PhilanTopic

Protect Charitable Deductions for Stronger Communities

2013-06-18T14:30:00-04:00

(Jen Klaassens is vice president of programs at the Wasie Foundation, which supports scholarship programs for students of Polish ancestry at colleges and universities in Minnesota and make grants to nonprofit charitable organizations in a number of areas.)

Congress is threatening to eliminate the charitable deduction as we know it -- at the expense of millions of people in need. Specifically, lawmakers on both sides of the aisle are talking about imposing a cap or limit on the value of the charitable tax deduction as part of a bigger effort to raise additional revenue and/or "simplify" the tax code.

The charitable deduction is a unique element of the federal tax code that encourages Americans to selflessly invest in their communities. Capping or limiting the deduction is not the solution to current budget concerns.

Philanthropy spurs innovation, aids the most vulnerable, provides relief in crises, supports education and health, advances cures and scientific breakthroughs, enhances the arts, and makes investments that fuel economic growth. For every $1 a donor receives in tax relief, communities garner as much as $3 in benefits. It is highly unlikely government could find a more effective way to leverage private investment in vital community services.

The charitable deduction works. It encourages Americans to give a portion of their income to charitable causes without getting anything back, benefiting communities across the country as well as the larger economy. In many cases, donors also experience a sense of well-being from helping. Limiting or capping the deduction will reduce charitable giving, which will hurt Americans most in need. Nonprofits already struggling to balance increased demands for services with reduced income need more support, not less.

The Wasie Foundation, part of the Foundations on the Hill Florida delegation, is actively reaching out to members of Congress and encouraging them to preserve the charitable deduction so as to ensure a thriving charitable sector that has adequate resources to address needs in our communities and invest in the mounting challenges confronting society. Foundations on the Hill consists of thousands of grantmaking foundations that have come together around a single message: there is an inextricable link between thriving communities and charitable giving.

Here are a few statistics: nonprofit organizations put $1.1 trillion into the economy every year in the form of human services; 1 in 10 Americans work for a nonprofit, and the sector accounts for 13.7 million jobs; and a significant majority of Americans (67 percent) are opposed to capping or limiting the charitable deductions, while 62 percent say they would likely reduce their charitable giving by a significant amount (25 percent or more) if the deduction is capped or limited.

The message is clear: Americans want to protect the charitable deduction. We urge Congress to maintain the deduction in its current form and protect the critical role philanthropy plays in strengthening our economy and communities.

-- Jen Klaassens

After the Giving Pledge: Strategic Philanthropy Is More than Money

2013-06-17T14:04:58-04:00

(Mary Glanville is Managing Director, Institute for Philanthropy UK. The London-based institute works to increase effective philanthropy in the United Kingdom and internationally by providing donor education, building donor networks, and raising the awareness and understanding of philanthropy.)

In February, the Gates Foundation announced that the Giving Pledge, founded by Warren Buffett and Bill and Melinda Gates in 2010, would for the first time extend its invitation to philanthropists outside the United States. The pledge, whose signatories propose to give at least half their wealth to charitable causes, welcomed twelve more people to its ranks, bringing the total number of those who have signed the pledge to a hundred and five.

It's a commitment that does not tally with the traditional media-held view of wealthy individuals and their families, a view that portrays the preservation of assets as the primary if not sole consideration. In order to understand what has prompted the apparent urgency and scale of this charitable giving, we asked twenty-two donors in our networks about the rate at which they intend to deploy their philanthropic capital. Their responses were revealing in several respects.

The donors came from many countries and regions -- from the UK, the U.S., Brazil, Canada, Lebanon, and Mexico -- and they or their foundations had philanthropic assets on average of $79,081,250, from which they gave an average of $2,168,050 each year. Half said they would give at least 25 percent of their wealth to charity.

Despite the regional differences, it was possible to discern a common theme in their areas of giving: none of the respondents gave money to the arts, as might be expected, but instead gave to address social issues that they considered among the world's most pressing problems. One donor was particularly forthright on this point, stating that "I generally believe in addressing the needs of underserved poor in the neediest parts of the world, where I have worked for much of my professional life, not the arts or environmental needs so popular among donors here at home, or SOBs (symphony, opera, ballet) -- as much as I love them personally."

Among this group of twenty-two, the four leading charitable causes, by frequency, were education, children and youth, community re-generation, and the environment. Impact investing and technology also were fairly high in the rankings. In addition, there was a notable emphasis on the part of respondents on being proactive and fully engaged in their grantmaking. One donor remarked that "I strongly believe that philanthropy can be more effective when driven by the wishes and strategy of a living donor. Long-lasting philanthropic institutions can become sclerotic and bureaucratic, not always but often. Family foundations may end up with their hands tied by a legacy directed at tackling a social problem that no longer exists." Another highlighted the need to avoid "safe" causes, saying: "I focus on leadership and because my funds are limited support smallish charities with dynamic leadership in unattractive and unpopular fields where it is difficult to raise funds."

Perhaps the most promising theme was the focus on collaborating effectively with other individuals and organizations toward a common goal. One donor put it best, identifying the key elements of such collaboration: partnership, engagement, and empowerment. As he put it:

Partnership: the more we -- civil society, philanthropists, NGOs and activists -- can work together toward a cause, the faster we can move the needle.

Engagement: not only personal engagement, but moral and legal and financial engagement. Empower the organization so they do the best they can to move the needle. Help the executive team to excel in their strategy and operations to achieve their mission and reach goals they have set with their trustees and other constituencies.

What is clear is that making well thought-out, intentional decisions about the rate and timeframe over which assets are deployed can often assist in making one's philanthropy more strategic. It is encouraging to see these issues being raised more frequently between philanthropists across the globe, and it will be particularly exciting to see how donors in emerging markets inform this new vitality in charitable giving. We look forward to seeing and reporting on how the space develops.

-- Mary Glanville

Weekend Link Roundup (June 15-16, 2013)

2013-06-16T14:52:25-04:00

Our weekly roundup of new and noteworthy posts from and about the nonprofit sector....

Civic Engagement

Guest blogging at Beth's Kanter's blog, Kate Wing, a program officer at the Gordon & Betty Moore Foundation, shares some of the exciting new developments in the civic engagement space she heard about at the 2013 Personal Democracy Forum conference.

Corporate Philanthropy

"Stop bending over backwards for corporate partners," Denise Lillya, a senior research at the Directory for Social Change in the UK, tells nonprofits. "[C]ompanies usually want to hear what they're going to get out of any giving; they are receptive to arguments that it is a saving, an opportunity, an investment," Lillya writes, but "it's clear that too many companies continue to regard philanthropy as a means by which they can benefit -- ironic as that is."

Data

Christian Villum, community manager for Open Government Data at the Open Knowledge Foundation, announces the Global Open Data Initiative, a joint effort of the foundation, the Open Institute, Fundar, the Sunlight Foundation, the World Wide Web Foundation, and Open Knowledge to share principles and resources with governments and other stakeholders on how to harness opportunities created by opening government data.

Leadership

On Thursday, the Minnesota Council on Foundations announced the appointment of Trista Harris, executive director of the Headwaters Foundation for Justice, as its next president. To learn more about Harris, watch this "Flip" chat we recorded with her back in 2011. And congratulations, Trista!

Philanthropy

In latest installment of the Cohen Report, the Nonprofit Quarterly's Rick Cohen looks at foundation funding for rural nonprofits in the U.S. and concludes "that the best rural community development organizations in the nation have a hard row to hoe in tapping foundation support." What's more, Cohen writes, the funding situation for rural nonprofits is likely to get worse before it gets better in part because "foundations have started to lose interest in supporting housing and community development."

In the latest installment of Bloomberg's Good Talk series, Lewis Lapham, long-time editor of Harper's Monthly and founding editor of Lapham's Quarterly, talks to Vartan Gregorian, president of the Carnegie Corporation of New York, about the "theory and practice of philanthropy." As Lapham notes, no one knows more about the latter than Gregorian.

And on the Philanthropic Initiative's Deep Social Impact blog, TPI managing partner Ellen Remmer addresses the same topic -- "the understanding and practice of philanthropy" -- through a global lens.

That's it for now. What did we miss? Drop us a line at rnm@foundationcenter.org. And have a good week!

--The Editors

'Talking Good' With Joe Jones, President/CEO, Center for Urban Families

2013-06-15T14:58:01-04:00

Just in time for Father's Day, our friend Rich Polt at Communicate Good has posted the inaugural on-camera interview in his Talking GOOD series, a regular feature spotlighting the good works of "citizen philanthropists" -- purpose-driven individuals whose commitment to a cause is a central aspect of their being.

In the video below, Joe Jones, a former drug addict and repeat offender who had an epiphany in a Baltimore City courtroom, got himself off drugs, and went on to found the Center for Urban Families, talks about the first time he felt like a father.

In the video and accompanying transcript, Jones talks with Polt about his purpose in life, how his work with BRFP has changed him, and the burning question he would like to pose to his community. Enjoy.

And Happy Father's Day to all you fathers out there!

-- Mitch Nauffts

Foundations and Climate Change: 5 Questions for…Robert Searle, Partner, Bridgespan Group

2013-06-13T17:00:00-04:00

In recent years, the debate over climate change has centered on greenhouse gas emissions, which have been linked by scientists to rising global temperatures. But after Superstorm Sandy wreaked havoc on coastal areas of New York and New Jersey, underscoring the importance -- and vulnerability -- of critical infrastructure systems, many policy makers and environmentalists began to shift their attention to climate change adaptation strategies.

To help advance the debate, the Bridgespan Group has released a report, How Philanthropy Can Help Communities Advance Climate Change Adaptation (12 pages, PDF), that examines the funding environment for these strategies and offers a number of suggestions for foundations looking to support adaptation efforts in a post-Sandy context. Recently, PND spoke with Bob Searle, a partner in Bridgespan's Boston office and co-author of the report, about the impact of Sandy on the climate change debate, the tradeoffs between mitigation and adaptation, and some of the things foundations can do to advance the debate.

Philanthropy News Digest: The climate effects of a warming planet had been predicted long before An Inconvenient Truth was released in 2006. Why has it taken so long for the discussion about climate change to get serious?

Robert Searle: I think there are two primary reasons, and they are interconnected. The first is that all science involves an element of uncertainty, and climate science is no exception. There are elements of the climate situation that are quite certain. For example, greenhouse gas concentrations in the atmosphere are increasing, and that increase has led to a general warming of the planet. There are other aspects that are less certain and open to interpretation and judgment; for example, whether human activity is the major cause of these changes, and what the environmental and social impact of climate change will be.

And this is where the second reason comes in: The biggest source of greenhouse gases is the burning of fossil fuel, and the global economy is based on fossil fuels. In other words, there are incredibly strong vested interests in not making the explicit connection between man-made greenhouse gases and the potentially devastating effects of climate change. Those vested interests will naturally seize on any element of uncertainty to argue against change that will threaten economic development, especially when the economy is already shaky.

One mistake that the environmental community has made is to allow itself to be painted as anti-people and anti-economic development on the climate issue. There was a great article in the Fall 2012 issue of the Stanford Social Innovation Review titled "Climate Science as Culture War," by Andrew Hoffman, that speaks to some of these points.

PND: Has Hurricane Sandy changed the way shore communities in New York, New Jersey, and Connecticut plan for and invest in infrastructure projects?

RS: It seems like it's starting to. Just this week, Mayor Bloomberg announced a $19.5 billion plan to invest in infrastructure to protect New York City from future storms and sea-level rise. However, he didn't identify any funding streams for the initiatives, and infrastructure investments happen over a long period of time, so it's unclear how much things will really change, especially in the short term. So while the mindset of people seems to have changed, it's not clear how much action that will translate into.

PND: In terms of their response to climate change, should foundations be pushing an agenda of adaptation, an agenda of mitigation, or both?

RS: The answer for an individual foundation probably depends on its particular strategy, but there's clearly a need to work on both mitigation and adaptation. If you believe the majority of climate scientists, increased concentrations of carbon in the atmosphere could lead to devastating consequences, particularly for the most vulnerable populations on the planet, human and otherwise. So it doesn't make sense to abandon efforts to curb emissions of greenhouse gases.

However, there is plenty of evidence that the effects of climate change are already being felt. And a lot of these effects are happening faster than climate models predicted a decade ago, so ignoring those impacts doesn't make much sense. As we mention in our paper, low-income and other disadvantaged populations are less able to cope with the consequences of climate change, so foundations that care about these populations certainly have a role to play in adaptation.

We also think there are a couple of aspects to the adaptation issue relative to mitigation that make it attractive for foundations. The first is the opportunity to leverage public dollars. If foundations can help influence how public money that is already budgeted gets spent so that the investments take into account the effects of climate change, that's a lot of leverage for the foundation and a big win for society.

The second aspect is the nature of adaptation investments relative to mitigation. In general, adaptation is incremental and doesn't require massive changes to things like the global economy. So it's likely to be an easier lift than making headway on mitigation, at least in the near term.

PND: In the report, a number of foundations leaders were quoted as saying that pursuing an adaptation agenda felt like giving up on mitigation. Is it too late for mitigation?

RS: We hope not. But just in case, we aren't investing in any beachfront property.

PND: What can small, grassroots environmental organizations and foundations that traditionally don't fund public policy or advocacy do to make a difference?

RS: Based on our research, we think there are important roles for grassroots organizations to play, and they don't necessarily require hard-core advocacy or public policy work. One example in our paper is UPROSE, which is a community-based organization in Brooklyn. UPROSE has been engaged with climate change adaptation with local officials and nonprofit and business leaders. It has participated in several local planning processes, such as working with the New York City Department of Transportation on adaptation measures such as permeable pavement and bio swales -- landscape elements designed to remove silt and pollution from surface runoff water.

Similarly, there are important roles for foundations at the local and national levels that don't come close to the public policy or advocacy arena. Advocacy, at least in the form of public pressure, is important, but there are many other levers that need pulling. Our paper outlines five agenda items for philanthropy: One, support local science by local scientists; two, invest in neutral conveners; three, support community advocacy for change; four, build the field to share adaptation strategies; and five, reframe the dialogue around people and social benefits.

The first three strategies lend themselves to local or place-based funders, while the last two are more appropriate for national funders. So on the topic of climate adaptation, there are opportunities for all kinds of foundations to make a difference.

-- Matt Sinclair

Foundations and Public Interest Media: A 'Flip' Chat With Vince Stehle, Executive Director, Media Impact Funders

2013-06-12T16:02:29-04:00

(The video below was recorded as part of our "Flip" chat series of conversations with thought leaders in the social sector. You can check out other videos in the series here, including our recent chat with Mona Chun, deputy director of the International Human Rights Funders Group.)

"There's a saying: If paying for journalism is a down payment on democracy, it's a bargain," Vince Stehle, executive director of Media Impact Funders, told me during a recent chat. "The cost of corruption and a lack of transparency and accountability in government can really be a costly thing for society in many ways, so whatever we need to pay, whether it's through commercial media or through foundation and individual support for journalism, is a bargain."

The wisdom of Stehle's words has never been more apparent. And yet, with the economy stuck in neutral and cheap digital tools making it easy for anyone to be a publisher, traditional news and media outlets find themselves under increasing pressure to cut costs and "right-size" their operations -- or get out of the way.

Enter nonprofit news organizations. While the number of such organizations has increased over the last few years and the nonprofit model would seem to be more sustainable than the traditional ad-based model, a new report from the Pew Research Center suggests that nonprofit media outlets face considerable challenges of their own -- foremost among them inadequate and uncertain revenue streams. Indeed, the report (26 pages, PDF) found that while 61 percent of the nonprofit news outlets surveyed received a startup grant from a foundation, only 28 percent reported that the funder making the grant had agreed to renew it.

Many of us think that foundations are -- or should be -- an important source of funding for public interest media. But how important are they? That's something Stehle and his colleagues at Media Impact Funders (formerly Grantmakers in Film + Electronic Media) wanted to know. With support from the Knight and Ford foundations, the Foundation Center has blended its data with GuideStar and built a new data mapping application that, when launched in the fall, will provide a comprehensive look at philanthropic support for media in the United States. According to Stehle, the application, which will be publicly available on the MIF Web site, shows "literally thousands of funders and billions of dollars of funding for a broad range of media in the public interest."

In the video, which was recorded at the Manhattan studios of Democracy Now!, Stehle, who spent a decade covering fundraising and management issues for the Chronicle of Philanthropy and was a program director at the Surdna Foundation, discusses how the media landscape has changed since MIF was founded in 2006, the fuzzy line between "money and influence" that media funders have to navigate, and his idea that foundations should create a rapid-response mechanism "to respond to major threats and opportunities in a more timely fashion."

(If you're reading this in an e-mail, click here.)

(Running time: 7 minutes, 19 seconds)

Have a thought or comment you'd like to share? Use the comments section below....

-- Regina Mahone

Foundations and the 'New Normal': A Q&A With Bradford K. Smith, President, Foundation Center

2013-06-10T13:09:31-04:00

(The following Q&A with Foundation Center president Bradford Smith appears as part of a special feature on "Philanthropy in a changing world economy" in the June 2013 issue of Alliance magazine. It is reprinted here, with minor revisions, courtesy of Caroline and her team.)

Caroline Hartnell: To what extent are U.S. foundations changing in response to austerity?

Bradford K. Smith: I started this job two weeks after Lehman collapsed. On my first day in the office, we had a press call about what foundations were doing about the economic crisis. I put down the phone and walked down the hall to our research department and said, "Quick, I need a statistic," and they came up with a really good one. Foundation giving for the previous year, 2007, was around $45 billion -- about 6 per cent of the first stimulus package announced by the federal government. So one thing the crisis really showed up was the scale of foundation resources. When the economy gets into serious trouble, it takes government to try to keep it from collapsing. Foundation dollars alone aren't enough to solve problems. That made foundations think more about how they can leverage money from each other, how they can collaborate with other sectors rather than trying to do it themselves.

A second interesting thing is that foundation giving held up quite well during the recession. One reason is that U.S. foundations calculate their mandatory payout on a rolling three-year average of the value of their assets, which cushions them from big market swings. It also held up well because foundations actually went beyond the federally mandated payout rate of 5 percent.

CH: The recession has changed things for the foreseeable future. Do you think U.S. foundations see this as a "new normal" and are rethinking their role?

BKS: I think most of them are adjusting to the idea that long-term expectations for returns on investment need to be reduced. 2012 was a good year in the financial markets, but nobody really expects that it will go back to the boom years when, as one foundation investment manager put it, for a number of years "all we had to do was get out of bed in the morning and we could make a 20 percent return on our endowment."

CH: What will that mean for foundations? Spending down part of their assets? Trying to get the mandatory 5 per cent figure changed?

BKS: I don’t think foundations will try to get that changed. They've fought hard, during strong years in the stock market, to maintain the 5 percent level.

But with declining assets, going above 5 percent in the years following the crisis means that they've been spending their assets. In order to maintain the value of those assets, they'll have to give less or do better on their investments in the future. We did some research on whether or not more foundations have made the decision to spend down, and the answer is not really.

The decision to spend down or exist in perpetuity is less a strategic one than a question of donor attitude. Sixty percent of U.S. foundations are family foundations, so many decisions are about expectations of family involvement in the future. We found that the largest group was those who have left it open for future generations to make that decision. Does this mean that families in the "open" group are also open to the possibility that they might not exist forever? At the very darkest point of the recession, there was some soul searching among foundations about the fact that if their assets declined enough and they maintained their grantmaking at the same level, the result would be either to spend themselves out of existence or to resign themselves to being smaller foundations. But we haven't seen evidence of a conscious decision to adopt a spend-down approach because of the recession.

Some of these foundations have been around a long time: Rockefeller and Carnegie are celebrating a hundred years, Ford is celebrating seventy-five years, and they've seen a lot of bad markets. The Ford Foundation suffered such a decline in the value of its assets in the 1970s that it took until the mid-1990s to recover. But that didn’t change Ford's view of perpetuity. What it changed was the amount of resources it had available to achieve its mission.

CH: You mentioned that foundations have adjusted the way they work. Can you give an example?

BKS: Approaches to grantmaking have changed. There is more interest in providing general operating support. The Weingart Foundation, for instance, a large foundation that funds primarily in Southern California, responded to the recession by adopting the provision of general operating support as a strategy. When the crisis was at its worst, the best thing it could do to help nonprofits was to make sure they could pay the bills, pay their staff, and do the work they're supposed to do.

The other thing we saw was greater willingness by foundations to make program-related investments -- PRIs -- where they make subsidized loans to nonprofits for activities that produce income, which might in turn provide a monetary return for the foundation. During the recession, a number of foundations joked that their best returning assets were those PRIs. There was something like a 2 percent interest rate on some of those loans and the nonprofits were paying that back, whereas foundations were losing 17, 25, sometimes 30 percent on their stock market investments.

That was one reason why interest in PRIs increased. The other was that, in a situation where endowments were declining, it was a way to extend the use of foundation resources beyond their grantmaking, because PRIs come out of foundations' equity.

Related to that, the recession gave a push to mission-related investing, which some people call impact investing, which also uses the equity part of a foundation portfolio. This is different from socially conscious investing, which is basically trying to make sure there is nothing toxic in your portfolio. Omidyar Network provides a good example of this. As part of their work on mobile technology, they made an equity investment in a Mexican telecommunications services provider, Micel (formerly Finestrella), to enable access to smartphones and affordable mobile Internet for those without bank accounts or credit cards. Mobile phones are increasingly seen as a means to deliver essential services and empower low-income consumers to make informed decisions. But if you don’t have mobile access, you can't have mobile delivery of anything, and you probably wouldn't fund a nonprofit to expand cellphone access. So, although it's still a minority, I think more foundations are looking seriously at how they can use their endowment to do this kind of thing.

CH: What about renegotiation of relationships with different sectors, for example between foundations and the state.

BKS: There is a lot more interest in public-private partnership at all levels, though it is tempered a bit by foundations' wariness about being stuck with the bill. In the U.S. and Europe, there has been a tendency among governments, local and national, as their revenues have declined, to say, "We'll stop funding, for example, the arts and we'll get foundations to do it." There was even a case in California where foundations were written into a state budget. They were cutting back their spending, and they put a plug on the revenue side called "foundations."

Still, there is more interest in partnership. In cities like Detroit and parts of Ohio and Pennsylvania, the old Rust Belt region where steel and automotive manufacturing used to dominate, you see foundations stepping in and trying to work with government. Again there is a certain reluctance, because foundations don't feel they could ever be a substitute for a viable public education system, for example.

But some foundations have taken the lead on re-envisioning certain cities. Detroit, for example, is never going to be the city it was -- the epicenter of automobile manufacturing and the birthplace of organized labor -- so the Kresge Foundation, the Skillman Foundation, and others in the region have tried to re-envision it. I think it's a good use of foundation resources because they can work without electoral or market pressure. It also brings into play another strength of foundations, which is their ability to convene. In Detroit, there is now public-private collaboration called Detroit Future City involving corporations, community groups, state officials, and foundations.

CH: Are foundations also collaborating more with each other and with the corporate sector?

BKS: There has always been some collaboration with companies, particularly on economic development and job issues. But you're also seeing more collaboration around technological innovation, especially with companies like Google that see themselves in some way as contributors to the public good. There's more of an appetite for foundations to collaborate with each other. It's not an easy thing to do: the costs are high, partly because of the individual nature of foundations, which means that each has a unique information system. They might not even see the possibility of collaboration, because it's difficult for them to see that they’re working for the same thing.

CH: Do you think these changes are a stopgap until the crisis passes, or are they being consciously adopted as a long-term strategy?

BKS: I think they are likely to continue because the economic crisis altered the resource base available to the private sector, the public sector, and philanthropy. But there are other factors. Technology is making it much easier to get information and collaborate. Impact investing is taking off because there are more vehicles for foundations that want to do it. The typical argument against impact investing used to be that there weren't enough investments for foundations to put money into. Now there are special investment funds, a whole body of literature, groups working on this. I think it's fair to say that although the recession induced some rethinking of the philanthropy industry, these changes are not just a result of the bottom falling out of the economy.

CH: So you don't agree with some of our editorial board members who have said that foundations have put their heads in the sand rather than rethink their strategy?

BKS: Obviously, the foundation world is varied, with a small number of richly endowed foundations and a sea of very small ones. What's more, there's a sort of demographic replacement as some wind up and new ones are founded. So there are new ideas coming in all the time, and I believe there is more thinking going on in philanthropy than people give it credit for.

CH: Do you see the rethinking and changes that have come out of the recession as by and large positive?

BKS: I think so. You're not going to see a radical transformation of philanthropy -- it's not the kind of field that radically transforms itself -- but we are seeing change that's important. Growing inequality is a phenomenon in the U.S. as well as everywhere else.

CH: What are foundations doing about that?

BKS: From the end of 2008 to 2010 we were able to track about $550 million worth of grants made by U.S. foundations to address the recession. A lot of it was service provision for emergency situations, like people losing their homes. What we didn't see much is grantmaking focused on the nature of the financial and economic system itself, looking at why the crisis happened and what we can do to try to make sure it doesn't happen again -- though there are one or two exceptions. The Sloan Foundation in New York has done work in this area and is now supporting a project to create a unique identifying system for all parties to financial transactions. When Lehman Brothers collapsed and the regulators had to liquidate it, it turned out to be seven thousand different corporations, all over the world. So this would create a fast way to uniquely identify all parties to financial transactions and then link them back say to Lehman or Goldman Sachs. I think the MacArthur Foundation and the Hewlett Foundation are interested in working on the challenges posed to democracy by inequality, but it's a relatively small amount of work.

Philanthropy of the kind we're talking about -- and that Alliance tends to write about -- comes from big money, from accumulated wealth. At some point, the person or family or company that owns that wealth decides to put it toward public benefit. So it would be surprising if philanthropy came up with a new economic system all on its own.

What is interesting is the growing support for social entrepreneurship, which in some ways is a challenge to the structure of the economy. There are social problems that all these years of foundation funding and aid programs have not been able to solve, and maybe we can solve them through social entrepreneurship. A lot of it is technology-driven and there is a lot of energy and creativity in that space. For instance, there are interesting things happening around payment systems that allow people in remote parts of the world to work and get paid through their mobile devices, so people who were outside the economy can become part of it. Whether this will fundamentally address inequality is another matter, and no amount of innovation will allow us to duck the big question of what kind of world we want to create.

I was talking earlier to the president of a foundation that funds universities, and the whole notion of residential education is being challenged, first because it's expensive to house students on a campus, and second, because more and more people want to take classes online. A lot of what we assume about institutions is being reinvented. This is happening partly because of the economic crisis but also because of changes in information and technology.

-- Caroline Hartnell

Weekend Link Roundup (June 8-9, 2013)

2013-06-09T14:57:41-04:00

Our weekly roundup of new and noteworthy posts from and about the nonprofit sector....

Collaboration

"The idea behind nonprofit mergers isn't cost savings -- in a high-touch world like ours, there is only so much excess you might be able to trim in a merger," writes Boston Foundation president/CEO Paul Grogan in PhilanTopic. "Rather, it's all about service. Organizations that merge and/or collaborate build capacity to do more of what they do best, and do it even better...."

Communications/Marketing

On the Knight Foundation blog, Elizabeth Miller highlights conversations from the 2013 Grantmakers for Effective Organizations conference about how funders can better communicate what they learn:

Prioritize the audience. Know specifically whom you're trying to reach with your findings so that what you're learning is shared in the right circles.

Market determines method. Understanding who will benefit from these insights may determine the best way to deliver them. Different platforms or social media outlets may be your "friends" in distinct cases.

Enlist the evaluated. Work with grantees to help disseminate the findings.

Reflect and refine. Take time to measure the success of your efforts. Measurement is as important as the planning process in terms of understanding what works. Use specific analytics to determine whether dissemination methods were effective, whether you targeted the right audiences, and how you could improve on the overall strategy next time.

Beth Kanter, co-author of Measuring the Networked Nonprofit, shares findings from a recent report on video use among nonprofits by Edelman, See3, and YouTube. Based on a survey of five hundred nonprofits as well as interviews with experts in the field, Into Focus: Benchmarks for Video and a Guide for Creators found that while video is important now and will become even more important for nonprofit groups over the next three years, more than half of respondents said their budgets do not support more video production.

Diversity

In a video on the Bush Foundation blog, Jennifer Ford Reedy, the Minnesota-based foundation's president, talks about the foundation's new Resident Fellows program, which will offer three-year staff positions to a variety of individuals "in order to inject new ideas into the foundation and provide a launch pad for the fellows' subsequent career opportunities."

Grantmaking

In another post on the Knight Foundation blog, Jenna Buehler recaps three tips on learning from failure shared by the Annie E. Casey Foundation's Rafael López, the Henry P. Kendall Foundation's Courtney Bournes, and Knight's own Michael Maness at the GEO conference's opening panel discussion: 1) Confront it; 2) Be a champion for change and ask the hard questions; and 3) Give it time. "[I]t's important to allow time and space for ideas to incubate and grow," said Maness. "Offering context and information on the practice itself can help to warm up leaders prior to the big pitch."

Human/Civil Rights

On the Open Society Foundations blog, Kasia Malinowska-Sempruch and David Holiday look at recent attempts by human rights groups to get governments to adopt drug policy reforms aimed at ending the failed War on Drugs.

Impact/Effectiveness

Philanthropy 411's Kris Putnam-Walkerly urges funders to think about three questions when evaluating a grantmaking program or initiative:

What do you want to know?
Who needs to know it?
How will the evaluation findings be used?

Leadership

In a recent article for her On Leadership column at WashingtonPost.com, Jena McGregor wonders why Nancy Brinker is still listed on the Susan G. Komen for the Cure's Web site as the organization's CEO nearly a year after the cancer charity announced that Brinker intended to step down from the position. The charity, which was widely criticized for its February 2012 decision to stop funding Planned Parenthood affiliates -- a decision which it subsequently reversed -- is in the midst of a "very thorough executive search," Komen spokesperson Andrea Rader told McGregor. Maybe so, but "it may be that much harder to find and attract incoming CEO candidates," writes McGregor, "when they know the founder will be sticking around in a yet-to-be-well-defined role."

Social Media

The Robert Wood Johnson Foundation is asking for help in naming its new podcast, which is scheduled to launch next month. Hosted by Christine Nieves Rodriguez, program associate of RWJF's Pioneer Initiative, the podcast will "provide listeners with insight about the types of ideas in which the Pioneer team wants to invest,...[and] will include conversations with program officers, grantees, and friends, as well as news about grants and events." Have an idea for a name? Share your suggestions here.

That's it for now. What did we miss? Drop us a line at rnm@foundationcenter.org. And have a good week!

--The Editors

To Innovate…Collaborate

2013-06-06T18:30:12-04:00

(Paul Grogan is president and CEO of the Boston Foundation. His blog, City of Ideas, appears regularly on the Boston Foundation Web site.)

"If we put our heads together, we might be able to figure this out."

It's a bit of folk wisdom that often rings true -- and for a number of years, the Boston Foundation has highlighted the opportunity for collaborations and mergers to tackle otherwise intractable problems.

In 2010, we co-founded the Catalyst Fund for Nonprofits, a five-year, $1.925 million fund in partnership with local funders Boston LISC, the Hyams Foundation, the United Way of Massachusetts Bay and Merrimack Valley, and the national Kresge Foundation. The idea behind nonprofit mergers isn't cost savings -- in a high-touch world like ours, there is only so much excess you might be able to trim in a merger. Rather, it's all about service. Organizations that merge and/or collaborate build capacity to do more of what they do best, and do it even better.

In Boston, the much-publicized merger of the Pine Street Inn for the homeless and hopeFound, a job training nonprofit serving the same client base, has proven a success, as demonstrated in a recent assessment of the Catalyst Fund's work and in a profile in the Boston Globe. The merger has allowed the two organizations to connect their respective job training programs and opportunities in a way they likely never would have as separate entities, and the results have been remarkable.

But to succeed, we also need to see the power of a more grassroots-level of collaboration. In that vein, we launched our first-ever Collaborate Boston competition this winter. The premise was simple: We'd pose a problem and then open the floodgates to proposed solutions, with one important restriction -- all the proposals had to bring together organizations in collaborative efforts to address the issue.

What we hoped to achieve was slightly more than that. We wanted to inspire organizations that didn't normally talk, or talk as much as they should, to work together toward a specific outcome.

For the initial competition, we put up $100,000 in prizes for collaborations that focused on "improving the lives and futures of black & brown boys and young men, ages 9-15, living in Roxbury, Dorchester and Mattapan." Seventy different collaborations applied and had their applications reviewed by a remarkable advisory committee comprised of business, government, nonprofit, and philanthropic leaders. Twelve made the finals and made an in-person pitch for their projects, and in the end two were selected.

Black and Latino Boys at the STEM of Success partners a Boston Public Schools office, a university STEM center, a Latino STEM group, and one of the state's largest construction firms in a collaboration to create neighborhood-based robotics teams and provide academic and social support. The other, the Codman Square Brotherhood Project, brings together neighborhood arts, business, ministerial, and men's groups with neighborhood police to create a supportive infrastructure, a brotherhood, for boys age 10-14 in Dorchester's Codman Square section.

Last week, the two winners presented their plans to about one hundred and fifty funders, donors, and civic and community leaders. (You can watch their presentations on the Boston Foundation YouTube channel.) All twelve finalists were invited to attend the celebration and take the opportunity to network, share ideas, and maybe even find funding for their efforts. The conversation was lively, the mood was celebratory, and ideas and connections were abundant.

It's a conversation we in philanthropy need to encourage, because the power of effective collaboration and mergers can only serve to amplify the best of our creativity, innovation, and ideas.

We’ll be working to ensure that the conversation continues, and that organizations looking for broader partnerships and collaborations to enhance their work continue to have the support they need.

Because if we put our heads together, we might be able to figure some things out.

-- Paul Grogan

Advancing Social Media Measurement for Foundations: A Re-Cap (Part Two)

2013-06-05T16:30:00-04:00

(Beth Kanter is the author of Beth's Blog, one of the longest running and most popular blogs in the social sector, and co-author of the acclaimed books The Networked Nonprofit [J. Wiley & Sons, 2010] and Measuring the Networked Nonprofit: Using Data to Change the World, [J. Wiley & Sons, 2013]. A version of this post originally appeared on our Transparency Talk blog.)

In my post yesterday, I discussed what working transparently means as well as the benefits of transparency, and I left you hanging with a promise to discuss how to measure your foundation's transparency return on investment.

Transparency is like any other measurement challenge; you first need to be clear about what you are measuring. For our purposes, the first is assessing the impact of a change in transparency on your organization by measuring the change in the benefits created by being more transparent -- in this case greater organizational efficiency and/or constituent/stakeholder trust. And the second is evaluating how transparent your organization actually is.

How to Measure Improvements in Organizational Efficiency

To measure changes in organizational efficiency you first need to have a chat with your accounting and operations departments to figure out what the organization is tracking in terms of efficiency metrics. If no one in the organization is tracking efficiency metrics, chances are someone in one of those departments knows how to do it and can help you. Typical efficiency metrics include:

percent reduction in response time from inquiry to satisfied resolution;
percent reduction in staff hours responding to queries;
percent increase in satisfaction and knowledge of employees.

The benefits of increased transparency can also be quantified by conducting a relationship survey.

How to Measure Improvements in Trust

Several studies have shown that the more transparent people perceive an organization to be, the more likely they are to trust the organization. Indeed, the willingness to be open and transparent was found to be more important than competence. In other words, people care more about an organization's willingness to be open and transparent than whether it is competent enough to do what it says it is going to do!

How to Measure Your Own Transparency

While the field of transparency measurement is relatively new, thanks to the work of Brad Rawlins and others there are established techniques to quantify the transparency of any organization.

Measurements of transparency typically look at four separate but equal components:

Participation. The organization asks for feedback, involves others, takes the time to listen, and is prompt in responding to requests for information.

Substance. The organization provides information that is truthful, complete, easy to understand, and reliable.

Accountability. The organization is forthcoming with bad news, admits mistakes, and provides both sides of a controversy.

Absence of secrecy. The organization doesn't leave out important but potentially damaging details, doesn't obfuscate its data with jargon or confusion, and isn't slow to provide data (or only provides it when required).

In Measuring the Networked Nonprofit, we recommended using questions based on the work of Dr. Rawlins or the Who Has Glass Pockets? assessment, which your foundation can use to audit its own transparency. Typically a survey like this is administered either as a group discussion or as a written survey followed by a group discussion of the results. Some areas of discussion that should emerge as a result of such an exercise are outlined below:

Is our organization participative?

Do we involve stakeholders to help identify the information we need?
Do we ask the opinions of stakeholders before making decisions?
Do we take the time with stakeholders to understand who we are and what we need?

Do we provide substantial information?

Do we provide detailed information to stakeholders?
Do we make it easy to find the information stakeholders need?
Are we prompt when responding to requests for information from stakeholders?
Are we forthcoming with information that might be damaging to the organization?
Do we provide information that can be compared to industry standards?
Do we present more than one side of controversial issues?

Are we accountable?

Do we provide information in a timely fashion to stakeholders?
Do we provide information that is relevant to stakeholders?
Do we provide information that could be verified by an outside source?
Do we provide information that can be compared to previous performance?
Do we provide information that is complete?
Do we provide information that is easy for stakeholders to understand?
Do we provide accurate information to stakeholders?
Do we provide information that is reliable?
Do we present information in language that is clear?
Are we open to criticism?
Do we freely admit when we make mistakes?

Are we secretive?

Do we provide only part of the story to stakeholders?
Do we leave out important details in the information we provide to stakeholders?
Do we provide information that is full of jargon and technical language that is confusing to people?
Do we blame outside factors that may have contributed to the outcome when reporting bad news?
Do we provide information that is intentionally written in a way to make it difficult to understand?
Are we slow to provide information to stakeholders?
Do we only disclose info when it is required?
Do we only disclose “good” news?

Measuring Stakeholder Perceptions

The second part of transparency measurement is assessing whether your stakeholders perceive your organization as being transparent. To measure that, you need to ask your stakeholders whether they agree or disagree with the following statements. (These questions also can be added to grantee perception reports or other surveys that are routinely conducted by foundations.)

The organization wants to understand how its decisions affect people like me.
The organization provides information that is useful to people like me for making informed decisions.
I think it is important to watch this organization closely so that it does not take advantage of people like me.
The organization wants to be accountable to people like me for its actions.
The organization wants people like me to know what it is doing and why it is doing it.
This organization asks for feedback from people like me about the quality of its information.
This organization involves people like me to help identify the information I need.
Provides detailed information to people like me.
Makes it easy to find the information people like me need.
Asks the opinions of people like me before making decisions.

The transition to transparency may be discomfiting, but the benefits of inviting people in and sharing in your strategy development far outweigh the potential downsides. Imagine how much stronger responses, feedback, and suggestions from your network will make your organization -- and how exciting it will feel to share your work with even more people. And with a measurement strategy in place, you'll know for sure that your organization is walking the transparency talk and changing for the better.

-- Beth Kanter

Advancing Social Media Measurement for Foundations: A Re-Cap (Part One)

2013-06-04T16:30:00-04:00

Last month, I was invited to participate in a meeting organized by the Robert Wood Johnson Foundation where I presented on the State of Nonprofit Social Media Measurement. The participants were a cross-disciplinary group and included people who work at different foundations in the areas of evaluation, communication, social media, and programs, as well as people who work for nonprofits or as consultants in the areas of evaluation, social media, network analysis, and data science.

We had two working sessions where we focused on defining outcomes, strategies, key performance metrics, and measurement methods for five outcome areas that may be common to many foundations' communications strategies, including transparency -- a topic that KD Paine and I devoted an entire chapter to in our book Measuring the Networked Nonprofit.

Transparency is a developing practice for nonprofits and their funders, and the field of transparency measurement is embryonic. Transparency exists to a lesser or greater degree in all organizations. To be transparent means that an organization is open, accountable, and honest with its stakeholders and the public. Greater transparency is a good thing, not just because it is morally desirable, but because it can provide measurable benefits.

Measureable Benefits of Transparency

Transparency helps an organization to engage its audiences and accelerate the processes of learning and growing. Two of its readily measureable benefits are increased organizational efficiency and improvements in stakeholder perceptions of trust, commitment, and satisfaction.

Increased efficiency: Transparency improves organizational efficiency by reducing or eliminating the gatekeeping function, which not only takes time but can be an exhausting way to work. When foundations are working transparently, problems take less time to solve, questions require less time to answer, and stakeholders' needs are met more quickly.

Increased trust, satisfaction, and commitment: Dr. Brad Rawlins' research has demonstrated that increased organizational transparency is directly correlated to increases in trust, credibility, and satisfaction among an organization's stakeholders. Indeed, Rawlins sees a key benefit of transparency as "enhancing the ethical nature of organizations in two ways: first, it holds organizations accountable for their actions and policies; and second, it respects the autonomy and reasoning ability of individuals who deserve to have access to information that might affect their position." (Rawlins is dean of the College of Communications at Arkansas State University.)

Now that we have defined what working transparently means as well as a couple of its benefits, we need to look at out how you measure it. In my next post, I'll outline the best approaches for doing just that.

-- Beth Kanter

Weekend Link Roundup (June 1-2, 2013)

2013-06-02T14:55:08-04:00

Our weekly roundup of new and noteworthy posts from and about the nonprofit sector....

Communications/Marketing

Guest blogging on the Inside Philanthropy blog, Katherine McLane, vice president for communications and external affairs at the Livestrong Foundation, explains how the organization plans to move on from the doping scandal involving its founder, international cycling star and cancer survivor Lance Armstrong. "None of us anticipated the rapid and radical changes that are now the new normal," writes McLane. "But we're dusting ourselves off and keeping the focus where it should be: helping people with cancer...."

Community Improvement/Development

The folks at the Philanthropy Potluck blog give a shoutout to MCF member the Bush Foundation, which has launched two new grant programs designed to "enable, inspire, and reward community innovation" in Minnesota, North Dakota, South Dakota and the twenty-three Native nations that share the same geography.

Fundraising

On the Chronicle of Philanthropy blog, Carol Weisman, an international consultant who specializes in fundraising, governance, and volunteerism, shares some advice about "what to do when donors say 'no' or 'I'm not sure'."

Grantmaking

On the GrantCraft blog, Rosien Herweijer shares links to a handful of "visual summaries" for grantmakers in Spanish, French, Italian, and Turkish.

Leadership Development

"What if, instead of barreling ahead, relentlessly focused on keeping their organizations afloat (until they burn out trying), effective nonprofit leaders started delegating more and more responsibility to staff -- at once paving the way for a next generation of leaders, and freeing themselves to think about their own leadership in more expansive ways?" asks Stefan Lanfer, knowledge officer at the Boston-based Barr Foundation. "And what would emerge if, at the same time, a critical mass of these great leaders become a great network?" These are the questions the foundation set out to explore in creating the Barr Fellowship, a network of nonprofit leaders whose stories of personal, organizational, and city transformation are now featured in three short films: Reflection and Rejuvenation, The Power of Disruption, and Social Capital & Emergence.

Regulation/Oversight

As the Internal Revenue Service continues to deal with political the mess created by its exempt organizations office in Cincinnati, Lucy Bernholz suggests on her Philanthropy 2173 blog that the real issue has more to do with the money flowing into political campaigns and less to do with "incompetence and mismanagement" at the IRS. "For this there are two...solutions," adds Bernholz.

[F]irst, fund candidates and parties directly and require full disclosure of all such gifts. This is was what campaign finance looked like before Watergate revealed the cracks in the system and we responded by taking the first steps to today's broken system. The second...is to provide public money for campaigns and not allow private gifts above a certain percentage. This is what Larry Lessig has been promoting with Rootstrikers. It's appealing, but even Lessig recognizes it's very slim chances of happening under current conditions (which is why he's also calling for a Constitutional convention).

There is a third way that has nothing to do with stopping the flow of money in, but instead focuses on the flow of money out. Most of the dollars raised go to broadcasting candidates’ messages. If we made air time (television and radio) free to candidates and campaigns, limited the length of campaigns to a certain period of time and gave everyone the same amount of airtime (on those publicly owned, privately leased airwaves of ours) we’d kill the beast of demand and supply would wither in response....

Social Media

According to analyst Mary Meeker's annual review of Internet trends, mobile usage globally will continue to grow rapidly over the next twelve months, writes Katya Andresen on her Non-Profit Marketing blog. According to Andresen, Meeker also predicts that multimedia content will continue to dominate on the Net, that social media usage will continue to grow, and that organizations will discover "it’s nearly impossible not to have full transparency -- whether that’s coming from your organization or those talking about you."

That's it for now. What did we miss? Drop us a line at rnm@foundationcenter.org. And have a good week!

--The Editors

Leveraging a Budget to Build a Foundation-Grantee Partnership

2013-05-31T10:55:27-04:00

(Steven Green is the director of grants management and administration for the Jim Joseph Foundation, which seeks to foster compelling, effective Jewish learning experiences for young Jews in the United States.)

In many ways, a grantmaking relationship begins with a shared understanding of a budget. This is not to say that grant financials supersede programmatic goals; rather, they are essentially complementary: comprehensive financial reporting, accompanied by a detailed budget narrative, sets a roadmap for an organization's programmatic priorities.

When a funder and a grantee come together for budget reviews, it is an opportunity for them to explore how grantee management of the funding can support efficient implementation of the grant. They can think more strategically about how to achieve their shared goals. For the Jim Joseph Foundation, conversations about timing of grant payments and reporting on grant implementation are part of a relational funder-grantee dynamic. Four key factors, all related to financial practices, can provide the framework for a substantive foundation-grantee partnership:

Pay prospectively. By the time we award a grant to an organization, we have undertaken an extensive review of its mission alignment, fiscal health, leadership, strategy, and prior accomplishments. In addition, the grantee has already invested significant resources in advancing beyond the application process.

As grantees will attest, we request thorough documentation on the projects to be funded. From this information, we gain an understanding of the stages of a grantee's initiative and can anticipate when payments will be needed. We often agree to a payment schedule that provides part of the funding in advance of when expenditures are expected to occur. This practice supports an initiative's growth and progression, and it provides a sense of security for the grantee. Moreover, making selected grant payments in advance allows both parties to focus more on the actual initiative and less on the dollars. (Incidentally, we have a similar relationship with researchers, consultants, and independent evaluators. While we reserve a small payment to be made at the end of each contract, a majority of the contract awarded is paid prospectively. Reconciliation based on wages and expenses occurs at the end of the contract, when a final payment is calculated.)

Specify budget requirements and be willing to adapt. Along with specifying programmatic benchmarks, it is imperative that the grantmaker be clear about which financial reporting is necessary and avoid requesting documents that do not provide any critical information about the success of a grant or the financial well-being of an organization. Our goal is to gain a full understanding of the grantee -- how it has been operating and how it seeks to operate in the future. Over the past year, we standardized the questions that we ask in each of our internal systematic budget reviews of major grants. These questions, which help us formalize the items that we request as fiscal deliverables, include:

Are there any red flags in the most recent audited financials, including a citation in the management letter?
Is there a single/multiyear deficit in the program or organizational budget? If so, do we know why?
Are foundation payments consistent with actual budgeted payments?
Are actual revenues and expenses consistent through different iterations of the budget?
Are personnel costs appropriate? What are the FTEs?
Is carryover accounted for and consistent between years?
What percentage of the program/organizational budget does the foundation pay?
Does the organization have adequate cash flow/reserves?

Interacting with each grantee on an individual basis is paramount to developing a partnership. We understand that each organization is unique. Rather than requiring all grantees to conform to a specific percentage basis for overhead costs within the budget, we try to understand what the overhead relates to in each circumstance and ensure that the agreed-upon percentage is consistent across the grant period. And if we discover that expenses or revenues vary from the original budget projections, we are open to adjusting payments accordingly. We have even had cases where the organization changed its grant strategy midway through the grant period and we were able to adapt the grant.

Our goal is to move forward with grantees to achieve shared goals. Before issuing payments, we make sure to understand the reason behind a budgetary choice and confirm that the budgets come to the foundation with the formal approval of the grantee's board.

Schedule budget-related deliverables and payments collaboratively. The foundation coordinates payments to grantees based on when deliverables are submitted and approved. We have preliminary conversations with grantees regarding when budgets and related information (including audited financials, program and organizational budgets and actuals, and cash flow documentation) should be submitted to avoid redundant production of materials. Typically, cash payments are scheduled around the organization's board meetings, fiscal and program/academic years, and annual audits. It makes little sense to have a budget for an academic program operate on a calendar year simply because that was when a foundation issued the grant -- that would simply create an additional burden for the organization and more opportunity for mistakes in the budgetary process. Instead, by having this dialogue, we limit the need for an organization to create new budgets for the sole purpose of satisfying our grant reporting requirements in favor of those that are already created for the organization's board or other donors. In other words, as recommended by Project Streamline, we try to "align grant schedules with the grantee's timing," not our own.

Maintain communication with other funders. Funder communication is two-fold and centers on both reporting and funding. First, whether or not a grant began through co-funding, coordinating an organization's reporting among multiple funders can be timesaving, informative, and productive. In addition to the fact that foundation professionals can learn from one another about best practices for monitoring financials and program achievements, organizations' administrative workload is reduced when funders receive the same reports and communicate with one another. While we never share an organization's proprietary financial information with other funders, we encourage grantees that are co-funded to adopt more collaborative reporting practices.

Secondly, just as a foundation should communicate concerns about an organization's performance, it also is important for a funder to highlight the organizations that are good fiscal and operational stewards. While the grantmaking process is an opportunity to support a cause, it also is an opportunity to showcase a grantee or specific initiative to other foundations and help open up additional funding opportunities.

Budgets are more than just pro forma documents. They provide a roadmap for both the funder and grantee that depict the interaction of expenses, revenues, and project activities. When leveraged appropriately, budgets can be the "jumping-off" point for a productive partnership for both parties -- crystallizing goals and leading to positive long-term outcomes.

-- Steven Green

Scaling Social Innovation

2013-05-29T12:30:00-04:00

(Paul L. Carttar is a partner at the Bridgespan Group and former director of the Social Innovation Fund, a federal initiative that enlists private intermediaries to help expand innovative programs proven to promote economic opportunity, healthy lives, and youth development.)

In much the same way a parent feels extraordinary awe and wonder in watching his or her child grow up and succeed, I recently experienced a powerful sense of pride at a conference in Washington, D.C., devoted to the subject of bringing to scale innovative nonprofit programs, particularly those serving low-income communities.

The conference was sponsored by the Local Initiatives Support Corporation (LISC), the country's largest community development organization, and focused on LISC's successful scaling of Financial Opportunity Centers (FOCs) -- an initiative to help low-income people take control of their family finances. Working off a model developed by the Annie E. Casey Foundation, in just three years LISC has expanded the program from four centers in Chicago to seventy-one locations in thirty cities across the country. Much of the funding for this growth came from an innovative federal program called the Social Innovation Fund when I was the fund's director. As I said, I couldn't be prouder.

The FOC approach is simple but sound. It recognizes that getting a job is just the first step toward achieving long-term financial stability. So FOCs focus on improving the actual net cash a family has each month, taking account of what a family spends as well as what it earns, and helping low-income and unemployed individuals by providing an integrated set of services that are typically siloed. These services include not only job training and help getting and keeping a job, but also hands-on financial coaching related to budgeting and building credit, as well as assistance in identifying and applying for public benefits.

While we still have much to learn about the full impact of FOCs, there are clear indications the approach works. Over the past two years, nearly 75 percent of FOC clients improved their monthly cash flow and net income, while 43 percent raised their credit scores. In addition to improved cash flow and credit scores, clients receiving this integrated set of services showed dramatic gains in employment and net assets compared to those who received such help piecemeal.

At the Bridgespan Group, we often work with funders to determine how they can most effectively invest their resources to advance their missions. And while there are many valid approaches to generating social impact, one of the most compelling is to identify promising programs that are producing strong results in low-income communities and help those programs scale their impact.

But just because an approach is compelling doesn't mean it's easy to implement. So what has enabled LISC to make such dramatic progress in scaling the FOC program? We see three major factors.

First, the FOC model represents an intuitive, evidence-based means of addressing a widespread, persistent challenge facing low-income individuals. Job training and placement are critical, but true financial security comes from the totality of how individuals manage their financial affairs -- and that is what FOCs aim to affect on an individual client basis.

Second, because FOCs are not independent organizations but rather programs based on a model, they can readily be expanded to new communities by aligning with existing service-providing agencies that already have the clients, presence, funding, and governance needed for success. The model offers the potential for the host agency to significantly increase its own impact by providing a more complete and better integrated set of services aimed at achieving clear benchmarks.

Third, FOCs have the benefit of LISC's network of offices in dozens of urban and rural communities nationwide, as well as partners such as the United Way, which co-sponsored the conference. Working through these networks enables LISC to more rapidly and effectively attract funding and support, develop on-the-ground relationships, and engage staff while still preserving the integrity of the FOC model.

Our country needs more stories of successful social innovation and scaling. Simply put, we are not getting the biggest bang out of our investment in the public sector, where marginally effective programs often hang on well past their sell-by date and innovative, potentially high-impact ones face enormous challenges getting off the ground, much less achieving significant scale.

Fortunately, the federal government is beginning to recognize the problem. As Jonathan Greenblatt, director of the White House Office of Social Innovation and Civic Participation, noted at the conference, the government is looking to do more to support promising programs like Financial Opportunity Centers, innovations that have the potential to generate real impact and change lives. Not only will such an approach help government be a more effective funder and partner, it will also greatly increase America's ability to effectively address its most critical problems.

That's something we can all be proud of.

-- Paul Carttar

Managing Up: The Grantwriter’s Dilemma

2013-05-28T16:14:10-04:00

(Allison Shirk is a freelance grantwriter based in the Puget Sound region. In her last post, she wrote about the art of the phone call.)

Good grantwriters have a unique perspective with respect to nonprofit organizations: We know what grantmakers want to hear and we know what we'd like to be able to put into grant proposals. But when conspicuous gaps begin to show up in proposals, what should you -- the grantwriter -- do? Here are six elements of a good proposal that often are missing or inadequate, and some resources to help you and your employer/client address the problems they might be hiding.

1. Mission Statement: Does the organization's mission statement cause you to scratch your head? I've seen mission statements that fill an entire page and mission statements that no longer reflect the priorities and/or activities of an organization. Unfortunately, like an old quilt, board members tend to become attached to the mission statement they know, so proceed gently. Here are a few good resources about the art of the mission statement you can share with the board when the time is right: 1) how to create an effective mission statement; 2) the one-sentence mission statement; 3) eight words can be effective, too.

2. Board of Director Affiliations: When funders look at a board roster, they typically are assessing both the size and quality of the board. When they ask for "affiliations," they want to know the name of the company or organization where a board member works, or, if retired, most recently worked. For bonus points, feel free to describe the particular competencies (e.g., financial expertise, knowledge of IT systems, fundraising experience) that individual board members bring to the table. When a board member balks at providing information for this part of the proposal, explain why the funder wants to know and be sure to let the hesitant board member know that personal contact information is not part of the deal.

3. Strategic Plan: Funders want to know that an organization is not just focused on its immediate needs but has a vision for the next five to ten years, a strategy to achieve that vision, and a plan to get there. So what can you, the grantwriter, do when an application asks for a strategic plan and the organization doesn't have one? You can start by sharing with leadership the Organizational Capacity Assessment Tool, a self-assessment instrument developed by the Marguerite Casey Foundation to help nonprofits identify their capacity-related challenges and establish capacity-building goals. Then write about the process the organization has embarked on to identify those challenges and develop a plan to address them.

4. Budgets: The best organizational (and program) budget includes all the standard income and expense items across three columns -- last year's actuals, this year's estimated, and next year's projected -- and also explains any major changes or red flags in the narrative. (Remind the finance team that a budget is as much a part of the "story" the organization wants to tell as the narrative.) The Foundation Center's GrantSpace is a great one-stop shop for budgeting basics, sample budgets, and other budgeting resources.

5. Demographic Data: All nonprofits, but especially service-delivery organizations, should have a centralized database to store important data on their constituents, volunteers, partners, donors, grant opportunities, and so on. The nonprofit resource portal 501 Commons offers a nice assessment tool to help organizations evaluate their database needs (and lots of other good stuff). And if the thought of providing demographic data and case studies to funders causes senior management to break out in a cold sweat, have them read this article about case-management tools from the folks at Idealware.

6. Evaluation: Once you know who (in the aggregate) the organization serves, the next step is to find out whether those services are making a difference. Organizations should start with the basics -- you might want to suggest that leadership consider implementing a constituent-satisfaction survey. An easy way to approach such an objective is to choose one month out of the year during which every person who walks through the door is asked to fill out a survey. Then take it to the next level. Once you get the hang of them, logic models are a great way to understand the relationship between community needs and service provision. The W.K. Kellogg Foundation offers a free downloadable guide in the Knowledge Center of its Web site that provides practical assistance to nonprofits engaged in the logic-modeling process. You might also want to check out the fee-based four-part webinar series on outcomes thinking and management offered by the Foundation Center.

Regardless of the particular challenge or challenges you face in crafting a grant proposal that will get funders' attention and provide them with the information they require, be sure to always present yourself to senior management as an excellent source of knowledge and helpful resources. And remember: To effectively tell the story of an organization, you need to develop good relationships and an open, two-way communications channel with key board members and every manager and senior leader in the organization.

What kind of challenges have you encountered as a grantwriter looking to craft a compelling proposal for a well-meaning but less-than-organized client? Have any good resources you can share? We’d love to hear them. Use the comments section below....

-- Allison Shirk

(Long) Weekend Link Roundup (May 25-26, 2013)

2013-05-24T16:00:00-04:00

Our weekly roundup of new and noteworthy posts from and about the nonprofit sector....

Advocacy

Change.org founder and CEO Ben Rattray proudly announces that the organization, a certified B-corp, recently raised $15 million in investment capital through its first outside financing round, with the bulk of the funds provided by Omidyar Network. Rattray, who has said the organization will never go public, plans to use the investment to build tools that "more effectively empower hundreds of millions of people around the world;...enable people to build long-term movements on our platform; [and] personalize each user’s experience to better connect people to the issues and organizations they care most about....'

Communications/Marketing

On her Getting Attention blog, Nancy Schwartz shares a few tips from Amy Sample Ward and Allyson Kapin's new book Social Change Anytime Everywhere for nonprofits looking to improve their next multichannel campaign.

Community Improvement/Development

Ed Skloot, director of the Center for Strategic Philanthropy and Civil Society at Duke University, announces the publication of a new installment in a series of "occasional essays" written by thought leaders in the sector. In Changing the Game (48 pages, PDF), Boston Foundation president/CEO Paul Grogan reflects on the state of philanthropy and "the compelling strengths of community foundations as seen from his perch." Among other things, Grogan, who has served as president of the Boston Foundation for more than a decade, explains how "contemporary community foundations can become more agile, energized, relevant, and not least, consequential in their communities."

And on the CNN site, John Bare, vice president of the Arthur M. Blank Family Foundation and executive-in-residence at Georgia Tech's Institute for Leadership and Entrepreneurship, looks at how foundations, the Hudson-Webber Foundation among them, are rethinking their giving in Detroit to achieve maximum impact.

Education

For anyone who spends time training others, Beth Kanter has a fascinating post on her blog about "learning design." In her post, Kanter shares a few principles from Sharon Bowman's Using Brain Science to Make Science Stick that you'll want to incorporate into your next training session:

Movement is better than sitting.
Having participants talk is better than listening.
Images are better than words.
Writing is better than reading.
Shorter is better than longer.
Different delivery options are better than the same old.

Impact/Effectiveness

Our colleagues over at the Transparency Talk blog share a transparency-focused call to action from Hallie Preskill, managing director at FSG Philanthropy Advisors, that was included in the D5 coalition's annual State of the Work report (34 pages, PDF). In her article, Preskill notes that while she is excited to hear that foundations are paying lip service to the idea of being more transparent, she has yet to see "much evidence that many are truly embracing th[e] idea of transparency when it comes to sharing evaluation findings and other types of grantmaking data." Although "there are many reasons organizations may be hesitant about sharing evaluation results," adds Preskill,

a true learning organization will understand that with any good evaluation, there are important insights and lessons that deserve to be shared both internally and externally. A learning organization also knows that a good evaluation must start with sound data on who the organization is trying to impact and the contexts in which they operate, including data related to demographics.

This doesn't mean foundations have to publicize mean scores, quotes from those interviewed, or volumes of evaluation findings. Instead, it means being committed to collecting relevant, credible, and useful information that is strategically informative; being open to sharing what was learned from engaging in the evaluation process in ways that that help others think about their own work more critically; growing and adapting their practices to be more effective; and finding ways to achieve greater social impact. When evaluation and research activities and findings are made transparent, they can be a powerful catalyst for facilitating individual, group, organization, community, and field learning.

Philanthropy

On the Philanthropy Potluck blog, MCF communications associate Susan Stehling shares a few highlights from Practices That Matter (34 pages, PDF), a new report from the Grants Managers Network and Project Streamline that provides, among other things, a number of tips designed to help grantmakers improve their application and grantee reporting processes.

Commenting on the release of a new set of fact sheets in his organization's Philanthropic Landscape series, NCRP executive director Aaron Dorfman sees "hopeful signs that more foundations are giving in ways that benefit those that need philanthropic support the most," before adding that "only time will tell [whether] the...trends will hold."

Regulation/Oversight

The disclosure last week that the Internal Revenue Service had subjected to extra scrutiny a hundred and thirty or so groups applying for tax-exempt status as "social welfare" organizations because they had "tea party," "patriot," or some other politically charged word or phrase in their name certainly created a stir. But before we tear up the tax code and get rid of the IRS, write ProPublica's Kim Barker and Justin Elliott, let's keep in mind six facts that seem to have been lost in the scandal:

Social welfare nonprofits are supposed to have social welfare, and not politics, as their “primary” purpose.
Donors to social welfare nonprofits are anonymous for a reason.
The Supreme Court’s Citizens United decision meant that corporations could pay for political ads, anonymously, using social welfare nonprofits.
Social welfare nonprofits do not actually have to apply to the IRS for recognition as tax-exempt organizations.
Most of the money spent on elections by social welfare nonprofits supports Republicans.
Some social welfare groups promised in their applications, under penalty of perjury, that they wouldn’t get involved in elections. Then they did just that.

Social Media

And in the middle of writing a new book, tentatively titled Our Biggest Small Towns, Allison Fine wonders whether digital acts of kindness are making society as a whole kinder and more generous. What do you think? Share your thoughts here or in the comments section below.

That's it for now. What did we miss? Drop us a line at rnm@foundationcenter.org. And have a good week!

--The Editors

[Review] 'Why Philanthropy Matters: How the Wealthy Give, and What It Means for Our Economic Well-Being'

2013-05-23T17:00:00-04:00

The basic premise of Zoltan Acs' new book Why Philanthropy Matters: How the Wealthy Give, and What It Means for Our Economic Well-Being is that many people — including some very wealthy people — need to understand that philanthropy is both a moral and economic good. Acs' Exhibit A is Mexican telecom tycoon Carlos Slim Helú, who, when asked whether he planned to join the Giving Pledge — a campaign launched by Warren Buffett and Bill and Melinda Gates to convince the world's billionaires to dedicate a majority of their wealth to philanthropy — said: "Charity doesn't solve anything."

While Slim, one of the world's richest men, believes the wealthy do have an obligation to address endemic poverty, his preferred solution isn't charity; it's to use his personal wealth to create more jobs. Acs, who directs the Center for Entrepreneurship and Public Policy at George Mason University, doesn't fault that approach, although he is careful to distinguish between charity and philanthropy. The latter, writes Acs, involves "a reciprocal relationship between the philanthropist and the beneficiary" in which the beneficiary must invest its own time, energy, and resources in order to create a positive outcome(s). "In short," writes Acs, "philanthropy is an investment that stimulates other investments."

Indeed, according to Acs, philanthropy is an underappreciated economic force that strengthens American capitalism in two ways: by supporting entrepreneurship through investments in universities, basic research, and innovation; and by redistributing accumulated wealth into opportunity-creating investments. A former Kauffman Foundation fellow, Acs acknowledges that while the creatively destructive nature of American-style capitalism has served to foster an entrepreneurial spirit among Americans, it has also enabled a significant concentration of wealth in the hands of a relative few. And, he writes, it is only "through philanthropic investments — in particular through the organized, large-scale networks of what I call philanthropic entrepreneurialism — [that] the imbalance inherent in capitalist growth [can] be corrected to create a self-sustaining process in which wealth creation is supported alongside social innovation and opportunity."

Acs, whose heroes are Andrew Carnegie, Leland Stanford, John D. Rockefeller, and other industrialists-cum-philanthropists of the Gilded Age, identifies in American-style capitalism "a self-sustaining circle of opportunity, innovation, wealth creation, and philanthropy" and devotes a chapter to each of them, outlining the development of a distinctly American system characterized by entrepreneurialism and a spirit of giving back. (Acs is a big believer in American exceptionalism.) The lack of a strong state apparatus or class system in colonial America meant that wealth accrued not to a hereditary nobility but to hard-working entrepreneurs and innovators, a notion reinforced by Puritan and Quaker values. The democratic capitalistic system that evolved during the nineteenth century embraced a limited role for government in terms of supporting new enterprises and "in innovating systems of public education such as the land-grant universit[y]" — developments that were complemented by "a sustained parallel role of private philanthropy in innovating systems of private education." The result was the creation of a skilled workforce and a robust research infrastructure able to drive innovation in industry.

Focusing on the investment in universities, Acs describes a feedback loop in which an economy that allows for creative destruction rewards "breakthrough" innovations with outsized personal financial gains, which in turn are invested via philanthropy in new innovations that ultimately displace old industries, igniting a virtuous cycle of profits, wealth, and innovation. This dynamic was short-circuited, Acs writes, after World War II, as big business, labor, and government colluded in the creation of a "managerial economy" that valued stability over dynamism, shifted innovation to corporate research institutes, and eventually produced the economic stagflation of the 1970s.

The malaise of that period was shattered by the personal computer revolution of the late 1970s and '80s, writes Acs, a seemingly unstoppable force that once again led to the decentralization of economic innovation and created new engines of economic growth (e.g., Silicon Valley). In time, it also created income inequality to rival that of the Gilded Age. Which is where the crucial role of philanthropy comes in, Acs writes. Unlike British-style trusts, which are meant to preserve wealth, the private foundation structure in the United States mitigates against the concentration of wealth because most American philanthropists are entrepreneurs who are naturally inclined to support institutions, like universities, that promote and contribute to entrepreneurial activity.

According to Acs, America's prosperity is built on the backs of innovative entrepreneurs who become wealthy and then use their wealth to nurture, often through their philanthropy, the next generation of innovative entrepreneurs — a tidy, circular narrative that, at times, struck this reviewer as oversimplified and idealized. Indeed, even Acs has doubts about the sustainability of "philanthropic entrepreneurialism." He questions, for example, whether the virtuous cycle may have broken down, recognizing that failing elementary and secondary schools across the country are limiting opportunity for lower-income Americans, and wonders whether philanthropy is up to the challenge. And while he duly notes Facebook co-founder Mark Zuckerberg's $100 million gift to the Newark public school system and views charter schools as "the K-12 analog of creative destruction," one has to ask: Is that enough?

Having described at book-length what he calls a "self-sustaining circle of opportunity, innovation, wealth creation, and philanthropy," Acs notes that "[t]oday...the value of giving back is not universally shared, even in the United States, where the rich have retreated from the challenge of recycling their wealth to maximize the benefit to society. What is required to sustain U.S. and global capitalism in the twenty-first century is a renewed spirit of philanthropy among the new rich." How might U.S. philanthropists be encouraged to embrace that spirit? For starters, writes Acs, we should raise the estate tax rate and increase the payout rate for private foundations from 5 percent to 7 percent.

Why Philanthropy Matters is an accessible look at what some might call a relationship of convenience between American capitalism and philanthropy in which each is both a product and an enabling force of the other. It is also a system that Acs would like to see exported around the world in order to nurture and sustain global capitalism.

Which got me thinking: Maybe a better title for the book would be For Whom Philanthropy Matters.

--Kyoko Uchida

The State of Philanthropic Giving in 2011

2013-05-22T14:47:54-04:00

(Niki Jagpal is research and policy director and Kevin Laskowski is senior research and policy associate at the National Committee for Responsive Philanthropy. Both frequently blog about the role of philanthropy in society. You can follow NCRP on Twitter @ncrp.)

Anyone working in the nonprofit sector knows the value of measurement. If something is important -- whether it's your own impact and outcomes or a field-wide trend -- you measure it. Somehow, some way, you track it.

NCRP recently completed an analysis of 2011 foundation giving based on our own Criteria for Philanthropy at Its Best: Benchmarks to Assess and Enhance Grantmaker Impact guidelines. In the past, we examined average giving over three years to monitor trends in giving to underserved communities and for social justice, as well as general operating support and multiyear funding.

This year, we've moved to analyzing data annually in the hopes of providing the sector with real-time information on emerging trends and associations. The figures are based on the Foundation Center's grants sample database, which comprises grants of at least $10,000 awarded by more than one thousand of the nation’s largest grantmakers, representing approximately half of the grant dollars awarded by U.S. foundations in 2011. Grantmakers can use the information to see how they are performing compared to their peers, as well as as a guide for future strategy. Grantees can see which funders are providing vital types of funding in support of transformative change.

The Philanthropic Landscape 2011 reveals important changes in the philanthropic ecosystem:

In The State of General Operating Support 2011, the share of foundation dollars classified as general operating support (also known as "core support") increased from the 2008-10 average of 16 percent to 24 percent in 2011. A welcome and hopefully lasting shift, the increased share to general operating support is the highest NCRP has seen in recent years.
In The State of Giving to Underserved Communities 2011, we found that 42 percent of foundation grant dollars were classified as benefiting underserved communities such as economically disadvantaged persons, racial and ethnic minorities, women and girls, disabled persons, and other groups. That is up slightly from 40 percent of grant dollars in the 2008-10 period.
In The State of Multi-Year Funding 2011, nearly 90 percent of funders reported making no multiyear grants. The Bill & Melinda Gates Foundation alone accounted for 60 percent of the $7.2 billion in multiyear grant dollars awarded in 2011.
In The State of Social Justice Funding 2011, the share of giving to social justice declined from an average of 15 percent of total grant dollars in the 2008-10 period to 12 percent of grant dollars in 2011. Conversely, the number of grantmakers providing our proposed level of 25 percent of grant dollars for social justice work increased from 76 to 94.

When we restricted our analysis to only those grantmakers that reported some level of giving toward each benchmark, we saw important, if incremental, progress. It appears that, in the aggregate, once funders begin to intentionally identify the beneficiaries of their grantmaking or prioritize social justice, general operating, or multiyear support as a part of their strategy, they increase or maintain that commitment.

This suggests that we are making progress toward creating a more responsive, effective, and accountable foundation sector. There are sizeable groups of funders that understand the benefits of engaging and empowering vulnerable communities and the nonprofits that work with them. Our challenge remains to engage with and help foundations see the value of awarding both more grants and more grant dollars in these ways.

Part of the solution is accurate and expanded reporting, along with a willingness to adapt to the variable needs of the communities served by the nonprofit sector. We urge you to make a commitment to report the particulars of your grantmaking to organizations like the Foundation Center and to pay particular attention to providing information about the nature, purpose, duration, and intended beneficiaries of your grantmaking.

In addition, take stock of your own numbers and compare them to those of your grantmaking peers. E-mail us at research@ncrp.org if you'd like to learn more about how your foundation appears in the data.

Last but not least, as we continue to analyze trends and report on them, let's all collectively ask ourselves whether the field is doing all it can to make the world a more inclusive, just, and democratic place. Engage in critical self-reflection and ask yourself: Are the communities we care about seeing the benefit of our grantmaking? What role does public policy, advocacy, and civic engagement play in our strategy and in the work of the nonprofits we support? What role could it play? Are we providing enough long-term flexible support to achieve the results we hope to see? Are we doing enough to see the results we all hope for?

Use those answers to inform and adjust your strategy. With a more responsive foundation community, the causes and communities we all care about will see real results.

-- Niki Jagpal and Kevin Laskowski

Partnering With State Governments to Strengthen Families: Early Lessons From the Work Support Strategies Initiative

2013-05-20T14:45:12-04:00

(Luis A. Ubiñas is president of the Ford Foundation. This commentary is adapted from a forthcoming Urban Institute report, available online starting June 4, that includes an array of perspectives from leaders about practical lessons emerging from the Work Supports Strategies initiative.)

Over the past half-decade, as the country has suffered through a deep, persistent economic downturn, America's work support programs have served as an essential backstop for millions of working families struggling to keep a toehold in the labor market. For many families, supports such as child care subsidies, health insurance and unemployment assistance, and food stamps have been the difference between staying together and dissolution.

Yet in dozens of states, lean budgets and antiquated, underresourced work support systems are failing to meet the needs of America's working poor. Problems that were evident in better times have become more intractable, even as caseloads have expanded. How can states improve the health and well-being of low-income families, stabilize their work lives, and make it possible for family breadwinners to get and keep a job if they are unable to get basic work supports to those who are eligible?

Solving such a challenge goes to the heart of what all of us in the philanthropic community do on a daily basis: tackling major problems at a scale that results in real and enduring change -- in this case, creating opportunity for low-income populations and keeping low-income workers in the workforce.

That's why the Ford Foundation, along with the Annie E. Casey, Kresge, and Open Society foundations, is proud to support the Work Supports Strategies (WSS) initiative, a multiyear demonstration project directed by the Urban Institute, with technical assistance from the Center on Budget and Policy Priorities. WSS is partnering with nine states -- led by governors from across the political spectrum -- to design, test, and implement easy-to-navigate quick-to-deliver operating changes to public work support systems that keep employees in the work force and families together. Many of these changes have the further benefit of reducing the cost of running the programs.

More than a year after we launched the initiative, the progress in fixing what was described in one state as a "completely dysfunctional, broken system" has been greater than any of us could have imagined. In some cases, the changes spurred by WSS had an impact on pilot offices or counties; in others, statewide changes affected tens of thousands of families. For example, in Colorado, state and county staff trimmed their work support application from twenty-six pages to eight; in Rhode Island, the Providence office implemented same-day service to Supplemental Nutrition Assistance Program (SNAP) applicants, enabling clients to obtain work support after just one visit; and in South Carolina, the Express Lane Redetermination program preserved health coverage for tens of thousands of children -- and is projected to save the state $1 million a year in operating costs -- by using data in families' SNAP records to certify eligibility.

Taking advantage of new technologies, streamlined bureaucracies, and operating processes borrowed from the private sector, many states are strengthening the customer experience and reducing the burdens on state workers. Beyond our nine partners, these efforts are already serving as models for other states.

For those of us in the philanthropic community, the work of WSS offers three important lessons for future partnerships between foundations and state governments.

First, as any philanthropic funder will tell you, the idea of working directly with the public sector often meets with resistance. Foundations fear being placed in the middle of ideological disputes or paying for services that are the government's responsibility to deliver. But such trepidation, though hardly unjustified, shouldn't be an excuse for inaction; the opportunities are too great. After all, where else can funders meet their goals of supporting initiatives that scale, create impact, and are sustainable? Federal and state governments remain the largest source of resources targeted at the issues that drive our work. As the progress of the initiative so far demonstrates, when a project has clear goals and strategies, funders can successfully partner with public agencies.

Second, one of the by-products of the budget crisis has been the elimination of state resources for and attention to "research and development." Despite the fact that many agencies running work support programs have budgets of hundreds of millions or even billions of dollars at their disposal, the flexible funding to promote ongoing innovation, modernize operating processes, and use data to improve operational effectiveness has all but vanished. While it shouldn't be a surprise that state leaders increasingly are compelled to devote dwindling resources to direct benefits rather than innovation, the result often is greater inefficiency and poorer distribution of services. By providing the kind of technical assistance and peer learning that leaders and staff of public systems need as they embark on the task of modernizing large bureaucracies, that's exactly where foundations can be most helpful. Quite simply, without foundation engagement these work support systems would continue to underserve their recipients and burden taxpayers with unnecessary operating costs.

Finally, tough budget times are a reason to engage, not disengage. With work support offices stretched thin and the current squeeze on state budgets, one might imagine that helping those in need -- rather than making investments in improving the efficiency of state government -- would take priority. But if you look at the early response from twenty-seven states to the initial request for proposals and the dedicated work of the nine states chosen to participate in the first year of the WSS project, the desire for ideas and resources to modernize the safety net -- in both red states and blue -- is overwhelming. With states aspiring to do better, this is a great opportunity for foundations to step in and ensure that this current crisis becomes an opportunity to make lasting changes in how we deliver work support benefits across the country.

Philanthropy has a proud history of convening disparate groups and seeking common ground based on practical solutions. The result has been an impressive mix of programs that make a real difference in the lives of individual Americans -- and often bring people together. The WSS initiative aspires to that tradition, and we hope the lessons it is yielding inspires even more partnerships for the betterment of the most vulnerable in our society.

-- Luis Ubiñas

Weekend Link Roundup (May 18-19, 2013)

2013-05-19T18:00:00-04:00

Our weekly roundup of new and noteworthy posts from and about the nonprofit sector....

Data

We're big fans of data visualization whiz Hans Rosling, and so is Humanosphere blogger Tom Paulson. But, writes Paulson, Rosling "is strikingly upfront about the limitations of data. Sometimes, the problem is that different countries measure things -- like unemployment -- in different ways....In other cases, there are real uncertainties in the data that must be assessed: child mortality statistics are quite precise, whereas maternal mortality figures are not; global poverty measurements are infrequent and uncertain." And so on. Still, when it comes to telling stories with numbers, few can rival Rosling, as the video Paulson embeds in his short post well illustrates.

Education

In a post on the Huffington Post Impact blog, Chris Gabrieli, co-chair of the Time to Succeed Coalition and founder and chair of the National Center on Time & Learning, and Ford Foundation president Luis Ubiñas discuss the progress the coalition, which works to ensure that children in high-poverty neighborhoods have access to more and better learning time in school, has made since its was established a year ago.

Fundraising

On her About.com blog, Joanne Fritz gives a thumbs up to Future Fundraising Now blogger Jeff Brooks' The Fundraiser's Guide to Irresistble Communications. Among the things she liked, writes Fritz, is Brooks' admonition that "our biggest mistake in fundraising is thinking that what we like is what works. We're self-centered, rather than donor-focused. And, frankly, we are soooo off the mark."

International Affairs/Development

On the Mashable site, Casey Brown announces the creation of G-everyone, a "24-hour digital convening" that, on the eve of next month's G8 Summit in Northern Ireland, will unite local groups around the world to discuss the pressing issues addressed at the summit. According to Brown, "G-everyone will provide an open dialogue around the G8's core themes of 'Open Economies, Open Governments and Open Societies.' [And] Mashable will crowdsource the best ideas and thoughts from our community...and report back to the leaders at the [summit]."

Nonprofit Management

David La Piana draws some important lessons from a merger involving two Texas providers of adoption services that ultimately failed to save the weaker of the two organizations. The case, writes La Piana, "offers a reminder that merger is not designed to change the underlying market dynamics an organization faces. A good merger can strengthen management, improve strategic positioning, and bring needed scale, but it cannot move a marginal or declining operation into the black if demand is just insufficient or the economics of the activity don’t pencil out."

Philanthropy

On the GrantCraft blog, Rosien Herweijer takes a closer look at the newest GrantCraft guide, Foundations Moving On: Ending Programmes and Funding Relationships. As Herweijer notes:

All funders somehow have to deal with exits. Venture philanthropist and limited-life or spend-out foundations tend to be very deliberate about exits, but other grantmaking or operating foundations also change strategic priorities, leave fields, or leave countries. And on a smaller scale, project funding ends automatically or -- in rare cases -- has to be withdrawn. You cannot wait for all the complicated questions to pop-up once an exit decision looms. And once you make and communicate a decision to exit, you need a lot of answers....

Social Media

In the latest installment of her Social Good podcast, Allison Fine chats with Jennifer James, founder of Mom Bloggers for Social Good, a network of a thousand women bloggers using their influence to drive attention to a range of social causes.

Transparency

On the Keeping A Close Eye Blog, NCRP executive director Aaron Dorfman compares a three-decades-old report from his organization that ranked and scored more than two hundred foundations on their ability to meet a standard of transparency with a new report from the Center for Effective Philanthropy that surveyed 138 nonprofit leaders on what they'd like to see from foundations in the way of transparency. According to Dorfman, the old NCRP report found that "60 percent of foundations in the sample did not meet an acceptable standard of transparency," while findings in the new CEP report reveal that the more things change, the more they stay the same. "I see many parallel findings between that report and CEP's...report," writes Dorfman.

A full 33 years later, nonprofits are still clamoring for more information about how foundations make funding decisions and they want clear and open communication about priorities. They want to know whether it's worth their time to cultivate a relationship and pursue funding. And despite an explosion of glossy annual reports and fancy Web sites, leaders of grantseeking organizations are still highly frustrated by the lack of clear communication about a central element of foundation activity, namely how foundations decide which organizations to fund....

That's it for now. What did we miss? Drop us a line at rnm@foundationcenter.org. And have a good week!

-- The Editors

Trouble at the IRS: What Were They Thinking?

2013-05-16T16:00:00-04:00

(David Jacobs is director of foundation information management at the Foundation Center. In his last post for PhilanTopic, he blogged about an Open Data Master Class presented by the World Bank.)

Like many Americans, I was shocked to learn last week that the Internal Revenue Service had targeted conservative and Tea Party organizations applying for 501(c)(4) tax exempt status for additional review prior to last year's elections. And like many Americans, my shock turned to disgust this week as additional details -- including the alleged leaking of confidential donor information -- emerged, showing the scandal to be more serious than initially disclosed.

Regardless of whether you believe what happened in Cincinnati was an act of political malfeasance or just a case of monumental governmental ineptitude, the fact that it did happen should be sending shockwaves through the nonprofit sector. One of the bedrock principals of organized philanthropy and nonprofit advocacy in America is the idea that such activity should be tax advantaged, regardless of cause or political orientation, and that, when it comes to the nonprofit sector, the IRS should always operate in a fair and impartial manner. The thought that that might not be the case in every instance should bother and disturb all Americans.

Some apologists for the agency have tried to rationalize its actions by placing them in the context of the Citizens United decision:

The danger of this frame is that it will discourage the IRS from fully investigating all nonprofit groups spending money to influence elections. And it will distract from the core problem behind the IRS's mess: the post-Citizens United explosion of undisclosed electoral spending.

Before the Supreme Court's decision in Citizens United, only a limited number of nonprofit 501(c)(4) groups could spend money to influence elections -- those who did not take contributions from corporations or unions. But Citizens United lifted restrictions on corporate spending in elections, setting the stage for individuals and companies to funnel unlimited money through all corporations, including (c)(4)s and super PACs in an effort to help elect the candidates of their choice.

While no one questions the propriety of fairly vetting any organization applying for tax-exempt status, let's not get sidetracked and pretend that the issue here is beleaguered workers at the IRS who, in a presidential election year, found themselves swamped by new applications:

It's not like the IRS needs a way to flag the new groups that were created in the wake of the Citizens United decision. They have all the information they need to do that without any special filter. They can search for the date of the application. If what you're concerned about is that most of the new groups being created are in fact thinly disguised electioneering vehicles, then what you want to do is take a random sample of the new groups, review them, and see what percentage turn out to be self-dealing or otherwise engaged in inappropriate behavior.

Instead, the IRS method for dealing with the volume was to take an unrandom sample. And how did they decide that you deserved extra scrutiny? Because you had "tea party" or "patriot" in your name. Since the Tea Party was a brand-new movement in 2010, they couldn't possibly have had any data indicating that such groups were more likely to be doing something improper. So how exactly did they come up with this filter? There is no answer that does not ultimately resolve to "political bias."

One of the reasons I have chosen to devote myself to nonprofits and the nonprofit sector is because I see philanthropy and nonprofit advocacy to be quintessentially American activities. What could be more American, after all, than people gravitating to an issue or problem that concerns them and choosing to work to solve it by starting a nonprofit organization or making a donation to an organization that already exists for that purpose? Which is why I am deeply troubled by the thought that other people, including civil servants at one of the most powerful agencies in the federal government, value that freedom much less highly than I do.

While I realize the Tea Party isn't the most sympathetic or popular movement around, I hope that leaders of the nonprofit sector will speak out to condemn what happened in Cincinnati as strongly as they surely would if the IRS had decided to subject groups with words such as "progressive," "marriage equality," or "pro-choice reform" in their names to additional scrutiny.

What do you think? Were the actions of the IRS a case of political bias or just government ineptitude? And what shold the nonprofits and the sector do to let the Obama administration know that the agency's actions are unacceptable?

-- David Jacobs

Dear Fundraisers: The Annual Report Is Yesterday’s News

2013-05-14T09:45:00-04:00

(Derrick Feldmann is CEO of Achieve, an Indianapolis-based creative fundraising agency. In his last post, he wrote about the importance of differentiating between your "sophisticated" and average donors.)

When I headed off to college for the first time, I had no idea what I wanted to study or what kind of career I would pursue after graduation. Like so many other "undecideds," I took classes from lots of different departments and hoped something would click.

Then, in my junior year, I discovered criminal justice. I had always enjoyed crime novels, detective stories, and hearing about unsolved mysteries, and after I took a few classes in the field, I convinced myself that maybe the law was my calling. Eventually, I marched into my advisor's office and declared my major: pre-law.

Well, as a pre-law major, I needed to take the LSAT in order to be able to apply to law school. But unlike just about everyone else taking the test, I didn't bother to study until the night before. Don't ask me why.

So, I took the test and, thinking I might have done okay (or even a little better than okay), I settled in at home and waited for the results. I checked the mailbox every day for an oversized envelope, and as days turned into weeks, my thoughts ran every which way. Law? What had I been thinking? The second part of the test wasn't so hard, though, and I'm pretty sure I did okay on the third part. Who knows? And, hey, I do love a good mystery.

Then, one morning, it was there, larger than life. I tore open the envelope and scanned the contents for the only thing that mattered, the score that was going to gain me entry to the best law schools in the country and change my life.

Wow. I blinked and stared harder. Could a person really score that low on the LSAT? It was a pivotal moment for me. I returned to school and wasted yet another month, still with no answers about my future career path.

After I graduated with a degree in criminal justice, I bumped around a bit and eventually found work in a university development office. I loved working with students and alumni, and before long I realized that fundraising was my true calling. To advance my career, I decided to go to graduate school, which meant I needed to take the GRE.

This time I studied every night for two months, and by the time I drove to the local test administering site I was as prepared as I could be. Two hours later, having completed the last section, I clicked the submit button and something interesting happened. A message popped up on the screen: "Would you like to see your unofficial score?"

How was that possible? It had taken a month to get my LSAT scores. I hesitated. Had I prepared well enough? Did I really want to know how I had done right then and there? Maybe I should wait?

After a long pause, I took a deep breath, clicked the "yes" button, and up popped my score. Huge relief. A score to be proud of, even. With the click of a button, I had received instant feedback on my performance, and the world was a beautiful place.

What does all this have to do with annual reports? Well, in case you haven't noticed, we live in a world where real-time feedback is fast becoming the norm. Whether posting on Facebook and checking three or four times a day to see how many of your friends and acquaintances "liked" your update, to online polls where your vote is instantly aggregated, to comment threads where your thoughts jostle with the thoughts of others, we are rapidly creating a world in which real-time feedback on virtually everything we think, do, and create is the norm. Why is that significant? Because it enables us to make better decisions based on actual performance and achieve our goals more efficiently and with less guesswork.

Of course, the nonprofit sector has its own feedback mechanisms. The typical nonprofit will create an annual report to provide information to its donors about its financial/operational performance and, quite often, how the gifts it received were used to advance its mission over the course of the previous year. Similarly, experienced fundraisers make a point of providing feedback to donors with respect to the impact of their gifts in face-to-face meetings and when making stewardship calls, usually once or twice a year.

But is that enough? As the pace of communications and feedback accelerates, is your nonprofit moving as quickly as it needs to in terms of reporting results to donors?

Take annual reports. In today's fast-paced world, very few people think the annual report is the answer to providing donors with the kind of timely feedback they want (and increasingly expect). Asking donors to wait a full twelve months to be updated about how their gifts are being used and whether those gifts had an impact is a recipe for losing their interest, if not their support.

Donors want and deserve quicker feedback. They deserve the kind of reporting that helps them understand how the gift they made last week or a month is going to be used to advance the mission or cause. They need to see the impact of their gifts through the eyes and in the words of the people who are benefiting from those gifts.

Nonprofits that whinge about their inability to report impact in a more timely fashion inevitably are the organizations that have chosen not to address the disruptive changes in technology and communications we've seen over the last decade and a half. Which is not to say that direct mail is dead or that we should abandon more traditional methods of communication such as the phone call or the personal note. Think of this, instead, as an urgent reminder that the need to report back to your donors in a more real-time fashion using any method at hand is no longer a luxury; it's a necessity.

Indeed, thanks to the Internet, the ability to communicate with almost anyone, anywhere, in real time demands that we "reframe" our notions of time. And your organization is no exception; it needs to adapt to the changes that are happening all around us and embrace a new feedback and reporting paradigm. The framework below is designed to help you and your colleagues do just that.

Immediate. How can your organization share the impact it had today with respect to its constituents and/or the communities in which it works? Share a photo of a person who was helped by your organization on your social networks and tell your donors, "Thank you. This is [fill in the blank], one of the people you helped today."

Short term. How can your organization share the impact it had this week? Create a page on your Web site that illustrates how your donors' gifts were put to work over the last seven days and let them know through e-mail or by postcard that you've created a page they should bookmark and visit on a regular basis.

Longer term. How can your organization share the impact it had this month? Send a postcard and/or dedicated e-mail at the beginning or end of every month that provides an overview of the impact your organization is creating, making sure to include key statistics and to highlight the impact of your organization's efforts on real people or in the community.

These are just a few ideas to get you started. The key takeaway is this: Reporting at a twenty-first century pace will help your organization maintain its relevance with donors and keep their passion for your mission/cause fresh and vital. It's not easy, and it may require an additional investment of time and money. But then, the world shows no sign of slowing down, does it?

And at your next development/communications planning meeting, don't focus the discussion on whether you should publish your next annual report in print or digital form (or both). Ask instead, "What can we do to report faster?"

-- Derrick Feldmann

Weekend Link Roundup (May 11-12, 2013)

2013-05-12T18:31:30-04:00

Our weekly roundup of new and noteworthy posts from and about the nonprofit sector....

Communications/Marketing

On the Philanthropy Potluck blog, Megan Sullivan shares a list of tools for resource-constrained nonprofit communications officers.

Fundraising

Frustrated by your organization's inability to turn its good work into consistent, sustainable donor support? Hop over to the Fired-Up Fundraising blog, where fundraising consultant Gail Perry shares a very good list of the ten things you need to understand about how fundraising really works. Recommended.

Impact/Effectiveness

On the Markets for Good blog, Laura Quinn, executive director of Idealware, argues that as much as funders and others value the idea of more and better performance data from nonprofits, most nonprofits do not have the resources to provide high-quality data about their own effectiveness. How do we get them to a point where that’s possible? asks Quinn.

It would take more than just a little training or a second look at their priorities. They'd need sizable investments in a number of areas. They'd need help with technology, and to understand how to best make use of data and metrics on a limited budget. They'd need a rationalized set of metrics and indicators that they're expected to report on, standardized as much as possible per sector with a standard way to provide them to those who need them.

Funders need to understand what is and isn't feasible, and to redirect the focus of their desire for community impact evaluations from small nonprofits to the university and research world so the nonprofits they support can be unencumbered to work toward a better world....

Building out the "information infrastructure" of the social sector, as Markets for Good and its supporters (the Gates and Hewlett foundations prominent among them) propose to do, is an admirable idea, writes Bridgespan's Daniel Stid on the Markets for Good blog. But "if we build it," he asks, "will the putative buyers and sellers in the envisioned marketplace -- the philanthropists and nonprofits spending and soliciting money within it -- use it as planned?... [W]ill better information change their behavior?" What do you think? Share your thoughts in the comments section below.

Leadership

"There are a number of affinity groups that focus on bringing together younger grantmakers," writes Greater New Orleans Foundation president Albert Ruesga on the White Courtesy Telephone blog. "Their challenge, as I see it, is to avoid simply turning younger practitioners in the field into older practitioners in the field...."

Nonprofit Management

In an excellent post on the Nonprofit Quarterly site, Minnesota Council of Nonprofits executive director Jon Pratt argues that financial independence not only is something that nonprofits should strive for, it's something they can achieve -- with good planning, continuous and active attention, and lots of hard work.

Philanthropy

In a world characterized by growing social and environmental challenges, foundations need to think and act more like "catalysts," writes Erik Rasmussen, founder and CEO of Scandinavian think tank Monday Morning, on the Huffington Post's Social Entrepreneurship blog. What's more, says Rasmussen, catalytic philanthropy isn't about how much you give,

but how you give. [C]atalytic foundations have realized that they can make a big difference not by writing checks but by offering their competencies, network[s] and way of thinking as a new form of capital. By doing so, they bring forth innovative capital that opens the door to great changes and improvements in society. Imagine what change we could gain from one hundred philanthropists thinking and working [like] Bill Gates, Warren Buffett or David Rockefeller....

"What does the journey from entrepreneur to philanthropist look like, and how can we chart these experiences to help the cause of more and increasingly effective giving?" asks Charles Harvey, pro-vice-chancellor for humanities and social sciences at Newcastle University. Citing Andrew Carnegie as "perhaps the best example" of an entrepreneur-turned-philanthropist, Harvey, who helped lead the research team that looked into the question, writes: We want this research to show there is a logical process at play which many struggle to understand. Entrepreneurs apply the same rigour and disciplines from the world of commerce to the charitable sector, which suggests there is in fact a science to giving at this level that can be replicated and learned from....

What are the hallmarks of "entrepreneurial" philanthropy? Harvey and his team suggest the following:

It is the pursuit by entrepreneurs on a not-for-profit basis of big social objectives through active involvement of their economic, cultural, social and symbolic resources.
They apply business-like methods when making social investments: key performance indicators and rates of return.
Entrepreneurs invest more than simply money [in] their causes: time, connections, the "know-how," branding.
They like to leverage investments and frequently partner with others, including governments.
Businessmen and women don't believe in giving handouts. They want to help others to help themselves.

Technology

Joanne Fritz has a good post on crowdfunding site Benevolent, which enables Chicagoans to help ordinary folks who find themselves in a tough spot. As Fritz explains, the site is effective in part because it works with nonprofits that "vouch" for the individuals listed (i.e., verify that their needs are legitimate and reasonable). The site has been a hit, she adds, because it's simple to use and because people understand that giving through Benevolent is less about charity and more about "neighbors helping neighbors."

On her Philanthropy 2173 blog, Blueprint 2013 author Lucy Bernholz fleshes out her digital civil society concept and explains that the discussion going forward should be focused on governance issues and how such assets work, not about gadgets.

That's it for now. What did we miss? Drop us a line at rnm@foundationcenter.org. And have a good week!

-- The Editors

[Infographic] Mission Investing

2013-05-11T14:36:46-04:00

This week’s infographic provides some basic facts, courtesy of the data architecture team here at the Foundation Center, about the relatively small but growing field of mission investing, which encompasses both market-rate mission-related investments (MRIs) and program-related investments (PRIs).

The first program-related investment was made in the late 1960s, and the Foundation Center has been tracking foundation use of PRIs for more than sixteen years. The infographic below, which is partly based on a Foundation Center survey conducted in 2011 and on more recent research, reveals the staggering amount of assets available for mission investing and the geographic scope of such investments.

As foundations, the public sector, and businesses increasingly investigate the profit potential in making socially beneficial investments, the dollar amount of both MRIs and PRIs is expected to increase. As it does, the Foundation Center will continue to collect and share information about those investments and their impact.

Has your organization made or received an MRI or PRI? Was it a positive experience? Have any mission investing lessons you can share with funders and/or potential recipients of such investments? Use the comments section below...

-- Sue Rissberger

5 Questions for...Katie Everett, Executive Director, Lynch Foundation

2013-05-10T10:41:52-04:00

Today, as in the past, education reform tends to be politically charged and fraught with controversy. And while the needs of students often figure prominently in the debate, the devil is always in the details.

In the Boston area, the Lynch Foundation has worked to engage administrators, educators, and parents to think outside the box about how to improve the educational experience for all. In that spirit, the foundation has begun to work with educational innovator Salman Khan and Khan Academy to provide free educational materials to schools in the metro Boston area.

Recently, PND spoke with the foundation's executive director, Katie Everett, about its partnership with Khan and how new approaches to classroom instruction are making a difference in Boston-area schools.

Philanthropy News Digest: What areas of education does the Lynch Foundation fund?

Katie Everett: We fund in all areas, from early education to higher ed. We've been around for twenty-five years and have funded everything from targeted early literacy programs to comprehensive projects at Harvard, Boston College, and the University of Pennsylvania. We fund teacher training, we fund charter schools, we fund in the Catholic school sector, we fund public schools, and we fund principal leadership programs. If there's one area in which we have stopped investing, it is job training. We found it was really hard to measure the impact of those programs.

PND: Tell us about your support for Khan Academy.

KE: We had the pleasure of meeting and talking with Sal [Khan] at a couple of events a few years ago and were open to piloting an initiative that had the potential to reduce operating costs within the Archdiocese of Boston school system. Sal had already piloted programs in a handful of charter and district schools that used technology to create cost efficiencies while maintaining academic excellence within the classroom. Not by replacing the teacher, but by leveraging his or her skills to accelerate students' progress and outcomes. We launched our pilot program with Sal and his team last year, and it's been a great success. We started with two Catholic schools just south of Boston, one in Quincy and one in Milton, and families have loved it, students have loved it, the teachers have loved it. After introducing Khan classrooms in fifth and seventh grades as planned, the schools have already spread it to the sixth and eighth grades and are looking to expand it into the lower grades. At the moment, they're working alongside the Khan team to build up assessments of what's working and where challenges remain. They're getting a lot of feedback from students and from teachers. It's a wonderful partnership.

PND: Are they identifying shortcomings in the traditional curriculum and augmenting it with Khan materials? How does it work?

KE: Basically, this approach involves "flipping the classroom." The teachers give the students the assignment, and their "homework" is to visit Khan Academy online and watch a ten- or fifteen-minute video clip that walks them through the lesson or module, and then they come to school the next day and do their homework in the classroom with the teacher. It's the complete opposite of how we were taught in school, where the teacher would assign us, say, math homework, and we would go home and struggle to figure it out on our own. This is a significant shift. Now, students learn the lesson the night before from a module at Khan, and the next day they go in and the teacher actually does the exercises with them and provides as much additional help as they need. Students do exercises online, which means that they can keep practicing until they have fully grasped the concept. Teachers track this progress and provide highly individualized attention to address exactly where students may be "stuck." Some kids may be accelerated, in which case they can dive into the next lesson. Khan gives teachers the tools they need to encourage mastery of each concept, by each student, and helps them maximize the impact of their teaching time.

PND: How do you manage the risks associated with something that’s perceived to be innovative?

KE: That's a good question. We built in what we thought would be a solution to some of the foreseeable challenges, for example, pushback from teachers. Some teachers are threatened by new technology in the classroom, seeing it as something that might end up costing them their job. So it was important from the beginning of the project to include teachers in the discussions about the project and secure their buy-in. This is a teaching resource, not a replacement, and that was an important conversation to have up-front. We even flew teams of teachers out to California to meet Sal and his team and spend a couple of days learning the approach.

We also hired a consultant whose main focus is to make sure that any problem or challenge a principal or teacher may have is sorted out. In our experience, those two things are critical when it comes to launching anything having to do with technology -- or with education reform, for that matter. You need to have buy-in from all the stakeholders from the outset, and you need a dedicated person to troubleshoot problems.

PND: It sounds like it might be a difficult thing to scale.

KE: It can be scaled, but it needs to be done thoughtfully. We're pretty ecumenical about the schools we work with. Doesn't matter if you’re red, white, blue, brown, Catholic, public, charter -- we love schools. But we won't work with school leaders who aren't excited to work and partner with us. After seeing initial success with the Khan Academy pilot, we flew a Khan team in from California and invited every middle school math teacher in the City of Boston to a day of professional development. We got over a hundred teachers to join us on a Saturday in December.

So, yes, these things can be scaled, but only if there's interest at the teacher and school administration level. It has to be bottom up, not top down.

-- Matt Sinclair

No Second-Class Families

2013-05-09T12:48:30-04:00

(Ben Jealous is president/CEO of the NAACP.)

African Americans have spent much of our history fighting for equal treatment. Just two generations ago, our parents and our grandparents were banned from eating at certain restaurants, attending certain schools, and working in certain professions.

So it's not difficult to empathize with the struggle of immigrants in our country. Like our ancestors who migrated from the former slave states of the Deep South, millions of undocumented immigrants move to the United States each year to find work and a decent education for their children. When they arrive, however, they are confronted with blatant discrimination, racial profiling, and hardly any legal recourse.

As people of color, we have a responsibility to stand up for social justice whenever it is violated. That is why the NAACP has joined other civil rights and human rights organizations, including the Rights Working Group and the Leadership Conference of Civil and Human Rights, to support comprehensive immigration reform.

Across the country, an estimated 11 million undocumented immigrants live with permanent second-class status. Many immigrants come to the U.S. to find a better life but find themselves living in the shadows, in constant fear of arrest and deportation. This has a cost.

Undocumented workers are exploited on a regular basis. Many business owners pay low wages and provide dangerous working conditions for their undocumented workers, with little fear of retaliation. They know that their employees have too much at stake to risk contacting the proper authorities.

Undocumented immigrants are also targeted by police. Racial profiling has been legalized in states like Alabama and Arizona under the guise of immigration enforcement. Our national immigration laws, in conjunction with these state laws, encourage local police to stop people of color, whether they are undocumented or not.

Right now Congress is debating a comprehensive immigration bill that will offer a road map to citizenship and also deal directly with workplace discrimination and racial profiling. One proposed provision allows undocumented immigrants to have the full protection of American labor laws. Another provision explicitly prohibits racial profiling by Homeland Security agents -- which, if passed, would make it the first federal law to do so.

The bill in its draft form is not perfect. The racial profiling provision needs adjustments that are being debated at the time of this writing. The bill also contains provisions that would eliminate the diversity visa program -- which helps many African and Caribbean immigrants come to America -- and dramatically expand the guest worker program. The NAACP and our allies will continue to make our voice heard as Congress debates the bill.

In August 1963 a sea of diverse activists descended on the National Mall to demand social justice and an end to segregation. In April 2013 a similarly diverse assemblage of legal immigrants, undocumented immigrants, and activists of all backgrounds gathered at the Capitol to call for an end to second-class citizenship. Just as the March on Washington helped pressure Congress into passing the Civil Rights and Voting acts, this year we need to show Congress that Americans of all stripes care about progressive immigration reform.

As Dr. King said, injustice anywhere is a threat to justice everywhere. If we truly want to discharge the sins of our past, we must ensure there are no second-class families in America.

-- Ben Jealous

Advancing Human Rights: A 'Flip' Chat With Mona Chun, Deputy Director, IHRFG

2013-05-07T15:05:00-04:00

(The video below was recorded as part of our "Flip" chat series of conversations with thought leaders in the nonprofit and philanthropic sectors. You can check out other videos in the series here, including our previous chat with Harish Bhandari, director of digital engagement and innovation at the Robin Hood Foundation.)

Since 2012, the Foundation Center has been working with the International Human Rights Funders Group to develop a framework for assessing the state of human rights grantmaking around the globe. The two organizations recently released some key findings (12 pages, PDF) of their research based on data collected from IHRFG, Ariadne, and the International Network of Women's Funds and an analysis of more than seven hundred funders representing twenty-nine countries.

Among other things, the analysis found that in 2010 the United States accounted for the largest number of human rights funders -- which may be a reflection of the ability to draw upon a wealth of data on U.S.-based philanthropy through the Foundation Center's database and the lack of a similar resource outside of the U.S. -- followed by Western Europe, Latin America, Asia and the Pacific, Eastern Europe, sub-Saharan Africa, and the Middle East.

The analysis also found that the Ford Foundation was the largest funder of human rights by grant dollars ($159.5 million), while the Open Society Foundations reported the largest number of human rights grants (1,248); that human rights funders awarded a total of $1.2 billion in 2010; and that the largest share (69 percent) of that funding went to U.S.-based organizations, many of which work in other countries, regions, and/or at the global level.

While the full report won't be released until June, PND recently had a chance to chat with IHRFG deputy director Mona Chun about this important work. During our sit-down, Chun discussed the biggest challenge and opportunity for international human rights funders and shared what she and her colleagues have learned from the research project with the Foundation Center.

(If you're reading this in an e-mail, click here.)

(Running time: 10 minutes, 11 seconds)

What do you think? What else should foundations and individual philanthropists be doing to advance human rights globally? And what advice would you give organizations working in the field? Share your thoughts in the comments section below.

-- Regina Mahone

Weekend Link Roundup (May 4-5, 2013)

2013-05-05T18:31:29-04:00

What a gorgeous weekend! Hope yours, wherever you are, was half as nice. Here, a little late, is our weekly roundup of new and noteworthy posts from and about the nonprofit sector....

Communications/Marketing

The Catalytic Network, an interesting new initiative of the Rockefeller Foundation, aims to share tools and stories which emerge from the foundation's work with innovators around the globe. In that spirit, Michael Myers, a senior policy officer at the foundation, lays out the 5 Golden Rules of a Great Pitch on the network's site to help nonprofits better tell their story.

The five rules are:

Keep it under two minutes.
Know your audience, and know the ask.
Talk about the problem you are solving -- in one sentence.
Give two reasons why your approach is unique.
Leave them one memorable, repeatable story.

Data

On the Harvard Business Review blog network, Mark Bonchek, "chief catalyst" at Orbit & Co, argues that without Little Data -- "what we know about ourselves. What we buy. Who we know. Where we go. How we spend our time" -- Big Data "has a tendency to become Big Brother," and that without Big Data, Little Data "is incomplete."

Fundraising

On her Non-Profit Marketing blog, Katya Andresen, the host of the April Nonprofit Blog Carnival, shares two dozen posts from nonprofit bloggers and readers on the theme "the best career advice you ever received."

Impact/Effectiveness

Amit Bouri, managing director of the Global Impact Investing Network, flags five themes for impact investors to keep an eye on: the emergence of better tools and improved infrastructure; a growing need for strong fund managers; the importance of supporting the "demand side" of the impact investing equation; the growing interest of "retail" investors in the field; and the growing acceptance of and emphasis on impact measurement.

Philanthropy

On his White Courtesy Telephone blog, Greater New Orleans Foundation president and CEO Albert Ruesga takes a long look at philanthropy's "uneasy" relationship with the social sciences. "We make grants because we predict (or at least fervently hope) that our interventions will shift human behavior in certain hoped-for ways," writes Ruesga. And after "we make our grants, we test our predictions and adjust our grantmaking accordingly. Those of you with grantmaking experience know, however,

that our interventions seldom, if ever, unfold as we predict they will. Our inability to predict human actions with a high degree of accuracy has been understood and discussed by philosophers, psychologists, social scientists and others longer than the field of organized philanthropy has been in existence. Yet those of us who work in foundations ignore these fundamental truths about the difficulties of predicting human behavior when, for example, we construct elaborate theories of change, or worse, when we inflict them on our grantees. These truths don't absolve us of the responsibility to change or inspire human behavior, but they do place limits on our attempts to anticipate or direct the many twists and turns of the human heart.

If the idea of philanthropy as an experimental social science unnerves you as much as it does me, how would you re-conceptualize it in a way that the most "results-oriented" among us would find compelling? If the idea appeals to you, how would you suggest that philanthropy capture and teach the lessons learned long ago in allied fields, especially those lessons that might help save our grantees and the communities we serve from unnecessary suffering?...

Like pretty much everything Ruesga writes, the post is worth your time.

On NCRP's Keeping a Close Eye blog, Trista Harris, executive director of the Headwaters Foundation for Justice, shares a list of six tips designed to help you become a (social justice) philanthropy rockstar.

Writing on the GrantCraft blog, the European Foundation Centre's Rosien Herweijer looks at a new study from the Association of German Foundations that explores how German foundations approach their mistakes and failure. Not surprisingly, the study found that larger foundations tend to do more evaluation and documenting of mistakes than smaller foundations, while operating foundations tend to be more self-critical than general grantmaking foundations.

In a post musing on the "changing landscape of philanthropy," Senay Ataselim-Yilmaz says that the annual Global Philanthropy Forum should "pay more attention to the rising impact of diaspora [contributions] in global philanthropy."

Women

In an op-ed on the CNN site, legendary investor Warren Buffett argues that women are the key to America's future prosperity. "No manager operates his or her plants at 80 percent efficiency when steps could be taken that would increase output," writes Buffett. "And no CEO wants male employees to be underutilized when improved training or working conditions would boost productivity. So take it one step further: If obvious benefits flow from helping the male component of the workforce achieve its potential, why in the world wouldn't you want to include its counterpart?"

That's it for now. What did we miss? Drop us a line at rnm@foundationcenter.org. And have a good week!

-- The Editors

The Art of the Phone Call: How to Stand Out With Funders

2013-05-03T15:50:03-04:00

(Allison Shirk is a freelance grantwriter based in the Puget Sound region. In her last post, she shared ten tips for making the best use of your grantwriter's time.)

In today's world of high-speed communications, it can be hard to make a meaningful connection. Remembering the art of the personal phone call is a great way to stand out in the crowd. Here are some tips when reaching out to a potential funder by phone.

Leave a short but detailed message. Most funders receive dozens, if not hundreds, of phone calls a week. Voice-mail messages that don't include the right amount of detail will be ignored. Leave your name, phone number, and the elevator pitch for your organization/project. Speak clearly and slowly.

Make a plan to connect. Be sure to include a time (during regular business hours) when you can be reached. Mention that you'll call back in two days if you haven't heard from them. Follow up with an e-mail that includes your contact information and a link to your organization's Web site.

Don't drop the ball. If they call back and you miss the call, call them back within forty-eight hours and follow up with an e-mail. Be persistent but respectful.

Once you've connected. Someone from the funder's office returned your call and is on the line! Don't ramble. Take detailed notes. If it turns out the funder isn't interested in your project, politely thank him/her for their time. Don't argue.

It never hurts to write down in advance what you plan to say when a funder does call back. Here's a framework for a couple of scenarios you're likely to encounter in that situation.

Before submitting a proposal: "I've looked at the information and guidelines on your Web site and have determined that a funding request for our youth development program is a good match for your [_____] program. I'm ready to submit a grant proposal and wonder whether there's anything specific I can include in the application that would be of interest to you and your colleagues."

After the proposal is submitted: "I submitted an application two weeks ago. I'm checking to make sure you have all the information you need and to answer any additional questions you might have."

If your proposal is declined: "I received the declination letter and wondered whether you would be willing to spend a few minutes telling us how we could improve the proposal for next year."

It goes without saying that you should never argue a decision. Ever. If the funder's letter says they didn't fund you because your organization doesn't meet their guidelines and you can prove that you do, you might mention it, but don't push it. At that point, it's likely the money has been committed to another project and arguing will only ensure that your application is declined next year as well.

You received a grant: "I just received your letter. Thank you! We're delighted to have an opportunity to work with you and your colleagues. What can we do to keep you informed about the project over the coming months?"

During the grant period: "I wanted to let you know that the youth development project you funded has received an additional grant from the ABC Foundation. We're delighted to have additional support for the project."

Of course, some funders do not accept phone calls -- under any condition. Respect their wishes and follow the application instructions on their Web site or in tools like the Foundation Directory Online.

Whatever you do, don't get discouraged. Grantseeking is a marathon, not a sprint.

Have other grantseeking tips/comments you'd like to share? We'd love to hear 'em. Use the comments section below....

-- Allison Shirk

PhilanTopic

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'Talking Good' With Joe Jones, President/CEO, Center for Urban Families

Foundations and Climate Change: 5 Questions for…Robert Searle, Partner, Bridgespan Group

Foundations and Public Interest Media: A 'Flip' Chat With Vince Stehle, Executive Director, Media Impact Funders

Foundations and the 'New Normal': A Q&A With Bradford K. Smith, President, Foundation Center

Weekend Link Roundup (June 8-9, 2013)

To Innovate…Collaborate

Advancing Social Media Measurement for Foundations: A Re-Cap (Part Two)

Advancing Social Media Measurement for Foundations: A Re-Cap (Part One)

Weekend Link Roundup (June 1-2, 2013)

Most Popular PhilanTopic Posts (May 2013)

Leveraging a Budget to Build a Foundation-Grantee Partnership

Scaling Social Innovation

Managing Up: The Grantwriter’s Dilemma

(Long) Weekend Link Roundup (May 25-26, 2013)

[Review] 'Why Philanthropy Matters: How the Wealthy Give, and What It Means for Our Economic Well-Being'

The State of Philanthropic Giving in 2011

Partnering With State Governments to Strengthen Families: Early Lessons From the Work Support Strategies Initiative

Weekend Link Roundup (May 18-19, 2013)

Trouble at the IRS: What Were They Thinking?

Dear Fundraisers: The Annual Report Is Yesterday’s News

Weekend Link Roundup (May 11-12, 2013)

[Infographic] Mission Investing

5 Questions for...Katie Everett, Executive Director, Lynch Foundation

No Second-Class Families

Advancing Human Rights: A 'Flip' Chat With Mona Chun, Deputy Director, IHRFG

Weekend Link Roundup (May 4-5, 2013)

The Art of the Phone Call: How to Stand Out With Funders