Funding Crunch Hits Drug Reform Movement

Disclosure: This article discusses funding sources that support DRCNet.

Lay-offs, deferred projects, canceled conferences -- these are some of the immediate consequences of a funding crisis now hitting the drug reform movement. While the funding squeeze is due in part to general economic and social factors, it also reflects shifting priorities for some major individual funders and institutional changes that have slowed the funding process. However one divvies up the responsibility, the impact is already showing up.

"There is less money available than last year," said Ethan Nadelmann, executive director of the Drug Policy Alliance, an organization that, along with George Soros' Open Society Institute (OSI), helps decide on grants funded through the Tides Foundation Fund for Drug Policy Reform. "A number of things account for that. First, the economy is poor, and many people who contributed got hit by the stock market."

The money crunch is not limited to drug policy reform. Indeed, in its March 6 issue, the Chronicle of Philanthropy reported that even the nation's largest private foundations have seen their assets drop for the third straight year and that more than 100 of them are reducing or freezing their grant levels this years.

"Second," said Nadelmann, "there is growing competition for funding, not only within the movement, but between drug reform and other concerns," he told DRCNet. "Many contributors are Democrats and were focused on the elections last year, and since then they continue to focus on the composition of the federal government."

But also, added Nadelmann, OSI is reducing its share. "With OSI, there is a continuing commitment in the area of drug reform, but not at the level it was in 1999 and 2000." The move is part of a broader OSI retreat from operations in the US, he said. "OSI is going through an evolution toward a significantly reduced level of funding, and a number of US projects are basically being phased out in the next few years. Drug reform has fared well within OSI, but is not exempt from the overall reductions."

And Nadelmann pointed to one more reason for the funding slowdown. "Folks are stepping back and trying to reassess. We suffered various losses on ballot initiatives last year, and Washington is firmly in the hands of the drug warriors. There is a lot of questioning about what are the optimal strategies. Ballot initiatives loomed large for funders, and now there is some questioning of that."

That's not news to the Campaign for New Drug Policies, the organization behind California's Proposition 36 and a slew of other successful initiative campaigns in the states. CNDP has just laid off three staffers for lack of funds. "We're down to bare bones," CNDP's Dave Fratello told DRCNet. "We don't have any funding commitments or guaranteed plans for next year, but we continue to throw ideas at funders."

Part of CNDP's problem, said Fratello, is the cyclical nature of its campaigns. "When you work in election campaigns, you don't expect to stay in business and automatically get funding for new campaigns," he explained. "Our staff goes up and down, and right now we're at the low point between election cycles. We're still trying to raise money, and we remain optimistic about the future."

Dave Purchase, executive director of the North American Syringe Exchange Network, wishes he could wax as philosophical as Fratello, but he told DRCNet funding problems have already forced NASEN to cancel its annual conference -- and then some. "We had to cancel the conference because a grant we anticipated receiving never came," Purchase told DRCNet. "At first, we thought it was late, now we don't know when it will come or how much it will be. In addition to canceling the conference, we have reduced our staff time by 40%, effective February 15. Since we only have the equivalent of two full-time employees, no one has been laid off, but what this means is that no one will be in the office to answer the phone on Fridays, our responses to inquiries will be slower, and we are looking at what other programs we may have to cut."

What galls Purchase as much as the lost funding is the lack of notice. "The real problem is we are in an unpredicted immediate fiscal crisis without warning," he said. "Nobody's funding cycle is set up to send us a check in two weeks. If something isn't worked out fast, we'll have to make really drastic decisions long before the granting process can be completed."

The funding crunch has also hit the Harm Reduction Coalition, a New York-based harm reduction education and resource center, which announced two weeks ago that it could not publish its newsletter, the Harm Reduction Communication. But it's worse than that, HRC director Allan Clear told DRCNet. "It's not just the newsletter," he said. "We've all taken pay cuts. It's like standing on a table and having two legs kicked out from under you."

Clear wasn't happy with the way HRC's major funder had operated regarding the sudden loss of money. "To be told when you're already in your funding year and relied on the money to arrive at a certain time, then get a phone call saying the money has been cut and they don't know when it will come, is tough to deal with," he said. "We don't have to produce a newsletter, but we do have to pay the rent. Now I have to waste time figuring out how I can sublet the office. You know, maybe compared to active needle exchange programs, what we do is a luxury, but our money goes to interacting with people in the movement, and if you're going to be a movement for social change, you can't be getting undermined by your allies like this."

But Clear wasn't ready to let the Harm Reduction Communication die just yet, either. "I have to find the money to keep us going through the next few months," he said, "but if we can find the money to print and mail it, it will go out. In the meantime, this is a great time to be sending in submissions -- if we can put together a brilliant issue, maybe we can get someone to fund it. And we will continue to have it available on the web."

The two big institutional sources of movement funding are the Tides Foundation's Fund for Drug Policy Reform, which administers grants formerly handled by George Soros' Open Society Institute (OSI) and the erstwhile Drug Policy Foundation, now part of the Drug Policy Alliance; and the Marijuana Policy Project's grants program.

The MPP grants program is dedicated to supporting "efforts that foster measurable changes in US public policy that will lead to marijuana's being regulated similarly to alcohol and to marijuana's availability for medical use," according to MPP's web site. The program, which is funded by Progressive Insurance chairman Peter Lewis, one of the so-called "troika" of big individual drug reform funders along with George Soros and John Sperling, disbursed $950,000 last year, and is set to award $1 million this year, MPP executive director Rob Kampia told DRCNet.

The MPP grants program does fund some efforts that are broader than marijuana alone but have a significant marijuana-related component, said Kampia, citing recent grants to the Higher Education Act reform campaign (DRCNet received a grant of $39,000+ for non-student organizing in key Congressional districts) and to Flex Your Rights, an organization that teaches young people how to respond to police encounters. "If we see that there is a project that will advance our goal of ending marijuana prohibition, such as HEA reform, then we can fund it," said Kampia.

MPP holds three grantmaking rounds per year, cutting checks in March, May and September. Tides has not yet announced a 2003 schedule, however, and this is what many organizations are watching and waiting on. Tides money, and its predecessor programs at DPF and OSI, have provided crucial support for groups ranging from the Austin Harm Reduction Coalition and the Puerto Rican Alianza Positiva (Positive Alliance) to the November Coalition and the Topeka AIDS Project, and many other organizations working in drug reform, harm reduction and related areas. (See listing.)

"Tides support for DRCNet work and projects in the last 14 months exceeded a hundred thousand dollars," DRCNet executive director David Borden said, "so obviously we like the places where Tides gives their money." DRCNet received $58,000 in general support from Tides plus $30,000 to hire a campus coordinator for the Higher Education Act reform campaign during that time, and Tides also awarded $20,000 to Narco News for travel costs of Latin American participants in DRCNet's conference last month, "Out from the Shadows: Ending Drug Prohibition in the 21st Century", in the Mexican city of Mérida on the Yucatán peninsula.

"Two and a half months into 2003, 80 percent of our budget for the year is still up in the air, though not all of that is dependent on Tides. I'm not sure if I'll be able to pay my staff in two weeks, let alone two months or the rest of the year. Our key campaigns have been significantly affected by this situation," Borden continued. "Last year, we used a portion of our core funds to pay for direct lobbying and coalition work in the HEA campaign -- culminating in the pivotal May 21 press conference at the Capitol, where 10 members of Congress spoke out for full repeal of the HEA drug provision. But this year, we can't do that, because we don't have core funds. Students for Sensible Drug Policy is facing the same problem, without as large a set of financial supporters as DRCNet has to draw on, so they can't pay for it either. We're working together to find creative ways to make the things happen over the next month that urgently need to, and DPA is pitching in staff time too. But not much money plus not much money doesn't add up to sufficient resources to do the job." DRCNet and SSDP are mustering forces for a Capitol Hill press conference and Day of Action next month promoting Barney Frank's reintroduced bill, H.R. 685, to repeal the drug provision in full.

DRCNet's work has also been indirectly affected by the movement's larger financial woes. "We called every drug reform group in the country on the phone to pitch them on attending our conference," Borden said. "A few did show up, but the vast majority told us they'd love to go but were just too broke -- even if we waived the registration fee, they couldn't afford the plane tickets. That in turn meant fewer paid registrations and therefore less money with which to sponsor Latin American attendees. With 300 people there, the conference still turned out well -- in part due to Tides support -- but it could have been even bigger and better."

"Tides went through inevitable startup problems," acknowledged Nadelmann. "That happens whenever you reorganize or initiate a substantial grants program. And this program is handling grants to about a hundred organizations, along with three directed programs -- one on California's Prop. 36, one on reducing heroin overdose fatalities, and on one drug reform in Latin America. A lot of these problems should now be in the past." [Editor's Note: The three directed programs mentioned above were funded for 2002 and will not necessarily be the same ones funded for 2003.]

But more than organizational problems at Tides, said Nadelmann, the primary problem is more good groups and projects competing for less money. "There's less than last year, but hopefully as much as two years ago, and the number of competing quality programs and organizations is only increasing."

"We thought we had a much larger pot to work with," said Michelle Coffey, the senior program officer for Tides who manages the Fund for Drug Policy Reform, "but OSI, which is our major source, is only providing approximately $2 million this year, about half of what it provided last year. We continue to seek additional funding sources, but they haven't yet come forth, so now we are reevaluating the cycle," she told DRCNet. "There is an internal evaluation about how to reduce the harm to the movement, so we have not announced the 2003 schedule, and that is probably where the tension and apprehension is coming from."

But things are moving, said Coffey. "We got this information about reduced funding at the end of the year, and it's been hard to move everything forward, but we hope to have everything announced in the coming weeks. Most of the delay has been about how to move forward in a healthy, responsible manner," she said. "I understand that folks are upset because they don't know what's going on, and we are trying ways to get this information out rapidly," Coffey continued. "Our first announcement for the 2003 funding cycle will go out in the mail, but we've cut back on mailings to decrease administrative costs, and we'll usually be communicating via e-mail. We don't yet have the funding cycle confirmed, and we don't know the amount we will be able to give away yet, but we will let people know as soon as possible."

But even when the Tides Foundation for Drug Policy Reform money comes, there will be less of it. That means beating the bushes, said Nadelmann. "We've had to make a contingency program for the Tides program having half the funding it had last year, and while we are hopeful that more funds will become available, it is incumbent on organizations to do whatever they can to raise additional funds." The matter is especially serious for needle exchange programs, some of which had succeeded in raising funds from state and local governments, said Nadelmann.

Borden is worried about the future, and not just payrolls. "With the initiative strategy up in the air after a tough election season, grassroots and legislative efforts are more important than ever. If our movement doesn't start to provide consistent and adequate resources in a timely manner to the most promising efforts, there's no way we will be able to sustain the force needed to change drug laws during a time of conservative ascendancy. We may instead suffer greater and greater setbacks, unnecessarily, which in turn will decrease the interest of funders -- and politicians -- in supporting drug reform. I'm not talking about less progress made five years from now than we'd hoped; I'm predicting a major train wreck in the next 12-18 months if things don't change in a big way."

NASEN's Dave Purchase isn't waiting around for the collision. When asked if NASEN was exploring alternative funding sources, he replied: "You bet your ass. Have you got $5 you can lend us?"

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