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18 posts from January 2008

Bill Gates at the World Economic Forum

January 25, 2008

Here's an extended excerpt of Gates' remarks to the World Economic Forum in Davos, Switzerland, on Jan. 24, 2008:

"There are billions of people who need the great inventions of the computer age, and many more basic needs as well. But they have no way of expressing their needs in ways that matter to markets. So they go without.

"If we are going to have a serious chance of changing their lives, we will need another level of innovation. Not just technology innovation — we need system innovation. That's what I want to discuss with you here in Davos today.

"Let me begin by expressing a view that might not be widely shared.

"The world is getting better.

"In significant and far-reaching ways, the world is a better place to live than it has ever been.

"Consider the status of women and minorities in society — virtually any society — compared to any time in the past.

"Consider that life expectancy has nearly doubled in the past hundred years.

"Consider governance — the number of people today who vote in elections, express their views, and enjoy economic freedom compared to any time in the past.

"In these crucial areas, the world is getting better.

"These improvements have been matched, and in some cases triggered, by advances in science, technology, and medicine. They have brought us to a high point in human welfare. We are at the start of a technology-driven revolution in what people will be able to do for one another. In the coming decades, we will have astonishing new abilities to diagnose illness, heal disease, educate the world's children, create opportunities for the poor, and harness the world's brightest minds to solve our most difficult problems.

"This is how I see the world, and it should make one thing clear: I am an optimist.

"But I am an impatient optimist.

"The world is getting better, but it’s not getting better fast enough, and it's not getting better for everyone.

"The great advances in the world have often aggravated the inequities in the world. The least needy see the most improvement, and the most needy see the least — in particular the billion people who live on less than a dollar a day...."

For the complete text of Gates' remarks, click here. And to view a Webcast of the speech, click here.

-- Mitch Nauffts

Microsoft Founder Calls for Kinder, Gentler Capitalism

January 24, 2008

Bgates_2008_2Today's Wall Street Journal is reporting that Bill Gates, one of the wealthiest individuals in the world and its most generous philanthropist, will issue a call in a speech at the World Economic Forum this afternoon for a more "creative capitalism" that harnesses market forces to do good in poor countries ("Bill Gates Issues Call for Kinder Capitalism," Robert A. Guth, 01/24/08).

According to the Journal, Gates has grown increasingly aware of capitalism's shortcomings as a result of his many trips to developing world countries and through his "voracious" reading of books "that propose new approaches to narrowing the gap between the rich and poor."

"Talk of 'moral sentiments' may seem suprising from a man whose competitive drive is so fierce that it drew legal challenges from antitrust authorities," the Journal notes.

But Mr. Gates said his thinking about capitalism has been evolving for years. He outlined part of his evolution from software titan to philanthropist in a speech last June to Harvard's graduating class, recounting how when he left Harvard in 1975 he knew little of the inequities of the world....

Gates' speech, "A New Approach to Capitalism in the 21st Century," will be Web- and podcast live on World Economic Forum Web site later today. For a complete listing of Web- and podcasts from the 2008 annual meeting, click here.

-- Mitch Nauffts

PND Poll (Jan. 22 - Jan. 28, 2008)

January 23, 2008

This week's poll wants to know:

Is the U.S. economy in recession?

  • Yes
  • No
  • Not sure

And here are the results of last week's poll:

How would you rate media coverage of the early presidential primaries? [177 votes total]

  • Very Good (17)
  • Good (36)
  • Fair (60)
  • Lousy (64)

-- Mitch Nauffts

When Wall Street Catches a Cold...

January 22, 2008

Money_treeAfter five months of speculation, the news this morning suggests we are in or headed for a recession. Last week, in fact, Steven Cochrane, a senior managing director at Moody's Economy.com, noted that California, Michigan, and Florida already were in recession -- and the likelihood the rest of the country will soon join them is roiling financial markets from Wall Street to Hong Kong.

It would seem the only remaining question is how severe the recession will be. For U.S. foundations and nonprofit organizations, that question is far from academic.

Nonprofits could feel the impact in a variety of ways:

  • Individual companies, especially in the financial sector, are already reporting major hits to their profits. When profits are down, corporate charitable giving declines.
  • When markets decline, returns on foundation endowments -- and, eventually, grantmaking budgets -- follow suit.
  • When unemployment and economic insecurity rise, individuals cut back on their charitable contributions.
  • As economic activity slows and tax receipts fall, local and state governments are forced to cut social services and expenditures on health and education.

Stock market volatility is nothing new. Many of us recall October 19, 1987 -- "Black Monday" -- when the Dow Jones Industrial Average plunged 508 points, or 22.6 percent, in a single session.

Nonprofits are survivors, however. We're accustomed to wearing our belts snugly -- and tightening them when the economy takes a turn for the worse. During the early 1980s, many nonprofit organizations were forced to adjust to the Reagan administration's "trickle-down" approach to social problems. In fact, I wrote my book, Securing Your Organization's Future (firstpublished by the Foundation Center in 1987), to help nonprofit organizations successfully navigate changes in the economic landscape that characterized those years.

What lessons can we learn from the recent past in dealing with economic downturns? In the '80s, many nonprofits jump-started new earned-income enterprises, even as they found additional ways to cut expenses. In addition, many professionals from the world of business -- so-called "sector-jumpers" — left the private sector (either by choice or involuntarily) to seek the rewards of nonprofit work and were able to adapt their skill sets to a nonprofit environment. Planned giving efforts also took on greater significance, as an increasing number of wary donors became drawn to that form of giving.

Is that a prescription for nonprofit survival in the current economic climate? Are we better situated to weather the turmoil this time around? We'd love to hear your thoughts about what nonprofits and funders alike can and should do to help the charitable sector ride out the gathering economic storm.

-- Michael Seltzer

Quick Hits (Jan. 21, 2008)

January 21, 2008

Interesting comments/dialogue over at Gift Hub in response to Phil's comment about Rich Polt's post here at PhilanTopic about communicating impact.

The January Giving Carnival is in full swing at Trista Harris' New Voices of Philanthropy, where the topic is, What will the foundation of the future look like?

In New York magazine, Jennifer Senior wonders whether the explosion of wealth in America is creating a generation of Paris Hiltons.

Allison Fine has started a conversation on her blog about evaluating the value of social networks.

Lucy Bernholz asks what transparency really looks like in a foundation context and wonders whether we're there yet.

Michele Martin at the Bamboo Project has a nice post on the nine lessons she learned from running her first webinar.

Eduwonkette, our favorite education blogger, has a snazzy new home at the Education Week web site.

And the anonymous blogger who blogs at Don't Tell the Donor.org celebrates a milestone -- his/her 500th post. Congrats!

-- Mitch Nauffts

Quote of the Day (Jan. 21, 2008)

Quotemarks...And so even though we face the difficulties of today and tomorrow, I still have a dream. It is a dream deeply rooted in the American dream.

I have a dream that one day this nation will rise up and live out the true meaning of its creed: "We hold these truths to be self-evident, that all men are created equal." ...

I have a dream that my four little children will one day live in a nation where they will not be judged by the color of their skin but by the content of their character.

I have a dream today!...

I have a dream that one day every valley shall be exalted, and every hill and mountain shall be made low, the rough places will be made plain, and the crooked places will be made straight; "and the glory of the Lord shall be revealed and all flesh shall see it together."

This is our hope, and this is the faith that I go back to the South with.

With this faith, we will be able to hew out of the mountain of despair a stone of hope. With this faith, we will be able to transform the jangling discords of our nation into a beautiful symphony of brotherhood. With this faith, we will be able to work together, to pray together, to struggle together, to go to jail together, to stand up for freedom together, knowing that we will be free one day.

And this will be the day -- this will be the day when all of God's children will be able to sing with new meaning:

My country 'tis of thee, sweet land of liberty, of thee I sing.
Land where my fathers died, land of the Pilgrim's pride,
From every mountainside, let freedom ring!

And if America is to be a great nation, this must become true.

And so let freedom ring from the prodigious hilltops of New Hampshire.

Let freedom ring from the mighty mountains of New York.

Let freedom ring from the heightening Alleghenies of Pennsylvania.

Let freedom ring from the snow-capped Rockies of Colorado.

Let freedom ring from the curvaceous slopes of California.

But not only that:

Let freedom ring from Stone Mountain of Georgia.

Let freedom ring from Lookout Mountain of Tennessee.

Let freedom ring from every hill and molehill of Mississippi.

From every mountainside, let freedom ring.

And when this happens, when we allow freedom to ring, when we let it ring from every village and every hamlet, from every state and every city, we will be able to speed up that day when all of God's children, black men and white men, Jews and Gentiles, Protestants and Catholics, will be able to join hands and sing in the words of the old Negro spiritual:

Free at last! Free at last!
Thank God Almighty! We are free at last!

-- Martin Luther King, Jr.

Demanding Donors and the Red Cross

January 20, 2008

Red_crossInteresting article by Stephanie Strom in today's New York Times about the big operating deficit and likelihood of staff cuts at the American Red Cross ("Here's My Check; Spend It All at Once," Week in Review, Jan. 20). The deficit ($200 million) and the cuts (as much 30 percent of the organization's headquarters staff) are the result, writes Strom, of one of the most "vexing" trends in the world of charity: donors earmarking their gifts for a specific purpose or cause -- or what Strom calls "the growing tyranny of donors."

According to the article, it's a trend that first emerged about a decade ago (during the heady days of the dot-com boom) and really got traction in the wake of the Sept. 11 attacks, when the Red Cross came a cropper for announcing "it would spend part of the roughly $1 billion it had raised after the attacks on much-needed equipment and other upgrades that would allow it to cope with future disasters."

That had been SOP for the organization, as the article makes clear. "Before 9/11," writes Strom

the Red Cross always told donors their gifts would be "used for this and other disasters," an escape clause that allowed it to put the money into a general disaster operation fund. Thus, donations inspired by major catastrophes also helped underwite the Red Cross's response to the more garden-variety disasters.

Sounds like a good idea, right? But in the months after the attacks the public balked at business as usual, ultimately forcing the Red Cross to change its procedures. Why? The article doesn't say, but certainly press coverage of the organization's post-9/11 actions contributed to the atmosphere of distrust.

As a review of PND's 9/11 Response archive shows, it only took a week for the national press to suggest that the charitable response to the attacks might create problems of its own ("Americans Donate to Disaster Relief Funds at Unprecedented Rates," Washington Post, Sept. 18, 2001). In that article -- and in others to follow in the Post, Times, and other outlets -- the concerns were the possibility of fraud and a reduction in giving to other charities. (Fraud turned out to be a negligible problem and the reduction in giving turned out to be a non-issue.)

As donations continued to pour into the Red Cross (and other organizations/funds) in the weeks that followed, the press began to raise concerns about the absence of "a unified mechanism for delivering philanthropic relief," as had been developed after Oklahoma City bombing in 1995 ("Without Centralized System, Charities Handle $850 Million in Donations," New York Times, Oct. 8, 2001).

It wasn't until October 23, however, that the Red Cross's decision to redirect a portion of the donations it had received became an issue ("Red Cross Considers Using Portion of September 11 Donations for Future Disasters"). After that, it was all bad news for the country's oldest and most important disaster-relief organization, with Congress getting into the act in early November ("Grassley Calls for Federal Oversight of September 11 Donations," "House to Hold Hearing on 9/11 Charitable Response"); the Red Cross trying to defend its decision to withhold $200 million in 9/11 donations for other purposes; and the organization finally announcing "sweeping changes" to its Liberty Fund a week later, with interim CEO Harold Decker (Bernadine Healy had resigned by then) saying:

Americans have spoken loudly and clearly that they want our relief efforts directed at the people affected by the September 11 tragedies. We deeply regret that our activities over the past eight weeks have not been as sharply focused as America wants, nor as focused as the victims of this tragedy deserve. The people affected by this terrible tragedy have been our first priority, and beginning today, they will be the only priority of the Liberty Fund.

And now here we are, seven years later, with the Red Cross $200 million in the red and trying to figure out what to do with an extra $5 million it received for Southern California wildfire relief (above and beyond the $16 million cost of that effort), while the New York Times suggests that designated gifts may be "an imperfect tool for imposing accountability on an organization."

Don't get me wrong. I'm a staunch supporter of a vigorous free press. But as long as the press continues to believe that the only story worth reporting is "Man Bites Dog," that "gotcha" journalism trumps reponsible, nuanced journalism, public distrust of institutions, good and bad, will continue to grow -- to the detriment of us all.

-- Mitch Nauffts

Communicating Impact: Do We Appeal to the Heart or the Mind?

January 17, 2008

(Guest contributor Rich Polt is president of Louder Than Words, a Boston-based PR agency. He previously blogged on PhilanTopic about Second Life, an Internet-based virtual world.)

Most of us agree that foundations need to do a better job of demonstrating and communicating their impact to outside audiences. It's the how that has everyone so flummoxed.

One camp (let's call them the "left-brainers") says that impact is best shown through mindful analysis: robust measurement systems, rigorous evaluation, and quantitative reporting. Another camp (the "right-brainers," presumably) advocates for softer measures of impact that resound with the heart: compelling case studies, persuasive storytelling, articles that depict human drama. While the answer most certainly lies somewhere in the middle, there is no denying that each of us tends to favor one approach over the other.

This dichotomy was made very clear to me as I read through the Philanthropy Awareness Initiative's recent digest: "Five Questions about Demonstrating Impact." The piece -- a great read -- is a virtual roundtable discussion with leaders from the field looking at how foundations can show their value and why they should.

At one point, the question is posed to the expert panel: "Why do foundations struggle with it [demonstrating impact]?" Consider this left brain-influenced response by Phil Buchanan from the Center for Effective Philanthropy (note: the bold-faced type comes directly from the document):

Many foundations struggle to demonstrate their impact because they simply aren't working strategically. Without a strategy, implementing a foundation-wide performance system is next to impossible and making the case for impact challenging, at best. Consider this. When we at CEP looked at the grantmaking of a hundred and forty-two large foundations, the median grant size was fifty thousand dollars. Fifty thousand dollars. It seems highly improbable to me that a foundation that makes hundreds or thousands of small grants across myriad programs, with vague goals, will be able to make a case for its impact, even accepting (which I do) that we shouldn't get hung up on causality. What's left are anecdotes. And anecdotes won't cut it.

At the other end of the spectrum is this response from Tim Walter of the Association of Small Foundations:

Communicating impact presumes a rational dialogue and decision-making process, and while no one is arguing that it's bad to be rational, we'd be naïve to think that it's sufficient to generate public or political support for foundations. Emotional, cultural, financial, and ideological biases are at play. A rational argument about "impact" may give one victory in a debate tournament or before a judge, but not in politics. Foundations should stop trying to win good press in The Economist and start trying to get more coverage in People magazine's "Heroes Among Us" column.

Speaking personally, I favor the softer side of things. Probably because I work with an audience that is driven more by human drama then by long-term analysis (the media). I have to say that when I read Tim Walter's response I nearly let out a “WAHOO!” He nailed it.

If you haven't yet read Made to Stick by Chip and Dan Heath, do yourself a favor and order a copy right now. It's a brilliant book about the power of compelling ideas and its lessons are applicable to any industry. On page 165, the authors describe a Carnegie Mellon University study that put this issue of mind vs. heart to the test. Researchers wanted to see how people responded to an opportunity to make a charitable contribution to an abstract cause versus a charitable contribution to a single person.

After making sure that each test participant was holding five one-dollar bills (payment for doing something that was irrelevant to the experiment), participants were handed one of two versions of a charity request letter for Save the Children. One version featured statistics about the magnitude of the problems facing children in Africa; the other gave an account of a single young African girl. On average, the analytical appeal brought in $1.14 from each participant, the story-based appeal brought in an average of $2.38 -- more than twice as much. What's even more interesting is that when the two approaches were combined into the same letter, the average donation dropped back down to $1.43.

I’m certainly not advocating for stories without data or data without stories, but I do believe that to truly convey impact among diverse and widespread audiences we need to appeal first to the heart.

-- Rich Polt

PND Poll (Jan. 8 - 15, 2008) -- Results

January 16, 2008

As this historic presidential election season rolls along, I thought you might be interested in the results of last week's (admittedly unscientific) PND Poll:

What is the biggest obstacle to success in American society? [258 votes total]

  • Gender (8) -- 3%
  • Race (33) -- 13%
  • Education (112) -- 43%
  • Class (61) -- 24%
  • Other (44) -- 17%

Most would probably agree that the low vote total received by Race (13 percent) and Gender (3 percent) is surprising -- or maybe it isn't. Maybe Americans, especially those of us who work in the charitable sector, really do believe the country is more tolerant and committed to equal opportunity for all than it ever has been. Certainly, our workplaces and the increasingly diverse composition of those assuming leadership roles in the sector would support that thesis.

Nor does it surprise me that Education (43 percent) received as many votes as it did. The crisis in public education has been on most people's radar since the mid-80s, and today concerns about America's ability to compete -- and create good jobs -- in a global economy clearly are driving voters to reject the status quo and opt for "change." Indeed, a new report from the National Science Foundation, Science and Engineering Indicators 2008, underscores those concerns.

But what about Other, which received 17 percent of the total votes in the poll? What could possibly be a bigger obstacle to success in American society than education, class, race, or gender? We'd love to hear your thoughts.

-- Mitch Nauffts

Real-Time Chat With Diana Aviv

January 14, 2008

Last October, the Panel on the Nonprofit Sector, a group of foundation and nonprofit officials convened by Independent Sector to improve accountability and ethical practice in charitable organizations, released the final version of Principles for Good Governance and Ethical Practice: A Guide for Charities and Nonprofits (32 pages, PDF). Eighteen months in the making, the guide represents "the first time that charities and foundations reflecting a broad cross-section of the American nonprofit community have come together to develop principles that they [can] aspire to and encourage all organizations to follow."

While not everyone agrees with the Panel's recommendations, more than 250 organizations have endorsed them and interest in the Guide continues to grow.

In the interest of promoting greater accountability and transparency in the charitable sector, the Chronicle of Philanthropy has invited Diana Aviv, president and CEO of Independent Sector and executive director of the panel, to participate in an online chat tomorrow, January 15, from noon to 1:00 p.m. EST. Questions for Diana are encouraged and can be submitted before and during the discussion through the Chronicle's Web site.

-- Mitch Nauffts

Phil Buchanan on Foundation Effectiveness

Tactical Philanthropy's Sean Stannard-Stockton has just posted a podcast of an interview he did with Phil Buchanan, the executive director of the Center for Effective Philanthropy. During the podcast, Sean and Phil discuss why most foundations are not strategic, the role of intermediaries in fixing the philanthropic capital markets, and a “secret club” of foundations that seem to be responsible for all of the innovation in philanthropy. And I've been told by Sean that Phil will be standing by to answer questions and comments for the next little while.

-- Mitch Nauffts

Quick Hits (Jan. 13, 2008)

January 13, 2008

The GiveWell board has fined GiveWell co-founder Elie Hassenfeld $5,000 for "astroturfing" -- the same offense that cost GiveWell co-founder Holden Karnofsky his leadership position at the organization.

Allison Fine, author of Momentum: Igniting Social Change and blogger-in-chief at A.Fine Blog, argues that the GiveWell board was too lenient in demoting Karnofsky.

Lucy Bernholz flags a new resource, JustPhilanthropy.org, dedicated to addressing racial and social justice inequities in philanthropy. (Note: In the wake of the GiveWell-related grilling she was subjected to by members of the MetaFilter community, Lucy now includes a disclosure statement at the bottom of most of her posts.)

As reported in the New York Times, BigThink debuts with some questions designed to get us thinking.

And over at Give and Take (the Chronicle of Philanthropy blog), Peter Panapento asks whether direct mail is dead.

-- Mitch Nauffts

Susan Berresford Looks Back

January 10, 2008

Berresford2_lg

As many of you know, January 4 was Susan Berresford's last day as president of the Ford Foundation. In December, Susan spoke with me about her distinguished thirty-seven career at the foundation, and I've just posted a transcript of that conversation to the Newsmakers section of PND.

I first interviewed Susan in 2002, five or six months after the 9/11 attacks, and I walked away from that interview (conducted in Susan's office, where she served me tea and cookies!) absolutely charmed by her easy, unpretentious manner. Over the course of her career, Susan met thousands of people around the globe (and touched the lives of many more), and as far as I can tell she always related to people simply as "Susan." As an admirer of hers recently told me, Susan wore her position and accomplishments very lightly. I'm sure many of you would agree.

BTW, the Q&A with Susan represents a milestone of sorts for PND, in that it's the 100th interview in our Newsmakers series. (Click here to browse the complete Newsmaker archive.) I'd like to take this opportunity to thank all the smart and committed foundation executives, nonprofit practitioners, and sector thought leaders who agreed to speak with us over the years. We couldn't have done it without you! 

-- Mitch Nauffts

PND Poll (Jan. 8 - 15, 2008)

January 09, 2008

With the presidential primaries in full swing and the prospect of an historic presidential campaign before us, the editors of PND are asking the following in this week's PND Poll:

What is the biggest obstacle to success in American society?

  • Gender
  • Race
  • Education
  • Class
  • Other

To cast your vote, visit:

http://foundationcenter.org/pnd/

-- Mitch Nauffts

Philanthropy: The View From 35,000 Feet

January 08, 2008

Lucy Bernholz, founder and president of Blueprint Research, author of Creating Philanthropic Capital Markets: The Deliberate Evolution, and nonprofit blogger extraordinaire, took her share of (undeserved, in my view) lumps in last week's GiveWell/Holden Karnofksy imbroglio. (You can read more about that here and here.)

But when it comes to philanthropy, Lucy is a deep, original thinker. I especially liked her post in response to Denise Caruso's Re:Framing column in Sunday's New York Times ("Can Foundations Take the Long View Again?", Jan. 6, 2008). After pointing to some of the forward-looking organizations that Caruso cites her in article (Grantmakers for Effective Organizations, Social Venture Partners International, the Center for Effective Philanthropy, the Edna McConnell Clark Foundation, the Hewlett Foundation, Compasspoint, the Meyer Foundation), Lucy asks whether or not the movement to advocate for and provide more unrestricted support to nonprofits "adds up to a trend or has enough heft to act as a countervailing force." Then she treats us to this bit of whimsy:

Fly up to 35,000 feet with me and the view gets really interesting -- there is a lot of experimentation and variation underway in philanthropy right now. As we fly over the "landscape" of funding for public good, we see an increasingly varied and dynamic topography:

From this altitude we can see...[groups] focused on general operating support, as well as those focused on project-specific metrics. We also spot the various efforts at accountability and transparency, a few on knowledge sharing, and several that are trying out new ways of using technology. And over there -- out that window -- can you spot the efforts to directly connect small donors with international projects? They're there, just next to the corporate social responsibility movement -- over by cause marketers. Just beyond them -- out another window, if you will -- is the increasingly organized microfinance community. From another window we see the growing range of donor advised funds. Look over there, we can see on the horizon the socially responsible investing movement and as we continue along social entrepreneurs, double/triple bottom line investment companies, and social venture capital firms are coming into view. Wait -- over there -- way on the horizon -- is that the carbon trade movement coming into view?

As we fly along we notice all along the way the interspersed tens of thousands of small foundations, organized around a family legacy or values, working hard to advance the causes they care about and not bothering with all the tumult around them. We also spot banks and trust companies, attorneys and accountants, consulting firms, wealth managers and multi-family offices -- all providing philanthropic advising and management services. And, look! Over there! Media companies and magazines that help frame the discussions about philanthropy. Out every window we see the hundreds of millions of individuals who make a daily, weekly or at least annual practice of giving some amount of their time or money to make life a little better for someone else....

Thank you, Lucy...for staying focused, and for reminding all of us that what we do is important and rooted in the real world.

-- Mitch Nauffts

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