PhilanTopic

ANNOUNCEMENT: Target Awards $3 Million Through Facebook Giving Campaign

Bullseye Gives, which kicked-off May 10, invited Facebook users to help Target decide how it would divvy up $3 million among ten national charities. During the two-week campaign, Target's Facebook page added 97,000 new fans, received more than 3,000 wall posts, and created a forum for Target's online fans to share their experiences.

With 77,427 votes (26.6 percent) out of the 291,039 votes tallied, St. Jude Children's Research Hospital garnered the most votes and will receive the largest donation ($797,123). Funds raised for St. Jude through the campaign will support the hospital's school program.

Here's how the other nine charities fared:

• American Red Cross – 77,118 votes (26.5%) = $793,942
• Salvation Army – 38,004 votes (13%) = $391,258
• Operation Gratitude – 22,627 votes (7.8%) = $232,948
• Breast Cancer Research Foundation – 19,264 votes (6.6%) = $198,326
• Feeding America – 15,574 votes (5.3%) = $160,336
• HandsOn Network/Points of Light Institute – 11,378 votes (4.0%) = $120,845
• Parent Teacher Association – 10,904 votes (3.7%) = $112,259
• National Park Foundation – 9,553 votes (3.3%) = $98,350
• Kids In Need Foundation – 9,190 votes (3.2%) = $94,613

Congratulations to all ten organizations; each one is a winner in our book. To learn more about the Facebook contest and Target's other community outreach activities, follow the links.

-- Regina Mahone

U.S. Philanthropy and the Global Economic Crisis

(Amina Evangelista Swanepoel, a project consultant at Anthony Knerr & Associates, has significant experience in the nonprofit sector, especially within the fields of human rights and public health. This is her first post for PhilanTopic.)

In the last few months countless articles, papers, studies, and surveys have been published about the adverse effects the economic crisis is having and will continue to have on nonprofit organizations in the United States. A growing number of nonprofits have declared bankruptcy and many more are expected to shut their doors due to significant endowment losses and steep declines in grants and donations. Studies and anecdotal evidence confirm that bankruptcies are on the rise within the sector and that many organizations, particularly social service agencies, are struggling to stay afloat while providing assistance and support to an ever-growing population of poor and needy people.

And the United States is still the richest country on earth. What about the rest of the world, where needs, especially those related to health and social services, often are greater than those that exist in the U.S., but where many of the existing nonprofit organizations and programs are supported mostly or entirely by American philanthropy? With basic needs in the United States increasing, how will international programs supported by U.S. philanthropy fare?

Situations vary. For larger, more established nonprofits, the picture may not be so bleak. But smaller grassroots organizations more dependent on individual donations are facing tough times.

Groups such as the Bill and Melinda Gates Foundation, the Ford Foundation, and the Open Society Institute continue to provide billions of dollars to nonprofits and nongovernmental organizations around the world. Unfortunately, obtaining a grant from foundations like these is extremely competitive; the process is rigorous and requires applications and reports to be submitted in English, which prevents many smaller organizations without strong administrative support from applying for and winning grants. Typically, these types of organizations rely more heavily on individual giving. But with the unemployment rate in the U.S. approaching double digits and trillions in household net worth having been vaporized, individual donations are expected to decline dramatically. The result: hundreds, if not thousands, of smaller nonprofits in developing countries will be forced to close their doors.

The Obama administration’s 2010 budget doubles total foreign aid, and a small portion of USAID funding is usually available to nonprofits abroad. It's a step in the right direction, but as a percentage of the country's total income (or GNI), American foreign aid isn't even 0.05 percent of the federal budget. Indeed, among developed nations, only Greece gives less than the U.S. as a percentage of GNI. And while the Obama administration's plans to increase foreign aid are commendable, the majority of American foreign assistance will come, as it has for decades, from foundations and individual donations.

At the same time, U.S.-based organizations with both domestic and international programs are likely to cut back on their international activities in the months to come. Given increasing needs here in the U.S., groups such as Heifer International, Habitat for Humanity, Mercy Corps, and Save the Children may soon be forced to allocate more of their resoruces to their domestic work. In fact, a December 2008 article in the Chronicle of Philanthropy suggested that donations to international aid organizations on a per annum basis could fall by as much as $1 billion going forward. Charlie MacCormack, president of Save the Children, even told the Chronicle that a prolonged global economic crisis (i.e., longer than sixteen months) could be disastrous for many international aid groups. "If jobs are still going away," MacCormack said, "and equity is still going away, and people say 'I don't have a lifeline myself any longer', then it will be tough."

In a recent blog post, Foundation Center president Bradford Smith wrote about the Dalit Foundation, which grew out of the National Campaign on Dalit Human Rights and which received critical endowment support from the Ford Foundation. Dalits, or "untouchables," are a marginalized group of people in India who despite recent political gains still face discrimination on the basis of caste at the hands of the larger Indian population. NCDHR recognized the positive impact it could have by providing small grants to Dalits through support provided by Ford.

The point is, even as we focus on issues and problems here at home, we must not forget the nonprofit and nongovernmental organizations struggling to provide invaluable (and often life-saving) services and assistance in other countries. Given the financial and economic threats confronting many international NGOs, it is imperative that foundations fortunate enough to have large endowments broaden their funding criteria and extend grants to smaller nonprofits and NGOs that have been excluded from their consideration in the past. The Dalit Foundation is just one example of how much good a nonprofit can do with what, in America, would be considered a relatively small amount of money.

Just as the economic crisis has been global in nature and demands international solutions and coordination if it is to be fixed, the approach to social problems should also be global and requires worldwide cooperation and input. To succeed, the new face of philanthropy will have to be global as well. As it did in the years immediately following the end of World War II, U.S. philanthropy has an opportunity to provide visionary leadership that will make a difference in the lives of millions around the globe. Will it hear the call? 

-- Amina Evangelista Swanepoel

Don't touch that dial...

Taking a few days off. We'll be back on Sunday with the weekend link roundup and more.

Enjoy the long weekend!

MacArthur Island Launches in Second Life

On Monday, the MacArthur Foundation opened MacArthur Island to the public in the virtual world Second Life. Part of the foundation's $50 million digital media and learning initiative, the island is "an alternative space to educate grantees and others about the potential for philanthropy in virtual worlds and allow grantees and Foundation partners to showcase their work and connect with new audiences." As the press release notes:

Visitors to MacArthur Island can interact with installations created about the work of MacArthur and its grantees. They include a giant pair of 3D headphones that visitors can use to listen to stories by independent radio producers as part of Public Radio Exchange, and a map about Chicago neighborhoods through which visitors can learn about a comprehensive community development effort being carried out in Chicago....

Developed by Linden Research, Inc., and inspired by the fictional virtual world "Metaverse" in Neal Stephenson's novel Snow Crash, Second Life is an Internet-based virtual world whose "residents" can explore, meet other residents, socialize, participate in individual and group activities, and trade goods and services. In a PhilanTopic post back in November 2007, Rich Polt noted that

Enterprising folk can become rich on Second Life (see this story from BusinessWeek), and charitable folk can generate some serious dollars for causes (the American Cancer Society recently raised over $128,000 through its annual Second Life Relay for Life)....

To commemorate the opening of MacArthur Island, MacArthur Foundation president Jonathan Fanton and the former co-creator of Second Life, Cory Ondrejka, held a public conversation about virtual worlds and philanthropy. The discussion offered thoughtful criticisms of Second Life, as well as Fanton and Ondrejka's thoughts about the challenges and opportunities for nonprofits presented by cost-effective communication tools like Second Life.

Much of the discussion centered on the topic of convergence. Ondrejka spoke briefly about the success of the music sector in Second Life, where hundreds of concerts and music events involving participants from around the world happen every day. Visitors can experience being in an audience (via their avatar) and listen to a performance, just as they would in the real world.

The $64,000 question is, Can things work the other way? Can the kind of civic engagement happening in Second Life be transferred to the real world? Yes, says Connie Yowell, education director at the MacArthur Foundation and the moderator of the Q&A portion of Monday's discussion. Yowell notes that virtual worlds enable young people to participate, produce, join, and engage in group activity. Instead of "pushing skills" on kids, educators can encourage students to actively participate in their learning experience. I Dig Tanzania, for example, enabled kids to participate in a virtual archaeological dig with real archaeologists in Tanzania.

The MacArthur Foundation believes Second Life has the potential to "open up" foundations and make them transparent in ways previously unimaginable. And Fanton said we will see more involvement by foundations and nonprofit organizations in virtual worlds moving forward. In fact, more than a hundred nonprofits already interact on the Nonprofit Commons island, a project managed by TechSoup Global.

After Fanton opened up the discussion to audience members, the presenters received a question that got my attention.

Question from audience member: "I encounter a deep fear of virtual environments within my circle of friends (i.e., the matrix will kill us all). Where I live in rural California many nonprofits I talk to have no clue, and seem to have no interest either in changing their models. What needs to happen to engage people who can really benefit from these platforms?"

Cory Ondrejka: I think there are parallel challenges here. The first one, as I think everybody sitting in this audience is probably painfully aware, is that Second Life has significant technological requirements. And so there certainly is still a disparity of broadband access, a disparity of high-end computer access. If you are thinking about how to apply Second Life to some of those challenges, it would behoove you to understand who you are trying to engage with so that you aren't in a position of trying to [bridge] a technological gulf.

You also have a [perceptual] challenge: Are virtual worlds serious places? Are they worth using? etc., etc. What MacArthur has done allows you to [say], "MacArthur is doing it." I think there are tens, hundreds, thousands of examples of fantastic public engagement, civic engagement that have happened in Second Life that you can point to... ranging from Katrina to NASA....

I think it's [important] when you're trying to bring people into something new...to be able to demonstrate paths [to success] -- especially for somebody who may be worried that if they bring it to their superiors they're going to get yelled at or fired -- it's important to be able to provide a safe path that says, "No, this is serious stuff, and you can really [use it to] change things for the better...."

You can watch a video of the hour-long discussion here.

Frankly, I'm not sure what to make of Second Life, but I have to say that that Cory Ondrejka is one cool cat. What do you think? Does Second Life have potential as a learning environment for a new generation of digitally savvy kids? Is it a preview of the future, or just a dead end on the road there, whatever "there" might be? Love to hear your thoughts....

-- Regina Mahone

Grants That Make a Difference: World Savvy

June is Funding for Education Month at the Foundation Center, and to celebrate we'll be offering a full slate of special events and programs designed to help grantseekers find education-related funding resources. In the following story, Dana Curran Mortenson at World Savvy describes how a grant and a collaborative relationship with the funder that made the grant have advanced the organization’s mission to educate students about global issues. (For stories about other grants that made a difference, click here and here.)

Grant Recipient
World Savvy
San Francisco, Minneapolis/St. Paul, and New York

World Savvy’s mission is to educate and engage youth in community and world affairs to prepare them to learn, work, and live as responsible citizens in the global community.

Grantmaker
Walter & Elise Haas Fund
San Francisco, California

About the Grant
Two-year, $80,000 grant to support Global Educators Program.

The grant provides comprehensive professional development for middle and high school teachers (grades 6-12) in the Bay Area, building educators' content knowledge, skills, and capacity to consistently integrate contemporary world affairs into their teaching in all subject areas. School partners of the program are provided access to the following services:

1. Professional Development, including one-on-one consulting; provision of relevant global issues curricula resources and materials for classroom use; one-day Global Education Institutes in August 2008 and 2009 and two on-site workshops annually.

2. Online Global Educators Network: A range of online services that provide timely and high-quality global education resources to teachers.

3. Community Connections: Partnerships with individuals, organizations, and associations in the local community and beyond.

Impact of the Grant
The program integrates relevant, current, age-appropriate global issues curricula into the classroom. By leveraging this work to reach more teachers and schools across California and the entire country, World Savvy seeks to promote systemic change in education so as to prepare youth for success and engagement in the global community in the 21st century. An example is World Savvy's Global Youth Media and Arts Festival at Zeum, which featured an exhibition of student’s original artwork on "immigration and identity," including that of students from Phillip & Sala Burton Academic High School (pictured). Through support from the grant by the Haas Fund, teachers from Burton High School received comprehensive professional development and resource support from World Savvy on integrating global issues in their teaching.

How did the funder and grantee work together effectively during the course of the grant project?

The program officer at the Walter & Elise Haas Fund shared knowledge and best practices observed from the field with World Savvy and took a genuine interest in learning about World Savvy's model and approach. The conversations did not revolve exclusively around grant guidelines or geographic areas of service and evaluation tools, but rather the larger issues that the mission and vision of World Savvy sought to remedy. Since our program officer has extensive knowledge and experience in education and reform efforts and is deeply committed to those efforts, the partnership was mutually beneficial in that it offered opportunities for World Savvy to share challenges openly and explore solutions with the Haas Fund during the course of the program's implementation.

What makes this particular grant a good example of the effective use of philanthropic funds?

So often in funder-grantee relationships, the candor in approaching the challenges of difficult work is compromised by a need to demonstrate that the grantee has met strictly defined reporting guidelines and/or to showcase only those aspects of the work that exceeded expectations. It is a missed opportunity for the grantee to learn from the breadth of knowledge of the funder and for the funder to understand the challenges in the field from the grantee’s perspective. The best relationships grow from deep faith in the work and a commitment to institutional learning for both funder and grantee. World Savvy is fortunate to have benefited from such a relationship in this work. Our program officer is in every way an advocate, for us and for the work we do.

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Do you have a story about a grant that made a difference? Submit your story, and we'll continue to feature them on a regular basis here on PhilanTopic, at one or more of our regional Philanthropy Front and Center blogs, and at other areas of our Web site. We also encourage you to submit stories of grants that are addressing needs associated with the economic crisis.

Philanthropy, Morality, and Politics

(Bradford Smith is president of the Foundation Center. In his last post, he wrote about his fears and hopes for philanthropy.)

Consider two propositions: "philanthropy is the moral voice of society" and "philanthropy should hold government accountable." Both propositions arose during a recent meeting on global philanthropy co-sponsored by the European Foundation Centre (EFC), the Council on Foundations (COF), and the Worldwide Initiative for Grantmaker Support (WINGS). Though the goal of the meeting was relatively straightforward -- to initiate a process that could lead to reducing the legal and fiscal barriers to global philanthropy -- this being an encounter of forty-two professionals from twenty countries, it wasn't long before morality and politics forced their way into the discussion.

At dinner afterward, a group of us, all Americans, were reflecting on these two propositions. "Morality" is a word seldom heard in American philanthropic discourse. We can talk for hours about initiatives, lines of work, strategy, effectiveness, assessment, and impact, with nary a mention of morality. Yet virtually all of philanthropy is driven by a moral sense of what is right, fair, or just; indeed the very act of philanthropy is a moral expression of solidarity and a desire to help others. The more we talked, the more it became apparent that it was the notion that philanthropy should somehow be the moral voice of society that was troubling. A foundation that supports access to safe abortion does so out of a profound moral conviction that a woman should have the right to decide while one that opposes abortion on moral grounds will back right-to-life groups. Philanthropy may be a moral voice, but it is not a single moral voice which dictates that there is only one kind of philanthropy and one set of causes that are "right" while all others are "wrong."

The notion that philanthropy should hold government accountable was only slightly less troubling. American philanthropy spends a fair amount time (though arguably not enough) trying to figure out how it can be more accountable so as to avoid overly zealous regulation by Congress. Indeed, the desire today in much of philanthropy is to collaborate with the Obama administration, many of whose officials have foundation experience and are actively courting foundations to join the "all hands on deck" effort to confront the economic crisis. Nevertheless, there are foundations that invest heavily in organizations that track campaign contributions, monitor federal and state budgets, and do community organizing -- all for the purpose of reminding elected officials that their role is to serve the public good and that the public is watching. Again, the real discomfort at the table seemed to be with the idea that this was being posited as the only legitimate role for philanthropy as opposed to one of many.

At the meeting, both propositions were put forth -- not by Americans, but by those whose countries had only recently emerged from long periods of totalitarian rule, armed conflict, or what political scientists call "weak states." Where human life often seems to have little value, avenues to political participation are blocked, and "leaders" sometimes behave more like predators, philanthropy can become an outlet for activists seeking deep and lasting change. In such cases, they are challenged with the Herculean task of righting past wrongs, creating a culture of philanthropy, and building accountable, democratic governments, all at once. Their mission is both moral and political. We can afford to make the finer distinctions because our task, though not easy, is far less daunting, living as we do in a (still) prosperous America with strong democratic institutions and guided by the rule of law.

But something else happened in that (still) prosperous Europe that surprised. Meeting in Italy, a country that had narrowly defeated legislation calling for civil servants to be fired if they failed to report individuals suspected of being undocumented and where a local politician had proposed segregating buses, the EFC passed a resolution. It reads, in part:

it is with great regret that we witness the emergence of a climate in Italy, which is symptomatic of a general trend throughout Europe, which leads to measures relating to undocumented migrants that undermine people’s basic human rights….As members of Foundations, we are committed to a Europe which is inclusive and tolerant; we work for this alongside citizens and civil society organisations, as well as with governmental bodies. We strongly encourage the governments of all member states to work individually, together and with the institutions of the European Union to build a framework for addressing migration in ways that truly respect the dignity of all human beings as defined in the European Convention on Human Rights....

The EFC hardly qualifies as a fringe group. Its 236 members manage more than €140 billion in assets and range from liberal, Quaker-inspired, UK foundations in the north to wealthy, sometimes conservative Italian banking foundations in the south. Alarmed by growing xenophobia in Europe, they chose to take a stand that was both moral and political, rather than be voiceless spectators to a march toward the past.

Philanthropy everywhere gets its energy and drive from moral values. And there are places and moments where those values impel us to tread the risky and challenging terrain of politics.

-- Brad Smith

Weekend Link Roundup (May 16 - 17, 2009)

Here's our latest roundup of noteworthy posts from and about the nonprofit sector. Enjoy....

Communications/Marketing

Do you wish your board members were better communicators of your organization's mission? On her Getting Attention blog, Nancy Schwartz offers the following tips:

1. Make sure they know your organizations's talking points and elevator pitch cold.
2. Share your marketing strategy with them and tell them what they can do to advance it.
3. Teach, don't tell. Have a real, sit-down training session with new board members to give them some practice and increase their comfort level with their role

AdWeek recently reported that the more than 60 percent of the people that try Twitter, the popular microblogging platform, do not return after the first month. On his Donor Power Blog, Jeff Brooks argues that while nonprofit organizations should take some time to learn what Twitter is about, they shouldn't get their hopes up when it comes to using it to motivate action and raise funds. "If I had to place a bet on which will go away first -- Twitter or postal mail," writes Brooks, "I'd bet that the post will outlast."

Economy

Rick Cohen takes a closer look at the Obama administration's proposed FY2010 budget, which includes several programs of importance to nonprofits.

Education

The margin for failure in the education sector is virtually nonexistent, writes Chris Murakami Noonan on the Philanthropy Potluck blog. Noonan agrees with a finding from Lessons in Education Philanthropy: Proceedings from BHEF’s Inaugural Institute for Strategic Investment in Education that "strategically targeted philanthropic resources can serve as a vital catalyst for positive, lasting and high-impact change in public education." But without transparency, says Noonan, the successes achieved by private philanthropic dollars -- which, after all, are small compared to overall support for education -- are easy to miss. The question, then, is what can private philanthropy do to enhance its commitment to transparency so that others can learn and build on that work?

On the White Courtesy Telephone blog, Albert Ruesga asks readers to consider: Which sector has had the bigger say "in framing the purpose of K-12 education," business (Homo economicus) or government (homo democraticus)?

Leadership

Seth Godin's talk at this year’s TED conference has been posted online. On the Social Citizens blog, Kari Dunn Saratovsky says the seventeen-minute talk is "a good introduction to [Godin's] book Tribes: We Need You to Lead Us." In both, adds Saratovsky, "Godin argues that lasting and substantive change can be best effected by a group of people connected to each other, to a leader, and to an idea."

Nonprofit Management

Dan Pallotta, author of Uncharitable: How Restraints on Nonprofits Undermine Their Potential, has started blogging for the Harvard Business Review. And in his first post, he urges the nonprofit sector to -- surprise! -- re-visit its "fundamental canons." "It's time," writes Pallotta, "to give charity the big-league freedoms we really give to business. The fight for these freedoms must be our new cause, because without them, all of our causes are ultimately lost." Or not. Jump over to the HBR site to join the conversation.

On the Social Venture Partners blog, Lynn Coriano offers a nice summary of the recent Money Matters conference in New York City, including discussions of whether grantmakers are "buyers" of services and programs or "builders" of nonprofit enterprises.

Social Entrepreneurship

In response to a recent post by Allison Fine, Root Causes' Andrew Wolk argues that the government's recently announced Social Innovation Fund could be helpful in breaking down some of the existing "silos" in the social impact arena and is a good first step toward realizing more sustained and collaborative public-private partnerships.

Tony Wang, a researcher at Blueprint Research & Design (Lucy Bernholz's shop), argues that for-profit businesses are better at creating social impact than aid and nonprofits/NGOs -- and is thoughtfully engaged in debate by Tony Pipa (in the comments) and Nell Edgington, among others.

Social Media

Social Actions, in partnership with the Skoll Foundation, PopTech, ideablob, and Civic Ventures, has launched the Social Entrepreneur API, a new resource that will make it easier, says Sean Stannard-Stockton, for people interested in social entrepreneurs to “follow the smart money.”

Retailer Target has launched Bullseye Gives, its first giving campaign on Facebook, and from May 10 through May 25 is inviting everyone to help it decide how to allocate $3 million among ten large institutional charities. On her blog, Beth Kanter wonders whether these types of contests are moving philanthropy forward via the use of new technologies, or further exhausting an already cause-fatigued crowd. Writes Kanter:

On the one hand, I think competition is healthy and pushes us to take a few risks, innovate and explore these new tools, particularly if the potential reward $ is big. On the other hand, online contests remind of an experience I had in Hawaii feeding fish and makes [me think] about the drawbacks like cause fatigue, transactional vs relational, and promoting scarcity thinking....

Katya Andresen shares some key findings from the eNonprofit Benchmarks Study, a new study by M+R Strategic Services and NTEN that examined the effectiveness of online nonprofit fundraising in 2008. Here are a few of her takeaways:

• Online fundraising was up 26 percent in 2008
• E-mail fundraising and advocacy response rates held steady, compared to declines in previous years
• The average online gift size was $71, down $15 from the previous year. The decline was most pronounced in the fourth quarter of the year (as the economy fell off a cliff)
• Fundraising e-mails sent to previous donors generated response rates more than three times as high as those sent to non-donors
• For most organizations, almost one-third of all online actions are taken by the most active subscribers, who comprise just seven percent of all donors
• E-mail click-through rates fell in all issue sectors

That's it for now. Have a great week!

-- Regina Mahone

TED on Sunday: Barry Schwartz on the Paradox of Choice

In this wryly amusing talk, psychologist Barry Schwartz interrupts his morning jog to explain why more personal choice in almost every domain -- work, healthcare, entertainment, lifestyle decisions -- is making us less happy and more dissatisfied. It's a problem peculiar to affluent, industrialized societies, says Schwartz, but the consequences are global and increasingly destructive, psychologically as well as environmentally. So remember, when Mom or Dad tells you everything was better back when everything was worse, they just might be on to something. (Filmed: July 2005; Running time: 19:37)

Liked this talk? Then try one of these:

• TED on Sunday: Alex Tabarrok on the Benefits of Globalization
• TED on Sunday: Majora Carter on Environmental Justice
• TED on Sunday: Al Gore on Climate Change
• TED on Sunday: Sylvia Earle on Saving the 'Blue Heart' of the Planet
• TED on Sunday: James Howard Kunstler on the Death of Suburbia
• TED on Sunday: Clay Shirky on Epochal Change
• TED on Sunday: Mark Bittman on How We Eat
• TED on Sunday: Hans Rosling on the Dimensions of Development
• TED on Sunday: Sir Ken Robinson on Education and Creativity

-- Mitch Nauffts

New Rules for a New Age

Just started reading What Would Google Do? by Jeff Jarvis and have to say that Jarvis has captured much of what I've learned about the Internet, economics, and the psychology of networks in ten easy-to-grasp rules:

• Customers are now in charge. They can be heard around the globe and have an impact on huge institutions in an instant.

• People can find each other anywhere and coalesce around you -- or against you.

• The mass market is dead, replaced by the mass of niches.

• "Markets are conversations" (The Cluetrain Manifesto). That means the key skill in any organization to day is no longer marketing but conversing.

• We have shifted from an economy based on scarcity to one based on abundance. The control of products or distribution will no longer gurantee a premium and a profit.

• Enabling customers to collaborate with you -- in creating, distributing, marketing, and supporting products -- is what creates a premium in today's market.

• The most successful enterprises today are networks -- which extract as little value as possible so they can grow as big as possible -- and the platforms on which those networks are built.

• Owning pipelines, people, products, or even intellectual property is no longer the key to success. Openness is.

Over the last decade, we've seen those "rules" disrupt and reshape industry after industry, from computers to photo processing to classified advertising to recording and music distribution. Philanthropy? Not so much. But change is coming, and more quickly than we may want to admit.

So here's your weekend assignment. Which of the above rules is likely to be the most disruptive in terms of philanthropy as currently practiced in the U.S.? Which has no application to philanthropy at all? And what would you add to the list?

-- Mitch Nauffts

From the Answer Desk: What Do I Need to Know About Collaboration?

(In yesterday's post, we suggested that while the worst of the economic storm may have passed, the nonprofit sector can expect heavy weather for the next year or two. In this post, Katie Artzner, the Foundation Center's online librarian, pulls together some terrific resources for nonprofits contemplating a merger or collaborative enterprise. Katie's post was originally posted on our Philanthropy Front and Center-Cleveland blog.)

Q: In the current economic climate, nonprofit organizations are being urged more than ever to work together in new and creative ways. Why?

A: Demand for services is up along with competition for financial resources, making the drive toward efficiency increasingly important. Duplication of services is viewed as wasteful. Strategic alliances, like collaboration, are equated with cost-savings. And the complex issues that nonprofits address are presenting themselves on a grand scale, calling for scaled-up solutions.

Gaining a basic understanding of the types of strategic alliances is a good first step in determining a fit for your organization. There's general agreement that the types of strategic alliances follow a continuum, from those that are informal to those that require high levels of intensity, complexity, and formality. The following types are based loosely on the work of Dr. John Yankey, Ph.D., emeritus professor, Case Western Reserve University:

• Endorsement: Providing approval or support of a concept or action already conceptualized or completed by another organization (letters of support).
• Co-sponsorship: When two or more organizations share (although not always equally) in the offering of a particular program or service.
• Affiliation: A loosely connected system of two or more organizations with a similar interest(s).
• Federation/Association: An alliance of membership organizations established to centralize common functions.
• Coalition: An alliance of independent organizations that usually share a political or social change goal.
• Consortium: An alliance of organizations and individuals representing customers, service providers, and other agencies who identify themselves with a specific community, neighborhood or domain.
• Network: An alliance of organizations that share resources for mutual benefit such as service provision.
• Joint Venture: A legally formed alliance in which member organizations maintain joint ownership (generally through a joint governance board) to carry out specific tasks or provide specific services.
• Acquisition: An alliance in which an organization acquires a program or service previously administered by another organization.
• Divestiture: When one organization "spins off" a program or service to another organization.
• Merger: When one organization is totally absorbed by another.
• Consolidation: When two organizations combine to form an entirely new organization.

Based on the work of Michael Winer and Karen Ray (Collaboration Handbook: Creating, Sustaining, and Enjoying the Journey) and David LaPiana (Nonprofit Mergers Workbook), the Fieldstone Nonprofit Guide to Forming Alliances uses these categories:

• Cooperation: Informal arrangements and relationships with no change in organizational structure of participating entities.
• Coordination: More formal arrangements and relationships that focus on specific programs or projects and are accompanied by plans and a shared mission.
• Collaboration: Longer-term, formal arrangements and relationships where separate organizations are brought into a new structure with a shared mission.
• Merger: An arrangement in which two organizations become one.

The resources below are excellent places to start to learn more about the costs and benefits of strategic alliances.

Collaboration -- Fieldstone Alliance
Provides free access to useful articles and tools related to planning nonprofit collaborations.

"Collaboration Strategies for Nonprofit Organizations" -- Curtis Thaxter LLC
Briefly examines the preliminary questions that all nonprofit organizations should address before engaging in a collaborative effort and outlines collaboration strategies available to nonprofits.

Managing Collaboration Risks -- Nonprofits’ Insurance Alliance of California
Explores the kinds of collaborative relationships that nonprofits typically engage in and how to manage or avoid the risks associated with them. Published in 2002; 18 pages, PDF.

"The Reality Underneath the Buzz of Partnerships: The Potentials and Pitfalls of Partnering" -- Stanford Social Innovation Review
Shares findings from a study of nonprofit partnerships and examines why most failed to fulfill participants' expectations. Published: Spring 2005.

In addition, the following print publications can be found at Foundation Center libraries:

• Forming Alliances: Working Together to Achieve Mutual Goals by Linda Hoskins and Emil Angelica
• Uniting for Survival by Don Haider
• Time to Merge? Fundraising and Financial Implications by Priscilla Hung

Still have questions? Ask us.

-- Katie Artzner

Now What?

"More than any other time in history, mankind faces a crossroads. One path leads to despair and utter hopelessness. The other to total extinction. Let us pray we have the wisdom to choose correctly."
-- Woody Allen

Okay, so maybe the world isn't coming to an end. The sense of impending doom that hung over the economy last fall and the early part of this year seems to have dissipated. We have a new president committed to minimizing the human costs of the recession and to correcting many of the mistakes and practices that contributed to the mess we find ourselves in. Some have even spotted "green shoots" of recovery amidst the wreckage of the boom-turned-bust. "It's bad," we tell ourselves, "but we'll get through this." Then we knock wood and try to focus on something less depressing.

We will get through it -- though when and in what shape remain to be seen.

For the moment, however, the nonprofit sector is hurting. Consider these findings from The Quiet Crisis, a recent report (22 pages, PDF) written by Bruce Reed, president of the Democratic Leadership Council, and John Bridgeland, president/CEO of Civic Enterprises:

• The United Way saw a 68 percent increase over the past year in the number of calls for basic needs such as food, shelter, and warm clothing;
• The state of Arizona reports an increase of more than 100 percent over the past year in the number of people who sought social services;
• More than 70 percent of Michigan nonprofits have experienced increasing demand for their services, while 50 percent report that their financial support has dropped;
• Churches, an important provider of social services to the poor and needy, were expected to raise $3 billion to $5 billion less than anticipated in the last quarter of 2008.

Or these findings from a survey and series of roundtable discussions conducted by the Community Foundation for Greater New Haven earlier this year and in the fourth quarter of 2008:

• Nonprofit organizations are experiencing significant challenges in raising money and a significant decline in donations;
• As a result of the downturn, donors in general have been more focused on giving to basic needs organizations;
• Arts organizations are seen as especially vulnerable during these turbulent times;
• Executive directors are deeply concerned about cash flow;
• There is great concern, especially among larger organizations, about the effect that state budget shortfalls will have on nonprofit revenue streams;
• Executive directors are concerned about the well-being of their staff and their ability to continue to deliver critical services in an increasingly stressful environment;
• Nonprofits are deferring plans for new initiatives and programs;
• Donors are becoming more focused on giving locally.

A "quiet crisis," indeed. As Rip Rapson, president of the Michigan-based Kresge Foundation (and the source of the Woody Allen quote above), remarked to a gathering of YMCA leaders recently:

The nonprofit landscape of yesterday or today will not be the nonprofit landscape of tomorrow. Undercapitalization, chronically a problem, will become a death spiral. When revenues decline by 10 or even 20 percent, a nonprofit can put itself on a diet of discipline and flexibility and emerge at the other end with its mission pretty much intact. When demand skyrockets and revenues decline by 40 or 50 percent, however, you're a different organization altogether.

Generous benefactors will almost certainly rise to the occasion and try to stabilize their organizations of choice. But they can't begin to provide enough support to offset diminished public and philanthropic dollars. And their generosity will flow selectively, leaving outside the rescue pipeline vast numbers of organizations that are largely invisible to most of those donors -- particularly organizations that have traditionally been heavily subsidized by government.

Regardless of which direction you look -- other sources of private capital, the stimulus package, elsewhere -- the result is not so different. Too few dollars, too rapid an unraveling, too little time to plan systematically for thorough-going change. We have to face the very real possibility, therefore, that the kind of re-examination and re-invention demanded by this new world is either not possible or simply too difficult. If that were to become the case, the consequences for our social and economic fabric would be correspondingly harsh, cruel, and disruptive....

Will it become the case? It depends on how we respond, as individuals and as organizations, and whether we believe our actions can make a difference.

In his speech, Rapson outlined the strategies that Kresge, a national funder, will pursue going forward: more flexibility with respect to the way the foundation works with current grantees; closer scrutiny of new funding requests so as to avoid squandering resources; and a greater focus on field-building efforts in its areas of interest.

The Community Foundation for Greater New Haven, a local funder, is taking steps of its own: more operating support grants for key nonprofits in the community and more technical and capacity-building assistance for the nonprofit sector in general; convening and connecting institutions; developing and disseminating knowledge about the sector to donors; promoting collaborations and mergers; and using the current crisis to encourage broader thinking in the region about its economic future.

Our own Michael Seltzer has some wonderful advice for nonprofits (here, here, and here). And Steve Rabin reminds all of us that a little bit of spending, done wisely, can go a long way.

These are great ideas and will make a difference -- especially if implemented by funders, large and small, nationwide. But they're not the final word on the subject. So, now it's your turn. What do you think foundations and other donors should do to address the crisis in the nonprofit sector? And what can nonprofits do to ensure their own survival in these difficult times? Don't be shy...

-- Mitch Nauffts

Annals of Wealth: Nick Paumgarten Deconstructs the Economic Crisis

Nick Paumgarten's piece in this week's New Yorker ("The Death of Kings," May 18, 2009) is long, detailed, and gripping, in the same way Greek tragedy often is. I'm guessing it was researched and written between November and February, a period when the global financial system was on the verge of collapse and the "green shoots" of the past few weeks were a distant hope. But whether you're a beginning-of-an-end type or, like me, an end-of-the beginning gloomster, it's an article everyone should read. Here's an excerpt:

This thing we're in doesn't yet have a name. It's variously called, in placeholder shorthand, the global financial meltdown, the financial crisis, the credit crisis, the recession, the great recession, the disaster, the panic, or the bust. It long ago metastasized beyond the subprime mess, which was merely a catalyst -- the first whiff, the last straw. A text-friendly acronym, ITE, for "in this economy," has started to get around, in sales pitches and head count meetings, but it doesn't do the work.

This thing is enormous and all-pervading, evolving and ongoing, history-altering yet in many respects banal. It is a persistent state, like the weather, or a chronic illness. In some circles -- financial professionals in Manhattan, regulators in Washington, central bankers in Europe, or the owners of cash-strapped businesses, to say nothing of the millions of people who have been laid off or whose houses have been foreclosed on -- this thing is, in its various incarnations, pretty much the only subject of conversation. The loss of a job, a home, a college fund, or one's dignity is both a symptom of the collective disaster and a contributor to its deepening. People assess their own exposure first and then, gradually, the implications for their friends, their town, the social fabric, and, in the darker hours, the fate of the American experiment.

In a way, the financial crisis is like a plague or war, except that the pestilence and carnage are metaphorical. Some have compared it to Hurricane Katrina, but Katrina occurred suddenly, and then all was aftermath. In this case, it's as though the levees failed anew every day. We stay on the porch, carrying on with our card game, in water up to our necks. War...fails as an analogy, too; there is no enemy to shoot at, and the destruction is so gruesome that it is hard to mistake wartime for normalcy. An economic meltdown can camouflage itself in the commonplace. It is more like radiation. It's everywhere, but you can't see or smell it....

Click here for an abstract of the article; the complete article is available only to magazine subscribers. Or you can buy a copy at your local newstand. (What a novel idea.)

-- Mitch Nauffts

Weekend Link Roundup (May 9 - 10, 2009)

Here's this week's roundup of noteworthy posts from and about the nonprofit sector....

Arts

Grantmakers in the Arts has relaunched its Economic Turmoil and Change blog to answer questions about how artists and arts and culture organizations are managing in the current recession. (H/T: Philanthropy Potluck)

Michael M. Kaiser, president of the John F. Kennedy Center for the Performing Arts, sat down with editors from the Post last week to answer reader questions about how the economic crisis is affecting the arts community in Washington, D.C., and beyond.

Diversity

Rosetta Thurman attended the annual Association of Black Foundation Executives conference last week and has posted a number of video interviews with ABFE board members on her blog. At a pre-conference luncheon, writes Thurman, Susan Taylor Batte, newly minted president of ABFE, outlined several ways that affinity groups can draw attention to the needs of black communities. Batte's list includes:

• Build a database of promising strategies for what works in black communities.
• Partner with the Congressional Black Caucus. Make yourselves known to the larger, national policy conversations.
• Build a high-level diversity pipeline.
• Pursue stronger relationships with executive search firms.
• Do what you can to make sure 2010 census accurately counts communities of color.

"With so much 'talk' on diversity,” writes Natasha Desterro from the Council on Foundations' 60th annual conference, "I would have liked to see more action, starting with a more complete set of demographics of speakers and conference attendees in our packets." And, adds Desterro, "if you're white and male in this field, you should get an extra packet of information on why diversity matters."

And with a California Supreme Court decision on the anti-gay-marriage legislation known as Proposition 8 scheduled for May 19, the Alliance for Justice has compiled a list of twenty-five things you might not know about California ballot measures.

Economy

Dorothy "Dottie" Reynolds, former president of the Community Foundation of Greater Flint (MI) recently spoke with the Mott Foundation about the significance of community foundations, especially in these difficult economic times. Read the full interview here.

Impact/Effectiveness

Lucy Bernholz says that as an amateur historian she has a tendency to put things into boxes. So statements like the one Greater New Orleans Foundation president Albert Ruesga made on the new Council on Foundations blog Re: Philanthropy to the effect that the lines between the sectors have blurred "and it's the IRS that forces incorporated entities into nonprofit and for-profit boxes" get her attention. It is indeed a scary thing, writes Bernholz, to have to deconstruct boxes to make sense of the world. The "fact" that

people of different ages or different backgrounds see things in different boxes can both explain some significant changes...[and] also heighten tension between groups, and make it harder to find common ground, not easier. It is not just the boxes we use to explain things, or the boxes that develop as part of our tax code. Our boxes of time, place, and access are also shifting....

The big changes can be too big for sense-making on a regular basis. My work is driven by my interest in the question, "What is public and what is private, who decides, and how is that changing?" But I can't consider that question in its entirety every day. Instead...I consider the different expectations that my 80-year-old mother had about the role of the government and those that my 8-year-old son might be developing. And I try to question my own assumptions about what is fixed, what can be changed, and which boxes might be breaking before my very eyes....

A lot of talk at the Council on Foundations conference last week centered on accountability. Guest blogging on Tactical Philanthropy, Paul Connolly, senior vice president at the TCC Group, noted how grantmakers increasingly have been eager to scrutinize the performance of their grantees. "Yet fewer funders are comfortable evaluating their own capacity, behavior, and impact." Writes Connolly:

With more and more people twittering on handheld devices these days, the amount of decentralized, real-time feedback for funders will inevitably grow. The power imbalance between funders and grantees will probably always exist, but dynamic technological tools will close the gap at least a little....

Connolly's right, of course, but it will be interesting as the digital revolution plays out to see what "at least a little" in this context looks like.

Social Media

Inspired by Lucy Bernholz's post "Metrics Are Good, Unless They Are Bad," Beth Kanter takes a closer look at existing metrics for social media efforts. In her post, Bernholz draws a distinction between measuring and measuring the right thing. And the right metrics for social media, writes Kanter, "are those that can help [your organization] understand engagement and relationships." She then points to a number of experts who are developing strategies for measuring the ROI of relationships. Good stuff.

Diana Scearce, a consultant with the Monitor Institute, shares some lessons Monitor has learned about "working wikily" from its partnership with the David and Lucile Packard Foundation. They include:

• Design your experiments around a problem that needs to be solved, not the technology tools.
• Experiment a lot, invest in understanding what works and what doesn’t, and try to make only new mistakes.
• Set appropriate expectations for the amount of time and effort required.
• Prioritize human elements such as trust and fun.
• Understand your position within networks and act on this knowledge.
• Push power to the edges.
• Balance bottom-up and top-down strategies for organizing people and effort.
• And be open and transparent; share what you’re doing and learning as a matter of course.

What would you add to the list?

With conferences in every sector experiencing declines in attendance, Kari Dunn Saratovsky asks whether "the days of rubber chicken lunches and long winded powerpoint presentations" are over? Maybe not yet. Saratovsky notes that there are a significant benefits to incorporating Web technology onsite -- better peer-to-peer, audience-to-presenter, and audience-to-public conversations during a conference -- but that "being there in person delivers the rich experiences that virtual meetings oftentimes cannot replace."

Presented by Allison Fine (and hosted by the Chronicle of Philanthropy), the latest installment of the Social Good podcast series features Jessica Clark, director of the Future of Public Media Project at American University, discussing the future of newspapers.

And that's it for now. Have a great week!

-- Regina Mahone

TED on Sunday: Alex Tabarrok on the Benefits of Globalization

In this upbeat talk, economist and blogger (Marginal Revolution) Alex Tabarrok argues that globalization and the lowering of barriers it has fostered are beginning to help us repair the horrific damage created by the political and economic storms of the first half of the twentieth century. But the best, says Tabarrok, is yet to come, as free trade spreads prosperity to all parts of the world and the globalization of the market for ideas creates powerful incentives for tackling -- and solving -- many of the world's most daunting problems. (Filmed: February 2009; Running time: 14:35)

Liked this talk? Then try one of these:

• TED on Sunday: Majora Carter on Environmental Justice
• TED on Sunday: Al Gore on Climate Change
• TED on Sunday: Sylvia Earle on Saving the 'Blue Heart' of the Planet
• TED on Sunday: James Howard Kunstler on the Death of Suburbia
• TED on Sunday: Clay Shirky on Epochal Change
• TED on Sunday: Mark Bittman on How We Eat
• TED on Sunday: Hans Rosling on the Dimensions of Development
• TED on Sunday: Sir Ken Robinson on Education and Creativity

-- Mitch Nauffts

Can You Solve 34 Across...?

"Christian of the Dark Knight"?

Okay, okay, that's an easy one. How about 80 Down, "Foul-smelling"?

Don't have a clue what I'm talking about? Then you need to check out the Philanthropy Annual: 2008 Review crossword puzzle, now available as a single-page, downloadable PDF here.

In March, the Foundation Center released the second edition of the Philanthropy Annual, our yearly look back at the news, issues, people, organizations, and giving trends that shaped the field of philanthropy. The new edition "serves as a permanent record of the ups and downs we've faced together in 2008 and the efforts of so many people to strive for something better," says Foundation Center president Bradford K. Smith.

Created by Christopher Hurt, the philanthropic-themed puzzle, "Takes All Kinds," is a fun test of your foundation knowledge.

Check it out here. The solution to the puzzle can be found on page 111 of the Annual, which can be downloaded or purchased at our Web site.

-- Regina Mahone