PhilanTopic

Inequality

2012-01-26T17:00:00-05:00

(Mark Rosenman, a nonprofit sector activist and scholar, directs Caring to Change, an effort in Washington that seeks to promote foundation grantmaking for the common good. In his last post, he challenged the notion that more nonprofit organizations necessarily translates into greater social good.)

Although the public and a few elected leaders increasingly are focused on growing economic inequality in America, the topic isn't receiving much attention from charities and nonprofits. This in spite of the fact that the sector itself is characterized by a similar inequality.

That silence is surprising for a couple of reasons. Today's yawning inequality exacerbates the problems many people face as well as their need to turn to charities for assistance. It also directly affects the help they're able to receive; as a general rule, the larger a nonprofit organization's budget, the less likely it is to provide the kind of assistance needed by low-income Americans and those falling toward poverty. Wealthier charities tend to cater to wealthier Americans, and as the rich get richer, inequality -- in society and the nonprofit world -- grows.

Let's look at some statistics about growing inequality in the country and then explore what it means for Americans and the nonprofit organizations that serve them. Since 1979, after-tax income for the top 1 percent has more than doubled, even as it fell for middle-class and lower-income Americans. The top 5 percent of households in the United States now hold more than 60 percent of the wealth. The imbalance is even greater in the nonprofit sector, where the top 2.5 percent of charities that report data to the IRS control more than 50 percent of the wealth and account for over 60 percent of annual revenues.

Three types of exempt organizations -- hospitals, primary healthcare facilities, and institutions of higher education -- make up the top tier of the sector. Compare their finances with those of human service groups, which comprise more than a third of all exempt organizations but account for only 13 percent of its annual revenues (including government funding, fees-for-service and other income, and donations) and 11 percent of its assets.

It gets worse. This is the first recession on record in which the median income of working-age people was lower as the economy "recovered" than it was before the economy tanked. The wealthy, of course, continue to do well. Much the same is true for charities, as larger, more prosperous organizations see modest growth in contributions while many smaller nonprofits struggle to survive.

Higher education is a perfect example. The recession officially ended in the summer of 2009, and giving to higher education rose about 3.5 percent in 2010. Compare that to giving to the human services sector, which declined 1.5 percent in spite of contributions for disaster relief and recovery efforts in Haiti and elsewhere.

That's a problem, in part, because giving to higher educational institutions contributes to inequality. Consider the top two hundred or so colleges, where only 15 percent of students come from the bottom half of the income-distribution pyramid and 67 percent come from the top quartile. At most institutions, moreover, financial assistance for low- and moderate-income students has failed to keep pace with increases in tuition and related costs. And this as the increasingly large salaries paid many university presidents makes them "1-percenters."

Indeed, retiring Amherst College president Anthony Marx recently observed that "we are actually part of the problem of the growing economic divide rather than part of the solution." While having a college degree remains important to getting, or at least holding on to, a good job with benefits and some security, it also helps to legitimate inequality by seeming to validate a college education as a sure-fire route to meritocratic success.

But is it? According to a College Board study using Department of Education data, students with high test scores from low-income families were less likely to complete college than those with low scores from affluent families. And an Education Trust study of almost twelve hundred four-year colleges found that only five institutions (that's a number, not a percentage) were doing a good job serving low-income students.

The problem isn't confined to higher education. Nonprofit hospitals -- a category that includes some of the best hospitals in the country -- often fail to adequately serve those in greatest need while handing out executive compensation packages that would make a banker blush. In 2009, two-thirds of the nonprofit hospitals in the country dedicated less than 2 percent of their total expenditures for "charity care" -- i.e., medical care for the poor and indigent -- while only 7 percent directed more than 5 percent to such care. And this during a severe economic downturn in which health-related crises put countless numbers of low- and moderate-income people at grave economic risk.

I'm not suggesting that nonprofit organizations at the top of the income pyramid completely fail to provide beneficial services to society at large. They do. But with their elite reputational status and considerable economic wherewithal, they could do much more. The same is true of foundations.

Human service groups and community-based organizations often are the most helpful to people on the short end of the inequality stick. In addition to the direct services they provide, community-based organizations frequently advocate for and organize around the plight of the downwardly mobile and financially insecure. Yet, faced with ongoing budget cuts and flat or declining contributions, they are among the organizations that are most strapped financially as we head into an even more challenging future.

Notwithstanding the recent assertions of various Republican presidential candidates, it's not "class warfare" or "the politics of envy" to acknowledge -- and want to address -- growing economic inequality. On the contrary, it's a gross disservice to the nation to downplay its existence and assert that we can fix the problem by giving more tax breaks to the wealthy or by further deregulating corporations. As my kids would say, been there, done that. Acknowledging the divide between the haves and have-nots is an important step -- we can't solve the problem unless we are willing to speak frankly.

In short, nonprofit and foundation leaders need to talk more forcefully and publicly about economic inequality in America -- and do more to address it in both their programs and their own operations. They can start by countering the myths and obfuscation that characterize too much of today's political discourse. It's time we united, as a sector, to help people understand and act on their shared interests and better serve the common good.

-- Mark Rosenman

Bill Gates' Fourth Annual Letter

2012-01-25T11:47:51-05:00

As he has every year since 2009, Microsoft co-founder Bill Gates has put his thoughts about the scourge of extreme poverty and the efforts of the Bill and Melinda Gates Foundation, the world's largest, to improve the lives of millions around the globe into a letter and posted it to the foundation's Web site.

In addition to outlining the foundation's key priorities in 2012, this year's letter focuses on the need for continued investments in innovations -- agricultural and otherwise -- that are accelerating progress against poverty in the developing world. Or as Gates puts it in the letter's opening section:

The world faces a clear choice. If we invest relatively modest amounts, many more poor farmers will be able to feed their families. If we don't, one in seven people will continue living needlessly on the edge of starvation. My annual letter this year is an argument for making the choice to keep on helping extremely poor people build self-sufficiency.

My concern is not only about farming; it applies to all the areas of global development and global health in which we work. Using the latest tools -- seeds, vaccines, AIDS drugs, and contraceptives, for example -- we have made impressive progress. However, if we don't make these success stories widely known, we won’t generate the funding commitments needed to maintain progress and save lives. At stake are the future prospects of one billion human beings....

To read or download the letter (which is available in Arabic, Chinese, English, French, German, and Spanish), click here.

Non-Financial Capital and Social Change

2012-01-25T10:30:00-05:00

(Paul Shoemaker is executive director of Social Venture Partners Seattle and recently was named one of the "Top 50 Most Influential People in the Non-Profit Sector" by The NonProfit Times.)

The theme of this year's World Economic Forum gathering is The Great Transformation: Shaping New Models. A lot of people took a lot of time to write a convoluted description of what that really means. Let's boil it down to this: Because of the huge economic and social shifts taking place around the world, we don't have good models for understanding this "new norm" or for aligning stakeholders/citizens around a vision and inspiring institutions and individuals to realize those visions.

As some of you know, a few months ago I did the local TEDx about the power of human and social (not just or even primarily financial) capital to change our world in the years ahead. I think there are two parts of that message that might be relevant to WEF, and there's one I mentioned in the talk: our old ways of adding up the financial and institutional resources for community change flat out miss the power, potential, real, and often more enduring impact of human and social capital. (I give credit to SVP partner Bill Henningsgaard for articulating that.) This is starting to change, but we have to become much more intentional and specific about the role and value of non-financial capital in social change. That is a core part of our game at SVP.

This other one I didn't mention: another huge reason why human social capital is so critical is because the amount of money we can bring to bear on social issues is fixed, constrained, or even shrinking in many places. Whether we like it or not, that is not going to change anytime soon. Governments around the world are collectively tens of trillions (tr, not b) of dollars in debt. No matter your politics, that is a fact that unquestionably points to constrained public resources.

So the most plentiful, expandable assets we have are non-financial. Don't get me wrong -- money always matters. But if we want to increase the "supply" of assets for positive change, we're gonna have to do it in ways that are leveraged, creative, and expand human and social capital. How much difference can that make? I don't know for sure, but think about the "social value" that Facebook creates -- and the fact that it didn't even exist ten years ago.

What do you think? Given the challenges confronting us in 2012 and beyond, what does the social sector have to do to think -- and be thought of -- differently? How can we rapidly change the "equation for social good"?

-- Paul Shoemaker

Weekend Link Roundup (January 21 - 22, 2012)

2012-01-22T14:49:21-05:00

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

Civil Society

Filming at the 20th anniversary INTRAC conference in Oxford, England, Nicetreefilms interviewed Demos senior fellow Michael Edwards, author of Just Another Emperor? The Myths and Realities of Philanthrocapitalism (2008) and Small Change: Why Business Won’t Save the World (2010), about the role and future of civil society via-a-vis business and the public sector.

To mark the second anniversary of Citizens United v. Federal Election Commission, the Supreme Court ruling that said corporations have the same right as people to spend money in elections, Demos has curated a dozen or so blog posts, articles, policy briefs, and multimedia presentations that highlight the anti-democracy implications of the decision.

Disaster Relief

On the heels of the two-year anniversary of the earthquake that killed hundreds of thousands in Haiti and left up to a million more homeless, the Adventure Project's Becky Straw spotlights a couple of social enterprises that are using technology to boost the Caribbean nation's economy.

Leadership

On her About.com blog, Joanne Fritz responds to Getting Attention blogger Nancy Schwartz' MLK Day-inspired call for nonprofit bloggers to write about their dreams for the sector by sharing her hopes for the charities she admires: that they do not become stuck in the past; that their fundraising appeals address the big social issues of our day; and that they work to create organizational cultures that value learning, adequately reward hard work, and treasure the people who engage with their causes.

And on her blog, Allison Fine, co-author (with Beth Kanter) of the Networked Nonprofit, says her dream "is for organizational leaders to switch from viewing the world through a lens of scarcity to one of abundance...."

Elsewhere, How to Become a Nonprofit Rockstar co-author Rosetta Thurman shares eleven tips guaranteed to make your search for a job in the nonprofit sector a successful one.

Philanthropy

Writing on the Center for Effective Philanthropy blog, Paul Beaudet, associate director of the Seattle-based Wilburforce Foundation, explains why funders need to stop asking nonprofits to "do more with less."

Regulation

On his Harvard Business Review blog, Uncharitable author Dan Pallotta criticizes New York governor Andrew Cuomo for launching a nonprofit "executive pay witch hunt." "Elected officials consistently conflate smart investments in the talent, organizational strength, and long-term planning necessary to address massive social problems with fraud," writes Pallotta. "Why? Because they lack a fundamental understanding of how long-term social problems get solved and because the humanitarian sector has been too terrified to stand up to them."

Social Media

And Social Media for Social Good author Heather Mansfield explains why Pinterest, a new invitation-only social networking site that allows users to create virtual "pinboards," is worth your nonprofit organization's time.

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

-- The Editors

Foundation Leadership for a New Era

2012-01-21T17:00:00-05:00

The news that Peter Hutchinson had stepped down as president of the St. Paul-based Bush Foundation after four-plus years at its helm came as a surprise to many. Hired in 2007 to lead a strategic refocusing of the 55-year-old foundation's mission and grantmaking activities, Hutchinson impressed those who worked with him as a thoughtful, energetic leader, and his decision to move on left many scratching their heads.

Hutchinson himself was rather cryptic about his reasons for leaving. As he put it in a valedictory post on the foundation's blog:

[The "change"] part of this organization's journey is now complete. While I might like to believe that I can do all things well, I know that is not true. I am great at some things but only good at others. I believe there are others who will be better than me at leading the foundation through the next phase of its journey....

For some this will seem sudden. I don't believe in long good-byes. If new leadership is going to succeed, old leadership needs to get out of the way so that people in the organization and its partners can focus on the future and not the past...."

As we noted in our year-end wrap, Hutchinson is the latest in a series of foundation executives -- Greg Chaillé, Aryeh Neier, Gara LaMarche, Thomas Aschenbrener, Karen Davis, Lance Lindblom, and Gary Yates among them -- who over the last year have either stepped down or announced that they would be stepping down. With the oldest baby boomers now reaching retirement age, they'll be joined over the next decade by tens, if not hundreds, of thousands of senior-level nonprofit and foundation executives.

This rolling wave of retirements presents the philanthropic sector with both a challenge and an opportunity -- a situation not lost on the leaders of nine progressive nonprofit organizations who earlier this month released an open letter to the trustees of the $7 billion William and Hewlett Foundation. As many of you know, the foundation's president, Paul Brest, has announced he'll be stepping down this summer to return to teaching, and the letter's authors wanted to share some thoughts with the Hewlett board. After noting that the board has "no more important role than selecting [a new] CEO," they offered four suggestions for the board to keep in mind as it conducts a search for Brest's replacement. The next president of the foundation, they wrote,

should be someone who maintains the foundation's historic commitment to philanthropic effectiveness;
someone who understands the role that race continues to play in determining life opportunities in America;
someone with deep experience and passion for the highest-impact grantmaking strategies of grassroots advocacy, community organizing, and civic engagement;
someone who understands the limits of "strategic philanthropy."

While the above list reflects the social justice concerns of the nonprofit leaders who issued the letter, it also raises a number of questions: What kind of qualities and experience should a foundation leader -- and I'm talking here about foundations with half a billion or more in assets, of which there are more than a hundred -- possess in the twenty-first century? Should he have had prior experience as a grantmaker? What about nonprofit or NGO experience? Should she have earned at least one advanced degree? Be fluent in a foreign language? Have visited at least half a dozen countries, including countries in Asia, Africa, and South America? Should he have at least one entrepreneurial failure on his resume? Know about and use Facebook, LinkedIn, and Twitter? Be able to program, or at least know the difference between Java, Perl, Python, and Ruby?

Okay, maybe the last one isn't entirely reasonable. But you get the point. In a connected, networked world where money and knowledge flow across borders at the speed of light, where rising inequality is a global phenomenon and the threats to our survival increasingly are transnational, where the metaphor of earth-as-lifeboat has never been more appropriate, effective foundation leadership is vital.

Given the reality of the power dynamics in our sector, I don't really expect anyone to weigh in on this. But I'll ask it anyway: What will (or should) effective foundation leadership look like a decade from now? Use the comments section to share your thoughts....

-- Mitch Nauffts

Becoming a "Web 2.0 Philanthropy"

2012-01-18T14:46:12-05:00

(Steve Downs is chief technology and information officer at the Robert Wood Johnson Foundation. This post originally appeared on the Foundation Center's Glasspockets blog.)

The Robert Wood Johnson Foundation, like many philanthropies today, has embraced social media. We have a Facebook page, YouTube channels, blogs, and multiple official Twitter feeds. Our staff also participate directly: more than forty of my colleagues are regular Twitter users and many have contributed blog posts to popular sites within their fields. Our CEO, Risa Lavizzo-Mourey (@risalavizzo), sets the tone with her regular activity on Twitter.

Like many philanthropies, we're still finding our way and doing our best to learn from our collective experiences and from the experiences of others. For RWJF, engagement in social media is rooted in a context -- a context about who we are as an organization and what we seek to become.

The first part of that context comes from our history with transparency. Since RWJF's beginnings, we have emphasized independent evaluation of our programs. As David Colby (@DavidCColby) and his colleagues have detailed, RWJF chose to make public the results of those evaluations so others could learn whether the interventions had (or had not) been effective. In addition, since 2007, we have made public an annual assessment that examines a number of dimensions of our organizational performance. (You can download the reports from our Web site.)

The second part starts in 2008, when RWJF underwent a strategic planning exercise where we began by looking at the world around us. We saw innovations in philanthropy coming from newer, smaller foundations like the Steve and Jean Case Foundation and Omidyar Network that were leveraging new technologies to cast a wider net, stimulate conversation, and engage people more widely. We saw new models for the sector such as Kiva and DonorsChoose -- platforms that enabled more direct connections between donors and their impact. And we also saw the amazing, disruptive accomplishments of services like Wikipedia and craigslist that were run by organizations employing only a few dozen staff but drawing their power from vast networks of engaged users. We came away from this effort with a sense -- still impressionistic -- that we should explore what it would mean for us to become a "Web 2.0 philanthropy."

"Web 2.0" is becoming an archaic term as it is supplanted by the term "social media," but for us the distinction has meaning. Where "social media" is often associated with services like Facebook, Twitter, or Flickr, we see Web 2.0 as running deeper. It is the collection of tools that harness the collective creativity and knowledge of -- and promote interaction among -- the Web's many users. It is based on an "architecture of participation," which enables the users of a service to add value to that service. Beyond social media, it can be expressed in many ways, ranging from the user who improves on a cooking magazine's recipe by adding an unexpected spice to the protester during the Arab Spring posting a cell phone video of a beating on YouTube for the world to see. It is the seller-rating system of eBay, in which the experiences of hundreds of other buyers give a potential buyer confidence in the seller. It is about the blurring of the lines between producer and consumer, between expert and non-expert, and the aggregation of many small contributions into something of great value.

We knew that as a relatively large and middle-aged foundation (we celebrate our 40th anniversary this year) with traditions, habits and engrained practices, we would have to consciously push ourselves to evolve in this direction. We needed first to flesh out the vision, which we did through a combination of research (i.e., small "r" research like reading case studies and talking with folks at other organizations) and experiential learning. Those of us tasked with working on the vision felt we couldn't do so unless we were actively engaging in Web 2.0 experiences, so we started experimenting with Twitter and Facebook -- and experiencing their cultures and value to our day-to-day work. It wasn't long before we concluded that becoming a Web 2.0 philanthropy was not so much about adopting new social media than it was about embracing the underlying values of Web 2.0 and weaving them into our work. To that end, we homed in on three principal values:

Openness, at one level, implies transparency -- letting others see into the organization and how it works. But in Web 2.0, openness goes beyond organizational transparency and represents humility and a willingness to learn, to be surprised, and to hear and accept criticism.
Participation refers to a style of engagement in the professional communities of which we are a part. It requires asking questions, listening, responding, and contributing where we can add value -- whether expertise, research and other materials, or connections.
Decentralization is a natural consequence of distributed participation and inherently requires a ceding of some control. So much information is now created and shared collaboratively, and the path and shape that such information takes cannot be controlled by any one entity or group. A tremendous upside of the emergence of Web 2.0, however, is the potential for countless unseen contributors to augment and amplify one's own contributions.

Building on these values, the research and our early experiences, we sketched out a vision of how RWJF could embrace Web 2.0. The vision included a number of elements, ranging from using social media to be better informed about our fields and the work of our grantees, to cultivating networks of people and organizations who care about our issues, to crowdsourcing expertise, to seeking feedback and criticism, to using Web 2.0 principles to design programs that work at very large scale. The vision, along with a strategy to evolve toward it, gave the organization a context and a rationale for our embrace of social media.

One might be tempted to think that with all this Web 2.0 strategy development going on, we approached social media with a deliberate, carefully planned strategy, when in fact we took a much more organic approach. Previous to our Web 2.0 work, we had done some blogging and gotten over the usual jitters about all the things that could go wrong. Later, as a few intrepid staff began testing the waters at Twitter and Facebook, we consciously took a supportive stance. We came up with social media guidelines that, while putting up some guardrails to limit the likelihood of an unfortunate event, actually encouraged staff to experiment and to develop their own individual personalities online. We wanted them to explore how they could provide value, and we wanted to learn from their experiences. The context of our overall push to become a Web 2.0 philanthropy informed the development of our social media guidelines, provided a strong incentive for staff to participate, and, by connecting their participation to a set of values, also influenced how they participated.

We're a couple of years into our journey and we reap the benefits of being more open and engaged every day. Many staff feel as if they're better engaged in their fields, learning more, and expanding their networks. At the same time, this being a journey, it hasn't always been easy. Staff wrestle with where to find the time to engage meaningfully in social media, and being open and engaged often means having to expose what you don't know, which can be uncomfortable. We're also finding that there's a long way between having a vision of how to leverage Web 2.0 to change the world and having the world work like a Wikipedia or a craigslist. Just because you ask people's opinions doesn't mean you'll get them -- sometimes the crowd keeps its wisdom to itself. (My colleague Erin Kelly will speak to some of these challenges in a future post on our social media experience.)

As we continue on this journey, we still have lots to learn -- and we'd love to hear how others are finding success or overcoming obstacles to becoming more open, more participatory, and more decentralized. Has your organization ventured down a similar path and/or embraced social media tools to work in a different fashion? Are you using them to listen or become better informed? Build networks? Service a traditional organizational or "consumer" need in a new manner? Use the comments section to share your thoughts....

-- Steve Downs

Five Qs for...Mario Morino, Co-Founder/Chair, Venture Philanthropy Partners

2012-01-17T14:56:09-05:00

After a successful career as a software entrepreneur and business leader, Northeast Ohio native Mario Morino founded the Morino Institute in 1994 to encourage innovation and entrepreneurship, promote a more effective philanthropy, and explore the impact of the Internet on society. Over the next few years, as the dot-com boom morphed into a bubble, Morino emerged as a forceful spokesperson for a more business-centric approach to philanthropy and in 2000 co-founded Venture Philanthropy Partners (VPP) as a vehicle to concentrate investments on improving the lives of children of low-income families in the National Capital Region.

That was also the year the dot-com boom went bust and the venture philanthropy meme lost its hold on the public imagination. Looking back on those years, Morino today says he regrets "the corporate-sounding jargon I bandied about. I spoke often of the value of being 'business-like' and the need for results. People who didn't know me saw me as a brash, arrogant interloper. I offended far too many wonderful nonprofit leaders who had dedicated their lives to making a difference for others."

In the decade that followed, VPP established itself as a leading practitioner of the "high-engagement" model of philanthropy, and Morino became more convinced than ever that nonprofits' ability to collect information about the impact of their work and use that information to drive continuous improvement in their programs and results -- what he calls "managing to outcomes" -- was a critical element in the social change equation. So convinced, in fact, that he wrote and (in 2011) published Leap of Reason: Managing to Outcomes In an Era of Scarcity, a monograph "intended for leaders...who know in their bones that they want and need better information in order to fulfill the mission that compelled them to dedicate their lives to serving others."

PND chatted with Morino recently about the book, performance measurement (and its costs) in a nonprofit context, and the importance of leadership in shaping a performance culture.

Philanthropy News Digest: The subtitle of your monograph is "Managing to Outcomes in an Era of Scarcity." In a world awash in information, data, processing power, and other blessings of the digital economy, what is it we don’t have enough of?

Mario Morino: That's a great question. My view is that even in a world awash in information, nonprofit leaders generally don't have the benefit of the right information. By the same token, most don't have the supporting culture or encouragement to put the right information to good use in managing their mission and operations.

To be sure, more public and private funders are demanding information from nonprofits, and nonprofits are dutifully complying. But in many cases, the data that funders demand are not all that useful to nonprofit executives for managing their performance and charting the strategic direction of their organizations. In fact, when you dig into the details of the information requirements, you see that too often the data are not even that valuable for the funders who request them, except for allowing these funders to check some "accountability" boxes.

As we said in the book, in the name of "accountability," we funders are foisting unfunded, often simplistic, self-serving mandates on our grantees -- rather than helping them define, create, and use the information they need to be disciplined managers. I strongly urge funders not to foist lots of unfunded "compliance" requirements on nonprofits. Instead, we want funders to help their grantees identify and collect the information that's most valuable for nonprofit leaders themselves for determining how well their organizations are doing and how they can keep getting better at meeting the needs of those they serve.

PND: What's driving the increased focus on outcomes measurement in the social sector? And what makes you sure the movement isn't a consultant-driven fad that will fade in popularity as the economy improves?

MM: I believe there are many forces that are distorting and, frankly, dumbing down the dialogue on outcomes. And, fortunately, there are emerging forces driving the dialogue on outcomes in positive directions. On the positive side, we're fortunate that a few foundations like Edna McConnell Clark are demonstrating that a focus on outcomes is key to achieving a real, lasting impact in their chosen issue areas. And there are some very good consultants and thought leaders in the mix, including Bridgespan, McKinsey, Monitor, Public/Private Ventures, and the Center for Effective Philanthropy. I also see some remarkable early-adopter nonprofit executives contributing in important ways to the dialogue by showing what's possible.

The increased focus on data and outcomes is not a fad. Based on my forty-plus years in the for-profit and nonprofit sectors, I am absolutely convinced that organizations in any sector need good information to make good decisions. Leaders often have good intuition. But the top leaders in any sector want to augment their intentions and intuition with the best data they can get their hands on. They can't sleep at night when they don't know whether they're on course to achieve the results they seek. They're obsessed with finding ways to do better for those they serve.

Over time, the nonprofit leaders who do manage to get their hands on good data and integrate information-based inquiry into their cultures are going to achieve more for those they serve. We don't yet have data to prove this in the nonprofit sector. But there is a growing body of literature on the link between good information and good results in the for-profit sector. Eventually, I believe we'll have similar evidence for the nonprofit sector.

But there's no guarantee the adoption of outcomes-based management in the social sector will get to where it needs to be unless there is a sea change in the mindset of nonprofit leaders and the funders who support them. The shame is that if that sea change doesn't come to pass, those who will pay the price are those whom nonprofits exist to serve.

PND: You argue in the monograph that all organizations should strive to nurture a performance culture. How do you define that term, and does it mean different things depending on what sector one is talking about?

MM: My definition is really straightforward. I mean simply that the organization should have the mindset to do what it does as well as it possibly can and continually seek to do even better. And that definition is identical across sectors.

In the book, I shared a concrete example from my for-profit days that I hope is not too self-serving. Despite my shortcomings as a manager when I ran a software company, I worked very hard to nurture a performance culture. Factoring in that I might be engaging in slightly revisionist history, I believe that the people in the company really cared about what they did and how they did it. They cared about our customers and each other -- so much so that these relationships often grew into close friendships anchored in mutual respect. People worked hard not because I decreed they should but because they wanted to do their work very well; they wanted to experience the exhilaration of excellence. When we made mistakes, our openness allowed us to quickly admit and rectify them. It was inherent in the culture that we would respond this way.

I see these exact same hallmarks in several great nonprofits I have supported and visited over the past few years. In these organizations, people are highly motivated by their work. They have taken big risks and undertaken hard, painstaking work to build human and technology systems to help them get better at what they do. And they don't see "mission" and "metrics" as mutually exclusive!

PND: How important is individual leadership in the performance culture equation? And what are the most important qualities a nonprofit leader must possess in order to succeed in today's environment?

MM: It's essential! A performance culture never develops without leaders investing themselves deeply and taking big, bold risks.

In all the nonprofits that I regard as the top performers, leaders have taken on the challenge of nurturing a performance culture not because it's "important," not because it's a trend or a good marketing tool, and not because a funder or investor said they had to. They did it because they had an introspective moment when they realized that what they were doing wasn't working well enough and they needed to do more.

For example, in the early 1990s, Youth Villages CEO Pat Lawler kept hearing through the grapevine about young people who seemed to be on a good path after discharge from YV's residential treatment facilities and yet had ended up in prison or in other forms of crisis. This prompted him to start collecting more information to find out what was really happening to those kids. The results were disappointing.

Instead of hiding the bad news from stakeholders, Pat and his team openly acknowledged the shortcomings and then spent several tough years reengineering the entire program model. Today, data collection is part of the DNA of the entire organization. YV tracks its clients' outcomes six, twelve, and twenty-four months after discharge, feeding continual improvements into the program model. When you talk to Pat and his team, you see that they are not fixated on data and measurement per se. To them it's simply a precondition for knowing if their long hours are paying off for the young people they serve -- and for learning how they can keep getting better over time. Pat and his leadership team have built a true performance culture -- one that is the envy of nonprofit and for-profits alike!

As for the most important qualities leaders must possess in this environment, I would submit the following five: a passionate, unyielding desire to do the most you can for those you serve; the confidence to ask hard, even painful, questions about how your organization can do more and at a lower cost; the commitment, staying power, and talent to lead difficult change processes; the clarity and courage to get the "right people on the bus, in the right seats" -- even if that means making difficult personnel decisions; and a willingness to model -- that is, live -- the behavior you want others to practice.

PND: Who should bear the costs of an increased focus on outcomes measurement?

MM: Managing to outcomes should be a essential part of how nonprofits function and thus covered by their revenue sources, akin to how nonprofits fund their development functions or their budgetary/cost accounting.

But for this to happen, funders have to accept the necessity of providing resources to cover operational, not just project, expenses. Instead of just pushing nonprofits for "more information on results," funders should be willing to support what it takes for nonprofit leaders actually to produce those results. And that includes investing in outcomes management, a term I prefer over "outcomes measurement."

If funders really want their grantees to produce results, they must provide much more than project support and more than $5,000 or $10,000 "capacity-building" grants. Serious, results-oriented funders make multiyear investments so that nonprofit leaders can develop the talent, cultivate a performance culture, and build the human processes and technology systems for managing to outcomes. At a minimum, funders should support efforts to help nonprofits build the capacity and culture for tracking the outcomes of those served, undertake at least basic analysis of this information, and identify how they can use the information to improve their programs over time. For my money, these investments have a tremendous return on investment.

But let me also say that every nonprofit organization that has successfully made the "leap of reason" has put a lot of skin in the game. Nonprofit executives who have made the leap have invested a lot of human, relationship, and sometimes financial capital in the process. They often dip into reserves, raise special "innovation funds," and/or re-purpose existing dollars. They always invest a lot of their own time and effort. Organizational transformation like this cannot simply be outsourced or done on the cheap.

PND: What advice would you give executive directors and nonprofit board members who may have thought about adopting more of an outcome-focused mindset but just don't know how to get the ball rolling?

MM: I'm happy to answer the question, but I don't want anyone to think that managing to outcomes can be accomplished quickly with a simple, ten-step process. Managing to outcomes is a quantum leap for most organizations and involves significant culture change. It's not about implementing a cookie-cutter set of best practices.

That said, I would encourage people to look at the "Ideas Into Action" section of the book, which begins on page sixty-three and can be downloaded with the rest of the book at LeapofReason.org. That section provides a set of questions that boards and leadership teams should ask themselves to gauge their readiness and capacity for doing the hard work of making significant culture change.

In closing let me make an emphatic plea: You're not going to "get it" just by reading the book. We hope the book will give you some ideas. But, ultimately, you have to make the highly personal decision -- in some cases akin to a conversion -- that you want and need to do this. You have want to serve better, be better, and function better yourself and as an organization. Like the great leaders I've met who have done this, you have to want -- in a compelling way -- to make a more material, lasting difference for those you serve. It's a choice!

-- Mitch Nauffts

'Greed is Good' and Other Canards

2012-01-14T16:03:18-05:00

Op-ed columnist Charles Blow has a piece in today's New York Times about the "politics of envy," an already tired trope that likely Republican presidential nominee and leveraged-buyout specialist Mitt Romney has been trying out this primary season.

In the piece, Blow quotes Elizabeth Warren, who chaired the Congressional Oversight Panel created to oversee the Troubled Assets Relief Program and who is running for the Senate seat in Massachusetts that Romney unsuccessfully ran for in 1994, on the obligation we all have to "pay forward" our financial good fortune:

There is nobody in this country who got rich on his own. Nobody. You built a factory out there, good for you. But, I want to be clear: you moved your goods to market on the roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory and hire someone to protect against this because of the work the rest of us did. Now look, you built a factory and it turned into something terrific or a great idea. God bless. Keep a big hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along....”

"Greed is good" is a great logline for a movie, but it's a terrible way to organize society. Gordon Gekko didn't "liberate" Teldar Paper, and the United States is not (as Paul Krugman reminds us) a "malfunctioning corporation"; it is, rather, an ongoing political and social experiment in which the interests of 300 million people sometimes compete but more often overlap; in which "equality of opportunity" is an ideal and not yet a reality; and in which the concept of "the public good" was, for much of the twentieth century, bound up with the equally important concept of social mobility.

Unfortunately, as new survey data from the Pew Research Center makes clear, more and more Americans believe the post-WW II social contract in the U.S. has been shredded and that tensions and conflicts between the haves and have-nots are growing.

That sense is one of the key drivers behind the Occupy Wall Street movement, it will be an important point of debate in this year's presidential contest, and it's something all of us who work in or cover philanthropy need to recognize and address.

-- Mitch Nauffts

Weekend Link Roundup (January 14 - 15, 2012)

2012-01-14T13:00:00-05:00

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

Disaster Relief

On the two-year anniversary of the earthquake that killed more than 200,000 people and left over a million Haitians homeless, the Chronicle of Philanthropy has an updated look at how sixty aid groups spent the money they raised for relief and recovery efforts. (Requires subscription.)

And Sandra Miniutti advises those who donated to relief and recovery efforts to "check back" with the organization(s) to which they gave. "Find out what the charity been able to accomplish. If you like what you hear and the charity says it has ongoing needs, then consider making a follow-up donation to support those ongoing efforts."

Education

A recent post on the Give2Asia blog profiles the Afghan Institute of Learning, a Give2Asia grantee, and its founding executive director, Dr. Sakena Yacoobi. Established surreptitiously during the early days of Taliban rule, AIL organized and operated a network of eighty underground schools that educated three thousand girls across the country. Today, Yacoobi's organization operates in the open and has touched more than 8 million Afghans through its network of schools, teacher and nurse training programs, and healthcare services.

Impact/Effectiveness

Using findings from the Ford Foundation-sponsored report Transactions, Transformations, Translations: Metrics That Matter for Building, Scaling and Funding Social Movements, Beth Kanter considers the opportunities and challenges involved in measuring the impact of social change movements and networks.

Philanthropy

The Bridgespan Group's Alison Powell reviews a recent Foundation Center report that examined the center's own grantseeking processes as a way to highlight some of the costs of capital that donors impose on all grantseekers.

On the Philanthropy Potluck blog, Naomi Pesky, director of marketing and communications at Minnesota Philanthropy Partners, shares a recent video created by the organization as part of its ongoing efforts to make its grantmaking processes more transparent.

In a post on her Philanthropy 2173 blog, Lucy Bernholz looks at at a handful of recent reports on giving, including one from the Pew Center for the Internet & American Life and Harvard's Berkman Center that looks at mobile giving in the aftermath of the 2010 earthquake in Haiti. According to the report, the majority of people who used their cell phones to give to relief and recovery efforts made a spur-of-the-moment decision to do so and then told their family and friends to donate via text message as well. In her post, Bernholz wonders how this type of "tech-enabled" giving might change how and why philanthropic research is conducted.

About.com's Joanne Fritz shares a new infographic from Frugal Dad that highlights the impact of Microsoft co-founder Bill Gates's philanthropic work.

Center for Effective Philanthropy president Phil Buchanan takes a close look at Oliver Zunz's new book Philanthropy in America and uncovers "seven examples of things [in philanthropy] that are often portrayed as new -- or not done -- despite the fact that this is not, historically, the case."

The National Committee for Responsive Philanthropy's Kevin Laskowski shares his new year’s resolution for philanthropy: increase funding for community organizing among lower-income communities and "Emerging Majority" communities. Writes Laskowski:

I’m sure you're shocked to hear this from someone here at NCRP. However, one thing we saw in 2011 and we will likely continue to see in 2012 is the robust participation of some philanthropists in important public policy debates. Bill Gates, Eli Broad and others have played a large role in shaping the discussions about education reform efforts. A number of conservative philanthropies, such as the Koch brothers and the Bradley Foundation, have had an outsized influence on national debates for some time. Some see this involvement as a pernicious force in our democracy, but my concern is not that the wealthy participate in politics. My concern is that they're increasingly the only ones who do or can....

Scince/Technology

And on the Credit Writedowns site, Rick Bookstaber looks at the role computers and technology are playing in the destruction of the middle class.

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

-- The Editors

This Week in PubHub: Funding for Social Justice

2012-01-12T17:36:00-05:00

(Kyoko Uchida manages PubHub, the Foundation Center's online catalog of foundation-sponsored publications. In her previous post, she looked at four reports that examined specific grantmaking strategies and practices designed to maximize fundamental long-term social impact.)

In honor of Martin Luther King, Jr. Day on Monday, this week in PubHub we're featuring four reports that examine trends in funding for social justice and advocacy efforts in support of the rights of marginalized populations.

Foundation support is essential if advocacy and community organizing efforts to improve the lives of marginalized populations are to succeed, a report from the National Committee for Responsive Philanthropy argues. Strengthening Democracy, Increasing Opportunities: Impacts of Advocacy, Organizing, and Civic Engagement in the Gulf/Midsouth Region (88 pages, PDF) found that between 2005 and 2009 twenty organizations in the Gulf/Midsouth region secured more than $4.7 billion -- $114 for every dollar invested -- in benefits for marginalized communities, trained more than 31,000 local residents in civic engagement techniques, and achieved significant policy changes in the areas of environmental justice and LGBTQ and immigrant rights, with foundations providing 78 percent of the funding for said activities. Funded by the Winthrop Rockefeller Foundation, the report urges grantmakers to invest more in building the region's advocacy and community organizing infrastructure, make flexible investments in groups working in rural areas, and support organizations with people of color in leadership positions.

Of course, foundations that fund social justice activities saw their endowments take a hit during the post-Lehman financial crisis, as described in the Foundation Center report Diminishing Dollars: The Impact of the 2008 Financial Crisis on the Field of Social Justice Philanthropy (35 pages, PDF). While the report found that giving for social justice as a percentage of total giving by foundations in the sample varied only slightly between 2005 and 2009, in 2009 it fell below 2007 levels, with small foundations experiencing the sharpest declines in the value of their assets. Funded by the Cricket Island, Edward W. Hazen, and Ford foundations in partnership with NCRP, the Robert F. Wagner School of Public Service, and the Social Justice Philanthropy Collaborative, the report projects that unless the field sees five years of above-average investment returns, social justice grantmaking in 2015 will remain below 2008 levels.

The good news, according to Cultures of Giving: Energizing and Expanding Philanthropy by and for Communities of Color (112 pages, PDF), is that giving within and on behalf of communities of color is increasing. Commissioned by the W.K. Kellogg Foundation, with support from Rockefeller Philanthropy Advisors, the report found that, given the disproportionate need in communities of color, those communities typically have received a too-small percentage of mainstream philanthropic dollars -- a gap that was exacerbated by the Great Recession and cuts in public-sector funding. In response, the report argues, donors of color and others have begun to direct more resources to communities of color, with an eye to building advocacy skills in those communities and empowering local leaders and residents to lead short- and long-term change efforts. The report calls on mainstream funders to advance this kind of identity-based philanthropy by providing seed funding for grassroots efforts and forging stronger connections with local philanthropic leaders and other change agents.

What about trends in social justice work abroad? Mobilising for Social Justice: Migrant Rights Centre Ireland's Community Work Model (50 pages, PDF), a report from the Migrant Rights Centre Ireland that was funded by the Atlantic Philanthropies, offers case studies of MRCI's "community work practice" model on behalf of migrant workers' rights -- work that, among other things, encourages marginalized migrant groups to take part in decision-making structures through participation in discussion/action groups, empowers them through consciousness-raising and skills-building activities, and promotes advocacy and collective action.

What are your thoughts about the future of funding for social justice philanthropy? Are you aware of any new trends or developments that could energize the field or take it to the next level? Feel free to share your ideas in the comments section below.

And don't forget to check out PubHub, where you can browse more than a hundred and fifty reports on the topic of civil and human rights.

-- Kyoko Uchida

'Freedom Riders': Lessons for a New Generation

2012-01-10T14:53:48-05:00

(Kathryn Pyle is a frequent contributor to PhilanTopic. In October, she spoke with Orlando Bagwell, director of the Ford Foundation's recently launched JustFilms initiative. She first blogged about Freedom Riders in February of 2010.)

Writing from the 2010 Sundance Film Festival about the civil rights movement as captured in documentary films, I highlighted Freedom Riders, a documentary directed by Stanley Nelson that premiered at the festival. The film tells the story of the hundreds of courageous people, most of them young, who participated in the 1961 "freedom rides" that helped end segregation in the South.

Freedom Riders aired on PBS this past May; the film went on to earn three Emmy Awards and the New York Times, calling it "beautifully constructed," selected it as one of the ten best programs of the year. The broadcast was preceded by a ten-day reenactment of the original 1961 campaign that was organized by American Experience, the PBS program which had commissioned and broadcast the film. "Get on the Bus" brought together forty college students from around the country to reenact the rides -- from Washington, D.C., to New Orleans -- and interact along the way with some of the original freedom riders, various historians of the period, and community activists. As they made their way south, the kids shared their experience via Facebook, Twitter, and other social media tools.

"The re-creation campaign had high visibility and great partnerships with state humanities councils, colleges and universities, and museums around the country," says Sonya Childress, community engagement specialist at Firelight Media, the nonprofit partner of Firelight Films, Nelson's for-profit production company. The former organizes audience outreach programs -- a letter-writing campaign for Nelson's film The Murder of Emmett Till helped reopen a criminal investigation into that 1955 case -- and supports emerging documentarians through a producers' lab.

" 'Get on the Bus' was very successful," Childress adds, "but we at Firelight wanted to do something different. We saw our job as bringing the film to a different audience -- particularly youth, and including African-Americans, but people who weren't necessarily connected to the civil rights movement. In targeting youth groups, we immediately thought of the Dream Act, because the story of Freedom Riders is a story about multi-ethnic organizing. We wanted to reach people working on immigration reform who do not see the civil rights movement as part of their history or as relevant to their activism. And we wanted to help them use the film in their own campaigns."

Atlantic Philanthropies, the Open Society Foundations (through its Campaign for Black Male Achievement), and the National Black Programming Consortium were approached and ultimately funded the Firelight Media project.

"Many funders could have said the freedom ride reenactment was sufficient as an audience engagement component," notes Childress. "But these three organizations saw value in bringing the history to a new community. They understood that Firelight Films makes historical documentaries, but that we want to show that the lessons of the past can be dissected and discussed and applied to today. Also, the funders recognized that, being an independent entity, Firelight Media had the latitude to work with a wider variety of community groups than had been involved in 'Get on the Bus', and that was seen as a complement to the American Experience project."

Engaging foundations that are not "media" funders is a new strategy for many documentary filmmakers; the challenge is in helping private and corporate foundations see that film can further their grantmaking priorities, and that there are many points of entry for support beyond a film's production phase.

At the same time, as foundations become more engaged in distribution there is more concern around evaluation of the project's goals. In Social Justice Documentary: Designing for Impact, a new Ford Foundation-supported publication from the Center for Social Media, Jessica Clark and Barbara Abrash put it this way:

In an environment of information overload and polarized sparring, social issue documentaries provide quality content that can be used to engage members of the public as citizens rather than merely media consumers. As a result, they have gained in visibility, influence and number over the past decade.

But despite the box-office and critical success of high-profile examples such as An Inconvenient Truth or Supersize Me, the social impacts of such expensive, long- range projects have been hit-or-miss. As a result, investors and filmmakers are asking tough questions about how best to plan for and assess the impact of such films and related engagement strategies, and to create models and standards for a dynamic field....

The report proposes a systemic approach based on early and continuous community participation that combines quantitative and qualitative indicators and continuous feedback into the evaluation design. The best indicators measure "evidence of [the film's] quality, increased public awareness, meaningful partnerships, increased public engagement, and collective action."

Firelight Media's plan for Freedom Riders incorporated many of those elements, though as noted by the Center for Social Media report, each documentary project is distinct.

Firelight began by convening a small group of civic organizations to help develop ideas for a year-long project; by the time Freedom Riders was broadcast, the project was ready to go. (An agreement with American Experience required that the Firelight project not overlap with "Get on the Bus," which took place immediately before the film aired.)

Sixteen community-based organizations and student groups -- some national and some local -- were selected as formal partners. Seven of the smallest groups received stipends to carry out their activities. All agreed to screen the film and use an online guide, United in Courage (available on the Firelight Media site), to help plan events and facilitate discussions. Their experiences are being disseminated via an e-news broadcast to other partners, funders and filmmakers, and through Firelight Media’s newsletter; in effect, the partners provide ongoing feedback as a way to strengthen the project.

The groups include established organizations like the NAACP, which is bringing some of the original freedom riders to college campuses in the South for screenings and conversations. Puente Arizona has invited some of the freedom riders to discuss immigration reform strategies with members of the migrant communities with which it works. At a workshop on audience engagement earlier this fall in San Francisco, another partner, Bay Area-based Youth Speaks, described using the film at its annual Brave New Voices event, which brings young poets and youth development organizations together: five hundred spoken-word artists attended the screening and a subsequent conversation, later broadcast on Pacifica Radio, with two freedom riders. And New York City-based Brotherhood/Sister Sol showed the film in New York and Ghana and trained youth facilitators to lead post-screening talks. (A complete list of partners and their plans can be found on the "United in Courage" site.)

Recognizing that short films can be useful for community organizing and in educational settings, especially those involving children, Firelight Media produced a twenty-minute version of the film (available only to project partners) and also commissioned three ten-minute films on key issues in the current immigration policy debate. Immigration: Beyond the Headlines was supported by the Carnegie Corporation of New York and can be viewed on the Firelight Media site. Though apprehensive at first that the films would be seen as standalone media, Firelight staff now consider them to be useful vehicles for driving interested viewers to the longer and more comprehensive film.

Today, halfway through the year-long audience engagement effort, Firelight's independent evaluator is tracking how the full-length documentary is being used and the kind of impact it is having through pre- and post-screening interviews with various partners. The partners also submit formal reports on how they are using the film to enhance their work, in the process creating a repository of "best practices."

"Community organizations have varying levels of comfort with documentary films that are not 'advocacy' films, that are not prescriptive in terms of what to do about a particular issue," says Childress. "Freedom Riders is not a 'call to action'; it's an occasion for reflection. We're interested in knowing how community groups navigate that, how they challenge themselves and how they incorporate films into their programs. We want to know how this particular story resonates, especially within the immigrant rights movement that's looking for stories and trying to build relationships with other movements. The big question for us is: Can historical documentaries move the meter; can this content help people understand the current world?"

The anecdotal evidence is encouraging. Last month, as reported by the Montgomery Advertiser, "Two Freedom Riders who risked their lives to integrate Montgomery's bus station 50 years ago are back in the Capital City with a new cause: repealing Alabama's immigration law. The Rev. C.T. Vivian and Catherine Burks-Brooks joined a rally on the Capitol steps and a children’s march to the governor's mansion."

Some of the Firelight project's results to date are posted on its Web site in the form of testimony from the partners. We'll check back at the end of the year to see what lessons were learned and how they can inform the marriage between documentary film and community activism.

-- Kathryn Pyle

Weekend Link Roundup (January 7 - 8, 2012)

2012-01-08T14:53:42-05:00

Happy New Year, everyone! This week's roundup includes two weeks' worth of noteworthy posts from and about the nonprofit sector....

Communications/Marketing

Network for Good's Katya Andresen shares a recent Harvard Business Review blog post in which strategy consultant Dorie Clark offers a list of five things we should all stop doing in 2012.

Author, trainer, consultant, and blogger Kivi Leroux Miller has published her 2012 Nonprofit Communications Trend Report, which includes a look at the "Big 6" communication tools for nonprofits and the one thing that both excites and scares nonprofit communicators.

Impact/Effectiveness

On his Inside Philanthropy blog, Todd Cohen picks up where Blue Avocado editor Jan Masaoka left off and takes a hard look at what Masaoka called the Philanthropic-Consultant Industrial Complex. "Nonprofits buy what mediocre consultants are selling," writes Cohen,

because, strained to the breaking point in our damaged economy, and struggling to make ends meet in the face of rising demand for services and of shrinking resources, they need help and want to believe the consultants can provide it.

The icing on the cake is that consultants are neither regulated nor accountable for whether their advice actually makes a difference.

The hard work of turning that advice into results remains with the nonprofits....

International Affairs/Development

On the Gates Foundation's Impatient Optimists blog, Amie Newman takes a look at what famine relief efforts could look like in 2012. Encouraged by President Obama's pledge of $113 million in emergency relief funds for the Horn of Africa and USAID head Rajiv Shah's recent emphasis on "resiliency," Newman suggests that short-term relief efforts in 2012 will be merged with long-term development assistance to create more sustainable solutions to chronic food insecurity and lagging agricultural development in the region.

Elsewhere on the blog, Joe Cerrell, the foundation's European office director, offers five reasons to be hopeful about international development in 2012. Cerrell notes that in the past ten years, the number of people receiving treatment for AIDS has soared, malaria deaths are down 25 percent, and child survival rates have climbed steadily. At the same time, technological advances have brought the global community closer to developing vaccines for several diseases, while China, Brazil, India, and South Korea have emerged as important players on the development scene. So even though negative stories tend to dominate international development headlines, writes Cerrell, it's important to remember that by most measures, things are getting better.

Microfinance

Calling it "a voice of reason amid the sound and fury of the mircofinance debate," the UK-based Guardian gives a thumbs up to Due Diligence: An Impertinent Inquiry Into Microfinance, a new book by the Centre for Global Development's David Roodman.

Philanthropy

The folks at the BlackGivesBack blog have released their fifth annual list of the top ten black celebrity philantropists. Heading the list is Academy Award-winning actor Denzel Washington, who was honored for his $2.25 million donation to his alma mater, Fordham University, followed by entertainer Steve Harvey, recording artists John Legend, Mary J. Blige, Usher, and Alicia Keys, NBA stars Chris Paul and Dwyane Wade, and hip hop stars Antwan "Big Boi" Patton and Shawn "Jay-Z" Carter.

On The Philanthropic Initiative blog, TPI president and CEO Ellen Remmer looks at the development of the donor as stages in a continuum. The post is the second in a series of posts by Remmer on the topic of strategic philanthropy.

Philanthrocapitalism authors Matthew Bishop and Michael Green gaze into their "philanthrocrystal ball" and offer a list of ten predictions for philanthropy around the world in the new year. Among other things, the duo foresee a jump in giving from the estate of Apple co-founder Steve Jobs, a "big year" for impact investing, and a tough year for many nonprofits.

Social Media

In a guest post on the Communications Network blog, PhilanthroMedia's Susan Herr writes about the difficulty all content producers face getting readers to engage via social media. Based on the network’s experiment with a “Gorilla Engagement” squad at its annual conference, Herr offers a number of lessons, including pursuing those already active in the social networking sphere, spotlighting new voices, and acknowledging guest bloggers and commenters early and often.

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

-- The Editors

These Days Everyone Can Be a Communicator...But Is That Enough?

2012-01-06T11:58:31-05:00

(Bruce Trachtenberg is executive director of the Communications Network, an organization of people who work for or on behalf of the nation's grantmakers, and Michael Hamill Remaley is vice president of communications and public policy, Philanthropy New York.)

These days, everyone is a communicator. After all, how hard is it to send a tweet, post to a blog, or even shoot and upload a video?

Many people in charge of foundation and nonprofit communications have taken advantage of this trend by encouraging others in their organizations to develop and share content through online social networks.

Indeed, as they increasingly see that their messaging can be amplified by many voices, both on staff and off, one can imagine foundations asking: Do we still need professional communicators on staff? Why can't we all just say what we have to say? In a world of decentralized distribution of news and ideas, do we even need a communications department?

That last question obscures a fundamental fact. A successful foundation communication program isn't simply the sum of its tactics, regardless of whether those tactics involve "old media" like sending out press releases or more contemporary activities such as blogging, tweeting, or posting to Facebook.

What matters most is the strategy that unites these otherwise disparate elements so that the right message is delivered to the right audience through the right channel with a clear goal in mind.

That may be why the roles and responsibilities of communications staff members are actually deepening instead of fading away. And that'll continue to be the case as digital communications evolve and the competition for the attention of policy makers, community leaders, and others grows more fierce.

The changes under way in how grantmakers get their messages out can be seen in Foundation Communications Today, a report from the Communications Network that analyzes the findings from a survey of a hundred and fifty-five communication staff members at foundations across the country.

Almost half the communicators polled for the report said the leaders of their foundations had taken steps to ensure that communications strategy was incorporated into grantmaking, advocacy, and other work undertaken to advance the foundation's mission.

Why are foundations making communications a key element of their work? Because most foundations are in the business of advancing the public good, and the changes they seek to foster require demonstrating, sharing, and, in many cases, encouraging both public and private-sector investment in new solutions to challenging problems.

To convince foundation leaders to make communications integral to their organizations' work, communications staff recognize they have an internal selling job to do. Yet, as our survey shows, they are succeeding in their efforts to make other parts of the organization see both the benefits of integrating communications into their work and sharing responsibility for its implementation. As one respondent told us: "We have endeavored to be a much more well-integrated organization. Complete integration will take time, but our program officers think about communications at the start of the grant process rather than at the end of it." Another said: "As we are doing more and more advocacy, it seems communications is taking on a greater importance and our board has allowed our budget to reflect this, despite having much less money since the market collapse."

Let's be honest: we have a ways to go. Many of the communicators we surveyed said that efforts to better integrate communications into everything their foundation does is happening slowly, and a small but significant share said communications strategy is barely considered in decisions about advancing the mission and that it tends to be addressed at the end of a big project rather than throughout. And then there was this response: "Program staff seem to be making decisions without thought to the importance of properly messaging our work. Initiatives are designed without any communications goals -- or input asked for -- and later the communications department is asked to cobble something together."

Still, our communications brethren are making progress, and the survey provides valuable insights into specific ways communications departments are successfully working with and supporting the efforts of their program colleagues to advance their organizations' missions.

Asked to choose from a list of possible activities in which they might participate, for example, providing support for program-related events -- which could mean anything from organizing a discussion of experts to arranging a movie screening showcasing a grantee's work -- was identified as the most common form of support, with some 79 percent of respondents saying they regularly do this. And more than two-thirds of communication staff members say they advise/work with their program colleagues to develop content for Web sites.

Many foundation communicators also play a critical role in helping bring the important work their organizations do to the attention of key audiences. For instance, close to half of those polled said that influencing public policy-makers was a high priority, followed by community leaders and grantees.

The survey also shows how the work of foundation communications is changing. Almost half the respondents said they work for organizations that have blogs, while three-quarters (!) said their organizations host videos on their Web sites. Survey respondents also estimated that, on average, a quarter of their communications dollars in 2011 would be spent on electronic communications, more than on any other "channel," although printed annual reports and other print publications still consume a sizeable share of the communications budget. At the same time, increased capacity for new media and related digital work was cited as a high internal priority by 60 percent of survey participants, more than any other response.

In short, the findings suggest to us that a foundation communicator these days must be adept at orchestrating a variety of communications tactics, from traditional media outreach to tweeting and blogging, if he or she hopes to reach key stakeholders in immediate and thoughtfully focused ways.

It's also quite clear that every good-sized foundation needs at least one professional communicator on staff. Simply put, the jobs we do are central to ensuring that a foundation's message is heard and actually makes a difference.

-- Bruce Trachtenberg and Michael Hamill Remaley

3 Ways Your 'T-Shape' Helps You Collaborate

2012-01-04T12:50:29-05:00

(Thaler Pekar recently collaborated with Jay Rhoderick of BizProv to deliver the opening plenary at the 2011 New Jersey Non-Profit Conference. This is an excerpt from that plenary, "Productive Partnerships: Building Trust and Creating Collaborations." In her last post, Thaler offered seven tips for sharing stories in your organization.)

The metaphor of the "T-shaped person" is often used by human resource professionals to describe people who possess both deep expertise and broad knowledge of other disciplines.

Tim Brown, CEO and president of Ideo, explains how his product design firm applies the concept when hiring:

"We look for people who are so inquisitive about the world that they're willing to try to do what you do. We call them 'T-shaped'. They have a principal skill that describes the vertical leg of the T.... But they are so empathetic they can branch out into other skills, such as anthropology, and do them as well [the horizontal line]. They are able to explore insights from many different perspectives and recognize patterns of behavior that point to a universal human need."

Let's consider the metaphor in more detail, focusing on how important your T-shape is to your ability to collaborate....

1. Think of the vertical part of the "T" as your core talent and the horizontal line as reflecting your interests and your curiosity in involving diverse partners. As a leader, you consistently follow your passion and talent and work to broaden your interests and knowledge. Give yourself credit for the expertise you have acquired and stand strong knowing you have a solid backbone of knowledge. This enables you to function at the heart of the T -- the sweet spot, the common ground of shared interest between you and your collaborators.

Understanding and appreciating your T-shape means no apologies for knowing more than someone else -- and no fears about someone knowing more than you do about a given topic!

2. Just as you generously share your expertise, be sure to open your arms and embrace the talent that others share with you. There is a Buddhist instruction to maintain a strong back and open heart while meditating. Appreciating your T-shape is the physical embodiment of this wisdom. Don't withdraw, hunker down, or try to exert control when a collaborator is willing to share his or her talent and experience. Let your own talent (the strong vertical leg of your T) serve as an anchor, and indulge your curiosity (the horizontal line) so that you remain open and flexible. With such a firm grounding, you're in a better position to take risks and embrace a willingness to fail.

3. Valuing your T also will keep you from spending 20 percent of your time striving for perfection and will help you focus on the 80 percent that is "good enough." Allison Fine and Beth Kanter, co-authors of The Networked Nonprofit, recommend that nonprofit organizations "Do what you do best, and network the rest."

Think of the vertical leg of your T, your backbone of expertise, as comprising 80 percent of the talent and leadership you bring to a collaboration. The knowledge and talent you figuratively embrace comprise the other 20 percent. Why stress about achieving perfection as a soloist when you're engaged in a group process? Respect your team's creativity and contributions, and contribute to the shared goal with generosity.

And, yes, with everyone contributing his or her 80 percent, the whole will be far greater than sum of the parts. The T-shape metaphor can help you see (and accept) that not everyone in a collaboration has to contribute equally at all times. Rather, the goal is to achieve a dynamic balance in terms of expertise and sharing.

So stand up, spread your arms, and open yourself to possibility! Only then will you reap the benefits of collaboration.

-- Thaler Pekar

2011 Year in Review: What to Expect in 2012

2012-01-02T19:42:43-05:00

If you have a 401(k), you know that past performance is no guarantee of future results. As we look ahead to 2012, however, we can't help but think the next twelve months are going to look a lot like the last twelve.

As was the case in the latter part of 2011, uncertainty around the eurozone debt crisis and slowing economic growth globally will contribute to volatility in the markets, which is likely to keep a lid on charitable giving here at home. Although a majority of large nonprofits surveyed at different times during 2011 reported that gifts and donations were up, expect total giving for the year, as reported by Giving USA, to barely top the $290 billion registered in 2010. And in a "muddle through" economy like this one, don't expect the figure for 2012 (when it's reported in the summer of 2013) to show anything but modest growth.

In the category of known knowns, the political gridlock that characterized 2011 will be with us through Election Day, at least. That means no major changes to marginal tax rates or the deduction for charitable giving. The payroll tax holiday is likely to be extended through the end of the year, but there's little chance of additional stimulus spending, which means the unemployment rate will remain stuck north of 8 percent, while foreclosures will continue to weigh on home prices. As a result, nonprofits that deliver frontline services can expect more of the same: growing demand for their services with little or no increase in their revenues. Nonprofits of every kind will be pressed by their funders to work smarter, to collaborate more, and to devote more time and resources to measuring their performance and results.

Political gridlock also will ensure that American society continues to be organized for the benefit of the 1 percent. Emerging from its winter hibernation with renewed energy, the Occupy Wall Street movement is likely to add corruption and self-dealing in Washington to its list of grievances. But as income inequality in the U.S. grows, don't be surprised if the movement focuses its attention on philanthropy as well. In fact, we'd be surprised if there isn't at least one OSW-related protest at a high-profile philanthropic conference or event in 2012. (And the folks in Davos can pretty much count on it.)

Practitioners working in the field will continue to push for change in the year ahead. Open data, performance measurement, impact and mission-related investing, social impact bonds -- all will be debated, pushed, promoted. As Antony Bugg-Levine, recently named CEO of the Nonprofit Finance Fund, told the New York Times in November: "[Philanthropy boasts large pools] of money that have traditionally been invested solely to achieve a financial return. If just a fraction of those assets gets invested in this way, it can make a significant difference."

We don't disagree, though we wonder how big the difference is likely to be. Some of the most difficult problems we face -- climate change, growing inequality, the technology-driven loss of jobs -- are, like philanthropy itself, byproducts of a distinctly Anglo-American form of capitalism. But just as we're skeptical that more debt is the solution for too much debt, we doubt that any of these problems will be solved by philanthropy becoming more like business.

Instead, expect to see calls for greater accountability in philanthropy emerge as a movement in its own right in 2012. Adopting the slogan "private dollars for public good," a social media-empowered generation of young Americans will use the cheap and ubiquitous tools at their disposal to push for more diversity on foundation boards, more transparency in foundation decision-making, and more democracy in the allocation of tax-advantaged philanthropic resources.

We live, as the Chinese proverb would have it, in interesting times. The next twelve months are unlikely to disappoint.

IRS Reverses Course on Audits of Donors to Politically Active Nonprofits (7/11/11)

Charity Fundraising Saw No Change During First Half of 2011, Report Finds (9/29/11)

Donations to Largest Charities Still Below Pre-Recession Levels (10/18/11)

Nonprofits Optimistic Heading Into 2012, Survey Finds (10/24/11)

Foundations Increasingly Use Investment Assets to Achieve Their Missions, Report Finds (10/26/11)

SSIR@PND: Social Impact Markets (12/08/11)

Donations Are Up for 2011 Giving Season, Survey Finds (12/25/11)

2011 Year in Review: People in the News

2012-01-01T14:55:15-05:00

The twelve months that ended on December 31 were noteworthy for the large number of foundation executives who stepped down from their positions or announced their decision to retire in the coming year. They included Greg Chaillé (Oregon Community Foundation), Feather Houstoun (William Penn Foundation), Margaret McKenna (Walmart Foundation), Aryeh Neier (Open Society Foundations), Gara LaMarche (Atlantic Philanthropies), Richard C. Leone (Century Foundation), Paul Brest (William and Flora Hewlett Foundation), Thomas Aschenbrener (Northwest Health Foundation), Karen Davis (Commonwealth Fund), Lance Lindblom (Nathan Cummings Foundation), and Gary Yates (California Wellness Foundation).

The Bill and Melinda Gates Foundation, the nation's largest philanthropy, saw two significant departures in 2011: In February, Tachi Yamada, president of the foundation's global health program for the past five years, announced his decision to step down in June along with an interest in doing something "substantial" in his native Japan; and in October, Sylvia Mathews Burwell, founding president of the foundation's global development program, announced her decision to join the Walmart Foundation as president, effective at the beginning of the year.

The Miami-based John S. and James L. Knight Foundation also saw significant changes at the leadership level. In March, Knight announced the appointment of Eric Newton, head of the foundation's journalism program for the past ten years, as senior adviser to president Alberto Ibargüen, and of Michael Maness, most recently vice president of innovation and design for Gannett, as vice president of its restructured journalism and media innovation program. It also promoted Mayur Patel to the position of vice president of strategy and assessment, reporting directly to Ibargüen. In mid-July, the foundation named veteran journalist Michael A. Silver as director of Northwestern University's Knight News Innovation Laboratory. And in December the foundation named Andrew Sherry as vice president of communications, effective January 9.

And the John D. and Catherine T. MacArthur Foundation caused some excitement at the end of the year with the announcement that Daniel Socolow, who has directed the MacArthur Fellows (a/k/a "genius grants") program for fifteen of its thirty years, plans to step down next July.

PND also noted the passing of several major philanthropists and philanthropic leaders in 2011. In March, Brian O'Connell, founding president of Independent Sector, passed away at the age of 81. Another giant in the field, Robert Payton, co-founder of the Center on Philanthropy at Indiana University and the first full-time professor of philanthropic studies in the country, died in May.

In August, Ruth Caplan Perelman, a trustee of the Raymond and Ruth Perelman Education Foundation as well as several other cultural and educational institutions, passed away at the age of 90, just months after she and her husband announced a gift of $225 million to the University of Pennsylvania School of Medicine. Also in August, the John S. and James L. Knight Foundation paid its final respects to Creed Black, who served as president and CEO of the foundation from 1988 to 1999 and oversaw its development into a major philanthropic enterprise.

November saw the deaths of John Randolph Hearst, Jr., grandson of media titan William Randolph Hearst and a director of the Hearst Foundations; Evelyn Lauder, daughter-in-law of cosmetics magnate Estée Lauder, founder and chair of the the Breast Cancer Research Foundation, and one of the recipients of this year's Carnegie Medal of Philanthropy; and larger-than-life financier and philanthropist Theodore J. "Ted" Forstmann, who helped pioneer leveraged buyouts in the 1980s and coined the phrase "barbarians at the gate" during the buyout craze of the 1990s.

The year ended on a sad note with the passing of Margaret Mahoney, a luminary in the world of health philanthropy, on December 22. President of the Commonwealth Fund from 1980 until 1995, Mahoney was the first woman to head a major U.S. foundation. "The models she conceived for the role of foundations in effecting change continue to influence grant making around the U.S. today," said current Commonwealth Fund president Karen Davis. "It was inspiring to follow in her footsteps, and to build on the wonderful foundation she constructed at the Commonwealth Fund. She will be missed."

Related Links:

Community Foundation Update (1/22/11)

People in the News: Appointments and Promotions (2/06/11)

Gates Foundation Head of Global Health to Retire in June (2/16/11)

People in the News: Appointments and Promotions (2/13/11)

People in the News: Appointments and Promotions (2/20/11)

People in the News: Appointments and Promotions (3/13/11)

Brian O'Connell, Founding President of Independent Sector, Dies at 81 (3/23/11)

People in the News: Appointments and Promotions (3/27/11)

People in the News: Appointments and Promotions (4/24/11)

People in the News: Appointments and Promotions (5/15/11)

Robert Payton, Co-Founder of Center on Philanthropy, Dies (5/26/11)

People in the News: Appointments and Promotions (6/12/11)

People in the News: Appointments and Promotions (6/19/11)

People in the News: Appointments and Promotions (7/03/11)

Steve Gunderson to Leave Council on Foundations (7/07/11)

People in the News: Appointments and Promotions (7/10/11)

People in the News: Appointments and Promotions (7/24/11)

People in the News: Appointments and Promotions (8/07/11)

People in the News: Appointments and Promotions (8/14/11)

People in the News: Appointments, Promotions, and Obituaries (8/21/11)

People in the News: Appointments and Promotions (8/28/11)

People in the News: Appointments and Promotions (9/18/11)

People in the News: Appointments and Promotions (10/02/11)

People in the News: Appointments and Promotions (10/09/11)

Walmart Foundation Announces New President (10/15/11)

People in the News: Appointments, Promotions, and Obituaries (11/06/11)

People in the News: Appointments and Promotions (11/13/11)

People in the News: Appointments, Promotions, and Obituaries (11/20/11)

People in the News: Appointments and Promotions (12/18/11)

People in the News: Appointments and Promotions (12/25/11)

2011 Year in Review: Return of the Mega-Gift

2011-12-31T19:22:36-05:00

As we noted back in the spring, 2011 will be remembered for the unusually large number of eight- and nine-figure gifts and bequests that were announced, as an aging cohort of successful Americans moved to secure their philanthropic legacy.

Indeed, before May was even over, nine nine-figure gifts had been announced by either an individual, couple, or family foundation: an $800 million endowment gift from the Walton Family Foundation to the brand new Crystal Bridges Museum of American Art, the brainchild of Walmart stores heiress Alice Walton; a $200 million "spend down" gift from Las Vegas-based investor Kirk Kerkorian's Lincy Foundation to the University of California, Los Angeles; an unrestricted $200 million endowment gift from long-time supporters Dana and David Dornsife to the University of Southern California and a $110 million gift, also to USC, from John and Julie Mork; a $100 million gift from retired South Dakota banker and philanthropist T. Denny Sanford to Sanford Health; a $100 million gift to the Mayo Clinic from patient and long-time supporter Richard O. Jacobson; a $100 million gift to Ohio State University from Leslie Wexner and the Limited Brands Foundation; a $100 million gift to the Los Angeles-based Petersen Automotive Museum from Margie Petersen and the Margie and Robert E. Petersen Foundation; and a $225 million endowment gift from Raymond and the late Ruth Perelman to the School of Medicine at the University of Pennsylvania -- the largest-ever naming gift to a medical school in the United States.

And that's not counting a $100 million gift to Western Michigan University from a group of donors that wished to remain anonymous, or a $100 million endowment gift to Teach for America from philanthropists Steve and Sue Mandel and the Broad, Laura and John Arnold, and Robertson foundations.

Things settled down a bit after that, as the eurozone debt crisis, the debt-ceiling battle here in the U.S., and reports of a slowing global economy cast a shadow over the economic recovery and contributed to a gut-wrenching few months of volatility in the markets.

Still, the second half of the year was marked by a number of very large gifts and bequests, starting with the annoucement, in late June, that reclusive copper heiress Huguette Clark, who died in May at the age of 95, had left the majority of her estate, worth an estimated $400 million, to establish a foundation that will support the arts. In August, the Virginia Museum of Fine Arts and Virginia Commonwealth University announced a bequest from the trusts of Arthur Graham and Margaret Branch Glasgow that will provide the two institutions with a total of $115 million and thirteen other nonprofits with $10 million. And in November, the Graduate School of Business at Stanford University announced a $150 million gift from alumnus Robert King and his wife, Dorothy, to establish the Stanford Institute for Innovation in Developing Economies (SEED).

Two other eye-opining gifts were announced as the year was coming to a close: In December, Stony Brook University on Long Island announced a seven-year, $150 million gift from former math department chair and hedge fund quant genius James H. Simons and his wife, Marilyn, who received her Ph.D. from the school. Awarded through the Simons Foundation, the gift surpassed a previous gift of $60 million to the university from the couple and is the largest gift ever to a State University of New York school and the sixth largest ever to a public university in the U.S.

A few weeks later, Cornell University announced the largest gift in its history, a $350 million gift from alumnus and Atlantic Philanthropies founder Charles F. Feeney -- a recent signer of the Giving Pledge and a vocal advocate of the "giving while living" approach -- in support of its proposal to build a two-million-square-foot graduate science campus in New York City.

And then there was the remarkable story of William S. Dietrich II, a Pittsburgh industrialist who, late in life, made a series of planned bequests to higher education institutions in the Pittsburgh area. In early September, Carnegie Mellon University announced that it had received a $265 million gift from Dietrich -- the largest gift in its history and, like Feeney's, one of the ten largest gifts ever to higher education. Two weeks later, the University of Pittsburgh, from which Dietrich graduated and which he had served as a trustee since 1991, announced that it had received a $125 million gift from Dietrich. Mr. Dietrich passed away on October 6 at the age of 73, but two weeks later it was Duquesne University's turn to announce it had received a gift, $12.5 million, from the industrialist. And then a few weeks later, tiny Thiel College in Greenville, Pennsylvania, announced that Dietrich had left it $25 million, bringing the total dollar amount of his bequests to area institutions to a remarkable $472.5 million.

Somewhere up in that Duquesne Club in the sky, Andrew Carnegie is smiling.

Teach for America Receives $100 Million for Endowment (1/28/11)

Mayo Clinic Receives $100 Million Gift From Iowa Businessman (2/07/11)

UCLA Announces $200 Million Gift From Lincy Foundation (2/16/11)

Ohio State University Receives $100 Million Gift (2/17/11)

University of Southern California Receives $200 Million Gift (3/10/11)

Western Michigan University Receives $100 Million Gift (3/24/11)

Petersen Auto Museum Receives $100 Million Gift (4/27/11)

USC Receives $110 Million Gift for Undergraduate Scholarships (4/28/11)

Walton Family Foundation Awards $800 Million to Crystal Bridges Museum (5/06/11)

UPenn School of Medicine Receives $225 Million Gift (5/12/11)

USC Receives $150 Million From W.M. Keck Foundation (6/14/11)

Copper Heiress Estate to Benefit the Arts (6/24/11)

Virginia Museum of Fine Arts, Virginia Commonwealth University Announce $125 Million (8/2911)

Carnegie Mellon University to Receive $265 Million Bequest (9/08/11)

University of Pittsburgh to Receive $125 Million Bequest (9/23/11)

Duquesne University Receives $12.5 Million From William S. Dietrich II (10/22/11)

Thiel College Receives $25 Million From William S. Dietrich II (11/07/11)

Stanford Launches Institute to Alleviate Poverty With $150 Million Gift (11/07/11)

Stony Brook University Receives $150 Million Gift From Former Professor, Alumna (12/15/11)

Cornell University Receives $350 Million Gift for New York City Tech Campus (12/20/11)

2011 Year in Review: Legislative Sound and Fury Signifying…?

2011-12-30T17:35:52-05:00

As it has for the last few years, the nonprofit sector operated under the shadow of legislative and regulatory action in 2011. Although the Obama White House first proposed reducing the charitable tax deduction for affluent households and individuals in 2009, a number of similar proposals were debated -– and ultimately rejected -- during the endlessly contentious negotiations over the federal budget for which the 112th Congress will be remembered.

Proposals to either limit or get rid of the charitable deduction as a way to help reduce the nation's growing debt were debated during battles over the debt ceiling in August and the American Jobs Act in September, and to a lesser degree by the Joint Select Committee on Deficit Reduction (the so-called "Super Committee”), which concluded its deliberations in November without having achieved anything. After Senate majority leader Harry Reid (D-NV) removed the provision in the jobs bill to lower the deduction to 28 percent from 35 percent, Independent Sector president Diana Aviv noted that the decision validated "[o]ur message that the charitable deduction spurs the giving that enables nonprofits to create jobs and provide critical services...."

If nonprofit leaders thought the issue had been laid to rest, however, they were mistaken. In an op-ed in the Los Angeles Times in December, former California Community Foundation president and CEO Jack Shakely argued that the deduction should be eliminated. "[A]lmost a century after the charitable deduction was enacted, nobody can say positively, absolutely how much, or even if it stimulates giving, which was its primary purpose," wrote Shakely. "Moreover, in order to receive tax-deductible gifts, nonprofit corporations must become second-class corporate citizens -- they are not allowed to contribute to political campaigns, to lobby or to otherwise politically advocate for the very constituencies they were created to serve."

It remains to be seen whether the issue will be a political football in the inevitable budget battles of 2012. And while controversial legislation often gets tabled during a presidential election year, there are enough legislative and regulatory matters kicking around to keep nonprofit leaders looking over their shoulders. Then again, Washington being Washington, they probably shouldn't worry.

Take the 2006 Pension Protection Act, which included a provision designed to spur the IRS into keeping a closer eye on the activities of donor-advised funds and so-called supporting organizations; five years later, the agency is still soliciting comments with respect to new regulations for the latter and hasn't begun to tackle the former. And IRS efforts to impose greater disclosure of the use of management companies and other related businesses that can mask compensation to nonprofit executives have been on the back burner even longer.

At the city and state levels, budget shortfalls across the country left governments eyeing nonprofits as a source of tax revenue. In New Orleans, Boston, and Providence, Rhode Island, local governments floated the idea of asking large nonprofits to contribute, on a voluntary basis, payments in lieu of taxes (PILOTs). And in California, where a yawning budget shortfall has the state scrambling for revenues, some nonprofit groups were being denied property tax exemptions on the grounds they don't provide enough benefits to state residents.

Whether the state's "primary benefit" rule is eventually challenged in court, Ofer Lion, a lawyer representing a nonprofit client with "a global outlook" in a property tax exemption dispute, told the New York Times that the rule "clearly [is] a violation of the commerce clause of the Constitution, and, it may also be a violation of the equal protection clause, given the uneven application of the standard."

IRS Cracks Down on Supporting Organizations (2/16/11)

Report Targets Property Tax Exemption for New Orleans Nonprofits (3/18/11)

Senate Bill Would Permanently Extend IRA Charitable Rollover (3/21/11)

Nonprofits Pay Fees Despite Tax-Exempt Status, Survey Finds (4/22/11)

States Criticized for Weak Enforcement of Charity Rules (4/22/11)

Boston Requests PILOT Payments From Area's Largest Nonprofits (4/26/11)

Providence Considers Asking Some Nonprofits for PILOT Payments (5/11/11)

Debt-Ceiling Deal Spares Charitable Deduction for Now, Future Uncertain (8/04/11)

Increased Scrutiny of California Nonprofits Leads to Fewer Property Tax Exemptions (8/16/11)

Proposed Jobs Bill Limits Charitable Deductions for Wealthy Donors (9/15/11)

Illinois Postpones Challenging Property Tax Exemptions of Nonprofit Hospitals (9/30/11)

Senators Remove Charitable Deduction Cap Proposal From Jobs Bill (10/09/11)

Tax-Exempt Status of Nonprofit Hospitals Under Increasing Scrutiny (10/25/11)

White House Proposals Would Have Modest Effect on Giving, Study Finds (10/27/11)

IRS Oversight of Nonprofit Sector Questioned (11/02/11)

2011 Year in Review: Foundations Bet Big on New Initiatives

2011-12-30T12:23:38-05:00

Global, public-private, collaboration, thinking big -- these were some of the themes in play as foundations sought to boost their impact while addressing some of the most pressing challenges at home and abroad in 2011.

In the field of international development, the Chevron-sponsored Niger Delta Partnership Initiative Foundation and USAID pledged $50 million in February to support programs that promote economic development, improve the capacity of government and civil society institutions, and help reduce conflict in the oil-rich Niger Delta region. A month later, the Conrad N. Hilton Foundation announced a five-year, $50 million commitment to help improve water conditions for more than one million people in sub-Saharan Africa and areas of India and Mexico -- a commitment that included a grant to the Foundation Center to build an online portal to serve as a central hub for information about water-related issues. In July, the Bill & Melinda Gates Foundation stepped up its own commitment to WASH issues by awarding grants totaling $41 million in support of efforts to increase access to affordable long-term sanitation solutions for millions of people in the developing world. And in October, George Soros and the Open Society Foundations pledged $27.4 million to the Millennium Villages Project to boost development in villages across rural sub-Saharan Africa.

Closer to home, a number of foundations announced major initiatives benefitting underserved communities and vulnerable populations. In April, the Home Depot Foundation launched a three-year, $30 million initiative to address veterans' housing issues; in May, the New York City-based NoVo Foundation announced a ten-year, $80 million initiative to strengthen the movement to end violence against women and girls; and in July, the California Endowment announced the creation of a $200 million public-private loan fund, the California FreshWorks Fund, to support efforts to increase access to healthy and affordable food in underserved communities.

Filmmakers and performing artists also were beneficiaries of bold thinking on the part of foundations in 2011. In January, the New York City-based Ford Foundation committed $50 million over five years to help identify and support a new generation of documentary filmmakers; in February, the Howard Hughes Medical Institute in Chevy Chase, Maryland, announced a $60 million documentary film initiative of its own; and in October, the Doris Duke Charitable Foundation announced a ten-year, $50 million commitment to support more than two hundred individual artists in the field of jazz, theater, and contemporary dance.

Finally, in the area of health and health care, in September the Robert Wood Johnson Foundation, the nation's largest healthcare philanthropy, announced the launch of a three-year, $100 million "impact" fund to help its grantees leverage additional funding from multiple sources and share solutions that actually improve health and health care for all Americans. As part of the effort, RWJF awarded $10 million to NCB Capital Impact, a national Community Development Finance Institution (and the program administrator for the California Endowment's FreshWorks Fund), to create a low-interest credit facility that will support the development of Green House nursing homes over the next ten years.

"Our goal with this initiative is to go beyond traditional grantmaking, to drive social change, achieve measurable impact, and collaborate with partners who can help us achieve our mission," said RWJF president and CEO Risa Lavizzo-Mourey. "This commitment allows us to better leverage our funding and spread innovative models, like the Green House Project."

HHMI Launches Documentary Film Unit (2/08/11)

Chevron, USAID Pledge $50 Million to Improve Living Standards in Nigeria (2/21/11)

Hilton Foundation Commits $50 Million to Help Improve Global Water Conditions (3/23/11)

Home Depot Foundation Launches $30 Million Initiative to Address Veterans' Housing Issues (4/14/11)

NoVo Foundation Establishes $80 Million Initiative to End Violence Against Women and Girls (5/20/11)

Latin American Water Funds Launched With $27 Million in Funding (6/15/11)

Gates Foundation Announces $42 Million to Address Global Sanitation Issues (7/20/11)

California Endowment Announces $200 Million Public-Private Loan Fund (7/22/11)

Rockefeller Foundation, Partners Launch Initiative on Role of Philanthropy in International Development (8/10/11)

Robert Wood Johnson Foundation Establishes $100 Million Impact Capital Fund (9/12/11)

Soros Pledges $27.4 Million to Aid Development in Rural Africa (10/04/11)

Doris Duke Charitable Foundation Commits $50 Million to Support Individual Artists (10/21/11)

2011 Year in Review: The Giving Pledge Advances

2011-12-30T10:03:00-05:00

Although the Giving Pledge, a campaign launched in 2010 by Warren Buffett and Bill and Melinda Gates to encourage the nation's wealthiest individuals to commit the majority of their wealth to philanthropy, picked up a number of new participants in 2011, its biggest accomplishment may have been to inspire others to launch similar campaigns.

The positive buzz around the campaign was deflated a bit in January when Mexican multi-billionaire Carlos Slim Helu, the wealthiest individual in the world, declined to sign on, saying in a CNBC interview that he believed businesspeople should help fight poverty but that he wasn't convinced giving to charity was the best way to do so. A couple of weeks later, the Chronicle of Philanthropy reported the somewhat surprising news that relatively few of the American billionaires who had signed the pledge made large gifts in 2010.

Stilll, a total of sixty-nine individuals and families had signed on to the campaign by April. Newcomers to the group included Joyce and Bill Cummings of the Cummings Foundation; Bridgewater Associates founder Ray Dalio and his wife, Barbara; oil tycoon Harold Hamm and his wife, Sue Ann; Silicon Valley entrepreneur Vinod Khosla and his wife, Neeru; and Atlantic Philanthropies founder Charles F. Feeney, a vocal advocate of "giving while living" and the source, at year's end, of a huge $350 million gift to Cornell University, his alma mater.

Indeed, it was easy to argue, though the evidence is anecdotal, that the campaign was having precisely the kind of impact -- in the United States as well as in countries such as China and India –- that Buffett and the Gateses had hoped it would. In March, Indian entrepreneur Grandhi Mallikarjuna Rao, chairman of the Bangalore-based GMR Group, pledged $340 million to improve education among the most underserved segments of Indian society. A few months later, a report from global consulting firm Bain & Company found that private charitable giving in India had risen from 0.2 percent of GDP in 2006 to between 0.3 and 0.4 percent in 2011, putting it ahead of other countres with rapidly growing economies.

Back home, sixty-one of the sixty-nine signers of the pledge arranged to meet at an Arizona resort in early May to compare notes on their giving. The meeting, which covered a broad range of topics, was an opportunity for those present to meet and learn from each other. As energy tycoon George Kaiser, chairman of BOK Financial Corporation, founder of the George Kaiser Family Foundation, and the largest contributor to the Tulsa Community Foundation, told the Associated Press, "Being able to share with other people who are agonizing about the same decisions is extraordinarily useful."

As the economy weakened over the summer, media coverage of the Giving Pledge all but dried up. The campaign did not announce any new signers after April, and, as the nation began to focus on issues raised by the Occupy Wall Street movement, it received few mentions in the press after September.

But others were paying attention. In June, the Give Back Hollywood Foundation paid tribute to the campaign by launching its own Hollywood Pledge to encourage celebrities to publicly declare their support for charities nearest to their hearts. And a week later, the National Committee for Responsive Philanthropy in Washington, D.C., launched Philanthropy's Promise, an effort to encourage leading U.S. foundations to dedicate a majority of their grant dollars to underserved communities and a significant amount of those dollars to strategies that address the root causes of social problems.

As NCRP executive director Aaron Dorfman said in September when announcing that an additional thirty-two foundations had signed on to the campaign, bringing the total number of participants to nearly a hundred: "We hope that the foundations of Philanthropy's Promise inspire others to think about how their philanthropic dollars can truly make a difference in people's lives and our communities. At this time of great need, it's not enough to give. We have to give smartly. We are delighted and grateful to have these thirty-two organizations on board."

Giving By Top Donors Fell in 2010, Survey Finds (2/08/11)

Atlantic Philanthropies Founder Commits to Giving Pledge (2/23/11)

Indian Entrepreneur Pledges $340 Million to Improve Education (3/24/11)

Gates, Buffett Set to Meet With Indian Billionaires (3/23/11)

Ten More Families Sign 'Giving Pledge' (4/29/11)

'Giving Pledgers' Meet to Discuss Their Giving (5/10/11)

Give Back Hollywood Foundation Asks Celebrities to Take 'Hollywood Pledge' (6/02/11)

National Committee for Responsive Philanthropy Launches 'Philanthropy's Promise' Campaign (6/09/11)

Philanthropy in India on Upswing, Report Finds (7/09/11)

Questions Raised About Jobs' Philanthropy (8/31/11)

Tom Steyer Steps Up His Philanthropy to Advocate for Change (9/19/11)

Thirty-Two Foundations Join 'Philanthropy's Promise' (9/20/11)

Foundation Had Jobs in Mind When It Invested in Solyndra (9/28/11)

Community Action Project Receives $22 Million From George Kaiser Family Foundation (11/18/11)

Cornell University Receives $350 Million Gift for New York City Tech Campus (12/20/11)

George Kaiser Family Foundation Acquires Woody Guthrie Archives (12/30/11)

2011 Year in Review: Microfinance Vows to Do Better

2011-12-29T17:01:39-05:00

Once viewed as pioneers in the fight against poverty, microfinance institutions (MFIs) -- under siege since 2010 when loan default rates in many developing countries soared and Indian politicians accused lenders of exploiting the poor -- faced growing political hostility and calls for stricter regulation in 2011.

The year got off to an inauspicious start when Bangladeshi prime minister Sheikh Hasina, long a champion of microfinance, accused MFIs in general and Grameen Bank and its Nobel Peace Prize-winning founder, Muhammad Yunus, specifically of "sucking blood from the poor in the name of poverty alleviation." In January, nearly a month after a documentary film on Norwegian state television raised questions about the use of $100 million in Norwegian aid funds by Grameen in the 1990s, Hasina initiated a probe into the matter -- despite assurances from the Norwegian government that the bank had been cleared of wrongdoing.

Subsequently, Hasina moved to dismiss the 70-year-old Yunus as managing director of the partially government-owned bank on grounds he was well past the country's mandatory retirement age of 60 -- a move that Yunus supporters viewed as politically motivated. While an investigating committee failed to dig up anything it could use against the bank, the Bangladeshi High Court rejected Yunus' appeal of the order, and he resigned from the bank in May.

That same month, the Reserve Bank of India issued new regulations capping interest rates and margins for MFIs operating in the country, limiting the size of loans and total debt per household, and requiring a minimum loan term and other protections for borrowers.

Meanwhile, MFIs continued to expand their operations in other countries, many with an eye to integrating their lending with so-called livelihood services. As of February, for example, Seattle-based Global Partnerships had invested $4.5 million of a new $20 million social investment fund in six Latin American MFIs -- all of which bundle their loan activities with business education, health services, agricultural training, and other services -- and expected to disburse the fund's capital by year-end. In March, a $25 million grant from the MasterCard Foundation enabled Bangladesh-based BRAC, the world's largest nongovernmental development organization, to export its "microfinance multiplied model" to Uganda and expand its capacity to undertake longitudinal analyses of the effectiveness of its integrated microfinance and livelihoods model. And in May, Opportunity International, a global nonprofit microfinance institution headquartered in Oak Brook, Illinois, was awarded a $2.5 million grant by the United Nations Capital Development Fund to provide access to safe savings accounts, business loans and training, and other services in the Democratic Republic of Congo -- a grant followed, in July, by a $2.5 million award to the organization from the John Deere Foundation to expand its community banking network in Ghana, Malawi, Mozambique, Rwanda, and Uganda.

As of October, roughly a year after the Indian state of Andhra Pradesh promulgated an ordinance regulating microfinance activities, MFIs reportedly had stopped making new loans in the state. At the same time, many appeared to be committed to improving their accountability and client protection practices. Indeed, the Smart Campaign, a global initiative committed to embedding client protection practices into the institutional culture and operations of the microfinance industry, issued a report (48 pages, PDF) in November that examined MFI practices in areas such as preventing over-indebtedness, transparency, responsible pricing, protection of client data privacy, and mechanisms for complaint resolution and gave 88 percent of the rated MFIs overall passing marks.

"The fact that we now have data from almost five hundred third-party, external assessments of client protection practices at MFIs shows the extent to which the microfinance industry has committed itself to accountability on this all-important front," said Smart Campaign director Isabelle Barrès. "Responsible finance is assured when we develop and apply tools to hold MFIs accountable for the way they interact with customers."

Global Partnerships Announces Investment of $4.5 Million in Latin American MFIs (2/23/11)

Bangladesh Court Upholds Order to Dismiss Yunus as Head of Grameen Bank (3/09/11)

5 Questions for...Alex Counts, President and CEO, Grameen Foundation (3/23/11)

BRAC Receives $25 Million to Expand Microfinance Model in Uganda (3/31/11)

Yunus Loses Final Appeal (4/7/11)

Reserve Bank of India Issues New Microfinance Regulations (5/04/11)

Bankers Without Borders Announces Partnership With Association for Enterprise Opportunity (5/08/11)

UN Capital Development Fund Awards $2.5 Million to Expand Community Banks Network Into DRC (5/15/11)

Opportunity International Receives $1.3 Million From Credit Suisse (5/24/11)

John Deere Foundation Awards $2.5 Million for Banking on Africa Initiative (7/08/11)

Microfinance Industry Embraces Accountability, Report Finds (11/13/11)

2011 Year in Review: A Disastrous Twelve Months

2011-12-29T12:50:49-05:00

Fourteen months after a magnitude 7.0 quake brought devastation to Haiti, disaster on an epic scale struck again in March when the most powerful earthquake ever to hit Japan triggered huge tsunami waves that inundated coastal regions of the Tohoku region. The twin disasters, which claimed the lives of nearly 16,000 people and displaced some 440,000 people, also were responsible for a series of partial meltdowns and releases of radioactive material at the Fukushima Daiichi nuclear power complex on the coast northeast of Tokyo, resulting in the evacuation of hundreds of thousands of people and raising global concerns about the safety of nuclear power.

The initial response to the disaster -- which, with an estimated economic cost north of $200 billion, figures to be the most expensive in history -- was one of restraint, as the Japanese government asked donor governments and individuals in other countries to hold off on providing emergency assistance until it could more clearly identify needs in the stricken region. A week after the disaster, the fifteen largest relief organizations had raised the relatively modest total of $25 million -- a figure that eventually surpassed $160 million -- with most of that collected by the American Red Cross. The global corporate community, on the other hand, moved quickly to assist one of its biggest trading and investment partners, contributing over a $137 million for relief efforts in just three and a half days.

Closer to home, spring brought unusually violent weather to the United States, as first Alabama, where more than three hundred people were killed and thousands left homeless after more than a hundred tornadoes ripped through the state in April, and then Joplin, Missouri, large portions of which were leveled by a killer tornado in May, bore the brunt of the assault.

An entirely different kind of disaster, severe drought, tightened its grip on the Horn of Africa as spring turned to summer. Indeed, by mid-July drought conditions had left more than twelve million people in Ethiopia, Kenya, Somalia, and neighboring countries in need of emergency assistance, and parts of southern and central Somalia were later declared famine zones by the UN. Much of that territory, of course, was controlled by al-Shabaab, an al-Qaeda-linked Islamist group that has prevented many international aid organizations from operating in the region. As the crisis intensified, the U.S. government issued new guidelines making it easier for such groups to deliver needed food to famine-stricken parts of the country without fear of prosecution -- a decision hailed by most NGOs, even though it appeared to apply only to the situation in Somalia.

Pakistan, which continues to struggle with its own Islamist and tribal insurgencies, was hit with serious flooding in August for the second consecutive year, resulting in another sluggish response from that South Asian country’s feckless government -- and a lukewarm relief effort from the international community.

In contrast, even the best-laid disaster-preparedness plans were no match for Hurricane Irene, which in August left a trail of destruction from South Carolina to Vermont, causing at least 56 deaths and an estimated $7.2 billion in damage, before finally exhausting itself over Labrador.

After yet another major quake, this one in eastern Turkey in October, it looked as if the year would end on a quiet note. But then flash floods struck the Philippines in late December, causing more than nine hundred deaths and bringing to a close a year that, in disaster terms, will go down as one for the record books.

Donations to Japan Quake Relief Efforts Trickling In (3/16/11)

Corporate Donations to Japan Earthquake Relief Efforts May Surpass Haiti Contributions (3/17/11)

U.S. Relief Organizations Defer to Japanese Agencies as Rescue Efforts Continue (3/18/11)

Fundraising for Japan Disaster Relief Surpasses $100 Million Mark (3/22/11)

One Month After Disaster, Red Cross Commits Additional $40 Million for Japan Relief (4/13/11)

American Red Cross Contributes Additional $30 Million for Recovery Efforts in Japan (5/02/11)

Needs Mount as Alabama Digs Out After Tornadoes (5/04/11)

Organization Formed to Spur Recovery in Tornado-Ravaged Joplin (6/22/11)

Disaster Relief Agencies Raised $22.3 Million for Tornado Relief Efforts in Alabama (7/26/11)

Somalia Famine Aid Trickles In (8/03/11)

U.S. Issues New Guidelines Loosening Aid Restrictions to Famine-Stricken Somalia (8/04/11)

United Arab Emirates Pledges $1 Million to Joplin High School (8/13/11)

Red Cross Contributions to Japan Tsunami Relief Efforts Reach $260 Million (8/24/11)

Corporations, Foundations Pledge $1.75 Million to Hurricane Irene Disaster Relief Efforts (9/02/11)

International Red Cross Begins Major Aid Push in Somali Famine Zones (10/06/11)

Turkish Red Crescent, International Federation of Red Cross and Red Crescent Societies Mount Earthquake Recovery Operations (10/25/11)

Coca-Cola Foundation Awards $1 Million to Turkish Red Crescent Society (10/27/11)

UN Launches 2012 Somalia Aid Appeal, Warns About Impending Crisis in the Sahel (12/14/11)

Lilly Endowment Awards $1.5 Million to Joplin Recovery Fund (12/24/11)

2011 Year in Review: A Tale of Two Economies

2011-12-28T16:35:35-05:00

It was a year of bruising budget battles and unnerving debt crises, of economic recovery and retreat, of the 99% and the 1%. For many, it was simply the "new normal."

After three years of economic hardship, stress, and uncertainty, the year opened on an optimistic note, with a handful of announcements and surveys seeming to find many Americans feeling better about their prospects.

In January, the Fidelity Charitable Gift Fund, the nation's largest donor-advised fund program, reported it had received more than $1.6 billion in contributions in 2010, a 42 percent increase over the previous year, and had authorized more than $1 billion in grants for the fourth consecutive year. That same month, the annual Dunham+Company New Year's Survey found that the number of households planning to boost their charitable giving in the coming year had jumped nearly 30 percent, while the number that planned to cut back on giving was down nearly 50 percent. And the Minnesota Council on Foundations' 2011 Outlook Report found that 35 percent of the foundations surveyed expected to boost their giving in 2011, while only 10 percent expected to give less.

The somewhat more constructive tone did little, however, to change the fact that millions of Americans were struggling to keep a roof over their heads, put food on the table, and/or secure gainful employment -- or that nonprofits, as a survey conducted by the Nonprofit Finance Fund found, expected to see increased demand for their services. Further clouding the picture for nonprofits, especially so-called "lifeline" organizations, was the highly partisan debate in Washington over the 2012 federal budget -- and the likely impact of funding cuts on an already frayed social safety net.

As spring turned to summer, the sovereign debt crisis in Europe and the possibility of the first-ever downgrade of long-term U.S. debt sent markets tumbling, threatening the fragile economic recovery at home and causing many charities and fundraisers to brace for the worst. But a last-minute (if temporary) debt-ceiling deal in Congress, collective (if halting) action by European countries and the ECB to stem the crisis in the eurozone, and steady (if modest) improvement in the U.S. economy helped to forestall the dreaded double-dip scenario -- for the time being.

As a result, by December many Americans were again feeling better about the future. Indeed, with the new year right around the corner, a Chronicle of Philanthropy survey found that donation income at more than half the charities it polled was running ahead of last year's holiday season total -- and that donations at one in five organizations were up by more than 20 percent compared to the same period in 2010.

At the same time, a distressing number of charities continued to report that income remained below pre-recession levels and that demand for assistance was rising faster than giving, while more than a few were looking to collaborations, mergers, and joint ventures to meet that demand.

"A much larger percentage of nonprofits were seeing significantly higher fundraising results before the recession," said Andrew Watt, president and CEO of the Association of Fundraising Professionals, in September. "[And] with many economists predicting a flat economy for several more years, charities face a very challenging environment in the near future….This is the reality charities will have to address."

Contributions to Fidelity Charitable Gift Fund Surpassed $1.6 Billion in 2010 (1/17/11)

Americans More Optimistic About Giving in 2011, Survey Finds (1/19/11)

President's Budget Calls for Cuts in Support for Nonprofits (2/15/11)

Kresge Foundation Awards $6 Million to Safety-Net Initiative Recipients (2/22/11)

As Economy Improves, Giving By Ohio Foundations Beginning to Recover (2/26/11)

Nonprofits Expect Increased Demand for Their Services in 2011, Survey Finds (3/22/11)

Foundation Giving Held Steady in 2010, Study Finds (4/08/11)

Dayton Nonprofits Pool Resources to Stay in Business (4/08/11)

Cleveland-Area Nonprofits Merge to Reduce Costs (4/19/11)

Marin Community Foundation Awards $2 Million to Bolster Healthcare Safety Net (4/30/11)

Foundation, Operating Charities Report Investment Returns of 12 Percent (5/25/11)

Charitable Giving Up Modestly in 2010, 'Giving USA' Finds (6/21/11)

Pittsburgh-Area Nonprofits in 'Merger Mode' (7/08/11)

Charities, Fundraisers Consider Possibility of Double-Dip Recession (8/09/11)

Foundations Concerned About Possible Double-Dip Recession (8/11/11)

Charity Fundraising Saw No Change During First Half of 2011, Report Finds (9/29/11)

Donations to Largest Charities Still Below Pre-Recession Levels (10/18/11)

Donations Are Up for 2011 Giving Season, Survey Finds (12/25/11)

Most Popular PhilanTopic Posts of 2011

2011-12-28T13:05:29-05:00

As we put the final touches on our special year-in-review issue and clear the decks for 2012, we thought it would be fun to look back at the most popular PhilanTopic posts of the year. Written by a diverse group of bloggers and covering a broad range of topics, here are the ten most popular posts of 2011.

What were your favorite posts -- here on PhilanTopic or anywhere else, for that matter -- of the year? Inquiring minds want to know...

A Q&A With Michael Edwards, Author, 'Small Change: Why Business Won’t Save the World' (Part 2)

2011-12-21T11:00:00-05:00

In November, PND spoke with Michael Edwards, author of the 2010 book Small Change: Why Business Won't Save the World, which offered a sharp critique of the philanthrocapitalist worldview. In part two of our interview, Edwards talks about the impact of the Occupy Wall Street movement and shares his take on the recently established Bellagio Initiative, which seeks to establish "a new framework for philanthropic and international development collaboration in pursuit of human well-being in the twenty-first century."

To read part one, click here.

Philanthropy News Digest: Are you surprised the Occupy Wall Street movement has gained as much traction as it has? And do you think it will continue to have an impact on the income inequality debate in the United States, or in other countries, for that matter?

Michael Edwards: I'm not surprised that Occupy Wall Street has had an impact, especially when you consider that inequality in this country is at its highest level since records began to be kept. Something like one in four American children today live below the poverty line, and across a very broad swath of the American population people are feeling economically stressed, fed up, and want some change. Historically, that's precisely the kind of environment that spawns social movements. It just happened to be Occupy Wall Street, but it could have been something else. That said, the movement already has had an impact on the public debate, across party and ideological lines, and people are now talking about inequality in a way that they weren't even six months ago.

That's what social movements do. They may not have a direct impact on policy in the short term, but they give large numbers of people permission to talk about critical issues in a way they weren't able to before, and they tend to change the cultural conversation in ways which are important over the long term. In a sense, Occupy Wall Street is just a convenient platform for people, many of whom are somewhat suspicious of it, but who feel that something has gone terribly wrong. Whether it will continue to play that role in the future is the big question, and no one knows the answer. But I don't think that matters much right now, because, to give the movement its due, it has done something pretty remarkable in terms of changing the national, and in some ways international, debate about inequality. Will it be able to transform itself into something more formal, politically speaking? Will it develop a policy platform? Will it align itself with other existing movements for change? I don't know. But even if it disappeared tomorrow, its impact would continue to be felt.

PND: What is the appropriate role for foundations with respect to social movements? Should they be doing more to support a movement like OWS in its initial phase?

ME: Foundations have never been very important in supporting social movements in the United States or anywhere else, because that's not how social movements develop. Social movements are self-organized, self-created entities which largely run on their own firepower, including financial firepower raised through small donations, membership dues, labor contributions, and so on. Sure, if you look at the civil rights movement or the women's movement there were foundation dollars involved at various stages, but they were never particularly determinate, and the same holds true today, though maybe the Tea Party is an exception. Part of the reason I think -- and it's a good reason -- is that foundation funding comes with certain strings and accountability requirements attached. And that has an impact on the movement itself in terms of who makes decisions and how they're made. It implies a level of formality that people may not be comfortable with, and it can sometimes de-radicalize a movement in ways that are quite damaging.

It reminds me of the old battle cry "The revolution will not be funded." It might seem silly now, but it's based on something quite important, which is that you have to be sensitive when you introduce foundation funding into a spontaneous, democratic, disorganized movement space. That doesn't mean there isn't a role for foundations and foundation funding. But, generally speaking, what you typically find is that foundations are most effective in these situations when they take a back seat in the process of movement-building and focus on something very concrete where their funding can really make a difference. In the civil rights era, for example, foundations concentrated on supporting voting rights and voter registration, and I think there are parallels to that today.

PND: You've recently written a paper for the Bellagio Initiative, a collaborative project led by the Institute of Development Studies, the Resource Alliance, and the Rockefeller Foundation that aims to establish "a new framework for philanthropic and international development collaboration in pursuit of human well-being in the twenty-first century." How does the concept of human well-being differ from other measures of human development? And why is it the right measure to focus on at this particular moment?

ME: Well, the first thing I'd say is that it is a controversial thing and not everyone agrees it's the right way to go. Some people think well-being is too vague and abstract and un-measurable to be an effective guide to grant-making. The reason I believe it's potentially useful is that it forces us to focus on the bigger picture, on quality of life, on happiness, on empowerment -- the less material dimensions of how and why people feel fulfilled in their lives, which are equally important as having a job or house, receiving a microcredit loan, or any of the other more conventional things we measure. You know, the GDP data we use to measure economic progress in this country are virtually meaningless, for all sorts of reasons, so GDP is a fairly hopeless measure of welfare. And the well-being movement is saying, we can do better than that, we can measure all these different dimensions of how people are faring, and it will be a more effective and accurate guide to our decision making than relying on these outdated measures.

The problem is, how do you measure happiness? How do you measure fulfillment? How do you measure equality in social terms? It's very difficult. So the pushback is coming from people who want more solid, short-term metrics, which is where they feel most comfortable. The Bellagio Initiative was mounted against the backdrop of a debate in the international development community between people who are happy to support the infrastructure of problem solving and those who want to fix problems in a specified time frame -- a debate that's happening in philanthropy domestically as well. Traditionally, foundations followed the first approach; their focus was on creating strong institutions, governance processes, links between civil society and the private and public sectors, and so on, and not so much on "fixing" problems like endemic poverty or inadequate health care in the short term. The new generation of philanthropists, in contrast, is more impatient and very much wants to fix those problems in the short term. Bellagio is designed to advance that debate, to enable people to talk about the issues involved and see where they lead. A lot of different views are being expressed, and that's a good thing. The more diversity you have in the room, the more honesty in the room, the more likely you'll be able to generate a sense of direction that leads somewhere.

PND: Are you a fan of the type of globalization that has characterized the last few decades, with ever-tighter economic integration and new communications technologies shrinking the planet to the size of a village?

ME: Well, there are elements of globalization which are irreversible because of the way capitalism works and the way technology drives things. But the tacit understanding should be to try and make sure that globalization generates as many benefits -- and as few costs -- as possible. And that's a huge task. Market integration, technological innovation, and the accelerating speed of information flows don't by themselves solve the great questions that have always exercised human beings. They don't teach us how to live well together. They don't teach us how to cope with violence and division, discrimination and prejudice. They don't tell us how we can create some sort of common ground out of this huge diversity we are all experiencing.

Underlying all the razzmatazz of our high-speed, high-tech, globalized world are bigger philosophical questions. What grand purpose do we want technology to serve? What, in a social sense, is the purpose of markets -- simply to match buyers with sellers and feed a never ending spiral of consumption? I'm more interested in people who are talking about how we can use all this "stuff" to address those kinds of questions than I am in people who embrace technology and globalization enthusiastically and argue that if everyone has a cell phone, we'll solve the problems of poverty. That's daft and has never worked. And I see my role as constantly reminding people of those deeper philosophical questions, of asking, who are you, who are we, and how do we live well together? It's not a particularly popular conversation, because it slows things down and forces people to analyze their own role in the world, but it's a necessary one.

PND: A final question: Are you an optimist or a pessimist?

ME: Definitely an optimist. Given the current state of the world, I wouldn't be able to get out of bed in the morning if I wasn't. All my writings, even the critical ones, are trying to push people to create more change, to be more successful, to go much deeper. That's why I'm critical of some of the hype around social innovation and venture philanthropy and philanthrocapitalism. It's one thing to say we have lots of new opportunities; it's another thing to analyze them rigorously for their costs as well as their benefits. We can easily get lost in the hype and lose sight of the fact we face enormous challenges which will require every ounce of our critical imagination in order to address them. But you have to think, in a critically optimistic way, that we will rise to the challenge.

PND: Well, thanks for your time, Michael.

ME: Thank you.

A Q&A With Michael Edwards, Author, 'Small Change: Why Business Won’t Save the World' (Part 1)

2011-12-20T14:56:44-05:00

Over the past decade, philanthropy has been invigorated by the arrival on the scene of some very large and innovative foundations, many of them established by hugely successful individuals from the worlds of business and technology. In 2009, Matthew Bishop and Michael Green brilliantly captured the spirit of the decade in their book Philanthrocapitalism: How Giving Can Save the World. But while the book was well received within the sector, not everyone was ready to jump on the bandwagon.

Last month, Philanthropy News Digest spoke with Michael Edwards, author of the 2010 book Small Change: Why Business Won't Save the World, which offered a sharp critique of the philanthrocapitalist worldview. During our conversation, Edwards criticized the growing tendency to adopt a "one size fits all" approach to philanthropy and suggested that, in order to solve complex problems, we need a large dose of humility and a wide range of tools and techniques. Edwards also spoke about the impact of the Occupy Wall Street movement and shared his take on the recently established Bellagio Initiative, which seeks to establish "a new framework for philanthropic and international development collaboration in pursuit of human well-being in the twenty-first century."

A leading expert on civil society, philanthropy, and democracy, Edwards has worked for the World Bank, Oxfam, Save the Children, and other NGOs in Washington, D.C., London, Colombia, Zambia, Malawi, and India. From 1999 to 2008 he was the director of the Ford Foundation's Governance and Civil Society Program, and he currently serves as a distinguished senior fellow at Demos, a progressive think tank in New York City, and as a senior visiting fellow at the Brooks World Poverty Institute at the University of Manchester.

The first part of our conversation with Edwards follows; part two will be posted tomorrow.

Philanthropy News Digest: You've been a vocal critic of the philanthrocapitalism approach popularized by Matthew Bishop and Michael Green in their book of the same name. Given that philanthrocapitalism is a somewhat nebulous set of ideas with no universally accepted definition, is there any aspect of the concept you find value in or agree with?

Michael Edwards: Sure. Let's go back three years in time when I wrote that little pamphlet, Just Another Emperor?, which was the first shot across the philanthrocapitalists' bow. Back then, philanthrocapitalism was all the rage: "Oh yeah, you know, I'm a philanthrocapitalist and I'm going to save the world." The aim of the pamphlet was simply to start a debate about what philanthrocapitalism was, to cause people to stop and think, because people were believing in something without actually knowing what it was. And to do that, it had to be fairly polemical or oppositional, which it was, as was my book Small Change: Why Business Won’t Save the World, which is based on the pamphlet. In both, I was saying, "Don't buy this stuff, it often doesn't work, and here are the reasons." It was a tactic. But what really matters is delving into the details of who is doing what on the ground, regardless of the labels they use to describe it. So to answer your question, there are lots of ways in which people can use the market to drive change, ways that are socially and environmentally beneficial; but I wouldn't confuse them with what I would call philanthropy.

In fact, for me there's a major conceptual and practical difference between philanthropy, which I see as funding for activities that do not generate short-term returns and results, and social investment, which does. It's simply a case of helping people figure out which tool to use. You wouldn't use a hammer to write a book. You wouldn't use a typewriter to plough a field. You have to select your tools carefully and systematically if you hope to achieve the results you want. And what pleases me now is that we seem to be moving into a different phase of the debate: instead of arguing about who is or isn't a philanthrocapitalist, we're talking about how we can use the different tools in the tool kit to make progress. In some areas, venture philanthropy, business techniques, and technology can be very useful in pursuing social change. In other areas, they're not and can actually be damaging. As long as people get that, they can describe it any way they want and I won't care because they'll be using the right tool for the right purpose.

PND: Matthew Bishop, Michael Green, and other proponents of the philanthrocapitalist approach would argue that more competition in the nonprofit sector is bound to help reduce and eliminate inefficiencies, which would mean more resources being allocated to the problems we all want to see solved. Do you agree with that perspective?

ME: No, that's nonsense. It's nonsense because we are talking about completely different worlds that operate on very different principles. Philosophers would say the philanthrocapitalists are committing a category error, which is when you take one set of ideas and principles that works in a particular setting and you transport those ideas and principles into a very different setting while expecting the same results. That's the definition of insanity. None of the great social movements of the past have been based on competition. They've been built on solidarity, cooperation, bridge building, and networking.

That's not to say there isn't room for some competition in the nonprofit sector; of course there is, because there are never enough resources to go around. But there's a difference -- a huge difference -- between recognizing that people need resources to do their work and believing that classical market principles like competition apply in the world of social change. What happens when you apply formal market principles to civil society -- and we see this already -- is that lots of very important organizations will be eliminated. Big ones will tend to get bigger, and small ones will tend to get smaller. A lot of organizations doing easier work will attract more resources, while many doing the more difficult work will lose out. Sometimes, though, they're the most important of all. No one would suggest, for example, that we force local volunteer fire departments to compete with each other in the interest of making them more efficient, because they play a role in their communities which can't be analyzed in terms of profit and loss. It's a rather ridiculous application of something that works in economic theory but not in social practice, and it can actually be very damaging when applied inappropriately.

PND: Do you think foundations, individual donors and nonprofits, working together, can solve huge, seemingly intractable problems such as poverty, our broken public education system, and climate change? Is that where nonprofits and philanthropy should be focusing their efforts and energies?

ME: Well, they should be playing a part in focusing everyone's efforts and energies on those problems. But the idea that philanthropies and nonprofits by themselves could address any of them successfully is, again, nonsensical. They are far too small, and the levers they have over change are far too weak to be able to effect that kind of change. What you need to effect that kind of change is, obviously, strong government intervention. You also need a thriving market economy that creates wealth which can be used for socially useful purposes. Instead of holding themselves responsible for solving climate change or poverty, philanthropy and the nonprofit sector should be constantly nudging, pressuring, and filling in gaps so that other, larger institutions do their jobs properly.

I think that's where my critique of venture philanthropy -- my fear that we will use scarce philanthropic dollars to tackle problems that are important but which should be dealt with by other parts of society -- is particularly relevant. There's an issue here of how we make sure we remain focused on the fundamental transformation of society and don't get locked into simply being social businesses, which are important but not particularly consequential in the deeper areas of social change.

PND: Impact assessment and performance measurement have become hot-button issues in philanthropy. Are the people promoting those disciplines missing something? Is there a better way to promote effectiveness in philanthropic work?

ME: It depends entirely on what you mean by effectiveness and how rigid you want to be in terms of using only certain techniques and methodologies of impact assessment, like randomized control trials, as opposed to qualitative research. We often see a stereotyping of traditional nonprofits and philanthropy as being backward in the way they look at impact assessment, but I've never found that to be the case. It's simply that we use a different set of quite defensible measures and methodologies. I would put far more trust in mixed methodologies which involve ethnography, qualitative assessment, quantitative research, and traditional social science than I would in a methodology that solely focused on randomized controlled trials or things of that ilk.

Look, I welcome a focus on impact. Everyone does. But it's a complete falsehood to say we've never been interested in impact, that we're not interested in impact, and that being interested in impact is somehow the exclusive property or characteristic of the so-called new philanthropy. The real issue is how we view impact. What kinds of change do we value? What measures do we use? How do we configure an impact assessment tool kit that will produce the most useful and accurate results without submerging the people who are doing the work in so much data they don't have time to do what they should be doing in the first place? One has to think about impact assessment in the context of the work that people do, what their objectives are, and over what time period, and then see how it can help them do their work more effectively. That requires us to be really imaginative about what we're doing and why we're doing it, rather than simply saying: "I have a magic methodology -- all you need to do is follow it."

PND: How is the new generation of tech philanthropists -- people like Bill Gates, Steve Case, and Pierre Omidyar -- changing philanthropy? And what, if anything, can they learn from old-line foundations such as Ford, Rockefeller, and Carnegie?

ME: Well, they are definitely a force for change. They have high profiles, they're ambitious, and they're aggressive, at least in some ways. Many of them want to spend down, either in their lifetimes or in a relatively short period of time after they die, and they are not shy about taking on very large problems. There is an attractiveness about that energy and about the grasp of new opportunities they have which I quite like. It's definitely not the stodgy, bureaucratic world that perhaps those more traditional foundations are accused of inhabiting. But at the same time, one has to recognize that social change is complicated, messy, politicized, and a long-term phenomenon. There are no simple answers. Just because you have wealth and technology doesn't grant you a special wisdom. And I think what some of the new philanthropists can learn from people who have been doing this kind of work for a long time -- and I actually hear new philanthropists say this quite a lot -- is that things are more difficult and more complicated than they thought they were when they started down this path, and that maybe if they had talked to more people who'd been doing this work for decades, they might have learned some things early on that they could use.

I'm a big fan of people who borrow elements from the old and the new, who don't get trapped just working with traditional methods, or just seizing opportunities in technology or the marketplace. That's where the real impact is going to come, from people who have the humility and the flexibility to say, "I have to be in learning mode constantly, and I can and should borrow from all over the place to do my work most effectively." You can learn as much from the civil rights movement of the 1960s as from new tech-based networking organizations like Avaaz. To me, there's still too much hype around the new and not enough respect for the old, and that means we're not learning as much as we could be. So, yes, I welcome the energy and forcefulness of the new philanthropists, but I want that energy and forcefulness to be balanced by a greater respect for tradition and the idea that we can learn from the past.

PND: Do you share the concerns of some that the Gates Foundation, because of its enormous size, has too much influence over agendas and policy in areas where it is active? And what can the Gates Foundation do to allay those fears?

ME: I don't think it's a question of size per se. We've had very large foundations in the past. Rockefeller, Ford, and Carnegie -- all of them, when they were first established, were large. It's more a question of how we use private resources in a way that serves the public interest, as opposed to private interest or a single individual's own interpretation of what they think the public interest is. Education reform is a classic example. The problems come when significant private resources controlled by organizations with weak accountability mechanisms are aligned with a targeted, rigid approach to a controversial issue such as school reform. It's a recipe for problems, not least because the impression is that here is this hundred-pound gorilla with no discernable democratic accountability structure barreling into something that belongs to all of us, and that's not acceptable. I don't want my kids' education to be decided by Bill and Melinda Gates, thank you very much. Not because I don't like them. It's just not the way we do things in a democracy.

Instead, why don't we ask Bill and Melinda to put half their funding for education into a national education innovation fund which is governed by a cross section of society -- teachers, teachers' union officials, principals, parents' representatives, and academics who've studied the field? That's one way of mitigating the dangers that come with highly concentrated funding. Another way, obviously, would be to change the composition of the Gates Foundation's board so that it's more diverse. But that doesn't seem to be an option which has any resonance with Bill and Melinda.

Let's talk about another example. Look at what's happening in Newark at the moment with the hundred million dollars that Facebook founder Mark Zuckerberg pledged to the city for school reform. Originally it was promised that there would be democratic structures attached to the gift so that residents of the community, people who send their kids to Newark schools, felt they had a stake in how the money was spent. But as we see so often, that's exactly what's not happening; instead, most of the decisions are being left to a small group of powerful rich people. Of course, residents of the community are pushing back against that, as common sense suggests they would. I think it's an important test case, actually, for philanthropy in America, and it's important we get it right. We need to find a way to use the huge private resources of a Bill Gates or a Mark Zuckerberg for the benefit of society, but to do so in a way that the rest of us can share in and feel a part of. If we don't do that, there could be trouble down the road....

Click here for part two of the interview.

Open Data Master Class

2011-12-19T17:34:43-05:00

(David Jacobs is director of foundation information management at the Foundation Center. In his last post, he wrote about the bankruptcy of Solyndra LLC.)

Recently, Foundation Center staff participated in an Open Data Master Class presented by members of the World Bank, which has made all of its data freely available to the public. Over the course of the day-long session, staff learned how to use easily accessible Web platforms like GeoCommons to mash up geographic information and data from multiple sources to create informative, eye-opening maps on almost any subject imaginable.

Why is this important? Well, in addition to data-rich organizations like the World Bank, a number of donor country governments are beginning to make all sorts of valuable data available to the public as part of the so-called open data movement. Among the biggest and most accessible date troves are those amassed by the U.S. government and its frequent "special relationship" partner on the other side of the Atlantic, the UK. These open data sites, along with the World Bank site, offer a wealth of economic, development, and demographic information.

However, as many of you know, releasing gigabytes of data in context-free tables and hard-to-read files doesn't guarantee transparency or do much to advance knowledge. In fact, it can have the opposite effect, thanks to something called information overload. Which is why it is so important for programmers, GIS experts, information specialists, and others to be able to access this data and filter it in ways that can reveal valuable hidden nuggets of knowledge. A good example of this is the funding map on our new WASHfunders portal, which makes use of both free and professionally managed data to show private- and public-sector funding for clean water and sanitation projects by country and region.

While open data and GIS mapping are still young fields, making once-inaccessible data available to members of the public to mash up with other types of information -- demographic or geographic, for example -- has great potential to yield real social benefit.

And while the buzz around open data has been building, it shouldn't be limited to governments and large multilateral organizations. In fact, any organization in the sector can leverage their knowledge and contribute to the public good by sharing their own data and/or mashing it up with data provided by others to identify hidden needs, regions or communities that are underserved, and a host of other things.

What do you think? Where do you see opportunities for the sector to take better advantage of open data? Where have we been good? And where is there room for improvement? Share your thoughts (and data!) in the comments section below.

-- David Jacobs

Weekend Link Roundup (December 17 - 18, 2011)

2011-12-18T14:48:45-05:00

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

Communications/Marketing

In a post on her Non-Profit Marketing blog, Network for Good's Katya Andresen weighs in on a new Silverpop white paper that looks at where digital marketing trends are headed. Among other things, writes Andresen, nonprofit marketing staff should expect their work to become more personal, "human," and mobile in 2012.

Disaster Relief

On Oxfam International's From Poverty to Power blog, Chris Anderson, Oxfam's global adviser for disaster risk reduction, makes the case for more investment in disaster preparedness, noting that investment in DRR accounts for less than 1 percent of official humanitarian assistance to the world's twenty biggest recipients of such assistance.

Diversity

Rosetta Thurman shares a new article from the Nonprofit Professionals Advisory Group in which Katherine E. Jacobs and Andrew Grant-Thomas explain that when it comes to recruiting there "is no such thing as a diverse candidate."

Education

Writing about federal education policy in the New York Times ("Class Matters. Why Won't We Admit It?"), Helen Ladd, a professor of public policy and economics at Duke, and Edward B. Fiske, a former education editor at the Times and the author of the Fiske Guide to Colleges, pose what they believe is a critical question: "Why do presumably well-intentioned policy makers ignore, or deny, the correlations of family background and student achievement?" Ladd and Fiske propose that rationales for ignoring such correlations range from a belief that schools are capable of offsetting the effects of poverty, to not wanting to lower expectations for poor students, to the huge challenges posed by tackling poverty as a whole. "Let's agree," they write in closing, "that we know a lot about how to address the ways in which poverty undermines student learning. Whether we choose to face up to that reality is ultimately a moral question."

Global Health

On his Humanosphere blog, Tom Paulson has some nice things to say about Seattle-based PATH's acquisition of the nonprofit drug company OneWorld Health.

Philanthropy

On his Inside Philanthropy blog, Todd Cohen commends foundations and corporations for "moving beyond grantmaking and investing more of their assets to address critical social and global problems." "[T]hat kind of innovation," adds Cohen, "is critical to help make the social economy more productive in serving people and places in need."

Philanthropy 2173's Lucy Bernholz shares her annual list of new buzzwords and phrases, including evidence based, shapeshifting, and disruption.

Social Media

Nonprofits shouldn't confuse content curation -- "the organizing, filtering and 'making sense of' information on the web" -- as aggregation, writes social media expert Beth Kanter in a recent post on her blog. "The debate in content curation circles [right now]," adds Kanter, "is that [if] we treat content curation as aggregation, then we’ll miss the point and just create noise. We don't need more content but a human point of view guided by intelligent tools that can help others find and make sense of the information and resources out there."

Transparency

On the Foundation Center's Transparency Talk blog, Bill Somerville, executive director of the Philanthropic Ventures Foundation, offers his take on the relationship between transparency and effectiveness that was the subject of recent event in San Francisco co-hosted by the Foundation Center and the Center for Effective Philanthropy. Writes Somerville:

Does transparency and glass pockets help effectiveness? I don't know. What difference does it make for people to know foundation salaries? If it does make a difference, then we are talking about accountability not effectiveness. Is the foundation accountable in being efficient, frugal, responsible, responsive and productive?

Foundations have a special place in the community in that they are answerable to themselves. They are independent and have maximum latitude to do their work. They have a unique asset in that their money is not political, not in competition with anything or anyone, and they have no ax to grind. So, what are the factors of excellence in the exercise of philanthropy? A question foundation personnel should ask themselves every day....

One is leadership. Foundations should exercise leadership in their willingness to venture where others haven't gone, to take risks, to think into the future rather than indulge themselves in endless paper. A leader is one who brings out the best in others. Isn't this what foundations should be doing?

Another factor of excellence is modesty. Money is the tool of philanthropy and money is power. Foundation personnel must understand that it is not their money nor is it their power. Foundations are investing funds in people and programs worthy of the investment. They are not "giving money away."

Somerville concludes by noting that his comments are meant to "create a dialogue and stimulate other people to add their thoughts on what makes for effectiveness." Here's your chance to join that conversation. What do you think an "effective" foundation looks like? And what is the relationship between transparency and accountability? Use the comments section to share your thoughts....

That's it for now. With the holidays looming, most of our shopping still be done, and miles to go before we sleep, we'll be posting a little less frequently over the next couple of weeks. Here's hoping you get to spend time with friends and loved ones. Have a great holiday!

-- The Editors

A to Z Survival Guide for Uncertain Times

2011-12-16T14:00:00-05:00

(Michael Seltzer is a regular contributor to PhilanTopic. This post originally appeared on this blog in October 2008, shortly after the collapse of Lehman Brothers. Plus ça change, plus c'est la même chose. Michael's last post was a Q&A with David Jones, president of the Community Service Society of New York.)

Each time the American economy has suffered a downturn or government has cut back on funding for social programs, the media has focused on how those of us on "Nonprofit Street" are being affected. Those of us running nonprofit organizations don't need newspapers to tell us how things are going or how our constituents are faring. Instead, we want to know what our colleagues are doing to address the financial challenges we each face.

The "A to Z Nonprofit Survival Guide for Uncertain Times" is compiled from my past writings and strategy recommendations I learned from grantees, clients, and fellow consultants. To all of you, I am grateful for your generosity and wisdom.

_____

Accentuate the positive
There's enough doom and gloom in the media and on Wall Street. The public doesn't want to hear how poorly nonprofits are doing; they want to know that nonprofit organizations will continue to be there for them.

Be bold
The pressure to scale back programs and to promise less is real. But it's important, when possible, to find new ways to provide value to clients, funders, and supporters.

Collaborate
In normal times, many nonprofit leaders view collaboration as the most unnatural of acts. These are not normal times. There is much to be gained, including cost savings and enhanced impact, by working more closely with others.

Deepen relationships (with elected officials, in particular)
Unfortunately, local, state, and federal governments will be forced to make cuts in their budgets as tax revenues decline. Be sure to make the case with your elected officials and their key staff for continued government funding of your organization.

Experiment
Look for opportunities to experiment and/or pilot small-scale initiatives. Such opportunities are likely to be a less expensive investment in change than grand, large-scale progams or initiatives.

Fundraise selectively
Good advice anytime, but especially in the current economic climate. Focus on strong, solid prospects rather than second-tier long shots. With corporate donors, be prepared to discuss non-cash ways the company can support your operations, including loaned executives, volunteer programs, the short-term loan of facilities, and other in-kind contributions.

Get rid of dead (board) wood
Tough times demand that all stakeholders roll up their sleeves and give generously of their "time, talent, and treasure." Board members who are unable and/or unwilling to pull their weight and contribute what they can to strengthen the organizations must (gently) be shown the door.

Help other organizations less well positioned than your own
It doesn't have to be with money; technical assistance, fundraising advice, even something as simple as words of encouragement can go a long way in a tough economic environment. At the end of the day, we're all in this together.

Invest in the future
Though you're likely to find that cost-cutting measures are unavoidable, it's equally important that you identify ways to create or expand your reserve funds. No one can predict the future, so the best advice is probably the old Scouts motto: "Be prepared."

Join your local or state association of nonprofits
Networking is not only helpful in times like these, it's essential. Local nonprofit associations provide a great meeting ground to exchange information and lessons learned with peers and colleagues in other organizations.

Keep informed of developments in your field
That means staying on top of your issues and looking for even better ways to do what you do. This is not the time to cut back on professional journals and magazine subscriptions.

Look to the future, not the past
Another way of saying, "Don't rest on your laurels." And if your organization is struggling, take comfort from the fact that, with creativity, hard work, and an optimistic outlook, things are likely to get better.

Mind the sweet spot
Don't just chase dollars. Identify your organization's "sweet spot" -- the intersection of its vision, mission, assets, and other strengths with the giving "impulses" of your supporters and stakeholders -- and make sure everything you do connects to it.

Never reinvent the wheel
No explanation necessary.

Open yourself and your organization to new ideas
If something has stopped working for you, it's probably time to change it. Open your mind to new ideas and new ways of doing things, and seek out the opinions of experts in your field.

Plan for uncertainty
To be a good steward of the resources that have been entrusted to you, you simply must forecast several different financial scenarios for your upcoming fiscal year. Be conservative in your revenue projections.

Quickly communicate bad news to your key supporters
Make sure your key internal and external stakeholders feel they are being kept apprised of major changes and developments affecting your organization. And whatever you do, do not let them learn bad news about your organization from the media.

Respect your stakeholders
You can expect to get a lot of tough questions from concerned stakeholders. The fact they are concerned is a positive for your organization. Don't squander it by giving false or misleading answers.

Share
Cost-saving measures such as sharing office space or pooling back-office functions must be considered in tough economic times. Many funders will be cutting back on administrative costs and will appreciate grantees' efforts to do the same.

Tell your story
Across the country, in practically every community, low-income families and individuals are the ones who will be most affected by the economic downturn. They are likely to turn, in growing numbers, to local nonprofit organizations for food assistance, child care, credit counseling, job retraining, legal assistance, and other services. Nonprofit leaders would be well-advised to collect the stories of the individuals and families they serve and share them with donors, supporters, and local media.

Upgrade your staff perks
Many nonprofits will be pressured to reduce headcount and/or to contract out some of their services. Such measures can hurt morale and reduce organizational effectiveness. It's important, therefore, for nonprofit leaders to find both material and non-material ways to express their appreciation for and solidarity with staff. Listen to their ideas and validate their concerns. They'll appreciate it and your organization will benefit.

Vision, vision, vision
In tough times, people tend to rally around organizations and leaders that project an air of confidence and optimisim. Franlkin D. Roosevelt warned about fearing "fear itself" in the depths of the Great Depression, and in the 1960s Lyndon Johnson rallied a shocked and racially polarized country around the notion of a "Great Society." For both men, language was a critical tool in helping to paint and convey a picture of better times to come. Nonprofits would be well-served to take a page out of their respective books.

Wear your values on your sleeve
In our sector, the most important assets are our values and the public's trust. Whether we express our values through our Web sites, marketing materials, or on a T-shirt, we should display and wear them proudly. And in no circumstance should we compromise our ethics or the integrity of our organizations or the sector.

eXhale
Remember: Most of us still have a lot to be grateful for.

Yield no ground as an authority in your field
In order to assert that authority, however, you have to stay informed (see K) and must communicate clearly.

Zero in on your core competencies
Identify what your organization does best and strive to be a leader and innovator in that area or space.

-- Michael Seltzer

Questions for the Stavros Niarchos Foundation

2011-12-15T15:02:10-05:00

I'll be speaking tomorrow with a couple of program officers at the Stavros Niarchos Foundation, a private philanthropy founded by Greek shipping magnate Stavros Niarchos before his death in 1996. While I'm with them, I hope to gain some fresh insights, informed by a non-U.S. perspective, into the Greek sovereign debt crisis, its impact on the lives of ordinary Greeks, and its effect (if any) on philanthropy in Greece.

Here are a few questions I plan to ask:

Greece is at the epicenter of the European sovereign debt crisis. How did it get into the mess it finds itself in?
Can you give us a sense of what the crisis has meant for the average person in Greece?
Has it undermined their support for the eurozone? Has it undermined their faith in democracy?
Has the crisis affected the way the Greek people view their wealthy compatriots, in general, and philanthropy specifically?
What are your best guesses as to how the crisis will be resolved? Are the Greek people in a frame of mind to embrace years of austerity? What are the chances that Greece will end up leaving the eurozone?
Will philanthropy in Greece come out of this crisis stronger or will it be diminished in the eyes of the Greek people?

What else should I ask? Share your thoughts in the comments section below...

-- Mitch Nauffts