Up against the Nonprofit Industrial Complex in New Orleans

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Fifteen months after New Orleans became an international symbol of governmental neglect and racism, the city remains in crisis.  Students are still without books, healthcare is less available to poor people than ever, public housing is still closed, and infrastructure is still in desperate need of repair.  In an open letter to funders and national nonprofits released on 15 December 2006, a diverse array of New Orleanians declared, “From the perspective of the poorest and least powerful, it appears that the work of national allies on our behalf has either not happened, or if it has happened it has been a failure.”

In conversations with scores of New Orleans residents, including organizers, advocates, health care providers, educators, artists, and media makers, I heard countless stories of diverted funding and unmet needs.  While many stressed that they had important positive experiences with national allies, few have received anything close to the funding, resources, or staff they need for their work, and in fact most are working unsustainable hours while living in a still-devastated city.

Research backs up the anecdotal reports.  A January 2006 article in The Chronicle of Philanthropy argued that the amount given to post-Katrina New Orleans was “small-potato giving for America’s foundations, which collectively have $500-billion in assets.”  The article also asserted, “just as deplorable as the small sums poured into the region are the choices foundations have made about where the money should go.”  In other words, very little of the money had gone to organizations directed by or accountable to New Orleanians.  One prominent New Orleans-born advocate and lobbyist called this phenomenon the “Halliburtization of the nonprofit sector.”

An August 2006 report from New York City’s Foundation Center points out that the Red Cross, which raised perhaps two billion dollars for Katrina relief despite widespread accusations of racism and mismanagement, “ranked as by far the largest named recipient of contributions from foundation and corporate donors in response to hurricanes Katrina and Rita,” receiving almost 33% of all aid.  The Bush-Clinton Katrina Fund, Salvation Army, and United Way together made up another 12%.  The rest was generally spread between other national relief organizations.  As late as February 2006, one third of hurricane relief donations had not been spent.


After nearly fifteen months of shuttered storefronts, a block of Black-owned businesses in New Orleans celebrated a rebirth in December 2006.  The street, on Bayou Road in the seventh ward neighborhood of New Orleans, is a hopeful sign in a city 60% of whose population remains displaced and many of whose businesses are shutting down or moving.  As recently as August, most of the area remained shuttered and empty.  Now, almost every shop is open.  The Community Book Center, a vital neighborhood gathering spot in the middle of the block, reopened in mid-December, despite still having no front windows and a floor in major need of work.  “Step carefully,” Vera Warren-Williams, the owner, warned guests as they entered the store during the reopening celebration.

Neighborhood spaces like the Community Book Center have long been a vital part of New Orleans organizing, serving as a gathering place for people and ideas.  The revitalization of Bayou Road is just one example of community pulling together — friends and strangers coming by to help gut houses, clear debris, cook food.  Anything to help, as the people of New Orleans struggle together against incredible odds in a city that was already devastated by poverty and privatization and neglect pre-Katrina.

Although Community Book Center is a crucial resource, spaces like it have received little outside support.  Foundations, according to the Chronicle of Philanthropy article, “seem to have been preoccupied with the issue of accountability.  Many foundations wondered how they could be certain that grants to local groups would be well spent and, therefore, publicly accountable.”  While those are reasonable concerns, many in New Orleans see a double standard.  As the Chronicle writer goes on to state, “the question of accountability didn’t seem to bother the large foundations that gave so generously to the Red Cross, which had a questionable record of competence to begin with and attracted even more criticism in the aftermath of Katrina over its unwise use of funds, high administrative costs, and lack of outreach to minorities.”

Many feel that the message from major funders has been that New Orleanians cannot handle the money appropriately. “Twenty seven years running a business, and they don’t trust us with money,” Jennifer Turner of the Community Book Center, comments, when asked about her feeling towards national funders.  “They think we’re all stupid or corrupt.”

In the aftermath of Katrina, the people of New Orleans were depicted in the media as “looters” and violent criminals, or as helplessly poor and ignorant.  In other words, as anything but a trustworthy partner in the rebuilding of their city.  Even today, many news stories about New Orleans post-Katrina focus on FEMA payments that were misused or obtained through fraud, rather than the bigger story of corporate fraud.

This media depiction, and the bias and racism that it in many cases reflected, is in part to blame for the reluctance of major funders to give money directly to the people most affected.  “They figure if they give poor people money they’ll buy crack and cigarettes,” People’s Organizing Committee and People’s Hurricane Relief Fund co-founder Curtis Muhammad summarized.


At a small corner bar in New Orleans’ Central City neighborhood, community activists and organizers from grassroots base-building organizations such as Critical Resistance, the New Orleans Worker Justice Coalition, and Safe Streets/Strong Communities gathered to celebrate a victory.  After a year of organizing, protesting and lobbying, Safe Streets won city funding for an independent monitor over the city’s notoriously corrupt and violent police department.

The Safe Streets victory is the result of several years of struggle by many organizations and individuals.  More importantly, it is a part of an overall effort grounded in, and led by, those most affected.  While there has been some funding for base-building  organizations such as those listed above, it has been pennies compared to the hundreds of millions directed elsewhere.

For a region of the country that has been historically underfunded, these issues are nothing new.  “I’m very much afraid of this ‘foundation complex,'” civil rights organizer Ella Baker said in 1963, referring to the changes happening then in the structure of grassroots movements.

In an article in an upcoming South End Press anthology about New Orleans post-Katrina, members of INCITE Women of Color Against Violence write, “Though hundreds of nonprofits, NGOs, university urban planning departments, and foundations have come through the city, they have paid little attention to the organizing led by people of color that existed before Katrina and that is struggling now more than ever.”

Echoing this analysis, the Chronicle of Philanthropy article complains of a “long-term lack of concern and neglect that foundations that operate nationally and in the Gulf Coast region have shown for poor and minority Gulf Coast residents, even as some grant makers proudly strutted their awards to national antipoverty and antiracism programs.”

The INCITE authors posit that successful organizing is rooted in the community and takes long time to bear fruit.  Mainstream funders don’t appreciate this, and, “a look at who and what gets funding in New Orleans, from foundations to support work, reveals the priorities of these foundations and the entire nonprofit system.  Organizations that represent their work through quick and quantifiable accomplishments are rewarded by the system.  Foundations are not only drawn to them but are pressured by their own donors to fund them.”

For many in the nonprofit field nationally, post-Katrina New Orleans has been an opportunity for career advancement.  While local residents have been too overwhelmed by tragedy to apply for grants, a few well-placed national individuals and organizations have not hesitated to take their place in line.  Although some have no relation to New Orleans, they often have previous relationships with the foundations, as well as resources that translate into easier access to funding, such as development staff, website designers, and professional promotional materials.


Foundations are not to blame for the continuing crisis in New Orleans, nor do they possess a special responsibility to help the city.  However, many foundations have expressed a desire to support New Orleans’ recovery, and funding is desperately needed on the ground.  Because of this, their actions have received added scrutiny from people in New Orleans.

Foundations are an integral part of the current structure of US nonprofits, a system that INCITE has called the Nonprofit Industrial Complex, to emphasize the interlocking, interdependent, and corporatized ways in which the system is constructed.  It is a system in which organizations are frequently pitted against each other for funding and  organizers are discouraged from being active in their own community.  Accountability to and leadership from those most affected have become increasingly rare; in many cases, the priorities of the “movement” are guided by those with money rather than being set by those most affected.

Perhaps the biggest lesson of Katrina for people concerned about social justice is that the structures of US movements are in serious crisis.  As the director of one base-building organization posed the question, “what’s wrong with the 501c3 structure that everyone could come down for a 5 day tour but no one could come to actually do the work for a month?  What’s wrong with a 501c3 structure where everyone is already so under-resourced and then tied to projects and promised outcomes that the biggest disaster this nation has seen in decades occurs and no one can stop what they are working on to come down and help?  What’s wrong with the foundation world that they have to produce 207 fancy glossy interview reports to their board in order to shuffle a few thousand dollars our way?”

One thing that is clear is that the current paradigm simply doesn’t work.  Without community accountability, projects aimed to bring justice to that community are weaker and sometimes counterproductive.


Writing in the South End Press book, INCITE members argue that the structure of a non-accountable movement stopped organizations from responding more capably to the disaster when it happened, and that a movement more responsive to local community would have been more effective.  “Community organizing and community-based accountability are the things we have left when the systems have collapsed,” they argue.

Many organizers told me that, in dealing with foundations, they were expected to be responsive to the foundations instead of to any concrete needs on the ground.  “It’s not just that you have to jump when they tell you to jump,” the manager of one organization told me, “you also have to act like you wanted to jump anyway.”

Again, these issues are not new.  More than forty years ago, Fannie Lou Hamer, civil rights leader and co-founder of the Mississippi Freedom Democratic Party, complained: “I can’t see a leader leading me nowhere if he’s in New York and I’m down here catching hell.”

“What’s wrong with our movement and our organizations,” the director of another grassroots organization asked me, “that they couldn’t collaborate and coordinate and offer us some organized plan of assistance instead of asking us to do more and more to help them help us?  What’s wrong with funders that they couldn’t coordinate, the way they ask us to, so that they could come down once, together, and not on 15 separate trips?”


When asked about solutions, many in New Orleans called for allies to bring a deeper respect for the experiences of the people on the ground.  Others expressed an overall need for movements to move away from reliance on foundations and large donors.

Several organizers highlighted the examples of positive experiences.  “National Immigration Law Center (NILC) came here in a principled way, looking to hire someone local, and to support already existing local projects,” Rosana Cruz, who works with NILC and the New Orleans Worker Justice Coalition, explained.  “Advancement Project does litigation led by and in support of grassroots organizing campaigns.  OXFAM is a major international organization, but they came in and worked responsibly with small organizations on they ground they had previous relationships with.  And they made multi-year commitments.  They didn’t just come and dump money — or worse, come and promise money then disappear, as some did.”

“Ironically, many of the folks who have come through for us are Southern groups, who are themselves under resourced,” the managing director of one organization told me.  “Organizations like Project South and Southerners On New Ground (SONG) have been stronger allies than many larger national groups.”

The Chronicle article asks foundations to play a role in “strengthening nonprofit organizations that serve low-income people and African-Americans, as well as other minorities. . . .  America’s foundations need to move from a policy of neglect of the nation’s most vulnerable organizations to one of affirmative action, an approach that will mean changing the way many foundations do business.”

“I would ask national organizing groups to send a staff person down for 6-12 months,” begins the executive director of another organization, “I would also recommend all progressive and liberal foundations with Katrina money to do an analysis of funding and jointly release the results along with the plan for funding in 2007 and 2008.”

Others listed specific needs they felt were unmet.  “We need seed money, technical training and leadership development,” explained Mayaba Liebenthal, an organizer active with the New Orleans chapters of Critical Resistance and INCITE.

The struggle of New Orleans is a struggle with national and international implications.  Questions of race, class, gender, education, health care, food access, policing, housing, privatization, mental health, and much more that also exist elsewhere are on vivid display here.  If the people of New Orleans are supported in their struggle and triumph, it will be a victory against profiteering and privatization.  “Everyone is here right now, or has come through,” Curtis Mohammed comments, referring to the vast array of organizations and individuals who have visited the city.  “If the movement continues to grow, New Orleans will be seen as a turning point.”  But, despite all of the resilience on display here, the people of New Orleans can’t do it alone.

Jordan Flaherty is an editor of Left Turn and a community organizer.  His previous articles from New Orleans are at www.leftturn.org/Articles/SpecialCollections/jordanonkatrina.aspx.  To contact Jordan, email neworleans@leftturn.org.  Jordan also hangs out at MySpace: http://www.myspace.com/secondlines.

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