PhilanTopic

Partnering With State Governments to Strengthen Families: Early Lessons From the Work Support Strategies Initiative

(Luis A. Ubiñas is president of the Ford Foundation. This commentary is adapted from a forthcoming Urban Institute report, available online starting June 4, that includes an array of perspectives from leaders about practical lessons emerging from the Work Supports Strategies initiative.)

Over the past half-decade, as the country has suffered through a deep, persistent economic downturn, America's work support programs have served as an essential backstop for millions of working families struggling to keep a toehold in the labor market. For many families, supports such as child care subsidies, health insurance and unemployment assistance, and food stamps have been the difference between staying together and dissolution.

Yet in dozens of states, lean budgets and antiquated, underresourced work support systems are failing to meet the needs of America's working poor. Problems that were evident in better times have become more intractable, even as caseloads have expanded. How can states improve the health and well-being of low-income families, stabilize their work lives, and make it possible for family breadwinners to get and keep a job if they are unable to get basic work supports to those who are eligible?

Solving such a challenge goes to the heart of what all of us in the philanthropic community do on a daily basis: tackling major problems at a scale that results in real and enduring change -- in this case, creating opportunity for low-income populations and keeping low-income workers in the workforce.

That's why the Ford Foundation, along with the Annie E. Casey, Kresge, and Open Society foundations, is proud to support the Work Supports Strategies (WSS) initiative, a multiyear demonstration project directed by the Urban Institute, with technical assistance from the Center on Budget and Policy Priorities. WSS is partnering with nine states -- led by governors from across the political spectrum -- to design, test, and implement easy-to-navigate quick-to-deliver operating changes to public work support systems that keep employees in the work force and families together. Many of these changes have the further benefit of reducing the cost of running the programs.

More than a year after we launched the initiative, the progress in fixing what was described in one state as a "completely dysfunctional, broken system" has been greater than any of us could have imagined. In some cases, the changes spurred by WSS had an impact on pilot offices or counties; in others, statewide changes affected tens of thousands of families. For example, in Colorado, state and county staff trimmed their work support application from twenty-six pages to eight; in Rhode Island, the Providence office implemented same-day service to Supplemental Nutrition Assistance Program (SNAP) applicants, enabling clients to obtain work support after just one visit; and in South Carolina, the Express Lane Redetermination program preserved health coverage for tens of thousands of children -- and is projected to save the state $1 million a year in operating costs -- by using data in families' SNAP records to certify eligibility.

Taking advantage of new technologies, streamlined bureaucracies, and operating processes borrowed from the private sector, many states are strengthening the customer experience and reducing the burdens on state workers. Beyond our nine partners, these efforts are already serving as models for other states.

For those of us in the philanthropic community, the work of WSS offers three important lessons for future partnerships between foundations and state governments.

First, as any philanthropic funder will tell you, the idea of working directly with the public sector often meets with resistance. Foundations fear being placed in the middle of ideological disputes or paying for services that are the government's responsibility to deliver. But such trepidation, though hardly unjustified, shouldn't be an excuse for inaction; the opportunities are too great. After all, where else can funders meet their goals of supporting initiatives that scale, create impact, and are sustainable? Federal and state governments remain the largest source of resources targeted at the issues that drive our work. As the progress of the initiative so far demonstrates, when a project has clear goals and strategies, funders can successfully partner with public agencies.

Second, one of the by-products of the budget crisis has been the elimination of state resources for and attention to "research and development." Despite the fact that many agencies running work support programs have budgets of hundreds of millions or even billions of dollars at their disposal, the flexible funding to promote ongoing innovation, modernize operating processes, and use data to improve operational effectiveness has all but vanished. While it shouldn't be a surprise that state leaders increasingly are compelled to devote dwindling resources to direct benefits rather than innovation, the result often is greater inefficiency and poorer distribution of services. By providing the kind of technical assistance and peer learning that leaders and staff of public systems need as they embark on the task of modernizing large bureaucracies, that's exactly where foundations can be most helpful. Quite simply, without foundation engagement these work support systems would continue to underserve their recipients and burden taxpayers with unnecessary operating costs.

Finally, tough budget times are a reason to engage, not disengage. With work support offices stretched thin and the current squeeze on state budgets, one might imagine that helping those in need -- rather than making investments in improving the efficiency of state government -- would take priority. But if you look at the early response from twenty-seven states to the initial request for proposals and the dedicated work of the nine states chosen to participate in the first year of the WSS project, the desire for ideas and resources to modernize the safety net -- in both red states and blue -- is overwhelming. With states aspiring to do better, this is a great opportunity for foundations to step in and ensure that this current crisis becomes an opportunity to make lasting changes in how we deliver work support benefits across the country.

Philanthropy has a proud history of convening disparate groups and seeking common ground based on practical solutions. The result has been an impressive mix of programs that make a real difference in the lives of individual Americans -- and often bring people together. The WSS initiative aspires to that tradition, and we hope the lessons it is yielding inspires even more partnerships for the betterment of the most vulnerable in our society.

-- Luis Ubiñas

Reducing Gun Violence: A Q&A With David Bohnett, Chairman, David Bohnett Foundation

"Now more than ever, we need to provide support for the advocacy organizations that are working to establish a formidable counterweight to the gun lobby, which is well financed, well organized, and will stop at nothing to protect the interests of the firearms industry and obstruct sensible legislation that will help save lives."

So argues David Bohnett in an opinion piece he co-authored with Los Angeles philanthropist Eli Broad in February. For Bohnett, a technology entrepreneur who co-founded the pioneering community site GeoCities back in 1994, gun safety has long been an interest of his and a focus area of the David Bohnett Foundation. Indeed, as Bohnett told PND, reducing gun violence is consistent with the foundation's mission "to improve society through social activism."

Earlier this month, PND spoke to Bohnett via e-mail about his and Broad's efforts to reduce gun violence in America, his view of recent legislative proposals in Congress to address the issue, and what he thinks other foundations and philanthropists should be doing to advance solutions to the problem. (For more on the issue, check out the special collection on gun violence in Issue Lab.)

Philanthropy News Digest: The Bohnett Foundation supports organizations working in a range of areas. When and why was gun violence added to the foundation's grantmaking portfolio?

David Bohnett: Supporting responsible gun legislation and working on gun safety has been one of our primary focus areas since the foundation began in 1999. Reducing gun violence is consistent with our mission to improve society through social activism. The issue is one of the cornerstones of building healthy and vibrant communities where people feel safe to walk the streets and conduct productive and meaningful lives.

PND: In February, you and Eli Broad co-authored an opinion piece that urged Americans to take action on gun violence. How did you and Broad come together on this issue and what did you hope to accomplish with the op-ed?

DB: It's a small universe of funders who all know each other, exchange ideas, and are working together to help solve the problem. We believe it's important to support advocacy organizations on the ground such as Mayors Against Illegal Guns and the Fund for a Safer Future. Supporting efficient nonprofit grantees helps maintain the energy behind reform and keeps up the pressure on our elected officials.

Eli Broad and I support the efforts of New York mayor Michael Bloomberg, who spearheads Mayors Against Illegal Guns. We have worked to promote education in our communities and support MAIG's anti-gun violence campaigns. Since 2007, the David Bohnett Foundation has provided grants to MAIG for outreach and awareness efforts.

In writing our op-ed, we wanted to send the message to the philanthropic community and all concerned citizens to be active, to stay active, and not let this moment pass us by. We believe philanthropists can help ensure that politicians make the right decisions, while private citizens can also help make a difference -- by writing a check, donating time, calling and writing their elected officials, using social media channels for outreach and awareness. We hope to continue building a grassroots campaign that can't be ignored. By helping raise awareness, we can get more people to participate in the conversation and bring positive change to our communities.

PND: The horrific school shooting in Newtown, Connecticut, in December seemed to signal a turning point in the gun control debate. Two and a half months later, not much has changed. Are you disappointed by the lack of action on the part of Congress?

DB: A lot has changed in terms of generating new support for efforts to reduce gun violence and promote a real dialogue around guns. We are encouraged to see that gun violence reform has finally become a priority in Washington and that the president has unveiled a bold package of legislation to deal with this complex issue.

The NRA has been exposed as beholden to gun manufacturers and not gun owners, yet many of our congressional leaders continue to pay more attention to the needs of the firearm industry rather than the safety of average citizens. It's one reason out of many to be disappointed in Congress, but those of us who are committed to change take the long view and will continue to do the work we need to do.

Ultimately, Congress must find common ground with the president and those working to curb gun violence and act, while concerned Americans need to stand united and keep up the pressure. In the end, it's up to us. We need to stay active and hold our leaders accountable.

PND: Are you optimistic that Congress and the White House can reach an agreement?

DB: I'm very optimistic. I believe we can pass new laws and change our culture. At the same time, I think we need better data on the effect of gun violence on society, on communities, on our economy, and on people's individual pocketbooks. The more vivid and personal we make the problem of gun violence, the better.

Second, we need to change the language we use and be more inclusive. The term "gun control" has become a wedge which divides a public that overwhelmingly favors gun safety and violence prevention. The more we talk about "controlling" guns, however, the more we turn off voters who support reasonable legislation and the enforcement of laws already on the books. Ultimately, gun owners and non-gun owners have the same goal -- keeping our families and communities safe. It's time to join together, find common ground, and send a message to Washington. In the end, if both sides work together and hold our leaders accountable, we'll see real reform.

PND: The Bohnett Foundation has awarded nearly $3 million to organizations in the United States working to research and prevent gun violence. What advice would you give other foundations that may be thinking about funding efforts in this area?

DB: Let's not re-invent the wheel. It is important to promote existing organizations and not arbitrarily start new ones from scratch that overlap and duplicate the good work already being done. I believe interested givers should seek out groups that are making strides in the campaign to reduce gun violence and help fund their advocacy.

Unfortunately, philanthropic foundations tend to be cautious about funding this kind of advocacy work, so the best advice I can give is this: be bold. People -- not just philanthropists, but all people -- need to understand how critical it is to support organizations that are fighting to make our streets, schools, and communities safe from gun violence. It is an epidemic, but we have the power to do something about it.

-- Emily Robbins

Homeownership and the Racial Wealth Gap

I'm 29 and still hopeful I'll be a homeowner one day. Both my parents have owned their homes for years, and it has always been clear to me that the financial and social benefits of owning a home outweigh the benefits of paying less in rent and using the extra income for other things. Even though I know, as an African-American woman with some serious student debt living in one of the most expensive cities in the world, that the odds are stacked against me, I've started taking some steps to make homeownership a possibility in the not-too-distant future.

So you can understand my unease after reading the following in a new study from the Institute on Assets and Social Policy at Brandeis University about the growing wealth gap in the United States:

While homeownership has played a critical role in the development of wealth for communities of color in this country, the return on investment is far greater for white households, significantly contributing to the expanding racial wealth gap shown in [the figure below]. The paradox is that even as homeownership has been the main avenue to building wealth for African-Americans, it has also increased the wealth disparity between whites and blacks....

As the report, The Roots of the Widening Racial Wealth Gap: Explaining the Black-White Economic Divide (8 pages, PDF), notes, homes are the largest investment most American families make, and they are by far the biggest item in a family's "wealth portfolio." For African Americans, home equity represents 53 percent of household wealth, while for whites, who typically have a more diversified wealth portfolio, it accounts for just 39 percent. "Yet, for many years," the report's authors write, "redlining, discriminatory mortgage-lending practices, lack of access to credit, and lower incomes have blocked the homeownership path for African Americans while creating and reinforcing communities segregated by race. African Americans, therefore, are more recent homeowners and more likely to have high-risk mortgages, [making them] more vulnerable to foreclosure and volatile housing prices."

Home ownership is just one of five factors the report's authors identified as contributing to the racial wealth gap in the U.S. -- which, as the figure below shows, has tripled over the past twenty-five years, from $85,000 in 1984 to $236,500 in 2009. Other factors include family income, employment stability, education level, and family financial support and inheritance.

To help all Americans build wealth, the report's authors recommend that the public sector implement a number of broad policy and institutional changes, including:

• taking steps to ensure mortgage and lending policies and fair-housing policies are enforced and strengthened so that the legacy of residential segregation in the United States ceases to be a source of greater wealth opportunities for white homeowners than for African Americans;
• adopting proven policies at the national, state, and local levels to help all Americans access stable employment opportunities and retirement benefits;
• investing in affordable high-quality childcare and early childhood development programs to ensure that every child is healthy and prepared for school;
• supporting policies that help more students from low- and moderate-income families and families of color attend college and graduate;
• supporting policies that do not leave students drowning in debt or left with no option but to drop out of school because they can no longer afford the enormous price tag; and
• eliminating the preferential tax treatment for large estates.

After reading the report, I could't help but wonder what the philanthropic sector, which has grown in size as inequality in America has widened, is doing to address the growing racial wealth gap in the country? And what more can or should it be doing to expand wealth opportunities for all Americans?

What do you think? Share your thoughts in the comments section below.

-- Regina Mahone

Let's Think Smarter About the Charitable Tax Deduction

Jan Masaoka is CEO of the California Association of Nonprofits (CalNonprofits), publisher of Blue Avocado, and author of The Best of the Board Café, Nonprofit Sustainability (with Jeanne Bell and Steve Zimmerman) and The Nonprofit's Guide to Human Resources.

On New Year's Day, lawmakers in Washington finally agreed to disagree and passed a bill to avert the so-called fiscal cliff. But with the federal government looking at another trillion-dollar deficit and record levels of debt, no idea for balancing federal expenditures and revenue will be off the table for long.

For many nonprofits, keeping the charitable tax deduction off the table is the issue. But while the issue itself may seem straightfoward, there are more nuances and choices to it than meet the eye. There are many ways, for example, to increase taxes that would not have a directly negative impact on nonprofits -- which, after all, are a huge part of the safety net for the poor, the elderly, the unemployed, and many others.

The deal made to avoid the fiscal cliff left the charitable tax deduction untouched for the most part -- and for the time being. To be clear: neither eliminating the deduction nor reducing the deductibility rate was discussed; the administration's proposal would have lowered the current cap on the deductibility of charitable gifts from 35 percent to 28 percent of one's income. The one tiny change passed was the reinstatement of the Clinton-era Pease Amendment, which will raise taxes on some of the wealthiest donors by perhaps $2,000 each.

However, the intensity of the debate served to highlight some thought-provoking issues for those of us in the nonprofit and philanthropic communities, especially as the potential for revisiting the charitable deduction (and other tax breaks) looms large.

Some nonprofits are conflicted about the charitable deduction: on the one hand, nonprofits benefit from donations that often are influenced by their tax-deductible status; on the other, many of these same nonprofits support higher taxes for the wealthiest in our society. Indeed, a reduction in the charitable deduction does two contradictory things for nonprofits: it reduces the financial incentive for people to give, and it also brings in more tax revenue -- revenue that could be used to fund nonprofit services.

Of note, the current deduction formula affords greater tax relief to higher-income individuals than to lower-income individuals, for three reasons:

• Higher-income individuals are more likely to itemize;
• Because it's applied to taxable income, the deduction helps higher-income individuals more since their marginal tax rates are higher; and
• The cap only affects individuals who donate a third or more of their taxable income. (Lower-income individuals are unlikely to be able to give away such a large percentage of their income.)

Other proposals, such as establishing a "floor" for the charitable deduction (a minimum percentage of adjusted gross income by which charitable contributions could qualify for deduction), could be more equitable and arguably could raise more tax revenue while having little or no impact on charitable giving. We should also look at ideas for extending the charitable tax deduction to non-itemizers, changing the formulas on deductions for donated stock, and making the estate tax more of an incentive for bequests. 

All of us at the California Association of Nonprofits encourage our colleagues in the nonprofit sector to advance the longer-term conversation about the charitable deduction as it relates to the balance between sector sustainability, equitable taxation, and fiscal responsibility.

But while we all must work to protect the deduction, we cannot allow the main message from the nonprofit sector to be only about tax breaks. We feel strongly that the Bush tax cuts of 2001 and 2003 have been harmful to our economy and our communities, while benefiting very few Americans. In the fiscal cliff deal, current marginal tax rates were extended indefinitely for individuals earning less than $400,000 and couples earning less than $450,000 -- approximately 98 percent of all U.S. taxpayers. While the revenue that will be realized by raising rates on the highest-earning 2 percent of taxpayers is less than what President Obama originally proposed, it's a step in the right direction for equitably increasing tax revenue as part of a longer process to bring the federal budget into balance.

We believe the responsible position is to support the charitable deduction and to support policies that result in increased revenue. In order to do that, we all will need to consider additional options as a new Congress begins to craft policy around these important issues.

-- Jan Masaoka

Gun Violence in America: A Q&A With Ellen Alberding, President, Joyce Foundation

The December shooting of twenty children and six adults at Sandy Hook Elementary School in Newtown, Connecticut, by a young man armed with a semiautomatic assault rifle, two handguns, and several hundred rounds of ammunition sparked an explosion of outrage and immediate calls for Congress to do something about the seemingly unchecked and -regulated spread of guns in America. In the three weeks since the massacre, another four hundred and twenty-seven people in the U.S. have been killed by guns and the momentarily white-hot debate over gun control has taken a back seat to other policy issues.

Just before the New Year, PND checked in with Ellen Alberding, president of the Chicago-based Joyce Foundation and an outspoken proponent of reasonable gun-control policies, about the scourge of gun violence in America and what philanthropy can do to address the issue.

Philanthropy News Digest: You wrote eloquently about the problem of gun violence in America after the January 2011 shooting in Tucson that left six people dead and thirteen others, including Rep. Gabrielle Giffords, wounded. Here we are, two years later, trying as a nation to come to terms with another horrific mass shooting, and nothing has changed. Does that surprise you?

Ellen Alberding: There's no question that gun violence prevention is one of the most challenging public policy issues facing our nation. And for too long, that has been an excuse for inaction. But following the recent tragedy in Newtown, our country seems to be done with excuses and is demanding action, in the form of stronger gun laws that can help prevent further carnage.

More than 400,000 people have signed a White House petition asking for action and 900,000 citizens have joined over 800 mayors in cities across the country to demand a plan from Washington to reduce the toll of gun violence. Since the Sandy Hook shooting, the response from so many other groups -- nonprofits, law enforcement, education groups -- has been encouraging as well.

This time is different. And we must demand a different outcome.

PND: What do you say to people who argue that gun violence in the U.S. cannot be prevented, that "bad" people who want to hurt or kill other people will always be able to get guns?

EA: Gun violence is preventable. The solution is multi-faceted and includes smart law enforcement strategies, proven community-based interventions, and more funding for mental health services. It also must include stronger gun laws.

Easy access to guns makes all the difference. Americans are not more violent than people of other nations. Rather, study after study by researchers at Harvard, Johns Hopkins, and elsewhere have shown that easy access to guns is the difference between life and death -- in violent disputes, in suicides, in accidents. Simply put, where there are more guns, there are more deaths.

Research shows that specific policies can help limit access to guns by dangerous people. We know, for example, that the National Instant Criminal Background Check System has blocked more than 1.9 million permit applications and gun sales to felons, the seriously mentally ill, drug abusers, and other people prohibited by federal law from possessing firearms. Currently, a loophole in the law allows 40 percent of gun sales to occur with no background check. Bans on high-capacity ammunition magazines will stop shooters from firing dozens of rounds -- killing and injuring more people -- before pausing to reload. And current state gun dealer regulations have proven effective in reducing illegal gun trafficking.

These policies enjoy broad public support. Polls show that an overwhelming majority of Americans support stronger gun laws. In fact, 86 percent of Americans support a measure requiring all gun buyers to pass a criminal background check, and 63 percent support banning military-style assault weapons and high-capacity ammunition magazines.

PND: With the country again embroiled in a debate over gun violence and gun control, do you believe public health considerations should trump Second Amendment considerations in that debate?

EA: Reducing the toll of gun violence does not require a choice between public health and the Second Amendment. Two recent United States Supreme Court decisions, District of Columbia v. Heller and McDonald v. Chicago, do not preclude commonsense gun laws. In District of Columbia v. Heller, Justice Antonin Scalia wrote: "Like most rights, the right secured by the Second Amendment is not unlimited….[N]othing in our opinion should be taken to cast doubt on longstanding prohibitions on the possession of firearms by felons and the mentally ill, or laws forbidding the carrying of firearms in sensitive places such as schools and government buildings, or laws imposing conditions and qualifications on the commercial sale of arms."

In fact, since the Heller decision, lower courts across the nation have found a wide range of firearms law constitutional.

PND: In your 2011 op-ed for the Chronicle of Philanthropy, you reminded readers that gun-violence prevention had once been on philanthropy's agenda. What caused it to fall off?

EA: There's no question that philanthropy needs to do more, and I believe it will. Following that op-ed in response to the January 2011 Tucson shooting, I received a lot of positive feedback and interest from others who were curious about becoming involved. Joyce and several other grantmakers joined forces to create the Fund for a Safer Future, and together we've awarded more than $14 million to groups working to promote regulation and legislation that makes a difference. More recently, we created the Fund for a Safer Future - 2013 Action Fund, a 501(c)(3) charity to support organizations working for stronger gun laws.

PND: What else can philanthropy do to address the issue of gun violence in America?

EA: Foundations have an opportunity to cut through the political back and forth, roll up our sleeves, and focus on solutions. We have the freedom to invest in long-term, nonpartisan solutions for complicated issues like reducing gun violence. Let's keep up the momentum for meaningful change, support our grantees and partners as they work overtime to get something done, and stay committed to reducing gun violence even as the nation and media shift their focus.

-- Mitch Nauffts

Newsmaker: Shawn Dove, Campaign Manager, Campaign for Black Male Achievement, Open Society Foundations

In October, the Open Society Foundations and the Foundation Center released a report, Where Do We Go From Here? Philanthropic Support for Black Men and Boys  (40 pages, PDF), which found, among other things, that philanthropic support for African-American men and boys has risen steadily over the past decade, from $10 million in 2003 to $29 million in 2010. At a time when nearly every major indicator of economic, social, and physical well-being shows that African-American males do not have access to the opportunities they need to thrive, the philanthropic sector is working to address this critical need on two fronts: by supporting organizations in the "black male achievement field" and by spotlighting the fact that more needs to be done to tackle racial and economic inequality in America.

In the foreward to the report, Shawn Dove, manager of the OSF-based Campaign for Black Male Achievement, noted that former Open Society board member Lani Guinier has long argued that African-American males are not unlike "canaries in the coalmine," in that their socioeconomic plight foreshadows many negative trends that eventually will affect the broader society. That explains why, for many, the well-being of African-American men and boys is not a "black issue." It is, as Dove said when we spoke to him recently, "an American issue." Moreover, he added, "[g]rantmakers should not enter th[e] field with the expectation that they can parachute in and save the day....We need to look at what's working, and to spread the word about what success looks like."

After more than twenty years working in the fields of youth development, education, and community building, including stints as a director of a Beacon School in Harlem, as creative communities director for the National Guild of Community Schools of the Arts, and as vice president for MENTOR: The National Mentoring Partnership, Dove joined OSF in 2008. PND spoke with him in November, shortly after the release of the report.

Philanthropy News Digest: We've been told that America in 2012 is a post-racial society. Is it?

Shawn Dove: I guess that depends on one's definition and interpretation of "post-racial." If one's definition is a society in which there are no racial disparities when it comes to opportunity, access, and equity, I would say, "Not so much." In 2012, America aspires to be post-racial. But judging by the wealth gap, ethnic and racial disparities in access to high-quality education, and the number of people of color in the House and Senate, I'd say we still have some work to do.

PND: Countless studies and papers have outlined the many root causes of racial inequality in America. If the causes are clear, why do large portions of the African-American community continue to be adversely affected by disparities in education, health care, and employment?

SD: You know, that is the billion-dollar question. Two of our grantee partners, the American Values Institute and the Opportunity Agenda, have done extensive research on implicit bias in America, and what their research revealed was that far too many people hold unconscious racial prejudices that affect their decision making when interacting with races other than their own. So while retail sales managers, for example, will say they don't have racist attitudes or are not prejudiced, they'll also resist putting people of color, specifically African-American males, in roles that have direct contact with customers.

Americans of all ethnicities still have an exceedingly difficult time having honest conversations about race. There are a number of organizations and leaders who are organizing people to have discussions about racial disparities in our society, but a lot of work still needs to be done to change the behaviors that perpetuate inequality in this country.

In 2013, a film called American Promise will premiere and lift up the issue of black male achievement, offering all of us an opportunity to have an honest conversation about race and education in America. The film provides a rare look into the lives of two middle class black families as they navigate the ups and downs of parenting and educating their sons. With support from Open Society, the Ford Foundation, and the Fledgling Fund, as well as other partners, a national outreach campaign is being developed to empower boys, their parents, and educators to help close the black male achievement gap and deal with racial disparities.

PND: As journalist Gary Younge noted in a Nation article last year, the economic gap between black and white has grown since President Obama took office. What advice would you give the president as he prepares for his second term?

SD: We need to be clear about what the president inherited when he was elected in 2008, and how long it will actually take to turn things around, especially when the political process for moving legislation is fraught with partisan obstacles at every turn. Back then, the American economy was in free fall, and by the time Obama took office in January 2009, the economy was in a certified crisis. The president had to take certain measures to avert a full-out depression. Yet even with those steps, the country could not avoid the layoffs and high unemployment that followed -- something that affected all ethnicities and racial groups but hit African Americans the hardest.

Now that Obama has been re-elected and the economy is slowly recovering from the collapse of the housing bubble, we need a plan to lower the poverty rate and help raise low-income families into the middle class. We need policies and solutions that are systemic and sustainable and will endure past 2016. The administration also should develop more partnerships with the private sector to ensure that young people are developing employable skills, and it needs to focus on how education can help people become first-generation members of the middle class.

PND: According to Where Do We Go From Here?, foundation funding for African-American men and boys started to pick up after 2006. To what do you attribute the increase?

SD: Fearless leadership and innovation in the philanthropic sector. Data across issues that have been disaggregated by race and gender. And any number of leaders who have pushed strategies and formed coalitions around targeted solutions designed to improve the life outcomes of African-American men and boys.

PND: Have efforts like the Campaign for Black Male Achievement and the National Committee for Responsive Philanthropy's Philanthropy's Promise campaign helped to raise awareness of needs in the African-American community?

SD: The answer is a resounding yes. But, you know, even before philanthropy became more organized and coordinated around the issue, we were seeing greater investment in research and communications strategies to elevate the issue. Here at Open Society, our aim with the Campaign for Black Male Achievement was to keep the issue front and center in the public discourse, because we felt that if it dropped out of the conversation and if solutions were not identified and amplified, other things would wind up distracting us from addressing it. I think the same can be said of the Promise initiative, which in June, a year after its launch, had doubled the number of its partners to a hundred and twenty-five, representing nearly $3.4 billion in giving. These campaigns help shine a light on the needs of an underserved and underrepresented population, and how we are working to meet those needs.

PND: Tell us about the Campaign for Black Male Achievement. How did it come about? And how did you become involved?

SD: I would say an impassioned conversation inside philanthropy was ignited after an article titled "Plight Deepens for Black Men, Studies Warn" appeared on the front page of the New York Times in 2006. The article highlighted the many disparities and inequities confronting African-American men: indeed, at a time when the economy was booming and the nation's top earners were gaining significant wealth, African-American men were falling further and further behind. Well, the article ignited a conversation at OSF among staff who felt that an organization that prided itself on supporting a more democratic, fair, and just society and on empowering the most marginalized individuals in society to become agents in their own empowerment should be at the forefront of this issue. As I later learned, there was debate about whether the foundation should launch a campaign specifically targeting support for African-American men and boys, with some staff making a strong case that the foundation already was engaged in the issue through its investments in reform of the criminal justice system. But it eventually became clear to everyone that this was an opportunity to more directly address the causes of the "prison pipeline."

At the same time that discussion was happening, I was publishing a community newspaper called Proud Poppa for African-American Fathers and leading a youth ministry at my church. Prior to that, I had worked with Geoffrey Canada at the Harlem Children's Zone. After the foundation decided to launch the campaign, a number of people encouraged me to apply for the position of campaign manager. Eventually, I did, and that's how I got involved.

The campaign, which launched in 2008, was originally supposed to be a three-year initiative. But about eighteen months into it, OSF founder George Soros and the foundation's board decided to get rid of the term limits and, based on our early work, increased our budget. I think that decision helped other philanthropic institutions to better understand the severity of the problem and the foundation's deep commitment to addressing it over the long haul.

PND: Has the campaign had an impact? And how do you measure that?

SD: Well, that's the other billion-dollar question. Four years ago, when the campaign was launched, there was no clearly defined field of black male achievement -- or it wasn't acknowledged in the way it is today by researchers, policy advocates, practitioners, and funders. In that way, we have been successful beyond measure. Today there is a movement and a field of black male achievement. To achieve this in four years speaks to the commitment among organizations, individuals, and communities who are seeking to find solutions to the problems plaguing black men and boys. But while there's been a breakthrough on both the national and local level in terms of awareness and activity around the issue, the verdict is still out on how and whether the field is creating impact on a national scale. There is anecdotal evidence that it is, but that's the main reason why my colleagues and I argue that philanthropy needs a sustained commitment to this work.

Through its Boys and Young Men of Color initiative, for example, the California Endowment has helped to introduce a number of bills in California around school discipline and dropout/pushout rates; four of which have passed. The endowment also is helping to reduce the number of African-American boys engaged in the juvenile justice system. Elsewhere, the Knight Foundation re-launched an effort called Black Male Engagement that supports African-American males in their communities. The unique thing about the Knight initiative is that the foundation acknowledges -- correctly, in my view -- that the problem isn't with African-American men and boys, the problem is rooted in the system and the society in which African-American men and boys grow up. And so the initiative seeks to recognize and elevate the work of "regular" guys who are already adding value and contributing to their respective communities.

Open Society, in partnership with Echoing Green, also launched a Black Male Achievement Fellowship, to identify innovative social entrepreneurs who are focusing on ways to sustain black male achievement across a number of issue areas and a Leadership and Sustainability Institute for Black Male Achievement, a national membership organization that we believe will be the engine that sustains this work over the long haul. We've already seen a tremendous response to the institute after its official launch during our Innovation and Impact Forum for Black Male Achievement. To date, over four hundred organizations across the country have been identified and expressed a sincere commitment to join efforts designed to improve the life outcomes of black men and boys.

Ultimately, however, it is important that we acknowledge that this is a generational issue that will require a long-term commitment. The challenges that prevent black male achievement come out of decades and centuries of systemic injustices. So to expect that after four years of a campaign we would reverse these trends is reflective of the general state of philanthropy, which often will focus on a hot or popular issue of the moment but, after a few years, will move on to the next pressing issue. If we hope to truly measure impact and see change we must commit for the long term.

PND: Even as some of the biggest foundations are stepping up their support for African-American men and boys, the sector continues to wrestle with its own diversity challenges, including the relative lack of minority representation on foundation boards or in foundation leadership positions. Is that an issue of there not being enough qualified minority candidates for these positions? And if so, what can foundations do to help boost the size of the applicant pool?

SD: It's definitely not an issue of there not being enough qualified candidates for these positions. Anyone who states that is not looking hard enough -- there are fellowships, internships, more aggressive recruiting tactics, and even affinity groups out there that can help organizations find qualified people of color to fill open positions. I do think we are seeing an increase in the diversity of leadership, but we have a long way to go to get where we need to be, especially when we closely examine diversity data at the trustee and CEO level.

PND: Given President Obama's re-election, are you at all encouraged by general trends in society with respect to African Americans, particularly men and boys?

SD: Oh, yes, I'm an eternal optimist. As you know, our recent Innovation and Impact Forum brought together leaders from every sector who are focused on the issue, including folks from New York City mayor Michael Bloomberg's Young Men's Initiative as well as Cities United, an effort led by Philadelphia mayor Michael Nutter and New Orleans mayor Mitch Landrieu to galvanize municipal leaders to respond to the unacceptably high number of violent deaths of African-American men in cities nationwide. The issue has definitely gained traction at the municipal level, and I feel optimistic about the pace of our progress.

But as we look more closely at how we measure impact and promote what works, I am concerned about the sustainability of our efforts. There are groups doing phenomenal work, and they need continued support. What America really needs is something like a corporation for Black Male Achievement that would allow an endowed philanthropic social enterprise to really lean into this issue and create lasting change.

PND: What would you say to your colleagues in other foundations about the importance of this issue?

SD: Well, I would say that this is not a "black issue," it is an American issue that has a negative impact on all of us. I would ask them to focus on assets and not deficits. Grantmakers should not enter this field with the expectation that they can parachute in and save the day. I truly believe that the answers to the challenges African-American men and boys are facing reside in the hearts, minds, and hands of African-American men and boys. It's this whole idea of the power of positive deviance. We need to look at what's working, and to spread the word about what success looks like.

I would encourage my colleagues who ask "Why an explicit focus on African-American men and boys?" to look at the data. Once they do, I believe they will join us and the many other foundations working to build and strengthen the African-American community. I would also challenge my colleagues to think about how we can increase public-private collaboration around this issue, and about being in this for the long haul. We're not going to create lasting change with a three- or five-year campaign, or by launching another initiative. The philanthropic community needs to give this issue the time and support it requires.

Lastly, I would share a quote from one of my colleagues, John Jackson, CEO of the Schott Foundation for Public Education. In a speech he delivered at a recent grantmakers for education conference in New York City, John said, "Programs are progress, and we need progress. But policy is power." And with that, I would like to encourage my colleagues to invest in advocacy and policy change, not just programs. We are dealing with systemic and structural barriers that I believe can only be addressed and solved through policy reform.

-- Regina Mahone

[Infographic] The Danger of Capping Deductions

Like deer in the headlights, lawmakers in Washington, D.C., have spent the last five weeks paralyzed by the approach of the so-called fiscal cliff.  While the White House and Congress appear to be moving closer to a deal that would delay or avoid the worst effects of the cliff, the details of such a deal remain murky.

One thing that has surfaced repeatedly in negotiations between the two sides, however, is a cap on various tax deductions, including the deduction for charitable giving. As the infographic from the National Council of Nonprofits below suggests, such a cap would have an adverse impact on charitable donations -- and, by extension, local communities.

To learn more about the impact of a cap on deductions as part of a fiscal cliff deal, check out the council's new report, The Fiscal Cliff's Twin Threats Against the Work of Charities.

Campaign Finance and Charities

(Mark Rosenman, a Washington-based scholar-activist and director of Caring to Change, a D.C.-based effort to promote foundation grantmaking for the common good, is a frequent contributor to PhilanTopic. In his last post, he looked at the potential impact of the Romney/Ryan platform on nonprofits.)

Charities depend on people's trust and on the public's support for their existence. Unfortunately, much of that goodwill is being eroded by the behavior of some nonprofit organizations in the 2012 presidential race.

First, it's important to understand that there are lots of different kinds of organizations that are granted tax-exempt status by the IRS. They range from industry associations and what are called "social welfare organizations" to the charitable and faith-based groups we usually think of when we hear the term "nonprofit." Only donors to the latter, however, receive a tax deduction for their charitable donations.

For years, most social welfare organizations operated in service to a particular charitable concern and the broader community. The main difference between these organizations and charities is that the former are granted extensive powers to lobby government -- although those activities may not include "direct or indirect participation or intervention in political campaigns on behalf of or in opposition to any candidate for public office." As my grandmother used to say, that's all gone to hell in a handbasket since the Supreme Court handed down its landmark Citizens United decision in 2010 -- and that hurts charities.

A lot has been written about the partisan political abuses perpetrated by what are known as (c)4 groups (that's the IRS designation for social welfare groups; charities are classified as [c]3s). Indeed, in this election cycle, (c)4s are using the secrecy afforded them by law -- (c)4s do not need to make public the names of those who fund them -- as never before to pour millions of dollars into vitriolic presidential ad campaigns intended to influence voters.

A side effect of the decidedly nasty and often deceitful ads run by these groups -- and the press attention paid to these abusive practices -- is that real nonprofits are being tarred with the same brush. Most people don't distinguish between (c)4s and charities. As a result, the good work of the latter, work that is dependent on public support, is being tarnished by cynical political operatives and agendas.

Of course, the corrupting influence of money in politics has long been a problem for charities. Among other things, they are at a grievous disadvantage when it comes to advocating for the common good with legislators and chief executives who too often are beholden to private interests. Sadly, instead of honoring "one person, one vote," our democratic system now rewards big bucks with outsized influence.

Charities and legitimate social welfare organizations should be able to advocate and lobby for their clients, their communities, and their causes. And we need to accept that sometimes it may be difficult to distinguish between nonprofits working for the public interest and those serving pecuniary and partisan purposes. Yet, charities cannot allow the ongoing corruption of social welfare nonprofit status to go unchallenged.

To help protect themselves against such corruption while continuing to push for a more democratic society, charities of all types need to work together to moderate the influence of money in politics. They can do this by calling for timely, energetic investigations of (c)4 groups that violate strictures on partisan political activity, as the IRS seems belatedly to be doing with Crossroads GPS, a (c)4 group established by Republican political operative Karl Rove.

Charities also should join in calling for much greater transparency with respect to political contributions, regardless of the tax status of the organizational vehicles used to encourage and bundle those contributions. And they must work to support legislation and other policies that help restore the voice of ordinary people in our political process while curbing the influence of billionaire donors.

Nothing less than the continued health of the charitable sector -- and our democracy -- is at stake.

-- Mark Rosenman

Nonprofits Missing From Big Battles

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

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

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

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

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

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

And that's just a start. Democrats and Republicans in Congress agree that the interest rate on federal student loans shouldn't be raised, although the former want to pay for keeping the current rates by getting rid of some business tax cuts, while the latter are focused on defunding nonprofit preventive care programs related to obesity, cancer, and HIV/AIDS.

I've heard it said that nonprofits used to talk about problems and now the conversation is about branding. And everyone knows that foundations are becoming more technocratic in their approach and are focusing on metrics and the promotion of social investment schemes. What's going on here? Have charitable and philanthropic institutions been seduced by our thirty-year love affair with markets and forgotten about the public good? Why do they just accord with politicians' actions that benefit private interests?

These days, it seems to be easier for nonprofits and foundations to acquiesce to externally determined realities, to figure out how to do as well as they can in an environment that glorifies all things private instead of trying to figure out how to change things. Too many seem to go along to get along.

While that might be in the interests of some organizations and institutions, it does not serve society well. And it certainly works against the interests of the increasing numbers of Americans who are struggling to keep a roof over their heads and food on the table. The profoundly disturbing increase in economic inequality threatens all of us, even those who view themselves as one-percent winners.

There is much that charities and foundations can do to challenge policy decisions that are destroying the social safety net in the United States, not to mention the social contract that has been in place since the 1930s.

Everyone knows that Congress is at an all-time low in its approval ratings, but charity and foundation leaders appear to be unwilling to take public positions with respect to its more destructive actions. The nation desperately needs leaders who will speak to the public interest, who will step up and help Americans understand the direction in which we are being led and what it means for ordinary citizens and the organizations that serve them.

Foundations and nonprofit organizations can fund and direct resources to assertive and ambitious voter registration and education efforts. They can help people better understand the critical issues and solutions being debated -- and in some cases avoided -- by elected officials. Charities can propose and advocate for their preferred policy options and can urge individuals to promote action on those solutions by communicating with their legislators and administration officials.

The stakes are huge -- for individuals, communities, charities, and foundations. The ways in which Congress and the next president address the fiscal issues confronting us will determine our collective future for years to come. Policy choices made now and in the not-too-distant future could dramatically worsen the quality of life for tens of millions of Americans. And we may soon find both government and the nonprofit sector without the resources to moderate the deteriorating circumstances we face as individuals and as a society.

Most Americans agree that we need comprehensive tax reform which results in the wealthiest among us paying a fairer share of the revenues collected by the federal government, as was the case in and before the Clinton era. We need reforms in entitlement programs that find real long-term savings while protecting those dependent on them. We need infrastructure investments that will stimulate the economy and create jobs. And we need to be sure that the defense budget bears its share of the deficit-reducing burden, especially as the long conflict in Afghanistan winds down.

A disastrous future is not inevitable, and the passivity of most charities and foundations is not immutable. Our nation faces very real choices with profound implications. But we do have choices. The question is who will help make them.

We are rapidly approaching a moment of truth and are in need of leaders who are committed to the public good. Nonprofit organizations and philanthropies can maintain their silence and fail America, or they can help lead us in that direction by promoting popular action on behalf of our shared interests. The time to act is growing short....

-- Mark Rosenman

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

Investing in the Environment: A PubHub Reading List

(Kyoko Uchida manages PubHub, the Foundation Center's online catalog of foundation-sponsored publications. In her previous post, she highlighted reports that address some of the issues and legal questions raised by the Affordable Care Act's individual mandate.)

Protecting the environment has long been a priority for many philanthropic organizations; the Goldman Environmental Prize, for example, is now in its twenty-third year. But what about public and private investments in the environment? With global climate change threatening to halt and even reverse the social and economic gains we've seen in the developing world since the fall of the Berlin Wall, one would think that policy makers, multilateral agencies, institutional investors, and private philanthropy would be eager to collaborate to help mitigate the worst of its effects. In honor of Earth Day, today we're highlighting two reports that look at aspects of the clean energy landscape.

According to Impact at Scale: Policy Innovation for Institutional Investment With Social and Environmental Benefit (64 pages, PDF), a report from InSight at Pacific Community Ventures and the Initiative for Responsible Investment at Harvard University, the emerging field of impact investing -- investing with the intention of generating measurable social or environmental benefit in addition to financial returns -- will only gain traction when it succeeds in attracting large institutional investors. Indeed, with total assets of more than $20 trillion worldwide, institutional investors (e.g., pension funds, insurance companies, and private endowments) are key players in global capital markets and could do much to legitimize impact investing as a viable alternative to more traditional investment approaches. To unlock the potential of the field, however, public policy must be adjusted to incentivize institutional impact investment by offering, among other things, co-investment opportunities, tax credits, and subsidies for industries and sectors that meet specific impact goals.

For example, the Energy Policy Act of 2005 created incentives for solar energy development that, according to the report's authors, helped boost U.S. solar manufacturing capacity:

The legislation created a federal investment tax credit (ITC) incentive for solar energy equal to 30% of expenditures on commercial and residential solar energy systems. Initially applicable for only two years, the tax credit was extended for an additional year with the Tax Relief and Health Care Act of 2006, and again for eight years in 2008 with the Emergency Economic Stabilization Act. This last version also allowed utilities to qualify for the tax credit. Between the creation of the ITC in 2006 and year-end 2010, U.S. solar manufacturing capacity quadrupled, with the vast majority of growth in 2009 and 2010. While not solely responsible for the market expansion, the ITC was a substantive driver and policy certainty provided by the eight-year extension has helped to catalyze private investment in the field....

Funded by the Rockefeller Foundation, the report notes that institutional investors' fiduciary duty to fund beneficiaries can be a constraint:

Institutional asset owners have the potential, through their investments, for delivering social and environmental impacts at scale. But for public policy to help achieve this goal, it must take into account the nature of asset owners as investors and, in the near term, overcome perceptions of impact investing as a new, idiosyncratic, or niche market....

According to the report, targeted engagement of institutional asset owners should include: 1) an "enabling" strategy directed at investors to provide flexibility and "investability" in target markets; 2) an "integrative" strategy directed at intermediaries; and 3) a "developmental" infrastructure-building strategy to support nascent markets.

Where do we stand, then, in terms of investments in clean energy? Global investment in solar, wind, biofuels, and other renewable energy sources, as well as energy efficiency and low-carbon technologies, reached a record $263 billion in 2011, according to Who's Winning the Clean Energy Race? 2011 Edition (56 pages, PDF), a report from the Pew Charitable Trusts and Pew Environment Group, with the G-20 countries contributing 95 percent of the total and more than half of that, some $128 million, going into solar. The report also found that the U.S. reclaimed its global leadership position in 2011 -- after falling to second place in 2009 and third place in 2010 -- with $48.1 billion in clean energy investments, an increase of 42 percent, followed by China ($45.5 billion) and Germany ($30.6 billion). "At the end of 2011, more than 565 GW of clean energy generating capacity was in place globally, 50 percent more than installed nuclear generating capacity," the report notes.

And what role did public investment play in supporting the sector? "In response to the global economic crisis...,

government stimulus plans allocated more than $194 billion for clean energy efforts. By the end of 2011, almost three-fourths of those funds ($142 billion) had reached the sector. More than $46 billion in stimulus funding for clean energy was spent in 2011, more than half of that by the United States and China together. Of the $53 million that remains, 67 percent ($35.7 billion) is expected to be spent in 2012....

But even though the U.S. led in total clean energy investment, as well as investments in solar, energy efficiency technologies, and biofuels, its leadership "is likely to be short-lived"  because of policy uncertainty. Indeed, nothing "appears likely to stem the long-term shift in the clean energy sector's center of gravity as investment swings from the West (Europe and the United States) to the East (Asia) and from the Northern Hemisphere to the Southern."

Both reports suggest there is an urgent need for long-term public policies which incentivize institutional and other private investment in businesses that deliver environmental and social benefit. Without a policy framework to guide those investments and a market infrastructure to support them, however, the U.S. could end up losing the clean energy race and suffer the environmental, social, and economic consequences.

Eager to learn more about investments in clean energy, clean energy technology, and the economic impact of global climate change? Check out these reports, all of which can be found in PubHub:

• The Business of Innovating: Bringing Low-Carbon Solutions to Market
  Pew Center on Global Climate Change
• Clean & Green: Best Practices in Photovoltaics
  As You Sow
• United States Building Energy Efficiency Retrofits: Market Sizing and Financing Models
  Deutsche Bank Climate Change Advisors; Rockefeller Foundation
• Guidelines for Identifying Business Risks and Opportunities Arising From Ecosystem Change
  World Resources Institute; Meridian Institute; World Business Council for Sustainable Development
• Financing Stormwater Retrofits in Philadelphia and Beyond
  Natural Resources Defense Council
• The Economic Impacts of the Regional Greenhouse Gas Initiative on Ten Northeast and Mid-Atlantic States
  Analysis Group
• From Barracks to the Battlefield: Clean Energy Innovation and America's Armed Forces
  Pew Charitable Trusts

Have a report or comment you'd like to share? Use the comment section below...

-- Kyoko Uchida

Weekend Link Roundup (November 26 - 27, 2011)

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

Community Improvement/Development

On the White Courtesy Telephone blog, Greater New Orleans Foundation president and CEO Albert Ruesga issues a call to support community-based organizations, which, he says, "are just too good and too important to fail."

On the Knight Blog, Philadelphia program manager Donna Frisby-Greenwood announces the beta launch of Change By Us, a platform for Philly residents who want to share ideas, join or create projects, build teams, and find resources to advance their projects.

Economy

Did you find yourself fumbling for words when the dinner-table discussion turned to income inequality and the Occupy Wall Street movement this weekend? The next time that happens, you might want to mention this finding about the widening income gap, courtesy of the Weakonomist:

In 1967, the lowest fifth (called a quintile) of income earners earned 9 percent of what the top quintile earned. In 2010 that number was 6.5 percent. That means the gap between the top and bottom has widened.

But there's a problem with statistics like that. It's a measure of household income. Household income is the total income of anyone living at a particular address. Since 1967, the total number of households in the US has grown 95 percent, while the population has only grown 56 percent. How can that happen? When a household splits in half, you get two households. Say mom and dad get divorced and each make $30k a year. You go from having one household that makes $60k to two that make $30k. How does this get reflected in the data? It skews the low-income numbers down. In the lowest quintile household, on average, there are zero income earners. In the top, of course, there are two. If more households had two income earners, you'd see less of the widening gap....

International Affairs/Development

Philanthrocapitalism authors Matthew Bishop and Michael Green explain why the High Level Forum on Aid Effectiveness created by the Organization for Economic Co-operation and Development in 2005 to manage development assistance has been disrupted "beyond repair" by the financial crisis.

Leadership

GuideStar president and CEO Bob Ottenhoff weighs in on organizational leadership, which happened to be the subject of Ashoka CEO and founder Bill Drayton's remarks upon accepting the John W. Gardner Leadership Award and is discussed at length in Bill Joiner and Stephen Josephs' book Leadership Agility. During his remarks, Drayton urged nonprofits to trade in their hierarchical structures, which, he said, don't work anymore because they "are no longer able to respond quickly or sufficiently enough," for a team approach, while Joiner and Josephs argue that today's organizations need to "nimbly anticipate and respond to rapidly changing conditions," and that the team approach is one way to do that. "There's a lot to think about here," writes Ottenhoff. "In some ways, these observations seem to be stating the obvious. But if [it's] so simple, why aren’t we doing it?"

Public Policy

On the National Committee for Responsive Philanthropy's Keeping a Close Eye blog, Niki Jagpal looks at at a new study from the Pew Research Center's Forum on Religion and Public Life which found that there has been a "dramatic increase in the size and influence of the 'religious lobby.'" These findings, Jagpal writes, "are important for any foundation concerned with advancing our democracy or engaging in policy."

Regulation/Oversight

In and op-ed for the New York Times, Boston College Law School professor Ray Madoff looks at the favorable tax treatment accorded donor-advised funds, many of which are affiliated with and managed by large financial institutions like Fidelity, Schwab, and Goldman Sachs, and calls on Congress to enact rules "that require donor-advised funds to distribute all of their assets to real public charities within seven years of their contribution."

Social Media

To kick off the holiday season, Philanthropy 2173 blogger Lucy Bernholz highlights a few campaigns that embrace a sense of fun, including a #GoodSpotting sweepstakes organized by the Case Foundation that invites Twitter users to share pictures of an individual or organization doing good using the hashtag #GoodSpotting; participants who enter the contest on the foundation's Facebook page can win up to $500 in holiday spending cash -- and up to $5,000 for the charity of their choice.

Guest blogging at Beth's Blog, Mary Trudel and Rory MacPherson of Trudel | MacPherson Arts Consulting share findings from a new national study that looked at social media use by arts organizations. Among other things, the study, How Strong Is Your Social Net?, found that 70 percent of the 1,600 arts groups surveyed feel that social media is delivering on its promise and hype.

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

-- Regina Mahone

Philanthropy and the 'Filter Bubble'

(Helen Brunner is 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. In March, she answered five questions for PND.)

We all understand that the Internet and technology are changing the world and impacting how we -- and our grantees -- work. Like the printing press, television, or other past leaps forward in information and communications technology, this advance is bringing with it new opportunities and new problems. One of those new problems is that algorithms are making decisions about what you see online -- and those algorithms are deciding to show you only what you "want" to see.

It's a problem recently brought to light by Eli Pariser in his book The Filter Bubble: What the Internet Is Hiding From You. Eli joined me, and several dozen funders, earlier this month for an MDF Talk to discuss the wide-ranging implications of the "filter bubble" for philanthropy.

The Filter Bubble details how the Internet isn't living up to its potential to expand our access to a diversity of views. Instead, we are increasingly relying on filters to help answer our questions and point us to things we're interested in. Using algorithms, these filters -- Google, Facebook, and others -- are personalized to show us the information they determine we "want" to see based on our past searches and page views. As a result, the information we see is constricting into a smaller and more limited world, short circuiting the potential of the Web to add to knowledge and build bridges between disparate viewpoints.

Almost every current Web site and service is already personalizing our information through algorithms. Personalization is one way to help us wade through the mountains of information available online -- and it makes a lot of sense for advertising and selling products. But such filtering has deeply concerning repercussions for democracy and civil society.

The Filter Bubble has been getting a lot of well-deserved press, and I certainly recommend it to anyone who wants to better understand how communications is evolving.

But the book raises even broader questions for funders.

Many funders recognize that there are decisions being made about the structure and protections of the Internet. We understand that these decisions will have a major impact on issues as diverse as education, health, civic participation, and international human rights.

But even the most plugged-in among us would be forgiven for thinking that these important decisions were being made only by regulators or elected officials. Today, as The Filter Bubble makes clear, we need to recognize that companies, engineers, and coders are a major factor in those decisions.

These are big decisions. Important public services and utilities, including the library, public television, telephony, and the postal service are moving or have moved online, while new developments in education and social networking seem to spring up every day. Things like the filtered Web experience can have an enormous impact on the success or failure -- indeed, the very framing -- of issues that funders most care about.

It's a new world. As funders, we need to recognize and address the challenges it presents and support decisions which ensure that information and communication in the digital age remain open and fair.

(Illustration credit: Nicholas Scalice)

-- Helen Brunner

Pro-Voice and Pro-Chaos

(Regular contributor Thaler Pekar helps smart leaders and their organizations find, develop, and share the stories and organizational narratives that can rally critical support. In her last post, she shared seven tips for finding stories in your organization.)

Typically, stories have a beginning, middle, and end. They are set in place and time. They feature characters who struggle with choices and consequences. They hinge on conflict and its resolution. The listener/viewer/reader can hear/see/comprehend that something has happened to someone.

One of the most ubiquitous storylines is the hero's journey. This is the mono-myth found in every culture: an individual sets out on a journey, encounters a challenge, and returns changed. The hero's journey is a story of personal or community transformation. It is the story of Jesus and Luke Skywalker, of Rosa Parks and César Chávez.

It is also the story with which philanthropy and advocacy is most familiar. In the quest to secure funding and other types of support, the stories we use are usually chosen for their effectiveness in illustrating a preferred solution to a defined problem.

Exhale, a community-based organization working to transform the way in which abortion is discussed, abstains from pre-selecting a single version of a hero's journey. The organization isn't interested in sharing a piece of reality; it wants to share the chaotic, muddled mess that is reality.

The Millennials, Abortion and Religion Survey (46 pages, PDF), a recent poll conducted by the Public Religion Research Institute, found that, on the issue of abortion, Americans hold "complex and sometimes contradictory views, and grasping this complexity is critical for understanding the dynamics of the debate." According to the report,

Seven-in-ten Americans say the term "pro-choice" describes them somewhat or very well, and nearly two-thirds simultaneously say the term "pro-life" describes them somewhat or very well. This overlapping identity is present in virtually every demographic group.

[Similarly], majorities of Americans simultaneously say abortion is morally wrong (52%) and that it should be legal in all or most cases (56%)....

Of course, real life is complex. Decisions are made across a continuum that runs from absolute clarity to muddled confusion. Jean Luc Godard observed that, "Sometimes reality is too complex." And, Godard added, "Stories give it form."

Because Exhale is eliciting stories from women and men whose experience of abortion varies widely, what it hears is simultaneously encouraging, disturbing, and surprising. By asking for authentic stories, Exhale's Talkline allows people to talk in a respectful and non-judgmental space about things that are otherwise difficult to discuss in the sharply polarized public debate over abortion. That the discussion occurs at all is only because Exhale is willing to embrace the chaos that results from welcoming and respecting all voices and all stories.

Aspen Baker, who helped found and now leads Exhale, explains: "Our approach is humanizing; it is not a policy approach." The message that emerges from this chaos is that women's voices should be heard and respected. "People who care about women who have had abortions can help us take control of our own narratives so that they don't become just one more tool in the cultural war," says Baker.

Indeed, being "pro-voice" means being anti-predetermined story. The people who work with and support Exhale understand that embracing reality is the only authentic choice for those advocating for sustainable conflict resolution and a more peaceful social climate. Imagine if more advocates let go of their fear of being surprised, contradicted, or losing control and looked to solicit and share stories that didn't necessarily fit predetermined agendas. In their representation of the complexity of reality, the resulting stories might appear to be chaotic. But the odds are excellent that out of that chaos, profound insight would follow.

(Illustration: "Journey of the Goddess," Kay Singleton Keller)

-- Thaler Pekar

The Patriot Act and Aid: Focus on Somalia

(Nick Scott is assistant to the publisher at PND. In his last post, he wrote about the role of philanthropy in the Arab world's transition to democracy.)

With a severe drought once again visiting misery on the Horn of Africa, international NGOs and aid agencies are pouring into southern Somalia to provide food aid and other assistance in an attempt to blunt the looming humanitarian crisis. Due to a provision in the Patriot Act banning all "material support" for designated terrorist groups, organizations from the United States will not be among them.

Southern Somalia is controlled by al-Shabaab, an Islamist insurgent group classified as a terrorist organization by many Western countries, including the United States, Australia, Canada, Norway, Sweden, and the United Kingdom. Until last week, the group did not allow foreign aid organizations to operate in areas under its control, and it has a long history of committing violence against foreign relief workers and locals who partner with them. There's no questioning the group's grisly record of terrorism.

Still, after nearly twenty years of bloody civil war, Somalia is one of the most neglected and war-torn countries in the world, and its people desperately need outside help. It speaks volumes about the severity of the situation that refugees seeking food aid are leaving rural areas in droves for Mogadishu -- quite possibly the most dangerous city on earth. Since October, the U.S. has contributed $368 million in emergency relief to other countries in the region, so our inaction is not a result of indifference. It should also be acknowledged that Americans give generously to organizations like UNICEF, which recently resumed operations in southern Somalia.

The issue is not so much that the Patriot Act is leading to a bad policy decision, it's that it is preventing any debate from taking place at all. Might al-Shabaab appropriate and hoard any food aid that is delivered to the stricken region? Would this free up resources for the group to conduct military operations (Ken Menkhaus, a Somalia expert at Davidson College, thinks it almost certainly would)? What are the chances that al-Shabaab, which historically has been engaged in a struggle to overthrow the Somali government, will try to launch transnational operations against Western interests? Does doing the right thing in this situation from a humanitarian perspective outweigh the potential risks? It's a complicated problem that warrants careful consideration. But, thanks to the Patriot Act, these and other important questions will never even be considered by policy makers in Washington.

USAID deputy administrator Donald Steinberg recently reaffirmed the government's position on the issue. "We cannot provide anything that is interpreted as material support for a group that we consider to be a terrorist organization," Steinberg told AFP. USAID has pledged $5 million to help Somali refugees who cross into neighboring Kenya and Ethiopia, but it has firmly ruled out aid for Somalia itself -- in part, no doubt, because the Supreme Court, in a 6-3 decision handed down last year, ruled that the "material support" clause of the Patriot Act included such seemingly innocuous activities as working with designated terrorist groups to teach them how to use peaceful means to achieve their political goals.

Unfortunately, the problematic nature of the act isn't limited to the unfolding humanitarian crisis in Somalia. Fear of repercussions or even prosecution has caused many NGOs and foundations to think twice about operating in some of the world's neediest regions. Denying "material support" to terrorist organizations is an admirable goal, but the act's sweeping approach to the problem of terrorism prevents many worthwhile projects from ever being attempted.

What do you think? Is the injunction of the Patriot Act in the case of al-Shabaab and the unfolding crisis in Somalia appropriate given the risks involved? Or should the U.S. government find a way to debate the material support clause and perhaps relax it in this situation? Use the comments section below to share your thoughts.

(Photo credit: Cassandra Nelson/Mercy Corps)

-- Nick Scott