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24 posts from October 2015

Latino Entrepreneurs: How Philanthropy Can Fuel Small Business

October 15, 2015

Hand-with-FlagsAs National Hispanic Heritage Month comes to a close, it's a good time to recognize and celebrate the critical role that Latino-owned businesses play in the U.S. economy. Consider, for starters, that between 1990 and 2012, the number of Hispanic entrepreneurs in the United States more than tripled, from 577,000 to 2 million (Source: Partnership for a New American Economy).

While significant, however, those gains are modest compared to the growth of white-owned businesses over the same period. What's more, Latino-owned businesses generate less annual revenue than non-Latino small businesses and grow at a slower rate. And, like many small businesses and entrepreneurs, Latino-owned businesses report that access to capital is a major barrier to growth.

That should not come as a surprise. A recent Harvard Business School study (66 pages, PDF) reports that small business loans as a share of total bank loans in 1995 was about 50 percent, compared to only 30 percent in 2012. And a report on minority entrepreneurship by researchers at UC-Berkeley and Wayne State University finds that minority-owned businesses typically encounter higher borrowing costs, receive smaller loan amounts, and see their loan applications rejected more often.

The reasons for such disparities are many, but one thing seems abundantly clear: resolving them is not just a question of social justice; it goes to the heart of American competitiveness in a fast-moving global economy.

On the plus side, there are no shortage of examples of dynamic businesses started — and nurtured — by Latino entrepreneurs who have secured access to affordable loans from lenders who understand their dreams, their businesses, and their challenges.

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Funding the Voter Participation Spectrum

October 13, 2015

The fiercely contested American presidential election of 2000 laid bare the different ways in which voters can be disenfranchised: faulty voting machines, poor ballot design, uncounted ballots, and needless barriers to voter registration, to name a few. And, of course, the winner of the election wasn't determined by ballot but by the U.S. Supreme Court a month after the election itself.

In the decade and a half since, voting rights advocates, funders, and various elected officials have promoted reforms that make it easier to register and cast a ballot. These well-intentioned actors are operating under a classic economic theory: if we lower the costs associated with a transaction (i.e., voting), more people will avail themselves of it. But is it that simple? My research supports the theory — new, more accessible ways to register and vote do indeed have a positive impact on voter participation, but only to a point. And election reform is only one step in a continuum of activities that must take place if voter participation is to increase, especially among current non-voters.

Putting this into action requires a new way of thinking about funding. More than ever, it means we need to think about increasing voter turnout as a coordinated process — with the passage of inclusive, pro-voter reform as just one step in that process, not the ending point. The crucial steps that funders and the organizations they fund must be aware of and integrate into a holistic strategy if they hope to really boost turnout include:

  • Researching the most effective reforms and activities for increasing participation;
  • Educating voters and organizations about why voting is important and how it relates to issues that affect them, the voting process, and the availability of new methods of participation (i.e., early voting) and how to make use of them;
  • Organizing and mobilizing people at the state and local level to actively take advantage of new, more accessible voting options;
  • Pursuing legal strategies to ensure that the right to vote is upheld in every jurisdiction; and
  • Sustaining voter engagement into the future as younger generations reach voting age.

What's more, these steps cannot be treated as discrete activities by those interested in promoting and advancing voting rights, including funders.

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5 Questions for…Judith Rodin, President, Rockefeller Foundation

October 12, 2015

The tenth anniversary of Hurricane Katrina was a poignant reminder of the power of nature and our often ineffective efforts to control and contain it. As we have come to understand more fully in the decade since, Katrina also exposed a number of troubling truths about America that many had chosen to ignore or deny. Growing inequality. The persistence of institutional racism and racist attitudes. The social and economic costs of de-industrialization. The interconnectedness of the built and natural environments.

The New York City-based Rockefeller Foundation was one of the first philanthropic organizations to respond to the devastation caused by Katrina, and within months the foundation had been enlisted by the Louisiana Recovery Authority to assume a leading role in the recovery planning process for New Orleans. Recently, PND caught up with a busy Judith Rodin, Rockefeller's president, to talk about the foundation's role in the recovery process and what it learned from its efforts about urban resilience in an age of climate change.

Philanthropy News Digest: The Rockefeller Foundation was instrumental, post-Katrina, in the formation of the Unified New Orleans Plan. What was the foundation looking to accomplish by supporting the UNOP effort?

Headshot_judith_rodinJudith Rodin: I stepped into the presidency at the Rockefeller Foundation in March 2005, and Hurricane Katrina hit the Gulf Coast in August 2005. Like many others, we responded to the immediate need, in our case funding Enterprise Community Partners and Habitat for Humanity to work on rebuilding the city's devastated housing stock. But then, in early 2006, I got a call from Walter Isaacson, who at the time was co-chair of the Louisiana Recovery Authority and wanted to gauge our interest in restarting the recovery planning process, which, six months after the storm, had stalled. Walter knew that my then-colleague Darren Walker [now president of the Ford Foundation] and I both had experience with collaborative community development efforts involving stressed, often fractious, and impoverished communities. We also knew that without a plan, the bulk of the federally authorized recovery money could not flow to the city. People were desperate, and our board authorized us to jump in. It was the first big test of the approach that would come to define the Rockefeller Foundation as it turned one hundred.

The goal in New Orleans was to use a deeply consultative, inclusive process to create a single unified plan that would go beyond recovery and rebuilding to expand the capacity of local institutions such as the Greater New Orleans Foundation and promote interventions that would build greater resilience in the city and the region.

From day one, we focused on community empowerment. The storm had exposed longstanding issues of race and class that contributed to the city's inadequate response; we wanted to work with all stakeholders — community leaders and elected officials, NGOs and the private sector, and, most importantly, the people who had been displaced, whether they had returned to their neighborhoods or not. Creating a shared vision was crucial if the recovery was to proceed more effectively and New Orleans was to become more resilient and better able to handle whatever the next shock might be, which, as it turned out, was the BP oil spill a few years later.

The funding we provided to support the creation of the Unified New Orleans Plan helped the city recover and rebuild. As New Orleans looks forward, we have been proud to partner with the city on its just released resilience strategy, which includes the city's priorities for long-term resilience building. Supported by 100 Resilient Cities, the global organization we founded to celebrate our centennial in 2013, it is one of the first strategies of its kind and will serve as an example to other cities around the world that are currently developing their own resilience strategies.

PND: If you had known then what you know today, what might the foundation have done differently to respond to Katrina?

JR: While it is tempting to look back and speculate about what everyone could have done differently, I think it is more constructive to look forward. New Orleans has come a long way over the past ten years, but there is obviously still much to do over the next ten.

Moving forward, it will be important to ensure that investments in building resilience benefit everyone in the city. Not everyone has gained equally over the last ten years as things in the city began to improve. Crime and unemployment among black males are still far too high. Resilience planning is being more intentionally designed to respond to and integrate physical infrastructure solutions with economic and social ones. For example, as the city continues rebuilding its water management system, it has done so in a way that responds to the threat of flooding and clears sewage more effectively for conversion into usable water. The new system will better manage water through an improved canal-and-pond system as well as bio-swales and rain gardens, keeping water inside the levees where it belongs. Importantly, this water management project is designed to provide job training and new, good jobs for two hundred and fifty currently unemployed African American men, with many more to come. This type of resilience planning is designed to respond not just to the physical needs of the city but also its social and economic needs. By preparing the city for future shocks, and also creating opportunity today, the city is realizing what we call the "resilience dividend."

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Consortial Leadership to Scale and Sustain Innovation

October 08, 2015

Teagle-Foundation-Tree-IconScaling change. Short- and long-term impact. Indicators of success. Dissemination. Effect. Sustainability.

Foundation officers frequently utter these phrases. In most cases, these words reflect a heartfelt concern for change in the desired area, and, to be sure, big bucks often are put behind such efforts. Still, scaling and sustaining innovation in colleges and universities is challenging work. Consortial leadership can make it easier, yet, as we have found, it is often overlooked and underestimated as a change strategy.

The Teagle Foundation has been making grants to higher education consortia and multi-campus collaboratives for more than a decade now. The strategy rests on the basic premise that "critical friends" — a term that higher education scholar George Kuh uses to describe friends who help you think better and do better work — need to be built into the change process. External evaluations of the foundation's work conducted by leading scholars in the field corroborate the foundation's own finding that collaboration, a core feature of Teagle's grantmaking, pays off in terms of greater change and innovation on campus.

Consider the advantages. Consortial leadership and collaboration help institutions get beyond the "no one is our peer" mindset. The consortial network provides support and a sounding board, creates shared responsibilities among its members, allows for information and knowledge exchange, and provides multiple settings in which practices can be tested. Perhaps one grantee said it best: "Collaboration helped 'foster the baking of half-baked' ideas." Adapting a solution borrowed from elsewhere is often much easier than inventing the solution.

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Why Are We Obsessed With Social Media Fundraising?

October 07, 2015

Social_media-fundraisingWe all have guilty pleasures. Whether it's a favorite show on Bravo, the tabloid magazine we read in the checkout line at the grocery store, or that box of Girl Scouts cookies hidden in a desk drawer, there are certain things we become attached to and will not give up, on pain of death.

In fundraising, many of us share a guilty pleasure: social media fundraising.

We dream about it, discuss it with colleagues, and love reading articles and blog posts about it. Whether it's a platform highlighted in the latest issue of our favorite trade publication or a conference that always has at least one session on the topic, we just can't help ourselves.

Why? Why do we spend so much time obsessing about an activity that, in reality, doesn't generate all that much income – in fact, just 1 percent of total revenue from online donations?

The answer, I suspect, lies in our own use of social media, our often-overzealous boards, and misguided expectations.

You enjoy social media...

...and why shouldn't you? It's a great way to stay in touch with friends and family members, who entertain you with their pictures and videos, share things you like, and keep you informed of their career moves. As long as it's not abused, social media also provides a convenient, low-cost respite from the daily grind.

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To Strengthen Democracy in America, Think Tech

October 06, 2015

A decade-and-a-half into the digital century, the vast majority of large foundations concerned with strengthening American democracy don't seem to get tech. According to the new Foundation Funding for U.S. Democracy tool recently launched by Foundation Center, out of a total of 18,446 grants awarded since 2011 by more than 1,300 funders focused on the broad range of issues and efforts related to democracy, just 962 have been focused on technology.

What's more, that represents only $215 million out of a total of $2.435 billion awarded to study and/or reform campaigns, elections, and voting systems; expand civic participation; research or upgrade government performance; and/or study the workings of the media and improve public access to media. The Foundation Center tool also reveals that the universe of foundations making technology-related grants is much smaller, at 186, than the overall funder pool, as is the recipient base.

Tech_constellations_image

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Up and Coming: An Inside Look at a Next-Generation Experience in Family Philanthropy

October 03, 2015

Hand_money-treeIt was 1:00 a.m. and six college students were crammed into a small hotel bedroom in New York City— but we weren't wrapping up a night on the town. Crouched around computers, we were putting the finishing touches on our first presentation, which would be given to the entire Andrus Family Fund board. The atmosphere was generally light – we were having a blast hanging out with cousins – but we felt the weight of the following day, too. Our presentation would directly impact the allocation of $25,000. We were also proud to be engaged so meaningfully in our family's philanthropy.

AFF was launched fifteen years ago as an offshoot of the Surdna Foundation to engage members of the extended Andrus family in philanthropy. BETs, the Board Experiential Training program, was designed to introduce 18- to 24-year-olds to philanthropy by building awareness of social justice issues for future board members. Both AFF and BETs emphasize "sharing power to build a culture of learning." This sharing manifests itself in the communication that AFF establishes with organizations and communities to ensure that vulnerable populations have a voice. The culture of learning is essential for AFF's and BETs' funding goals, which focus on issues of social justice related to youth involved in foster care and the justice system.

Our training with BETs focused on learning about social justice and its implications for philanthropy and applying that knowledge in a supportive learning-focused environment. Though our BETs cohort was all family, we hailed from five states and many of us had never met. When we'd first connected a year ago in New York, we received an orientation to the program and learned that our task over the following twelve months would be to go through the grantmaking process like board members. Our two facilitators noted that AFF was shifting its language and focus to further incorporate awareness of inequity in the grantmaking process. As a result, our learning about the practical implementation of grantmaking would be grounded in social justice.

Most importantly during that first meeting, we learned about each other. We were all in different phases in college, with a range of majors spanning interior design to chemical engineering, and we all had different hobbies and career aspirations. We were family, yet we had different backgrounds. Moreover, we were tasked with connecting with and funding communities around the country that most of us hadn't personally experienced. It was important to realize our differences early so we could collaborate effectively and eventually make cohesive decisions.

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Most Popular PhilanTopic Posts (September 2015)

October 02, 2015

Although PhilanTopic was on vacation for a couple of weeks, our readers found lots to chew on, content-wise, in September, including new posts by Derrick Feldmann and Claire Axelrad, infographics from Bloomerang and the ALS Association, a timely post by Foundation Center president Brad Smith, and perennially popular posts by nonprofit executive director Susan Danish and fundraising consultant Richard Brewster. As for us? We'll always have Paris....

What have you read, watched, or listened to lately that warmed your baguette? Feel free to it share in the comments section below, or drop us a line at mfn@foundationcenter.org.

Creativity: A New Pillar of Sustainability

October 01, 2015

Sustainability21.980x980Creativity. We hack it. We map it. We study it. We rate it. We take it places. We build industries around it. We invest in it. We recognize we need it, even when it hurts. We know our future depends on it.

This is the first in a series of blog posts which will explore the radical premise that creativity is a key driver of sustainability

We will look at the role creativity plays in strengthening communities and driving change. We will appreciate entrepreneurs using the arts, design, and making to tackle topics like healthy food, climate change, the criminal justice system, and immigration. We will remind ourselves how much research science, technology, and social entrepreneurship have in common.

We will imagine creativity as an investment theme and propose how it may be integrated into impact and mission-related investment portfolios. We will review creativity standards for companies and investment funds seeking to have a positive social and financial impact. We will start the conversation about how to measure creativity's contribution toward our sustainable future.

What Do We Mean By Creativity?

Creativity is the spark. When the spark catches, it catalyzes an expression, an experiment, a "creation." If the spark turns into an invention, an entrepreneur can build an enterprise around it. 

If the invention works and the company is profitable and grows, there can be a wide-spread change – that's innovation. Innovation makes markets.

Business uses the word creativity, too. In fact, the Conference Board reports that creativity ranks among the top five skills that U.S. employers believe to be of increasing importance.

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