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37 posts from January 2009

ANNOUNCEMENT: Finalists for $250,000 Nonprofit Collaboration Prize Announced

January 18, 2009

We featured a nice post about the benefits of collaboration by Lois Savage, president of the Phoenix-based Lodestar Foundation, in December. To help encourage beneficial collaborations within the sector, Lodestar, in association with the Arizona-Indiana-Michigan (AIM) Alliance, initiated the Collaboration Prize, a $250,000 award to the best U.S. nonprofit collaboration in early 2008.

After receiving 644 nominations, Lodestar has announced the eight finalists in the competition. Selected by a panel of leaders from the nonprofit and business world, the finalists are strikingly diverse in their locations and areas of focus. "The missions of these eight finalists are so different, and yet each found a way to utilize a collaboration strategy -– ranging from joint programming to administrative consolidation to merger -– to maximize their resources and impact," said Savage. "We hope that these finalists will serve as a source of inspiration for other nonprofits."

The finalists (in alpha order) are:

  • Chattanooga Museums Collaboration, Chattanooga, Tennessee -- administrative collaboration among the Creative Discovery Museum, the Hunter Museum of American Art and the Tennessee Aquarium
  • Crittenton Women's Union, Boston, Massachusetts -- merger of two organizations serving low-income women
  • Museum of Nature and Science, Dallas, Texas -- merger among the Dallas Children’s Museum, the Science Place, and Dallas Museum of Natural History
  • New York LawHelp Consortium, New York, New York -- collaboration among legal services organizations providing online resources
  • Ready, Set, Parent, Buffalo and Lackawanna, New York -- collaboration between organizations supporting at-risk new parents
  • ShoreBank Enterprise Cascadia, Ilwaco, Washington -- merger of two community development financial institutions
  • YMCA/JCC Integration, Sylvania, Ohio (Greater Toledo) -- merger of Jewish Community Center and Young Men’s Christian Association in Greater Toledo

The winner of the $250,000 will be announced at a luncheon in Scottsdale, Arizona, on March 5, 2009.

-- Mitch Nauffts

Where Do We Go From Here?

January 17, 2009

Ray_sunshine Paul Light has a great piece in the new issue of the Nonprofit Quarterly in which he outlines four possible futures for the nonprofit sector (listed here from least likely to "wouldn't that be nice"):

The rescue fantasy. "The first future scenario is based on the 'kindness of strangers' and is likely to leave the nonprofit sector in the same position as poor, homeless Blanche DuBois. The idea is that Americans are a generous people and will continue giving, perhaps rising to the challenge and giving more from their strained budgets...."

A withering winterland. "This scenario has every nonprofit in the sector suffering....Depending on the length of the economic downturn, many nonprofits will starve themselves into a weakened organizational state through hiring freezes, pay freezes, layoffs, and deferred organizational maintenance...."

An arbitrary winnowing. "In this scenario, some nonprofits will fold, while others will prosper as contributions flow to the most visible and largest organizations as well as to those most connected to and influential with their donors...."

Transformation. "As has been noted in several of this issue’s articles, nonprofits could use the faltering economy and its impact on the sector as an opportunity to reinvent themselves. But this approach requires examining all possible options quickly and creatively...."

For the fourth scenario to become a reality, says Light, nonprofits need to embrace flexibility, innovation, and responsiveness and, at the same time, take the following concrete steps: resist funding restrictions; seek new ways to collaborate with other organizations; more closely coordinate research efforts that help the sector learn quickly about what works well and under what conditions; avoid overdependence on predetermined metrics as a method for encouraging effectiveness; and give young people a voice in determining the future of the sector. (Click here to read the complete article; it's well worth your time.)

Sounds like a sensible prescription to me. Is he right? Does the sector have the requisite capacity and leadership to, as Rahm Emanuel likes to say, turn crisis into opportunity? Or are we on the threshold, as Light has suggested elsewhere, of the proverbial seven lean years?

-- Mitch Nauffts

Quote of the Day (Jan. 17, 2009)

Quotemarks "Since Friedmanite gradualism will not permit a sharp enough recession to clear out the debt, this means that the American economy will be increasingly faced with two alternatives; either a massive deflationary 1929-type depression to clear out the debt, or a massive inflationary bailout by the Federal Reserve. Hard money rhetoric or no rhetoric, the timidity and confusion of [policy makers] make clear what its choice will be: massive inflation of money and credit, and hence the resumpton of double-digit and perhaps higher inflation, which will drive interest rates higher and prevent recovery. A Democratic administration may be expected to inflate with even more enthusiasm. We can look forward, therefore, not precisely to a 1929-type depression, but to an inflationary depression of massive proportions. Until then, the Austrian program of hard money, the gold standard, abolition of the Fed, and laissez-faire will have been rejected by everyone -- economists, politicians, and the public -- as too harsh and Draconian. But Austrian policies are comfortable and moderate compared to the economic hell of permanent inflation, stagnation, high unemployment, and inflationary depression that Keynesians and Friedmanite neo-Keynesians have gotten us into...."

-- Murray N. Rothbard, America's Great Depression, introduction to the fourth edition (1982)

Stimulus Package Pie Chart

January 16, 2009

The House Committee on Appropriations has released details of its massive $835 billion economic stimulus package (a/k/a the American Recovery and Reinvestment Bill of 2009), and the New York Times' Catherine Rampell does her best to break it down for taxpayers who'll be footing the bill.


(HT: Tim Kane, Growthology blog)

According to a recent article in the Chronicle of Philanthropy,

[The] economic-stimulus package... proposes billions of dollars in spending on Medicaid and other federal programs that will help nonprofit groups in cash-strapped states meet spiking demand for social services.

It also proposes spending $200-million to allow AmeriCorps, the national-service program, to expand by 16,000 members to help vulnerable people during the recession, and $50-million to allow the National Endowment for the Arts to provide grants to struggling arts groups....

Many nonprofit leaders and experts have proposed that the stimulus package include billions of dollars of spending to help charities both weather the recession and put people to work solving the country’s problems...

This package does not take up those ideas, although many of the measures to bolster the social safety net and state finances would trickle down to charities that rely on government revenue....

On the Growthology blog, Kane notes that while "some of the stimulus looks smart," the package may not do what it's supposed to -- reinflate the sagging economy. What do you think? Has the House come up with a viable plan? And should the final package include billions of additional dollars to help charities and nonprofits?

-- Regina Mahone

ANNOUNCEMENT: 'Fundraising in Challenging Economic Times' Podcast Now Online

January 15, 2009

Last month, Janet Camarena, director of the Foundation Center's San Francisco office, sat down with Kim Klein, internationally known educator, author, and fundraising consultant, to discuss fundraising strategies for tough economic times. The podcast is the latest installment of Philanthropy Chat, a series of recorded interviews featuring experts and thought leaders in the field.

(Total running time: 23 minutes, 32 seconds)

Among other things, Klein offered the following advice:

  • Nonprofits shouldn't necessarily resort to cutting important programs and services; instead, why not try to raise more money? Too often, says Klein, nonprofits cut programs instead of reaching out and asking for additional help. If there was ever a time to reach out to donors and close supporters, this is it.
  • If your board insists on cuts, then suggest some specific things that should be done before any cuts are made.
  • Try and put yourself in your donors' shoes. "We have to remember: the vast majority of gifts come from an individual's income, and the vast majority of people remain employed." For big donors who have suffered significant losses in the downturn, your outreach strategy will have to be calibrated differently. Explain that your organization continues to do great work but is making adjustments in light of the difficult economic circumstances. Also consider reaching out to them with volunteer opportunities such as hosting a house party. Donors like and want to hear that they've been critical to your organization's work and success.
  • Donors respond well to specifics (e.g., what does it cost per day to keep your doors open). Almost any organization that thinks creatively can describe its work in terms of how much it costs to do a specific thing. You can build loyalty among your donors by helping to educate them about their giving. Being transparent about your organization's finances is a start.

To download an mp3 version (10MB) of the podcast, click here.

And be sure to check out the audio events archive for more Philanthropy Chat podcasts.

Memo to the President: Higher Education Is US

January 14, 2009

What should the top priority of the incoming Obama administration be?

Jamie-Merisotis If you're like most people, you're probably thinking "the economy." Makes sense. Things are bad -- and they're likely to get worse before they get better. But as Jamie Merisotis, president of the Lumina Foundation for Education, argues in a "memo" to the president-elect on the Lumina Web site, the issue isn't just short-term economic recovery; it's about long-term economic transformation. And higher education attainment has to be a key driver of that transformation.

The key to progress, writes Merisotis,

...lies in the development of the knowledge economy, which in turn requires the American workforce to develop the skills that are required in a globally-competitive environment. Higher education attainment is increasingly important to the U.S. economy as the workforce demands education and training leading to higher levels of skills and knowledge. The implications of this shift can scarcely be overstated. For generations, the American economy has created large numbers of middle class jobs that did not require high levels of skills or knowledge. As a consequence of global competition, these jobs are rapidly disappearing. It is not that low-skill jobs do not exist in the United States -- it is that the Americans who hold them are not likely to enter or remain in the middle class. This means they are not likely to have access to quality health care, save for retirement, or assure their children access to higher education. The consequences of failing to reach the middle class are increasingly severe. What has changed is that access to middle class jobs is now mostly dependent on completing some form of postsecondary education.

Higher education attainment rates are rising in almost every industrialized or post-industrial country in the world, except for the United States. Lumina Foundation estimates that at current college graduate production rates there will be a shortage of 16 million college-educated adults in the U.S. workforce by 2025. Today, roughly 39 percent of American adults hold a two- or four-year degree. That attainment rate, which has held steady for four decades, led all other nations for much of the post-war period. Unfortunately, this is no longer the case. Based on data published by the Organization for Economic Development and Cooperation (OECD), our nation now ranks only 10th in the percentage of young adults (25 to 34 years of age) with college degrees. Today in some countries more than half of young adults are degree holders. Even more disturbing for the United States is that attainment rates in these other countries continue to climb while ours remains stagnant....

The clearest evidence that rising attainment rates in the rest of the world reflect real economic demands is that the gap in earnings based on level of education continues to widen. In 29 of the 30 OECD member countries, the gap in earnings between people who have completed some form of postsecondary education and those who have not is widening despite the fact that the proportion of postsecondary graduates in the workforce is increasing. If the economy were not demanding higher levels of skills and knowledge, the gap in earnings would be expected to narrow as the supply of graduates increased -- a case of simple supply and demand. This trend is evident in the United States as well. Since 1975, the average earnings of high school dropouts and high school graduates fell in real terms (by 15 percent and 1 percent, respectively), while those of college graduates rose by 19 percent. In other words, the economic benefits -- both for individuals and the society -- of completing higher education are growing.

Dangerous stagnation is evident in another area as well: Rates of college attainment among our nation's underserved students -- first-generation students, low-income students and students of color -- are significantly lower than those of other students. These achievement gaps have endured for decades, and they're now widening -- an ominous sign when one considers current demographic and economic trends. More than 30 percent of white, non-Hispanic American adults have at least four years of college, but only 18 percent of African Americans and 12 percent of Hispanics have reached the same level of attainment. Because the average income of Americans with a four-year degree is $43,000 per year, compared to $27,000 for those with just a high school diploma, this chronic gap in educational attainment contributes to the disparities in income between racial and ethnic groups in the United States. This issue is of growing importance as the proportion of the population from groups traditionally underrepresented in higher education grows rapidly. Of the total U.S. population growth of 56 million between 2000 and 2020, 46 million will be members of minority groups. The United States is projected to become a "majority minority" country by 2050.

At Lumina Foundation, we have embraced a single, specific goal that will help us address this issue. Our Big Goal is this: to increase the percentage of Americans with high quality degrees and credentials from 39 percent to 60 percent by the year 2025. How do we as a nation achieve this goal?

Click here to read the rest of Merisotis' thought-provoking memo.

-- Mitch Nauffts

Digg this? Tweet it.

January 13, 2009

We finally bit the bullet: PhilanTopic is on Twitter. You can find us here.

We've also made it easier to share and bookmark PhilanTopic posts via e-mail, Stumble, Digg, Twitter, Facebook, and/or Del.icio.us.

So what are you waiting for?
TweetIt from HubSpot

-- Regina Mahone

Michelle Obama's Call to Service

Yesterday, I received this message from Michelle Obama:

Regina --

One week from today, on January 19, Barack and I will join thousands of people all across the country for an extraordinary day of service.

I recorded a short video to tell you more about this important effort:

Volunteers of all ages and backgrounds are committing to renew America together, one community at a time.

Whatever service activity you organize or take part in -- cleaning up a park, giving blood, volunteering at a homeless shelter, or mentoring an at-risk youth -- you can help start this important journey. But this is about more than just a single day of service, it's the beginning of an ongoing commitment to your community.

It's early days, but the incoming Obama administration seems committed to changing the way in which government and the nonprofit sector work together to improve society. Exciting stuff!

-- Regina Mahone

The Revolution Will Not Be Televised

January 12, 2009


(Cartoon: John Sherffius, Boulder Daily Camera; HT: The Big Picture)

Weekend Link Roundup (January 10-11, 2009)

January 11, 2009

Happy New Year to all. Here's this week's roundup of noteworthy posts from and about the nonprofit sector....

Arts and Culture

Back from the holidays and loaded for bear, the Nonprofiteer questions whether the United States needs -- or can afford -- a national arts policy.


Because so many people had their trust in institutions shattered in 2008, testimonials could be your organization's most powerful communications tool in 2009, writes Nancy Schwartz on her Getting Attention blog.


Nonplussed by a recent assertion in The Economist that giving during the Great Depression actually rose, Lucy Bernholz asked readers to point her to data supporting that conclusion. The discussion in the comments generated by her post is fascinating (and yes, after declining initially in the years 1929-31, giving -- much of it "faith-based" -- did rise, albeit erratically, through the rest of the decade and into the early war years).

Nice profile of Patty Stonesifer, the "woman who built the Gates Foundation," in the December 30 issue of the Financial Times.

Trista Harris (New Voices of Philanthropy) has a nice list of New Year's resolutions for foundations. They include: "unrestricting" grants that have already been given to nonprofits for project-specific activities so that they can make mission-driven choices about their activities in 2009; using 5 percent as a payout guideline, not a rule; to collaborate more with other funders; and releasing staff from their nine-to-five routines.

On his Charity Governance blog, Jack Siegel offers a list of simple steps smaller family foundations can take to protect themselves from Bernie Madoff-style scams. (HT: Give & Take) Here's his list:

  • Reconsider the decision to create a foundation
  • Understand what you invest in
  • Stay away from hedge funds
  • Use an investment advisor who specilaizes in smaller family foundations
  • Diversify
  • Ask about supplemental fidelity insurance
  • Don't invest if you don't understand

The folks at PhilanthroMedia have finished re-posting the "Ten Things We'd Like to Tell Every New Philanthropist" series penned by Paul Shoemaker, executive director of Social Venture Partners Seattle. Have a great idea for a new program and think you should start a nonprofit? Don't, Shoemaker advises.

In short, it is much easier to start a non-profit than a for-profit company, but it is much harder to effectively sustain a non-profit over the long-term. When you have a new idea, please be sure to look around to see if anyone is already doing the work you care about; or if there is someone to partner with or someone that might want to take on a new "line of business"....

Additional topics in the series include funding need vs. impact, improving a grantee's long-term sustainability, and perpetuity vs. "giving while living."

Over the next week or so, Sean Stannard-Stockton will be debating Hewlett Foundation president Paul Brest's framework for strategic philanthropy on Brest's blog. (You can read our interview with Brest here.) Says Sean:

Unlike most of the writing I do, where I advance a specific opinion, this series of posts will be a live discussion in which I have not made up my mind but am skeptical of part of Paul's framework. This is me going through the process of forming an opinion in public. I hope you'll join in the fray....

Continue reading »

Quote of the Day (January 10, 2009)

January 10, 2009

Quotemarks"… in an information-rich world, the wealth of information means a dearth of something else: a scarcity of whatever it is that information consumes. What information consumes is rather obvious: it consumes the attention of its recipients. Hence a wealth of information creates a poverty of attention and a need to allocate that attention efficiently among the overabundance of information sources that might consume it."

-- Herbert Simon (1916 - 2001)

Back to the Future

Holy hybrid, Batman! The 1958 Ford Nucleon, a concept car with its own nuclear power plant. And parking was never a problem....


(HT: New York Times)

-- Mitch Nauffts

More Foundations Respond to Crisis: Bush, Gund, Cleveland Foundations

January 09, 2009

The Cleveland Foundation, the oldest community foundation in the nation, has released the following statement in response to the economic crisis:

With the current economic crisis, we have seen an increased demand at agencies that address basic human needs such as food, shelter, and medical services. We remain committed to helping those agencies that improve people's daily lives. We also remain committed to long-term, overarching initiatives that have the potential to restructure our city, giving us new jobs, high-quality schools, and livable neighborhoods, among other benefits.

We have taken several steps to ensure our grantmaking dollars have the greatest impact. To have the resources to respond appropriately to our community's immediate needs, our board has deferred our major capital grants program, which usually runs in the spring. They will reconsider in June whether to run this program in 2009....

The George Gund Foundation, another pillar of the philanthropic community in Northeast Ohio, released its own statement yesterday:

The stock market collapse has affected almost everyone, including The George Gund Foundation. The Foundation has lost almost one-third of its value, necessitating changes in our approach. 

We believe it is essential that our grantees understand how we are planning to adjust to the constraints on our resources and what this may mean to them. We have adopted several principles to guide us that we think it is important to share.

First, we have reduced our operating budget. Every dollar we spend on operations is one that we cannot give away, so we have tightened our belts in several ways. For example, this year we will issue an online annual report instead of a printed version. We have cut our travel expenditures and will curtail staff travel to out-of-town meetings and conferences in the coming year.

We intend to increase the percentage of our assets that we give away. Federal tax law requires that we spend 5% of our assets every year, and we always exceed that minimum. But in 2009 we will go substantially beyond that. However, because our portfolio is diminished, the dollars available for grants still will likely decline in 2009. Thus, we do not expect to make any large new commitments. In recent years we have made numerous substantial, multi-year grants to important community projects in Cleveland. We will, of course, honor those commitments but doing so automatically imposes a constraint on our ability to consider new awards of similar magnitude....

And the St. Paul-based Bush Foundation, which we cited as a model of transparency after it announced a new strategic direction and goals last summer, has acknowledged that while the economic crisis has complicated things, it is proceeding as planned:

We made these choices before the current financial typhoon hit. So what now? We are sticking to our goals. We may wish today’s circumstances were different, but it was not immediate circumstances that motivated our focus on these goals. Ours are long-term aspirations. We believe that the best time to start pursuing long-term change is right now.

For 2009 that will mean:

Our budget will be nearly the same as it was in 2008.

  • We will honor all our prior commitments; they will make up about 30 percent of our budget.
  • We will pay out the transition grants commitments we have made to individual organizations and fields of interest as part of changing our strategy; this will take about another 15 percent of our budget.
  • We will commit the balance of our resources to launching the first partnerships as part of our Goals for a Decade.

The work we did in 2008 to decide what difference we want to make has served us well as we face 2009, because among all the right things we could do, we know which ones are right for us. No doubt circumstances will continue to change. While those changing circumstances may alter the means, the ends we intend to achieve will remain the same.

More tomorrow.

IS Issues Nonprofit Policy Platform

January 08, 2009

The following nonprofit policy proposals for the incoming administration were developed, with the help of an advisory committee and hundreds of charities and foundations, by our colleagues at Independent Sector:

1. Ensure adequate resources and fair responsible fiscal policies to support vital programs that sustain, protect and strengthen communities.

2. Preserve and expand policies that help Americans give back to their communities.

3. Ensure that nonprofits have the capacity and capital to serve the needs of our communities.

4. Protect the rights of Americans to speak out through nonprofit organizations.

5. Ensure that Americans are able to continue vital charitable work throughout the world without unduly jeopardizing their safety or their civil rights.

6. Support funding and policies that provide for transparency and accountability to ensure integrity and public trust in our institutions.

It's a great platform, with many more details and specific recommendations than I've provided here. Do be sure to give it some of your time: http:///www.independentsector.org/programs/gr/2009_Nonprofit_Platform.htm

I wonder, though. Will the press of events and soaring budget deficits allow the Obama administration to be "nonprofit-friendly"? And are the sector's expectations for the incoming administration aligned with reality? Your thoughts...?

-- Mitch Nauffts

ANNOUNCEMENT: Online Directory of Fiscal Sponsorship Launches

January 07, 2009

Most of us know individuals who've had a great idea to benefit their community but couldn't get the idea funded because they didn't have 501(c)(3) tax-exempt status. Fewer of us know that those people are perfect candidates for fiscal sponsorship. Say what?

According to San Francisco attorney Greg Colvin, who literally wrote the book on the subject (Fiscal Sponsorship: 6 Ways to Do It Right):

Fiscal sponsorhip arrangements typically arise when a person or group (we call this a project) wants to get support from a private foundation, a government agency, or tax-deductible donations from individuals or corporate donors. By law or preference, the funding source will make payments only to organizations with 501(c)(3) tax status. So the project looks for a 501(c)(3) sponsor to receive the funds and pass them on to the project....

Recently, the San Francisco Study Center, a community service provider and resource for community organizers, launched Fiscalsponsordirectory.org, an online directory offering detailed information on 139 fiscal sponsors in 26 states, including sponsors' philosophies, fees, eligibility requirements, and a listing of the services they provide. The interface is nice and clean, and the sign-up process for tax-exempt organizations interested in being listed as a sponsor couldn't be easier. Hats off to all involved.

For more information, contact director manager Heidi Swillinger at heidi@studycenter.org.

-- 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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