Big Changes Are Underway in CZI’s Policy Funding. Here’s What’s Happening and Why

Photo: CZI

Let’s take a trip back to late 2015. Mark Zuckerberg and Priscilla Chan had just pledged via Facebook post to give away 99% of their wealth, setting the couple on a trajectory to be philanthropic power players for a half-century or more. Even back then, in what we might now think of as simpler, more innocent times, the creation of the Chan Zuckerberg Initiative sparked debate.

Here at Inside Philanthropy and elsewhere, CZI’s early moves prompted questions about a lack of transparency and the access and power that kind of wealth can buy. The couple’s unabashed intention to influence policy, in particular, marked out CZI as something new—the most prominent example of a rising LLC-based giving model whose adherents include Pierre Omidyar, Laurene Powell Jobs and Laura and John Arnold. 

The next several years saw CZI crystalize much of its policy giving around its Justice and Opportunity Initiative, a core pillar that came to embrace three focus areas: criminal justice reform, immigration reform and housing affordability. In each, CZI has grown into a leading funder, particularly in its home state of California. CZI’s outlay for Justice and Opportunity stands at roughly $436 million through October 2020, a total that makes Chan and Zuckerberg voices to be reckoned with in some of the most important philanthropic debates of recent times.

The couple haven’t exactly turned out to be the reckless philanthropic disruptors many feared in the wake of Zuckerberg’s infamous $100 million attempt to reform Newark’s schools. Nevertheless, CZI has found it next to impossible to distance its Justice and Opportunity work—and, indeed, its entire brand—from the impact of Zuckerberg’s immensely influential and controversial day job. CZI has also faced recurring criticism from current and former staff over lack of racial equity within the organization itself.

The public relations struggles at Facebook and CZI, which have only compounded over the five years of the initiative’s existence, may be one unstated factor behind some major changes underway at the LLC. At the same time, the initiative is responding to a critical moment for the causes it supports, and according to leadership, the motivation behind the shakeup is to better serve grantees’ needs and opportunities. So after years of direct grantmaking across its three Justice and Opportunity focus areas, CZI is spinning off both its criminal justice reform and immigration reform work to independent entities and furnishing them with a combined war chest of $450 million. It’s also committing a half-billion dollars toward efforts to center racial equity across its programming. Here’s what’s going on at CZI, and what it might mean for the initiative’s future grantmaking.

A new fund takes the stage

In an announcement at the end of January, CZI made explicit its intention both to double down on criminal justice and immigration, and, at the same time, to pull back. The greater part of its new $450 million commitment consists of $350 million for criminal justice reform over the next five years, more than double the $164 million it has given away to date on that front. But rather than disbursing the money directly, CZI is offloading that duty to an entirely new organization, the Justice Accelerator Fund. 

“The launch of the Justice Accelerator Fund is about seizing an unprecedented moment in the criminal justice reform movement,” Ana Zamora, the fund’s founder and executive director, told IP. “The criminal justice reform movement has been underinvested in for a long time and is full of organizations and leaders that have been doing incredible work and know what it takes to get the job done. What they need now is more funding and support to help achieve our shared goals of decriminalization, decarceration and second chances.”

As of right now, CZI’s $350 million commitment is the new fund’s only source of support. Zamora herself comes directly from CZI, having helmed its criminal justice reform giving. So does Aly Tamboura, who will be the new fund’s strategic advisor after working for several years as a program manager at CZI. Tamboura has firsthand experience with the system, having spent over a decade of his life incarcerated.

Despite all these close links with CZI, the Justice Accelerator Fund has been designed as an independent organization, ready and willing to take on additional funding partners as it begins its work. And as Zamora’s remarks attest, timeliness appears to be top of mind for CZI as it stands up the new fund. In addition to policy opportunities presented by a new federal administration, 2020’s historic protests against structural racism in policing and incarceration have only fueled what was already a growing movement for reform—and for some, abolition.

“Criminal justice reform is winning in the hearts and minds of Americans,” Zamora wrote in a letter posted on the new fund’s website. “This time is ripe for a more just America, and this surge of funding will dramatically speed up the pace of progress.”

Over the next several weeks, CZI expects more announcements about the new fund’s governance and structure, potentially including information on its board of directors and advisory board. Despite its origins and close affiliation, it appears as if CZI will have no direct oversight over the Justice Accelerator Fund. CZI is transferring its current criminal justice reform grantee relationships over to the new organization, at which point related grantmaking from CZI will cease. 

According to Chan Zuckerberg, one advantage of this new approach is the degree to which an independent advocacy organization can build diverse coalitions and remain attuned to state-specific strategies, a vital consideration in the hyper-local world of criminal justice reform. The implication is that more centralized grantmaking of the sort CZI has favored may be less capable of achieving that. 

CZI seems ready to act as what Theodore Schleifer recently described in Vox’s Recode as a “political bank account,” distributing much larger and more streamlined grants to outside advocacy organizations with their own governance and strategies. CZI’s hope is that its overtures will invite more collaboration, deepening the resources available to justice reform. As Open Philanthropy’s Chloe Cockburn put it, CZI’s criminal justice commitment “will provide critically needed resources to this field’s strong, growing infrastructure, and sends a signal to existing and potential investors in this work that the time to ramp up is now.” 

Moving forward, stepping back

CZI is taking a very similar approach with the spinoff of its immigration reform giving, which for now will consist of $100 million over the next three years. The recipient in this case is FWD.us, the 501(c)(4) immigration advocacy organization Zuckerberg and Chan co-founded in 2013. Since that time, FWD.us has been a major recipient of CZI cash as it evolved from a Silicon Valley-flavored lobbying shop into an important (though not uncontroversial) national voice on flashpoint issues like DACA. 

By plugging into existing advocacy infrastructure, CZI is once again signaling its willingness to sign onto collaborative funding efforts, something it’s been eager to do in its home state via efforts like the Partnership for the Bay’s Future and the California Immigrant Resilience Fund. In the case of immigration reform, it may be easier for big funders like CZI to translate concentrated money into policy change now that a pro-immigrant administration is in the White House. Compare that to criminal justice reform, where local control of key processes and institutions complicates national bids for change.

As with criminal justice reform, CZI plans to transfer its current immigration relationships to FWD.us and wind down its own grantmaking. That prompts the question of whether movement groups will experience gaps in funding or a cessation of support. One source told Schleifer that FWD.us wants to ensure that doesn’t happen. But it’s hard to know exactly how all this reshuffling will affect existing grantee relationships over the long term.

By shifting some of its most sensitive advocacy grantmaking onto external intermediaries, CZI is embracing a trend. Across the board, collaborative and pooled funding endeavors are gaining traction as big donors appear to recognize the need for coordination in the face of historic crises, and in some cases, the need for more advocates from affected communities in the driver’s seat. At the same time, CZI is also putting some space between itself and certain politics-adjacent work. That could serve two functions—to shield the founders from the impression of political partiality and to introduce distance between advocacy grantees and Zuckerberg’s own mixed reputation.

In what now seems like a prelude to this move, CZI saw in December the departure of Mike Troncoso, a former aide to Kamala Harris, who served as head of CZI’s Justice and Opportunity Initiative. Troncoso was himself the successor to David Plouffe, of Obama campaign fame, who came aboard CZI to some fanfare at the beginning of 2017 to lead the organization’s expanding advocacy work. Plouffe remains a “strategist in residence” at CZI. 

It’s unclear what will become of the Justice and Opportunity Initiative itself. CZI Vice President of Technology Osi Imeokparia is now serving as interim head, and Zamora is unlikely to be the only staffer who’ll make the move to one of the two intermediaries. CZI did offer that its structure will end up looking different, but that it plans to remain a leading funder across all three issues: criminal justice, immigration and housing. On that last front, at least, things will remain the same: CZI will continue its direct grantmaking for housing affordability. 

“We must go further” on racial equity

In their annual letter for 2020, Zuckerberg and Chan started off with overtures to collaboration and the need to “build the right infrastructure,” priorities these recent changes at CZI certainly reflect. Their third lesson was hardly a surprise: the need to do more on racial equity. “While we have made some key investments in the last five years to advance equity,” they wrote, “we must go further to consistently and systematically apply a racial equity lens across all of the areas in which we work.”

According to CZI, the organization has been engaged in efforts to center racial equity since well before the summer of 2020. But only in their annual letter did Chan and Zuckerberg begin to define what that’ll mean in monetary terms. Over the next five years, CZI intends to “support organizations and leaders which are leading the fight for racial equity in CZI focus areas” to the tune of $500 million. Of that total, $300 million will consist of refocused commitments within existing planned spending, and $200 million will be entirely new money. 

As part of its organization-wide commitment to advance racial equity, CZI formed an internal working group to determine how to apply that lens to all of its funding. It also just hired its first head of DEI, Belinda Stubblefield, who will play a key role in that effort. External engagement is a priority, with Chan and Zuckerberg’s letter mentioning outreach to “community leaders and partners in the field who are already steeped in this practice.”

These big moves on racial equity come in the wake of significant controversy. Last June, over 70 employees at CZI—most of whom worked for its education program—sent a missive to Chan and Zuckerberg calling for internal changes to combat systemic racism. CZI responded with a stated commitment to expand its equity efforts beyond what already existed, but that wasn’t the end.

Later that month, it became apparent that at least one prospective racial justice grantee, Color of Change, had turned down a CZI grant in the past. According to reporting from the Washington Post in August, members of CZI’s Black employee resource group claimed that “for years,” Black employees calling for more explicit attention to racial equity had met with “resistance and exasperation” from CZI leadership. And in November of 2020, Ray Holgado, a former CZI employee, came forward with damning allegations of “anti-Blackness” at the organization in an account published by NCRP.

Whether or not CZI can resolve what appear to be contentious internal debates over the sincerity of its racial equity commitments, there is at least one big sign that it’ll fund promising work externally. On February 4, the organization joined with a host of philanthropic partners to debut the California Black Freedom Fund (CBFF), a $100 million collaborative effort to resource Black power-building and organizing in CZI’s home state over five years. (See IP’s coverage on CBFF here.)

An ever-changing organization

Between its decision to offload criminal justice and immigration reform and its ramp-up of concrete racial equity commitments, big changes are afoot at CZI, a grantmaker that always seems to be facing at least a moderate level of tumult. This is yet another case of “stay tuned”—representatives from CZI say further announcements are coming down the pike soon. 

What seems clear at this point is that CZI is evolving in response to pressures and currents we’re seeing throughout the sector. It’s moving portions of its upfront advocacy work in a collaborative direction that may yield better results and risk less blowback for donor and grantee alike. It’s also trying to course correct after being called out for failures on racial equity, a reckoning underway at many philanthropic institutions right now.  

As for Chan and Zuckerberg themselves, these changes at CZI are very much in line with the emerging playbook of what we’ve called the new apex donor—excessively wealthy individuals like MacKenzie Scott, Jack Dorsey and Jeff Bezos who have begun to make massive, sector-shaping gifts on a new scale, without much in the way of staffed foundations or even LLCs. 

That’s not to say CZI’s going anywhere, although its criminal justice and immigration funding certainly is. But as two of the nation’s most scrutinized billionaires, Zuckerberg and Chan must be taking the temperature of the room and looking for ways to bolster or at least insulate their public image. Their massive and unorthodox commitment of philanthropic funds to secure last year’s elections—separate from CZI—was an obvious example of that effort, and epitomized the apex donor approach. They cut huge checks and stepped back.

If the couple continues along that path, they’ll be engaged in a different sort of philanthropic disruption than what we once feared from all these young techie billionaires. Instead of parachuting in with all the answers, they’ll simply send in all the money and let others formulate solutions. That does little to diminish the immense power they’ll still wield as donors, but maybe it’s an improvement in a world brimming with outrageous fortunes and bad ideas.