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33 posts from December 2008

'2008: The Year In Review' Now Online

December 31, 2008

As we do every year at this time, the editors of PND look back at some of the important philanthropic stories and personalities of 2008 -- and look ahead to 2009.

Enjoy. And Happy New Year!

2008: THE YEAR IN REVIEW

  • The Economy Implodes
  • Political Roadblocks, Economy Hamper Response to Disasters
  • Foundations Urged to 'Embrace' Diversity
  • Global Philanthropy Edges Toward Spotlight
  • Environment, Climate Change Compete for Attention, Dollars
  • School Reform, Endowments Dominate Education Debate
  • Legislative Roundup
  • Noteworthy Gifts
  • People in the News
  • 2009: Preview of the Year Ahead
  • -- Mitch Nauffts

    Knight, McKnight Foundations Respond to Economic Crisis

    December 30, 2008

    Here are two more announcements from major foundations in response to the economic crisis.

    In an open letter to partners and grantees, Kate Wolford, president of the Minneapolis-based McKnight Foundation, outlined McKnight's plans for grant payouts in 2009:

    • To limit the recession's impact on grant payments, the foundation will increase the percentage it draws from its own endowment in the coming year.
    • While McKnight continues support for all current programs -- children and families, region and communities, the arts, the environment, and select international work and scientific research -- the foundation will expand its strategies to mitigate catastrophic climate change.
    • Although fewer funds will be available for new and returning grantseekers, McKnight pledges to honor all active grant agreements to completion.

    Wolford writes:

    Earlier this year, the Foundation made a decision to expand our funding to fight catastrophic climate change. Our increased investment builds upon work we have pursued for decades and represents a timely extension of our central mission. Unchecked in the short term, climate change will affect our planet and its people for generations, endangering all those served by McKnight's programs. To accommodate this increased investment, we planned to slow the growth of other program areas.

    As the economic downturn creates a troubling new context in which to expand our climate work, it also raises the issue's urgency. We believe strategic philanthropic investments made now can help chart a new low-carbon future, one that is good for the environment and the economy. Our region stands to benefit greatly from innovations in renewable energy production and transmission, a green workforce, and more. For these reasons, we believe now is exactly the right time -- in fact, a critically important time -- for McKnight to expand our work in this priority area.

    Balancing McKnight's resources with the volatile economy and our longstanding mission and values, the foundation's board of directors met recently to finalize our grantmaking forecast for 2009. Since January, McKnight has lost more than $700 million, roughly 30 percent of our endowment -- a shocking loss, although generally on par with foundations around the country. To limit the impact on the communities we support, McKnight's board has authorized us to draw a larger than usual percentage from the foundation's endowment next year. But the net result will not be status quo....

    Click here for the complete statement.

    And earlier today the John S. and James L. Knight Foundation released this video of foundation president Alberto Ibargüen talking about Knight's work and how the foundation plans to respond to the economic crisis in 2009.

    For a print transcript of Ibargüen's remarks, click here.

    For more foundation responses to the crisis, go here, here, and here.

    -- Mitch Nauffts

    Holiday Cheer: The Story of Women Moving Millions

    December 27, 2008

    (Michael Seltzer is a regular contributor to PhilanTopic. His recent posts include the A to Z Guide for Uncertain Times and the A to Z Grantmakers' Guide for Uncertain Times.)

    Women_handsIt has been a sobering few weeks on Nonprofit Street, what with news, on a regular basis, of dramatically reduced and, in some cases, wiped-out endowments (JEHT, Picower Foundations) and nonprofits struggling to stay afloat. In such an environment, the story of Women Moving Millions is a source of hope to all who work in the nonprofit sector.

    Recently, WMM, a campaign launched by the San Francisco-based Women's Funding Network and philanthropists Helen LaKelly Hunt and her sister, Swanee Hunt, passed the $110 million mark, well within striking distance of its ambitious $150 million goal. To date, sixty-five women from around the United States as well as six other countries have made contributions of $1 million or more to one of the network's 130-plus member organizations. Those organizations work to secure economic and social opportunities for women around the world and are the first line of support for thousands of community-based organizations that seek to meet the daily needs of women and their families.

    In New England, a woman made a million-dollar contribution anonymously when she first learned of the campaign though a news article. In Dallas, a donor who planned to give $250,000 to the Dallas Women's Foundation decided to increase her gift to $1 million after she learned about Women Moving Millions.

    To what can we attribute the success of the campaign, especially against the backdrop of a deepening global recession? And what insights might we glean about the growing phenomenon of women's philanthropy? Here are a few observations:

    Continue reading »

    Same as It Ever Was...

    December 26, 2008

    (Kathryn Pyle is producing a documentary film about the post-conflict period in El Salvador. In August, she wrote about Grantmakers in Film & Electronic Media and the documentary Traces of the Trade.)

    Scam23Déjà vu -- that's the feeling in Philadelphia philanthropic circles this week, as staff at foundations and nonprofits count the similarities between the Bernie Madoff Ponzi scheme and the scam created by Jack Bennett, founder of the Foundation for New Era Philanthropy, which operated in the Philadelphia area for about ten years before it was exposed in 1995.

    Although New Era defrauded nonprofit organizations of only $135 million -- until then, the largest charity fraud ever -- compared to the $50 billion Madoff is alleged to have vaporized, the impact was just as shocking. About a hundred and fifty organizations had invested a total of roughly $350 million in New Era, believing that they would double their money within three months as "secret donors" matched their investment; the "profits" could then be donated to charity, in the case of individuals, or, in the case of charities, added to the organization's coffers.

    "I wasn't that familiar with New Era but I thought, That's great: A plan to increase charitable contributions. Like many people, I thought it was a good thing," said Harry Cerino, then president of the William Penn Foundation. Unlike Madoff, whose operation was strictly for-profit, Bennett described New Era as a charitable enterprise. Both men, however, cultivated wealthy philanthropists whose participation was in large part motivated by their desire to give back to their community. "I didn't have any reason to be suspicious," said Cerino, "and since he wasn't asking for a contribution from William Penn, we never investigated the organization."

    Continue reading »

    Carnegie Corporation Responds to Economic Crisis

    December 22, 2008

    Ccny_logo_4 Apologies for the lack of posts today -- we've been working on our year-in-review issue and lining up stories for the long holiday break.

    Here's the statement from Carnegie Corporation president Vartan Gregorian in its entirety. For more foundation responses to the crisis, click here and here.

    As we begin a new year with hope and anticipation, we must recognize that the economic crisis we are experiencing has affected every sector of American society and caused turmoil in the world economy. No sector has been immune to the downturn, not you and not Carnegie Corporation of New York.

    Given the gravity of the situation, we know that there are no simple answers to the challenges that we all face. What is certain, however, is that we remain committed to our grantees and to carrying out Andrew Carnegie's vision of philanthropy by building on his major concerns: international peace and advancing knowledge and understanding. We have been dedicated to this work for almost a century now and have continued to invest in our grantee partners through times of great social, economic and international change. Continuing to do so remains our paramount goal. We are focused today on making certain that all our grantees working on issues critical to our mission know that they can continue their vital work, aware that Corporation support will be there for them.

    Most important of all, we are committed to fulfilling all the grants that have been approved by the Corporation.

    Tomorrow is a work/travel day. Back on Wednesday.

    -- Mitch Nauffts

    Congratulations, Albert!

    December 21, 2008

    ReusgaWe're pleased when good things happen to good people. The Greater New Orleans Foundation, a community foundation serving New Orleans and southeast Louisiana, has announced that Albert Ruesga will join the foundation as president and CEO in January. Ruesga replaces Ben Johnson, who served as GNOF's chief executive from 1991 to 2008, and Ellen Lee, who has served as interim president since Johnson's departure from the foundation in June.

    Currently vice president for programs and communications at the Washington, D.C.-based Meyer Foundation, Ruesga previously served as founding director of New Ventures in Philanthropy, a national initiative of the Forum of Regional Associations of Grantmakers; worked with the Boston Foundation; and was an assistant professor of philosophy at Gettysburg College.

    He's also a wicked good writer. In fact, two of my favorite posts this year were written by Albert and appeared on White Courtesy Telephone, his hugely entertaining blog.

    The first, a point-by-point rebuttal of the most common objections to social justice philanthropy, is a must-read for anyone who cares about fairness and justice in society. Here's how Albert answers critics who say funding for social services or youth enrichment programs or housing development etc. is social justice funding.

    I'll cede the point: there's no use arguing over the ownership of the term "social justice." Moreover, I can imagine contexts in which giving a hungry man a piece of bread would count as a deeply political act. It's true that funding social services or youth programs, for example, fails the definition I've given above of social justice philanthropy. After all, providing funding for these services doesn’t typically lead to structural change and might in some cases impede it. Nevertheless there's something wonderfully human, deeply just about giving assistance to someone who needs our help.

    There is, however, another kind of funding that aims to address the upstream causes of our downstream problems, that asks why some communities are much more desperately in need of social services or affordable housing than others, or why the young people in these communities attend schools that are falling down around their heads. It's the kind of philanthropy that analyzes how power and privilege are brokered and maintained in this country. It's the kind of philanthropy I'm championing here. I'll call it "social justice philanthropy plus" perhaps, "or turbo philanthropy" or "Maureen." Rather than fight for possession of the term social justice philanthropy, I'd happily yield it to whomever would claim it since ultimately it doesn’t matter what we call it, it matters only that we do it....

    And this is Albert opining about the "talent gap" in the nonprofit sector:

    Attend any earnest discussion of nonprofit issues and there’s frequently an elephant in the room. On the issue of how to attract and retain the best nonprofit talent, the room that houses all those elephants in the room is, in my view, the chronic and significant undercapitalization of nonprofit organizations.

    "Undercapitalization" is a fancy way of saying that nonprofits are always madly scrambling for money. This undercapitalization leads to fundraising burnout (figuring prominently in both the Daring to Lead and Ready to Lead reports), underinvestment of time and money in staff capacity, lack of attention to new staff, and an impoverished organizational infrastructure.

    But chronic undercapitalization also exacerbates something I'll call the nonprofit "frump factor." That's frump as in "frumpy." Think Roz Chast doing a cartoon about a bake sale for the local 4-H Club.

    A friend and I were watching a film about the making of Cloverfield, one of those big budget summer blockbusters featuring extraordinary special effects: thirty-storey monsters tearing off the head of the Statue of Liberty and hurling it down Broadway -- that kind of thing. At one point my friend, a veteran of nonprofit work, turned to me and asked, "Why can’t our sector do anything as cool as that?"...

    Alas, things have been pretty quiet over at WCT since midsummer, and now maybe we know why. Still, what a shame. Imagine, had he had the time, what Albert might've said about the collapse of Lehman Brothers, the bailouts of AIG, Fannie and Freddie, the TARP, Hank Paulson, Bernie Madoff, and the whole sorry cast of characters on the Hill and on Wall Street that fiddled madly as Rome burned.

    Congrats to GNOF on an inspired choice. And here's wishing you the best in your new job and city, Albert. Don't forget to write.

    -- Mitch Nauffts

    Quote of the Day (December 21, 2008)

    Quotemarks"Just when we thought that reality couldn't hit a new bottom it did with Bernie Madoff, a smiling shark as sleazy as the TV host in "Slumdog [Millionaire]." A pillar of both the Wall Street and Jewish communities -- a former Nasdaq chairman, a trustee at Yeshiva University -- he even victimized Elie Wiesel's Foundation for Humanity with his Ponzi scheme. A Jewish financier rips off millions of dollars devoted to memorializing the Holocaust -- who could make this stuff up...?"

    -- Frank Rich, "Who Wants to Kick a Millionaire?" (NY Times, Dec. 21, 2008)

    Fallout From Madoff Scandal Spreads (Part 2)

    December 20, 2008

    Greed_trust_2Earlier this week we noted that at least three private foundations had been caught up in the scam run by New York money manager Bernie Madoff -- described in today's NYT as "a fraud that lasted longer, reached wider and cut deeper than any similar scheme in history" -- and, as a result, had -- or soon would -- close their doors.

    Add another one to the list.

    The Times and wire services are reporting that the Palm Beach-based Picower Foundation, a family philanthropy that has given some $268 million to nonprofits and educational institutions, has announced that it would halt its grantmaking "effective immediately" and would "close its doors in the coming months." Created by Barbara Picower and her husband, investor Jeffry Picower, in 1989, the foundation had assets valued at nearly $1 billion as of 2007, making it, at this point, one of the largest philanthropies to be caught up in the scandal. In a statement released to the press, Barbara Picower, the foundation's president, said: "This act of fraud has had a devastating impact on tens of thousands of lives as well as numerous philanthropic foundations and nonprofit organizations. We deeply regret that in such a harsh economic climate, we will be unable to support the profoundly important programs and organizations that have helped us further the Foundation's mission."

    Meanwhile, the New York Post is reporting that the Elie Wiesel Foundation for Humanity, a small public charity created by Nobel laureate Elie Wiesel, was "completely wiped out" by Madoff. The staff at the foundation has released the following statement:

    We are deeply saddened and distressed that we, along with many others, have been the victims of what may be one of the largest investment frauds in history. We are writing to inform you that the Elie Wiesel Foundation for Humanity had $15.2 million under management with Bernard Madoff Investment Securities. This represented substantially all of the Foundation's assets.

    The values we stand for are more needed than ever. We want to assure you that the Foundation remains committed to carrying on the lifelong work of our founder, Elie Wiesel. We shall not be deterred from our mission to combat indifference, intolerance, and injustice around the world.

    At this difficult time, the Foundation wishes to express its profound gratitude for all your support.

    Sad. So sad.

    -- Mitch Nauffts

    'Giving Map' of D.C. Nonprofits

    December 19, 2008

    In the spirit of the holidays, we point you to a very cool map of D.C. nonprofits sorted by area of interest (map courtesy of the Washington Post):

    Giving_map_2

    (Hat tip: AFP blog)

    -- Regina Mahone

    Daniels Fund (CO) Responds to Economic Crisis

    Daniels_logo_2From the fund's Web site:

    The Daniels Fund will be making cuts in charitable allocations and operating expenses in 2009 in response to a loss of assets and uncertain market conditions, it was announced today by Linda Childears, president and CEO.

    While actual losses will not be known until all investment reports are filed after the New Year, the Daniels Fund started 2008 with nearly $1.3 billion in assets and anticipates ending the year below $1 billion for the first time since 2003.

    "The impact of the economic downturn is significant and widespread," explained Childears. "Like everyone else, it cannot be business as usual for the Daniels Fund...."

    The fund's areas of interest include aging, amateur sports, alcoholism and substance abuse, disabilities, education, the homeless and disadvantaged, and youth development.

    Click here for the complete statement. And here (scroll to the bottom) for other foundation statements in response to the downturn.

    -- Mitch Nauffts

    ANNOUNCEMENT: 'Economic Storm' Video Now Online

    The Foundation Center, New York Regional Association of Grantmakers, and United Way of New York City convened a roundtable session on November 19 to consider the impact of the ongoing economic crisis on the nonprofit sector.

    The session was attended by more than two hundred nonprofit, foundation, business, academic, and government leaders in the New York metro region interested in exploring how nonprofits — individually and collectively — can prepare to meet the challenges ahead while continuing to provide vital services to their communities.

    The program is available in two parts. Part one (below):

      Welcome
      Natalie Abatemarco
      Director, North America Community Programs, Citi

      Bradford K. Smith
      President, Foundation Center

      Keynote Speaker
      Geoffrey Canada
      President/CEO, Harlem Children's Zone

      Remarks
      Linda Gibbs
      Deputy Mayor, Health and Human Services, City of New York

    And a follow-up panel discussion featuring:

      Gordon J. Campbell (moderator)
      President CEO, United Way of New York City

      Lorraine Cortés-Vázquez
      New York State Secretary of State

      Phillip Henderson
      President, Surdna Foundation

      Clara Miller
      President/CEO, Nonprofit Finance Fund

      Stephanie Palmer
      Executive Director, NYC Mission Society

      Carolyn Cavicchio
      Senior Research Associate for Global Corporate Citizenship, the Conference Board Center for Corporate Citizenship and Sustainability

      Paul C. Light
      Paulette Goddard Professor of Public Service, New York University

      Closing Remarks
      Ronna Brown
      President, New York Regional Association of Grantmakers

    It was a very interesting conversation. You'll want to check it out.

    -- Regina Mahone

    GE Foundation to Shift More Grant Dollars to Basic Needs

    December 18, 2008

    Ge_foundation_logoEarlier today, the Wall Street Journal reported that the GE Foundation, the philanthropic arm of global conglomerate General Electric, is planning to shift more of its grant dollars to organizations and programs working to meet basic needs such as food, shelter, and clothing. The Fairfield, Connecticut-based foundation awarded roughly $100 million in grants in 2008, including $5 million for basic needs. According to the Journal, that number will jump to $20 million, a 300 percent increase, in 2009.

    "With the credit crunch and recession in full swing, people are not necessarily worrying about putting their kids in college in 20 years but how they are going to pay rent next month," Bob Corcoran, president of the foundation and vice president of corporate citizenship at GE, told the Journal.

    Interestingly, the word circulating on market/financial blogs today is that GE will be announcing job cuts after the first of the year. And just a few minutes ago, the company had its outlook rating lowered to negative from stable by Standard & Poor's. Let's hope the rumors are nothing more than that....

    -- Mitch Nauffts

    Collaborating From Strength

    (Lois Savage is president of the Phoenix-based Lodestar Foundation. This is her first post for PhilanTopic.)

    Collab_prize_logo_2In this tough economic environment, calls for nonprofits to adopt business strategies in order to become more efficient and maximize the impact of their work abound. Usually included in the list of such strategies are the dreaded "c" and "m" words -- collaboration and merger. The implication is that employing either of these strategies is a sign of weakness, a last-ditch attempt to avoid organizational extinction. In reality, collaboration and merger strategies often are employed by nonprofits when they are healthy, with powerful synergistic results: the collaborative entity is more effective and impactful than the individual nonprofits, acting alone, ever were capable of being.

    Still, collaboration can be daunting for many organizations, which is why they avoid it. Frequently cited as barriers to collaboration are the sheer time and resources it takes to collaborate; difficulties in integrating staff, programs, and different organizational cultures; loss of funding from long-standing donors; and ego and turf considerations.

    These challenges are real, but the benefits of collaboration can be exceptional. For example, the Global Forum for Media Development, a global conference of world-wide independent media NGOs, has led to organized coordination and cooperation within the industry, enabling significantly more efficient utilization of resources and effective results within the field. Similarly, the Arizona's Children Association's acquisition of two existing nonprofits resulted in a dramatic reduction in operating costs for the first acquired nonprofit, Golden Gate Community Center, while the second acquisition enabled the New Directions Institute for Brain Development to increase its training capacity by 100 percent in a single year.

    Since our inception almost ten years ago, the Lodestar Foundation has focused on helping nonprofit organizations collaborate to leverage the growth and effectiveness of philanthropy. While there is a wealth of information about collaboration in the business world, including case studies, models and how-to books, there is very little information about the unique realities of nonprofit collaboration. With the goal of providing such information to the sector, Lodestar earlier this year initiated the Collaboration Prize, a $250,000 award to the best U.S. nonprofit collaboration (including joint programming, administrative consolidations and mergers) between otherwise competitive organizations. We thought that if we received a hundred nominations, we could consider the project a success -- and were amazed when we received 644 nominations, all of them formulated during relatively prosperous economic times.

    We are now in the process of organizing and analyzing this treasure trove of information. One thing is clear, however: While some of the nominated collaborations were formed as a result of adverse conditions (such as loss of an executive director or loss of funding) or pursuant to funder mandates, many involve marriages between strong viable organizations focused on maximizing effectiveness through joint action. This latter group demonstrates that collaboration can be a thoughtful, positive strategy for fulfilling an organizational mission, not just a desperation-induced tactical decision. All the nominees provided quantitative evidence of efficiencies and impact achieved through the vehicle of collaboration.

    Collaboration will continue to be promoted as an option to nonprofits as a way to reduce costs and survive. Learnings from the Collaboration Prize, which we will begin to roll out in the first quarter of 2009, can be used to advance the concept of collaboration as a positive tool. In addition to providing models for initiating and managing collaborations, data from the nominees address a broad range of collaboration-related issues of import to funders and to nonprofits, issues ranging from how funders can create an environment that encourages nonprofits to explore collaboration, to how nonprofits can overcome common challenges that inhibit collaboration. Armed with practical knowledge about successful collaborations, perhaps more nonprofits will consider this powerful strategy. Stay tuned.

    -- Lois Savage

    Why Should I Use Twitter? (Part 2)

    December 17, 2008

    Two weeks ago, Mitch asked PhilanTopic readers to explain the value-add of Twitter. We received feedback from two readers who found the service to be an efficient way to share news, announcements, and feedback in real time.

    Yesterday, Matt Blasi addressed the same question on the onPhilanthropy blog onLine. Praising Twitter as "very powerful if done properly," Blasi pointed to Tweetsgiving, a fundraising campaign held on Twitter this past Thanksgiving that raised $10,000 for a school in Tanzania. "In just those two days," Blasi noted, "[Tweetsgiving] had over 9,000 absolute unique visitors, and over 16,000 page views with visits coming from around the world."

    He then outlines, at some length, other ways that Twitter can be used:

    Twitter is a great source for building a brand and loyal follower group. By allowing you to post messages as often as you like, forcing you to keep those messages short, and providing a way for people to share your message with a large number of other people who may be interested you can develop quite a following...

    Twitter can also help to show activity, in many cases with nonprofits and small businesses people who want to know you are actually doing something. It is human nature to be skeptical but if someone sees you Tweeting several times a day with what people are doing in your organization or updates on product development then it provides a means of being more transparent easing the tensions people have.

    Twitter is also a great way to get volunteers involved. By giving them a way to also promote your cause or product you are simply expanding your customer base. It is really a word of mouth campaign done over a digital age technology. Volunteers can post links to you, updates on what they read from you, and share even more about what they are doing....

    And the best part about Twitter, Blasi adds, is the cost. "It is a free service….For those looking at a solid ROI you can get it here[,] if you make a dedicated effort and use the right strategy for your situation."

    So, it sounds like there's value to using Twitter after all. And we just might…

    For more on Twitter and how nonprofits are using it, check out:

    -- Regina Mahone

    ANNOUNCEMENT: Grants That Make a Difference

    December 16, 2008

    We live in uncertain times colored by mounting concern about the impact of the economic crisis on nonprofits and the communities they serve. In the spirit of the holiday season, however, we may gain some perspective as we focus not on losses but rather on the gifts, given and received, that contribute to the building of a better world. To that end, we'd like to invite nonprofits, foundations, individual grantseekers, and anyone involved in or touched by philanthropy to share your experiences with a grant or other support you gave or received as part of a new feature called Grants That Make a Difference. What impact did the grant have? Who did it help? What positive change did it create? Why was it effective? With your help, we'll regularly feature stories selected from those submitted on PhilanTopic, at one or more of our regional Philanthropy Front and Center blogs, and on other areas of our web site. So tell us your stories and help us tell the story of philanthropy.

    To submit a story about a grant that made a difference, click here.

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