Ten High-Impact Giving Opportunities

For all its problems, the world is a better place thanks to the efforts of millions of NGOs and nonprofit organizations as well as philanthropists and donors who strive to advance thoughtful and effective giving.

There are other ways to evaluate the impact of a philanthropic investment, including the application of what, in the for-profit world, might be called cost-benefit analysis. Or, as the folks at Arabella Advisors, a D.C.-based philanthropic advisory firm, frame it:

• What issues are timely but overlooked?
• What challenges lie on the horizon that might be mitigated with proactive support?
• Where can one’s contribution go the farthest in saving lives, educating children, preserving the environment, alleviating poverty, or addressing another urgent need?
• Where can donors see measurable return on their investments?

To get us all thinking, Arabella has released its first annual list of ten under-recognized and/or under-funded issues for donors.

1. Improving Financial Literacy for America’s Youth -- According to a recent study, 60 percent of pre-teens cannot explain the difference between cash, checks, and credit cards. Donor support of programs that teach financial management is critical to helping the next generation get jobs, stay out of debt, and contribute to the economic welfare of our society.

2. Support First Generation College Attendees -- College graduates are three times less likely to live in poverty than people who complete high school. Providing assistance to first-generation college students is a unique alternative to traditional alumni giving.

3. Provide Safe Water and Sanitation in the Developing World -- Many areas of the developing world lack access to clean water. Supporting clean water efforts can reduce childhood mortality, promote adult health, and help to alleviate global poverty.

4. Combating Poverty by Closing the Microcredit Gap -- In Bangladesh, 48 percent of the poorest households with access to microcredit loans rose above the poverty line. Donors can reinforce and extend those gains to other regions and countries by filling in the gap between small microcredit loans and larger-scale commercial finance.

5. Improving Access to Dental Care for Low-Income Children -- Lack of access to dental care can impair a child's ability to eat, learn, smile, sleep, and play. Innovative opportunities for donors helps to raise awareness of this issue and bring quality health services to children in need.

6. Promoting Renewal in New Orleans -- Investing in the city's once thriving arts community not only helps to preserve one of the nation's most treasured cultural resources, it also provides valuable economic returns to the city's tourist and arts-based economy.

7. Improving Energy Efficiency in Low-Income Communities -- Investments in energy efficiency and weatherization programs can significantly reduce pollution and heating bills by 31 percent for the average low-income home, helping families as well as the environment.

8. Increasing Access to Financial Services for the "Unbanked" -- Supporting community-based organizations that educate and fund practices that provide the "unbanked" with assistance will positively impact the financial future of millions of households.

9. Developing Local Food Systems -- Supporting local food systems reduces pollution, creates jobs, and promotes healthy eating in an increasingly unhealthy society.

10. Facilitating Trust-Building to Prevent Violent Conflicts -- Investments in international conflict-prevention programs can help address root causes of conflict before they develop into full-scale violence.

What do you think? Are these the areas/issues you would choose to achieve impact with your charitable dollars? What other areas/issues should be on the list? We'd love to hear your thoughts.

-- Mitch Nauffts

Quote of the Day (Dec. 7, 2007)

"The new billionaires and other people of means now entering the philanthropy sector are likely, by both size of their investment and their ideas about giving, to influence how foundations conceive of the relationship of mission, payout and lifespan. New, strong interest in the effectiveness of philanthropy and how to create greater impact may well result in the continued questioning of existing foundation procedures, and the discovery of new ways in which the vast and growing reservoir of charitable dollars can be used to benefit mankind."

-- Beyond Five Percent: The New Foundation Payout Menu

Taglines R Us

Is your organization's tagline strong enough to capture people's attention and get them thinking?

Old friend Nancy Schwartz, who blogs at Getting Attention!, wants to know. Nancy is launching an effort to help nonprofits craft better taglines, and as part of that effort she's posted a short four-question survey on her blog. In return for your time, Nancy will be happy to e-mail you a copy of the Getting Attention Tagline Report when it's published in early 2008.

You'll find lots of other good stuff at Nancy's blog, so be sure to check it out.

-- Mitch Nauffts

Payout: Beyond Five Percent

Payout -- the amount, as a percentage of assets, that private foundations are required to pay out in grants and administrative costs each year -- is the third rail of American philanthropy. Often linked to and driven by the concept of "perpetuity" (i.e., the expectation that foundation assets will and should be "preserved for future use"), the payout rate was set at 6 percent by the Tax Reform Act of 1969 and revised to 5 percent in 1976, where it has remained.

American philanthropy is changing, however, and as new billionaires and other people of means enter the sector, many are seeking new ways to deploy and leverage the impact of their philanthropic dollars.

Beyond Five Percent: The New Foundation Payout Menu, a joint project of the French American Charitable Trust (FACT), Northern California Grantmakers, and the New York Regional Association of Grantmakers, looks at a range of foundations that have moved beyond the "default" positions of perpetuity and 5 percent payout and are following "alternative courses to lifespan." Through thirteen case studies*, the report "examines the motivations, methodologies, and results of the decision to do things differently; explores the new structures these foundations have developed; and presents lessons learned from the process of linking lifespan and/or payout to mission."

The report is a fascinating look at what, in a philanthropic context, could be called out-of-the-box thinking. It's also deeply researched, crisply written, and available as a free download (36 pages, 1.07MB, PDF) at the NNG Web site.

-- Mitch Nauffts

(*The foundations profiled in the report include the Whitaker Foundation, the Helen F. Whitaker Fund, the Beldon Fund, Atlantic Philanthropies, the Richard and Rhoda Goldman Fund, the Lewis B. and Dorothy Cullman Foundation, the Haigh-Scatena Foundation, the Evelyn and Walter Haas, Jr. Fund, the Needmor Fund, the HKH Foundation, the Endswell Foundation, and the Omidyar Network.)

Invest in Leaders as Well as Projects

(Wendy Bay Lewis is the author of The CivicMinded Companion, a blog for and about nonprofit and national service leaders, philanthropists, social entrepreneurs, and interested citizens. This is her first post for PhilanTopic.)

Foundations often seem separated from nonprofits by a moat. Each side communicates with the other during a grant cycle, when the drawbridge is down. In contrast, Susan and Albert Wells, founders of the Windcall Resident Program for social justice leaders, built a footbridge for their private philanthropy.

Over the course of seventeen years, between 1989 and 2005, they welcomed four hundred activists to their Montana ranch for two weeks of reflection and renewal. Susan tells the story of Windcall in her just-published book, Changing Course: Windcall and the Art of Renewal, with Seven Profiles by Sally Lehrman (Heyday Books, Berkeley).

Although I have known Susan and Albie for twenty years, I learned much more about the Windcall Program from Susan’s book than either of them ever told me. Windcall alumni are community activists and organizers in low-income, usually urban communities who, prior to their mini-sabbatical at Windcall, rarely took time for themselves, much less vacations. As a direct result of their intense work, they suffered debilitating burnout and came to Windcall for a two-week respite, where, as Susan explains in her own words as well as those of the residents, they regained their equilibrium through experiences as varied as horseback riding, throwing clay pots, hiking, and writing poetry. 

For the first time in their lives, these community nurturers were nurtured -– by their hosts, by nature, and by each other. When they returned to work, they took their Windcall experience with them. As one Windcall alum told me, the program is transformative because residents extend the lesson they have learned to their organizations, colleagues, friends, and families.

Burnout is a serious threat to leadership in the nonprofit sector. A survey conducted by the Young Nonprofit Professionals Network found nearly half of the respondents intend to leave the nonprofit sector (some forever) -- and of those, 90 percent cited burnout "as a likely reason for leaving," followed closely by salary, lack of career advancement opportunities, and job-related stress. (Stepping Up or Stepping Out: A Report on the Readiness of Next Generation Nonprofit Leaders, the report based on the survey, is available from YNPN as a PDF file.)

The nonprofit sector, like American society as a whole, has embraced a work ethic based on "productivity and efficiency," which, in Susan's words, "are antithetical to the very essence of social justice work." She calls on funding institutions to take a longer view, beyond project performance, and "affirm the important relationship between healthy individuals, healthy organizations, and high-quality, enduring progress." 

What do you think? Is burnout a problem for the nonprofit sector? Do we expect too much of -- and do too little to reward -- our nonprofit leaders, especiallly those who work in social justice fields? And what, if anything, can we do to rectify the situation?

As always, we welcome your thoughts and comments.

-- Wendy Bay Lewis

Quick Hits (Dec. 1, 2007)

With a nod to recent articles by New York Times' reporters Stephanie Strom and David Cay Johnston, the folks at Beyond Philanthropy argue that "there is a lot of ‘unproductive’ philanthropic capital out there," much if it "either frozen in untouchable endowments, or spread out in small amounts over hundreds of thousands of tiny organizations, many of which overlap in mission and approach, and are too numerous for the government to monitor properly." 

The anonymous blogger known as Don't Tell the Donor wrestles with whether he/she should reveal the identity of the other party in the Mark Everson "sex scandal."

Nancy Schwartz, at Getting Attention!, grades the Red Cross on its communications reponse to the Everson scandal.

The November Giving Carnival has arrived at Maya Norton's New Jew: Blogging Jewish Philanthropy, with posts from Phil Cubeta (Gift Hub), Dahna Goldstein (Philantech), Marc Pitman (Fundraising Coach), Christopher Scott (Nonprofit Leadership, Innovation, and Change), Arlene Spencer (Grant Plant), and Rosetta Thurman (Perspectives From the Pipeline).

The Nonprofiteer has some questions about a recent grant from the Doris Duke Charitable Foundation, a major supporter of the arts in the U.S., to the Nonprofit Finance Fund for a new national initiative, Leading for the Future: Innovative Support for Artistic Excellence.

BusinessWeek reports that the "Ivy Plus" schools (the seven Ivy League schools plus Stanford and MIT) are solidifiying their position atop the higher education heap by using their deep pockets to recruit top-notch faculty, shrink class sizes, increase financial aid for lower-income students, and expand their central role in research. "The gilding of the Ivies," says BusinessWeek, "offers a striking manifestation of the contemporary American tendency of the rich to get much richer."

And Albert Reusga asks, Why is it so difficult to marry art with advocacy?

-- Mitch Nauffts