PhilanTopic

Curtailing Democracy

(The following post was written by 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, and Gary D. Bass, executive director of the Bauman Foundation and affiliated professor at Georgetown University's Public Policy Institute. In his previous post, Rosenman wrote about widening inequality in the philanthropic sector.)

Nonprofit organizations have fewer rights today than they did last year. Thanks to language pushed by Republicans in the Consolidated Appropriations Act of 2012, charities face yet another coordinated campaign by conservatives to quash popular democracy. And unlike past "defund the left" efforts, this legislation wasn't caught in time by charity leaders to prevent its passage.

Those efforts began in 1981 with a proposal from the right-wing Heritage Foundation, were pushed by the Reagan White House throughout the early and mid-'80s, morphed into major Republican congressional legislative activity in the mid-'90s, and have come back around in various forms since then. Some have tried to limit what charities can do with private contributions; others have tried to expand the types of activities that are prohibited by charities that receive federal funding. Most of these prior attempts were stopped by watchdog organizations -- sometimes working as part of a broad-based coalition -- but only at considerable expense.

And yet conservatives continue to try to chip away at the right of nonprofit groups to engage in advocacy. For example, there is now a law on the books that prohibits nonprofit social welfare (503[c][4]) organizations that lobby from receiving federal grants. Similarly, grantees of the Legal Services Corporation face greater restrictions on advocacy than do other federal grantees.

Over the years, many grantmaking foundations have been alarmed by these attacks. Like much of society, they recognize that a strong, vibrant nonprofit sector helps to build a strong, vibrant democracy. A key element in that equation is the ability of nonprofits to speak out on public policy issues, to challenge institutional power, and to encourage people to get more involved in democratic decision-making. One legacy of earlier attacks on nonprofit advocacy was that a small number of foundations provided support for nonprofit sector watchdogs to monitor these attacks and to help build nonprofits' capacity to engage in advocacy. Alas, while laudatory, that funding was limited and episodic.

Strikingly, over the past few years even the modest amount of foundation funding available for watchdogs and advocacy capacity-building efforts has been scaled back. Key organizations no longer have staff dedicated to monitoring these issues and some organizations that devoted all their work to this cause no longer can. As these trends continue, we should expect that nonprofits will be even less prepared for future assaults on nonprofit advocacy.

The newly enacted appropriations law expands the long-standing and widely accepted prohibition on using federal grant funds for nonprofit lobbying to include "any activity to advocate or promote" any "proposed, pending or future" tax increase (at any level of government) or any "future requirement or restriction" on a "legal consumer product" (e.g., tobacco and alcohol products, junk foods and beverages) -- even when such efforts reflect the very purpose of public funding. None of these key terms is defined, and the scope is disturbingly vague and broad.

The new law also restricts the use of federal funds for many types of regulatory and administrative actions. This means that many groups that comment on state regulations, for example, will no longer be able to under their federal grant. Combined, these changes significantly restrict the advocacy rights of the nonprofit sector as well as the core functions of the public sector to promote and protect people's and communities' interests.

The law is limited at this point to programs funded through the appropriations bill that covers the Departments of Health and Human Services, Labor, and Education, as well as several independent agencies. But it is easy to see that conservatives will likely want to extend these restrictions to other spending bills that affect the arts, the environment, and many other issues across the nonprofit world.

Consider a few illustrations: a charity might receive federal funding to address the scourge of cancer by reducing tobacco use. To that end, it might launch a public service campaign about the health dangers of cigarettes, especially for minors. Or a charity might get a federal grant to combat the epidemic of obesity in the U.S. They might promote ideas for raising funds for obesity-prevention campaigns or to help reimburse government for the costs of treating obesity-related diseases, including a surcharge on sodas and other sugary foods.

Under the new law, charities would likely no longer be able to undertake these types of activities. Charities are already not permitted to use federal funds to lobby, but they certainly should be able to use federal funds to educate and suggest ideas to the public and policy makers on social issues when consistent with the purposes of a grant. It strengthens our communities when policy makers receive information from independent nonpartisan parties such as government grantees. And their research and policy ideas often are vital to improving the quality of life in our communities. All of this has been made more difficult and in many cases prohibited under the new law.

Let's be clear about this: The new legislation really is a case of the public interest losing out to private ones. Charities tend to advocate on and for issues and in debates where the voices of average people aren't really heard; they work to promote the common good. Additional restrictions on charities' free speech rights are a pointed example of how moneyed interests impose their will on ordinary people and the groups that try to serve them -- and of the need for nonprofit advocacy.

The new law was developed by Rep. Denny Rehberg (R-MT) and is supported by a number of powerful industries, including the American Beverage Association. Why would a trade association want new restrictions on nonprofit advocacy? Maybe it's because it wants to kill federal funding of programs that address anti-obesity and other public health campaigns that could affect the public's attitude and behavior with respect to sweetened drinks. Knowing how hard that is, they go after the speech rights of public health charities that get federal funding -- all part of a continuing conservative attack on nonprofit speech.

Participating in the broader assault on nonprofit advocacy rights is Cause of Action, an organization established a few months before the restrictions were enacted that's directed by a former staffer to Rep. Darrell Issa's (R-CA) Oversight and Government Reform Committee (and before that a legal associate at one of the militantly free-market/limited government Koch Family Foundations).

Cause of Action has written to at least twenty grant recipients of a federal program that funds anti-obesity and -tobacco activities warning that they may have engaged in illegal lobbying activities. It was writing, it said, only "as a convenience" and to let the organizations know that they may be subject to civil penalties and private lawsuits.

Both are tactics reminiscent of right-wing efforts dating to 1980s to stifle charitable advocacy work. Back then, the threat or actual filing of SLAPP suits (Strategic Lawsuit Against Public Participation) had a chilling effect on nonprofits' efforts to build democratic participation and otherwise affect public policy for the common good. Often filed by corporations and deep-pocket conservatives, the practice became so frequent that it earned its own acronym. You can be certain that the threat of lawsuits implied by Cause of Action will have a similar effect.

Democracy depends on ordinary people having a voice in policy decisions that affect them, and ordinary people depend on charities to advocate for and promote initiatives that improve their lives and the well-being of their communities. Efforts by conservatives and big business to deny charities some of their power to increase democratic participation limits charities’ ability to address critical problems and issues, and, ultimately, is corrosive of society and representative government itself.

Foundations must understand -- and embrace -- the absolutely critical role they play in providing support for charity watchdogs working to protect the advocacy voice of the nonprofit sector. At a time when the wealthiest people and corporations in this country are hell-bent on rigging the political system for their own gain, it is essential that private philanthropy step up and fund the people and organizations who are working to build a stronger voice for the common good.

-- Mark Rosenman and Gary Bass

Weekend Link Roundup (April 21-22, 2012)

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

Civil Society

In the Encyclopaedia of Informal Education, writer, activist, and sometime PhilanTopic contributor Michael Edwards bemoans the lack of clarity around the term civil society and attempts to restore some precision to the debate over its meaning. In the process, he reminds us that "Recognizing that civil society does indeed mean different things to different people is one of the keys to moving forward, because it moves us beyond false universals and entrenched thinking."

Communications/Marketing

On her Non-Profit Marketing blog, Katya Andresen shares four trends, including the growing popularity of peer networks, likely to shake up nonprofit marketing. "People listen to each other more than us, so we need to stop viewing social media as another form of getting our message out," writes Andresen. "Its primary value is that it allows other people to get the message out, for us."

Entrepreneurship

On the Kauffman Foundation's Growthology log, Dane Stangler looks at the evolution of entrepreneurship and how the very definition of the word entrepreneur has broadened over the years. Writes Stangler: "In its original use by Jean-Baptiste Say, it was someone who undertook economic activities and capitalized on arbitrage opportunities. Joseph Schumpeter ushered in the modern way in which people typically use the term by equating it with newness -- new products, services, combinations, business models, etc. Israel Kirzner saw entrepreneurs as those who targeted and eliminated disequilibria in the economy (for Schumpeter, entrepreneurs created those disequilibria)." Today, however, "the word has come to be so overused as to potentially lose a great deal of meaning...."

Environment

In a guest post on the Knight Blog, Shannon Dosemagen, director of community engagement at the Public Laboratory for Open Technology and Science, a 2011 Knight News Challenge winner, explains how the decision by Google to license community-created aerial maps from the lab's archive could lead to better policy and replace commercial and government data as a recognized representation of sites of civic and environmental concern.

Higher Education

The New York Times' Room for Debate series takes up the question of whether wealthy colleges deserve their tax breaks, with contributions from economist Sandy Baum; Michael McPherson, president of the Spencer Foundation; the American Entreprise Institute's Frederick Hess; Barbara Gitenstein, president of the College of New Jersey; Andrew Coulson, director of the Center for Educational Freedom at the Cato Institute; Osamudia James, an associate professor of law at the University of Miami; and Anthony Carnevale, director of the Georgetown University Center on Education and the Workforce.

International Affairs/Development

About.com's Joanne Fritz reminds readers who are thinking about doing a little "voluntourism" this summer to use common sense and follow these tips from the Center for Responsible Travel.

Philanthropy

On his Inside Philanthropy blog, Todd Cohen offers his take on some of the investment strategies that have emerged in recent years to scale up or expand proven nonprofit programs.

Regulation/Oversight

Idealist researcher/blogger Putnam Barber reminds nonprofit organizations, many of which do not have to file their Form 990s until May 15, to make sure they have answers to three important questions:

• When is our filing deadline?
• What do we need to know to be sure we stay current with all the rules and regulations?
• Who is going to file our Form 990-N?

Social Entrepreneurship

Over at Dowser, J. Gregory Dees, a professor in the Fuqua School of Business at Duke University and creator of the first course in social entrepreneurship in the U.S., challenges New York Times' columnist David Brooks' characterization of social entrepreneurship as something young people do to "avoid political participation and...[tackle the] 'corruption, venality, and disorder head-on'." Writes Dees:

Social entrepreneurs do not discourage political participation -- they invent new mechanisms for achieving the public good. Quite often solutions to problems require not just mobilizing political support but actually demonstrating how to solve problems that have confounded others.... Social entrepreneurs serve as society"s "learning laboratory," developing, testing, and refining new approaches to problems in ways that government agencies, with all their budgetary, bureaucratic, legislative, jurisdictional, and political constraints cannot do. These innovators represent the kind of decentralized problem solving that Nobel laureate Douglass North identifies as essential for any society to achieve what he calls "adaptive efficiency," the ability to adjust and thrive in the face of new challenges and shifting problems....

Social Media

On her blog, Allison Fine weighs in on the value of a Facebook "like." Writes Fine:

The notion of creating a direct equation of how much it cost to get one person to like a Facebook page and how much that person bought or gave as a result might satisfy the bean counters, but misses the larger point of why social media are so much more powerful than broadcast media. If you’re just looking for one, or ten, or one hundred thousand stand alone customers or donors, then there is no extra value in using social media. You could have just sent out a direct mail piece for that. The value in using social media is that every person, every like, comes with their own network that can be activated in an instant, and at no additional cost, for the organization. And that value, the value of having an army of your most ardent fans, affects far more than the development department....

Transparency

On the Foundation Center's Transparency Talk blog, Mark Hager, associate professor of nonprofit studies at Arizona State University's School of Community Resources and Development, explains how students in his Theory and Practice of Philanthropy course are using Glasspockets indicators to evaluate private foundations and "reflect critically on the value of transparency and how well the Glass Pockets assessment captures the concept." In the coming weeks, Hager will share thoughts from the student who "presented the most interesting observations about foundations, transparency, and the 'Who Has Glass Pockets' indicators." Stay tuned.

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

-- The Editors

Weekend Link Roundup (February 4-5, 2012)

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

African Americans

BlackGivesBack's Tracey Webb gives a shout out to The Root, which earlier this week unveiled its 2012 list of Young Futurists -- African Americans under the age of 22 who are "not only achievers but also innovators in the worlds of green innovation, science and technology, arts and culture, social activism, and business enterprise."

Civil Society

"[Is there] a textbook definition of the common good?" asks Steven Fajon, a Case Foundation intern, in a guest post on the Social Citizens blog. The question occurred to Fajon after panelist Ai-Jen Poo, director of the National Domestic Workers Alliance, in an Independent Sector webinar titled "What the Heck Is the Common Good Anyway?" explained that the purpose of the question was to initiate a dialogue between communities in need. For his part, Fajon remains unconvinced. "[I]n the end," he writes, "the idea of the common good doesn't need to be an exact science –- it simply has to strike up a debate, just like it did in my mind."

Communications/Marketing

Has any public charity had a worse week, communcations-wise, than the one Komen for the Cure had this week? For a complete rundown of the missteps made by the Dallas-based organization as it tried to explain its decision to de-fund grantee Planned Parenthood, badly fumbled its response when the Internet erupted in outrage, then reversed itself a day later, see Kivi Leroux Miller's post on the "accidental rebranding" of Komen.

Global Health

On his Humanosphere blog, Tom Paulson shares a Twitter map made by Marc Smith, founder of the Social Media Research Foundation, that seems to show the global health community -- at least the portion of it "active" on Twitter -- to be fairly insular and uncommunicative. "It's mostly just an echoing of the Gates Foundation," says Smith. "There's not a lot of response, or engagement. Basically, it looks like people preaching to the choir." For his part, Paulson suggests the problem isn't so much Twitter or social media as it is "the passive...and sometimes simplistic nature of the narrative within the global health and development community itself. This is a community," Paulson adds,

devoted to -- and advertising itself as -- doing good. Humanitarians, in my experience, are exceptionally uncomfortable when forced to talk about things going bad. It also doesn't help with fund-raising, of course. But it's reality, and reality makes for better stories.

Health

In a post on the Breast Cancer Action blog, BCA executive director Karuna Jaggar writes: "The sad truth is that Komen’s willingness to restore funding to Planned Parenthood, while a victory for women who rely on those resources, will not end the epidemic....Not while Komen overemphasizes the value of mammography -- mammography will never stop cancer before it starts. Not while pinkwashing remains the status quo, and not while Komen allows companies to put pink ribbons on their carcinogenic products. Not while metastatic disease, which is what kills women, gets only 2% of research dollars in this country...."

Higher Education

The Nonprofit Quarterly's Rick Cohen takes a closer look at the tax-exempt sector's "1 percent" -- elite universities like Harvard, Yale, Princeton, and Stanford whose endowments, on average, racked up gains of 19 percent in fiscal year 2011.

International Aid/Development

In the first two installments of a four-part series here on PhilanTopic, Demos senior fellow Michael Edwards uses the paper he wrote on the Rockefeller Foundation-sponsored Bellagio Initiative to explore the relevance of "well-being" as a lens in development work and some of the lessons philanthropy can learn from that work. Coming up next: the role of metrics in that conversation.

On the White Courtesy Telephone blog, Greater New Orleans Foundation president and CEO Albert Ruesga weighs in on a disturbing article in the New York Times that exposed the unsafe working conditions at an Apple supplier in China. "It's not a given that being poor means having to work extremely hard in unsafe conditions to make very little,” writes Ruesga. “Fixing this in your supply chain needs to take priority over an on-time delivery of iPhones to eager consumers....”

Nonprofit Blogosphere

Hosting this month's Nonprofit Blog Carnival, Getting Attention's Nancy Schwartz shares a selection of posts that highlight the dreams of our fellow nonprofit bloggers.

Philanthropy

In a video reposted on the Humanosphere blog, Melinda Gates explains the purpose of the Gates Foundation's new visitor center in Seattle.

In the text of a speech reprinted on the Philanthropy Daily site, William Schambra, the director of the Hudson Institute's Bradley Center for Philanthropy and Civic Renewal, offers a typically provocative take on the difference between liberal and conservative philanthropy. "Granted, every progressive foundation has in mind a particular social ill or injustice it seeks to remedy, whether environmental degradation or poverty or racial inequity," writes Schambra. "But what do all these add up to?

Very seldom do liberal foundations tell us explicitly what their overriding political philosophy is, or how they understand the basic character of the American political order, and what’s worth preserving and what needs changing.

Instead, if you add up the range of specific problems on the agenda of liberal philanthropy, we’re left with a pretty depressing view of America -- an America beset by a wide range of social ills and injustices that desperately require philanthropic interventions of all sorts.

By contrast, conservative philanthropy tends to see beneath the problems America may be experiencing -- many of which are of course quite serious -- [and sees] a profoundly decent and good political order.

And the vision is to understand and preserve that order, the American regime of liberal democracy, in the face of powerful intellectual forces that have pulled us away from that commitment....

Social Enterprise

Is the social enterprise bubble about to burst? In an attempt to answer that question, the folks at GOOD asked half a dozen social entrepreneurs working in Africa what they think is driving the hype, where the sector is going, and what advice they have for those just starting off.

Social Media

And in a guest post on Beth’s Blog, Levi Strauss Foundation executive director Daniel Jae-Won Lee looks at how some human rights organizations are using social media to engage underserved communities on the issues that affect them. For example, the American Civil Liberties Union of Northern California developed MiACLU.org, an online Spanish-language platform that's designed to educate and engage Latinos in the region about immigration issues.

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

-- The Editors

Can Philanthropy Put Humpty-Dumpty Back Together Again?

(Michael Edwards is a leading expert on global civil society and the author of Small Change: Why Business Won't Save the World. This is the second in a series of posts in which he looks at different aspects of the Bellagio Initiative, an effort funded by the Rockefeller Foundation to produce a new framework for philanthropic and international development collaboration in pursuit of human well-being. Click here to read the first post in Edwards' series, "Well-Being and Philanthropy," and here to read/download the Bellagio paper from which the quotation below is taken.)

"The more one disaggregates the components of well-being into smaller and more manageable pieces...the more each piece can be measured and controlled in order to improve returns....[B]ut the same pieces can't simply be re-arranged to the same effect in different contexts...."

One of my most important career lessons was taught to me by Sithembiso Nyoni, an activist in Zimbabwe. "No country in the world has developed itself through projects," she said, reflecting on the tendency of NGOs to fund their own small bits and pieces of development and hope that they add up to something more substantial over time.

Unfortunately, because the larger structures of society evolve organically rather than in assembly line fashion, they rarely do. The long and messy processes that drive our politics, culture change, and institution-building can neither be predicted nor controlled, especially if the outcome is something as complex as well-being. In that sense, development is poetry and foreign aid is prose.

Of course, a clear sense of purpose and direction is important to success. In contrast to Zimbabwe, that was one of the things that distinguished South Korea, Taiwan, and other societies that developed quickly after World War II. But as the experience of those countries also shows, clear goals were balanced by the flexibility to pursue them in lots of different ways as circumstances changed. "Evolution is always surprising," wrote Whole Earth Catalog creator Stewart Brand, "so make room for it. If you let things flourish you get a wild ride, but you also get sustainability." That's been true of all game-changing experiences in development right up to the Arab Spring.

Tension between "local ownership" and "outside intervention" has been woven through the history of development efforts for half a century or more, and it's unlikely to disappear as long as foreign aid is a tool in the foreign policy toolkit. Accountability to taxpayers, concerns about corruption, and a desire to show more "value for money" have all reinforced a project-by-project mentality that a decade ago seemed to be fading in favor of unrestricted support. Projects that are carefully planned and monitored do offer the prospect of more control, even if their influence over the deeper drivers of development is weak. On the plus side, there are many ways to leverage the impact of projects -- including through policy advocacy, capacity building, networking, and knowledge-creation -- so that they become more than small pieces in a jigsaw that can never be completed.

Nevertheless -- and here's the link to current trends in philanthropy -- the idea that successful projects can be "replicated" or "scaled-up" has, for reasons I don't entirely understand, become an article of faith. There are striking similarities between the Millennium Villages Project in sub-Saharan Africa, for example, and the Harlem Children's Zone in New York City. Both have received significant injections of resources in an effort to demonstrate that good results are possible without broader changes in the surrounding environment. The same goes for school-reform efforts and the Obama administration's Social Innovation Fund. Other schools and communities will learn from these experiences and follow a similar path, or so the theory goes.

Except that they don't, because the resources aren't there, or because the same innovation doesn't work or isn't valued when transported to another setting, or because those broader forces have a nasty habit of kicking the ladder away just when you least expect it.

If that's the case, why do pilot projects (or "policy experiments," as they are often referred to in the U.S.) continue to exercise such a powerful hold on the imagination of philanthropists? Perhaps it's because they accomplish other things that are important, like building support for their favored approaches, strengthening networks of people prepared to back them, and keeping alive the comforting thought that social progress can be removed from the influence of politics, economic restructuring, and social struggle.

Even if it could, it would be something of a pyrrhic victory, threatening to sacrifice long-term improvements in the infrastructure of problem-solving for short-term advances in services and other material indicators of success. As fifty years of trial and error in development make clear, however, investing in people's capacities to innovate is much more important than replicating any particular innovation.

But how we do measure success in that kind of scenario? And is there a way to knit all these different approaches together in a positive and constructive fashion? That's the subject of next week's posts.

-- Michael Edwards

'Well-Being' and Philanthropy

(Michael Edwards is a leading expert on global civil society and the author of Small Change: Why Business Won't Save the World. In a series of posts over the next two weeks, he'll be looking at different aspects of the Bellagio Initiative, an effort funded by the Rockefeller Foundation to produce a new framework for philanthropic and international development collaboration in pursuit of human well-being.)

"Understanding the different dimensions of well-being is crucial…because it reminds us that material and non-material assets, resources and experiences are equally important to the outcomes that people seek through the processes of development and social change...."

What can philanthropy learn from international development? Usually that question is asked and answered in reverse, leading to the export of community foundations, "philanthrocapitalism," and other models and ideas from the United States to developing countries. But despite the differences in context, I would say there's much we can learn from fifty years of development work -- the good, the bad, and the ugly.

My love/hate relationship with development stretches back to 1978, when I boarded a British Caledonian 707 in Manchester and arrived in Bogota twenty-four hours later via London, Madrid and San Juan, Puerto Rico (remember the joys of "refueling"?). I spent the first twenty years of my career with Oxfam, Save the Children, and other NGOs before joining the Ford Foundation in 1999, and the lack of cross-fertilization between philanthropy and development has always struck me as a missed opportunity for learning, at least outside the small number of U.S. foundations that make grants internationally.

And then along came the Bellagio Initiative, an effort funded by the Rockefeller Foundation and organized by the Institute of Development Studies in England to take a more systematic look at the links between these two different traditions. I was lucky enough to be asked to write one of the background papers for this process, and over the next two weeks I'll be highlighting some of the key points from that paper which I think are especially relevant to the state of philanthropy today. (Ed note: You can read the full paper -- quotations from which appear at the top of each blog post in the series -- here.)

One of the most important debates in "development" concerns the different meanings of the term itself. The implications of this debate are huge because everything flows from the outcomes we seek -- grantmaking strategies and priorities, metrics and measurement, and which types of funding are best-suited to the tasks at hand. Initially development was defined in terms of economic growth and assets, then poverty reduction and human welfare, but by the 1990s it was clear that these indicators said little about the values, systems, and institutions that underpin success. They were all too narrow and did not reflect the aspirations of those who were being "developed."

Faced by this situation, many observers, most famously the Indian Nobel laureate Amartya Sen, argued that what really matters to development are "human capabilities" and the conditions (like effective governance and land reform) required to strengthen them throughout the population, with the ultimate goal of promoting "well-being" and fulfillment, instead of just material success. The deepest challenge of well-being is "to live well together," and that's a challenge of a different order than delivering new vaccines to reduce child mortality or raising incomes through microcredit loans. It's not that these things are unimportant -- far from it -- but thinking about the broader implications of well-being forces us to give equal weight to much deeper questions about things like sustainability, patriarchy, privilege, and quality of life.

Without broader indicators of success, you end up -- how can I say this politely -- like the U.S. today or China in perhaps twenty-five years, characterized by very little absolute poverty or starvation, considerable material success for some, and large-scale social and environmental failures, including rising inequality, declining social cohesion, political gridlock, and looming ecological disaster. Unlike our current focus on enabling more people to participate in systems already in place, a focus on well-being forces us to think more rigorously about these broader challenges and how to meet them by transforming the global economy and other aspects of how we live, work, and govern our societies.

That's a huge challenge for development and for philanthropy, which spends very little money on transformative work of this kind. Part of the reason is that most of us still operate within a narrow frame of outcomes. In the U.S., there's some interest in alternatives to GDP and other indicators of national progress, but the concept of well-being isn't really part of the conversation, and that's a shame. Maybe if we spent more time arguing about a broader range of outcomes and less time debating how to measure the small number we've already selected, philanthropy would be a more creative force in society.

That's tough, because as I'll explore in my next two posts, these broader outcomes are even more difficult to influence and measure. And that makes them especially challenging for the "new" philanthropy, with its emphasis on metrics and models. If we continue to ignore them, however, we'll all be the worse for it.

-- Michael Edwards

Weekend Link Roundup (January 28-29, 2012)

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

Civil Society

Writing on the White Courtesy Telephone blog, Greater New Orleans Foundation president Albert Ruesga urges grantmakers to invest less money in white papers and candidates' forums this election season and more on "helping advocates introduce democracy to the United States." Writes Ruesga: "While foundations might not have the resources to shift the political discourse in this country [in] the coming year, they can at least help liberate us from the illusion of free and fair elections...."

Communications

In a post on the Communications Network blog, Commnetwork board chair Mitch Hurst suggests that grantmaking organizations need to do a better job of monitoring social networks, blogs, and the mainstream media if they hope to understand "how their issues are being influenced in online conversations."

Corporate Social Responsibility

In a post on the Harvard Business Review blog, Rosabeth Moss Kanter argues that great companies are about more than a single-minded focus on the bottom line. Truly great companies, writes Kanter,

believe that business is an intrinsic part of society, and they acknowledge that, like family, government, and religion, it has been one of society's pillars since the dawn of the industrial era. Great companies work to make money, of course, but in their choices of how to do so, they think about building enduring institutions. They invest in the future while being aware of the need to build people and society....

Education

Philanthrocapitalism authors Matthew Bishop and Michael Green argue against the idea, suggested last week by former British prime minister Gordon Brown, of a Global Fund for Education to help address education funding cuts and boost the number of young people globally who attend and graduate from high school. Unlike fighting malaria -- which, write Bishop and Green, is "a finite task that can be achieved even where governments are weak" -- "educating the children of the world will need sustained investment indefinitely...."

Fundraising

Future Fundraising Now blogger Jeff Brooks explains why it's important to "keep your eye on the ball" in fundraising -- and life in general.

Impact/Effectiveness

The Nonprofit Quarterly has published a fascinating exchange between the Hudson Institute's William Schambra and Wallace Foundation president Will Miller on the use of metrics in "the development and dispersion of knowledge" as a driver of the foundation's grantmaking. A must read for anyone who works in the sector.

Technology

On the Impatient Optimists blog, the Bill & Melinda Gates Foundation's Deborah Jacobs considers how the surge in tablet and e-book reader ownership presents "huge opportunities in an increasingly digitized society where information access plays a critical role in building knowledge and skills," as well as a challenge, in that the trend threatens "to exacerbate the digital divide that is already perpetuated across the U.S."

Transparency

On the Foundation Center's Transparency Talk blog, Meyer Memorial Trust communications director Marie Deatherage discusses the foundation's "road to transparency," a decade-long journey that included the early and active embrace of the Web and other online communications channels.

Volunteerism

Last but not least, CauseShift managing director Scott Henderson offers a few ideas for folks interested in changing the world one good deed at a time.

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

-- 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

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.

Do We Really Need Twelve Million New Nonprofits?

(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 wrote about commercialization of the public good. A version of this post appeared in the Chronicle of Philanthropy on Friday.)

When I learned recently via a Civic Ventures study that more than twelve million baby boomers "are interested in starting their own (social impact) business or nonprofit organization in the next five to ten years," I became alarmed.

Why do I find this aspiration so distressing? I worry that the addition of millions of new nonprofit and social enterprises -- on top of the million or so incorporated charities and foundations already registered with the IRS -- will make it more rather than less likely that we continue to view and treat critical societal issues as if they were fragmented and unrelated. And that means less effort to bring about the broad-based changes needed in our social, political, and economic institutions.

While I admire the commitment and spirit of these baby boomers -- and of the millions of others who make real contributions to improving conditions in this country and around the globe -- there is something truly incongruous in each person thinking he needs to start his own nonprofit.

And the dissonance isn't simply generational. While some entrepreneurs may want to do well by doing good and believe that is best achieved through the vehicle of her own enterprise, such individuation has contributed to the very problems that vex us.

With the number of Americans in need of help on the rise, shouldn't we be asking whether encouraging a thousand organizational flowers to bloom is the best way to respond to our current dilemma?

We know the middle class is in trouble -- and not because people are lazy or feckless. Most people have played by the rules, worked hard, and done what they thought was the right thing for themselves and their families. Yet they find themselves falling further and further behind.

The median annual income for a male full-time worker, adjusted for inflation, is virtually the same as it was in 1973. For households, median income fell last year to levels not seen since the mid-90s. Indeed, this is the first "recovery" on record in which the median income of working age people is lower post-recovery than it was pre-recession.

Not all Americans are suffering, of course. The share of after-tax income going to the top one percent of income-earners is the highest it has been in the last thirty years, while the portion going to the middle of the income spectrum has fallen to its lowest level in that span. Just as distressing, the 80 percent of families below the top quintile have less than 13 percent of American's wealth, while the top five percent control well over 60 percent -- and the richest one percent controls more than 30 percent.

The gross disparity in the distribution of income and of wealth has a human face in the growing numbers of Americans who are having difficulty paying for basic needs such as food, shelter, and medical care. Many face foreclosure or are saddled with horrendous debt loads. Student loans have become a huge problem, and the sharpest drop in income has occurred among the youngest workers.

Nor should it come as a surprise that the ranks of the poor are growing. In fact, more of us -- over 46 million -- are living in poverty than at any time in the more than fifty years that the U.S. has been publishing poverty statistics. And perhaps more troubling is the fact that poverty is becoming deeper; the poor are actually getting poorer.

Stagnant or declining wages, growing income disparities, and financial/housing/health insecurity -- for families today and perhaps future generations -- is not the result of people making bad decisions. They are, instead, the legacy of a system that has run off the rails.

So why, at a time when nonprofits are being pushed to be more efficient and there is growing pressure for mergers and other resource-sharing schemes in the sector, do boomer entrepreneurs think that starting millions of brand new entities is the most effective way to address our problems? And why, instead of simply trying to relieve the suffering of the ever-growing number of Americans hurt by the failures of our economic, social, and political systems, aren't more of them talking about the need to address the continuing cause of our problems, the systems themselves?

We know it was the egregious and unregulated abuses of big banks and other financial institutions that brought us to the brink of a second Great Depression. In fact, we're still teetering on the edge of that cliff. Thanks to their political influence, however, financial institutions have been able to stave off significant re-regulation of the industry.

Other corporations are holding over two trillion dollars in cash -- the highest level since 1963 -- and refuse to invest in job-creating opportunities for Americans. At the same time, many corporations are working overtime to reverse years of hard-won public protections with false assertions and misleading claims about regulations.

It is these dynamics -- the imbalance of power in our political and economic systems -- that must be addressed if the decline of the middle class is to be reversed. Ten million more service-providing or social entrepreneurial enterprises will not change that reality.

As the philanthropy consultant Christopher Harris recently observed, our society needs activists, not entrepreneurs. We need nonprofit organizations and foundations willing to challenge the fact that America's celebrated social mobility has been derailed. Baby boomers can help get us back on track by shifting their commitment to the common good from the ill-advised (and often self-centered) ambition to start a new enterprise and instead join hands with others to build the social, political, and economic movements that this country so desperately needs.

-- Mark Rosenman

5 Qs for... Barbara Ibrahim, Director, Gerhart Center for Philanthropy at the American University in Cairo

(Shortly after the government of Egyptian president Hosni Mubarak was toppled earlier this year, we asked What Lies Ahead for the Egyptian Philanthropic Sector? Seven months later, the Supreme Council of the Armed Forces is still serving as de facto head of state as various factions attempt to shape the oft-delayed transition to a democratically elected government. While the form and composition of the next government remains uncertain, few people are better positioned to assess the situation in Egypt than Barbara Ibrahim, director of the John D. Gerhart Center for Philanthropy & Civic Engagement at the American University in Cairo and co-editor of From Charity to Social Change: Trends in Arab Philanthropy. We recently had the opportunity to ask Ibrahim about the role of philanthropy in shaping the future of the country, what Western foundations can do to support democratic transitions in the Middle East, and why she is optimistic about the future of Libya.)

Philanthropy News Digest: The first chapter of your book From Charity to Social Change is titled "Arab Philanthropy in Transition." Now that we're seeing one authoritarian Arab government after another crumble, one has to wonder whether the political changes sweeping the region will accelerate the changes already taking place in Arab philanthropy.

Barbara Ibrahim: There is no doubt that the pace of change will be faster and deeper now in the countries experiencing political uprisings -- and perhaps also in neighboring countries trying to avoid a popular uprising. However, the direction and pace will very much depend on specific historical and socioeconomic conditions in individual countries.

Philanthropy in the Arab world had been growing fairly rapidly until the global economic recession, driven partly by the recognition that governments could no longer provide quality welfare services for their populations. Some of that philanthropy was too closely allied with ruling families and not transparent in its mode of operation. Now there will be a necessary period of "resetting."

PND: The Egyptian people have taken an amazing step toward self-determination, but longstanding social issues and economic problems in Egypt clearly won't be solved by the ouster of Mubarak alone. While the new government, whatever form it takes, will have the primary responsibility for addressing these problems, philanthropy seems poised to shoulder some of the burden -- especially in the human services sphere. Is philanthropy in Egypt developed enough to meet the challenge? And what are some key areas where philanthropic resources could do the most good?

BI: This is a moment of tremendous potential for philanthropy in Egypt. Always a country of great individual generosity, now we are seeing an unleashing of interest in more collective means of problem solving. When the police withdrew from protecting citizens in January, thousands of neighborhood watch groups sprang up spontaneously across the country. Many of those are hoping to evolve into more sustainable community development organizations -- the classic motivation for a community foundation. I also anticipate that middle class and professional Egyptians will become more engaged in giving through new institutional forms. Social media like Twitter and Facebook are already being utilized to inform and mobilize citizen funding for good causes.

PND: Naguib Sawiris, whose personal wealth is estimated to be in excess of $2.5 billion and who, with family members, founded the influential Sawiris Foundation for Social Development, recently has helped establish the Free Egyptians Party. Do you expect to see philanthropy and philanthropists play more of a role in the Egyptian political process in the coming months?

BI: Absolutely. After decades of being shut out of the political process, business leaders, religious groups and youthful activists are jumping into the public space. What impresses me about Naguib Sawiris' approach so far is that he is helping a number of youth coalitions and parties, in addition to his own, through financial contributions. He believes that youth deserve extra support in order for their voices to be heard in the upcoming elections.

PND: There are a number of Western foundations with longstanding ties to Egypt and the Middle East that are trying to figure out the best way to strengthen and advance civil society in Egypt and other countries in the region. What kind of role should they play? And is there room for greater collaboration between Egyptian and Western foundations?

BI: Foundations already present on the ground have been agile in providing rapid support to important causes in the post-uprising period. In Egypt, the Ford Foundation and Open Society Foundations are funding media and public awareness efforts, political education, and youth projects "beyond the center." However, there is a long history of popular suspicion of the motives behind foreign funding of political and human rights groups, especially when the source is U.S. government agencies. We had hoped this would no longer be used to discredit local human rights activists by questioning their patriotism or loyalties if they took foreign funds. Unfortunately, the transitional rulers seem to be repeating some of Mubarak's tactics for undermining independent critics of their policies.

I always urge new actors to spend time listening and to form alliances whenever possible with donors who have longer experience in the country. A number of us in the region are prepared to organize learning visits for any donors who would like to explore opening new programs in Egypt or other Arab countries.

PND: Are you optimistic about the outcome of the Arab Spring uprisings in Egypt, Tunisia, Yemen, and Libya? Which of the revolutions has the best chance of delivering on its promise of democratic reform? And would failure to deliver on that reform be a serious blow to an independent philanthropic sector and the continued strengthening of civil society in the region?

BI: Egypt is the largest and in some ways most complex country undergoing a democratic transition. Its endemic poverty, corruption, and poor educational standards will make economic progress difficult, even under the best of circumstances. Local and international philanthropy will play a critical role in this coming period until the overgrown public sector gets on its feet. Egypt needs major external support for debt relief, reform of basic services, and infusions of private capital to jump-start medium and small enterprises that can take advantage of young people's talents. If Egypt falters on its path to reform, the implications will be negative throughout the region.

Unlike some others, I am optimistic about Libya. It has undergone a protracted conflict in which nearly all citizens were mobilized and paid a price for the liberty they are now close to achieving. There will be a lot of energy and mobilization going forward -- including from highly educated expat Libyans who are returning to help with the transition. With ample oil resources and a relatively small population, economic growth can be achieved and shared fairly quickly. Ironically, the lack of basic institutions or a civil society may be a blessing in disguise. Libyans can build modern democratic institutions from scratch, instead of going through the painful process Egypt and Tunisia face of dismantling dysfunctional systems first.

-- Nick Scott

Foundations and Power: Beyond Advocacy

(Mark Rosenman, a long time nonprofit sector activist and scholar, directs Caring to Change, a D.C.-based effort to promote foundation grantmaking for the common good. A version of this piece appeared on the Huffington Post.)

Grantmaking foundations are being taught an important lesson, but most of them don't seem inclined to learn it. The Tea Party movement has shown that building political power is of much greater consequence to the causes foundations care about than is their support for innovative and scaled-up programs in the nonprofit sector.

Although foundations desperately want to be "more impactful" than current practices allow, they generally settle for becoming more effective at what they already do. Rarely does any truly fresh approach to grantmaking get serious consideration. And in spite of this being a "teachable moment," too few funders fully recognize the importance of government and even fewer are willing to talk about power. Unfortunately, that has become the essential conversation.

The import of government for foundations has long been clear to some funders, many of whom have pushed themselves and their peers to provide greater support for critical public policies and programs. Today's challenge to philanthropy, however, goes far beyond its support for advocacy and an often narrow focus on parochial interests.

Indeed, what is at stake today is nothing less than who has the power to define government's role with respect to the common good. The lesson being taught foundations is that without the power to implement advocated policies, problems of concern to philanthropy will rapidly grow more complex and intractable.

Most of the troubles we face as a society, and that foundations seek to address, reflect failures of government to effectively moderate the forces that created those problems in the first place. Whether those problems originate in the failures of the market and the sometimes-destructive behavior of corporations, in the poor performance of public and private institutions, or in the dysfunctional conduct of individuals, governments can and should do something about them.

Markets and corporations need effective regulation to ensure the orderly conduct of business and to provide public protections. Institutions need leadership, accountability, and resources to promote the public interest. And individuals can both be encouraged and helped to behave in their own and society's best interests. Government is a critical player in each of these realms and an essential partner to philanthropies that seek to address problems in all of them.

The current arguments for smaller, cheaper, and weaker government are, at least in part, a response to the perceived inadequacy of the public sector's efforts to provide effective protections and deliver programs and services efficiently. Yet, while some believe that the scope of laws, regulations, social programs, and taxes exceeds acceptable limits, the majority of Americans continue to want better safeguards and services; many are even willing to pay higher taxes to make sure that appropriate regulations and programs are available.

Simply advocating for that position and/or improved government responsiveness isn't sufficient in our current political reality. The momentum in the pro-/anti-government debate has swung toward the latter -- a development that hasn't happened spontaneously. It is, instead, the result of some funders, even a few foundations, understanding that it's all about power.

In funding citizen-engagement work and by using sympathetic media outlets, uber-wealthy conservatives like the Koch brothers, the folks at the Sarah Scaife Foundation, and many other like-minded philanthropists have helped build the Tea Party movement into an important force in our democracy.

The anti-government ideology advanced by those donors and activists holds profound negative consequence for most of organized philanthropy and its causes. But few foundations have come to a recognition that they ought to support a counterbalancing power, one that serves aggregated interests across the nonprofit world.

Because foundations and charities are prohibited from partisan political spending, some content themselves with efforts to strengthen democratic participation. Few really focus on it. But while electoral politics appropriately remains a forbidden zone for tax-exempt entities, foundations are free to encourage robust civic engagement and to support and develop social movements in pursuit of the common good.

Unfortunately, most of philanthropy steers clear of such efforts, even though the exercise of political power today is undercutting work long championed and supported by foundations. Evidence of attempts to undermine hard-won victories can be seen in:

• the relaxing of environmental protections won in legislatures and the courts over decades, even as climate change and its associated disasters grow worse;
• cuts in desperately needed services for those living with physical and mental disabilities;
• reductions in education funding, even as the United States has fallen further behind other industrialized nations in terms of high school and college graduation rates;
• zeroing out support for arts and culture, even as long-cherished institutions go dark before our eyes;
• the curtailing of housing assistance programs, even as the twin crises of foreclosures and homelessness get worse; and
• efforts to reverse recent consumer financial protections in spite of the fact that prior deregulation of banks and Wall Street resulted in huge costs to the Treasury and individual Americans.

Some of this retrenchment is clearly a function of government deficits, which are real and compelling. But while tax-cutting has been a priority for many, few politicians have bothered to recognize or acknowledge its impact on deficits. The $20 billion estate-tax give-away to the wealthiest in society (i.e., the top one-quarter of 1 percent of all Americans) -- money that otherwise would have made its way into foundation endowments and to public purposes -- only exacerbates matters.

Indeed, the kowtowing by Congress to the richest elites at the expense of "the people" is just the latest instance of the long-running "starve the beast" strategy advocated by conservatives. That such a strategy has caused our national debt and deficit to explode while driving arbitrary and ill-considered cuts in public programs and services -- many established through foundation-funded advocacy -- should concern us all.

Rolling back successful campaigns on behalf of consumer, environmental, and workplace protections not only hurts regular people, it costs money and adds to the deficit over the long term. Alas, public-sector approaches to the problems we face as a nation -- problems that frame both the missions and operating contexts for most foundations -- are not based on technical policy arguments about best solutions. Rather, they reflect conscious decisions made by those with political power and the interests they serve. Continuing to ignore questions of political power will only serve to accelerate the movement away from government for the people in favor of government by the few.

We might not like to admit it, but the momentum behind tax cuts and public-sector retrenchment is unlikely to fade unless foundations undertake a new kind of grantmaking, one that goes beyond funding services and advocacy and aims explicitly at building power in support of a government committed to, and capable of, taking action on the myriad problems that confront us -- including rational and humane approaches to deficit reduction.

This will require direct organizing as well as efforts to educate the public about vital government programs and regulations that work. We need significant investment in projects that mobilize the grassroots. To support such movement-building, we also need additional funding for public policy work, for advocacy, for mass media, and for social networking campaigns.

Even though they provide less than 2 percent of total nonprofit sector revenues, foundations can play a unique, some might even say a heroic, role in energizing and mobilizing the millions upon millions of Americans involved in charitable work to stand up for their concerns through greater engagement in our democratic process. It is time for philanthropy to step up and help build popular political power for the common good.

-- Mark Rosenman

Brian O'Connell, Co-Founder/President Emeritus, Independent Sector (1930-2011)

I was deeply saddened to learn of Brian O'Connell's passing.

I first met Brian in 1994, as he was preparing to retire from Independent Sector, the organization he had helped found and served so ably for so many years. In advance of the annual IS conference that fall, Brian was preparing a collection of his writings, to be published by the Foundation Center, and I had been assigned to shepherd the manuscript through the production process. As Brian wrote in the Foreword to that book (People Power: Service, Advocacy, Empowerment), he was pleased that friends and colleagues thought it would be a valuable addition to the literature of the field -- and surprised, as he got into the project, that the pieces "didn't fit, they were repetitious or contradictory, and they revealed very different styles...."

I don't remember much about that summer; it was hot, and Brian spent most of it on his beloved Cape Cod while we toiled away here in the city. We used the phone (landline!) and FedEx to manage the various stages of production, and on the two or three occasions when Brian made it into town, my colleague Rick Schoff and I would join him for lunch at one of the wonderful restaurants in the center's Union Square neighborhood. It was all very civilized.

Which pretty well describes Brian himself. A gentleman, generous, gracious to a fault. But beneath that cultivated exterior was another man, a dedicated reformer who believed passionately that democracy was a gift to be cherished and nurtured and who was fierce in his conviction that an engaged citizenry was our last, best hope. As he wrote in Finding Values That Work: The Search For Fulfillment (New York: Walker and Co., 1978):

There are no shortcuts to happiness, but the most direct route follows the line of service rather than selfishness. The individual who would be fulfilled will sooner or later learn the equation of self and service. The successful searchers will also have learned that happiness isn't found, it's created. The closest I can come to a prescription is equal dosages of independence and interdependence -- and plenty of warmth to both core and community. There's no pretension that this formula will necessarily provide blissful contentment. It follows more the course outlined by Aristotle: "Happiness is the utlization of one's talents along the lines of excellence." That's the truer direction of fulfillment, and if all that effort and service sometimes cause you to wonder if there isn't an easier way, recall Dag Hammarskjold's statement that "In our era the road to holiness necessarily passes through the world of action...."

Brian O'Connell lived a long, full life, almost all of it spent in service to our sector and the country he loved. I join all those who worked with and admired Brian over the years in saying: "Well done, sir. Well done."

-- Mitch Nauffts

5 Questions for...Helen Brunner, Director, Media Democracy Fund

The pro-democracy uprisings sweeping the Arab world have focused the world's attention on the importance of demography and the promise and perils of globalization. They've also demonstrated the growing power of new communications technologies to influence and affect change. From Egypt to Libya to Iran, the reponse of strongmen and dictators has been predictable: Shut it down. More and more, however, economic and educational opportunity, creativity, freedom of expression, and democracy are intertwined with and dependent on the Internet and wireless communication.

Recently, PND chatted with Helen Brunner, director of the Media Democracy Fund, which partners with funders to make grants that "protect and promote the public's rights in the Digital Age," about events in the Arab world, net neutrality, and the role of nonprofit advocacy groups in ensuring that every American continues to benefit from an open 'Net.

Philanthropy News Digest: Over the last six weeks, we've seen autocratic regimes in Egypt, Libya, and elsewhere attempt to squelch pro-democracy protests by "turning off" the Internet. How have those governments done it? And what does it say about the Internet as a neutral, open network?

Helen Brunner: I think it speaks to the centrality of the Internet to civil society and democratic movements across the world. The Internet is now the world's primary tool for communications and accessing information. You're right that it's problematic that a dictator can attempt to shut it off or limit access to information, as China does. Your readers might be surprised to learn that it's relatively simple to shut off the Internet — Fast Company has a recent piece that does a good job of explaining how it works — but essentially you can unplug it. Obviously, this is easier in repressive regimes, since they're already in control of much of the communications infrastructure or have an extremely close relationship to the providers. But it's way, way too late for us to go back to a world that doesn't rely on the Internet — that genie is out of the bottle. That's why it is so important to establish a strong set of protections that govern the Internet and what governments and corporations can and cannot do with it. We need to establish basic rights that protect a neutral and open network.

PND: Could something like that ever happen in the United States?

HB: Yes and no. The United States' current infrastructure would make it all but impossible to unplug our Internet. But that could change. Senators Lieberman (I-CT), Collins (R-ME), and Carper (D-DE) have introduced a bill, the Protecting Cyberspace as a National Asset Act, that would allow the federal government to shut down civilian access to the Internet should a "cybersecurity emergency" arise and keep us offline indefinitely. Under the bill, "unplugging the Internet" would not require a judicial order.

PND: What does "net neutrality" mean, and why should Americans care?

HB: True net neutrality would prevent major Internet service providers like AT&T, Comcast, or Verizon from blocking, slowing, or favoring one Internet user's content over another's. They would have to treat all content the same, which is the case today. My Web site loads as quickly as yours, which loads as quickly as CNN's or Fox News'. It means we wouldn't have to worry about a company prioritizing my Web content over your content based on money, political orientation, or whether they own the content themselves. If you think the average person should have access to any point of view, and that nonprofits should be able to use the Web to freely promote their ideas and messages, then net neutrality matters to you.

PND: The Federal Communications Commission passed new regulations concerning net neutrality in December, only to have the new Republican-controlled House vote to defund the FCC's efforts to enforce those regulations. What did the FCC propose, and why do Republicans in the House object?

HB: A very quick description of the FCC decision is that it created some weak and fairly vague consumer protections on the wired — broadband and dial-up — Internet, while leaving wireless Internet almost totally unprotected. One of the themes of the Republicans in the new Congress is a rejection of government regulation. However, if we want to protect small businesses and preserve the Internet's role as an engine of job creation, ensure that innovation flourishes, and guarantee that all Americans have access to a twenty-first century communications infrastructure, we need a "cop on the beat," so to speak.

Although the FCC has attempted to provide some assurance that everyone's content will continue to reliably reach its destination and now requires telecommunications companies to disclose their network management policies to consumers, the commission leaves open the possibility of economically motivated content discrimination. In a letter to the FCC before the vote, Sen. Al Franken (D-MN) wrote: "Absent significant changes to the draft order as it has been described to me, adopting these rules as they are may actually send signals to industry endorsing any closing off of the Internet that is not specifically prohibited."

So, why are the big telecommunications companies suing the FCC and Republicans in Congress intent on blocking action by the commission? My guess is that Republicans prefer that there be zero free-speech and consumer protections when it comes to the Internet and — given their partial victory — are going for total victory. If they win, the ability for the FCC to enact the many provisions of the congressionally mandated National Broadband Plan will be in jeopardy.

PND: What should we be paying attention to over the next few months in terms of the debate?

HB: There are the lawsuits and two bills moving through Congress. But the decision is not the end, it's only the beginning. The new rules and the manner of their adoption underscore the deep need for more work in the media justice field, as well as the effectiveness of nonprofit advocacy groups working in this area. They are extraordinary organizers and are using every tool at their disposal, from town halls and viral videos to academic research, op-eds, and petition drives. Without their work, the FCC would likely not have included the consumer-protection provisions that made it into FCC Chairman Genachowski's proposal, some at the eleventh hour. That said, as the debate over a free and open Internet enters its next phase, the public interest community will need to work even harder.

— Mitch Nauffts

Weekend Reading: Egypt's Transition?

With President Hosni Mubarak's resignation, the popular uprising in Egypt enters a new phase of what everyone hopes will be a peaceful transition to a more democratic form of government. Here are a handful of foundation-sponsored reports in our PubHub catalog that explore aspects of democratization, political transition, and nation building in other countries around the globe.

But first: From the organizing of protests via social networking sites, to the Internet shutdown that reportedly sent more people into the streets of Cairo and Alexandria, to the outcry over the detention and abuse of journalists by the state security apparatus, the role of the media in recent events in Egypt and Tunisia cannot be ignored. Against that backdrop, the Carnegie Corporation of New York has posted an extended version of the article "Arab Media: The Web 2.0 Revolution," which originally appeared in 2008 in the Carnegie Reporter.

Also worth a second look is Muslim Publics Divided on Hamas and Hezbollah, which is based on a spring 2010 survey by the Pew Global Attitudes Project. Among other things, the survey found that 59 percent of respondents in Egypt said democracy was preferable to any other kind of government, while 22 percent said in some cases non-democratic governments might be preferable. The survey also found that 61 percent of Egyptians were either very concerned (20 percent) or somewhat concerned (41 percent) about Islamic extremism in their country, while 31 percent agreed that there was a struggle in their country between modernizers and fundamentalists.

An earlier analysis from Carnegie, Russia: Facing the Future, looks at Russia's economy, military, and democratic reforms, societal problems, and possible futures, ranging from the fragmentation of the Russian Federation to the reimposition of Soviet-era totalitarianism.

Often held up as a model of a peaceful transition, South Africa is the focus of Local Democracy in Action: A Civil Society Perspective on Local Governance in South Africa, a report from the Good Governance Learning Network, with support from the Mott and Ford foundations. The report evaluates South Africa's municipal governments in terms of democracy, responsiveness, and accountability; planning and budgeting; and poverty reduction; discusses priorities and challenges; and offers alternatives.

Developing a Strategy for Kosovo’s First 120 Days: Conference Summary Report, a report from the Rockefeller Brothers Fund, with support from the Mott Foundation, summarizes discussions from a conference convened to help the new government of Kosovo develop a strategy for governance during a 120-day transition period following the United Nations Security Council vote that transferred administrative control from Serbia to the government.

Reconciliation after the fall of a brutal regime is the subject of So We Will Never Forget: A Population-Based Survey on Attitudes About Social Reconstruction and the Extraordinary Chambers in the Courts of Cambodia, a report from the Human Rights Center at the University of California, Berkeley. The report, which was funded by the German Civil Peace Service, German Development Service, and Open Society Institute, analyzes the findings of a survey that asked Cambodians about crimes committed by the Khmer Rouge, the work of the Extraordinary Chambers in the Courts of Cambodia, and the outlook for reparations and justice in that Southeast Asian country.

Two other reports from the Human Rights Center, Transitioning to Peace: A Population-Based Survey on Attitudes About Accountability and Social Reconstruction in Northern Uganda and Building Peace, Seeking Justice: A Population-Based Survey on Attitudes About Accountability and Social Reconstruction in the Central African Republic, examine citizens' views with respect to transitional justice, accountability, and conflict resolution in those two African countries. Supported by the John D. and Catherine T. MacArthur Foundation, Humanity United, and USAID, the reports offer recommendations in a range of areas, including reconstruction and development, national dialogue, and regional security.

What has been the philanthropic sector's recent contribution to the building of civil society globally? Peace and Security Grantmaking by U.S. Foundations, 2008-2009, a report from the Peace and Security Funders Group that was funded by the Carnegie Corporation, provides an overview of trends in grantmaking by U.S. foundations for civil society peace and security initiatives worldwide by issue area, strategy, and foundation and grantee characteristics.

The Baltic-American Partnership Fund: Ten Years of Grantmaking to Strengthen Civil Society in Estonia, Latvia and Lithuania, a report from the Open Society Institute and USAID, reviews the outcomes and lessons learned from the fund's efforts since its creation. In addition to a grant summary and grantee profiles, the report includes essays by some of the fund's officers and partners.

This is just a sampling of reports related to civil society and national reconciliation, broadly defined, that you can find in PubHub. If you know of others, foundation-sponsored or otherwise, feel free to share them in the comments section, or drop me a line at pubhub@foundationcenter.org.

-- Kyoko Uchida

This Week in PubHub: Civil and Human Rights

(Kyoko Uchida manages PubHub, the Foundation Center's online catalog of foundation-sponsored publications. In her last post, she looked at four reports that explore the landscape of impact investing.)

Every January, in honor of Martin Luther King, Jr. Day, PubHub features reports on the topic of civil and human rights. This week's focus is on the protection and promotion of international human rights, whether through regional courts or development agencies.

The Open Society Foundations' study From Judgment to Justice: Implementing International and Regional Human Rights Decisions suggests that multilateral human rights mechanisms -- including the European Court of Human Rights and the Committee of Ministers, the African Commission on Human and Peoples' Rights and the African Court on Human and Peoples' Rights, the Inter-American Commission on Human Rights and the Inter-American Court of Human Rights, and the United Nations Human Rights Committee -- are struggling to implement their decisions on the ground. If the judgments are not effectively enforced, the report's authors argue, the very legitimacy of the courts could be undermined. The report calls for strengthening the procedures for monitoring and promoting implementation by, for example, developing national legal regimes governing implementation and reporting mechanisms, allocating greater resources to follow-up efforts, and fostering cross-system dialogue among human rights systems.

Report on Citizen Security and Human Rights, issued in December 2009 by the Inter-American Commission on Human Rights, finds that in Organization of American States member countries, many factors -- including the history and structure of the state and society, government policies and programs, the relevance of economic, social and cultural rights, and international and regional conditions -- are undermining the protection of citizens from crime and violence perpetrated by state and non-state actors. The report outlines governments' international obligations and urges states to adopt a human rights perspective on citizen security -- bolstering democratic participation, implementing comprehensive public policies to ensure that human rights are respected, and strengthening institutions, laws, programs, and practices.

Not only are governments obligated to protect their own citizens' rights, they should also be held accountable for promoting human rights as an integral part of international development efforts, a new report from the World Resources Institute argues. The report, A Roadmap for Integrating Human Rights Into the World Bank Group, suggests, for example, that political repression, discrimination, and poor health conditions for local workers are likely to prevent outside investment from generating poverty reduction and net development benefits. In part because the economic benefits of human rights protections are not easily quantified, however, open dialogue about a human rights approach to development is not yet the norm within the World Bank Group. The report recommends short- and medium-term strategic goals for human rights integration, including improving assessments of risks and empowering communities to use the World Bank's grievance mechanisms to address rights violations.

However flawed or limited, some of these multilateral efforts are actually advancing the protection of human rights around the world. Which makes Experiments in Torture: Evidence of Human Subject Research and Experimentation in the "Enhanced" Interrogation Program, a report from Physicians for Human Rights, all the more difficult to read. The report examines the evidence in three cases in which the United States involved medical professionals in monitoring detainee interrogations, analyzing the results, and drawing inferences applicable to subsequent interrogations. Highlighting the implications for public trust in the healing profession, the authors recommend a federal investigation as well as legal, executive, congressional, and other actions.

What role should philanthropy play in protecting and promoting human and civil rights around the globe? Is the presence of a robust civil society a precursor for the protection of rights? And is a human rights-first approach more likely to lead to sustainable economic development? Share your thoughts in the comments section below.

And don’t forget to visit PubHub, where you can browse over a hundred reports on civil and human rights.

-- Kyoko Uchida