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115 posts categorized "Strategies"

Catalyzing Impact Investments Through Coordinated Grantmaking

March 19, 2014

(The following post was adapted from "From Grants to Groundbreaking: Unlocking Impact Investments," an ImpactAssets issue brief by Amy Chung of Living Cities and Jed Emerson.)

Illustration_ImpInvPhilanthropy and the practice of grantmaking traditionally have been very separate from traditional investing in both culture and approach, but the emerging field of impact investing invites a productive collaboration between these two disciplines. Indeed, in an increasingly resource-constrained world, the ability to drive more impact investments into the communities and issues we care about is imperative. In the paragraphs that follow, we will explore how family foundations, philanthropic institutions, and public funders can use their grants strategically to unlock future impact investments in social businesses and socially driven business models that are either too risky or not ready for investors seeking financial returns.

In traditional capital markets, there are clear roles that different investors play in the sequence of financing for organizations as they move from seed stage to later stage. In the impact investing field, the role and needs of investors at different stages follows a similar though less clearly defined path. The relatively recent proliferation of socially driven business models makes it challenging for many to identify opportunities that are ready for investment or that have enough of a track record to provide confidence in their future returns. While such an environment provides investors with opportunities to be creative with financing, it also requires increased transparency and communi­cation from investees, funds, and intermediar­ies to accommodate different risk and impact profiles within the same deal or investment opportunity.

In many cases, the work of innovative socially driven business models may be accelerated by combining various types of impact invest­ment capital, in effect "stacking" capital that requires a financial return with capital that does not in order to "buy down risk" or otherwise make a deal happen that philanthropy or market rate investment alone would not be able to achieve. Because grants do not require repayment or a rate of financial return, they can be used more flexibly in certain transactions. For example, grants may be used to provide guarantees, fund a loan loss reserve, or serve as flexible lending capital, each of which may be needed in order to leverage or attract capital seeking a return. Coordinating grants with investment in this way may not only reduce the risk associated with particular transactions, but also can support socially driven financing models, thereby enabling impact investment opportunities that might otherwise not be possible.

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Venture Philanthropy and Development

March 06, 2014

(Heather Grady most recently was vice president for foundation initiatives at the Rockefeller Foundation and currently is serving as an advisor to the Conrad N. Hilton Foundation. As a member of the Rockefeller Foundation executive team, she provided vision, leadership, and direction to help the foundation achieve its goals of building resilience and promoting equitable growth and also managed a diverse group of professionals in the U.S., Asia, and Africa working in a a range of areas, from climate change, agriculture, and health to transportation, impact investing, and employment. This is her first post for PhilanTopic.)

Heather_grady1Venture Philanthropy in Development (90 pages, PDF), a new report from the OECD's NetFWD, charts the directions that many foundations and individual philanthropists are taking to tackle today's social, environmental, and economic challenges. While the term venture philanthropy has been around for almost half a century (credited in the report to John D. Rockefeller III, who said it was "the imaginative pursuit of less conventional charitable purposes"), it is seen as an emergent field, and there is little enough agreement on the term itself that the originators of the report gave scant attention to precisely defining it.

At a panel I moderated on the occasion of the report's launch, common dimensions of venture philanthropy were easily identified: high engagement with the grantees supported within any particular portfolio; provision of non-financial as well as financial support with a targeted group of grantees (e.g., convenings); an entrepreneurial start-up approach; a blending or even blurring of the lines between grant contributions and investments for financial return; working at a systems level to influence a combination of practice, policy, markets and even public opinion; and focusing on a positive enabling environment to achieve success.

The report is based on research from which the authors conclude that those sharing in depth their venture philanthropy experiences (the Rockefeller, Lundin, Shell, and Emirates foundations) were on a transformational journey, one that was not a "from-to" path but a much more inclusive and – as I read it – meandering one. As an integrative approach, it provides new opportunities for foundations to work with their grantees differently, and also for coalitions of foundations, civil society organizations, governments, and businesses to enter differently into shared ventures, not unlike the collective impact approach.

I learned a new term when one of the main researchers, Alexandra Stubbings, told us that the approach may force foundations to do a "drain-up" review. While that sounds fairly unpleasant, philanthropic institutions do need a good shaking out now and again.

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‘Fatal Assistance’: The Promise and Failure of Humanitarian Aid in Haiti

February 20, 2014

(Kathryn Pyle is a documentary filmmaker and a regular contributor to PhilanTopic. In her previous post, she wrote about the documentary Shored Up, winner of the 2014 Hilton Worldwide LightStay Sustainability Fund & Award.)

Fatal_assistance_posterThe magnitude 7.0 earthquake that struck Haiti on January 12, 2010, killed more than 200,000 Haitians, injured over 300,000 people, and left some 1.5 million Haitians homeless. It also devastated the capital city of Port-au-Prince, destroying buildings and wiping out large swaths of the city's infrastructure. As in most natural disasters, it was the poor, living in the most vulnerable areas, who were most affected – and Haiti was already the poorest nation in the Western Hemisphere.

The international response was immediate and unprecedented: ultimately, $14 billion was pledged for relief and recovery efforts by donor countries, bilateral and multilateral agencies, individuals, and foundations and corporations. The total amount actually disbursed was considerably less but still significant for a country with a population of only ten million.

Four years later, the clamor that arose almost immediately over how the aid was being disbursed, continues. In an editorial last month marking the fourth anniversary of the earthquake, the New York Times declared that despite the outpouring of support (and notwithstanding certain achievements), "Haiti is a fragile, largely forgotten country" where more than 170,000 people still live in temporary shelters.

A major criticism of the response has been the lack of direct support for, and meaningful consultation with, Haitians. According to the Guardian, of the $9 billion spent in Haiti by January 2013, 94 percent was funneled through donors' own entities, the United Nations, international NGOs, and private contractors. Reports since then confirm that only 5 percent of the money pledged for relief and recovery efforts in the country reached Haitian organizations.

Fatal Assistance, a new documentary by Haitian-born filmmaker Raoul Peck, provides a personal account of what happened in the weeks and months after the quake struck and, at the same time, is a plea for a more effective approach to humanitarian assistance in developing countries. Completed in 2013, the film premiered last year at Berlinale, the Berlin international film festival, and has been shown as part of the 2014 Human Rights Film Festival screening in cities across the U.S.

When the earthquake struck, Peck, like many other Haitians living abroad, returned home to help. "Those first weeks were a time of solidarity and connection," he told me. "Everybody slept outside. The Haitians were organizing everything."

That changed when the international relief groups arrived.

"Suddenly all our organization was erased. We weren't wanted and we were overwhelmed by the megaproject that took over. The locals were swallowed by the aid machine. We were of no use. So I decided to do what I do best: make a film. Without having any specific idea in my head, I decided to observe the whole process for a full two years, filming what was going on, interviewing people, penetrating the power structures where decisions were being taken, tracking the progress of the humanitarian efforts."

Peck's despair and anger with the reconstruction process is evident throughout the film, as the initial outpouring of money and promises of help were overwhelmed by agency competition, duplication of effort, and corruption.

Peck was in Philadelphia recently to screen Fatal Assistance and a previous feature film he had made, Moloch Tropical (2009), a satirical look at the final days of an unpopular Aristede-like politician. Organized by the Scribe Video Center in collaboration with International House Philadelphia, the program included a conversation with Peck about the creative process that was moderated by Louis Massiah, director of the Scribe Center.

In the post-screening discussion, Peck elaborated on a theme that was woven through Fatal Assistance: that the interests of humanitarian agencies working in Haiti seemed connected more to profit than to the needs of the Haitian people.

Even though many had never been to Haiti before, "the foreign workers didn't consult or involve the Haitians. They were the experts," Peck told those in attendance. "So much money was spent, but almost all of it went to foreign NGOs that carried out the projects designed by those experts. That meant that the money went back to the donor countries, it didn't go to the Haitian people. It was a business, where, for instance, instead of bringing water from other parts of Haiti, donors bought bottled water from businesses in their own countries and distributed them in Haiti."

Similar criticisms of the humanitarian relief model have been heard before. In a recent Q&A with PND about humanitarian aid efforts in the Philippines following Typhoon Haiyan, Jessica Alexander, author of Chasing Chaos: My Decade In and Out of Humanitarian Aid, made a plug for an alternative approach: humanitarian agencies should "recognize that the Philippines will always be vulnerable to natural disaster, and that the best thing they can do is to work with local communities to strengthen their capacity to prepare for and respond to the next disaster."

Oxfam International, a confederation of fourteen Oxfam organizations that was working in Haiti with about a dozen rural projects before the earthquake struck, is an example of this more sustainable model. The organization is highlighted in the film in an interview with one of its Haitian staffers.

"Many of those projects had roots in previous crises, so disaster risk prevention was part of our day-to-day program," says Michael Delaney, head of Oxfam America's humanitarian response efforts. "Our approach to disaster relief is closely linked to long-term development programs, focusing on the most vulnerable populations to create resilient communities.

"In this kind of situation, there's pressure on organizations to be seen doing something, such as housing construction," Delaney adds. "Consultation takes time, so it's often not included in a top-down relief program. It's easier to design the housing and get it done. But housing is the hardest piece of reconstruction: it's personal, it's cultural, there are related issues like getting land titles. You can't do that unilaterally. You get a lot of solutions that are rapid but not sustainable."

Oxfam America raised about $30 million from foundations and individuals for its relief and recovery efforts in Haiti. About $20 million has been spent on direct disaster relief such as emergency water, sanitation, and other public-health services that have reached more than a million Haitians. The organization also provided emergency shelter for more than 94,000 Haitians and food assistance to over 200,000 people. Other assistance included grants to small businesses and cash-for-work programs. The rest of the funds it raised will support ongoing programs to address local communities' economic and infrastructure needs – programs that are run by Oxfam America's Haitian staff working in collaboration with local Haitian partners.

Before the earthquake, Oxfam America had been building a "South-South" bridge between its partners in El Salvador and its local efforts in Haiti. The Oxfam America program in El Salvador helped create an effective emergency response and disaster risk prevention squad in that country, and it is now working to do the same in a number of Haitian communities. The focus is on preventing cholera and other sanitation-related diseases, building communication networks and infrastructure, and enhancing technical capacity within the local population. Local governments are also involved, preparing for the next disaster, including designing and coordinating the reconstruction projects they most need.

In the years since the earthquake, any number of reports have been highly critical of the way humanitarian assistance was delivered in Haiti. But critical analyses of the humanitarian aid model itself have been largely missing. Peck's powerful and very personal film provides such an analysis and argues for a different model, one that is inclusive, consultative, and, like Oxfam America's ongoing efforts in the country, guided by the goal of long-term sustainability.

Kathryn Smith Pyle

It’s the Year of Impact Investing: What Does That Mean for Foundations?

February 06, 2014

(Beth Sirull is president of Pacific Community Ventures, which, in partnership with ImpactAssets and Duke University's Center for the Advancement of Social Entrepreneurship, recently published the report Impact Investing 2.0: Insights: The Way Forward — Insight From 12 Outstanding Funds.)

Headshot_beth_sirullA growing body of evidence suggests that, as more investors get comfortable with the concept of impact investing — deploying capital with the intention of producing social benefits alongside financial returns — 2014 will be the year impact investing ceases to be a buzzword and becomes a real option for financial firms, pension funds, and endowed institutions. Indeed, research by JPMorgan Chase projects that impact investments worldwide will approach $1 trillion by 2020, while a 2013 survey by the World Economic Forum suggests that nearly two-thirds of U.S.-based pension funds expect to make an impact investment in the future. Meanwhile, major Wall Street firms such as Goldman Sachs and Morgan Stanley have already assembled teams dedicated to impact investing. What does all this mean for foundations, and what role should and can they play in the fast-growing impact investing field?

The term impact investing was coined in 2007, but activities of this kind have been around for much longer. Since 1969, when program-related investments (PRIs) were created under the U.S. tax code, private foundations have provided more than $4 billion in unconventional financing for enterprises and activities that further their charitable purposes in areas such as poverty alleviation and education. In recent decades, socially responsible and sustainability-oriented investments have expanded in the public markets and in private equity.

In the last few years, attention has largely been focused on building the supply side of the impact investing field. The Global Impact Investing Network (GIIN) has convened a group of more than sixty investors representing $11 trillion in assets under management, including $60 billion in impact investments; the White House has used its bully pulpit to activate investors; and in 2013 the G8 created the Global Social Impact Investment Task Force. All this activity is promising, but it isn't enough to unleash the true potential of impact investing in terms of delivering game-changing social, economic, and environmental gains.

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Compensating for Your Philanthropic Blind Spots

December 17, 2013

(Caroline Woodruff is a philanthropy advisor at Bessemer Trust, where she helps individual clients, families, and foundations develop strategies to meet their philanthropic and intergenerational legacy goals. Founded in 1907, Bessemer Trust is a privately owned wealth and investment management firm that serves ultra-high-net-worth families and their foundations and endowments.)

Vivienne_Harr_TwitterIPOFor those who may have missed one of her viral tweets, Vivienne Harr is the new face of the movement to end child slavery. Vivienne has raised more than $100,000 -- so far -- to eradicate child slavery by selling lemonade. (She's pictured here ringing the opening bell of the New York Stock Exchange to commemorate Twitter's initial public offering on November 7, 2013.)

Vivienne was a featured guest at a gathering for Bay Area philanthropists hosted several weeks ago by the Marin Community Foundation (MCF). I attended to hear MCF president and CEO Tom Peters moderate a session with my colleague Paul Connolly, director of Philanthropic Advisory Services at Bessemer Trust, in which Paul discussed the pros and cons of what he called "moneyball philanthropy" -- a data-driven and results-oriented approach to grantmaking. At the same session, members of the audience described their common struggle to balance the "head" and "heart" in their philanthropy.

Over the years, I've observed that donors typically fall somewhere on a spectrum, with a highly intuitive mode of giving propelled by passion at one end and a very technocratic approach focused more on logic, outcomes, and data at the other. Sometimes, leaning too much toward one end of the spectrum can negatively affect results. Indeed, during the session with Paul and Tom, it became clear how important it is to identify "blind spots" in one's grantmaking practice and find others to complement your particular inclinations.

Vivienne's story is an impressive example of a donor who is driven by heart. After seeing a photo of two boys in child slavery, she set an audacious goal to do something about it: sell lemonade from her neighborhood roadside stand for 365 days and raise $100,000. In less than six months, she had surpassed her target and decided to aim even higher. She wanted to create a socially conscious company to bottle her product, brand it as "Make a Stand Lemon-Aid," and leverage a portion of the gross proceeds to support her philanthropy.

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A Generational Transition

November 13, 2013

(Stephen Bronfman is executive chair of Claridge, an investment firm started by his father, Charles, and co-chairs the Claudine and Stephen Bronfman Family Foundation. He also serves as president of the Samuel and Saidye Bronfman Family Foundation, is a director of the David Suzuki Foundation, and chairs the Combined Jewish Appeal 2014 Campaign. This post, the second in the "Making Change by Spending Down" series, a joint project of the Andrea and Charles Bronfman Philanthropies and GrantCraft, orginally appeared on the GrantCraft blog.)

Headshot_stephen_bronfmanPhilanthropy -- as my father often says -- is in the Bronfman DNA, and we are fortunate to be able to practice it generously and expansively. Representing this philanthropic tradition properly and effectively is a responsibility I embrace and will pass to my own children.

The Andrea and Charles Bronfman Philanthropies' (ACBP) focus on Canadian heritage, Jewish community and Israeli culture, education, and society building is critical. Its footprint will be long-lasting, especially as it helps to put its major grantees on paths toward sustainability after it shuts its doors in 2016.

The work and mission of ACBP has always and rightly reflected the interests and passions of my father and his late wife, Andrea. I have my own, and I expect my own children to one day chart their own direction as well.

Deciding to close ACBP and direct his philanthropy through other channels shows how my father respected generational differences and transitions, aand also a changing world in which new challenges emerge and demand new philanthropic responses and approaches.

The decision reflects a philanthropic mindset to not burden a new generation with certain strictures, missions, and infrastructures. It empowers us to pursue our own visions and approaches to affect positive change. This is a desirable outcome.

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The Transparent Spend Down

September 23, 2013

The following post by Charles R. Bronfman, chairman of The Andrea and Charles Bronfman Philanthropies (ACBP), is the first in a new blog series, "Making Change by Spending Down," produced by ACBP in partnership with GrantCraft, a joint service of the Foundation Center and the European Foundation Centre. In the post, Mr. Bronfman explains how he, his late wife, Andrea, and ACBP president Jeffrey Solomon arrived at the decision to spend down the foundation by 2016; why he and Solomon decided to take extra steps to create transparency around the spend-down process; and what they hope the added measure of transparency will accomplish.

We welcome your comments on this and every post in the series and encourage you to discuss and/or share individual posts on Twitter using the #spenddown hashtag. To learn more about the project, visit the GrantCraft Web site.

*****

My parents were my greatest mentors. They taught me the meaning of philanthropy through their active involvement in many causes. Creating initiatives to address social, cultural and community needs now, and facilitating positive change for the future, were and remain my guiding principles.

Those principles became the foundation for The Andrea and Charles Bronfman Philanthropies, which my late wife, Andy, and I established in 1985. All along, we believed in creating programs with long-lasting effect and which could and would make a real difference in the world.

At the beginning of the twenty-first century, after doing our homework about foundations created in perpetuity, Andy; Jeff Solomon, the president of our foundation; and I decided that ACBP should fulfill its mandate. While several other foundations had chosen this course, we decided to keep our decision to ourselves. But as more foundations chose to be time-limited and publicly announced their decision, we decided to go public with ours in 2008.

In an open letter to the philanthropic community three years later, Jeff Solomon and I announced that we would spend down ACBP by 2016.

That's not news anymore. What is, though, is the transparency we vowed to establish around the spend-down process, a conscious effort to share our experiences -- expected and not, good and bad -- on the road to 2016.

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After Overhead: Investing in Nonprofit Financial Fitness

September 03, 2013

(Rebecca Thomas is a vice president at the Nonprofit Finance Fund, where she has strategic responsibility for national arts initiatives, funder partnerships, and product development efforts that advance NFF's profitability, visibility and impact.)

Headshot_rebecca_thomasRecent efforts to end the overhead myth are to be applauded. But they don't go far enough. Funders also need to focus on nonprofit resiliency.

Increasingly, funders understand that "overhead" costs directly support an organization's ability to deliver results and that the overhead ratio shouldn't be used as a simplistic indicator of an organization’s ability to deliver on its mission. The bigger opportunity here, however, is to go beyond funding the full costs of delivering specific services to build an organization's financial strength through surpluses and savings.

After all, many nonprofit organizations that routinely fund their administrative and fundraising expenses often are operating perilously close to the financial brink. They lack the resources to develop innovative approaches to service delivery, take calculated operational risks, manage unexpected funding shortfalls, and cultivate new, more reliable streams of revenue. The loss of one big government contract, an unanticipated facility emergency, or a period of economic distress can be enough to push these agencies over the edge.

Nonprofit Finance Fund's 2013 State of the Sector survey showed that, three years after the official end of the recession, the majority of nonprofits are still unable to address the needs of people and communities they serve. While more than 70 percent funded overhead by bringing in enough revenue to cover their expenses, only 48 percent reported an ability to meet service demand, and 90 percent said the outlook for people they serve will be less certain or the same in the coming year.

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Want Results? Funders Should Pay to Ask the Right Questions

August 07, 2013

(Laura Cronin is a regular contributor to PhilanTopic. In her previous post, she spoke with Sharna Goldseker, managing director at consulting firm 21/64, about the priorities of millennial donors and what makes them different from their parents and grandparents.)

Performance_measurementGrantmakers have always been able to manage their inputs. Each year private foundations provide a list of their grants to eligible 501(c)(3) organization via the Form 990-PF. Foundation boards, fundraisers, and anyone with access to the Foundation Center's site or a GuideStar account can quickly access this baseline data.

But just as the charges on your monthly credit card statement are only one indicator of your personal financial health, foundations don't learn a whole lot about their overall effectiveness by only tracking the size of their grants budget. After years of debate about the need for better evaluation -- on both the funder and grantee sides -- measuring outcomes and gauging the results of foundation grantmaking is still a work in progress, especially for small and midsize foundations and their nonprofit partners.

While reporting to funders has always been a requirement for smaller nonprofits, the data collection and evaluation they tend to do for funders is not always integrated into other organizational planning efforts. Indeed, most small to midsize nonprofits cannot afford to hire a full-time evaluation officer, and in a time of constrained budgets, few executive directors are willing to prioritize data collection over service delivery. And even when organizations are willing to devote resources to performance measurement, there often is a disconnect between the questions frontline managers are interested in asking and the kind of data foundation program officers and executives are looking for to prove the effectiveness of a given program to their boards.

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Top 10 Lessons Learned on the Path to Community Change

July 10, 2013

(Robert K. Ross, M.D. is president and CEO of the California Endowment. In part one of this two-part series, Ross shared three "aha" moments from the first two years of the the endowment's Building Healthy Communities initiative. This post originally appeared on the Foundation Center's Transparency Talk blog.)

Headshot_robert_rossAt times I step back and look at the BHC initiative and wonder, Could we have made it more complicated? Fourteen sites. Multiple grantees in each site. A core set of inter-linked health issues. Multiple state-level grantees. And the expectation that the parts will add up to something greater than the whole and catalyze a convergence that builds power at the community level and leads to greater impact.

But then supporting an agenda for social and community change requires multiple strategies operating in alignment; good data, message framing, and storytelling; influential messengers and convening and facilitating champions; innovative models; "grassroots and treetops" coordination; and meaningful community engagement.

Our Top Ten Lessons for Philanthropy

As we engaged in the BHC planning process, we tried in earnest to stick by a key aphorism, one I learned from colleague and mentor Ralph Smith at the Annie E. Casey Foundation: Make new mistakes. With that in mind, I want to share some lessons regarding planning and implementing a community-change initiative.

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After the Giving Pledge: Strategic Philanthropy Is More than Money

June 17, 2013

(Mary Glanville is Managing Director, Institute for Philanthropy UK. The London-based institute works to increase effective philanthropy in the United Kingdom and internationally by providing donor education, building donor networks, and raising the awareness and understanding of philanthropy.)

Headshot_mary_glanvilleIn February, the Gates Foundation announced that the Giving Pledge, founded by Warren Buffett and Bill and Melinda Gates in 2010, would for the first time extend its invitation to philanthropists outside the United States. The pledge, whose signatories propose to give at least half their wealth to charitable causes, welcomed twelve more people to its ranks, bringing the total number of those who have signed the pledge to a hundred and five.

It's a commitment that does not tally with the traditional media-held view of wealthy individuals and their families, a view that portrays the preservation of assets as the primary if not sole consideration. In order to understand what has prompted the apparent urgency and scale of this charitable giving, we asked twenty-two donors in our networks about the rate at which they intend to deploy their philanthropic capital. Their responses were revealing in several respects.

The donors came from many countries and regions -- from the UK, the U.S., Brazil, Canada, Lebanon, and Mexico -- and they or their foundations had philanthropic assets on average of $79,081,250, from which they gave an average of $2,168,050 each year. Half said they would give at least 25 percent of their wealth to charity.

Despite the regional differences, it was possible to discern a common theme in their areas of giving: none of the respondents gave money to the arts, as might be expected, but instead gave to address social issues that they considered among the world's most pressing problems. One donor was particularly forthright on this point, stating that "I generally believe in addressing the needs of underserved poor in the neediest parts of the world, where I have worked for much of my professional life, not the arts or environmental needs so popular among donors here at home, or SOBs (symphony, opera, ballet) -- as much as I love them personally."

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Foundations and Climate Change: 5 Questions for…Robert Searle, Partner, Bridgespan Group

June 13, 2013

Headshot_robt_searleIn recent years, the debate over climate change has centered on greenhouse gas emissions, which have been linked by scientists to rising global temperatures. But after Superstorm Sandy wreaked havoc on coastal areas of New York and New Jersey, underscoring the importance -- and vulnerability -- of critical infrastructure systems, many policy makers and environmentalists began to shift their attention to climate change adaptation strategies.

To help advance the debate, the Bridgespan Group has released a report, How Philanthropy Can Help Communities Advance Climate Change Adaptation (12 pages, PDF), that examines the funding environment for these strategies and offers a number of suggestions for foundations looking to support adaptation efforts in a post-Sandy context. Recently, PND spoke with Bob Searle, a partner in Bridgespan's Boston office and co-author of the report, about the impact of Sandy on the climate change debate, the tradeoffs between mitigation and adaptation, and some of the things foundations can do to advance the debate.

Philanthropy News Digest: The climate effects of a warming planet had been predicted long before An Inconvenient Truth was released in 2006. Why has it taken so long for the discussion about climate change to get serious?

Robert Searle: I think there are two primary reasons, and they are interconnected. The first is that all science involves an element of uncertainty, and climate science is no exception. There are elements of the climate situation that are quite certain. For example, greenhouse gas concentrations in the atmosphere are increasing, and that increase has led to a general warming of the planet. There are other aspects that are less certain and open to interpretation and judgment; for example, whether human activity is the major cause of these changes, and what the environmental and social impact of climate change will be.

And this is where the second reason comes in: The biggest source of greenhouse gases is the burning of fossil fuel, and the global economy is based on fossil fuels. In other words, there are incredibly strong vested interests in not making the explicit connection between man-made greenhouse gases and the potentially devastating effects of climate change. Those vested interests will naturally seize on any element of uncertainty to argue against change that will threaten economic development, especially when the economy is already shaky.

One mistake that the environmental community has made is to allow itself to be painted as anti-people and anti-economic development on the climate issue. There was a great article in the Fall 2012 issue of the Stanford Social Innovation Review titled "Climate Science as Culture War," by Andrew Hoffman, that speaks to some of these points.

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Foundations and the 'New Normal': A Q&A With Bradford K. Smith, President, Foundation Center

June 10, 2013

(The following Q&A with Foundation Center president Bradford Smith appears as part of a special feature on "Philanthropy in a changing world economy" in the June 2013 issue of Alliance magazine. It is reprinted here, with minor revisions, courtesy of Caroline and her team.)

Headshot_brad-smith2Caroline Hartnell: To what extent are U.S. foundations changing in response to austerity?

Bradford K. Smith: I started this job two weeks after Lehman collapsed. On my first day in the office, we had a press call about what foundations were doing about the economic crisis. I put down the phone and walked down the hall to our research department and said, "Quick, I need a statistic," and they came up with a really good one. Foundation giving for the previous year, 2007, was around $45 billion -- about 6 per cent of the first stimulus package announced by the federal government. So one thing the crisis really showed up was the scale of foundation resources. When the economy gets into serious trouble, it takes government to try to keep it from collapsing. Foundation dollars alone aren't enough to solve problems. That made foundations think more about how they can leverage money from each other, how they can collaborate with other sectors rather than trying to do it themselves.

A second interesting thing is that foundation giving held up quite well during the recession. One reason is that U.S. foundations calculate their mandatory payout on a rolling three-year average of the value of their assets, which cushions them from big market swings. It also held up well because foundations actually went beyond the federally mandated payout rate of 5 percent.

CH: The recession has changed things for the foreseeable future. Do you think U.S. foundations see this as a "new normal" and are rethinking their role?

BKS: I think most of them are adjusting to the idea that long-term expectations for returns on investment need to be reduced. 2012 was a good year in the financial markets, but nobody really expects that it will go back to the boom years when, as one foundation investment manager put it, for a number of years "all we had to do was get out of bed in the morning and we could make a 20 percent return on our endowment."

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To Innovate…Collaborate

June 06, 2013

(Paul Grogan is president and CEO of the Boston Foundation. His blog, City of Ideas, appears regularly on the Boston Foundation Web site.)

Headshot_paul_grogan"If we put our heads together, we might be able to figure this out."

It's a bit of folk wisdom that often rings true -- and for a number of years, the Boston Foundation has highlighted the opportunity for collaborations and mergers to tackle otherwise intractable problems.

In 2010, we co-founded the Catalyst Fund for Nonprofits, a five-year, $1.925 million fund in partnership with local funders Boston LISC, the Hyams Foundation, the United Way of Massachusetts Bay and Merrimack Valley, and the national Kresge Foundation. The idea behind nonprofit mergers isn't cost savings -- in a high-touch world like ours, there is only so much excess you might be able to trim in a merger. Rather, it's all about service. Organizations that merge and/or collaborate build capacity to do more of what they do best, and do it even better.

In Boston, the much-publicized merger of the Pine Street Inn for the homeless and hopeFound, a job training nonprofit serving the same client base, has proven a success, as demonstrated in a recent assessment of the Catalyst Fund's work and in a profile in the Boston Globe. The merger has allowed the two organizations to connect their respective job training programs and opportunities in a way they likely never would have as separate entities, and the results have been remarkable.

But to succeed, we also need to see the power of a more grassroots-level of collaboration. In that vein, we launched our first-ever Collaborate Boston competition this winter. The premise was simple: We'd pose a problem and then open the floodgates to proposed solutions, with one important restriction -- all the proposals had to bring together organizations in collaborative efforts to address the issue.

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Scaling Social Innovation

May 29, 2013

(Paul L. Carttar is a partner at the Bridgespan Group and former director of the Social Innovation Fund, a federal initiative that enlists private intermediaries to help expand innovative programs proven to promote economic opportunity, healthy lives, and youth development.)

Headshot_paul_cartarrIn much the same way a parent feels extraordinary awe and wonder in watching his or her child grow up and succeed, I recently experienced a powerful sense of pride at a conference in Washington, D.C., devoted to the subject of bringing to scale innovative nonprofit programs, particularly those serving low-income communities.

The conference was sponsored by the Local Initiatives Support Corporation (LISC), the country's largest community development organization, and focused on LISC's successful scaling of Financial Opportunity Centers (FOCs) -- an initiative to help low-income people take control of their family finances. Working off a model developed by the Annie E. Casey Foundation, in just three years LISC has expanded the program from four centers in Chicago to seventy-one locations in thirty cities across the country. Much of the funding for this growth came from an innovative federal program called the Social Innovation Fund when I was the fund's director. As I said, I couldn't be prouder.

The FOC approach is simple but sound. It recognizes that getting a job is just the first step toward achieving long-term financial stability. So FOCs focus on improving the actual net cash a family has each month, taking account of what a family spends as well as what it earns, and helping low-income and unemployed individuals by providing an integrated set of services that are typically siloed. These services include not only job training and help getting and keeping a job, but also hands-on financial coaching related to budgeting and building credit, as well as assistance in identifying and applying for public benefits.

While we still have much to learn about the full impact of FOCs, there are clear indications the approach works. Over the past two years, nearly 75 percent of FOC clients improved their monthly cash flow and net income, while 43 percent raised their credit scores. In addition to improved cash flow and credit scores, clients receiving this integrated set of services showed dramatic gains in employment and net assets compared to those who received such help piecemeal.

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