California and a few other states are now sitting on a bundle of cash generated from the sales now legal marijuana. Lots of nonprofits are lining up to receive the money. But what kind of conversation should boards have about this new source of monies? A lot of conversation - one that is guided by a discussion about values and facts and their consumers and their mission.
The Chronicle of Philanthropy offered the following review of the situation noting that some nonprofits are thinking hard about this dilemna - one that is akin to that which built places of worship all across the US - built mind you from both those who did an honest day of work and those who didn't. Yes, nonprofit boards need to have this conversation and as I have always urged, there should be a discussion that leads to a policy that describes what is tainted and what is not and when to take and when to night. Is it really possible that some tainted money is ok to take?
Here's some features from the article.
Nonprofits Have an Unexpected New Source of Funding: State Marijuana Revenue
Fathers and Families of San Joaquin, a small nonprofit that serves young people and people who have been through the criminal-justice system, got a big influx of money in 2019. The $1 million grant came from a surprising source — California’s marijuana sales.
The group, whose revenue was about $2 million a year before receiving the grant, trains formerly incarcerated people as substance-abuse counselors. Former inmates conduct workshops and training for young people in youth correctional facilities. The group has rapid-response teams for domestic abuse and child abuse and has partnered with a Native American substance-abuse program for healing ceremonies.
So many of the problems the organization tackles in and around Stockton, Calif., can be traced to the war on drugs, says Samuel Nuñez, the group’s executive director. He remembers police officers knocking down his front door when he was a child — something he says was common in his neighborhood — and his mother sitting terrified on the floor. Nuñez was in and out of juvenile facilities, nearly died at 18 from a shotgun blast, and served time in prison for retaliating. Then he changed his life.
“They were fiercely policing our communities, they were traumatizing us,” Nuñez says. Young men grew up without fathers because they were behind bars.
Over the past two years, California has tried to reverse some of the damage. The state is using some of the fees it collects from the sale of recreational marijuana to give grants to community groups like Fathers and Families that serve people and communities harmed by the war on drugs. So far, the state has awarded nearly $100 million, a figure expected to jump to $175 million in May.
California is not alone. Alaska and Illinois have similar programs, and as more states legalize the drug, additional programs could be on the way. In the 2020 election, voters in Arizona, Montana, New Jersey, and South Dakota approved measures to legalize the recreational use of marijuana. At the end of March, the New York state legislature passed a marijuana legalization bill that will set aside 40 percent of tax revenue for grants to community groups and local governments to help communities disproportionately affected by harsh drug policies.
overnor’s Office of Business and Economic Development and the Department of Health Care Services, both of which would receive the funds. He also brought together racial-justice and policy groups and put together recommendations on how best to use the funds to address fallout from the war on drugs. One goal was to make sure that funds went to small community-based groups run by people of color that often serve or employ people who have been incarcerated or have otherwise been affected by drug policies.
Ethical Concerns
Alaska is also making grants to nonprofits from revenue set aside from recreational marijuana sales. Although the state decriminalized marijuana in the 1970s, a 2014 ballot initiative set up a marketplace for legal sales.
Commercialization sparked concern about potential increased use of the drug by young people, says Thomas Azzarella, director of the Alaska Afterschool Network, which advocates for and supports youth programs. The state allocated 12.5 percent of its revenue from marijuana sales to fund after-school prevention programs. Azzarella says that young people who are in such programs are 2.5 times less likely than their peers to use marijuana
Azzarella’s group is distributing the state funds and providing technical assistance to grantees. It recently awarded its first round of grants — $1.25 million to seven organizations, both large established groups like the Boys & Girls Clubs and small community groups. Unfortunately, the need still outstrips the available funding: It received requests for about $2.5 million.
Illinois legalized recreational marijuana sales in January 2020. About a quarter of the state’s revenue from cannabis goes to organizations that work on civil legal aid, re-entry from prison, violence prevention, economic development, and business development in communities that were hurt by past drug policies. The program is overseen by a board made up of elected officials, community members, and people who have been through the criminal-justice system. So far, it has made 80 grants totaling $31 million.
Not all grant makers and nonprofits embrace money tied to marijuana. Using funds generated by the sale of marijuana means programs designed to stop people from using marijuana end up relying on drug use for support.
It’s something Azzarella has thought about a lot. He knows he is not going to stop legalization. For him, it’s a question of how to work within the system to do the most good. “We are not for or against the industry. We recognize if legalization occurs, we need to be focused on prevention,” he says. “With the new industry comes additional risks and hazards. And this is our way to ensure that the industry is a good partner.”
Keddy says few people in philanthropy recognized the opportunity in the cannabis revenue funds — and were willing to support his effort to get that money to nonprofits.
“A lot of philanthropy, you talk to them about engaging on cannabis policy and it’s just like it’s icky to them,” he says. “They don’t want to be around it.” While younger foundation executives are more open to the business, he says the older ones just don’t want to get involved.
At the California Endowment, which did support his efforts, there was some initial concern that getting involved with marijuana revenue funds would mean condoning the use of the drug, Madura says. But comparing the idea to the state’s use of cigarette taxes to fund children’s programs was helpful. People are going to use marijuana, just like they are going to use cigarettes, she says. The question then becomes how to use that money to help people before they use the substance rather than addressing health concerns after the fact. It also presented an opportunity to repair some of the harms caused by the criminalization of the drug.
“There are these dollars coming in. They belong to the people of California,” she says. “How can they be invested in the most disproportionately impacted communities in California?”
New Attention
Nuñez with Fathers and Families of San Joaquin says the money his group received is small recompense for the violence and trauma visited upon his community. But the recognition the grant brought has opened doors for his group.
“Proposition 64 funds definitely elevated our profile and actually gave us the opportunity to prove our model,” he says. He says the organization’s programs have led to some of the lowest recidivism rates in the state. For a long time, Nuñez struggled as a former convict to raise money and get policy makers to take notice.
Now city officials are interested in understanding more about his work. He says the grant was critical in drawing attention to his methods, and the results speak for themselves. “We’re so proud.”