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57 posts categorized "Accountability"

Meet the New Glasspockets Web Site

December 27, 2013

(Janet Camarena is the director of the Foundation Center's San Francisco office and leads the center's Glasspockets effort. A version of this post orginally appeared on the center's Transparency Talk blog.)

Headshot_janet_camarenaLast month, we launched a redesigned and enhanced Glasspockets Web site that I hope readers of this blog will enjoy exploring and/or rediscovering. Our goal for the new site remains the same as when the site originally launched in 2010: to champion greater philanthropic transparency in an increasingly digital world. But the new site is very different and much improved from that first site -— thanks in part to our efforts to create a user experience informed by direct feedback from our stakeholders.

Of course, you might be wondering whether we need a Glasspockets site to champion transparency at all. To which my answer would be a resounding "yes." You might be surprised to learn, for example, that according to the latest data from the Foundation Center, fewer than 10 percent of foundations in the United States have a Web presence. Many of you might assume this is due to the large number of small, unstaffed family foundations that comprise the private foundation universe in the United States. But even when you look at relatively large foundations, those with assets of more than $100 million, you find that nearly a third (30 percent) of them do not have a Web site.

Clearly, many people who engage in philanthropy prefer to do so quietly and without fanfare, which is a challenge for those of us in the field-building business as well as for grantseekers and other grantmakers interested in connecting with like-minded colleagues and funders. We also recognize that, when it comes to transparency, it's often hard for grantmakers to know where to begin. Which is why the redesigned Glasspockets site makes it much easier for grantmakers to find tools they can use and steps they can take to increase their level of transparency.

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Big-Dollar Philanthropy Gets the Broad-Brush Treatment

December 03, 2013

(David Jacobs is director of foundation information management at the Foundation Center. In his last post, he claimed to be shocked – shocked! – that the IRS was subjecting conservative and Tea Party organizations applying for tax-exempt status to extra scrutiny.)

Blue_paintIs big-dollar, high-profile celebrity philanthropy really just for show? That's what Guy Sorman, a City Journal contributing editor and public intellectual in France, seems to think. Writing in the fall issue of CJ, Sorman cites a CNN story from March that begins: "Bill Gates is putting out a call to inventors, but he's not looking for software or the latest high-tech gadget. This time he's in search of a better condom."

"Incongruous as the story seemed," writes Sorman,

the former Microsoft titan had joined the struggle against sexually transmitted diseases. The Bill and Melinda Gates Foundation was offering a $100,000 start-up grant to anyone who could design a condom that didn't interfere with sexual pleasure. Rachel Zimmerman, host of public radio’s CommonHealth, called the Gates Foundation's initiative "truly inspired." But was it? After all, the latex industry has pursued the same goal for decades and devoted many millions of dollars to the effort. What's the point of a philanthropist trying to do what the market is already doing?

Call this philanthropy for show, a kind of celebrity giving designed for a mediatized age, based on grand gestures, big dollars, and heartwarming proclamations -- but too little concern with actual results, which often prove paltry, redundant (as with the condom initiative), or even destructive. The American media often revel in controversy, so one might expect that the gap between expansive promises and disappointing outcomes would prompt intense journalistic interest. But for the most part, would-be statesmen-humanitarians -- such as Bill Clinton, Gates, and Al Gore, along with entertainment-world benefactors like Oprah Winfrey and academic superstars like Columbia development economist Jeffrey Sachs, have gotten a free pass for their good philanthropic intentions. They and their cohorts deserve closer scrutiny....

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Weekend Link Roundup (November 16-17, 2013)

November 17, 2013

Headshot_JFK_portrait_looking_upWe're getting ready to launch a new PND site, so this week's roundup of new and noteworthy posts from and about the sector is a little shorter than usual....

Climate Change

What's the link between global warming and killer tropical storms like Typhoon Haiyan -- quite possibly the strongest storm ever recorded upon landfall? It's not clear, writes Bryan Walsh in TIME magazine, but we shouldn't discount the possibility that such a link exists -- or that stronger, if not necessarily more frequent, tropical cyclones will be a feature of the twenty-first century because of "the warming we've already baked into the system...."

Disaster Response

On the GiveWell blog, Holden Karnofsky shares GiveWell's advice vis-a-vis disaster relief giving:

  1. Give cash, not clothes (or other goods).
  2. Support an organization that will help or get out of the way.
  3. Give proactively, not reactively.
  4. Allow your funds to be used where most needed – even if that means they’re not used during this disaster.
  5. Give to organizations that are transparent and accountable.
  6. Think about less-publicized suffering.

Evaluation

Good post by Tom Kelly, vice president of knowledge, evaluation and learning at the Hawaii Community Foundation, about foundations moving "to embrace and promote 'learning' as an alternative to evaluation." The problem with that, writes Kelly, is that "evaluation must be about learning and accountability. We must be accountable not only to the results we intend and promise to communities but...also learn in an accountable way." 

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5 Questions for...Charles Bailey, Director, Agent Orange in Vietnam Program

August 19, 2013

Headshot_charles_baileyFrom 1997 to 2007, Charles Bailey was the Ford Foundation representative in Vietnam. At the start of his posting, the war in Vietnam had been over for more than twenty years, but one of its legacies, environmental contamination caused by the U.S. military's use of Agent Orange, was an under-addressed concern. Bailey looked into the facts of Agent Orange use in the Southeast Asian country and began to develop a vocabulary that American and Vietnamese officials could use to discuss the issue. After a few years, Ford invited the Aspen Institute, which has expertise in facilitating difficult conversations, to initiate a dialogue around the issue, and the two governments began to talk. Eventually, the United Nations, other NGOs and foundations, and several European governments joined the conversation.

But one thing was missing, says Bailey, and that was a way to connect the American public to the effort. With his encouragement, Active Voice, a social documentary shop in San Francisco, put together a three-minute public-service video, "Make Agent Orange History," while San Francisco State University contributed fresh reporting to the discussion through its Vietnam Reporting Project. In 2011, Bailey moved to the Aspen Institute, where he continues to support dialogue, advocacy, and public education around the issue.

Recently, PND spoke with Bailey about the Agent Orange program and what remains to be done.

Philanthropy News Digest: Vietnamese President Truong Tan Sang recently met with President Obama in Washington, D.C. Why was the meeting significant?

Charles Bailey: President Sang is the second Vietnamese head-of-state to visit the U.S. since the two countries normalized relations in 1995, and his visit was an important opportunity to celebrate the remarkable progress made since 2007 in at last addressing the legacy of Agent Orange. Over the last six years, our Agent Orange in Vietnam Program has had a hand in raising over $100 million to assist Vietnam to begin to deal with this legacy from the U.S.-Vietnam War. Even more important for the future, President Obama and President Sang issued a joint statement at the end of their talks on July 26 that contained a key statement: "The president reaffirmed the United States' commitment to providing further medical and other care and assistance for people with disabilities, regardless of cause."

I published an op-ed in the Huffington Post on the occasion urging both presidents to take advantage of this breakthrough and include language on disability services and rights as part of a new comprehensive partnership agreement between the U.S. and Vietnam.

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Silence Isn’t Golden

July 09, 2013

(Mark Rosenman is an emeritus professor at the Union Institute & University and directs Caring to Change, an initiative that seeks to improve how foundations serve the public. In his last post, he urged PhilanTopic readers to assess how they value the things they value.)

Rosenman_headshotConfronted by headlines about truly questionable practices at a few dozen charities, the response of too many nonprofit leaders has been to bury their heads in the sand and try to pull the hole in after them. What these leaders fail to appreciate is that silence in response to scandalous behavior is neither golden nor in their best interests.

By now, most of you have seen the carefully researched list compiled by the Center for Investigative Reporting, in partnership with the Tampa Bay Times and CNN, of "America's 50 worst charities" -- tax-exempt organizations that "channel most of the money they raise to professional solicitors, mimic other charities' names, deceive donors on telemarketing calls, divert money and contracts to people with ties to their organizations, and use accounting tricks to inflate the amount they report spending on their missions."

Yet, despite overwhelming evidence of self-dealing by these groups and their closely associated entities, key leadership organizations in the sector, including Independent Sector, have responded to requests for comment from the press by declaring that they didn't have enough information to make a judgment, while others have defended outrageous fundraising percentages diverted to what the California Association of Nonprofits' Jan Masaoka labels the "philanthropic-consultant industrial complex."

When it comes to nonprofits, these kinds of abuses are nothing new, and neither is the timidity of nonprofit leaders in condemning them. Their silence in the past has greeted media coverage of huge salaries paid to charity officials, outlandish benefits, self-dealing within boards, tax gimmicks for donors, and malfeasance in program operations. Unfortunately, the cost of that silence is something we all bear.

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Foundations and the 'New Normal': A Q&A With Bradford K. Smith, President, Foundation Center

June 10, 2013

(The following Q&A with Foundation Center president Bradford Smith appears as part of a special feature on "Philanthropy in a changing world economy" in the June 2013 issue of Alliance magazine. It is reprinted here, with minor revisions, courtesy of Caroline and her team.)

Headshot_brad-smith2Caroline Hartnell: To what extent are U.S. foundations changing in response to austerity?

Bradford K. Smith: I started this job two weeks after Lehman collapsed. On my first day in the office, we had a press call about what foundations were doing about the economic crisis. I put down the phone and walked down the hall to our research department and said, "Quick, I need a statistic," and they came up with a really good one. Foundation giving for the previous year, 2007, was around $45 billion -- about 6 per cent of the first stimulus package announced by the federal government. So one thing the crisis really showed up was the scale of foundation resources. When the economy gets into serious trouble, it takes government to try to keep it from collapsing. Foundation dollars alone aren't enough to solve problems. That made foundations think more about how they can leverage money from each other, how they can collaborate with other sectors rather than trying to do it themselves.

A second interesting thing is that foundation giving held up quite well during the recession. One reason is that U.S. foundations calculate their mandatory payout on a rolling three-year average of the value of their assets, which cushions them from big market swings. It also held up well because foundations actually went beyond the federally mandated payout rate of 5 percent.

CH: The recession has changed things for the foreseeable future. Do you think U.S. foundations see this as a "new normal" and are rethinking their role?

BKS: I think most of them are adjusting to the idea that long-term expectations for returns on investment need to be reduced. 2012 was a good year in the financial markets, but nobody really expects that it will go back to the boom years when, as one foundation investment manager put it, for a number of years "all we had to do was get out of bed in the morning and we could make a 20 percent return on our endowment."

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Board Compensation in Grantmaking Foundations: Reasonable and Necessary?

February 20, 2013

(Mark Hager is associate professor of nonprofit studies in the School of Community Resources and Development at Arizona State University. This post originally appeared on the Foundation Center's Transparency Talk blog.)

Headshot_mark_hagerTradition dictates that board members work for free in most quarters of the nonprofit sector, but that isn't necessarily true for grantmaking foundations, especially independent ones. In a new paper (free access until late March) published in Public Integrity, the ethics journal sponsored by the American Society of Public Administration, Elizabeth Boris and I consider the question of what varieties of grantmaking foundations compensate their board members for governance duties. It reboots and reframes an earlier analysis conducted by the Urban Institute, the Foundation Center, and GuideStar.

In the paper, we point to several interesting examples, including a very large foundation's generous policy of trustee compensation spelled out in its organizing documents, another with seven-figure annual compensation paid to a bank to act as a very part time "institutional trustee," and another that underwent IRS investigation for eye-popping compensation that essentially amounted to trustees looting a charitable trust. These cases aren't typical, but they are part of the big picture of how work gets done in grantmaking foundations and how much insiders get paid to do it. In more typical cases, foundations might have justifiable reasons to compensate board members, including to ensure representation from beneficiary populations or to extend health insurance benefits to family founders. It's the extreme cases, however, that threaten to color all of philanthropy.

Compensation for governance duties is perfectly legal, so long as it falls under the IRS' broad standard of "reasonable and necessary." The practice is pretty rare in community foundations, partly due to the fact that they rely so heavily on public contributions and are therefore subject to public scrutiny. It also appears to be fairly rare in corporate foundations, but that may largely be due to the fact that many corporate foundation trustees get paid as corporate executives, making their compensation invisible on the foundation side. About one in five independent foundations, however, appear to report compensation of their board members for governance duties, as reported on Form 990-PF.

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“Beep, Beep”: The Sound of Philanthropy and the Social Economy in 2013

January 07, 2013

(Bradford K. Smith is president of the Foundation Center.)

Wile-E-Coyote"We will change what we do with and without institutions, and we will change how our institutions (funders, nonprofits, and others) work." So predicts self-described philanthropy wonk Lucy Bernholz in Philanthropy and the Social Economy: Blueprint 2013, a must-read roadmap available for the first time as a GrantCraft publication. "Beep, beep." Wile E. Coyote (me, nonprofit executive) has just been left holding a burning stick of dynamite while the Road Runner (Lucy, blogger extraordinaire) races headlong onto her next prediction. That is the true value of Blueprint 2013 for those who are busy running the institutions that make up the "social economy": Lucy has seen the future for us, and now we must struggle to adapt, respond, and innovate. The data- and technology-driven future she envisions is both exhilarating and a bit unsettling, but one thing is clear: the Silicon Valley credo is fast approaching the staid world of philanthropy: "Disrupt yourself or be disrupted."

The vast majority of today's social sector leaders grew up in a world where foundations were the funders and nonprofits were the doers. Blueprint 2013 lays out a vision of a social economy inhabited not only by traditional nonprofits, but also by social businesses, socially responsible corporations, peer networks, and institutional forms not yet invented. Donors in this economy have choices between well-known forms of charitable giving (like creating a foundation), impact investing, and political giving to bring out the change they desire.

Running throughout the social economy is the lifeblood of data. In 2012 alone:

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No Truth or Consequences

December 19, 2012

(Mark Rosenman is an emeritus professor at the Union Institute & University and directs Caring to Change in Washington, D.C. You can read some of his other posts on PhilanTopic here, here, here, and here.)

Rosenman_headshotNonprofit leaders, as well as those in government and the corporate world, seem unwilling to accept responsibility for their decisions and actions. Recently, the founding president of Social Accountability International, a nonprofit that works to advance the human rights of workers around the world, failed to live up to her organization's name when she vaguely defended SAI's decision to award its highest certification to a Bangladesh garment factory that burned down just weeks after its most recent inspection, killing more than two hundred and sixty workers.

As in so many similar situations, instead of acknowledging responsibility for a mistake and accepting the consequences, leaders like the president of SAI are quick to lay that responsibility on others -- and then support only minimal consequences for those assigned the blame. The corporate world saw an example of this after one of the greatest environmental disasters in recent memory, the Deepwater Horizon blow-out that released nearly five million barrels of crude oil into the Gulf of Mexico. Executives of BP, which had leased the rig and owned the rights to the undersea drilling site, remain free while two employees who were on the scene have been indicted for negligence related to the disaster.

Similarly, when it comes to the 2008 financial crisis and subsequent economic meltdown, corporate leaders who contributed mightily to the collapse have escaped responsibility for their wrongdoing. Not one top executive of Countrywide Financial, AIG, Lehman Brothers, Bear Sterns, or any other Wall Street firm has gone to jail, even as millions of Americans continue to suffer the economic consequences of their actions.

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Demystifying Corporate Responsibility Rankings

December 07, 2012

(Emily Keller is an editorial associate in the Corporate Philanthropy department at the Foundation Center. In November, she reviewed Roger Thurow's The Last Hunger Season: A Year in an African Farm Community on the Brink of Change.)

Csr_globeCorporations have long collected data generated by and/or relevant to their operations –- everything from sales figures, to permit applications, to industry trends and customer behavior. Increasingly, however, regulatory and watchdog groups are demanding that companies provide information about the impact of their activities on society and the environment.

As the corporate social responsibility (CSR) movement has gained traction, indices and lists that seek to quantify and rank company activities according to sustainability principles have proliferated. Financial analysts, media groups, and independent consultancies today produce annual assessments of everything from the amount of carbon companies put into the atmosphere to the sustainability of their supply chain management and the diversity of their boards. Those metrics, in turn, are often used by customers, investors, and prospective job candidates to determine their level of engagement with a particular company.

Earlier this year, the Foundation Center added a CSR tab to the company profiles in Foundation Directory Online that highlights nearly two dozen of these corporate sustainability ratings lists and presents basic information from them in a user-friendly format.

But in an emerging field characterized by a multiplicity of definitions and standards, even simple numbers can be hard to make sense of. Using hundreds of data points and a unique methodology, SustainAbility, an independent think tank and strategy consultancy, has taken it upon itself to "rate the raters" in order "to better understand the universe of external sustainability ratings and to influence and improve the quality and transparency of such ratings." As the firm is quick to note, many of these lists have been introduced within the last five years and there's plenty of room for improvement.

With that in mind, here are a few of the more prominent ratings lists/indices:

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Weekend Link Roundup (April 14-15, 2012)

April 15, 2012

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

Accountability

Thanks in part to the proliferation of social media and a loss of faith in institutions of every kind, foundations and nonprofit organizations must rethink how they communicate and hold themselves accountable, argues Lucy Bernholz on her Philanthropy 2173 blog. "The kind of organizing that led Komen to change its decision and that is now calling for change from Gates is easier than ever," writes Bernolz.

It can be turned on in an instant and reach unprecedented scale at unprecedented pace. Boards of directors of nonprofits and foundations need to know this, they need to expect it, and they need to engage with both critics and supporters. They need, in other words, to govern in a new landscape in which each and every decision they make may be the one that transforms supporters into critics (Komen) or turns educational policy grants into part of national outrage about gun laws and racial justice [i.e., Gates Foundation support for a conservative advocacy organization known as ALEC].

Is this about a social media policy? I don't think so. Is it about governance, engagement, conversation, accountability, structural consistency, clarity of mission, and a willingness to remain civil while participating in difficult areas of work riven with disagreement? Yes. Nonprofits are part of civil society which thrives only when it is filled with multiple points of view and diverse approaches to problem solving. The "public" will not agree with every decision a foundation or nonprofit makes and they have a right to express that disagreement. Foundations and nonprofits have a right (and a responsibility) to make their decisions and expect a public response to them....

Communications/Marketing

On her Getting Attention blog, Nancy Schwartz "nonprofitizes" a list of content marketing tips from top chefs originally compiled by MarketingProfs.com. Her list includes:

  • Use fresh ingredients. Fresh content retains its natural flavor. Avoid stale or processed content -- your supporters will know it and hate it.
  • Keep the menu simple. Don’t overcomplicate content or muddy the dish with too many flavors.
  • Experiment in the kitchen. Try new forms of content and solicit feedback so you know what's not working -- and what is.

Visit GettingAttention.org for the complete list.

Journalism/Media

On the HuffPost Media site, Kevin Murphy, president of the Berks (PA) County Community Foundation, suggests that the death of traditional journalism is going to force philanthropy to step up and fund alternatives. "[A]s foundations realize the profound impact of losing the communications vehicles that tie our society together," writes Murphy,

they're going to recognize the imperative of supporting journalism in their field or community. At a global level, funders rely on journalism to help the public understand challenges like world wide poverty, climate change and human rights violations.

Without the ability to hear from, and communicate with the populations they serve, foundations will find their mission nearly impossible to accomplish. So, they'll solve that problem....

Leadership

On her Non-Profit Marketing blog, Katya Andresen shares management lessons from Steve Jobs included in a recent Harvard Business Review article by Jobs biographer Walter Isaacson. Her favorite -- "Stay Hungry. Stay Foolish." -- was something Jobs told Isaacson he had first come across in that icon of '70s counterculture, the Whole Earth Catalogue.

On her blog, Rosetta Thurman offers a few suggestions for organizations interested in supporting the next generation of nonprofit leaders. Among other things, Thurman advises nonprofit executives to increase the number of professional development opportunities availble to young staffers and to require each employee to draft a career development plan.

Philanthropy

In advance of the annual conference of the Global Philanthropy Forum later this week in Washington, D.C., Jane Wales, president and CEO of the World Affairs Council and vice president of philanthropy and society at the Aspen Institute, considers the philanthropic legacy of Andrew Carnegie and John D. Rockefeller and connects it to some of the tools and approaches championed by a new generation of philanthropists.

On the BlackGivesBack blog, Tracey Webb announces the W.K. Kellogg Foundation's Cultures of Giving Donor Challenge, a ten-day online competition designed to boost funding for nonprofits working to address the critical needs of communities of color.

Social Entrepreneurship

Writing on the Stanford Social Innovation Review blog, Jason Saul, the founder/CEO of Mission Measurement, shares five takeaways from the 2012 Skoll World Forum: it's okay to make an economic return from trying to solve a social problem; measurement is no longer optional; it's cool to be corporate; people want to move the needle; and we're entering a new age of social entrepreneurship.

Social Media

In a guest post at Beth's Blog, Frank Barry, Internet strategy manager at software company Blackbaud, shares findings from the 2012 Nonprofit Social Networking Benchmark Report. Writes Barry: "We learned a lot of things, but one prevailing theme stood out -- despite limited budgets and staffing, nonprofits continue to find great value in their fast-growing social networks."

In the latest installment of her Chronicle of Philanthropy Social Good podcast series, Allison Fine chats with Alliance for Youth Movements co-founder Stephanie Rudat about how and why a few recent social action movements, including Kony 2012 and Change.org's Trayvon Martin petition, went viral.

Social Media for Social Good author Heather Mansfield discusses hashtag spamming, which "can do more harm to your nonprofit's brand on Twitter than good." Writes Mansfield: "Too many hashtags in one tweet can look messy or nonsensical, decrease click-through rates, and subtly communicate to your followers than you are a hashtag spammer -- i.e., you're not really monitoring or participating in the conversation around a certain hashtag, just spamming it in hopes of getting more followers, which doesn't work by the way." What do you think? Is less more when it comes to hashtags in tweets? Use the comments section below to share your thoughts.

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

-- The Editors

Microfinance and the 'Smart Campaign'

February 17, 2012

After a tough year, the microfinance industry is looking to heal itself. As Elisabeth Rhyne, managing director of the Center for Financial Inclusion at ACCION, writes in PND:

It could be argued that, after two decades, microfinance was slow to develop a client protection consciousness. (One might say something even stronger about the mainstream financial sector in the U.S.) After all, a sector built with intent to improve the lives of the poor should have the best interests of its clients at heart. And I believe it does. But the microfinance community — and here I include myself — was naïve in thinking that its good intentions would always benefit clients. We assumed too readily that borrowers always benefited from our services and thus the more borrowers, the greater the benefit. The drive for growth caused some providers to cut corners, lose their focus on quality, or simply be blind to the possibility that some clients were experiencing substandard treatment.

It took several instances of rapid growth leading to client over-indebtedness -- particularly in Bosnia, India, Morocco, and Nicaragua -- to make it clear that a model geared toward reaching people as fast as possible needed adjustment. In addition to the Smart Campaign, the microfinance industry is working on initiatives such as Microfinance Transparency (which promotes the release of comprehensive pricing data), as well as efforts to increase credit information reporting to identify clients who may be over-indebted. In Bosnia, MFIs have worked together to create a debt counseling center.

As the Smart Campaign has delved into the actual practices of MFIs through on-site observation, we find that most MFIs implicitly have been practicing client protection, even if they have not made explicit reference to the principles. The Smart Campaign recently analyzed the results of on-site third-party assessments of more than three hundred and fifty MFIs. The overwhelming majority (88 percent) earned passing scores. This exercise was a first-ever assessment of practices, mostly by social investors carrying out pre-investment due diligence, and we expect such assessments to grow more rigorous in coming years. Meanwhile, on-site assessments of MFIs like these are helping organizations identify their weaknesses and take steps to correct them....

Read Rhyne's commentary and learn more about the Smart Campaign here....

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)

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

Yéle Haiti Responds to NY Post Allegations

November 30, 2011

Haiti_earthquake_10Yesterday, we posted a digested version of a November 27 New York Post article ("Questions Dog Wyclef's Haiti Fund") which suggested that earthquake-relief funds raised by Yéle Haiti, a charity co-founded by hip-hop star Wyclef Jean (who is Haitian), in the months after the quake had been used improperly. At the heart of the Post's allegations are P&A Construction, which is run by Warnel Pierre, the brother of Jean's wife, Claudinette, and two independent contractors, Miami-based Amisphere Farm Labor Inc. and Samosa SA, in Port-au-Prince.

That article generated the following response from Hugh Locke, a co-founder of Yéle Haiti who served initially as executive director of the charity's Haiti operation and then as president of the combined Haiti and U.S. operations (until this past February). In the interest of fairness (and the facts), we thought it was important to reprint Locke's comments in their entirety.

Feel free to weigh in on Locke's comments, the Post's reporting, and/or our version of the Post story in the comments section below.

_____________________

<snip>

My name is Hugh Locke and I was until earlier this year the president of Yéle Haiti. I would like to set the record straight regarding the NY Post article.

Bad journalism can be the result of sloppiness, incompetence, or a distortion of facts in order to serve a bias or editorial agenda. All three of these traits are on full and splendid display in the November 27, 2011, New York Post article "Questions Dog Wyclef's Haiti Fund" by Isabel Vincent and Melissa Klein. These two reporters have Wyclef Jean, co-founder of Yéle Haiti along with Jerry Duplessis and myself, in their sights in a no-holds-barred effort to sell papers, and no pesky truth is going to stand in their way.

The Yéle staff and our various partners who braved a chaotic and dangerous situation in order to deliver emergency relief to victims of the January 12, 2010, earthquake in Haiti are true heroes in my book. Ms. Vincent and Ms. Klein cannot be allowed to discredit our collective efforts with falsehood and innuendo. What follows are the facts and figures to counter to each accusation in their Post article.

1. How much did Yéle receive in donations following the earthquake in Haiti and how much of that money was used for emergency relief?

NY Post: "In the months following the devastating earthquake in Haiti, a charity run by hip-hop star Wyclef Jean spent a pittance of the money it took in on disaster relief and doled out millions in questionable contracts....Records show that Yele Haiti spent just $5.1 million for emergency relief efforts, including food and water delivery to makeshift survivor camps...."

HL Response: As reported in Yéle Haiti’s 2010 IRS 990 tax filing, the organization received $16 million in donations that year (figures quoted are rounded off). More than half of these donations were received in the weeks immediately following the earthquake. Over the course of 2010 we spent a total of $9.2 million -- $8.2 million for programs (most of that for emergency relief and a small portion for other Yéle programs) and $1 million (or roughly 11 percent) on administrative overhead. Yéle made a decision not to expend all the funds raised in 2010 during that same year because people in the tent camps continued to need support. Consequently $6.8 million was carried over to cover operations in 2011.

Clarifications about contracts, none of which were "questionable," are answered in the points that follow.

Yéle’s activities in 2010 were a combination of emergency relief and long-term rebuilding. Here is an overview of what we accomplished.

Emergency Relief: Yéle worked with non-elected community leaders and elders within a core group of 30 of the tent camps throughout Port-au-Prince and the surrounding areas to identify needs and coordinate aid delivery. These targeted camps had a combined population of just under 80,000. Here is a summary of what was distributed by Yéle over the course of 2010:

  • 2,000 tents of various sizes
  • 873 tarp kits for building shelters
  • 4.2 million gallons of filtered water delivered in trucks (including to cholera areas)
  • 233,000 10-ounce pouches of water
  • 32,850 bottles of water in various sizes
  • 98,000 hot meals
  • 14,400 items of canned and packaged food
  • 270,310 nutrition bars
  • 4,425 individual care bags with personal toiletries and other items
  • 8,705 items of new and used clothing
  • 3,520 pairs of new and used shoes
  • 1,000 pairs of new boots
  • 14,300 pounds of medical supplies
  • 1,240 windup and/or solar flashlights
  • 2,500 windup and/or solar radios
  • 26 generators
  • 900 sheets and blankets

In response to the cholera outbreak in October of 2010, Yéle purchased 2 million water purification tablets and received a donation of 50,000 bars of soap and 100,000 bottles of hand sanitizer. These items were distributed by going tent to tent in the camps, noting that a portion of them were distributed in 2011.

Employment: There were very few jobs following the earthquake and even fewer for the 1.3 million people living in tent camps. Yéle began a program in 2010 that employed up to 2,000 people at a time to clean the streets of Port-au-Prince, paying them a respectable $7 a day. Towards the end of the year a vocational training program in carpentry, plumbing, and masonry was added to give youth marketable job skills.

Youth Development & Education: Yéle provided weekly support for two residential orphanages that were damaged in the earthquake. In additional to providing operational costs, one orphanage was completely rebuilt and more than doubled in size while the second was repaired and some additional facilities added. Yéle managed an onsite medical service for all the orphans as well.

Tree Planting & Agriculture: Haiti has less than 2 percent tree cover and imports roughly 70 percent of its food. Yele’s response in 2010 was to increase the capacity of local farmers, working with them to plant trees and introduce better farming practices that resulted in higher yields. A second Yéle program involved commissioning peasant farmers to grow vegetables that were delivered weekly to up to 2,000 orphans.

2. What was the role of Amisphere Farm Labor Inc. in Yéle’s emergency relief efforts?

NY Post: "A purported Miami business called Amisphere Farm Labor Inc. received a whopping $1,008,000 as a 'food distributor'. No trace of the company could be found last week in the Sunshine State, but records show the company’s head, Amsterly Pierre, bought three properties in Florida last year, including a condo in an upscale waterfront community.

"The firm incorporated in August 2008 but never filed any of the subsequent financial paperwork required to do business in Florida, according to the Florida Department of State.

"The address listed for the business is an auto-repair shop in Miami’s Little Haiti neighborhood, where a worker said he had never heard of Pierre or Amisphere. Pierre did not return a call for comment...."

HL Response: Getting food to people who were in makeshift tent camps following the earthquake was a priority. It was particularly important to send in hot meals because people had limited capacity to cook in the camps. With this in mind we approached Amsterly Pierre, a businessman in Haiti who had experience in this field, and asked him to set up the operation on our behalf. For this purpose he used the bank account of a company he had registered in the US, Amisphere, because the banks were not yet functioning in Haiti.

In the midst of the chaos that characterized Port-au-Prince at that time, Mr. Pierre used his operation on the ground there to find a kitchen that, although damaged, could be made operational with a minimum of effort. He found sources of food, some of which had to be brought in by truck from the Dominican Republic, and assembled a staff that could cook and deliver thousands of meals at a time.

The hot meal program began on January 24 with the first distribution of hot meals to tent camps, with a particular focus on women and children living there. Over the next three months a total of 98,000 hot meals were served in the course of 15 distributions that ranged between 5,000 and 7,000 at a time.

While the primary emphasis was on the tent camps, during the early phase of the program we provided some of these meals to members of the national police force who were themselves living in tents, as the government was unable to give them any food or wages for the first month and a half following the earthquake. We also provided meals during that same time for a number of civil servants who were in a similar situation but who were determined to stay on the job to do what they could to restore services for the population.

In addition to the hot meals, we also contracted Mr. Pierre to develop a dry food ration kit. These were prepared in the Dominican Republic and brought in by truck and distributed in tent camps. Each kit had enough rations for an average family for one week. A total of 700 of these kits were distributed.

The term "whopping" should be applied to the impact Mr. Pierre had on Yéle’s behalf. Each hot meal fed an average of two people, and the ration kits fed five people for a week -- so through Mr. Pierre we were able to feed around 200,000 people at a cost of about $5 per person at a time when food was scarce, hot meals almost unheard of, and delivery of food into the tent camps was regularly causing riots.

3. What was the role of Samosa SA in Yéle’s emergency relief efforts?

NY Post: "Yele Haiti also paid $577,185 to a company called Samosa SA, based in the Haitian capital of Port-au-Prince, as a 'bulk water supplier'. But some of that money went to rent a house for Yele Haiti volunteers on Samosa’s property at the inflated price of $35,000 a month...."

HL Response: Samosa SA is a Haitian company that Yéle contracted to provide fresh water to those living in tent camps. Samosa utilized 14 of their 1,200-gallon tanker trucks to deliver an average of 34,000 gallons of water a day on a rotating schedule to 30 different tent camps. The water came from an aquifer on the Samosa property and they filtered the water on site using a reverse osmosis process. While Samosa provided the trucks and drivers, Yéle sent its own staff to accompany each delivery -- having made sure that each tent camp would be ready with volunteers to help manage the operation and residents lined up with pails ready to take the water.

Water distribution began on January 24 and over the course of the remainder of 2010 a total of 4.2 million gallons of purified water was distributed at a unit cost of 10¢ a gallon. The unit cost went up in October when half the water was diverted as Yéle contributed to fighting the outbreak of cholera in the rural areas north of Port-au-Prince. The increased cost was a combination of more fuel being required to drive outside the capital plus a bonus paid to the drivers because they were afraid to go into the midst of the cholera outbreak when it had just begun and the population was terrified and did not yet understand how it was spread.

There was a second and separate contract with Samosa SA for Yéle to rent a seven-acre walled property that included a house. The property and house were rented from May 1 onwards for $15,000 a month.

The house was used by Yéle as a center of our relief activities, serving as both headquarters and main office. Our U.S. staff and visiting volunteers also stayed there. The house had three bedrooms and by using mattresses and sleeping bags we were able to accommodate as many as 30 people at a time, depending on the scale of the distributions or other emergency relief programs that were being implemented.

The rest of the property was used as the site of a warehouse operation where relief items such as tents, tarps, blankets, food, clothing, shoes, medical supplies, windup flashlights, windup radios, and other items were stored, sorted, and loaded onto trucks for delivery to the 30 tent camps that we served on a regular basis.

The warehouse operation had two components -- we installed a large concrete slab on which we placed nine permanent 40-foot containers and had space for six more that shuffled between the property and the port. The second component involved a 44-foot diameter geodesic dome that we erected and which was used for both storage and sorting.

Lastly, we built a facility that was intended to serve the needs of amputees. Two geodesic domes were erected, but the facility was not completed when it was discovered that the initial government estimates amputees had been significantly overstated. The two domes were taken down and are currently in storage.

As the overall emergency relief needs in Haiti changed, Yéle subsequently moved out of the rented Samosa property in early 2011.

4. What was the role of P & A Construction in Yéle’s emergency relief efforts?

NY Post: "Yele Haiti paid five contractors to accomplish its goals, including P&A Construction --- which received $353,983 and is run by Warnel Pierre, the brother of Jean’s wife, Claudinette...."

HL Response: Yéle contracted a company called P & A Construction to design and build several things, and in keeping with a policy of transparency we included the fact that the owner of the company is a relative of Wyclef Jean in our IRS 990 tax filing for 2010.

Finding a contractor who can build anything in Haiti on time and on budget is a rarity, and Warnel Pierre was that person. As we did with all contracts, estimates for projects were reviewed against standard costs per square foot or the relevant unit of comparison, depending on the project. In all cases we were satisfied that Mr. Pierre was providing a good service at a competitive rate.

Among the services provided by Mr. Pierre during 2010 were the following:

  • repair and complete rebuilding and expansion of the Jean et Marie Orphanage that had been damaged in the earthquake;
  • repair and the addition of a kitchen, bathrooms, and two new classrooms at the Bon Samaritan Orphanage that had been damaged in the earthquake;
  • installation of electrical power lines, septic and water storage tanks, and a well; re-surfacing with gravel and a drainage system, building of toilets and shower facility, and other upgrades to the Place Fierte tent camp in the Cité Soleil slum of Port-au-Prince;
  • installation of concrete slab and related ramps for container-based warehouse storage;
  • installation of concrete slab base, plumbing, bathrooms, and showers for the amputee facility, including assisting in the installation of two geodesic domes on the site; and
  • installation of concrete slab and surrounding gravel drainage area for geodesic dome used as part of the warehouse operation, including assisting in the installation of the dome.

5. What did Yéle do to ensure transparency of operation?

NY Post: " 'Given the fact that Yele Haiti was involved in a swirl of controversy after the earthquake in Haiti, it's all the more reason to be more transparent to ensure donors that their funds are going to help people,' said the Better Business Bureau’s Bennett Weiner...."

HL Response: Yéle hired the prestigious accounting firm of RSM McGladrey to improve its level of transparency and together we developed one of the most comprehensive and timely systems of disclosure of any NGO working in Haiti. Beginning in September 2010, Yéle regularly updated this financial information on its website.

6. Did Yéle lose $244,000 in 2009?

NY Post: "The group lost $244,000 in 2009...."

HL Response: This allegation is simply made up. Yéle began 2009 with $57,421 in cash on hand that was carried over from the previous year. To that was added donations in 2009 totaling $749,480, for a total of $806,901. We spent $994,344 in 2009, with the difference of $187,443 between what we spent and what we received being invoices that came in the latter part of 2009 and which were paid in 2010. There was no loss.

</snip>

(Locke is currently writing a book about his six years of humanitarian service in Haiti.)

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