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25 posts from December 2011

2011 Year in Review: Return of the Mega-Gift

December 31, 2011

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

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

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

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

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

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

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

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

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

Related Links:

Sanford Health Receives $100 Million to Target Breast Cancer (1/27/11)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

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

December 30, 2011

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

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

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

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

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

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

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

Related Links:

Republican-Controlled House Poised to Revisit Nonprofit Agenda (1/06/11)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

2011 Year in Review: Foundations Bet Big on New Initiatives

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

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

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

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

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

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

Related Links

Ford Foundation Announces $50 Million for Documentary Film Initiative (1/19/11)

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

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

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

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

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

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

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

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

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

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

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

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

2011 Year in Review: The Giving Pledge Advances

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

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

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

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

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

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

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

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

Related Links:

Carlos Slim Declines to Commit to Giving Pledge (1/21/11)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

2011 Year in Review: Microfinance Vows to Do Better

December 29, 2011

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

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

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

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

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

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

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

Related Links:

Government of Bangladesh to Investigate Grameen Bank (1/14/11)

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

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

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

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

Yunus Loses Final Appeal (4/7/11)

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

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

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

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

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

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

2011 Year in Review: A Disastrous Twelve Months

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

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

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

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

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

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

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

Related Links:

Businesses, Charities Step Forward With Assistance for Stricken Japan (3/15/11)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

2011 Year in Review: A Tale of Two Economies

December 28, 2011

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

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

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

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

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

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

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

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

Related Links:

Minnesota Grantmakers Optimistic About 2011, Report Finds (1/13/11)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Most Popular PhilanTopic Posts of 2011

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

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

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

December 21, 2011

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

To read part one, click here.

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

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

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

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

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

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

Continue reading »

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

December 20, 2011

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

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

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

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

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

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

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

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

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

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

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

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

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

Continue reading »

Open Data Master Class

December 19, 2011

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

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

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

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

Continue reading »

Weekend Link Roundup (December 17 - 18, 2011)

December 18, 2011

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

Communications/Marketing

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

Disaster Relief

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

Diversity

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

Education

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

Global Health

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

Philanthropy

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

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

Social Media

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

Transparency

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

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

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

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

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

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

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

-- The Editors

A to Z Survival Guide for Uncertain Times

December 16, 2011

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

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

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

_____

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

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

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

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

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

Continue reading »

Questions for the Stavros Niarchos Foundation

December 15, 2011

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

Here are a few questions I plan to ask:

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

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

-- Mitch Nauffts

This Week in PubHub: Grantmaking Strategies

(Kyoko Uchida manages PubHub, the Foundation Center's online catalog of foundation-sponsored publications. In her previous post, she looked at four reports that examined how much and why people give.)

One long-running theme in philanthropy is the need for sustainable social change models. This week in PubHub we're featuring four reports that look at specific grantmaking strategies and practices designed to maximize fundamental long-term social impact.

As part of its poverty reduction efforts, the Rockefeller Foundation is supporting the development of new impact sourcing models -- the use of business process outsourcing to create sustainable jobs for low-income populations in developing countries, especially in rural areas with limited employment options. According to Job Creation Through Building the Field of Impact Sourcing (44 pages, PDF), a Rockefeller-funded report from the Monitor Group, more and more foundations and educational institutions are willing to pay a premium for the services of impact sourcing service providers (ISSP) over traditional business process outsourcing (BPO) operations. The report outlines an action agenda to advance the field: train, recruit, and engage "bottom of the pyramid" (BoP) workers; create a platform to share market research findings, lessons learned, and best practices; connect small ISSPs with established BPOs; expose ISSPs to larger pools of demand; and build domestic anchor clients.

More broadly, Reframing the Conversation: What Do We Mean by Scale? (7 pages, PDF), a report from Grantmakers for Effective Organizations, examines some of the ways in which funders can help grantees scale their impact, including the promotion of ideas and innovations, funding skills-building initiatives, and supporting and/or engaging in policy advocacy. The report suggests that scaling efforts, in order to be successful, should include high-engagement relationships between funders and grantees that lead to thorough assessment, a solid evidence base, and a sustainable business model; and access to additional growth capital. Funded by SeaChange Capital Partners and the Annie E. Casey, Edna McConnell Clark, and Surdna foundations, the report notes in closing that "to scale is not to go it alone."

According to Lessons From the Field: From Understanding to Impact (16 pages, PDF), a report from the Center for Effective Philanthropy, foundations "need to develop a deep and nuanced understanding of the fields in which they work" if they hope to be effective. But how can foundations actually go about gaining a deeper understanding of their grantees' work -- the kind of understanding that leads to better funder-grantee relationships and contributes to funders being more strategic? The report describes how one foundation, the Evelyn and Walter Haas, Jr. Fund, recruited former activists and leaders in a given field, listened to stakeholders, emphasized collaborative learning, and took steps to foster greater grantee leadership as well as professional development among its own staff. The Energy Foundation launched a successful environmental program in China by working closely with local experts in energy efficiency and renewable energy who also could provide insight into Chinese politics and business culture. And, in addition to studying the environmental and ecological implications of its efforts to protect specific wildlife habitats, the Wilburforce Foundation also sought diverse perspectives from outside the conservation field to gauge the effects of its activities on local communities and populations.

Last but not least, the FSG Social Impact Advisors report Gaining Perspective: Lessons Learned From One Foundation's Exploratory Decade (17 pages, PDF), provides a case study of the Northwest Area Foundation's efforts to target its resources over a decade so as to have more of an impact in reducing poverty in the communities it serves. Embracing a greater level of experimentation than it might have been comfortable with in the past, the foundation made a long-term, multimillion-dollar commitment to an untested strategy and a number of new grantee organizations; shifted its perspective from that of funder to equal partner; and adopted a go-it-alone approach instead of engaging with other funders or public-sector agencies. Unfortunately, the hoped-for impact failed to materialize. The report offers lessons learned from the foundation's failed approach, including the need to support proven community-based organizations, to listen "deeply" to and communicate regularly with grantees and community stakeholders, and to collaborate with others, including other funders.

What do you think foundations should be doing to achieve greater social impact? Are you familiar with a promising or proven model for scaling social change efforts? What does your organization do to deepen its understanding of your grantees' work? Share your thoughts in the comments section below.

And don't forget to visit PubHub, where you can browse nearly fifteen hundred reports related to philanthropy and voluntarism.

-- Kyoko Uchida

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