty, and belonging. The Collective has recently begun conversations with another private landowner who is supportive of their vision and intends to sell their neighboring land back to the OVIWC within the next year. May more land and water continue to return to the Indigenous people of Payahuunadü. If you would like to learn more, please contact: threecreekscollective@gmail.com
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For a full list of our grantee partners, check out our grantee directory.
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