Public Policy and Philanthropy

Philanthropic funders in Greenville County traditionally have focused on grantmaking as their sole means of strengthening the community.  However – as it turns out, learning how to advocate effectively may be just as important as our dollars when it comes to strengthening our community. That’s because our local nonprofit organizations, as a sector, are much more dependent on government funding than philanthropic grants. In fact, nationally, 10 times as much nonprofit support comes from government as from foundations.  What does this mean for Greenville’s funders and their philanthropic work?

Stephanie Powers, Senior Director for Policy and Partnerships with the Council on Foundations, presented to GPP members and funder colleagues from the Upstate on public policy and philanthropy and why it matters in 2017.  To underscore the significance of government dollars in nonprofits’ budgets, she shared data from the National Council of Nonprofits that revealed 32.5% of nonprofit budgets come from government grants and contracts, compared to only 3% from foundations.  Locally, research conducted by Piedmont Health Foundation intern Sean Rusnak showed that Greenville County-based nonprofits received over $89 million from government sources in their most recent fiscal year (recent estimates put annual foundation giving in Greenville County at $38 million).

It’s not just government funds given directly to nonprofits that have an impact on the community.  Stephanie reported that 30-35% of South Carolina’s state budget comes from the federal government. As spending changes at the federal level, particularly as is described in the Trump Administration’s budget, our state’s revenues and the services it can (or can’t) provide will inevitably be impacted.  Local nonprofits are fearful of the impact that cuts in federal programs and agencies such as Medicaid, SNAP (“food stamps”), and HUD may have on the people they serve, undermining their work to boost families’ financial stability.

So, the health of Greenville County’s nonprofit sector and the people it serves is inextricably connected to the policies and budget of our federal, state, and local government.  But it can be difficult for nonprofits and the “general public” to pay attention to and understand the complicated policy-making process.  Minding policy-making is a way for funders to have far more impact than with grant checks alone.  Stephanie discussed how it is allowable and practical for funders to do so.

What is not allowable?  Federal tax rules prohibit private foundations from lobbying. Lobbying is defined as communication with a legislator that expresses a view about particular legislation. A “legislator” is anyone who takes part in formation of legislation, including elected officials, their staff, executive branch officials participating in forming legislation, or the public if it’s a ballot measure.  Grassroots lobbying that gives the public a call to action related to particular legislation is also prohibited or limited.  State rules?

What is allowable?  Foundations and grantmaking public charities are allowed to provide support to nonprofits that engage in lobbying.  But beyond that, funders can participate in or lead a wide range of important activities defined as advocacy.  Advocacy activities for foundations include:

  • Educating legislators about foundations and what they do. Inform them about the role we play and scale their expectations about how we can.
  • Educating legislators and the public about issues. Discuss social or economic problems and opportunities for change, but without discussing specific legislation or including a call to action.
  • Self-defense communications. Foundations may express a view to policy makers on issues affecting the foundation’s existence, tax-exempt status, powers and duties or the deductibility of contributions, and these communications can be made proactively.
  • Influencing regulatory bodies. Generally, communication with regulatory agencies like the IRS, HHS, and state agencies is permitted, as long as the intent isn’t to influence legislation.
  • Participating in litigation by filing lawsuits, submitting a friend of the court brief or serving as an expert witness (as long as it furthers a charitable purpose)
  • Communicating with government on jointly funded projects
  • Providing technical advice
  • Offering nonpartisan analysis or research that includes a full and fair discussion of the facts and does not directly make a call to action
  • Funding advocacy, either through direct grants for an advocacy project (or grants for non-lobbying amount of a lobbying project) or general support (allowable even if the grantee has lobbying activities)
  • Encouraging civic participation in a non-partisan manner

Staff of private foundations (and trustees when they are representing their foundation) MUST NOT intervene in campaigns by endorsing candidates, making campaign contributions, communicating in a way that explicitly or implicitly favors or opposes a candidate, or the like.

In local research with nonprofits, executive directors expressed support for funders considering the role of public policy and government funding on their work.  Specifically, nonprofits asked funders to engage with them in advocacy.  A funder’s position of neutrality lends credibility to their statements on community issues.  Funders also have a position of leverage because of their long-time investments in the community; they can speak to the impact of funding and the needs that still exist.  And frankly, funders – including trustees of private foundations and executives of local corporations providing grants and sponsorships – may be more likely to have social or business connections with policy makers than nonprofit staff members.

How can funders in South Carolina respond?  Stephanie shared an array of activities that funders and local funder networks in other areas have employed. They include personal visits with elected officials, events, traditional and social media, rapid response funding for nonprofits’ advocacy, employing a policy advocacy staff position, policy updates, and more.

Knowing that most funders in Greenville County and throughout South Carolina aren’t staffed at a level to engage easily in these activities, GPP meeting participants discussed ways to work together on policy issues.  Ideas discussed by attendees:

Identify shared public policy goals.  Items mentioned included:

  • Poverty and economic mobility (for example, boosting the median income in our county or state)
  • Early childhood development (for example, fully funding 3K and 4K or otherwise expanding access to high quality pre-K)
  • Affordable housing
  • Statewide effort to support rural communities
  • Access to affordable preventive health care
  • Addressing workforce issues by allowing for criminal record expungement for one-time nonviolent offenders and developing a pipeline to work and professional goals.

Develop the infrastructure for advocacy by creating civic engagement networks, creating statewide consortia on topics to advance priorities, and educating boards and trustees on why this is important

Other tactics, such as

  • sharing data
  • effective and consistent messaging and communication on issues
  • inviting in our delegation to discuss and learn about issues
  • giving voice to those affected by policy issues
  • hosting legislative forums.

As Franklin D. Roosevelt said, “Let us never forget that government is ourselves and not an alien power over us. The ultimate rulers of our democracy are not a President and senators and congressmen and government officials, but the voters of this country.”

That, of course, means us and the community we aim to serve.  We will continue the conversation on policy and advocacy at GPP.



Public Policy – Stephanie Powers

Public Policy – Greenville County nonprofit survey results

Pew Charitable Trusts’ Fiscal Federalism initiative, looking at the relationship between federal and state governments


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