PhilanTopic

NPO Job Openings (April 2012)

After surprising on the upside in January and February, the job numbers for March and April came in below expectations, reviving fears that, without further Fed easing, the economic recovery could stall.

According to the Bureau of Labor Statistics, nonfarm payrolls grew by 154,000 in March and only 115,000 in April, while the number of unemployed in April fell to 12.5 million from 12.8 million and the unemployment rate dropped a tenth of a percentage point to 8.1 percent (the lowest level since February 2009). BLS also revised upward the February (from +240,000 to +259,000) and March (+120,000 to +154,000) payroll numbers.

(Chart courtesy CNNMoney)

Here at PND, our own completely unscientific gauge of the economy's health -- i.e., submissions to the PND job board -- tells a slightly different story, with monthly job postings in April down on a consecutive and year-over-year basis, though not enough to set off alarms. Indeed, for the first four months of the year, the number of jobs posted to the job board eclipsed, by almost 5 percent, the number posted over the same four-month period in 2011, suggesting that the nonprofit sector, like the economy in general, is recovering (albeit slowly) from the disaster of 2008-09.

Unsurprisingly, given the tough funding climate, demand for nonprofit development and fundraising professionals remains strong. And we're also seeing a lot of postings in the finance category -- up 8 percent on a year-over-year basis -- perhaps because of increased merger and restructuring activity in the sector.

It might be overstating things to say the optimism we felt in January has faded. But with Greece on the ropes and the seventeen-country Eurozone at risk of falling into "severe recession" -- or worse -- the next couple of weeks will be crucial. And then there are the elections in November, with control of all three branches of government at stake, and, looking a little farther down the road, the dreaded "fiscal cliff" our elected officials in Washington seem determined to explore. How it all shakes out, and what that might mean for the nonprofit sector, is anyone's guess (though we're betting against a Thelma and Louise-style finale). In the meantime, we'll be keeping our eye on the May job numbers, to be released June 1, for clues.

-- Lauren Brathwaite

'The Art of Being Unreasonable' Launches in New York City

I had the pleasure Sunday evening of attending "A Conversation With Eli Broad" at the 92nd Street Y, an hour-long event marking the launch of Broad's memoir The Art of Being Unreasonable. At the event, Broad chatted with broadcast journalist Charlie Rose about his long and successful career (highlights of which are shared in the book's appendix). Broad, who turns 79 this summer, has helped build two Fortune 500 companies, KB Home and SunAmerica, and created with his wife, Edythe, the Broad Foundations, which focus on public education reform, scientific and medical research, art and culture, and civic projects in Los Angeles.

Rose began his interview by asking Broad for thoughts on the state of the economy, which Broad said will not recover until the housing market improves (in 2013?), before shifting gears to focus on the book.

While Broad doesn't consider himself to be unreasonable -- as he told the audience, "I don't think I'm unreasonable; other people think I'm unreasonable" -- he writes in his memoir that he believes "being unreasonable has been the key to my success." Throughout his career, he took chances that many said he was foolish for taking -- building homes without basements at a time when such a thing was unheard of, for example -- and succeeded because he and his partners did their homework and found a "niche where we could flourish."

During the Q&A portion of the event, one of my colleagues asked Broad -- who was instrumental in creating the first biomedical research institute in the world devoted to genomics, launching the largest urban education prize in the country, and has done much to nurture the burgeoning contemporary art scene in Los Angeles -- to share some of the ways in which his foundations assist nonprofit organizations and social causes other than through grants or philanthropic investments. "Foundations have to be innovative," said Broad, especially during tough economic times. The Broad Foundations, for example, offer their grantees lots of advice and counsel and, through the Broad Superintendents Academy program, provide business leaders with the training needed to make a successful transition to leadership positions in urban school districts.

That said, the one constant in Eli Broad's long career, which has spanned five decades and four industries, is a paperweight he received from his wife inscribed with this quotation from George Bernard Shaw:

The reasonable man adapts himself to the world. The unreasonable one persists in trying to adapt the world to himself. Therefore, all progress depends on the unreasonable man.

And sometimes that means asking "Why not?" instead of accepting "no" for an answer.

Were you at the event? What did you take away from the conversation? And what do you think foundations should be doing, beyond awarding grants, to address the many social, political, and economic challenges we face? Use the comments section to share your thoughts...

-- Regina Mahone

Weekend Link Roundup (April 28-29, 2012)

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

Advocacy

Responding to news that "Covering the Night," Invisible Children's offline event in support of its KONY 2012 campaign, was less than a rousing success, Allison Fine writes on her blog that the organization failed to attract widespread support because it "overlooked a fundamental tenant of networked activism: do what you do best and network the rest." Adds Fine:

Invisible Children has spent years honing its expertise in online organizing. And it showed in the initial outburst of support associated with the video and [the fact that] tens of thousands of people signed up to participate [in] Cover the Night....I think [the event] fizzled because on land organizing is simply not what Invisible Children does best. A better approach would have been to partner with an organization with the core competency of on land organizing, a group like Oxfam perhaps...."

In a guest post on the Communication Network's blog, Spitfire Strategies senior vice president Erin Campbell Boltz and former Greenpeace USA executive director John Passacantando offer a checklist for nonprofits that are planning issue campaigns. Their recommendations include: set a clear goal, know the opposition and arm yourselves to face them, play to your strengths, and engage the right coalition partners. Developed by Spitfire and the Communications Leadership Institute with funding from the Gordon and Betty Moore Foundation, the Just Enough Planning Guide provides an interactive step-by-step framework for mapping out a public advocacy campaign strategy.

Economy

Courtesy of the Browser, MIT economics professor Daron Acemoglu, co-author (with James Robinson) of the book Why Nations Fail, discusses four books and one paper that explain how and why the United States and other Western societies have become less equal over the last thirty years and what it means for the future.

Fundraising

"The charitable marketplace is consumed with big talk about the need for transparency, yet many nonprofits, along with their boards and their funders, operate with their heads in the sand," writes Todd Cohen on his Inside Philanthropy blog. "If nonprofits, boards, and funders do not wake up soon, nonprofits will continue to struggle, leaving as victims the clients who count on them to provide the programs and services they need more than ever in our shattered economy...."

Innovation

Guest blogging at Beth's Blog, Laura Quinn and Chris Bernard of Idealware share a case study included in the report Unleashing Innovation: Using Everyday Technology to Improve Nonprofit Services that demonstrates how technology can spur innovation and improve service delivery.

Philanthropy

In a long piece on the National Education Association site, Alison R. Bernstein, director of the Institute for Women's Leadership and a former vice president at the Ford Foundation, looks at the growing corporatization of philanthropy -- and doesn't much like what she sees. Writes Bernstein:

Corporatization is important because it is rapidly becoming the preferred way of doing the "business" of grant making and it is influencing both new and older foundations, large and small, in ways that I believe may undermine the diversity of the philanthropic world. Just to put all of this in context: there are approximately 72,000 foundations in the U.S., half of which have been created in the last 30 years. This explosive growth in philanthropy is proof that numerous individuals got very rich during the Reagan Revolution. In looking for models of how to give away money, more and more corporate givers, family foundations, and community trusts are modeling themselves along the lines of Gates, not Ford or Mellon. The question is why? Why do they think Gates is a more effective model? Why is large-scale grantmaking intrinsically better than carefully scaled efforts to make a difference? Why are leaders and practices from the corporate sector preferable to those of the nonprofit sector? Why are phrases like "strategic grantmaking" dominating the discourse of the day? (Parenthetically, would anyone proudly claim to be an unstrategic donor?) And where is evidence that this is happening?...

On the White Courtesy Telephone blog, Greater New Orleans Foundation president/CEO Albert Ruesga proposes a set of principles that would govern the way progressive funders collaborate so as to strengthen their collective efforts. Inspired by the Sullivan Principles, which were adopted voluntarily by more than a hundred companies with operations in apartheid-era South Africa, Ruesga's principles include: the Do 'With' Rather Than 'To' Principle; the Maximize Coordination Principle; the Drop Everything Else You're Doing Principle; the Get the Money Out of Politics Principle; the Everything Is Connected Principle; and the Empowerment Principle. With the hope that his post sparks an actual conversation, Ruesga writes, "I see the development of these principles as much more than another idle flipchart exercise."

Manwhile, over on NCRP's Keeing a Close Eye blog, Niki Jagpal commends Ruesga for his post and adds two principles to his list:

• The provision of unencumbered long-term support -- i.e., core support of sufficient duration to address pressing social needs.
• Bolstering the capacity of our (limited) think tanks because conservative funders have succeeded at moving a policy agenda by funding similar institutions that feed policy to the Hill.

In a recent Forbes article, Rahim Kanani interviews Rockefeller Foundation president Judith Rodin about the foundation's centennial celebrations and how the foundation views its anniversary as a critical opportunity to raise the effectiveness of its work and advance solutions to pressing global challenges.

On Health Affairs' GrantWatch Blog, Tom David challenges foundations to take the information shared at their annual conferences and networking events -- many of which are held in the spring -- and "actually go out and make them happen." Writes David:

Whether it's collective impact or impact investing or whatever the big idea of the moment is, considerable buzz is generated [at these events], blog posts are published, tweets are tweeted, and then we return to our respective corners of the country. What's waiting when we arrive home is often a pile of grant applications and files awaiting action. The pressure to meet the deadline for the next board meeting too often trumps our best intentions to apply those new ideas from the conferences to the way we do business.

Meanwhile, the context in which we operate is...chronic crisis mode. The economy may be slowly recovering, but the human toll of unemployment and foreclosure and lack of health insurance and underperforming schools continues to mount. Governments are stretched to the limit in their ability to maintain even basic services. To someone observing the situation in the United States from afar, it would be clear that this is not a time for business as usual....

Social Media

On her Nonprofit Marketing blog, Network for Good's Katya Andresen shares an infographic that highlights the most popular social networking sites and how best to use them.

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

-- The Editors

The Individual Mandate: A PubHub Reading List

(Kyoko Uchida manages PubHub, the Foundation Center's online catalog of foundation-sponsored publications. In her previous post, she highlighted reports about efforts to improve access to clean water, sanitation, and hygiene in the developing world.)

Last week, the Supreme Court heard arguments with respect to the constitutionality of the Affordable Care Act's so-called "individual mandate." But how much of the debate did you really understand? Framed by the media as a choice between the power of the federal government to coerce individuals to purchase something they may not want and the significant costs associated with "free-riding" in the healthcare system, the debate tends to give short shrift to the nuances and complexities of the legislation and existing legal precedent. (To cite one example: a March 2011 Kaiser Health Tracking Poll found that "opposition [to the legislation] falls markedly when people are told that the mandate will not change the existing health care arrangements of most Americans.") With that in mind, this week we're taking a closer look at a couple of reports that address some of the issues and legal questions raised by the individual mandate.

According to The Individual Mandate in Perspective (3 pages, PDF), a new issue brief from the Urban Institute, "if the ACA were in effect today, 94 percent of the total population (93 percent of the non-elderly population) or 250.3 million people out of 268.8 million non-elderly people — would not face a requirement to newly purchase insurance or pay a fine." That's because 33 percent of those under age 65 are exempt from the requirement due to income level, while of those who are not exempt, 86 percent will keep the employer-sponsored, nongroup, or public insurance coverage they already have.

So if the vast majority of Americans are exempted from the requirement or will remain covered under their existing plans, who is subject to the mandate? According to the report, roughly

26.3 million Americans who are currently uninsured will be required to newly obtain coverage or pay a fine. In this group, 8.1 million people will be eligible to receive free or close-to-free insurance through Medicaid or CHIP and can avoid the mandate penalties if they do so; hence our finding that 18.2 million Americans (6 percent of the total population, 7 percent of the non-elderly population) will be required to newly purchase coverage or face a penalty. Of that 18.2 million, 10.9 million people will be eligible to receive subsidies toward private insurance premiums in the newly established health insurance exchanges, but will have to make partial contributions toward their coverage. About 7.3 million people -- 2 percent of the total population (3 percent of the population under age 65) -- are not offered any financial assistance under the ACA and will be subject to penalties if they do not obtain coverage....

Funded by the Robert Wood Johnson Foundation, the issue brief also notes that by keeping currently insured healthy individuals in nongroup and small group markets and attracting newly eligible healthy individuals, the mandate will help to stabilize premiums.

What, then, is the legal basis for challenging the constitutionality of the individual mandate? According to Examining the Evidentiary Basis of Congress's Commerce Clause Power to Address Individuals' Health Insurance Status (21 pages, PDF), a report from the Bureau of National Affairs that also was funded by RWJF, the question is whether the Commerce Clause of the Constitution gives Congress "the constitutional power to apply a 'minimum essential coverage requirement' on most non-elderly Americans." In other words, does "being uninsured [amount] to an activity that substantially affects interstate commerce"? Congressional findings with respect to the relationship between the individual mandate and interstate commerce are based on a wealth of evidence, the report notes:

Evidence amassed and analyzed by health services researchers sheds considerable light on the economic spillover effects of being uninsured, not only on individuals and their families, but more importantly in the context of the minimum essential coverage requirement, on community and regional health care systems and the economy as a whole....

The Courts of Appeal for the Sixth and D.C. circuits both upheld the constitutionality of the requirement, and in doing so considered that:

Virtually everyone participates in the market for health care delivery and they finance these services by either purchasing an insurance policy or by self-insuring....Thus, set against the Act’s broader statutory scheme, the minimum coverage provision reveals itself as a regulation of the activity of participating in the national market for health care delivery and specifically, the activity of self-insuring for the cost of these services....

In contrast, the Eleventh Circuit Court of Appeals, which has jurisdiction over Alabama, Georgia and Florida, focused narrowly on the requirement that individuals enter the health insurance market and rejected any link between the requirement and an individual's activity in the broader economy:

Because the Supreme Court's prior Commerce Clause cases all deal with already-existing activity -- not the mere possibility of future activity (in this case, health care consumption) that could implicate interstate commerce -- the Court never had to address any temporal aspects of congressional regulation. However, the premise of the government’s position that most people will, at some point in the future, consume health care -- reveals that the individual mandate is even further removed from traditional exercises of Congress’s commerce powers....

The Supreme Court's decision, expected in June, will depend in part on how the court frames the problem the Affordable Care Act is intended to solve, the report concludes. How Justice Antonin Scalia's framing of the "broccoli question" during oral arguments ("Everybody has to buy food sooner or later, so you define the market as food. Therefore, everybody is in the market. Therefore, you can make people buy broccoli") plays out in terms of the final ruling, on the other hand, is anybody's guess.

Interested in learning more about the individual mandate provision? Check out these reports, all of which can be found in PubHub:

• A Guide to the Supreme Court's Review of the 2010 Health Care Reform Law
  Henry J. Kaiser Family Foundation
• Eliminating the Individual Mandate: Effects on Premiums, Coverage, and Uncompensated Care
  Urban Institute
• Newly Insured Californians Would Fall by More than 1 Million Under the Affordable Care Act Without the Requirement to Purchase Insurance
  Center for Labor Research and Education at University of California, Berkeley; UCLA Center for Health Policy Research
• Health Affairs/RWJF Health Policy Brief: Legal Challenges to Health Reform
  Health Affairs; Robert Wood Johnson Foundation

And feel free to use the comments section to share other reports of interest on the topic, as well as your thoughts about the mandate and the upcoming Supreme Court decision.

-- Kyoko Uchida

2012 State of the Sector Survey

The U.S. economy seems to be on the mend, the stock market is on a tear, and the 2012 presidential election looks as if it'll be contested by two relatively pragmatic moderates.

Business as usual, right?

Not according to the Nonprofit Finance Fund's 2012 State of the Nonprofit Sector survey.

The survey reveals that nonprofits, especially frontline service providers, continue to face significant challenges two years into what is supposed to be an economic recovery but for millions of Americans feels like something altogether different.

Among the survey's findings:

• 85 percent of nonprofits experienced an increase in demand for services in 2011; (compared to 77 percent in 2010, 71 percent in 2009, and 73 percent in 2008);
• 88 percent expect to see an increase in demand for services in 2012;
• 87 percent don't expect their financial outlook to improve in 2012;
• 58 percent of human service organizations were unable to meet demand in 2011; 60 percent say they won’t be able to meet demand in 2012;
• 56 percent of human service providers received federal government funding or contracts in 2011; 69 percent received state or local funding;
• 52 percent reported late payments from the federal government; 62 percent said state or local government payments were late.

Of course, if House Republicans have their way, the situation almost certainly will get worse before it gets better. As reported today by the Washington Post's Ezra Klein, the Center on Budget and Policy Priorities estimates that 62 percent of the cuts in the so-called Ryan budget passed by the House last week will involve programs for low-income Americans, while 37 percent of the proposed tax cuts in the plan will benefit Americans earning more than $1 million. Translation: Less money for social programs, more Americans falling into poverty, greater demand for frontline nonprofit services.

"Nonprofits are adapting to continued economic pressure in all sorts of creative and substantive ways, but for many these are stopgap measures that won't make up for the bigger forces at play: decreasing government support, the unwillingness of some private foundations to evolve funding practices, and a lack of necessary support from some boards," said Nonprofit Finance Fund CEO Antony Bugg-Levine. "We must rethink the way we fund solutions to our most pressing problems."

How we might do that is the subject of a post I hope to have up later in the week.

In the meantime, you can do a deeper dive on the survey data with the NFF Survey Analyzer, download a summary of the results in brochure or PowerPoint form, or download the full results in an Excel spreadsheet.

-- Mitch Nauffts

Five Qs for...Douglas Bauer, Executive Director, Clark Foundation

(Founded in 1931, the Clark Foundation focuses on helping individuals lead independent and productive lives and supports nonprofits and programs in New York City and Cooperstown, New York. In addition to his duties running the foundation, Doug Bauer is board chair of Philanthropy New York and an adjunct faculty member in the Social Enterprise Program at Columbia Business School and the Urban Studies Program at the University of Pennsylvania. Laura Cronin is a regular contributor to PhilanTopic.)

Philanthropy News Digest: How tough is it out there for nonprofits? And what can the foundation community do to inform itself about the financial challenges confronting the sector?

Doug Bauer: We're entering what is now the fourth year of reduced funding for nonprofits, with continued cuts at the federal, state and city levels, and it is taking a toll on the sector, especially in human services and the arts. If there's any good news, it's that the state of New York is looking at a $2 billion gap in the coming fiscal year, not the $10 billion previously forecast. That's a better situation to be in than predicted, but it still means cuts are coming.

Another concern is that some of the performance-based contracts that are being issued, like the ones New York State has put in place, mean that, for example, a senior daycare program that was expecting $1 million for a certain number of slots will not be getting all its funding. They might get 93 percent and then the last 7 percent is a "private match." What we are seeing, in other words, is the emergence of an expectation -- implicit or explicit -- that private philanthropy is going to start filling some of these gaps. We all know, however, that the resources available to private philanthropy pale in comparison to what the public sector is able to do and it's not philanthropy's job to try to fill these gaps.

Also, If you are working on issues related to poverty, especially in the human services area, some of the change around contracts with private matches and no overhead are going to have a major impact on the financial condition of nonprofits that are working to address those issues. The financial condition of a good chunk of the nonprofits we work with continues to deteriorate. And, by the way, these are not low-performing nonprofits. All of which is to say, funders really have to pay attention.

PND: How can funders support nonprofit leaders -- especially leaders of mid-sized organizations -- as they deal with a "new normal" characterized by reduced revenue and growing need?

DB: Mid-sized groups are especially vulnerable in the current environment. If you're a high six- or low- to mid-seven-figure organization, it's really tough. For example, we supported a mid-sized organization in Brooklyn that had very good programs but ran into some financial difficulties. The board and staff could have tried to make it work, but a better solution for them was to be absorbed into a much larger organization. All the back-office administrative work was brought into the "mother ship," while the frontline programming at the neighborhood level remained the responsibility of staff at the smaller organization. Let's face it, a merger like this, where there's good alignment between organizations' respective missions and programs, is going to be a solution for some mid-sized groups, while other groups, if they want to remain independent, are going to have to be more nimble, efficient, and effective than they've ever been.

Of course, smaller groups tend to be at a fundraising disadvantage simply because they don't have the development capacity of larger institutions. As you track where public funding is going, and you think about how the social safety net is being restructured, I have to believe that larger nonprofits are going to be in a much better position to figure out what that restructuring ultimately looks like and how they fit in. I have great admiration for leaders of smaller nonprofits who are trying to make a go of it, and there are a lot out there. But it's going to be interesting to see whether we end up with a nonprofit sector version of -– the analogy isn't perfect -- "battleships" and "motorboats." Are we going to end up with two types of nonprofits -- large eight- and nine-figure organizations doing most of the work and a bunch of social entrepreneurs and social enterprises that focus on innovation and figuring out new ways to deliver services? And if that's our future, where does the mid-sized nonprofit that's kind of in between the start-up and the behemoth fit in? I'm honestly not sure.

PND: What should private foundations be doing to help their grantees in a time of growing need?

DB: The best dollars a foundation or corporate giving program can be providing right now to nonprofits, especially nonprofits in the human services and poverty-alleviation area, are general operating support dollars. Most of these groups are 80 percent to 90 percent government funded. And given what's been going on with government funding and the uncertain political environment, general operating support is the best way to ensure that nonprofits have the flexibility to adapt. The Clark Foundation has provided general operating support to its grantees for almost two decades now, and our board understands how important and necessary it is in this kind of environment. In fact, 80 percent of our grantmaking is awarded as general operating support. And the reason goes back to this question of government support. Those dollars are restricted to the programs that nonprofits are contracted to operate on behalf of government. Not only are the dollars restricted, but the payment cycles associated with government contracts, especially over the last three years, have been all over the map. What used to be a thirty-sixty-ninety-day cycle can now be a hundred-and-twenty-to-two-hundred-and-forty-day cycle, which of course wreaks havoc on your cash flow. So again, general operating support is critical, because those dollars are not allocated to anything but the ultimate success and sustainability of the organization.

PND: What else are you doing to help grantees survive and thrive in this uncertain environment?

DB: Based on some 2011 research conducted by Philanthropy New York, we learned that the Clark Foundation is one of the largest funders of nonprofit management training in New York City, at just over $2 million a year, and it's proven to be immensely beneficial to our grantees. We fund a number of organizations that are dedicated to helping nonprofits perform better, including the Support Center for Nonprofit Management, the Nonprofit Finance Fund, and the Rensselaerville Institute.

That said, we don't go in and say to a grantee "You need this." Instead, we try to pay close attention to the organization's existing needs and whether the advice, counsel, or consulting offered is practical, outcome-oriented, and will actually help them in the near term as well as in the long term.

Of course, when foundations suggest, or worse, force mergers or other changes on an organization, it can be problematic. A new initiative, the New York City Merger, Acquisition and Collaboration Fund, or NYMAC, has been launched by SeaChange Capital Partners and a group of foundations to advance management transitions while avoiding the whole problem of funders acting as unwelcome matchmakers on nonprofit mergers. Several foundations and, interestingly, several individual donors, pooled over $1 million to create the fund, and those funds will be used to help pay for and facilitate mergers, acquisitions, and collaborations in the nonprofit sector.

As you can tell, I don't necessarily believe that mergers are a panacea for the sector. We're all familiar with examples from the corporate world where mergers have not worked out or created additional value. That said, given the environment we're in, we have to look at the question of encouraging more mergers, acquisitions, and collaborations. And I'm excited about NYMAC because it puts money in place to, one, have that conversation on a case-by-case basis; two, to pay for legal, financial, programmatic due diligence if the conversation goes well; and, three, if the conversation goes really well, to eliminate any roadblocks or deal breakers that might derail a merger or collaboration. For example, an organization might say, "We can't do this deal unless we break our lease." If that organization needs to come up with, say, $50,000 to legally break the lease so that a merger can go through, NYMAC is in a position to provide those funds.

We're very excited about it, and I hope, if it proves to be a success, that we'll be able to replenish and maybe even grow the fund.

PND: The Clark Foundation is known for its collegial relationship with its grantees and its commitment to regular site visits. Have you been inviting conversations with your grantees about their financial health and sustainability? And what would you recommend to other funders about managing those kinds of conversations?

DB: First of all, a good look at an organization's grant proposal, Form 990, three years' worth of audits, and management letter will give you a pretty good sense of how it is doing. The importance of advance preparation cannot be overstated. We also make a real effort to talk to other funders. A lot of our grantees are receiving support from other funders, and so we try to get their perspectives as well. Again, we try to go into meetings with our grantees with as much information as possible.

But you know that we tend to provide consistent support to our grantees over long periods of time; we even have a few we've been funding since the 1960s. And we would hope that, over time, with all our grantees, especially these last three years, that finances and financial health are going to be part of the discussion. Not asking about an organization's finances in any kind of detail is poor due diligence on the part of a funder. It's a "must have" conversation. And it's a conversation that grantees should welcome.

That said, we hope, and usually request, that a board member or officer is present during our site visit. It makes for a far richer conversation. And I have to say, as I look at the hundred-plus grantees we work with, I've been impressed with how attuned board leadership is to these issues. They understand that it's a difficult environment and that one of their key responsibilities is fiduciary oversight of the organization. I know of board chairs of well-run nonprofits that, because government funding and payment cycles have become so erratic, are looking at cash flows on a weekly basis; it's the only way they can stay on top of what's going on.

Of course, the funder/grantee dynamic is always a factor. And we try to mitigate that power imbalance by being responsive, being attentive, and listening. Funders need to listen more than they do. And, you know, your parents were right: manners matter. You have to be present. You have to be open. And you have to be nice. If you take the time to really analyze what grantees are doing; if you make an effort to see them on their turf; and if you listen a lot, you are demonstrating, via your actions, that you care about the organization and its work and are a conscientious partner.

I'm always pleased when a grantee, at the end of site visit, says, "You came prepared." I've never had an executive director not enjoy a robust conversation about what their organization is doing. They're always eager and willing to defend, debate, or support their programs. I always enjoy, for example, my conversations with a particular ED. He's not a wallflower, and more importantly, he really does want to have a good discussion about what his organization is doing because he's interested in continuous improvement and he sees us as a partner in that process. Yes, there are some longtime EDs -- and I get that the ED role is tough -- who are a little cynical about funders and funder behavior. Believe me, I know there's a lot that funders do to encourage that kind of cynicism. But I think, especially in this environment, that the funder-grantee relationship has to be a partnership, and a free flow of information is critical if the partnership is to be successful.

-- Laura Cronin

Tragedy in Greece: A Q&A With Andreas Dracopoulos, Co-President, Stavros Niarchos Foundation

For almost two years, Greece has been the epicenter of a sovereign debt crisis that threatens to undermine a European monetary union more than twenty years in the making. Ever since the country received a bailout in 2010, questions about its ability to service its debt have kept global financial markets on edge and Eurozone finance ministers, the European Central Bank, and the International Monetary Fund scrambling to find a solution. The announcement in February of a second, $172 billion (€130 billion) bailout did little to boost confidence that the country will be able to put its public finances on a more sustainable footing and avoid a potentially catastrophic default.

The real tragedy in the situation, however, is the worsening economic plight of the Greek people. Even as Europe skids into recession, the Greek economy is spiraling into depression, taking people’s livelihoods, life savings, and hopes for the future with it. As Anastasis Chrisopoulos, a 31-year-old Athens taxi driver, told a Reuters reporter after the most recent bailout deal was approved: "So what? Things will only get worse. We have reached a point where we are trying to figure out how to survive just the next day, let alone the next ten days, the next month, the next year."

Earlier this month, the Stavros Niarchos Foundation (SNF) announced grants totaling $12.1 million (€9.2 million) to sixteen organizations in Greece -- the first installment of a three-year, $130 million (€100 million) commitment announced by the foundation in January to address the effects of the deepening socioeconomic crisis there. Established by Stavros Niarchos, the Greek shipping tycoon, before his death in 1996, the foundation typically allocates in the neighborhood of 50 percent of its grant dollars to organizations and projects in Greece. In 2009, the foundation committed $790 million (€566 million) for the development and construction of the Renzo Piano-designed Stavros Niarchos Foundation Cultural Center in Athens.

Two of Niarchos' sons -- Philip and Spyros -- and a great-nephew, Andreas Dracopoulos, serve as co-presidents of the foundation's six-member board. PND spoke with Dracopoulos in New York in December and again in February about the foundation's approach to grantmaking, its decision to proactively address the situation in Greece, and his views on the ultimate resolution of the crisis.

Philanthropy News Digest: SNF makes grants in four broad areas -- arts and culture, education, health and medicine, and social welfare. What, if any, are the advantages of working internationally within those portfolios?

Andreas Dracopoulos: Well, we believe in collaboration, at all levels, and having broad portfolios gives us a lot of flexibility to pursue public/private partnerships that help link the U.S. with Europe or with Greece, and vice versa. At the end of the day, however, it's really about whether a project actually will add social value. If we think it will, and if the people behind it can demonstrate they are committed and will do a good job, we'll consider funding them.

PND: Can you give us an example of the kind of work you support outside Greece?

AD: Twenty percent -- around 50 percent, if the Stavros Niarchos Foundation Cultural Center is excluded -- of our grantmaking is international, and one of the things we have focused on with those grant dollars is accessibility and inclusion in the arts, for artists as well as patrons. Over the past six years, for example, we've provided support for accessibility programs at the Museum of Modern Art. We also support the Theatre Development Fund in New York City and some of its national work on open captioning, and Lincoln Center's accessibility campaign. And just recently we awarded a grant to Second Stage Theatre to boost ADA compliance at its new theater on Forty-Third Street.

PND: What is the foundation's biggest program in the United States?

AB: We don't operate programs in the U.S., although we do fund programs run by others. Our largest commitments have been to institutions like Johns Hopkins and Weill Cornell Medical College for medical research, and we've also provided major support to the Museum of Modern Art, the New York Public Library, and Yale University.

PND: Let's talk about the situation in Greece. For the last two years, the country has been at the center of Europe's sovereign debt crisis. How did Greece get into the mess it finds itself in?

AD: It's complicated. But at the end of the day, it's a problem that affects all of Europe, so I think it's important for us to talk about it. Look at Ireland and Greece, two countries having trouble. In those countries, the problem of too much debt had completely different origins. In Ireland, it was basically banks and the private sector that caused the problem with too much leverage and risky lending. In Greece, in contrast, it was the actions of the public sector over the last thirty or forty years that is to blame. Loss of competitiveness, what I call an erosion of morality, not following the rules, not following regulations, not paying taxes, a big black-market economy, people becoming complacent and entitled. All these things added up over these years. While the music was playing, everybody was happy. Greece hosted the Summer Olympic Games in 2004, and there was this false sense we had made it. That was another problem, because once again I don't think the country did a good job preparing for the Games. We were lucky that in the end it all worked out, but it reinforced the false sense that we didn't need to work any harder, that when push came to shove we'd be able to pull it off. Of course, the budget for the Games went through the roof. And it was the public sector that was most responsible for that and for the terrible situation in which the country finds itself.

PND: Even for those who follow the news from Europe, the crisis in Greece can seem pretty far removed from their everyday concerns. What has the crisis meant for the average person in Greece?

AD: I live in the States, but of course we have families in Greece and an office there, so we hear a lot about what's going on. I think over the last five to six months months, especially since the summer, the country has entered a new stage of the crisis, a stage where you have real suffering, people not having money, leaving their kids in orphanages because they have nothing to feed them, committing suicide. It has become a real social crisis. It's like Greece is a dying animal. In some ways, it's similar to what happened with Lehman, except that Lehman could and did disappear. Greece cannot disappear. Which means the Greek people will continue to suffer.

PND: SNF made a $1.9 million grant in December to address some of the more negative effects of the crisis. That was followed in January by the announcement that you had decided to commit up to an additional $130 million over three years to address the effects of the crisis. Let's start with the first grant. What were your objectives in making it?

AD: The important thing about it was that it was made to fund a series of pilot programs. Unlike the States, where you have all these organizations that are part of a regulated, well-functioning system, in Greece you don't have that. We were working over there with two small NGOs that were pretty new to this kind of work, and we were trying to see whether it would work. If it did, we were prepared to do more.

PND: And how did you determine it was working?

AD: Because it was new for us, we did things a little differently. We had people from our office here traveling to Greece to talk to people there to see, first-hand, how things were going. In other words, we were much more actively involved in the implementation of the grant than we would have been if it had been made to an organization in the States; here, we do our due diligence, make the grant, and move on. It's different in Greece because everything is up in the air. We wanted to have more control in terms of the money; we wanted to know that programs were being implemented properly. And we wanted to follow some of the best practices we learned in this country through our work on issues like homelessness and hunger. Those were the areas we were focused on in Greece, even though both were relatively unknown in Greece until fairly recently. So, working with our grantees, we piloted a program that tries to help families stay in their homes. A second program aimed to create three day centers where people could drop in during the day, get a meal, rest, take a shower, wash their clothes -- the kind of stuff you and I take for granted. And because we were starting to see evidence of rising levels of hunger in the general population, a third program aimed to boost the capacity of an organization that was already providing free meals to people who needed them.

PND: Obviously, you were pleased with the way those funds were used and decided to make a much larger commitment. How was that decision made, and what do you hope to accomplish with those funds over the next three years?

AD: As the crisis deepened, impacting every level of Greek society, it became evident that the initial grant of $1.9 million was not enough. We felt we needed to do more. Our hope is that the infusion of new funds will help ease some of the effects of the crisis, while creating the necessary long-term infrastructure for nonprofit organizations to be able to address these issues in the future.

PND: Has the crisis undermined the Greek people's support for the Eurozone? Has it undermined their faith in democracy?

AD: The crisis has not undermined people's faith in democracy, but it has undermined their faith in politicians. There is no doubt about that. I mean nobody in Greece trusts politicians, because they have been a big part of the problem. Certain politicians have been among those who have been corrupt -- people know that and have lost faith in politicians and the political system as a result. But not in democracy.

In terms of the Eurozone? No. I mean, even now, at least two-thirds of the Greek people want to stay in Europe. And the reason is something else the media doesn't pay enough attention to. It's not just the benefits of a common currency. There's a lot more to it, in terms of history and security arrangements, and so on. So despite all the difficulties, I think the Eurozone will survive, and it will survive with Greece as a part of it. The political and economic costs of the alternative are just too great for it to be otherwise.

PND: Given the well-publicized reluctance of many Greeks to pay taxes, has the crisis affected the way the average person in Greece looks at those in society who are more fortunate?

AD: I think it’s worth noting that people here in the States have started talking about the 99 percent and the 1 percent. Even so, the situation here is very different from the situation in Greece. In the U.S. -- there are exceptions, of course -- rich people pay their taxes and do a lot of philanthropy that benefits society at large. But in Europe overall, and in Greece especially, people don't do that, they don't give back. It's like what John F. Kennedy said in his inaugural address: "Ask not what your country can do for you, ask what you can do for your country." In Greece, they don't ask. Or they don't ask enough, in my view. Wealthy Greeks go out of their way to avoid taxes and they give almost nothing back, at a time when they should be doing more -- a lot more -- of both. The social fabric has to be maintained in order to have a functioning society, and in Greece wealthy people are not doing enough to help maintain it.

PND: Are you concerned that the crisis is doing permanent damage to the social fabric in Greece?

AD: It would be unrealistic for one not to be concerned about that possibility. On the other hand, we have witnessed extraordinary acts of kindness from people toward those most in need, as well as significant mobilization to provide the kind of support that didn't exist before. All of a sudden, we seem to be less introverted as a people, and that can only be a good thing.

PND: How long will SNF continue to make grants to help mitigate the effects of the crisis in Greece?

AD: As long as there is a crisis. In a way, given that our founder was Greek and our main focus is Greece, we don't have a choice. At the same time, we have to be careful. We cannot replace the Greek state. No one wants that, and we don't have the capacity to do it. But because nobody else is doing anything, we have to be careful we don't create false hopes or an expectation that we're going to step in and fix things. It's a fine line.

PND: What's your best guess as to how this all ends? Most of us have read about the rioting in Athens earlier in the month and the call for a general strike. There's an election coming up in April, and the mainstream parties backing the bailout are losing support. Will the Greek people continue to embrace the austerity being forced on them by the rest of Europe? Or will Greece exit the Eurozone, go back to the drachma, and try to devalue its way out of its debt problems?

AD: How can you embrace austerity? Will the Greek people accept what is being imposed? Yes, because, one, they don't have a choice; and two, because the majority of the Greek people agree that the whole situation has gone on for too long. What they will no longer accept is the fact that 15 percent of the people in Greece are largely to blame for the whole crisis in terms of corruption and tax avoidance and so on. These people have done a lot of damage, and they're not paying to fix it. That's the big problem, and it's affecting a lot of issues in Greece, including possible solutions.

PND: Do you think philanthropy in Greece will come out of the crisis stronger because of the response of foundations like SNF?

AD: Well, you have to ask whether such a thing as philanthropy even exists in Greece. I know, philanthropy is a Greek word -- philos and anthropos, meaning "friend of the people" -- but in practical terms, it doesn't really exist there, at least not in an institutional form. Individuals do what they can, but there are very few foundations in Greece, and philanthropy in an organized, institutional sense simply doesn't exist. You would think the situation would have improved somewhat over the last decade, but it hasn't; wealthy Greeks have not been giving back to society. But the time has come for those who have the means to step up and help.

PND: And if they don't?

AD: Then the crisis will persist and affect a significant number of Greek people, shattering social cohesion in the process and quite probably inciting class warfare.

PND: Well, we hope it doesn't come to that. Thank you for your time this morning, Andreas.

AD: Thank you.

-- Mitch Nauffts

(Photo credit: Ioannis Vastardis)

NPO Job Openings (January 2012)

The January job numbers seem to confirm the view of many that the U.S. economy, while still battling headwinds, is picking up steam. According to the Bureau of Labor Statistics, 243,000 nonfarm payroll jobs were created in January, with large gains in professional and business services, leisure and hospitality, and manufacturing.

The BLS also reported that the national unemployment rate dipped .2 percentage points, to 8.3%, the lowest level since February 2009.

(Chart courtesy CNNMoney)

Here at PND, the number of nonprofit jobs submitted to the PND job board -- our own, completely unscientific gauge of the economy's health -- seems to confirm that the economic recovery is on track and that nonprofits, in general, are feeling more confident about their situation.

Things were looking much less rosy in September, when we last checked. Back then, the federal government was smarting from the first-ever downgrade of its AAA credit rating, Congress and the White House, having danced the country to the brink of default, were elevating finger pointing to a new art form, and the debt crisis in the Eurozone was growing worse by the day. Investors responded by doing what they always do in times of uncertainty, fleeing stocks for the safety of U.S. treasuries.

Nonprofits, in contrast, took a look around and seemed to decide the situation was not as bad as the headlines would have it. On a year-over-year basis, job postings here at PND were flat in September and October, down in November, and up smartly in December and January. (And we're seeing a continuation of that trend in February.) For the year, job postings to the board were up 2 percent over 2010 and 36 percent over 2009 (though still well below the number posted in 2007).

Indeed, as we noted in a PND item last month, a recent study (18 pages, PDF) from the Center for Civil Society Studies at Johns Hopkins University found that during the Great Recession (2007 to 2009), the nonprofit sector gained jobs at an average rate of 1.9 percent a year, while the private sector lost jobs at a rate of 3.7 percent. And the Bureau of Labor Statistics recently reported that, after retail and manufacturing, the nonprofit sector in the U.S. now employs more workers than any other industry, with the vast majority of those jobs concentrated in health care (57 percent), education (15 percent), and social assistance (13 percent).

We’re not sure whether this is an entirely good thing -- that's a subject for another post -- but we are hopeful the Europeans will get their act together and that the economy here in the U.S. will continue to gain strength. We’ll check back in in a few months and let you know how things are going.

In the meantime, feel free to share your own thoughts and obesrvations with respect to the employment situation, both in and outside the nonprofit sector. How are things in your neck of the woods? Are nonprofits hiring? What about the private sector? And where do you think things will stand six months from now?

-- The Editors

Inequality

(Mark Rosenman, a nonprofit sector activist and scholar, directs Caring to Change, an effort in Washington that seeks to promote foundation grantmaking for the common good. In his last post, he challenged the notion that more nonprofit organizations necessarily translates into greater social good.)

Although the public and a few elected leaders increasingly are focused on growing economic inequality in America, the topic isn't receiving much attention from charities and nonprofits. This in spite of the fact that the sector itself is characterized by a similar inequality.

That silence is surprising for a couple of reasons. Today's yawning inequality exacerbates the problems many people face as well as their need to turn to charities for assistance. It also directly affects the help they're able to receive; as a general rule, the larger a nonprofit organization's budget, the less likely it is to provide the kind of assistance needed by low-income Americans and those falling toward poverty. Wealthier charities tend to cater to wealthier Americans, and as the rich get richer, inequality -- in society and the nonprofit world -- grows.

Let's look at some statistics about growing inequality in the country and then explore what it means for Americans and the nonprofit organizations that serve them. Since 1979, after-tax income for the top 1 percent has more than doubled, even as it fell for middle-class and lower-income Americans. The top 5 percent of households in the United States now hold more than 60 percent of the wealth. The imbalance is even greater in the nonprofit sector, where the top 2.5 percent of charities that report data to the IRS control more than 50 percent of the wealth and account for over 60 percent of annual revenues.

Three types of exempt organizations -- hospitals, primary healthcare facilities, and institutions of higher education -- make up the top tier of the sector. Compare their finances with those of human service groups, which comprise more than a third of all exempt organizations but account for only 13 percent of its annual revenues (including government funding, fees-for-service and other income, and donations) and 11 percent of its assets.

It gets worse. This is the first recession on record in which the median income of working-age people was lower as the economy "recovered" than it was before the economy tanked. The wealthy, of course, continue to do well. Much the same is true for charities, as larger, more prosperous organizations see modest growth in contributions while many smaller nonprofits struggle to survive.

Higher education is a perfect example. The recession officially ended in the summer of 2009, and giving to higher education rose about 3.5 percent in 2010. Compare that to giving to the human services sector, which declined 1.5 percent in spite of contributions for disaster relief and recovery efforts in Haiti and elsewhere.

That's a problem, in part, because giving to higher educational institutions contributes to inequality. Consider the top two hundred or so colleges, where only 15 percent of students come from the bottom half of the income-distribution pyramid and 67 percent come from the top quartile. At most institutions, moreover, financial assistance for low- and moderate-income students has failed to keep pace with increases in tuition and related costs. And this as the increasingly large salaries paid many university presidents makes them "1-percenters."

Indeed, retiring Amherst College president Anthony Marx recently observed that "we are actually part of the problem of the growing economic divide rather than part of the solution." While having a college degree remains important to getting, or at least holding on to, a good job with benefits and some security, it also helps to legitimate inequality by seeming to validate a college education as a sure-fire route to meritocratic success.

But is it? According to a College Board study using Department of Education data, students with high test scores from low-income families were less likely to complete college than those with low scores from affluent families. And an Education Trust study of almost twelve hundred four-year colleges found that only five institutions (that's a number, not a percentage) were doing a good job serving low-income students.

The problem isn't confined to higher education. Nonprofit hospitals -- a category that includes some of the best hospitals in the country -- often fail to adequately serve those in greatest need while handing out executive compensation packages that would make a banker blush. In 2009, two-thirds of the nonprofit hospitals in the country dedicated less than 2 percent of their total expenditures for "charity care" -- i.e., medical care for the poor and indigent -- while only 7 percent directed more than 5 percent to such care. And this during a severe economic downturn in which health-related crises put countless numbers of low- and moderate-income people at grave economic risk.

I'm not suggesting that nonprofit organizations at the top of the income pyramid completely fail to provide beneficial services to society at large. They do. But with their elite reputational status and considerable economic wherewithal, they could do much more. The same is true of foundations.

Human service groups and community-based organizations often are the most helpful to people on the short end of the inequality stick. In addition to the direct services they provide, community-based organizations frequently advocate for and organize around the plight of the downwardly mobile and financially insecure. Yet, faced with ongoing budget cuts and flat or declining contributions, they are among the organizations that are most strapped financially as we head into an even more challenging future.

Notwithstanding the recent assertions of various Republican presidential candidates, it's not "class warfare" or "the politics of envy" to acknowledge -- and want to address -- growing economic inequality. On the contrary, it's a gross disservice to the nation to downplay its existence and assert that we can fix the problem by giving more tax breaks to the wealthy or by further deregulating corporations. As my kids would say, been there, done that. Acknowledging the divide between the haves and have-nots is an important step -- we can't solve the problem unless we are willing to speak frankly.

In short, nonprofit and foundation leaders need to talk more forcefully and publicly about economic inequality in America -- and do more to address it in both their programs and their own operations. They can start by countering the myths and obfuscation that characterize too much of today's political discourse. It's time we united, as a sector, to help people understand and act on their shared interests and better serve the common good.

-- Mark Rosenman

'Greed is Good' and Other Canards

Op-ed columnist Charles Blow has a piece in today's New York Times about the "politics of envy," an already tired trope that likely Republican presidential nominee and leveraged-buyout specialist Mitt Romney has been trying out this primary season.

In the piece, Blow quotes Elizabeth Warren, who chaired the Congressional Oversight Panel created to oversee the Troubled Assets Relief Program and who is running for the Senate seat in Massachusetts that Romney unsuccessfully ran for in 1994, on the obligation we all have to "pay forward" our financial good fortune:

There is nobody in this country who got rich on his own. Nobody. You built a factory out there, good for you. But, I want to be clear: you moved your goods to market on the roads the rest of us paid for. You hired workers the rest of us paid to educate. You were safe in your factory because of police forces and fire forces that the rest of us paid for. You didn’t have to worry that marauding bands would come and seize everything at your factory and hire someone to protect against this because of the work the rest of us did. Now look, you built a factory and it turned into something terrific or a great idea. God bless. Keep a big hunk of it. But part of the underlying social contract is you take a hunk of that and pay forward for the next kid who comes along....”

"Greed is good" is a great logline for a movie, but it's a terrible way to organize society. Gordon Gekko didn't "liberate" Teldar Paper, and the United States is not (as Paul Krugman reminds us) a "malfunctioning corporation"; it is, rather, an ongoing political and social experiment in which the interests of 300 million people sometimes compete but more often overlap; in which "equality of opportunity" is an ideal and not yet a reality; and in which the concept of "the public good" was, for much of the twentieth century, bound up with the equally important concept of social mobility.

Unfortunately, as new survey data from the Pew Research Center makes clear, more and more Americans believe the post-WW II social contract in the U.S. has been shredded and that tensions and conflicts between the haves and have-nots are growing.

That sense is one of the key drivers behind the Occupy Wall Street movement, it will be an important point of debate in this year's presidential contest, and it's something all of us who work in or cover philanthropy need to recognize and address.

-- Mitch Nauffts

2011 Year in Review: A Tale of Two Economies

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.

• 'Don’t Call Us, We’ll Call You'
• Jumo: Get Grant, Do Good, Sell
• 7 Tips for Finding Stories in Your Organization
• Philanthropy and...Job Creation
• Steve Jobs and Occupy Wall Street: Two Ways to Disrupt Philanthropy
• Jumo-GOOD: The Future Is Now
• A 'Flip' Chat With...Amy Sample Ward, Membership Director, NTEN
• Why Measuring Impact Remains an Elusive Goal
• Christopher Doyle, Former Colleague and Friend (1982-2011)
• Sustainability: It Requires More Than Money (Pt. 1)

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)

In 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.

PND: You've recently written a paper for the Bellagio Initiative, a collaborative project led by the Institute of Development Studies, the Resource Alliance, and the Rockefeller Foundation that aims to establish "a new framework for philanthropic and international development collaboration in pursuit of human well-being in the twenty-first century." How does the concept of human well-being differ from other measures of human development? And why is it the right measure to focus on at this particular moment?

ME: Well, the first thing I'd say is that it is a controversial thing and not everyone agrees it's the right way to go. Some people think well-being is too vague and abstract and un-measurable to be an effective guide to grant-making. The reason I believe it's potentially useful is that it forces us to focus on the bigger picture, on quality of life, on happiness, on empowerment -- the less material dimensions of how and why people feel fulfilled in their lives, which are equally important as having a job or house, receiving a microcredit loan, or any of the other more conventional things we measure. You know, the GDP data we use to measure economic progress in this country are virtually meaningless, for all sorts of reasons, so GDP is a fairly hopeless measure of welfare. And the well-being movement is saying, we can do better than that, we can measure all these different dimensions of how people are faring, and it will be a more effective and accurate guide to our decision making than relying on these outdated measures.

The problem is, how do you measure happiness? How do you measure fulfillment? How do you measure equality in social terms? It's very difficult. So the pushback is coming from people who want more solid, short-term metrics, which is where they feel most comfortable. The Bellagio Initiative was mounted against the backdrop of a debate in the international development community between people who are happy to support the infrastructure of problem solving and those who want to fix problems in a specified time frame -- a debate that's happening in philanthropy domestically as well. Traditionally, foundations followed the first approach; their focus was on creating strong institutions, governance processes, links between civil society and the private and public sectors, and so on, and not so much on "fixing" problems like endemic poverty or inadequate health care in the short term. The new generation of philanthropists, in contrast, is more impatient and very much wants to fix those problems in the short term. Bellagio is designed to advance that debate, to enable people to talk about the issues involved and see where they lead. A lot of different views are being expressed, and that's a good thing. The more diversity you have in the room, the more honesty in the room, the more likely you'll be able to generate a sense of direction that leads somewhere.

PND: Are you a fan of the type of globalization that has characterized the last few decades, with ever-tighter economic integration and new communications technologies shrinking the planet to the size of a village?

ME: Well, there are elements of globalization which are irreversible because of the way capitalism works and the way technology drives things. But the tacit understanding should be to try and make sure that globalization generates as many benefits -- and as few costs -- as possible. And that's a huge task. Market integration, technological innovation, and the accelerating speed of information flows don't by themselves solve the great questions that have always exercised human beings. They don't teach us how to live well together. They don't teach us how to cope with violence and division, discrimination and prejudice. They don't tell us how we can create some sort of common ground out of this huge diversity we are all experiencing.

Underlying all the razzmatazz of our high-speed, high-tech, globalized world are bigger philosophical questions. What grand purpose do we want technology to serve? What, in a social sense, is the purpose of markets -- simply to match buyers with sellers and feed a never ending spiral of consumption? I'm more interested in people who are talking about how we can use all this "stuff" to address those kinds of questions than I am in people who embrace technology and globalization enthusiastically and argue that if everyone has a cell phone, we'll solve the problems of poverty. That's daft and has never worked. And I see my role as constantly reminding people of those deeper philosophical questions, of asking, who are you, who are we, and how do we live well together? It's not a particularly popular conversation, because it slows things down and forces people to analyze their own role in the world, but it's a necessary one.

PND: A final question: Are you an optimist or a pessimist?

ME: Definitely an optimist. Given the current state of the world, I wouldn't be able to get out of bed in the morning if I wasn't. All my writings, even the critical ones, are trying to push people to create more change, to be more successful, to go much deeper. That's why I'm critical of some of the hype around social innovation and venture philanthropy and philanthrocapitalism. It's one thing to say we have lots of new opportunities; it's another thing to analyze them rigorously for their costs as well as their benefits. We can easily get lost in the hype and lose sight of the fact we face enormous challenges which will require every ounce of our critical imagination in order to address them. But you have to think, in a critically optimistic way, that we will rise to the challenge.

PND: Well, thanks for your time, Michael.

ME: Thank you.

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

Over 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.

PND: Impact assessment and performance measurement have become hot-button issues in philanthropy. Are the people promoting those disciplines missing something? Is there a better way to promote effectiveness in philanthropic work?

ME: It depends entirely on what you mean by effectiveness and how rigid you want to be in terms of using only certain techniques and methodologies of impact assessment, like randomized control trials, as opposed to qualitative research. We often see a stereotyping of traditional nonprofits and philanthropy as being backward in the way they look at impact assessment, but I've never found that to be the case. It's simply that we use a different set of quite defensible measures and methodologies. I would put far more trust in mixed methodologies which involve ethnography, qualitative assessment, quantitative research, and traditional social science than I would in a methodology that solely focused on randomized controlled trials or things of that ilk.

Look, I welcome a focus on impact. Everyone does. But it's a complete falsehood to say we've never been interested in impact, that we're not interested in impact, and that being interested in impact is somehow the exclusive property or characteristic of the so-called new philanthropy. The real issue is how we view impact. What kinds of change do we value? What measures do we use? How do we configure an impact assessment tool kit that will produce the most useful and accurate results without submerging the people who are doing the work in so much data they don't have time to do what they should be doing in the first place? One has to think about impact assessment in the context of the work that people do, what their objectives are, and over what time period, and then see how it can help them do their work more effectively. That requires us to be really imaginative about what we're doing and why we're doing it, rather than simply saying: "I have a magic methodology -- all you need to do is follow it."

PND: How is the new generation of tech philanthropists -- people like Bill Gates, Steve Case, and Pierre Omidyar -- changing philanthropy? And what, if anything, can they learn from old-line foundations such as Ford, Rockefeller, and Carnegie?

ME: Well, they are definitely a force for change. They have high profiles, they're ambitious, and they're aggressive, at least in some ways. Many of them want to spend down, either in their lifetimes or in a relatively short period of time after they die, and they are not shy about taking on very large problems. There is an attractiveness about that energy and about the grasp of new opportunities they have which I quite like. It's definitely not the stodgy, bureaucratic world that perhaps those more traditional foundations are accused of inhabiting. But at the same time, one has to recognize that social change is complicated, messy, politicized, and a long-term phenomenon. There are no simple answers. Just because you have wealth and technology doesn't grant you a special wisdom. And I think what some of the new philanthropists can learn from people who have been doing this kind of work for a long time -- and I actually hear new philanthropists say this quite a lot -- is that things are more difficult and more complicated than they thought they were when they started down this path, and that maybe if they had talked to more people who'd been doing this work for decades, they might have learned some things early on that they could use.

I'm a big fan of people who borrow elements from the old and the new, who don't get trapped just working with traditional methods, or just seizing opportunities in technology or the marketplace. That's where the real impact is going to come, from people who have the humility and the flexibility to say, "I have to be in learning mode constantly, and I can and should borrow from all over the place to do my work most effectively." You can learn as much from the civil rights movement of the 1960s as from new tech-based networking organizations like Avaaz. To me, there's still too much hype around the new and not enough respect for the old, and that means we're not learning as much as we could be. So, yes, I welcome the energy and forcefulness of the new philanthropists, but I want that energy and forcefulness to be balanced by a greater respect for tradition and the idea that we can learn from the past.

PND: Do you share the concerns of some that the Gates Foundation, because of its enormous size, has too much influence over agendas and policy in areas where it is active? And what can the Gates Foundation do to allay those fears?

ME: I don't think it's a question of size per se. We've had very large foundations in the past. Rockefeller, Ford, and Carnegie -- all of them, when they were first established, were large. It's more a question of how we use private resources in a way that serves the public interest, as opposed to private interest or a single individual's own interpretation of what they think the public interest is. Education reform is a classic example. The problems come when significant private resources controlled by organizations with weak accountability mechanisms are aligned with a targeted, rigid approach to a controversial issue such as school reform. It's a recipe for problems, not least because the impression is that here is this hundred-pound gorilla with no discernable democratic accountability structure barreling into something that belongs to all of us, and that's not acceptable. I don't want my kids' education to be decided by Bill and Melinda Gates, thank you very much. Not because I don't like them. It's just not the way we do things in a democracy.

Instead, why don't we ask Bill and Melinda to put half their funding for education into a national education innovation fund which is governed by a cross section of society -- teachers, teachers' union officials, principals, parents' representatives, and academics who've studied the field? That's one way of mitigating the dangers that come with highly concentrated funding. Another way, obviously, would be to change the composition of the Gates Foundation's board so that it's more diverse. But that doesn't seem to be an option which has any resonance with Bill and Melinda.

Let's talk about another example. Look at what's happening in Newark at the moment with the hundred million dollars that Facebook founder Mark Zuckerberg pledged to the city for school reform. Originally it was promised that there would be democratic structures attached to the gift so that residents of the community, people who send their kids to Newark schools, felt they had a stake in how the money was spent. But as we see so often, that's exactly what's not happening; instead, most of the decisions are being left to a small group of powerful rich people. Of course, residents of the community are pushing back against that, as common sense suggests they would. I think it's an important test case, actually, for philanthropy in America, and it's important we get it right. We need to find a way to use the huge private resources of a Bill Gates or a Mark Zuckerberg for the benefit of society, but to do so in a way that the rest of us can share in and feel a part of. If we don't do that, there could be trouble down the road....

Click here for part two of the interview.

A to Z Survival Guide for Uncertain Times

(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.)

Each 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.

Fundraise selectively
Good advice anytime, but especially in the current economic climate. Focus on strong, solid prospects rather than second-tier long shots. With corporate donors, be prepared to discuss non-cash ways the company can support your operations, including loaned executives, volunteer programs, the short-term loan of facilities, and other in-kind contributions.

Get rid of dead (board) wood
Tough times demand that all stakeholders roll up their sleeves and give generously of their "time, talent, and treasure." Board members who are unable and/or unwilling to pull their weight and contribute what they can to strengthen the organizations must (gently) be shown the door.

Help other organizations less well positioned than your own
It doesn't have to be with money; technical assistance, fundraising advice, even something as simple as words of encouragement can go a long way in a tough economic environment. At the end of the day, we're all in this together.

Invest in the future
Though you're likely to find that cost-cutting measures are unavoidable, it's equally important that you identify ways to create or expand your reserve funds. No one can predict the future, so the best advice is probably the old Scouts motto: "Be prepared."

Join your local or state association of nonprofits
Networking is not only helpful in times like these, it's essential. Local nonprofit associations provide a great meeting ground to exchange information and lessons learned with peers and colleagues in other organizations.

Keep informed of developments in your field
That means staying on top of your issues and looking for even better ways to do what you do. This is not the time to cut back on professional journals and magazine subscriptions.

Look to the future, not the past
Another way of saying, "Don't rest on your laurels." And if your organization is struggling, take comfort from the fact that, with creativity, hard work, and an optimistic outlook, things are likely to get better.

Mind the sweet spot
Don't just chase dollars. Identify your organization's "sweet spot" -- the intersection of its vision, mission, assets, and other strengths with the giving "impulses" of your supporters and stakeholders -- and make sure everything you do connects to it.

Never reinvent the wheel
No explanation necessary.

Open yourself and your organization to new ideas
If something has stopped working for you, it's probably time to change it. Open your mind to new ideas and new ways of doing things, and seek out the opinions of experts in your field.

Plan for uncertainty
To be a good steward of the resources that have been entrusted to you, you simply must forecast several different financial scenarios for your upcoming fiscal year. Be conservative in your revenue projections.

Quickly communicate bad news to your key supporters
Make sure your key internal and external stakeholders feel they are being kept apprised of major changes and developments affecting your organization. And whatever you do, do not let them learn bad news about your organization from the media.

Respect your stakeholders
You can expect to get a lot of tough questions from concerned stakeholders. The fact they are concerned is a positive for your organization. Don't squander it by giving false or misleading answers.

Share
Cost-saving measures such as sharing office space or pooling back-office functions must be considered in tough economic times. Many funders will be cutting back on administrative costs and will appreciate grantees' efforts to do the same.

Tell your story
Across the country, in practically every community, low-income families and individuals are the ones who will be most affected by the economic downturn. They are likely to turn, in growing numbers, to local nonprofit organizations for food assistance, child care, credit counseling, job retraining, legal assistance, and other services. Nonprofit leaders would be well-advised to collect the stories of the individuals and families they serve and share them with donors, supporters, and local media.

Upgrade your staff perks
Many nonprofits will be pressured to reduce headcount and/or to contract out some of their services. Such measures can hurt morale and reduce organizational effectiveness. It's important, therefore, for nonprofit leaders to find both material and non-material ways to express their appreciation for and solidarity with staff. Listen to their ideas and validate their concerns. They'll appreciate it and your organization will benefit.

Vision, vision, vision
In tough times, people tend to rally around organizations and leaders that project an air of confidence and optimisim. Franlkin D. Roosevelt warned about fearing "fear itself" in the depths of the Great Depression, and in the 1960s Lyndon Johnson rallied a shocked and racially polarized country around the notion of a "Great Society." For both men, language was a critical tool in helping to paint and convey a picture of better times to come. Nonprofits would be well-served to take a page out of their respective books.

Wear your values on your sleeve
In our sector, the most important assets are our values and the public's trust. Whether we express our values through our Web sites, marketing materials, or on a T-shirt, we should display and wear them proudly. And in no circumstance should we compromise our ethics or the integrity of our organizations or the sector.

eXhale
Remember: Most of us still have a lot to be grateful for.

Yield no ground as an authority in your field
In order to assert that authority, however, you have to stay informed (see K) and must communicate clearly.

Zero in on your core competencies
Identify what your organization does best and strive to be a leader and innovator in that area or space.

-- Michael Seltzer