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35 posts from November 2008

Weekend Link Roundup (November 15-16, 2008)

November 16, 2008

Here's this week's roundup of noteworthy posts from and about the nonprofit sector....


Tim Kane at Growthology takes a look at the negative impact on GDP of recession-wary consumers cutting back on spending and cautions policy makers not to exacerbate the situation by stifling productivity growth. "The recession will be ugly, but remember that economic growth occurs naturally if you don't suffocate your economy in bubble wrap. Every effort to cushion workers, bail out failing firms, and 'stabilize' prices will gum up the wheels of progress. Permanently."


In its annual Giving pullout, the New York Times looks at how higher education institutions are coping with the financial crisis. Harvard, for example, is considering wage freezes after suffering losses totaling as much as a third of its endowment. Meanwhile, on the Chronicle of Philanthropy's Give and Take blog, Caroline Preston notes that many readers are not impressed. Writes Preston:

In response to a Chronicle of Higher Education article about announcements by Brown and Cornell universities that they would impose hiring freezes because of their shrinking assets, a reader named Bill wrote that the "purpose of an endowment" is "to get you through the tough times. When you sit on $6 billion, it seems to me that you could use some of it to make up for the revenue that's lost."

Then there's the Bill & Melinda Gates Foundation. Early in the week, the foundation announced several new education initiatives designed to double the number of low-income students who graduate from college. The foundation also announced that it will work to develop a more concise and consistent set of national high school learning standards, and will begin to gather feedback about its approach to high school reform through a variety of forums and its own Web site. Skoolboy, a regular contributor to the Eduwonkette blog, thinks the plan to develop a set of standards is a "really, really bad one":

I'm delighted that the Gates Foundation has realized that throwing money at small schools didn't work, but I'm not prepared to turn over the public's interest in what is to be taught and learned to a private philanthropy, no matter how civic-minded it may be....

(Hat Tip: Give and Take)


While many nonprofits in this tough economic climate are pondering across-the-board budget cuts, Getting Attention's Nancy Schwartz argues that a nonprofit's marketing budget is the last thing that should be cut. "Although it may seem right (politically) to accept the decision to slash your budget, it's the wrong move to make," writes Schwartz. "In the long run, accepting a significant budget cut will harm your organization. When a nonprofit cuts marketing, it severs one of the hands that feed it."


Paul Brest, co-author of the recently published Money Well Spent: A Strategic Guide to Smart Philanthropy, responds to criticisms of so-called strategic philanthropy in his first post to his new blog at the Huffington Post. Brest addresses two objections raised by the Hudson Institute's Bill Schmabra in remarks delivered to the annual meeting of the Philanthropy Roundtable ("The Uses and Abuses of Strategic Philanthropy"). In response to Schambra's criticism that strategic philanthropy is a pseudo-scientific construct that "gives excessive power to unaccountable actors pursing grandiose theories," Brest argues that strategic philanthropy has learned from the past and is based on evidence not abstract theory. And to Schambra's suggestion that strategic philanthropy ignores "what might be called the 'wisdom of communities'," Brest writes:

Achieving social change requires philanthropists to direct money to the organizations that use it most effectively. Whether an organization is housing and feeding the poor or improving educational outcomes or advocating for or against gay marriage, a philanthropist has every reason to ask whether it has a sound strategy and a good track record as well as good leadership. The alternative is to sow hundreds of seeds without ever finding out which take root and flourish.has every reason to ask whether it has a sound strategy and a good track record as well as good leadership....

(Hat tip: Tactical Philanthropy)

In response to a recent post by Beth Kanter in which Kanter argues that tough times require creative action, Lucy Bernholz suggests that as much as we hope individual donors will dig deep this holiday season, she is hearing the opposite from her extensive network of friends and contacts. Bernholz argues that charitable giving by individuals -- as opposed to foundations, donor-advised funds, trusts, etc. -- involves a tradeoff, and when the choice is between charity and basic needs (food, heat, gas, rent, savings, entertainment), charity is often the loser. Makes sense, but we hope she's wrong. Keep that in mind as you begin your holiday shopping.

That's it for now. Enjoy the rest of your weekend.

-- Regina Mahone

Knight Foundation Launches Knight Pulse

November 15, 2008

For anyone interested in the practice and future of journalism, the Miami-based Knight Foundation is an increasingly important resource. Under the leadership of Hodding Carter and now Alberto Ibargüen, Knight has worked creatively to identify opportunities with the potential to foster media innovation and transform journalism itself.

Last week, the foundation launched Knight Pulse, a site "designed to facilitate discussions about the future of information and its impact on communities." Conversations on the site are seeded with video posts on specific topics, continue in the comments, and, with a little luck, may even develop into projects that are considered for funding.

Kristen Taylor, Knight's online community manager, explains:


Visitors to the site (registration required) will also find media projects currently funded by Knight, events that foundation staff will be attending, and opportunities to volunteer in your local community. A handful of topics have already been posted to the site, and the early response is promising. Check it out.

-- Mitch Nauffts

Do Foundation Giving Priorities Change in Times of Economic Distress?

November 14, 2008

Fc_logoNot really, says Steven Lawrence, senior director of research at the Foundation Center, in the second in a series of advisories intended to shed light on the potential impact of the economic crisis on the nonprofit sector.

After cautioning that past actions are no guarantee of future behavior, Lawrence notes that "an examination of giving by U.S. foundations during the economic downturn of the early 2000s suggests that overall grantmaking priorities do not shift suddenly in the face of reduced resources and over the longer term are remarkably consistent."


SOURCE: The Foundation Center, 2008. Based on all grants of $10,000 or more authorized or paid (if authorized figures are unavailable) by a sample of over 1,000 of the largest U.S. foundations in their 2006 fiscal year. Figures exclude giving by the Bill & Melinda Gates Foundation. Includes civil rights and social action, community improvement and development, philanthropy and voluntarism, and public affairs.


He continues:

The Foundation Center analyzed more than 830,000 grants of $10,000 or more awarded by over 1,000 of the nation's largest foundations between 1999 and 2005 to see whether there were any significant changes in relative grantmaking priorities across major subject areas during the economic downturn of 2001 to 2003. While there were some fluctuations during those years in the relative shares of giving in specific subject areas, the fluctuations were no larger than those seen during the years both immediately preceding and following this period. This suggests that the last economic downturn primarily affected the overall level of foundation giving, rather than funders' broad grantmaking priorities (see "Past Economic Downturns and the Outlook for Foundation Giving")....

Does this mean that foundations are unresponsive to pressing demands outside of their core focus areas during times of exceptional need? In fact, the evidence suggests quite the contrary. The Foundation Center documented almost $700 million in giving by U.S. foundations in the aftermath of the September 11 terrorist attacks and close to $500 million in funding through mid-2007 for relief, recovery, and rebuilding efforts following the 2005 Gulf Coast hurricanes. In lieu of cutting back on support for existing funding priorities, foundations may use discretionary or emergency funds to make these commitments, or even tap their endowments....

No one can sucessfully predict how long the current financial crisis will last, how deep the recession will be, and what toll this will take on the grantmaking capacity of the nation's foundations. But the relative stability of foundation's grantmaking priorities during the last economic downturn should alleviate a least one source of concern for nonprofit organizations as they face the challenging times ahead.

To download a PDF version of the advisory, click here.

-- Mitch Nauffts

Job Postings: Leading or Lagging Indicator?

November 13, 2008

HelpwantedsignWe added a free job board to PND in 2000, and it's been one of the most popular features of the site ever since. Over the last year or two, the board has offered roughly 950 jobs on any given day (with jobs automatically rolling off the site after eight weeks). Over the last six weeks, however, the number of jobs submitted for posting has dropped some 20 percent, a sure sign that nonprofits are beginning to feel squeezed by the financial crisis and slowing economy.

Question: Are hiring freezes and reductions in head count a leading or lagging economic indicator? In other words, is the worst behind or ahead of us? And if we have a ways to go, when do you expect the economy (and hiring) to improve?

-- Mitch Nauffts

NY Times 2008 'Giving' Section

Ny_times_logo_3We love the New York Times, not only for its unmatched international coverage, its consistently superior arts, business, and science coverage, and its rockin' Web site, but also because it is virtually the only mainstream media outlet that pays regular, thoughtful attention to the charitable sector.

As part of its coverage of our sector, the Times publishes, at this time of year, a special pullout section on the "business" of giving. For those who don't subscribe to the print edition or may not check the Times' Web site on a regular basis, here's a roundup of articles from this year's Giving section:

Bracing for Lean Times Ahead (Stephanie Strom)
Lead philanthropy reporter Strom looks at how the financial crisis and slowing economy is likely to impact charitable giving.

When the Cupboard Is Bare (David Cay Johnston)
Report on how the slowing economy and increased demand is straining food banks.

Talking Business: Taking Science Personally (Joe Nocera)
Profile of former actor Michael J. Fox and the Michael J. Fox Foundation, which is changing the way Parkinson's research is done.

Veterans Helped by Healing Paws (Karen Jones)
Jones looks at how service dogs are helping disabled veterans recover their sense of independence.

Finding Similarities Among the Differences (John Hanc)
Walking the Walk, a Philadelphia nonprofit, isn't interested in organizing yet another "Kumbaya" moment; it actually fosters greater understanding among high school students of different faiths.

From Debris Pile to New Homes (Ken Belson)
A look at how building-supply companies, environmental groups, and community activists are working to redirect excess inventory and salvaged materials from the dump to people in need.

Building a Better World While Touring It (Hilary Howard)
A growing number of philanthropic travel organizations are teaching Americans how to combine tourism with good works.

In Boston, House Calls for the Homeless (Katie Zezima)
Zezima takes a closer look at Dr. Jim O'Connell's groundbreaking treatment facility for the sick and homeless.

A Matchmaker Finds Patrons for Artists' Work (Jori Finkel)
Profiles United States Artists, a Los Angeles-based nonprofit that "has developed a knack for bringing patrons and artists together."

Donations With Dividends, Like Cruises and Puppies (Deborah L. Jacobs)
Jacobs reports that organizations are relying on transaction-based philanthropy to boost their fundraising results in these tough economic times.

Seeking Profits in Nonprofits (Deborah L. Jacobs)
Profiles Jon Carson (cMarket), Kelly Fiore (Charity Folks), and JJ and Ken Ramberg (GoodSearch), social entrepreneurs who are striving to do good while making a profit.

When Charity at Home Begins Abroad (Micheline Maynard)
Maynard reports on mighty Toyota's efforts to pick up the philanthropic slack as the Big Three falter.

In Philadelphia, Grants Nurture New Theater (Julia M. Klein)
Looks at how the local philanthropic community has transformed the City of Brotherly Love into a hot spot for nonprofit theater.

Helping America Keep Its Innovative Edge (Steve Lohr)
Profiles the efforts of the Ewing Marion Kauffman Foundation to translate knowledge and entrepreneurship into economic growth and social well-being.

In Crisis, Remote Access (Julie Bick)
Spotlights NetHope, a collaboration of nonprofit organizations and technology companies working to improve communications infrastructure around the world.

For Africa, 'Energy From Dirt' (Cate Doty)
Examines the efforts of Lebone Solutions to develop and spread off-the-grid lighting technologies to rural villages in Africa.

Training to Lead Nonprofits (Cate Doty)
Doty reports that more and more graduates of nonprofit management programs are finding their dream jobs in the charitable sector.

Keeping the Promise to Help Children (Claudia Deutsch)
Looks at the growing reliance of child service organizations on in-kind support to meet the demand for their services.

The Nonprofit’s Guide to Surviving a Downturn (Robin Pogrebin)
Profiles Michael M. Kaiser, president of the John F. Kennedy Center for the Performing Arts, whose new book, The Art of the Turnaround: Creating and Maintaining Healthy Arts Organizations, has just been published. (Read the PND review of Kaiser's book here.)

Colleges Struggle to Preserve Financial Aid (Geraldine Fabrikant)
Business reporter Fabrikant looks at what higher education institutions faced with declining endowments are doing to preserve financial aid.

Hospitals Prepare for Bad News (Reed Abelson)
Examines the expected fall-off in funding for health-related organizations and offers advice from the experts.

A Tarnished Capitalism Still Serves Philanthropy (Matthew Bishop)
Bishop, author of the recently published Philanthrocapitalism: How the Rich Can Save the World, argues that in these tough economic times the need for philanthrocapitalism is greater than ever.

Ensuring That Gifts Go Where They’re Needed (Jan M. Rosen)
Looks at what individual donors to international causes can due to ensure that their donations are being used effectively.

Want a Business Plan? Log on for Free Advice (Alan Krauss)
Spotlights a new Web site from the Bridgespan Group that provides an array of free management resources to nonprofit and philanthropic organizations.

As the Economy Declines, Donors Rethink Estate Plans (Deborah L. Jacobs)
Argues that donors should be flexible about their planned gifts.

Foundations Face Pitfalls When Heirs Take Over (J. Alex Tarquinio)
Explores creative solutions that family foundations can use to avoid rifts among family members.

Sweeter Charity: A Word to the Wise Grant Maker (Eugene R. Wilson)
A former president of the ARCO Foundation and senior vice president of the Ewing Marion Kauffman Foundation suggests that humility, transparency, and accountability should be embraced by every grantmaker.

-- Regina Mahone and Mitch Nauffts

How to Survive (and Thrive in) Tough Times

November 12, 2008

(Ted Grossnickle is chairman and Derrick Feldmann is CEO of Achieve, an Indianapolis-based consulting firm that works with nonprofits. This is their first post for PhilanTopic.)

Achieve_founders_lr_derrick_and_tedEveryone agrees: The economy is bad, with no relief in sight. From slowing retail sales to tumbling stock markets, it's a scary time -- not only for individuals, but for nonprofit organizations as well. All around the country, nonprofits are asking the same questions: Will donors give less? Will some donors suspend giving all together?

Certainly, those are reasonable questions. But the more pressing question nonprofits should be asking is: "How will we respond to the economy?" Because the way an organization responds will have a much greater impact on its stability than the mind-set of its donors.

First and foremost, nonprofits must defend against crisis-related paralysis by avoiding the following pitfalls:

Blame: Assigning blame for any problem that arises -- financial or otherwise -- on the economy rather than focusing on root causes.

Status quo: Seeking to "ride out" the problems, choosing not to launch anything new or exciting until things get better.

Rash decisions: Making emotional judgments regarding fundraising, programs, and cost cutting.

Donor abandonment: Stopping the practice of stewarding, cultivating, and soliciting donors, assuming they should be left alone in difficult times. This can be the worst mistake.

Communications "freeze": Communicating less with constituents, donors, and the public out of concern that they may be "bothered."

To combat these understandable but ultimately self-defeating responses, leaders of nonprofits must do just that -- lead. Lead and be proactive with your fundraising strategies and nonprofit management techniques.

How do you do that in times like these? By following a few simple steps that can help your organization weather the economic uncertainty and, maybe, even grow.

Perform a financial review. Assess what is truly important. Meet with the best fiscal experts from your volunteer base to review expenses and test your fundamental business model. Confirm your pricing, and make sure everyone on your staff is contributing to the bottom line. Defend against panic and emotion by focusing on real information and making data-based decisions.

Be proactive. Address constituents' fears about the economy directly and openly. Say, "Here is how we plan to address this crisis." Don't wait to be affected; look ahead and try to anticipate what you can do to be a stronger and more efficient organization. Use the inevitability of change to drive the change that you probably already suspected was needed.

Refine your message. Now, more than ever, you must make sure the community, donors, and prospective donors understand the role you play in the community. Refine your message. Be sure to clearly articulate your value to the commnity. Ask yourself, "What fundamental message must our constituents and donors remember about us?" Be specific.

Cultivate. Bring potential supporters into your organization's circle. Focus on the one resource they can afford to give: time. Provide opportunities for constituents to see the work you do and meet the people involved as a way to build relationships that yield long-term support.

Communicate. Tell people about changes or adjustments you have made and they'll be much more likley to get involved or make a gift. Get your story out and show that you're being proactive.

Keep fundraising. Visit your donors. Then, visit them again. In fact, you want to see them as often as possible in times like these. You can count on other organizations making the worst mistake of all -- cutting off contact with their donors. Recognize that as the opportunity it is and try to build stronger relationships with donors and friends. Cultivate even if you don't think you should solicit. Experience teaches us that people might give less, they might defer a decision, but they will give.

Find answers. If you see a decline in program participation or fees for services, don't automatically shrug it off as a by-product of the economy. Analyze the problem to see what is happening and how long it has been happening. You might discover something that helps you redefine and improve your programs and services.

Partner. Consider partnership opportunities with other organizations that provide similar services. Not only can it help you cut costs, it's an opportunity to show the community how collaborative you are. Remember to partner for mutual benefit, defining the benefits you wish to obtain first before committing to the partnership.

Define a work plan. Make sure your organization has a clear plan of work for the next six to twelve months (i.e., a strategic plan).  If it doesn't, work with your board to develop a plan that helps the organization stay on track and meet its objectives.

Executing on these strategies will help your organization get through these tough times and come out stronger on the other end. Be proactive. Get out in the community. Connect with donors and stay positive. Communicate your belief that your organization continues to do incredible work in the community.

An old saying counsels that each individual decides what his or her attitude is going to be in life. You can choose to be happy or sad, productive or unproductive. The same applies to organizations. Your organization's actions and attitude in these tough times will be observed -- and adopted -- by many.

So, why not make the best of it? Look beyond simple survival. Choose to stay strong and grow stronger. You might just be amazed by the opportunities that come your way.

-- Ted Grossnickle and Derrick Feldmann

Time to Start Preparing for the Unthinkable?

November 11, 2008

Is_logo_color_horizontalWe're broke.

That is, government -- federal, state, and local -- is broke. And over the next three to five years, the public sector increasingly is going to resemble a wounded animal as it hunts for revenues in order to meet its commitments.

That, at any rate, was the message delivered by the panelists at a Monday afternoon session ("Redefining the Charitable Community: What Should be Different? Who Decides?") which turned out to be a lot scarier -- and more entertaining -- than most in the audience could have anticipated.

Of course, given the provocative way in which the session was framed, maybe we shouldn't have been surprised. Moderator Sandra Vargas, president and CEO of the Minneapolis Foundation, and the panelists -- Frances Hill, a professor at the University of Miami Law School; Ford Bell, president and CEO of the American Association of Museums; and John DiIulio, Jr., the Frederick Fox Leadership Professor of Politics, Religion and Civil Society at the University of Pennsylvania (and former "faith-based czar" in the Bush White House) -- were asked to address the following: Does current tax policy favor tax-exempt organizations serving wealthier communities? Should the charitable deduction be restructured to encourage support for organizations serving the disadvantaged? Is it appropriate for charitable organizations to maintain large endowments when so many people today are in desperate need of services? Should tax-exempt organizations that receive their primary support from fees for service be subject to special rules? And how should the nonprofit community respond to these challenges?

While the panelists might not have seen eye-to-eye on some of the particulars, they were in agreement on the big things, including tax exemption (it is a subsidy; it exists to provide a public benefit to a "charitable class"; and, in a society facing growing needs and shrinking resources, it must become more "efficient" -- i.e., we need to do more with less); the precarious position of universities and nonprofit healthcare systems with huge endowments; and the urgent need to redefine, proactively, what we mean by "public benefit" (before government does it for us).

As the combustible (was I the only one in the audience who thought he might explode at any moment?) DiIulio put it, every nonprofit has to take seriously the need to explain and justify the "flow of benefits it provides back to the public." And even that might not be enough to save them from the taxman's scrutiny. Or, as the more measured Ford Bell, put it, "the value of nonprofits is not intuitive," and the sector will suffer if organizations don't do a better job of creating and disseminating narratives that explain that value.

In other words, change is coming, but maybe not the kind of change the sector was hoping for. We have to get in front of that change, not hide from it. And the place to start is by telling our stories as if our constituents' lives -- and our tax exemption -- depended on it.

Your thoughts?

-- Mitch Nauffts

Question(s) of the Day

Asked by a member of the audience at one of the final sessions ("Assessing Nonprofit Effectiveness") at this year's IS conference:

How is that corporate America is entitled to a $700 billion taxpayer-financed bailout, while corporate philanthropy in the U.S. represents only 5 percent of total philanthropic giving? (Update: Tech Ticker reports the cost has risen to $3.5 trillion -- and is climbing.)

And given the magnitude of the financial disaster corporate America has dumped in the lap of American taxpayers, who is it to tell nonprofits and the nonprofit sector that they need to be more efficient and effective?

Inquiring minds want to know...

-- Mitch Nauffts

IS Conference -- Opening Thoughts

November 10, 2008

Is_logo_color_horizontal_6Like Michael (see the post below), I'm in Philadelphia for a few days to report on and network at Independent Sector's 2008 annual conference. As the conference tagline ("Our Hopes, Our Voice, Our Future") suggests, these are uncertain times -- for the economy, for the nonprofit sector, and especially for the least advantaged and most vulnerable among us. But the election of Barack Obama as our next president and the seeming rejection of business as usual that his election implies have most people at this conference looking ahead with guarded optimism. Optimistic that the possibility of change -- in our social, economic, and geopolitical priorities; in our rancorous political discourse; in our relationship to the natural world and the systems that sustain life on the planet -- is real; and guarded in that optimism due to a sober recognition of the magnitude of the challenges we face.

There's also a sense among attendees that the election of Barack Obama represents a once-in-a-generation opportunity for nonprofits and the nonprofit sector. An opportunity to reframe in broad, inclusive ways issues that are at the heart of the challenges we face. An opportunity to knock down many of the racial, sectarian, demographic, and gender barriers that divide us as a people. An opportunity to use new technologies to connect people to causes, causes to coalitions, and coalitions to action.

As IS board chair Brian Gallagher and IS president and CEO Diana Aviv put it in their message to conference attendees: "There is no better time than now for nonprofit leaders to come together to set a collective agenda -- one that will help steer our nation on a course to stability and prosperity."

It should be an interesting conference.

-- Mitch Nauffts

What Next?

(Michael Seltzer is a regular contributor to PhilanTopic. His recent posts include the A to Z Guide to Uncertain Times and the A to Z Grantmakers' Guide for Uncertain Times.)

Is_logo_color_horizontal_5Close to a thousand nonprofit, foundation, and corporate philanthropy leaders have gathered in downtown Philadelphia for Independent Sector's 2008 annual meeting. And less than a week after Barack Obama became president-elect of the United States of America, the excitement generated by the Illinois senator's historic accomplishment is palpable in almost every conversation and presentation here. Indeed, the president-elect and incoming First Lady's roots in the nonprofit sector have been cited by many here that an Obama administration will be deeply grounded in an understanding of and appreciation for the nonprofit experience. For most people at the conference, there is no question that the nation's new first couple understand how integral nonprofits are to the health and vitality of our democracy and how important it is for individual Americans to continue to come together through nonprofit and civic organizations to work on behalf of the public good.

At yesterday's opening plenary ("How The Election Results Will Shape Our Future"), the Honorable Henry Cisneros, Secretary of Housing and Urban Development in the Clinton administration and executive chairman of CityView, which works to provide attractive alternative project financing to experienced homebuilders and developers who work in urban areas, noted that "We saw the diversity of the nation assert itself" in the most recent election cycle and that the signs were strong that the independent sector would fare well in an Obama administration. Cisneros also drew attention to the fact that Senator Obama will be the first president identified with an urban area (i.e., Chicago) in more than sixty years.

At the same session, Judy Woodruff, senior correspondent for PBS' NewsHour with Jim Lehrer, referenced how perhaps as many as 35,000 grassroots organizations had organized in support of the Obama campaign, while at a later session, Miles Rapoport, president of Demos, a nonpartisan policy and research organization headquartered in New York City, described the upcoming era as the rebirthing of "a communitarian ethos" in the country. Indeed, for many people at the conference, the election represented an overwhelming repudiation of the "Reagan Revolution" message that government isn't the solution, it's part of the problem.

Continue reading »

Quote of the Day (November 9, 2008)

November 09, 2008

Quotemarks"...Ask why foundations don't accomplish more, perform better, advance farther, and you'll get a catalogue of barriers from nearly every knowledgeable player and observer. Yet the obvious, paradoxical question is: How can there be so many barriers to performance when there are so few boundaries to hem us in?

"The core of the answer, I think, is this: The biggest barrier to improved foundation performance is our own constraining 'mental model' about how we should conduct ourselves. It's not just what we do; it's our perception of the world and how we think. Our constraints don't come from the outside world; they come from within. If we can overcome this, our effectiveness will surely rise...."

-- Edward Skloot, "Doing Better -- It Isn't About the Money," collected in Beyond the Money: Reflections on Philanthropy, the Nonprofit Sector and Civic Life, 1999-2006

A to Z Grantmakers' Guide for Uncertain Times

November 08, 2008

(Michael Seltzer is a regular contributor to PhilanTopic. In October, he shared his A to Z Guide to Uncertain Times with readers.)

Abcs_gms_2It's still hard to predict what the long-term consequences of the current financial crisis on the economy and nonprofit sector will be. But the best evidence available would suggest that, for grantmakers, it's no time for business as usual. The turbulence affecting "Nonprofit Street" has two dimensions: (1) many nonprofits serve as a sort of de facto safety net for the low-income, unemployed, and vulnerable among us; and (2) these same organizations are most likely to experience the brunt of cutbacks in local, state, and federal budgets.

Many donors have already begun to rethink how they can work to create greater value for their grantees and other organizations in their areas of interest. The A to Z Grantmakers' Guide for Uncertain Times is a collection of existing foundation practices and is not intended to be either inclusive or representative of best practices. Consider it a sampler. The ideas offered in it are intended to send the message: "We are here to help." And that may be the most important message grantmakers can send in these troubled times.

I hope the list generates discussion among staff and boards, and inspires more innovation from and risk-taking by foundations.


Assume nothing
The future is too uncertain to make assumptions about the sustainability of key grantees. There are too many variables in the workings of the national and global economy to be able to predict either the length of the recession or its likely impact on the organizations you have committed to support over the long haul.

Break down barriers that create distance between you and your grantees
See "D."

Convene grantees and other key players in your fields of interest
One of the greatest tools available to foundations and other donors is their convening power. Indeed, many foundations have perfected this strategy and are aggressively using a range of new technologies to bring grantees together as well as extend their reach and influence.

Discuss with your grantees what they consider to be the greatest challenges to their organizational viability
Candor is too often a rare commodity in grantor-grantee exchanges. Creating a safe environment for these kinds of exchanges is integral to good communications -- and grantmaker effectiveness. To that end, some funders have experimented with grantee-perception reports, ombudsmen, 360-degree evaluations, surveys, and off-site retreats.

Continue reading »

PayPal 2008 Holiday Survey

And now for a little good news...

The results of PayPal's 2008 Holiday Survey, announced yesterday, found that even in these tough times, people plan to be charitable this holiday season. Conducted by Ipsos, a  global survey-based market research company, from October 13 to October 20 via email invitation, with a sample size of a thousand people who indicated that they intend to shop online this season, the survey found that:

  • Ten percent of respondents plan to give more to charity this year than they did last year; 
  • Seventy-one percent plan to give the same amount as they did last year;
  • Overall, 73 percent of online shoppers intend to give to charity this season, compared to 60 percent in 2007 (a 13 percent increase);
  • Nearly 25 percent of online shoppers plan to buy electronic gift cards or "green" gifts such as organic foods, eco-conscious clothing, and recycled house wares this holiday season;
  • Twenty-seven percent of shoppers age 45 and under plan to give green gifts;
  • Even as online shoppers continue to make giving a priority, they plan to cut back on their spending (70 percent) and do more bargain shopping (45 percent).

"Our survey results show that even though people are cutting costs, they’re still planning to give back with donations and by choosing environmentally friendly gifts," said Cliff Hopkins, senior director,


. "In times like these, while people are spending less on gifts, the spirit of giving around the holidays is still very much alive."

To learn more, click here.

-- Mitch Nauffts

Mellon, Weinberg Foundations Respond to Crisis

November 06, 2008

The New York City-based Andrew W. Mellon Foundation has joined the ranks of large foundations to publicly announce that they do not "foresee significant retrenchment or dislocations" in their grantmaking (or words to that effect). The foundation also said it plans to honor all existing commitments and will "continue to be alert to the needs of grantees as circumstances develop."

Read the complete statement here.

Update: November 7, 2008, 11:30 EST

The Baltimore-based Harry and Jeanette Weinberg Foundation has announced that it will temporarily stop accepting letters of inquiry from potential grantees and expects to continue that policy through April 1, 2009.

The foundation said the change was made due to the substantial number of grants already approved for the coming year and a desire by the foundation to evaluate the effectiveness of its prior grantmaking in the context of a slowing economy. While the foundation’s grantmaking process will remain unchanged in every other respect, the foundation may chose to focus more of its grants in 2009 on providing basic human needs such as food, shelter, and medical care. Click here for the complete statement (2 pages, PDF).

-- Mitch Nauffts

OSI Forum: The Economic Downturn

November 05, 2008

I've been meaning to post this for a while. It was recorded on October 20, and features Mark Winston Griffith, senior fellow at the Drum Major Institute for Public Policy and Mike Gecan, a long-time community organizer and national staff supervisor for the Industrial Areas Foundation. The program was facilitated by Bill Vandenberg, director of OSI's Democracy and Power Fund, which aims to engage and mobilize youth, immigrants, and communities of color working to advance open society in the United States.

-- Mitch Nauffts

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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