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34 posts from October 2008

Weekend Link Roundup (October 11-12 & 18-19, 2008)

October 19, 2008

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

Arts and Culture

Is the audience for live classical music, theater, and dance disappearing?  That's the question writer Diane Haithman asks in the Los Angeles Times. Maybe, says Haithman, but not if performing arts organizations can refocus the concert-going experience on the "new gray" and younger people who can actually afford tickets. (Hat tip Nonprofit Board Crisis.)


As we noted last week, many state governments are ill-equipped to weather a prolonged recession. And with state governments strapped for cash, the Century Foundation's Beverly Goldberg wonders who will backstop the growing ranks of the unemployed:

The Senate removed from its version of the [bailout] bill a provision that would have helped nearly 800,000 laid-off U.S. workers who ran out of unemployment aid Sunday. The Senate also ignored the possibility of helping these long-term unemployed by failing to address the need for an emergency extension of jobless benefits in a separate bill.... 

As USA Today notes,

If the states run into trouble, the federal government has its own unemployment insurance trust fund that will lend states money. If states don’t repay the bailout loans promptly, businesses in those states generally are required to pay higher federal and state taxes to restore the funds' solvency.... 

In other words, says Goldberg, "every American citizen will pay the price for this program aimed at saving those on Main Street -- in addition to paying for the bailout on Wall Street."

Continue reading »

Quote of the Day (October 18, 2008)

October 18, 2008

Quotemarks"...[M]ost of us have done our work in boom times in philanthropy, with parallel growth in nonprofit budgets. But what we have ahead of us is quite different.

"Virtually every foundation endowment stands at considerably less value today than it did only a few weeks ago, and assuming our institutions meet the commitments they have previously made, which most will, there will be dramatically less money to give out in the next few years, at least. Nonprofits fortunate to have endowments are also hurting -- over the weekend I ran into a friend, the leader of one such organization, who has carefully built a reserve fund in the last several years only to see it drop by 30 percent in the flash of an eye. Such stories will be standard fare in the weeks and months to come.

"Corporate philanthropy will be dramatically reduced, and among those in the financial services industry who have kept their jobs -- or, indeed, their firms -- most will be much less generous in their personal giving. Government revenues and social spending will continue to shrink -- the Center on Budget and Policy Priorities just looked at the budget gaps of fifteen states, from California to Rhode Island, reeling from the credit crunch and found six whose deficits are 10 percent or more of the total budget. All of this will have a sharp effect on the funding and programs of nonprofit organizations. And in what kind of social climate? One in which human need -- foreclosure, unemployment, greater health problems even less covered by insurance, hunger, homelessness, crime and violence -- grows ever more acute.

"What we are facing, then, is a kind of perfect storm...."

-- Gara LaMarche, President/CEO, Atlantic Philanthropies, "The State of Our Union in Crisis: Widening the Lens of Children and Families"

Are We There Yet?

October 17, 2008

Crystal_ballCiting the research note issued earlier this week by our own Steven Lawrence (the center's senior director of research), Lucy Bernholz questions whether foundation giving will hold up as well in this economic downturn as it has in past downturns. Lucy thinks not:

I don't think a short-term drop is all we're facing here. I think we're going to see new banking rules, new credit rules, new housing laws, new charitable giving laws, new philanthropic approaches, new tax structures, new public service demands and possibly programs, the heads and tails of important demographic and generational shifts, and lots of other things that will fundamentally resturcture the business if giving as we've come to know it. And I think a drop in giving this year is just the beginning of it....

She may be right. But this is getting into crystal-ball territory, and I'm of the school that believes all we really know is what we know (e.g., giving patterns in the past). Things could get much worse from here -- or the Dow and S&P could jump 25 percent from these levels by year's end, turning a generational crisis into a bad year.

I don't know what's going to happen in the equity or credit markets over the next six to twelve months, and I think many of the things Lucy points to -- new rules and regulations, revisions to the tax code, etc. -- will take much longer than that to play out. By the time they do (if they do), I suspect this crisis will be behind us and our attention will be focused on something else.

What about you? Are things going to get worse before they get better? Or is the worst behind us? Weigh in below -- and feel free to cross-post your comments to Lucy's blog. She's looking for people to disagree with her!

-- Mitch Nauffts

A to Z Survival Guide for Uncertain Times

October 15, 2008

(Michael Seltzer is a regular contributor to PhilanTopic. In September, he paid tribute to the late Paul Newman.)

AbcsEach time the American economy has suffered a downturn or government has cut back on funding for social programs, the media has focused on how those of us on "Nonprofit Street" are being affected. Those of us running nonprofit organizations don't need newspapers to tell us how things are going or how our constituents are faring. Instead, we want to know what our colleagues are doing to address the financial challenges we each face.

The "A to Z Nonprofit Survival Guide for Uncertain Times" is compiled from my past writings and strategy recommendations I learned from grantees, clients, and fellow consultants. To all of you, I am grateful for your generosity and wisdom.


Accentuate the positive
There's enough doom and gloom in the media and on Wall Street. The public doesn't want to hear how poorly nonprofits are doing; they want to know that nonprofit organizations will continue to be there for them.

Be bold
The pressure to scale back programs and to promise less is real. But it's important, when possible, to find new ways to provide value to clients, funders, and supporters.

In normal times, many nonprofit leaders view collaboration as the most unnatural of acts. These are not normal times. There is much to be gained, including cost savings and enhanced impact, by working more closely with others.

Deepen relationships (with elected officials, in particular)
Unfortunately, local, state, and federal governments will be forced to make cuts in their budgets as tax revenues decline. Be sure to make the case with your elected officials and their key staff for continued government funding of your organization.

Look for opportunities to experiment and/or pilot small-scale initiatives. Such opportunities are likely to be a less expensive investment in change than grand, large-scale progams or initiatives.

Continue reading »

Say What?

October 14, 2008

I know...this is supposed to be a blog about philanthropy. But this chart on the op-ed page of today's NY Times is...well, an eye-opener. For those who can't make sense of it, Tommy McCall, the chart's creator, lays it out:

"As of Friday, a $10,000 investment in the S.& P. stock market index would have grown to $11,733 if invested under Republican presidents only, although that would be $51,211 if we exclude Herbert Hoover's presidency during the Great Depression. Invested under Democratic presidents only, $10,000 would have grown to $300,671 at a compound rate of 8.9 percent over nearly 40 years."

(click for larger chart)


(Hat tip Gary on The Big Picture blog)

Back to our regularly scheduled program...

-- Mitch Nauffts

Podcast: J.T. Mullen, CFO, Cleveland Foundation

Mullen2_3Philanthropy Chat Cleveland
"J. T. Mullen Discusses Foundation Investment and Spending in Times of Financial Turmoil"
Cleveland, OH
October 10, 2008

My colleague Cynthia Bailie, director of the Cleveland office and special online initiatives at the Foundation Center, has started a podcast series called Philanthropy Chat Cleveland. Last week, Cindy spoke with J.T. Mullen, senior vice president and chief financial officer at the Cleveland Foundation, about the current financial crisis, the foundation's investment strategy and spending policies, and what nonprofits and other foundations can do to weather the storm.


Total running time: 20 minutes, 23 seconds

-- Mitch Nauffts

Past Economic Downturns and Outlook for Foundation Giving

October 13, 2008

(Steven Lawrence is senior director of research at the Foundation Center. This is his first post for PhilanTopic.)

The Foundation Center has been fielding questions about the possible impact of an economic downturn on foundation giving since the credit crunch began to grow worse in the latter half of 2007. A series of high-profile bank failures and buyouts, falling equity prices, and predictions of a serious recession have led to renewed concerns about the health of the nonprofit sector and foundations that serve as one of their sources of support.

The impact of the current financial market meltdown in the United States and around the globe is in many ways unprecedented. And with no clear bottom in sight, it can be tempting to conclude that the work of many institutions will be imperiled -- or, at a minimum, substantially compromised. Short of total economic collapse, however, the behavior of institutions during prior economic downturns provides some perspective on how they may weather today's challenges. This certainly seems true for foundations.

Since the Foundation Center began collecting data on all grantmaking private and community foundations in 1975, the United States has experienced several recessions. During most of these recessionary periods -- 1980, 1981-82, and 1990-91 -- U.S. foundation giving in inflation-adjusted dollars did not decline -- and, in fact, increased slightly.

(click on chart for larger image)


After the most recent recession, foundation giving did decline -- from $30.5 billion in 2001 to $30.4 billion in 2002 to $30.3 billion in 2003 -- the first consecutive years of decreased foundation giving tracked by the Center. But this marginal 0.6 percent reduction (4.4 percent after inflation) was quite modest compared to the inflation-adjusted 16 percent drop in foundation assets recorded between 2000 and 2002.

(click on chart for larger image)


A number of factors helped to moderate the impact of reduced assets on overall foundation giving during the last economic downturn and is likely to play a similar role during the current crisis. First, donors continued to establish new foundations -- 3,000 grantmaking foundations were established in 2002 and more than 1,500 in 2003. Second, donors continued to direct substantial gifts and bequests into the endowments of existing foundations. Third, foundations that determine their grants budgets each year based on a rolling average of their asset values over the prior two to five years -- including a number of the largest foundations* -- helped to ensure more stable levels of giving by foundations overall.

(*According to the Foundation Center 's 2003 "Foundation Giving Forecast Survey," of the 497 respondents indicating that they based their grant appropriations budgets on the value of their endowments, over one-third averaged the value of their endowments over two or more years, while close to half based their grant appropriations budgets on their prior year's endowment. But among larger respondents -- those reporting giving of $10 million or more in 2002 -- more than two-fifths reported basing their grant appropriations budgets on the value of their endowments over two or more years.)

In addition to these factors, a number of foundations indicated a willingness to reach into their corpus during the last downturn to ensure that multiyear commitments made during the late 1990s were met. Some even increased their payout rate to provide needed resources to communities and organizations they had long supported. (See Renz, L., Assessing the Post-9/11 Funding Environment: Grantmakers' Perspectives, New York: Foundation Center, 2002.)

Although the economic outlook has worsened over the course of 2008, these and other factors revealed by a survey of the country's largest independent, corporate, and community foundations led us to predict in Foundation Growth and Giving Estimates (released in May) that foundation giving will grow faster than the rate of inflation in 2008.

Foundation assets grew faster than inflation between 2003 and 2007, which enabled grantmakers to replenish their endowments after the downturn of the early 2000s. For foundations that determine their annual grants budgets based on a rolling average of their asset values, this growth should help to mediate the impact of possible asset losses in 2008 on their giving in 2009. Some foundations also will benefit from new gifts and bequests, and the sector as a whole will benefit from the continued establishment of new and sometimes quite large foundations.

(click on chart for larger image)


What does all this mean for 2009? Should the stock market recover some of its losses by year's end, the various factors cited above may help overall foundation giving to remain roughly unchanged next year. That would be the best-case scenario. If, on the other hand, the market fails to rebound from its current level or sinks further, the asset losses may be so pronounced and widespread that an overall decrease in funding becomes inevitable.

While these scenarios are less pessimistic than one might expect given the current turmoil, it is important to note that the experiences of the more than 72,000 grantmaking U.S. foundations and the organizations they support will vary markedly.

Now it's your turn. If you work at a nonprofit, we'd like to hear what happened to your grant revenues in the last recession. And what are you hearing from funders today? If you work at a foundation, how is the fourth quarter and 2009 shaping up in terms of your discretionary grantmaking? Use the comments below....

-- Steven Lawrence

Quote of the Day (October 11, 2008)

October 11, 2008

Quotemarks"People keep on stepping on the same rakes because money, like romance, is only partly an intellectual experience. Money, like sex, brings out some thought -- but also much heavy breathing and little stored knowledge. In finance, the process is cyclical. Some people learn from their ancestors, but mostly they repeat the same mistakes. Thus it has always been and thus it will always be...."

-- James Grant, editor, Grant's Interest Rate Observer ("Swept Up by the Insanity of the Markets," Joe Nocera, New York Times, 10/11/08)

'Open Letter' to Council Members and Other Nonprofit Leaders

October 10, 2008

Just received this e-mail (as many of you undoubtedly did) from Council on Foundations chair Ralph Smith and CoF president and CEO Steve Gunderson:

Dear Colleagues,

At the conclusion of the Council's 57th annual meeting in Pittsburgh, we committed that we would work to ensure that philanthropy will step up and take on "the challenges of our time." That commitment served as the theme and frame for the 2007 Annual Conference in Seattle, as a point of departure for the 2008 Summit at National Harbor and the upcoming 2009 conference scheduled next May in Atlanta.

Little did any of us know or expect that "the challenges of our time" would include an economic situation of the scope and magnitude now facing our nation and the world. Even so, there is no avoiding the question: what could it mean for philanthropy to step up in these circumstances? How can we play a constructive role without raising unrealistic expectations?

This is a conversation that has started already and will continue for sometime. We look forward to listening carefully, participating when and how we can and providing whatever technical assistance and support would seem appropriate. For starters, we have three broad recommendations:

1. Let's reach out to the nonprofit sector in general, especially those organizations, leaders, and networks we currently support. Our nonprofit partners will bear the brunt of shrinking resources and growing need. Within parameters defined by our respective missions, resources and work, we should actively look for creative ways to assist the sector in weathering this storm and serving those most impacted.

2. Let's play an active and visible role in helping communities and regions figure out the scope and extent of the challenges they face, and in finding and crafting solutions that make sense. We know that some regional associations and community foundations already are using the convening role of philanthropy to build the "big tent" under which diverse stakeholders can gather to create shared understanding and to search for common sense solutions. The exciting work of the Dade Community Foundation, the Arizona Grantmakers' Forum and the Clinton Center for Community Philanthropy represent just the tip of the iceberg of what our colleagues and peers are doing already. We'll share these examples in the toolkit.

3. Let's pay special attention to those situations where the loss of philanthropic resources could be the unintended consequence of mergers and consolidations that are the inevitable products of economic restructuring. In the D.C. area, there is considerable concern that the takeover of Fannie Mae and Freddie Mac could result in an annual reduction of up to $47 million in philanthropic support for programs around child welfare, hunger and homelessness. We know that this was not what was intended and we are hopeful that federal officials will work with local philanthropy and the nonprofit community to rectify the situation....

The economic crisis shows no signs of abating -- and it could wind up, as Smith and Gunderson write, as "one of biggest challenges of our time," an event so disruptive it alters the direction of society for years to come. What would that look like? And, as Smith and Gunderson ask, what would it mean for philanthropy to step up in such circumstances? Let the conversation begin....

-- Mitch Nauffts

State Budgets in Trouble

October 09, 2008

9808state_budget_shortfallsf1Home values, retirement accounts, and institutional endowments aren't the only things heading south in the current economic climate. According to the Center on Budget and Policy Priorities, a nonpartisan policy think tank in Washington, D.C., the credit crunch has contributed to new gaps in the budgets of at least fifteen states and the District of Columbia just two months after those states struggled to close the largest budget shortfalls seen since the recession of 2001. Because states are required to adopt a balanced budget going into a fiscal year (which starts July 1 for most states), the additional shortfalls will force states to cut spending, use reserves, and/or raise revenues over the coming months.

(Image courtesy Center on Budget and Policy Priorities)

The fifteen states facing additional shortfalls are:

Budget gap (as a % of the total budget): 22%
Gap: $22.2 billion

Budget gap (as a % of the total budget): 19.9%
Gap: $2 billion

Budget gap (as a % of the total budget): 19.9%
Gap: $5.1 billion

Budget gap (as a % of the total budget): 16%
Gap: $1.2 billion

Rhode Island
Budget gap (as a % of the total budget): 13.1%
Gap: $430 million

New York
Budget gap (as a % of the total budget): 9.8%
Gap: $5.5 billion

Budget gap (as a % of the total budget): 9.5%
Gap: $784 million

Budget gap (as a % of the total budget): 8.7%
Gap: $1.8 billion

New Jersey
Budget gap (as a % of the total budget): 7.7%
Gap: $2.5 billion

Budget gap (as a % of the total budget): 7.2%
Gap: $1.1 billion

Budget gap (as a % of the total budget): 7.1%
Gap: $1.2 bil

Budget gap (as a % of the total budget): 6.8%
Gap: $83 million

New Hampshire
Budget gap (as a % of the total budget): 6.4%
Gap: $200 million

Budget gap (as a % of the total budget): 6.3%
Gap: $1.8 billion

Budget gap (as a % of the total budget): 6%
Gap: $217 million

South Carolina
Budget gap (as a % of the total budget): 5.7%
Gap: $390 million

Budget gap (as a % of the total budget): 5.5%
Gap: $350 million

Budget gap (as a % of the total budget): 5.4%
Gap: $935 million

Budget gap (as a % of the total budget): 4.8%
Gap: $472 million

Budget gap (as a % of the total budget): 4.6%
Gap: $527 million

District of Columbia
Budget gap (as a % of the total budget): 2.1%
Gap: $131 million

(Source: CBPP, BusinessWeek)

Fasten your seat belts, everyone. We're in for a bumpy ride.

-- Mitch Nauffts

Taking Account of Race: The Philanthropic Imperative

October 08, 2008

Lamarche_lgThat was the title of the opening event in the 2008-09 Waldemar A. Nielsen Issue Forums in Philanthropy at Georgetown University on Friday, October 3. The evening's keynote remarks were delivered by the always insightful Gara LaMarche, president and CEO of the Atlantic Philanthropies.

Here's an excerpt:

"I asked to talk about race today...because there are three powerful forces, societal and philanthropic, that make this an important moment to do so. First, race and its impact are more central than ever to the national discourse, because of Barack Obama's candidacy, in a way that it has not been for some time. And the senator's own thoughtful, candid, and eloquent engagement with it in his March 18 Philadelphia speech set a very high bar, assuming the intelligence of the American people in a way that is all too rare among politicians and challenging us to talk about it more. Second, the Greenlining Institute's work on race and philanthropy, one impact of which was California Assembly Bill 624, to require reporting by larger foundations on the racial and ethnic composition of their staff, boards and grantees...has certainly gotten everyone's attention. The initially inadequate response of some of our California brethren shows that we all have a lot of work to do, and I'd like to offer some of my own thoughts on this particular approach to race and philanthropy. And finally, we are in a period in the foundation and nonprofit sector where effectiveness is the mantra, metrics the path, good outcomes the holy grail. How, then, do we think of race in this environment?

"Let us start with the moment. What might it mean, we are all asking -- or, rather, often not asking, race being the elephant in the room in this historic presidential election -- for America to have a black president, for the most powerful and visible leader on the planet to be a man of African ancestry, a man whose parents' interracial marriage was a crime at the time of his birth in the state of Virginia, just across the bridge from here, where polls show him leading his opponent as of this afternoon?

"We don't know, and it is exciting, no matter what your presidential preference, to imagine the possibilities. But we do know it will not obliterate America's racial history, absolve us of our sins, or 'put race behind us' once and for all. I don't want to seem like one of those people who don't like to be confused with the facts, or who tend to see just the cloud, not the lining. But Barack Obama's elevation to the presidency would leave the Senate without a single black member -- a situation that has remained constant for all but a few moments of American history -- only two Latinos, and two Asian-Americans, both from Hawaii. On November 5, there will still be only two black governors -- the second and third in post-Reconstruction U.S. history -- only one Latino, and only one of Asian descent, and the percentage of people of color in the House of Representatives will remain at best half of their presence in the population as a whole -- a percentage which, we all know, is growing to the point where many of us in this room will at some point in the coming decades live in a majority non-white country. The political world, like the financial world and most centers of power in America, is way out of line with the reality of the country...."

To read the complete transcript of Gara's remarks, click here.

-- Mitch Nauffts

USA Today: 'Sharing in the USA'

October 07, 2008

Decent insert devoted to charitable giving in today's USA Today. Articles and features include:

Usatodaylogo"The New Face of Giving" -- Looks at giving trends -- online giving, micro-donations, proliferation of platforms, growing popularity of environmental and international causes -- and concludes that the most successful way to raise money is still "in person — one person asking another person."

"Uncertainty Is the Enemy of Philanthropy" -- Brief look at how volatile markets and the slowing economy are affecting fundraising.

"Giving by the Numbers" -- Avg. household contributions by state, 2004; 10 largest gifts by individuals (2007); total individual giving, 1967-2007 (source: Giving USA Foundation, Center on Philanthropy at Indiana University).

"Poll: Donors Feel Fiscal Squeeze" -- Results of a survey of 994 adults conducted Sept. 22-23.

"Natalie Portman Is a Force for Change, Empowering Women" -- Profile of the young Star Wars actress and her work on behalf of FINCA International (the Foundation for International Community Assistance); includes sidebar of celebrities (Lucy Liu, Wyclef Jean, Jenny Jones, Greg Grunberg) active in charitable causes.

"Waiting on the Sidelines to Picth In" -- Sports philanthropy through the eyes of the athletes; includes sidebar of athletes (Warrick Dunn, Kyle Petty, Lolo Jones, Tiger Woods) active in charitable causes.

"Donating Your Money Do's and Dont's" -- Advice for donors from experts in the field.

"How to Do Good and Get Tax Credit" -- Tax advice.

"Street Angel" -- Photo essay about Clemmie Greenlee, a 49-year-old Nashville residents who advocates for the homeless, the addicted, and the mentally ill.

Nothing terribly new here, but as Art Taylor, president and CEO of the BBB Wise Giving Alliance, reminds us, in tough economic times it is imperative that charities and nonprofits get out there and tell their stories.

-- Mitch Nauffts

ANNOUNCEMENT: Forum of RAGs, Council on Foundations Forge 'Strategic Alliance'

October 06, 2008

Just in...

Alliance_3The Forum of Regional Associations of Grantmakers, which serves four thousand grantmakers through thirty-two regional hubs, and the Council on Foundations, with two thousand members nationwide, have announced a strategic alliance to better serve the nation's foundations and philanthropic donors.

According to the press release, both organizations will continue to provide education programs but through an "expanded common framework that draws on the knowledge of both, eliminates competitive and overlapping offerings, and reaches into new areas of learning." To further that effort, the forum will move its offices to the council's headquarters in Crystal City, Virginia, in January 2009.

"This alliance builds on the complementary strengths of both organizations -- the sector-wide leadership of the council and the unique local knowledge, credibility, and reach of the regional associations, said CoF board chair and Annie E. Casey Foundation executive vice president Ralph Smith. "This is a promising next step toward building a more coherent, effective, efficient, networked approach to supporting philanthropy."

With the economy heading south in a hurry, I suspect we'll see more annoucements of this kind in the coming months. Stay tuned...

-- Mitch Nauffts

ANNOUNCEMENT: Policy Portal Launched by Carnegie Corp.

Mccain_obama_0329_2Whether it's Obama or McCain, the forty-fourth president of the United States has his work cut out for him (sorry, Hill!). From the economy to health care to nuclear proliferation to climate change, the problems he will face are daunting and, in many instances, getting worse.

To help inform the next president and his administration as they tackle those challenges, the Carnegie Corporation of New York has launched a new Web portal that aggregates links to a selection of reports, articles, and analyses produced by U.S. think tanks, educational institutions, news media, and nonprofits and NGOs from across the ideological spectrum.

Topics addressed by the site include Afghanistan, Africa, China, Climate Change, Democracy and Human Rights, Education, Energy, Healthcare, Housing, Immigration, Iran, Iraq, Israel, Nuclear Proliferation, Pakistan, Poverty, Social Security, Terrorism, and the U.S. Economy.

To learn more and/or explore the resources at the site, visit: www.advicetothepresident.org.

-- Mitch Nauffts

Weekend Link Roundup (October 4-5, 2008)

October 05, 2008

Better late (we hope) than never. Here's this week's roundup of noteworthy blog posts:


In a recent presentation at the National Human Services Assembly Summit, Rosetta Thurman reminded attendees that while the racial composition of the nation continues to change, the nonprofit sector "isn't keeping pace with the cultural shift in America, nor making enough of an effort to recruit, retain, and promote people of color to top executive positions in our field." She also offered a short list of things each of us, as "agents of nonprofit culture," can do to improve the situation, including prioritizing cultural competency, expanding our networks beyond our comfort zone, avoiding "tokenism," and speaking out.

Nonprofits and Social Media

In response to B.L. Ochman's article "10 Reasons Why Your Company Shouldn't Blog" on the Ad Age site, onLine's Jenn Thompson offers "10 Reasons Why Your Nonprofit SHOULD Blog".

To blog or not to blog isn't the only important question nonprofits are asking themselves. As Beth Kanter, our favorite social media maven, points out, resource-constrained nonprofits are keenly interested in knowing how much time it takes to implement social media. After defining the key elements of any social media strategy — listening, participating, generating buzz, sharing your story, community building, and social networking -- Kanter takes a stab, with caveats, at quantifying the actual time involved and comes up with a number -- 30-35 hours a week -- that's sure to give more than a few executive directors pause.


According to some, the next big thing in the nonprofit software space was announced at the Clinton Global Initiative a week or so ago. Developed by the Acumen Fund, a venture philanthropy organization, with the help of engineers from Google and Salesforce.com, the Portfolio Data Management System is designed, as Claire Cain Miller writes in the New York Times' technology blog, to help foundations and grantmakers set benchmarks for measuring social impact, track grantees' performance, and compare the performance of grantees to other nonprofits doing similar work. Indeed, no less an authority than Jed Emerson says that while the social sector is still "grappling with many of the aspects of what it means to track social value and performance," PDMS has the potential to be "very significant." (Hat tip Lucy Bernholz.)

Matthew Bishop, The Economist editor credited with coining the term "philanthrocapitalism," and co-author Michael Green have launched a new Web site, Philanthrocapitalism.net, to support their newly published book, Philanthropcapitalism: How the Rich Can Save the World. These days, of course, it's increasingly looking like capitalism may not be able to save itself, let alone the world. But Bishop and Green remain optimistic:

Does a bad time for capitalism spell trouble for philanthrocapitalism? Not necessarily. Certainly, a few wealthy philanthropists have taken a nasty hit….But we are betting that when the dust settles — and assuming the powers that be do not repeat the huge policy errors after the 1929 Crash that led to the Great Depression — most of today's super rich will not be much worse off, and many of them will be considerably richer....

Not sure whether that's a good thing, but at least we can all agree that another Great Depression would be a very bad thing....

Lucy Bernholz (see above) also found time this week to review Money Well Spent, the new guide to "strategic" philanthropy by Hewlett Foundation president Paul Brest and co-author Hal Harvey. After calling publication of the book "a significant moment in the marketization of philanthropy," Bernholz praises the authors' synthesis and presentation of the key elements of rational, strategic giving. But she admits to being troubled by what they leave out of that presentation: the heart. Yes, philanthropy is an industry, Bernholz writes, but it's also

a labor of love. It is perhaps the only business where passion and volunteerism play major roles. No matter how strategic a donor or foundation becomes, they may still pursue what some will consider to be foolish, frivolous, or redundant goals. No matter how strategic or effective (or neither) a foundation may be, at any point in time for any number of reasons (some rational, others perhaps not) the donor may pull the plug, redirect the resources, or simply decide to no longer participate. There is little to put an endowed foundation out of business, nothing to tell a donor "don't do that, it is actually harmful," or little that can keep someone from packing up her philanthropic playthings and going home. The most strategic foundation, the most carefully evaluated program strategy, and the most well-weighted goals will still be pre-defined by the donor's interests -- be they environmental, health related, artistic, justice oriented, equality-seeking, or none of the above. So while the focus on strategy and measurement are in sync with two of the defining forces of philanthropy (markets and regulation), they are out of sync with the third, the heart and human nature.....

To which we would only add: Wish we had said that.

That's all for now. Have a good week.

-- Regina Mahone

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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