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20 posts from April 2008

What Price Failure?

April 30, 2008

"Fear of failure is rampant in our lives. I see this fear rear its ugly head in so many communities, where it can have a crippling effect on people’s work and psyche. Sometimes we don’t even realize the fear is within us, only to find ourselves stymied or stuck. The upshot is that we hide from taking risk, and the status quo wins out...."

So writes Rich Harwood in a new post on his Redeeming Hope blog. Rich's experience as an activist in a community where "jobs were scarce, trust was fleeting, and there was lots of finger-pointing and placing of blame" was the catalyst for a dream he had once, a dream he recently had occasion to recall. He calls it the "$100,000 Flop," and it was centered around getting a foundation to pay him to fail. As Rich describes it:

At the time a major foundation was funding various change efforts in the community....But progress was slow. No matter how much the foundation funded, fear persisted. People didn’t want to come out from their homes and leaders wouldn’t work with one another. Simply giving out grants didn’t seem to be the answer; money cannot easily erase something as insidious as fear. So I went to the foundation and asked for funding for an initiative that would intentionally fail in full public view. That’s right, I wanted to fail.

After failing, my plan was to call a meeting in the center of town for people to talk about what had happened, and why the initiative had failed. I simply wanted people to see that we could talk openly, in public, about our failures, and that nothing would happen to us. We’d all come through the experience intact, no matter how hard or excruciating the conversation was. I wanted people to see that we could dissect the initiative and together could produce insights that would help all of us; that the conversation need not end in more finger-pointing and acrimony. I wanted to create an opportunity for people to see themselves in my failure; and really believe they would be okay....

Crazy, right?

Maybe not. Silicon Valley, the most successful wealth-creation engine in the world, has thrived in part by ignoring the stigma that usually attaches to failure. Sure, Rich's dream is about intentional failure. But it's failure with a purpose. And his larger point is an important one: In social change work, as in our personal lives, the fear of failure can stop us before we even get started.

You can read the rest of Rich's post here. And if you have a story about a foundation funding failure, or being willing to fund it, we'd love to hear it.

-- Mitch Nauffts

Project Streamline '08

April 29, 2008


Like many significant developments, philanthropy's current obsession with metrics (to borrow Gara LaMarche's phrase) has had its share of unintended consequences.

One of the least commented on has been a marked increase in grant application and reporting requirements that has "grantseekers and grantmakers alike drowning in paperwork and distracted from purpose."

That's the conclusion of a new report commissioned by Project Streamline, an initiative of the Grants Managers Network, in partnership with seven other organizations representing both grantmakers and grantseekers. (Full disclosure: The Foundation Center, the parent of Philanthropy News Digest and PhilanTopic, is one of those organizations.)

The report, Drowning in Paperwork, Distracted From Purpose (44 pages, PDF), identifies ten ways that the current system of grant application and reporting creates "significant burdens on the time, energy, and ultimate effectiveness of nonprofit practitioners":

1. Enormous Variability -- "Nonprofits encounter a dizzying range of practice -- both within and among funders -- when it comes to the types of information they are required to provide."

2. Requirements Aren't "Right-Sized" -- According to the report, the majority (66 percent) of foundation respondents don't vary their requirements depending on the size of the grant given, while 59 percent don't vary requirements depending on the type of grant given.

3. Insufficient "Net" Grants -- Nonprofits don't really receive grants, the report concludes. They receive "net grants" -- "the total amount of funding minus the true cost of getting and managing the grant" -- leading most nonprofits to weigh the possibility of funding against the cost of seeking it.

4. Outsourced Burdens -- The report notes that although "many grantmakers do not want their grant money used for administrative and fundraising purposes, application and reporting often require labor- and time-intensive activities of the grantseeker, activities that frequently can and arguably should be done by grantmakers."

5. Trust Undermined -- "Simply put," says the report, "many nonprofits believe that foundations do not trust them, and they interpret the burdens of application and reporting as evidence of that distrust."

6. Reports on a Shelf -- Grantees believe their reports are used by grantmakers primarily as a way of checking compliance and "wonder why they are required to provide detailed and lengthy reports just to prove that they complied with the grant terms."

7. Fundraising Gymnastics -- According to the report, the most commonly cited effect of the current funding system "is that nonprofits continually reinvent their programs...in response to foundations' preference for the 'new and different' and reluctance to pay core operating support."

8. Due-Diligence Redundancy -- In a nervous post-9/11 world, the report found that grantmakers tend to play it safe when it comes to due diligence, requiring "redundant and often unnecessary documentation from grantseekers."

9. Double-Edged Swords -- In theory, online grantmaking should save everyone time and money; in practice, it has flaws and poses problems. These include balky online application systems, incompatible formats, and the difficulty, for grantseekers, of gaining access to real, live people at foundations.

10. Time Drain for Grantmakers -- The report suggests "that grantmakers, like grantseekers, are poorly served by the current [system]. Even though individual dealings between foundations and nonprofits may be harmonious and supportive, the overall tenor of the relationship seems to be one of distrust and irritation on both sides."

Not a pretty picture...

The report identifies five factors that have shaped current grantmaking practice (tradition, insufficient investment in staff time and capacity, difficulty getting the right information from grantees, the desire to be strategic and measure impact, a lack of good feedback) and then recommends four principles that grantmakers can/should adopt to relieve the burden on nonprofits:

1. Begin from zero. "In a zero-based approach to information gathering, grantmakers begin with a rigorous assessment of what kind of information they really need to make decisions."

2. Right-size grant expectations. "Grantmakers should consider whether the effort that grantseekers expend to get the grant is proportionate to the size of the grant, the type of the grant, and the existing relationship with the grantee."

3. Relieve the grantee burden. "By minimizing the amount of time, effort, and money that nonprofits spend getting and administering grants, funders increase the amount of time, effort, and money devoted to mission-based activities."

4. Ensure that communications and your grantmaking process are clear and straightforward.

"Almost every funder has a unique application and reporting process," notes Richard Toth, Project Streamline chair and director of the Office of Proposal Management at the Robert Wood Johnson Foundation, "and they're adopted for sensible and responsible reasons. But the problem our research underscores is the cumulative effect of these measures. Imagine each set of requirements multiplied by thousands of grantmakers and you get a sense of the gauntlet nonprofits face. We've created Project Streamline to do something about it."

Anyone who used to think (as I did) that the Digital Revolution would deliver super-efficient workbots and the paperless office is excused if they're feeling a bit skeptical. But this is an idea whose time has come, and my hat is off to the Grant Managers Network and its partners for taking it on.

-- Mitch Nauffts

The Earth Sector: A Call To Action

April 28, 2008

Earth(Michael Seltzer, a noted authority on philanthropy and the nonprofit sector, is a regular contributor to PhilanTopic. As president of the New York Regional Association of Grantmakers, Seltzer was responsible for the buildout of the organization's new "green" headquarters in Manhattan.)

We stand now where two roads diverge. But unlike the roads in Robert Frost's familiar poem, they are not equally "fair." The road we have long been traveling as a nation is deceptively easy, a smooth superhighway on which we progress with great speed to near-certain disaster. The other road -— "the one less traveled by" -— offers our last, best hope to reach a destination that, in the words of pioneering environmentalist Rachel Carson, assures the preservation of the earth.

When practically every new skyscraper that emerges on the Manhattan skyline is LEED-certified, it is easy for some to forget that the nonprofit sector and the environmental movement in particular originally birthed today’s interest in matters green.

Carson published her game-changing book, Silent Spring, in 1962 -- and, for perhaps the first time, human responsibility for the destruction of the natural environment was communicated to a vast audience. Through her work with the Audubon Society, the Nature Conservancy, the Environmental Defense Fund, and others, a grassroots movement was launched that resulted, among other things, in an eventual ban on DDT and other pesticides, as well as the creation of the Environmental Protection Agency.

A few years later, on the other coast, Stewart Brand, whose nonprofit organization published the first Whole Earth Catalog, gathered the tools, resources, and information that readers of Silent Spring could use to take individual action.

The work of Carson, Brand, and countless others led to the debut, in the spring of 1970, of the first Earth Day. Almost forty years later, Earth Day is a global phenomenon, with rallies and events taking place in thousands of communities and more than 140 countries across the planet.

Continue reading »

We're Back...

It's true what they say about all good things, including spring break in Florida. The weather was marvelous, my in-laws were hospitable (as always), and I didn't look at a Web site or blog or touch a keyboard for a week. That's what an old dead-tree guy like me calls a vacation!

I'll be back to posting about all your favorite topics tomorrow. In the meantime, I hope you'll read the post directly above by regular contributor Michael Seltzer. Although Earth Day was April 22, Michael's message is one we should keep in mind 365 days a year.

-- Mitch Nauffts

Best Practices in Disaster Grantmaking: Lessons From the Gulf Coast

April 18, 2008


Hurricane Katrina killed more than 1,300 people, caused $150 billion in property damage across 90,000 square miles of the Gulf Coast region, and put 80 percent of the city of New Orleans under water.

As destructive as the storm was to life and property, however, it may end up being remembered more for what it revealed -- about the shocking inequality and inequities in the region, about the lack of public sector accountability at the city, state, and federal levels, and about the wellspring of generosity that continually reinvigorates American society -- than for the damage it did.

Two and half years have passed since the storm made landfall, and the region's recovery advances by fits and starts. The public sector response has been halting and hampered by bureaucratic red tape, leaving much of the dirty, nuts-and-bolts work to underresourced nonprofits, community-based groups, and volunteers.

One of the bright spots in this often lackluster picture has been the response of the New York-area philanthropic community. According to data compiled by the New York Regional Association of Grantmakers (NYRAG), 145 New York-area philanthropic organizations have contributed over $325 million to 950 nonprofit organizations in 196 communities for rescue, recovery, and rebuilding efforts in the Gulf Coast region. Under the aegis of the NYRAG Gulf Coast Recovery Task Force, detailed information about that giving was provided in the NYRAG publication Donors' Guide to Gulf Coast Relief & Recovery, 2nd Edition (144 pages, 1.74mb, PDF).

In order to share the experiences of the foundations, corporations, and individual donors that made grants or gifts to address the needs of those affected by Katrina and its aftermath, as well as "to provide a blueprint for future philanthropic intervention following such disasters," NYRAG has just published a new report, Best Lessons in Disaster Grantmaking: Lessons From the Gulf Coast, that, in addition to a list of best practices, includes practices to avoid, brief case studies of innovative grantmaking in the region, and opportunities for future philanthropic investment.

You can download a copy of the report (44 pages, 1.45mb, PDF) here, but I thought it might be nice to give you a preview. As NYRAG president Ronna Brown has said before, "The ongoing efforts to rebuild and transform the Gulf Coast for all of its citizens and communities require focused, collaborative, and inclusive strategies." Best Lessons in Disaster Grantmaking: Lessons From the Gulf Coast is a valuable contribution to that effort.

Best Practices: Strategies Identified by Nonprofits, Community Foundations, and Governmental Agencies

Utilize key people in the affected communities. Recognize, respect, and utilize the skills and knowledge of key people and local leaders in the affected communities.

Utilize existing relationships to gather information. Leverage existing relationships with both nonprofit partners in the local community and philanthropic peers who are funding in the region to learn of needs, opportunities, and potential funding relationships in affected areas.

Be willing to take risks. Overcome the inherent cautiousness of foundations and invest in nonprofit organizations that have not previously received significant support from the philanthropic community.

Share information with other funders and with nonprofits. Foster collaborative relationships with peers, share ideas and funding opportunities, and encourage direct communication with nonprofit organizations in the affected communities.

Create a dynamic funder collaborative. Partner with other funders to create a flexible, adaptable information-sharing method that has the ability to adapt its purpose and function to the changing needs of its membership through all stages of the recovery process.

Create a nationally relevant information resource. Collaborate with other funders to develop a practical, user-friendly resource that distills information about community needs and grantmaking opportunities into a referenced document that encourages communication among funders.

Put staff "on the ground." Use staff to develop relationships in the affected communities, to garner knowledge about the ever-changing needs of the communities as they move through the recovery process, and to provide practical, skills-based support to nonprofit organizations in the days immediately following a disaster.

Be proactive. Don't wait for nonprofit organizations in the affected communities to request assistance -- make phone calls and offer support.

Create collaborative funding efforts. Work with peers to pool funds and maximize financial resources available to the affected areas.

Strengthen local philanthropy. Use financial resources and staff expertise and time to invest in and develop local philanthropic organizations. Stronger local philanthropic organizations will yield stronger nonprofit organizations.

Defer a portion of grant dispersal. Rather than providing only short-term funding to the affected communities, wait to see what "gaps" need to be filled and provide medium- and long-term funding in those areas.

Expand funding focus. Recognize the extraordinary circumstances that arise following disasters and look for opportunities to fund outside traditional funding guidelines.

Simplify the application process. Modify the grant application process to minimize demands made on nonprofits in the weeks and months following the a disaster, and utilize common application forms whenever possible.

-- Mitch Nauffts

2008 Goldman Environmental Prizes (cont.)

April 16, 2008

News_goldman_prize_07Commenting on my Goldman Environmental Prize post from yesterday, Vanessa pointed to a new (for me) site called Huddler.com, which bills itself as "the next generation of online product review and research" (think Consumer Reports meets Facebook or MySpace). The user-generated reviews, research, and collaborative wikis on the site are organized into silos called Huddles. Believing that "the sites with the best content are generally narrow in their focus," each Huddle is specific to a relatively small set of interests. In fact, there are only two at this point, one of which is the GreenHome Huddle.

Anyhow, a couple of the Huddlers managed to score tickets to the Goldman Prize ceremony last night and later posted video clips of the winners' acceptance speeches. Here's a clip of Ignace Schops, who led the effort to establish Belgium’s first and only national park, accepting the "Europe" prize. (Schops' was the only acceptance speech in English.)

And here's Pablo Fajardo Mendoza accepting the prize (in Spanish) for Central and South America. (You can find the other clips on the Huddler site.)

Finally, some additional information from the Huddler site about Yanza and Pablo Fajardo and their class-action lawsuit:

Fighting for justice after what has been called one of the most catastrophic environmental disasters in history, Luis Yanza and Pablo Fajardo are leading an unprecedented community-driven legal battle against a global oil giant. According to the plaintiffs, beginning in 1964 and through 1990, Texaco dumped nearly 17 million gallons of crude oil and 20 billion gallons of drilling wastewater directly into the Ecuadorian Amazon. Allegedly suffering from the health effects of the pollution, the region's inhabitants are demanding a complete cleanup in potentially the largest environmental lawsuit ever filed in the world. Yanza co-founded the Amazon Defense Front to organize 30,000 inhabitants of the northern Ecuadorian Amazon in a class-action lawsuit against Texaco, which was acquired by Chevron in 2001. The lead lawyer, Pablo Fajardo, a resident of one of the affected communities, has become the public voice of the plaintiffs.

-- Mitch Nauffts

Quote of the Day (April 16, 2008)

Quotemarks"Modern agriculture will have to change radically if the international community wants to cope with growing populations and climate change, while avoiding social fragmentation and irreversible deterioration of the environment."

-- Salvatore Arico, biodiversity specialist, UNESCO

2008 Goldman Environmental Prizes

April 15, 2008


If you've checked out PND today, you know our top story is about the 2008 Goldman Environmental Prizes, which are awarded to grassroots activists from Africa, Europe, Asia, and North, Central, and South America working to improve the environment and living conditions for people in their communities.

Established in 1990 by San Francisco civic leader and philanthropist Richard N. Goldman and his wife, Rhoda, the prize is probably the best known and largest environmental award ($150,000) of its kind in the world.

This year's recipients are Pablo Fajardo Mendoza, 35, and Luis Yanza, 46, who are leading a legal battle against oil giant Chevron to bring environmental justice and recovery to an area of the Ecuadorian Amazon devastated by petroleum pollution; Feliciano dos Santos, 43, who is using traditional music, grassroots outreach, and innovative technology to bring sanitation to the most remote regions of Mozambique; Rosa Hilda Ramos, 63, who is leading her community of Cataño, in Puerto Rico, to permanently protect the Las Chucharillas Marsh, one of the largest wetlands ecosystems in the region; Jesús León Santos, 42, who is leading a land renewal program in the state of Oaxaca that employs ancient indigenous practices to transform depleted soil into arable land; Marina Rikhvanova, 46, who is working to protect Russia's Lake Baikal, one of the world's most important sources of fresh water, from petroleum and nuclear pollution; and Ignace Schops, 43, who has helped raise more than $90 million to establish Belgium's first and only national park.

Interestingly, as Lucy Bernholz pointed out on her blog yesterday, Chevron, has launched a nationwide media campaign to protest its characterization by the Goldman Prize committee as a despoiler of the Amazon. In her post, Lucy quotes at length from a blog post by Phil Matier and Andrew Ross in Sunday's San Francisco Chronicle, a portion of which I re-quote here:

Once San Ramon's Chevron got wind of the Goldman Foundation [sic] selections, the oil giant began gearing up for a full-scale media counterattack charging that the charity founded by philanthropist and former San Francisco Protocol Director Richard Goldman had been "sadly misled" in honoring the Ecuadoran pair. Chevron says most of the pollution has happened under Ecuador's own government-run oil company, which took over drilling in 1990.

Chevron enlisted high-priced San Francisco PR crisis manager Sam Singer to push its assertion that the company is the victim of trumped-up charges and greedy lawyers. On Friday, it sent a letter to Goldman accusing Fajardo and his supporters of being "dishonest and duplicitous in their campaign" against Chevron.

On Tuesday, Chevron plans to roll out a full-page ad in the Chronicle -- the start of a nationwide campaign that will also feature ads in the New York Times and Wall Street Journal.

I haven't seen the ad, but if it's anything like the ads Chevron has been running in the NY Times and on TV the last year, I expect it'll be a curious mix of wounded sanctimony and corporate Big Brotherism. Stay tuned.

Lucy, a Bay Area resident, had the good fortune to attend the Goldman Prize ceremony last night. You can read her thoughts about the ceremony, which included an impassioned defense of Fajardo and Yanza's selection by Richard Goldman, here.

-- Mitch Nauffts

Weekend Link Roundup (April 12-13, 2008)

April 13, 2008

After a one-week hiatus, the weekend link roundup is back. Enjoy...


With the "R" word on everyone's lips, New York Times economics columnist David Leonhardt explains why an economic downturn could spell trouble for many middle-class Americans ("For Many, A Boom That Wasn't," April 9, 2008). The problem, writes Leonhardt

is that the now-finished [economic] boom was, for most Americans, nothing of the sort. In 2000, at the end of the previous economic expansion, the median American family made about $61,000, according to the Census Bureau's inflation-adjusted numbers. In 2007, in what looks to be the final year of the most recent expansion, the median family, amazingly, seems to have made less -- $60,500.

This has never happened before, at least not for as long as the government has been keeping records. In every other expansion since World War II, the buying power of most American families grew as the economy did. You can think of this as the most basic test of an economy's health: does it produce ever-rising living standards for its citizens?

Leonhardt's article was based on the results of a new national opinion survey by the D.C.-based Pew Research Center ("Inside the Middle Class: Bad Times Hit the Good Life"), which found, among other things, that:

  • Fewer Americans now than at any time in the past half century believe they're moving forward in life.
  • For decades, middle-income Americans had been making absolute progress while enduring relative decline. But since 1999, they have not made economic gains.
  • Almost half of all Americans think of themselves as middle class.
  • For the past two decades middle-income Americans have been spending more and borrowing more. Housing has been the key driver of both trends.
  • At a time when these borrow-and-spend habits have spread, Americans say it has become harder to sustain a middle-class lifestyle.
  • Economic, demographic, technological, and sociological changes since 1970 have moved some groups up the income ladders and pushed others down.

To paraphrase that famous economist Bette Davis, "Fasten your seatbelts; it's going to be a bumpy ride."


Citizen journalist Annie Leonard, coordinator at the Funders Workgroup for Sustainable Production and Consumption, relates The Story of Stuff, a "fast-paced, fact-filled look at the underside of our production and consumption patterns."  (Hat tip to Alison Fine.)

Doubt Thrown on Global Warming-Hurricane Link. At The Daily Green, Dan Shipley notes that Kerry Emanuel, a well-respected hurricane expert at the Massachusetts Institute of Technology, has unveiled a new technique for predicting hurricane activity which "suggests that, even in a dramatically warming world, hurricane frequency and intensity may not substantially rise during the next two centuries." (The Houston Chronicle first reported the story here.)


The tireless Beth Kanter shares what she has learned to date about fundraising on Facebook, including some very interesting numbers.


The Project for Excellence in Journalism, an initiative of the Pew Research Center, has released its fifth annual State of the News Media report. This year's reports highlights the following trends:

  • News is shifting from being a product -- today's newspaper, Web site, or newscast -- to becoming a service -- how can you help me, even empower me?
  • A news organization and a news Web site are no longer final destinations.
  • The prospects for user-created content, once thought possibly central to the new era of journalism, for now appear more limited, even among "citizen" sites and blogs.
  • Increasingly, the newsroom is perceived as the more innovative and experimental part of the news media.
  • The agenda of the American news media continues to narrow, not broaden.
  • Madison Avenue, rather than pushing change, appears to be having trouble keeping up with it.

These trends join others that PEJ has identified over the last five years: Journalism is not disappearing, it is changing; consumers trust and rely on journalists less while expecting more of them; many traditional news outlets are moving toward becoming niche products; and the once-bright future of online advertising is looking a little less bright. Good stuff. (Hat tip to Tom Bedford at The Agitator.)


Conventional wisdom has it that the looming retirement of baby boomer execs en masse portends a leadership crisis in the nonprofit sector. Not so, says Robert Thalhimer, in PhilanthroMedia:

Each generation, in my view, is guilty of an aggrandized sense of self-importance….Look at the facts. Each succeeding generation in modern times has brought fresh ideas and energy to lead and support worthy charitable causes. Each generation has groomed leaders for whom the daily satisfaction of making the community a better place in which to live outweighs industry's higher pay scale.

According to Thalhimer, boomers preparing to pass the torch of leadership are already grooming the sector’s next crop of leaders, just as members of the Greatest Generation before them groomed the boomers.


Nancy Schwartz has posted a very thorough primer on nonprofit branding on her Getting Attention blog. In it, you'll learn: why nonprofits should care about branding; how to bring a brand to life; the best workplan for developing an effective brand; and how to spread the word about your new or updated brand.


Blogging from Silicon Valley, the site of the seventh annual conference of the Global Philanthropy Forum, Lucy Bernholz reflects on how the meta-discussion among philanthropy movers and shakers is shifting from "unto" and "for" to "with" -- as in, "How can we work like we're all in this together?"

Trista Harris, who blogs at New Voices of Philanthropy, identifies five change "waves" that foundations ignore at their own peril: generational/demographic trends; increased regulation; the growing popularity of donor-advised funds; increased scrutiny of endowments/investments; and call for accountability with respect to the diversity of boards and staff.

Richmond, California-based Kordant Consulting has launched a blog dedicated to Asian American philanthropy. According to Dien Yuen, a director at Give2Asia and the blog's editor, Asian American Giving will promote stories of Asian American philanthropists, draw attention to issues in the Asian American community, and highlight trends and patterns in Asian American giving.

Social Entrepreneurship

In the NYTimes John Markoff reports ("When Tech Innovation Has a Social Mission," April 13, 2008) on the Silicon Valley love affair with "a new style of 'hybrid' technology organization...that is trying to define a path between the nonprofit world and traditional for-profit ventures." Nothing new here, though lots of familiar names: Jim Fruchterman, president, Benetech; Brewster Kahle, founder, Internet Archive; Rebecca Masisak, co-CEO, TechSoup; Mitchell Kapor; etc.

And here's Times columnist David Brooks' recent take on the social enterprise movement.


Last but not least, Katya Andresen has a great post on three personality traits we all would be wise to cultivate. This one's going on the bulletin board.

-- Mitch Nauffts

A Slippery Legislative Slope: Diversity in Philanthropy, Part 2

April 11, 2008

(Michael Seltzer, a noted authority on the nonprofit sector and philanthropy worldwide, is a regular contributor to PhilanTopic.)

In the weeks since my post on California Assembly Bill 624, which would mandate public reporting on diversity on the part of large foundations in the state, the bill has passed the assembly and awaits deliberation in the state Senate.

AB 624 would require private foundations with assets of more than $250 million to annually collect and publicly disclose the race, gender, and ethnicity of their board members, staff, and grant recipients. It also requires private foundations in the state to report the amount and percentage of grants to organizations where 50 percent or more of the board and staff belong to an ethnic or racial minority.

Those in favor of a legislative solution mandating diversity reporting argue that voluntary action has not worked and that government action is required to ensure that foundations improve their diversity practices. Some have also asserted that the reporting requirements are not burdensome and such data should be made available to the public.

Those in the opposing camp argue that voluntary initiatives are the most effective course of action, and that foundations are likely to do more without burdensome government regulation. Many also fear that any law would set the stage for unintended and undesirable consequences, such as discouraging donors from establishing new philanthropic entities in the state.

Continue reading »

IS Announces New Estimate for Value of Volunteer Time

April 10, 2008

Independent Sector has announced that the estimated value of a volunteer hour increased to $19.51 in 2007, up from $18.77 per hour in 2006.

Released every year just before National Volunteer Week, the figure is based on the average hourly wage for all non-management, non-agricultural workers as determined by the Bureau of Labor Statistics, with an extra 12 percent added to account for fringe benefits.

To learn more about how the figure is calculated, as well as tables showing the dollar value of a volunteer hour by year and state, visit the IS Web site.

-- Mitch Nauffts

Grassley Announces Replacement for Zerbe

April 09, 2008

Sen. Charles Grassley (R-IA), ranking member of the Senate Finance Committee, has hired Theresa Pattara, a project manager with the IRS Office of Exempt Organizations, to advise him on tax matters relating to tax-exempt organizations, including legislation and investigations.

Pattara, a magna cum laude graduate of the University of Scranton, served on Grassley's Finance Committee staff in 2005 and 2006.

She replaces Dean A. Zerbe, who resigned his post as senior counsel to Grassley in February to become national managing director of Alliantgroup, a Houston-based tax consulting company. In his seven years as Grassley's chief investigator, Zerbe earned a reputation as a vocal critic of perceived abuses by tax-exempt organizations and was widely considered to be the "engine driving [the Finance Committee's] ambitious agenda on nonprofit issues" -- an agenda that included scrutiny of nonprofit hospitals, donor-advised funds, and college endowments.

Those who thought Grassley would turn his attention elsewhere with Zerbe's departure might want to think again. Pattara, writes Brad Wolverton in the Chronicle of Higher Education, is a "tireless investigator with strong convictions [and], like her often-quoted predecessor, likes to speak her mind."

It's an assessment seconded by Zerbe himself: "She's smarter, better, and faster than me," Zerbe told Wolverton. "Colleges and charities better pull up their socks and make sure they're doing good."

-- Mitch Nauffts

Philanthropy and Global Warming

April 08, 2008

Mgf_logo_white As noted previously (here, here, and here), climate change is seen by many as the critical global challenge of our time. According to the latest report from the Intergovernmental Panel on Climate Change (which, along with Al Gore, was awarded the 2007 Nobel Peace Prize for its "efforts to build up and disseminate greater knowledge about man-made climate change"):

[A]tmospheric concentrations of carbon dioxide and methane in 2005 exceed by far the natural range over the last 650,000 years. Global increases in carbon dioxide concentrations are due primarily to fossil fuel use, with land-use change providing another significant but smaller contribution. It is very likely that the observed increase in methane concentration is predominately due to agriculture and fossil fuel use. The increase in nitrous oxide concentration is primarily due to agriculture....

The report further notes that

Continued greehouse gas (GHG) emissions at or above current rates would cause further warming and induce many changes in the global climate system during the 21st century that would very likely be larger than those observed during the 20th century....

So what's a small private foundation with a keen interest in the issue and relatively limited assets to do? That was the question addressed by Lukas Haynes, vice president at the New York City-based Mertz Gilmore Foundation, earlier today at a lunchtime presentation sponsored by NYU's Heyman Center for Philanthropy and Fundraising.

Haynes, a former program officer at the MacArthur Foundation and speechwriter for Secretary of State Madeleine Albright, opened his remarks by noting that the worst effects of climate change will be disproportionately felt by poor and developing countries and that the U.S., as the largest producer of GHGs (in both aggregate and per capita terms), has forfeited "its moral capacity to lead on the issue" -- a situation the foundation, which first identified global warming as a critical long-term challenge in 1984, hopes to change through its new Climate Change Solutions initiative.

How does MGF, which had assets of $106 million in 2005 and made grants totaling a little more than $5 million, plan to do that? By being both strategic and opportunistic with the $1.5 million a year it plans to allocate to climate change work, said Haynes.

To that end, MGF has embraced the strategic framework developed by the Climate and Energy Funders Group and is using it to inform and guide its climate change activities. Comprised of five strategies (all but the last of which the foundation has adopted), the framework calls for:

  1. Stimulating action plans and model policies at the state and regional level (with the ultimate goal of forcing action at the federal level);
  2. Mobilizing the public and engaging key constituencies (including political elites and the media);
  3. Partnering with and pressuring business (in particular, by funding advocacy coalitions working to stop utility companies from building coal-fired power plants);
  4. Working to accelerate the transition to a clean-energy economy by promoting the economic benefits of a green economy; and
  5. Applying pressure at the international level (the one strategy the foundation feels it doesn't have the resources to pursue).

Haynes cited #1 as an example of the foundation being "strategic," in that catalyzing change at the policy level requires a long-term perspective and lots of hard slogging in the legislative trenches; and #3 as an example of an "opportunistic" approach, in that halting (or even delaying) the construction of a coal-fired plant creates immediate results (i.e., reduced GHG emissions).

But perhaps the most important consideration for foundations looking to enter this arena, said Haynes, is figuring out ways to leverage their investments -- making a grant of, say, $50,000 that leads to a result, over time, potentially worth many times that amount.

A look at grants made by GMF in 2007 shows how the foundation hopes to accomplish that:

  • American Council for an Energy-Efficient Economy -- $35,000 to support implementation of the Northeast Regional Greenhouse Gas Initiative.
  • Appalachian Voices -- $70,000 to promote alternatives to new coal-fired power plants in Virginia and North Carolina.
  • Center for Public Interest Research -- $85,000 to support implementation of the Northeast Regional Greenhouse Gas Initiative.
  • Chesapeake Climate Action Network -- $25,000 to promote alternatives to new coal-fired power plants in Virginia.
  • Citizens for Pennsylvania's Future (PennFuture) -- $50,000 to support organizing and outreach on state-wide climate solutions.
  • Clean Air-Cool Planet -- $50,000 to support the New Hampshire Global Warming Education project during the 2008 primaries.
  • Conservation Law Foundation -- $50,000 to support implementation of the Northeast Regional Greenhouse Gas Initiative.
  • Energy Foundation -- $15,000 to support a fact-finding consultancy on coal-fired power plants in Kentucky.
  • Environment Northeast -- $65,000 to support implementation of the Northeast Regional Greenhouse Gas Initiative.
  • Environmental Advocates of New York -- $25,000 to support implementation of the Northeast Regional Greenhouse Gas Initiative.
  • Environmental Defense -- $50,000 to support climate change policy solutions in New York, New Jersey and Connecticut.
  • Natural Resources Defense Council -- $85,000 to support implementation of the Northeast Regional Greenhouse Gas Initiative.
  • New York Botanical Garden -- $10,000 to plan and implement an integrated program addressing regional and global climate change issues.
  • Pace Law School -- $50,000 to support climate and energy solutions in New York, including RGGI implementation.
  • Regulatory Assistance Project -- $25,000 to support implementation of the Northeat Regional Greenhouse Gas Initiative.
  • Resource Media -- $60,000 to conduct a pilot initiative that provides television station scientists with information and products needed to explain climate change and help their viewers reduce global warming pollution.
  • Sierra Club Foundation -- $20,000 to promote alternatives to new coal-fired power plants in Virginia.
  • Southern Appalachian Mountain Stewards -- $10,000 to promote alternatives to new coal-fired power plants in Virginia.
  • Southern Environmental Law Center -- $75,000 to promote alternatives to new coal-fired power plants in the Carolinas and Virginia.
  • Union of Concerned Scientists -- $25,000 to support dissemination of the Northeast Climate Impacts Assessment.
  • Union of Concerned Scientists -- $50,000 to support implementation of the Regional Greenhouse Gas Initiative and additional outreach for the Northeast Climate Impacts Assessment.
  • Urban Agenda -- $50,000 to educate the governing boards of the New York City pension funds and the Office of the Comptroller about investing new resources in the clean energy sector.

Collaboration is another key driver of the foundation's grantmaking. In fact, almost all of GMF's climate change grants are made in collaboration with other funders; as Haynes says, "There's no time to waste on petty turf stuff."

You can learn more about the Mertz Gilmore Foundation and its Climate Change Solutions Initiative here. And, as always, we'd love to hear your thoughts about climate change and philanthropy's role in mitigating it.

-- Mitch Nauffts

IRS Releases Draft of Form 990 Instructions

This just in from our colleagues at Independent Sector:

"The Internal Revenue Service has released draft instructions to the revised Form 990 information return that most public charities, as well as other tax-exempt organizations, will be required to file annually beginning in 2009.

"The instructions offer new tools, examples, a glossary, and comprehensive line-by-line directions, all designed to promote uniform, accurate, and complete reporting.

"The IRS is requesting comments from nonprofit organizations on all aspects of the draft instructions, including suggestions that might further reduce complexity or burdens. The comment period is open until June 1, 2008. The IRS has highlighted items in the instructions on which it would especially like to receive public comments. The IRS is particularly interested in comments on the definitions contained in the glossary and elsewhere in the instructions and on new or significantly revised areas such as compensation, governance, foreign activities, disregarded entities and joint ventures, group returns, hospitals, and tax-exempt bonds. It is also seeking, for Part III of the form, examples of program service accomplishments for specific sub-sectors...."

-- Mitch Nauffts

Women and the Future of Philanthropy

April 04, 2008


Fern Portnoy advises families and individual philanthropists on foundation formation, grantmaking programs and strategic initiatives, and preparing the next generation to be effective philanthropists. This is her first post for PhilanTopic.

Sometime in the recent past, a tipping point was ever so quietly reached: half of this nation’s private wealth passed into the hands of women. It's estimated that this percentage will rise to 60 percent by 2010 and possibly rise as high as 70 percent in the not too distant future.

What that means is that women are poised to change the face of philanthropy. That change is likely to constitute a revolution of sorts -- from a vertical model to one that is far more horizontal, a model more democratic than aristocratic.

The old model achieved much that is great and alive today -- think how woven into American society is the legacy of the Carnegie libraries -- but because it was most often led by men, it did not necessarily involve personal relationships to organizations, was less likely to support organizations devoted to women and girls, and was often tied to business or corporate interests.

The new women's model of philanthropy has been about changing all that.

Take, for example, Goldman Sachs' recently announced initiative, 10,000 Women. The endeavor is posited on a radical social notion that is taking hold in philanthropic and public policy circles and is being strongly advocated by the World Bank: Empowering women is a key lever for alleviating poverty and achieving a socially just world. That's why Goldman Sachs is partnering with business schools and women's nonprofits around the world to educate ten thousand women in business and entrepreneurship. Imagine the ripple effect throughout these ten thousand women's communities, especially in Africa, where much of the money will be concentrated. Women, better educated and able to take care of themselves, will also take care of their children, moving their families from poverty to economic self-sufficiency. They will have fewer children and their children are more likely to be educated.

Similarly, a new initiative is challenging women of wealth to increase their investment in women and girls by making gifts of $1 million or more and to support one or more of the hundred and twenty members of the Women's Funding Network, an initiative sparked by an initial grant from a group of visionary donors. Over the past twenty years, the network has garnered a reputation for smart grantmaking, with an emphasis on women's economic empowerment. As an advisor to the initiative, I've observed the following phenomena, which bode well for the future of philanthropy:

  • Women donors are strategic. They understand, deeply, the wisdom of funding women and girls.
  • They care about impact and know that women's funds -- which vet their grassroots grantees for effectiveness -- are an effective way to be sure their dollars truly make a difference.
  • They are relational. They want to give in community, to give together.
  • They are egalitarian and recognize that their dollars are far less effective without "grantee partners," the women on the front lines who know how to use the funding they provide. In the world of women's funds, you will see donors and grantees working side by side, a Disney heiress collaborating with the director of a shelter in Harlem.
  • Women are charging ahead even as the economy falters. Women Moving Millions has quickly surpassed $90 million toward its $150 million goal.

The upshot? Women are positioned to lead the way in shaping philanthropy’s future.

What do you think? Will philanthropy increasingly be shaped by women in the decades to come? And, apart from a focus on empowering women and girls, what might that philanthropy look like? We'd love to hear your thoughts.

-- Fern Portnoy

Quote of the Week

  • "[L]et me assert my firm belief that the only thing we have to fear is...fear itself — nameless, unreasoning, unjustified terror which paralyzes needed efforts to convert retreat into advance...."

    — Franklin D. Roosevelt, 32nd president of the United States

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