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Most Popular PhilanTopic Posts (August 2014)

September 02, 2014

Don't know what it's like where you are, but here in NYC someone forgot to tell Mother Nature that summer is over. Which is okay, because before it ends we want to make sure everyone has a chance to catch up with all the sizzling content we posted on PhilanTopic in August. Enjoy!

What have you read/watched/listened to lately that made you think, surprised you, or caused you to scratch your head? Share your finds in the comments section below....

Why WITNESS and Other Nonprofits Are Adopting the Serious Business of Monitoring and Evaluation

August 28, 2014

Last month, The New York Times "reviewed" the still-in-development Participant Media Index, which is designed to measure the impact and engagement of social issue documentaries. Anyone in the nonprofit world knows that impact and engagement are the buzzwords du jour. More than a passing fad, however, impact evaluation is serious business – one that many of us in the social change realm grapple with every day.

This has not always been the case in the eighteen years I've worked in the sector. Funders have increasingly driven the trend, asking grantees to not just monitor our progress, but also to develop innovative ways to quantify that progress and share our learnings more broadly. In this way, the nonprofit world is catching up with the fields of medicine, psychology and education – all of which have embraced "evidence-based practice" over the past two decades.

This is mostly a positive development. By laying out concrete objectives and outcomes at the start of a grant (in the proposal), organizations are forced to think more strategically and are held accountable for delivering on their promises. The most forward-thinking funders understand the risk inherent in our work – that social investments, like those in business, are not guaranteed to succeed, and that organizations can learn as much from their failures as their achievements. Yet careful planning (yes, even the ubiquitous logic framework) can help increase the odds that we uphold our end of the bargain: To ensure that precious resources are used to successfully mobilize positive social change.

WITNESS has always been considered an innovator in impact evaluation, starting in the mid-2000s with our groundbreaking Performance Evaluation Dashboard, and including a massive effort we launched recently to overhaul our program. Indeed, we are constantly looking for new ways to ensure we maximize our performance and learnings. But this approach is not without its challenges. Human rights advocacy is notoriously difficult to measure, change is often incremental, and ultimate "wins" can take years to achieve. Video advocacy is even more complex, since video is a complementary tool, intended to corroborate other, more traditional forms of documentation.

A point system for tracking Ouputs, Oucomes and Impact from WITNESS' first Performance Dashboard for our fiscal year 2006.

(A point system for tracking Outputs, Outcomes and Impacts from WITNESS’ first Performance Dashboard covering our fiscal year 2006.)

Continue reading »

5 Questions for…Michael Petrilli, President, Thomas B. Fordham Institute

August 26, 2014

With a new school year beginning and debate over the Common Core State Standards heating up, we thought it would be an excellent time to talk to an expert on the subject.

According to Michael Petrilli, president of the Thomas B. Fordham Institute, a D.C.-based think tank dedicated to advancing educational excellence for every child, the "Common Core Wars” scorecard currently stands at 42-4-3-1: forty-two states out of the forty-six that signed on to Common Core are still on board (including "plenty" of states that have "rebranded" the standards); four states (Alaska, Nebraska, Texas, and Virginia) never adopted them; three states (North Carolina, South Carolina, and Missouri) currently are going through a review process that will result in new standards; and one state, Oklahoma, has repealed the standards.

Headshot_michael_petrilliPND conducted the following Q&A with Petrilli earlier this month.

Philanthropy News Digest: One concern of opponents of the Common Core is that the standards are not as rigorous as some existing state standards. But a Fordham Institute analysis found that the Common Core standards were superior in content and rigor to the standards that three-quarters of the states were using in 2010. What are critics of the Common Core getting wrong? And why should any state with demonstrably tougher standards in place adopt the Common Core?

Michael Petrilli: Even critics of the Common Core acknowledge that the standards are more rigorous and challenging than what the vast majority of the states had in place before. To be frank, that's not saying much: most state standards pre-Common Core tended to be vague, misguided, or both. And the associated state tests, which often were set at ridiculously low levels, encouraged "drill and kill" style teaching, and regularly sent false signals that most students — and schools — were doing fine, were arguably worse.

The real question is how the Common Core stacks up to the best state standards, such as those that were in place in Massachusetts, Indiana, and California. In our judgment, it's a toss-up. Our reviewers gave the Common Core a grade of "A-" in mathematics and a "B+" in English language arts; a handful of states did slightly better, particularly in English. A smart move, then, would be to combine the Common Core with the best of these previous standards, as Massachusetts did in 2010 by adopting the Common Core but keeping, among other elements, the list of exemplary literary authors that was part of its old standards.

Why, you ask, should any of the handful of states with strong standards adopt the Common Core? We admitted to being divided on this question in 2010, though we anticipated some upside to the move to common standards, including the proliferation of high-quality Common Core-aligned curricula and assessments. In other words, it was our belief then that if states stuck with their old standards, even good ones, their educators would miss out on the improvements in curricula and assessments that we fully expected would soon sweep the country. Four long years later, we're finally seeing our prediction come true. Common Core-aligned curricular resources are starting to enter the market, and next spring Common Core-aligned assessments will replace the old state tests in at least half the country. And we still anticipate that these tools will represent big improvements over what preceded them.

But now the question, particularly in red and purple states, is whether states should stick with the Common Core. In Ohio, for instance, there's a bill under consideration that would move the state to the old Massachusetts standards in math and English. While that might have been attractive five years ago, in the interim school districts in the state have invested tens of millions of dollars in professional and curriculum development related to the Common Core. Ohio also is planning to use the new Partnership for Assessment of Readiness for College and Careers (PARCC) assessment, which looks to be a huge improvement on its previous test. So, changing assessments again would bring enormous additional costs. Such a switch also would be greatly demoralizing to Ohio educators, who have been working hard to implement the Common Core. In short, teachers and administrators would be right to be frustrated by a move to dump the standards simply because of politics.

PND: Another frequent criticism of the Common Core is that it was paid for and developed by a handful of large foundations behind closed doors and represents U.S. Secretary of Education Arne Duncan's reform agenda. You've written elsewhere that it was "a huge mistake" for some Common Core supporters to urge the federal government to create incentives for state adoption of the standards. What about the role of foundations in the process? Could the Common Core, or something like it, have been developed without the support of the Gates, Hewlett, and Broad foundations?

Continue reading »

'Under Construction': Northside Achievement Zone

August 25, 2014

Under-construction-logoUnder Construction is a multimedia online exhibit showcasing some of the best and brightest organizations working with males of color. The UC team of filmmakers, photographers, writers, and nonprofit experts worked directly with each of these organizations for several weeks. The collaborations yielded comprehensive portraits of the services men of color receive. Each profile features a short video, a photography exhibit, a visual program model, and a narrative essay detailing the efforts of these organizations.

Under Construction is a project of Frontline Solutions and was made possible through the support of the Robert Wood Johnson Foundation. For more profiles, click here.

"What do you want to be when you grow up?"

It's the classic question, probably the best way for an adult to get inside the mind of a child, who must imagine life ten, fifteen, twenty years from now.

Common sense dictates that we should outwardly deem every child's answer to that question as  airtight. Whatever you want, you can have. We'll embrace the different versions of those high-achieving future selves — whether it involves saving patients' lives, discovering a new gene, leading a Fortune 500 company. Privately, however, we may imagine less rosy futures, aware of certain realities that often impede the path to success, including income and wealth, geography, race, gender, and educational quality.

For a tightly knit group of residents in North Minneapolis, Minnesota, however, "whatever you want, you can have" is the gospel truth. For every child, no exceptions.

They have decided to aim very high for their children and to partner with mentors, teachers, tutors, and other professionals to provide the supports needed for their children to be ready for college and beyond. The mobilizing force behind this group is the Northside Achievement Zone (NAZ), a Promise Neighborhood collaborative that seeks to end intergenerational poverty in North Minneapolis through education.

Delajuante Moore, Josh Mendez, and Jason Spellman are among the more than 1,600 youth — many low income and youth of color — living in North Minneapolis that, with their families, are enrolled in NAZ. All three young men have thought about what they want to be when they grow up. Delajuante, a rising eighth-grader and recent graduate of Ascension Catholic School (a NAZ partner school), wants to be a lawyer. His classmate Josh is looking at different options but is really interested in being a video game director. Jason, a rising sixth-grader at KIPP Stand Academy (another NAZ partner), wants to be a doctor.

UC_Jason_SpellmanThrough the messaging of NAZ and its partners, the young men are reminded constantly that their plans rest on getting a college degree. At KIPP, a college-preparatory charter school, Jason and his classmates are proud members of the "Class of 2024," the year they expect to graduate from a four-year university. With Josh and Delajuante, Jason participates in an afterschool program called 21st Century Academy that is designed explicitly to help middle-school-age students prepare for college and careers.

Nine local schools also partner with NAZ, along with a total of twenty-seven nonprofit anchor organizations, including afterschool and expanded learning programs, housing agencies, and early childhood centers. Together, all these actors form a tight circle of support around Northside students and families. And while these resources may be available in a majority of low-income communities, the NAZ difference is the way in which it coordinates and aligns the various partners, and in how it champions a Northside "culture of achievement," with empowered families leading the way.

Continue reading »

The 'Overhead' Pledge

August 21, 2014

Cut_costsI was in a room full of international development professionals at the InsideNGO Annual Conference, and the excitement was palpable. Why? We had all just raised our hands and pledged to fully disclose the true costs of our nonprofit operations to anyone who wanted to see them.

This is a breakthrough for our sector, and affirms that we are willing to transparently and consistently report our costs. What's more, the pledge is based on the understanding that the overhead debate actually undermines nonprofits' ability to deliver transformational results. We are convinced that overhead transparency will lead to more open dialogue, real collaboration with funders, and a greater focus on outcomes and results.

Within the core concept of transparency, however, there are two recommendations we are focusing on right now:

Eliminate functional allocation. This IRS requirement allows organizations to allocate costs rather indiscriminately to programs, fundraising, and general administration categories. While the goal is to shed light on organizational efficiency across the nonprofit sector, the relaxed guidelines allow organizations to manipulate their expenses across categories, often inflating their program costs to appear more efficient. Organizational efficiency is never cut-and-dried, however, and more importantly, the guidelines don't take into account organizational effectiveness.

Eliminate direct and indirect costing on grants. Each funder has its own guidelines around direct and indirect program costs. When funders cap the amount they are willing to pay toward indirect costs, organizations are incentivized to manipulate their numbers in order to recover as much as of their costs as possible, or worse, they cut investments in organizational capacity that can result in them having greater impact.

Failure to eliminate these provisions will only serve to:

  • Starve nonprofit organizations from making key organizational investments that boost their impact and increase their efficiency.
  • Create division within organizations between program staff (perceived as "wanted" costs) and operation staff ("unwanted" costs).
  • Limit consistency and distort real benchmarking across the sector.
  • Increase administrative costs (necessitated by having to manage expense reporting in multiple ways to meet a variety of funder needs).
  • Reduce transparency.
  • Place the focus on administrative costs instead of impact and obscure questions around the real cost of social change.

So that day in D.C., we all raised our hands and pledged to clearly and honestly disclose the full costs of our operations, accompanied by explanations about why our investments were essential to achieving our respective missions.

Continue reading »

All Aboard for Practices That Matter

August 19, 2014

Headshot_nikki_powellIt's a common refrain these days: a perfect storm is changing the way philanthropy is done, and that change is likely to accelerate in the years to come.

Some of the forces driving this change are external, beyond the control of stakeholders in the field. Others are emerging from the field itself and represent some of the best opportunities philanthropy has to embrace, leverage, and accelerate its own evolution.

One of those internal forces is the simple yet confounding issue of grantmaking practices.

You don't need me to tell you that complexity is the rule when it comes to grantmaking strategies. Every funder has its own ideas about who it wants to fund, why, and the outcomes and measures of success it uses and is looking for.

At the same time, meeting nonprofit needs has become trickier, as the demand for services continues to outpace the resources available to meet those needs, making the decisions on who should be funded that much harder.

Against this backdrop, I'm pleased to report that some of the most exciting changes in philanthropy, changes that involve the how of grantmaking, are just waiting for funders to take advantage of them. As the association representing grants management professionals – the people who actually develop and execute grantmaking practices at foundations – Grants Managers Network has a unique vantage point on the ways in which grantmaking practice is becoming more important. Indeed, we feel so strongly about the issue, we've decided to share our perspective in a new report titled Blueprint for the Future.

Continue reading »

Weekend Link Roundup (August 16-17, 2014)

August 17, 2014

Conflict_ImageOur weekly roundup of noteworthy items from and about the nonprofit sector....

Education

Why hasn't the once-booming tech ed sector solved education's problems? Writing in The Atlantic, Robinson Meyer, an associate editor for the publication, shares some thoughts on that question from Paul Franz, a former doctoral candidate at Stanford who now teaches language arts in California. Those thoughts, writes Meyer, "mirror my own sentiment that education is a uniquely difficult challenge, both technically and socially, and that its difficulty confounds attempts to 'disrupt' it...."

Fundraising

The "ice bucket challenge," a grassroots campaign aimed at raising funds for the ALS Association, a a charity dedicated to finding a cure for amyotropic lateral sclerosis (aka Lou Gehrig's disease), went viral this week. Around the country, celebrities and members of the public were filmed being doused with a bucket of ice water and then posted the footage to their Facebook pages or Twitter feeds. "Multiply this activity 70,000 times," writes William MacAskill, a research fellow in moral philosophy at Emmanuel College, Cambridge, "and the result is that the ALS Association has received $3 million in additional donations....[A] win-win, right?" Not according to MacAskill, whose own nonprofit, Giving What We Can, champions the principles of the effective altruism movement. The problem, writes MacAskill,

is funding cannibalism. That $3 million in donations doesn't appear out of a vacuum. Because people on average are limited in how much they're willing to donate to good causes, if someone donates $100 to the ALS Association, he or she will likely donate less to other charities....

***

This isn't to object to the ALS Association in particular. Almost every charity does the same thing — engaging in a race to the bottom where the benefits to the donor have to be as large as possible, and the costs as small as possible. (Things are even worse in the UK, where the reward of publicizing yourself all over social media comes at a suggested price of just £3 donated to MacMillan Cancer Support.) We should be very worried about this, because competitive fundraising ultimately destroys value for the social sector as a whole. We should not reward people for minor acts of altruism, when they could have done so much more, because doing so creates a culture where the correct response to the existence of preventable death and suffering is to give some pocket change....

Before you get too upset, read the entire piece. (MacAskill is a thoughtful young critic who, like many other people in the sector, has grown impatient with the status quo.) Then come back here and tell us why he's wrong — or right.

For an entirely different take on this question, take a look at this recent post by Philanthropy Daily contributor Scott Walter, executive vice president of the Capital Research Center in Washington, D.C., which is unsparing in its criticism of effective altruism (and Peter Singer, who inspired the movement).

In a short post on the BoardSource site, Convergent Nonprofit Solutions' Tom Ralser looks at the important distinction between a donor and an investor.

Continue reading »

Grantees Sound Off About Philanthropic Funding System

August 15, 2014

MarcMaxson_GG_sweaterI believe that philanthropic foundations could make major progress in serving their constituents if they paid more attention to what grantees were saying about them. Not in the cozy pat-each-other-on-the-back love-fest way. I mean by listening to real, honest feedback.

Recently, we at Feedback Labs (as a neutral third party) decided to ask a group of twelve hundred organizations to publicly share stories about their experiences with funders, adopting our community storytelling approach to the task. That approach emphasizes open-ended narratives with a few follow-up questions, intermediation (people are a little more likely to say something negative if the boss isn't in the room), and confidentiality.

Sample Feedback

I selected these particular comments because the variety of issues addressed in them illustrates the importance of asking open-ended questions. In this case, the question was: "Talk about your experience approaching a grantmaking or funding organization that either did or did not grant you funding. What was the relationship like? Did you receive support from them?" (Feel free to add your own story to the collection here.) What follows are some representative highlights from the stories told by grantees about funders and the grantseeking process:

Comments from GlobalGiving partner organizations:

  • The process leaves little room to establish a relationship with a grantmaker because we're usually just asked to fill in a standard form and maybe attach a project summary and financial documents.
  • It was important for us to understand who the decision makers are. What are their priorities? And what aspects of the project are particularly appealing to the funder, given its vision and mission?
  • It was an unsolicited proposal, and we really didn't attempt to build any relationship with the foundation by writing to them or calling them up to ask where our proposal the previous year had fallen short. That really affected our chances of winning a grant.
  • We got to meet the organization through a mutual friend who had been following our work for years.
  • I was nervous when I sent the first email requesting support for a program in Nairobi. However, the funder responded positively and even made a trip to Nairobi to see the program first hand.
  • We waited endlessly for a decision on our proposal. One of the basic problems in dealing with a large CSR unit is that you have to keep following up and have a person dedicated to making sure that happens.

And here are some comments from smaller, emerging organizations not yet partnered with GlobalGiving:

Continue reading »

How Philanthropy Can Help Unaccompanied Child Refugees Now

August 13, 2014

Headshot_daranee_petsodTen-year-old Lucinda sits alone in a courtroom awaiting her fate. In front of her is a judge who will decide whether she is deported to her native Honduras. At the opposite table sits an experienced attorney advocating for her deportation. Her case will be argued in English, a language she does not speak. No one sits beside her.

Lucinda does not have an attorney. She does not have anyone to testify to the sexual abuse she suffered at the hands of her caregiver in Honduras, or to the psychological impact of that trauma and the ordeal she endured during her perilous journey to the United States. She has no expert witness to describe the non-existent child protection system or the rampant violence against women and girls in her home country. The burden of proof for her asylum claim rests entirely on her ten-year-old shoulders.

Driven by violence in Central America and Mexico, an increasing number of children like Lucinda are seeking refuge in the United States. Between 80,000 and 120,000 children are expected to arrive in 2014 alone, up from 6,000 in 2011. A growing number of these new arrivals are children fleeing some of the world’s most dangerous countries — the murder rates in Honduras, Guatemala, and El Salvador rank among the highest in the world; these are countries where it is not uncommon for gang violence to claim even the youngest lives. Many of these children have endured unspeakable forms of trauma on their journey north, and in immigration courts across the country, thousands of them — some as young as four and five — are appearing without legal representation.

Continue reading »

Weekend Link Roundup (August 9-10, 2014)

August 10, 2014

VeggiesOur weekly roundup of noteworthy items from and about the nonprofit sector....

Advocacy

On Gene Takagi's Nonprofit Law Blog, Michelle Baker, a San Francisco-based attorney, checks in with the second of two posts on the lag ins and outs of issue advocacy. (You can read the first post here.)

Civil Society

"One of the defining features of civil society...is that participation is voluntary," writes Lucy Bernholz on her Philanthropy 2173 blog. And "[i]f civil society claims a role in pursuing social justice than it has a special obligation to do two things - protect people's power to act and make sure that digital data aren't used to exacerbate existing power differentials.

Environment

Marketplace's David Brancaccio looks at the Sustainable Endowments Institute's Billion Dollar Green Challenge and online GRITS platform, which helps "universities take their operating cash or endowment, upgrade the energy efficiency of campus buildings, and get a bigger return in savings than the stock market would earn them."

Leadership

What kind of leadership skills do emerging nonprofit leaders need to succeed? Beth Kanter takes a look at two recent studies that "take a pass at answering that question...."

The Talent Philanthropy Project's Rusty Stahl has a good post on the handful of foundations that invest in nonprofit leadership.

Continue reading »

Make an Impact in Your Community: Join the Funding Information Network

August 06, 2014

More than ever, nonprofit organizations need information: metrics and analysis to improve their systems and services, learning opportunities to develop their capacity and advance their missions, and data to inform program design and implementation. In communities across the country, information hubs such as libraries play a crucial role in the exchange of information for nonprofit organizations, which are popping up in record numbers to serve their communities and solve critical problems.

Thumb-finThe place where information meets social sector advancement is where Foundation Center's Funding Information Network can be found. For more than fifty-five years, the center has served nonprofits by providing sophisticated fundraising resources and accessible learning opportunities. Our network of satellite partner organizations that bring these resources to local communities was started in 1959 and is now four hundred and seventy-five strong.

If your organization is already committed to the improvement of your community and is looking for ways to help your audience get the funding information and training it needs to solve problems and enhance the quality of life in your region, then consider becoming a partner with Foundation Center through the Funding Information Network.

Funding Information Network partners:

  • are located in public libraries, universities, nonprofit resource centers, NGOs, and foundations in every state in the U.S. and more than ten countries;
  • play an active, engaged role in their nonprofit communities, providing important funding information and training opportunities developed by the center over more than a half-century of work in the philanthropic sector;
  • connect people to the resources they need through training sessions and database orientation programs, often taking training out into the community to audiences where they live;
  • provide access to Foundation Directory Online Professional, the premier tool for identifying potential funders from a vast repository of more than 100,000 grantmakers.

As public libraries play an increasingly larger role in providing small business resources to their communities, many employ a business librarian and set aside space specifically for business development resources and trainings. Participation in the Funding Information Network, which provides comparable resources for nonprofit organizations, is the perfect complement to these business tools. And public libraries are uniquely positioned to deliver Foundation Center-vetted skill-building classes to their audiences because many already host other kinds of learning opportunities. Public libraries make up the largest segment of Funding Information Network partners.

Another active and growing group within our Funding Information Network is community foundations. We believe there is tremendous untapped opportunity for the country’s more than seven hundred community foundations to expand the outreach they already provide to their constituents by becoming network partners. Many of these foundations receive far more grant applications than they can fund, and housing Foundation Center materials at their site allows them to provide applicants and grantees with a clear pathway to much-needed supplemental or alternative funding opportunities.

But public libraries and foundations are not the only types of partners in the network; we also welcome nonprofit resource centers, universities, NGOs, and other social service agencies. And now, more than ever, we're looking to expand to new locations where our services are needed. We believe every community deserves to have access to the information and tools that will help it pursue social improvement projects, and it's our goal to see that happen. Active, engaged network partners are what drive the Funding Information Network. The ideal network partner is any organization that has and seeks connections with nonprofits, public agencies, individual community advocates, and funders in their local community.

We invite you to consider becoming a partner with Foundation Center through the Funding Information Network. Learn more about the network, how to join, and how to nominate another organization.

Katherine Farnan is manager of network engagement at Foundation Center.

[Newsmaker] Paul Connolly, Director, Philanthropic Advisory Services, Bessemer Trust

August 05, 2014

At the turn of the twentieth century, great industrialists of the Gilded Age, men such as Andrew Carnegie, John D. Rockefeller, George Eastman and Julius Rosenwald, began in earnest to turn their attention to philanthropy. Controlling vast personal fortunes that grew larger by the day and ever-mindful of the social disruptions and widening income inequality that had come to characterize America, they began, in the words of historian Robert Bremner, "to found institutions capable of distributing private wealth with greater intelligence and vision than [they] themselves could hope to possess."

Institutions like the Carnegie Institute and Carnegie Corporation of New York, the General Education Board and Rockefeller Foundation, MIT and the Eastman School of Music, the Rosenwald Fund and Chicago's Museum of Science and Industry helped establish the template for organized philanthropy as we know it and, in the words of TIME magazine founder Henry Luce, helped make the twentieth century "the American century."

Today, a new economic revolution is roiling the planet, disrupting old ways of thinking and doing and contributing to levels of income inequality not seen since the 1920s. At the same time, a new generation of philanthropists, inspired by the example of Carnegie, Rockefeller and others, are leveraging their wealth, networks, and know-how to address seemingly intractable and urgent challenges.

Paul Connolly has had a ringside seat on the changing philanthropic landscape for almost twenty years – first as an officer and director at consulting firm TCC Group, where he oversaw the firm's capacity-building and nonprofit and philanthropy practices, and today as director of philanthropic advisory services at Bessemer Trust, a privately held wealth management and investment advisory firm. Through his writing (Navigating the Organizational Lifecycle: A Capacity-Building Guide for Nonprofit Leaders) and frequent thought pieces in sector-focused publications, presentations at the Council on Foundations' annual convenings and other national conferences, and travels as a trainer and facilitator, he has had his finger on the pulse of the growing and increasingly dynamic philanthropic sector in the U.S. and has helped shape its evolution.

PND caught up with Connolly earlier this month and asked him, among other things, about foundations' ability to move the needle on deeply entrenched social problems, the difficulty of measuring impact, and the generational dynamic in philanthropy.

Headshot_paul_connollyPhilanthropy News Digest: You joined Bessemer Trust last year after more than sixteen years at the consulting firm TCC Group, where you served in a variety of roles and established yourself as a social sector thought leader. Why the change?

Paul Connolly: While at TCC Group, I had the chance to work with many talented colleagues and remarkable clients who were deeply committed to the greater social good. The firm tripled in size while I was there, and I had the opportunity to help steer that growth and provide strategy, capacity building, and evaluation assistance to a burgeoning and stimulating mix of nonprofits, philanthropies, and corporate community involvement programs.

When Bessemer Trust approached me about this job, I felt ready for a new challenge, and it seemed like an excellent setting to positively influence social impact in a different way. In my new position, I am privileged to guide individual philanthropists as well as established foundations. And because we are in the midst of what some are calling a "golden age of philanthropy" – more foundations are being formed, major gifts are getting bigger, and the pace of the massive intergenerational wealth transfer is accelerating – Bessemer is a great place to make a meaningful difference. Plus, it's a growing firm with a stellar reputation that values the philanthropic advising function. So it seemed like the right job at the right place at the right time.

PND: Bessemer, which was established as a family office in 1907 by Henry Phipps, a co-founder of Carnegie Steel, today serves over twenty-two hundred families with more than $97 billion in assets. Do all those families include philanthropy in their wealth-management strategies?

PC: Virtually all our clients incorporate philanthropy into their wealth-management strategies in some way. The purpose, scope, timing, and form of their giving vary widely, depending on the client's financial resources, motivations, values, and family and business context. Some clients are active in charitable giving during their lifetimes, others prefer to endow a foundation or designate bequests as part of their estate planning, and many practice a combination of the two. In the same vein, certain individuals prefer recognition for their donations, while others prefer to remain anonymous. So, they employ different vehicles for giving to help them achieve their particular goals.

Bessemer has about $4.4 billion in assets under supervision associated with five hundred and fifteen family and independent foundations, endowments, and trusts that collectively award more than $220 million in grants annually. In addition, many of our larger clients have professionally staffed foundations that are not directly connected to our firm. Our clients also contribute extensively both through individual gifts and, increasingly, donor-advised funds, which are managed by Bessemer Trust, community foundations, or other entities.

PND: You mentioned a few of the different vehicles available for charitable giving. Is there a dollar threshold for which Bessemer recommends starting a foundation instead of contributing to a donor-advised fund?

PC: Due to the greater administrative costs incurred by foundations, we usually suggest a starting size of at least $1 million if the client intends to continue adding funds in the future. An ideal target for establishing a private foundation is somewhere between $5 million and $10 million.

PND: What do you tell clients who may be interested in giving not only money but their time?

PC: We are definitely seeing more and more clients who want to donate their time as well as their funds to nonprofits. Some are younger donors who grew up volunteering and want to continue providing hands-on support. Others are successful executives who are retiring, want to start a new career chapter devoted to civic engagement, and have lots of energy and wisdom to offer. A case in point is a client who sold her human resources company and is now devoting her time to providing pro bono assistance to a few nonprofits that are dedicated to helping veterans enhance their employment skills and secure stable jobs. As you might imagine, her industry knowledge and connections have proven extremely valuable to those organizations.

The key is to help clients clarify their goals and get them thinking about how they can most effectively give, and then help them find the right nonprofit match. Some clients derive the most satisfaction by providing direct voluntary service, such as preparing food in a soup kitchen or tutoring a student who is struggling in school. Others may want to contribute their expertise, leadership ability, and network access by serving on a nonprofit committee or board.

We also realize that when a prospective donor wants to provide pro bono assistance, the nonprofit benefiting from that assistance usually wants to cultivate the relationship so that over time the donor will provide financial support as well. With that in mind, we counsel our clients to clarify expectations around their volunteer roles, responsibilities, and time commitments, as well as the amount of money they might be expected to "give" or "get" to support the nonprofit financially.

Continue reading »

Weekend Link Roundup (August 2-3, 2014)

August 03, 2014

Gekko_on_vacationOur weekly roundup of noteworthy items from and about the nonprofit sector....

Advocacy

Michelle Baker, a San Francisco-based attorney, has a very good post on Gene Takagi's Nonprofit Law Blog about the do's and don'ts of issue advocacy from a regulatory perspective. It's the first of a two-part series, so be sure to bookmark it and check back later this week for part two.

Arts and Culture

Still not sure what "creative placemaking" is or why you should care? Not to worry. On the National Arts Strategies' Filed Notes blog Taylor Craig explains it all, with the help of a few friends.

Impact/Investing

In the Stanford Social Innovation Review, Manuel Lewin, head of responsible investment at Zurich Insurance Group, and Brian Smith, chief strategy officer at Population Services International, share highlights of a report jointly produced by their organizations that provides a framework designed "to help investors and nonprofits speak a common language, and better understand various financial models through which they can engage with each other."

International Affairs/Development

In Forbes, Andrew Cave looks at Bill and Melinda Gates' efforts to help bring financial services -- bank accounts, loans, insurance, etc. -- to the 2.5 billion people in the world who are "unbanked."

Continue reading »

Most Popular PhilanTopic Posts (July 2014)

August 02, 2014

Ah, the lazy, hazy days of August...a perfect time to catch up on some of the great content we posted in July, including new posts by Derrick Feldmann and Mark Rosenman, the Association of Black Foundation Executives' Susan Taylor Batten, and the Case Foundation's Emily Yu. Pull up a hammock, kick you flip-flops off, and enjoy!

What have you read/watched/listened to lately that made you think, surprised you, or caused you to scratch your head? Share your finds in the comments section below....

The Paradox of Direct Mail

August 01, 2014

Headshot_derrick_feldmannDirect mail has become a polarizing topic in the nonprofit fundraising world. Many bloggers and development veterans feel that it's one of the most important tools in the fundraising toolbox. Others – many of them focused on targeting a younger demographic – want to change or do away with the practice altogether.

For what it's worth, approximately 90 percent of the direct mail I receive winds up in the recycling bin, unopened and barely glanced at.

And I'm not alone. For many new and younger donors, direct mail is viewed as intrusive, messy, and a waste of resources. So why do so many organizations continue to embrace it? The answer is simple: It works.

According to the 2012 Channel Preference Study from Epsilon, a full-service ad agency headquartered in Irving, Texas, more than seven out of ten (73 percent) consumers said they prefer direct mail for brand communications, in large part because it allows them to consume information at their convenience. Okay, so that only demonstrates direct mail's relevance to brand and product marketing. What about fundraising?

Well, here again, recent studies show that direct mail works. For example, Blackbaud's 2012 Charitable Giving Report found that 93 percent of overall giving comes from traditional fundraising methods, with online giving accounting for the rest (7 percent).

It's a paradox. For most people, direct mail is utterly annoying, and yet it still gets the job done.

Does that mean fundraisers should ignore the preferences of their donors, especially the younger ones, and hold on to the practice for dear life, acting on what donors actually respond to rather than what they say they want?

I'm not so sure. Traditional industries of all types and sizes are being disrupted by new, innovative business models based on digital technologies. Take a look at these examples and see if you can spot the common denominator:

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  • Laura Cronin
  • Derrick Feldmann
  • Thaler Pekar
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