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40 posts categorized "Policy"

Homeownership and the Racial Wealth Gap

March 06, 2013

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."

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Let's Think Smarter About the Charitable Tax Deduction

January 14, 2013

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.

Jan_masaoka_headshotOn 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.

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

January 04, 2013

Ellen_alberding_headshotThe 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.

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

December 17, 2012

Headshot_Shawn Dove_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.

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[Infographic] The Danger of Capping Deductions

December 11, 2012

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.

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Campaign Finance and Charities

September 06, 2012

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

Rosenman_headshotCharities 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.

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Nonprofits Missing From Big Battles

June 06, 2012

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

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

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

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

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

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

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Curtailing Democracy

April 26, 2012

(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.)

Voice-of-the-peopleNonprofit 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

April 21, 2012

(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.)

Earth-day2012Protecting 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:

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

-- Kyoko Uchida

Weekend Link Roundup (November 26 - 27, 2011)

November 27, 2011

Aurora-borealis-NWTOur 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'

August 01, 2011

(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.)

Filterbubble _wordcloud 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

July 25, 2011

(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.)

Journey_goddesses 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.

Continue reading »

The Patriot Act and Aid: Focus on Somalia

July 15, 2011

(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.)

Somalia_Food_Crisis 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.

Continue reading »

Limiting the Charitable Deduction: Bad for Charities?

July 11, 2011

(Matt Sinclair is the editor of PND. In June, he interviewed Premal Shah, president of microlending site Kiva.)

Afp_logo With all the talk about the federal debt ceiling -- and the economic disaster awaiting us if Congress doesn't vote to raise it by August 2 -- you may have missed the latest estimates about what might happen if the Obama administration's plan to limit the charitable deduction is enacted into law. Like a lot of news coming out of the nation’s capital these days, the numbers are pretty grim.

(For those who haven't been following the story, the Obama administration has proposed capping itemized deductions at 28 percent for married couples with income over $250,000 and individuals with income over $200,000.)

Earlier this year, the Association of Fundraising Professionals asked visitors to its Web site what kind of impact the White House proposal would have on their organization's fundraising. Three-quarters (77 percent) said donations would drop at least slightly, while one in ten (9 percent) said it would have no effect at all.

Here are the complete results (based on 525 responses collected between April 18 and June 19):

  • No effect at all on gifts: 9 percent
  • A small drop (~5 percent) in gifts: 23 percent
  • A small but significant drop (~10 percent to 20 percent): 27 percent
  • A sizeable drop (~25 percent or more): 27 percent
  • Not sure: 14 percent

Hardly a scientific study, but with the unemployment rate hovering around 9 percent and many economists scaling back their forecasts for the second half of the year, the results would seem to reflect the uncertainty that has characterized the economic recovery since the recession was declared over in the summer of 2009.

What do you think? What are the chances that any proposal to limit the charitable deduction will be passed before the 2012 elections? And if such a proposal is enacted, what is it likely to mean for total aggregate giving?

-- Matt Sinclair

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

March 03, 2011

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Mitch Nauffts

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