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307 posts categorized "Economy"

Hunger in America: A Q&A With Julie Gehrki, Walmart Foundation

October 12, 2012

In 2010, Walmart and the Walmart Foundation launched a five-year, $2 billion effort to help end hunger in America. In partnership with Feeding America and five of the country’s largest food companies -- ConAgra Foods, General Mills, Kellogg Company, Kraft Foods, and Unilever -- Walmart has since launched a variety of initiatives to encourage its customers to join the fight against hunger. Earlier this fall, Philanthropy News Digest spoke with Walmart Foundation senior director Julie Gehrki about the company's Fighting Hunger Together campaign and what the foundation is doing to address hunger in America.

Julie_gehrki_headshotPhilanthropy News Digest: What effect has the sluggish economic recovery and the drought in the Midwest had on hunger and food insecurity in the United States?

Julie Gehrki: In early September, the U.S. Department of Agriculture released the results of its most recent survey, which found that more than fifty million Americans are suffering from food insecurity. And a recent survey conducted by Feeding America found that 65 percent of its foodbank directors are very worried about food supply in the coming months. While we're hopeful the economy will continue to improve, we want to make sure that those who may not be benefiting from the improvement are taken care of. Feeding America foodbanks are on the frontlines of need in our communities, and Walmart wants to make sure they have the food they need to help those who need it -- particularly if food prices rise, as some are predicting, and as we head into the holiday season.

PND: What are some of the best ways for individuals to fight hunger in their communities?

JG: One of the things we're doing is called the Golden Spark campaign. Through Sunday, October 14, people can go to Walmart.com/hunger or our Facebook page and vote for a community to win $50,000 to start or expand a backpack program -- that's a program that provides meals to food-insecure children over the weekend, when they don't have access to free- or reduced-price school meals. A lot of people understand that kids get fed through school, lunches and sometimes breakfasts, during the week. But the backpack program forces people to think about what a kid does on the weekend. Studies have found that teachers have noticed that many kids are less attentive on Monday mornings, and that's because many of them have not eaten enough over the weekend. Backpack programs are largely run by volunteers. Individuals pack backpacks with food that's easy for kids to open and prepare on their own over the weekend. Walmart believes this is a local issue, something that communities and individuals in those communities have to rally around, because it's their neighbors who are feeling the pain.

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What Winning Looks Like: Impact & Innovation Forum for Black Male Achievement

October 05, 2012

(Grace Sato is a research assistant at the Foundation Center. This is her first post for PhilanTopic.)

Innovation-impact-forumWhat do New York City mayor Michael Bloomberg, philanthropist George Soros, and Harlem Children's Zone founder Geoffrey Canada have in common? They're all passionate about black male achievement. And they all shared the stage at the inaugural Impact & Innovation Forum, hosted by the Open Society Foundations, earlier this week.

At the event, more than two hundred leaders from every sector -- philanthropy, government, finance, media, education, nonprofit, faith -- gathered to hear about efforts taking place across the nation to improve the lives of black men and boys. And while acknowledging the many challenges black men and boys face, forum participants focused on celebrating victories, spotlighting innovative strategies, and building on growing momentum in the field.

Here are some of my takeaways from the event:

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NPO Job Openings (July 2012)

August 23, 2012

It’s been three weeks since the Bureau of Labor Statistics released the July job numbers, and the muted optimism that greeted news of a modest uptick in nonfarm payrolls seems to have dissipated as the presidential campaign has turned relentlessly negative.

According to the BLS, total nonfarm employment rose by 163,000 in July -- an increase of 99,000 from the 64,000 jobs added in June and significantly better than the 96,000 jobs added in July 2011. While the unemployment rate remained stuck at 8.3 percent (12.8 million people) -- a fact Republicans are likely to beat like a drum at their convention -- the average number of jobs added on a monthly basis rose above 151,000 for the first time in 2012.

July_2012_cnn_money

(Chart courtesy CNNMoney)

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Romney, Ryan, and Charity

August 16, 2012

(Mark Rosenman, a Washington-based scholar-activist and director of Caring to Change, a D.C.-based effort to promote foundation grantmaking for the common good, is a frequent contributor to PhilanTopic. In his last post, he argued that nonprofits are missing from critical policy debates.)

Rosenman_headshotWith the selection of Rep. Paul Ryan (R-WI) as his running mate, Mitt Romney has changed the stakes of the 2012 presidential race. Well beyond Republican versus Democrat, the question now before Americans is who we are as a nation and a people. Over the next four years, we must make decisions about public responsibility for the common good, about what we expect of government, and of what we expect of one another. The nonprofit and philanthropic sectors cannot afford to ignore this debate.

Developed by the presumptive Republican vice presidential nominee and already passed by the House of Representatives, the so-called "Ryan Plan" would have an immediate impact on many nonprofits, especially those serving low- and moderate-income people. Ultimately, however, it would affect each and every area of government support for charitable causes.

Indeed, after announcing Ryan as his running mate, candidate Romney issued a statement trying to distance himself from the plan, even though previously he had described it as "marvelous" and said he was "on the same page" as Ryan in terms of budget priorities. Charities are prohibited involvement in electoral politics, but helping to shape a public discussion about policy and our values as a nation is essential; nonprofit and foundation leaders must declare which page they are on.

Before we take a closer look at the unfolding debate, let me point out that Mitt Romney has himself already proposed similar policies. The nonpartisan Tax Policy Center concludes, for example, that Romney's detail-deprived proposal for tax reform would give the wealthiest Americans a significant tax cut while imposing tax increases on the remaining 95 percent of Americans.

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[Commentary] If Nonprofits Fail

July 05, 2012

Jennifer Talansky is vice president of knowledge and communications at the Nonprofit Finance Fund, a national nonprofit that provides a continuum of financing, consulting, and advocacy services to nonprofits and funders nationwide. Talansky held previous marketing positions at Credit Suisse Asset Management, Partnerships for Parks, Hearst Magazines Brand Development, and JP Morgan's Private Client Group.

NFF-logoRecently, the Nonprofit Finance Fund released the results of its 2012 State of the Nonprofit Sector Survey. The response to those results has varied widely based on who is interpreting the data. While many who are well-acquainted with the long history of the sector's financial woes saw the results as confirmation of their own experiences, some saw the results and told us, "That doesn't look so bad!" This divergence of perspective about what constitutes a healthy nonprofit sector begs the question: What is an acceptable level of instability -- or even failure -- within the sector?

Nonprofit financial health can be an abstract and technical subject. Let me start with a look at something more familiar. I live in New York City, where there's a pizza joint on almost every corner. Unless she has a favorite or is a friend of the owner, most New Yorkers don't blink if one of these pizza places goes out of business. Heartless as it may seem, it's the kind of economic Darwinism that one grows used to in a city with high commercial rents and an overabundance of almost everything.

Yet, there are repercussions to this kind of churn beyond a more limited pizza choice. The revenue once generated by the shuttered pizza joint supported the owner or group of owners, their families, other dependents, and employees. Its taxes contributed to the maintenance and expansion of the city's infrastructure, including teachers, police, and trash pickup. Perhaps the owners also donated to a local charity, or gave their time to a local business association. And because their basic needs were covered, the pizza shop owners and employees probably did not need to access some of the social safety-net services that a growing number of people in the city have come to rely on. With the failure of that one pizza place, the community lost all the economic and social good that was bound up in it.

Now let's take my example a step further and shift our thinking to the nonprofit sector. Like the pizza place, nonprofits contribute to their local economies in a variety of ways, including rent, the regular purchase of supplies, job creation, and more.

But imagine that the "business" at risk of failing is a domestic violence shelter. And that we're no longer in New York City but instead in a rural community in the Midwest. And that this particular shelter is the only safe haven for women and children within fifty miles. Is it acceptable from a community perspective if the shelter only has enough money to cover the next thirty days of its expenses, as is the case for one in four of the more than forty-six hundred organizations we surveyed? Or that it's like the 50 percent of survey respondents that don't expect to have the resources to keep up with demand for their services in 2012?

One of the more powerful aspects of the survey is its reflection of the collective voice of the organizations working to provide some of the most critical social services in our communities. But we mustn't succumb to statistical numbness: the survey numbers aggregate many individual stories, and each of those stories has local -- or wider -- meaning. For instance, it sounds great that "only" 20 percent of the organizations responding to the survey had to reduce or eliminate programs in the past year. Yet among these nine hundred organizations, 63 percent were unable to keep up with demand for their services. From Georgia to Texas to Montana, this simple fact has serious repercussions for the populations and communities that depend on those organizations and services.

Indeed, consider what a leader of one of those organizations told us: "We have seen a dramatic increase in the need for our services. As available resources decrease across the country, the demand for basic needs continues to grow....Domestic violence is the leading cause of homelessness among women and children in the nation. It takes more than a roof over [one's] head to break the cycle of homelessness, particularly when domestic violence is involved....Our greatest challenge is securing a steady stream of revenue and funding for services and programs."

So when we look at the numbers, it may seem like a small victory that "only" 31 percent of survey respondents finished 2011 with a deficit -- which means the other 69 percent either broke even or ended the year with a surplus. And yet, among the more than twelve hundred organizations that said they ran a deficit in 2011, 39 percent were human services organizations -- precisely the kind of organizations that provide the basic safety-net services that the most vulnerable in our communities rely on -- while another 15 percent work to educate our children.

And as if that's not sobering enough, when respondents filled out the survey in late January, 34 percent of those with a deficit in 2011 were already anticipating operating in the red in 2012. Are the rest of us willing to accept the possibility that, with two (or more) consecutive years of deficits on the books, many of these organizations may have to shut their doors? Do we, as a society, have a plan to replace the critical services they provide? The answers to those questions are unclear, the stakes are high, and, unfortunately, failure is a possibility.

NFF launched its annual sector survey in January 2009, during the darkest days of the recession. The nonprofit financial picture painted in the response to that first year's survey was pretty grim. Our hope, as the economy improved (albeit slowly) in the three-plus years since then, is that we would see a similar positive shift in the nonprofit sector's finances. That has not been the case and any improvements along the way have been modest.

Let's be honest: Business as usual is not working. The business models, revenue sources, and practices that have long been mainstays of the nonprofit sector are no longer adequate to see us through the challenging times that lie ahead. We must consider other approaches that tap new sources of money, generate new cross-sectoral partnerships and ideas, and help identify new solutions to persistent social problems. Because without fundamental change -- change that involves both innovation and more risk taking -- we will see the same disappointing results year after year. And that's a prospect that none of us should be willing to tolerate.

To see the results from the most recent NFF survey and from past annual surveys, please visit http://nonprofitfinancefund.org/survey. For individual stories behind the numbers, the "In their Words" section is likely to be of special interest. And for a more localized look at a particular sub-sector or state, we encourage you to check out our new NFF Survey Analyzer, which lets you easily filter the data in multiple ways.

-- Jennifer Talansky

Nonprofits Missing From Big Battles

June 06, 2012

(Mark Rosenman, a Washington-based scholar-activist and director of Caring to Change, a D.C.-based effort to promote foundation grantmaking for the common good, is a frequent contributor to PhilanTopic. In his last post, Rosenman and co-author Gary D. Bass, executive director of the Bauman Foundation, wrote about efforts by Congress to curtail the advocacy rights of nonprofits.)

Rosenman_headshotWe are seven months from what some are calling "taxmageddon" and others describe as a "fiscal cliff." And while leaders in the nonprofit sector are narrowly focused on proposed changes to the charitable tax deduction that could reduce charitable donations by about $2 billion a year, the Republican-controlled House of Representatives has already approved cutting trillions of dollars from programs critical to low- and moderate-income people and the charities that serve them.

Charities and foundations should be gearing up to confront immediate and near-term policy battles of extraordinary consequence to them. Instead, they seem to be wearing blinders -- or simply fear controversy, no matter the stakes.

Congressional Republicans seem to want a repeat of last summer's divisive struggle over raising the debt limit and are committed to pursuing new budget cuts. This comes after the House recently approved changes to last year's deficit-cutting sequestration agreement and shifted what was a shared annual burden of $109 billion entirely to domestic programs.

House Republicans also are trying to preserve Bush-era income tax cuts for wealthy Americans, an action that if successful will cost an estimated $1 trillion in revenue over ten years -- and doesn't include the loss of billions in revenue from estate tax reductions for millionaires. They have already passed the budget put together by Rep. Paul Ryan (R-WI), a plan that goes well beyond a renewal of the Bush cuts and give millionaires an additional tax break averaging $265,000 a year while cutting over $3 trillion from programs that serve low-income people or fund the charitable programs that help them.

This is not chump change. To give you a sense of the magnitude of the proposed cuts, the shift in sequestration alone is more than the total annual giving of all U.S. foundations combined. And the so-called Ryan plan calls for cuts in domestic program over ten years that are about seven times the equivalent projected total of foundation giving -- a shortfall that would result in some two million people losing their access to food stamps and another forty-four million having them reduced. The Ryan plan also would eliminate the social service block grant through which nonprofits now provide services to some twenty-three million people, over half of them children, as well as invalids dependent on Meals on Wheels programs, those in foster care, and those who rely on nonprofit childcare.

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NPO Job Openings (April 2012)

May 25, 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.

Cnn_money_4_2012

(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.

Pnd_jobschart_april2012
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

May 07, 2012

Eli_BroadI 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)

April 29, 2012

May_flowersOur 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 [email protected]. And have a great week!

-- The Editors

The Individual Mandate: A PubHub Reading List

April 06, 2012

(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.

Urban_mandateperspectiveAccording 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.

Bna_evidentiaryWhat, 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:

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

April 03, 2012

NFF-logoThe 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

March 26, 2012

(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.)

DBauer_headshotPhilanthropy 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.

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

March 06, 2012

Andreas_DracopoulosFor 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)

February 20, 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.

Cnn_money_jobschart

(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).

Pnd_jobschart_jan2012
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

January 26, 2012

(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.)

Rosenman_headshotAlthough 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.

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