The Role of Proximate Democracy Entrepreneurship in Building a Multiracial Democracy

1 A Democracy in Crisis

As we approach the 250th anniversary of America’s independence, we are confronted with a multitude of crises, one of which is a crisis of trust. Only 20%^[1] of Americans trust their government, and this lack of trust has proliferated from institutional distrust to distrust among one another as people. According to the Pew Center, 35% of Americans are “low-trusters”^[2] who believe that people cannot be trusted and only look at their own self-interest.

One in three Americans^[3] report not having a strong sense of belonging outside of family and friends. And many Americans,^[4] 45% of White Americans, 43% of Black Americans, 43% of Hispanic Americans, and 40% of Asian Americans are worried about being left behind. Compounding this crisis is the immense political and racialized efforts to suppress voting, particularly the votes of Americans of color. Following the 2020 Presidential election, over 400 voting restriction bills^[5] were introduced across 48 states, more than 20 of which have already passed. And our electoral system and government operations continue to lag in technology and innovation, creating an inefficient and opaque process fueling public distrust.

During this time of immense loss of life, where we have lost 5.5 million^[6] people globally due to the COVID-19 pandemic and historic natural disasters, why should we care about the crisis of trust? Because trust is the foundation of a democratic society and a strong indicator of a country’s ability to not only respond to but also to overcome a crisis.

In 2020, public policy comparisons showed that countries that had relatively successful COVID-19 containment strategies—including Germany and New Zealand—had higher levels of trust both in the government and in their fellow citizens. Data shows that 43% of Germans^[7] have strong trust in their government. New Zealand, where 59%^[8] of the public had trust in the government pre-COVID-19, saw a massive surge in trust, reaching 83%.^[9]

The lessons are instructive and further underscore the need for a new democratic vision and culture for America that is driven by the people. Historically, civil society—often referred to as “the nonprofit sector” in the U.S.—has played a key role in serving as the foundation for social cohesion and democracy building. As Alexis de Tocqueville stated in Democracy in America:

Americans of all ages, all conditions, all minds constantly unite. Not only do they have commercial and industrial associations in which all take part, but they also have a thousand other kinds: religious, moral, grave, futile, very general and very particular, immense and very small; Americans use associations to give fêtes, to found seminaries, to build inns, to raise churches, to distribute books, to send missionaries to the antipodes; in this manner they create hospitals, prisons, schools. Finally, if it is a question of bringing to light a truth or developing a sentiment with the support of a great example, they associate. Everywhere that, at the head of a new undertaking, you see the government in France and a great lord in England, count on it that you will perceive an association in the United States.

Today, civil society makes up 5.6%^[10] of America’s gross domestic product and employs approximately 10% of the workforce.^[11] In addition to providing a range of services, civil society organizations address the gaps and failings of existing social systems by tackling the adaptive and technical issues faced by underserved communities. In essence, civil society serves as a moral compass for governments, businesses, and our society at large. Civil society forms the bedrock of a democratic and equitable society.

However, since 2017, the public’s perception and trust in civil society organizations has stagnated at 53%.^[12] And in 2020, for the first time, people across the globe ranked business^[13] as the most trusted institution compared with civil society, government, and the media. According to the Edelman Trust Barometer,^[14] over the course of 2020s overlapping crises, confidence in the competence of civil society organizations declined while business made significant gains—emerging as the sole sector considered both competent and ethical.

The very American system that has helped to create and sustain our democracy is facing its own crisis of trust. Yet it is not hopeless.

2 Proximate Democracy Entrepreneurship

Proximate democracy entrepreneurship offers a promising path for repairing civic distrust and building a newly reimagined American civil society in service of a multiracial democracy. Organizations led by proximate democracy entrepreneurs—those with lived experience and deep connection to civically disenfranchised communities—build innovative models to repair or dismantle the broken systems in our democracy. They employ a range of strategies such as grassroots organizing, recruiting a pipeline of new and diverse leaders for public office, and building a narrative that counteracts misinformation and promotes unity. More importantly, the work of proximate democracy-entrepreneur-led organizations extends beyond election cycles and builds the civic infrastructure and culture we need in our communities. Examples of democracy-entrepreneur-led organizations include:

1. Liberation Ventures,^[15] led by Aria Florant, is a field builder fueling America’s Black-led racial repair movement. Liberation Ventures supports the ecosystem of organizations working on truth, reconciliation, and reparations in order to build public will for a comprehensive, federal, financial and non-financial reparations program.

2. Millennial Action Project^[16] (MAP), led by Layla Zaidane, works directly with our nation’s leading young policymakers on both a national and state level to bridge the partisan divide and lead a new era of collaborative governance. MAP gives our nation’s young leaders the resources and support to develop and pass innovative policy solutions, and forge productive partnerships on the issues affecting the youngest generations of Americans.

3. PushBlack,^[17] led by Julian Walker, is the nation’s largest nonprofit media organization for Black Americans, currently serving nine million people across all platforms. It uses the power of narrative, especially Black history and news, to educate and activate its subscribers to build their personal power and create lasting economic and political change.

4. Rise,^[18] led by Max Lubin, is working to address racial segregation in the form of voter suppression and denial of access to postsecondary education. Rise hires low-income college students to build campaigns and organize programs on their campuses. Through year-round issue organizing and get out the vote campaigns, Rise builds youth political power to affect change.

5. The People,^[19] led by Katie Fahey, is an organization of everyday Americans working to find common ground and take action to create a more responsive government of, by, and for the people. Built on the successful Voters Not Politicians grassroots campaign that ended partisan gerrymandering in Michigan, The People is building a powerful transpartisan movement for democratic reform.

From voter registration to community organizing to narrative change, proximate democracy entrepreneurs who represent the diversity of America are leading efforts to transform the civic destiny of our country. They are driving breakthrough solutions that target the underlying structural and systemic conditions creating disenfranchisement. However, this burgeoning field is grossly underrecognized and undercapitalized.

A recent report^[20] by New Profit’s Civic Lab, the nation’s first venture philanthropy fund to invest exclusively in proximate democracy entrepreneurs, generated unique insights into this overlooked democracy entrepreneurship landscape. The findings, based on data from 117 organizations who applied for the 2021 Civic Lab investment selection cycle, showed that the democracy entrepreneurship ecosystem is populated by diverse and proximate leaders, with 64% of democracy entrepreneurs identifying as people of color. Organizations work across all 50 states, however, there is a higher proportion on the coasts, highlighting funding disparities for organizations operating in southern and midwest regions. Additionally, the report highlighted that organizations helmed by democracy entrepreneurs of color reported a median 2020 revenue of $260,000, roughly 63% of the $410,000 reported by organizations led by white leaders. Women-of-color-led organizations reported a median 2020 revenue of $233,500, roughly 62% of the $377,500 reported by organizations led by white women.

The trends highlighted in the New Profit Civic Lab report underscore the vast investment in short-term electoral cycles rather than long-term and enduring infrastructure building for our democracy. The 2020 election cycle cost approximately $14 billion, while total philanthropic spending on media, government accountability, civic participation, as well as campaign, election, and voting reform, all add up to only $12 billion not over the past year, but over the past decade.

Despite the record spending, funding to nonprofit, nonpartisan, proximate democracy-entrepreneur-led organizations is scarce. Even the most ambitious democracy entrepreneurs often find their organizations struggling in between election cycles. This underinvestment in civic infrastructure and culture is further exacerbated by the lack of research and data on democracy organizations. We cannot expect our democracy organizations to create meaningful and enduring change when they remain desperately underfunded and dependent on cyclical funding.

3 Unlocking the Power of Democracy Entrepreneurship to Build a Multiracial Democracy

While the 2020 campaign cycle reached new heights of spending, Philanthropy—the engine of the nonprofit sector—has a massive opportunity, not only to increase dollar amounts but to improve how the dollars are spent. The sector has institutionalized top-down approaches largely focused on addressing the symptoms of problems rather than the root causes. In short, the way philanthropy approaches democracy reform needs to be rearchitected. The New Profit Civic Lab report makes five specific recommendations:

1. Philanthropists should shift from referral-based to open investment selection. Transitioning from an invite-only or referral-based investment selection to an open process enables philanthropists to reach a more diverse set of organizations. While open application cycles require more robust capacity and intentionality, it is a crucial element of practicing inclusive philanthropy.

2. Democracy organizations are in strong need of post-election, and sustained philanthropic investments. The boom-and-bust cycle of philanthropic investments in democracy organizations continues to hold. In order to address the structural and systemic inequities in our democracy, the philanthropic sector needs to make democracy investing a priority pillar, similar to education or poverty alleviation, and provide unrestricted and multi-year support to organizations.

3. Philanthropy needs to close the funding chasm, particularly for women of color. Despite leading innovative and transformational organizations, the leadership of women of color is vastly underrecognized and undercapitalized. Women of color are the linchpin of the democracy innovation ecosystem creating a multiracial and inclusive democracy. It is incumbent on institutional and individual philanthropists to close the funding chasm and invest in women of color.

4. In addition to capital, democracy entrepreneurs are seeking peer learning communities. As a relatively nascent field, the democracy entrepreneurship ecosystem is still forming. While there are often coalitions and networks that launch—and shutter or hibernate—in alignment with the electoral calendar, there are very few ongoing learning and nonpartisan convening spaces for democracy entrepreneurs. Democracy entrepreneurs are seeking inclusive and collaborative spaces not only to accelerate their individual organization’s efforts but to also weave the networks that are critical for building a collective vision for our democracy.

5. The democracy sector needs robust entrepreneur- and-practitioner-informed research. Due to a lack of resources, there is a dearth of organizations doing the foundational work of conducting research to deepen the field’s understanding of effective practices and levers for systemic change. In the absence of robust practitioner-informed data, there is often duplication of efforts, redundancies, and high levels of inefficiency in the landscape. In conjunction with academic research, there is an opportunity to invest in practitioner-informed research to help uncover effective practices for building a multiracial and inclusive democracy.

Crises present an opportunity for rebirth and renewal. As the wondrous advancements in science have given us hope in fighting the COVID-19 pandemic, proximate democracy entrepreneurship also offers insights, innovations, and wisdom to heal our communities and push us to realize our nation’s ideals. However, just as we cannot achieve scientific breakthroughs without concerted long-term investments, we cannot hope to see a better future without prioritizing investing in and building the foundation of our democracy.