Final Retrospective

In the wake of the great recession, a sense of righteous anger has spread through the public. The long-standing fact that millions of American workers struggle in jobs with wages so low they can’t provide for their families is taking center stage in our national political discourse. A growing awareness of the extent of economic inequality has galvanized a set of progressive political and social actions that seek to build a more just economy. In 2013 and 2014 alone, at least 12 cities and 17 states raised the minimum wage. Fast-food restaurant workers, who for several years have been organizing for union rights and raises to $15 an hour, went on strike in nearly 200 cities in 2014. Domestic and construction workers, long marginalized in the labor force, are joining together to win rights and recognition.

From the outside, it may seem as though these movements have sprung up spontaneously out of the present economic conditions. Yet this moment has a deep backstory about the work of community organizing groups, worker centers, and faith-based organizations joining forces with labor unions to wage a fight for economic and racial justice. And for nearly four decades, the Discount Foundation, a small grantmaking institution dedicated to funding community organizing for worker rights, has helped to catalyze the forces that have created what has been called our current inequality moment.

This report tells some of the Discount Foundation’s story, based on interviews with its founder and with grantees, current and former board members, current and former executive directors, and others in the progressive political and philanthropic landscape. Through this story, the report explores a set of lessons about how to fund community and worker organizing, lessons that take on enhanced importance as the American public turns its attention squarely toward issues of economic inequality. Among the insights revealed in this retrospective report of the Discount Foundation are these:

INVESTING IN THE MARGINS

By making strategic investments in the margins of the economy and labor market, foundations can, over the long term, catalyze a transformation in power relationships and build a new political core. Investing in economically and racially marginal organizations and communities can provide these groups the muscle they need to gain real power, and ultimately change economic and social conditions not only for the groups themselves, but for the whole country and economy.

RISK-TAKING

Funding marginalized groups and groups that do not yet have a track record can be a risk for funders. It is also a risk to base funding decisions on political values and long-term political goals, rather than solely on traditional metrics of success. However, by supporting unproven organizations, new ideas, and innovative organizing approaches that build power among the most disenfranchised, foundations can achieve a deeper impact than by simply measuring results in immediate wins.

USING SMALL FUNDS TO BIG EFFECT

When grantmaking is itself treated as an organizing tool, a relatively small amount of money can have tremendous impact. When foundation staff engage in work beyond grantmaking, for instance by mobilizing other funders toward a common mission, small coffers taken together can have a multiplying effect.

Since Discount’s founding in 1977, the Foundation has made $18 million in grants. This figure appears minor, perhaps, in a nonprofit and philanthropic world that casts about much larger sums. But Discount has punched well above its weight because, for the last two decades, it has taken strategic risks. It has consistently funded initiatives at the margins of the field of community and worker organizing in an effort to build a new progressive center. It has helped forge innovative collaborations and partnerships between unions and community groups that have logged victories in shifting America’s economic and political landscape. And, because Discount has always known that its dollars alone would never be enough to shift the balance of power in the American economy, the Foundation’s board and staff have spent the better part of the past twenty years motivating larger, mainstream foundations to support marginal-worker organizing. For 38 years, the Foundation has helped propel organizations devoted to worker organizing, racial justice, and immigrant rights from the margins toward the center. The Foundation has played a part in shaping an economic justice movement of low-wage workers that is now reaching critical mass.

In 2012 Discount announced it would spend down its funds completely and cease operation by the end of 2015. The Foundation’s endowment was hard hit by the market crash of 2007-2008. Rather than attempt to push the Foundation forward with a smaller giving capacity, the board decided to increase both grant size and total annual grant payout in order to assist vulnerable groups through this challenging economic period and establish an orderly exit plan.

“It has been more than thirty-five years since Discount first began supporting community organizing aimed at empowering low-income residents and workers to improve their lives and communities,” board President and founder Jeff Zinsmeyer and current Discount Executive Director Susan Wefald wrote in a 2013 letter to grantees about the decision to spend down. “We are proud of the work our grantees have accomplished.”