Less Hassle and Still Charitable: Why Projects Choose Fiscal Sponsorship

One of the big trends we've noticed in both philanthropy and international development is increasing interest in funding different and new types of organizations. For many foundations, traditional public charities are not their first choice for investment. Instead, they are turning to international networks and partnerships that bring together diverse stakeholders, innovation platforms, funder collaboratives and re-granting funds, social enterprises, and short-term projects with a handful of staff.

As a result of this, we’re seeing many funders and project leaders consider the fiscal sponsorship model, which typically entails a project or small startup being "sponsored" by a larger tax-exempt organization with an aligned mission. The larger organization handles governance, financial management, and administration for the project it has agreed to sponsor, while the project (in many cases) pursues an independent strategy with semi-autonomous staff and its own advisors.

Since the Transparency and Accountability Initiative (TAI) transitioned to a U.S.-based fiscal sponsor in 2016, we have been repeatedly asked for advice by both project leaders and program officers. We’ve also watched as the fiscal sponsorship sector has grown. In the international development field, we’re even seeing the demand for fiscal sponsorship expand to other countries, most of which do not have legal frameworks in place to accommodate such a model.

Here in the U.S., the law currently supports a variety of models. In the model used by TAI, the sponsoring organization assumes responsibility for all tax filings, financial reporting, and legal compliance, including ensuring the charitable mission and activities of the project it is sponsoring. Typically the project is expected to contribute to the sponsoring organization’s overhead, abide by its policies, and report to its management and board. The exact terms of the arrangement usually are spelled out in a memorandum of understanding (MOU). The MOU often allows the project or startup to have its own steering committee to direct its strategy.

We are frequently asked about fiscal sponsorship and wanted to share some of the things you should consider before taking the plunge. (Nonprofit leaders may also want to consider how some of these factors are shaping organizational structures in their own fields.) Based on our own experience and what we’ve heard again and again from other projects that have gone this route, below are the top factors in deciding whether to pursue a fiscal sponsorship arrangement:

• Time spent on administration. Many projects choose fiscal sponsorship out of a simple desire to focus on programming rather than governance issues or the nitty-gritty of administration (procurement, financial reporting, human resources, etc.).
• A need to be nimble and/or drive short-term impact. Fiscal sponsorship is an option for activities like art exhibitions and disaster relief efforts, both of which require flexibility and are often short-term in nature.
• Getting value from economies of scale. Overhead is always a consideration, and many projects worry that setting up their own formal organization will be too expensive and/or duplicative of other’s efforts.
• Leveraging synergies. In best-case situations, hosted projects and their sponsors learn from each other’s activities and share networking opportunities, funding information, and strategic insight.
• Balancing the interests of founders, funders, and stakeholders. Many networks and donor collaboratives choose fiscal sponsorship because member organizations are concerned about the hosting organization prioritizing its own issues and fundraising above the network’s needs.
• Qualifying for tax-exempt donations sooner rather than later. When done properly, fiscal sponsorship enables a project or startup to receive tax-exempt donations (based on the public charity status of its sponsor) more quickly than if it had decided to set itself up as a 501(c)(3).

Fiscal sponsorship is not for everyone. The San Francisco Bar Association has a nice list of trade-offs, including loss of formal control,  branding issues, potential costs, and the difficulty of disentangling oneself from such an arrangement at a later date. Let us add here that a lawyer should be consulted on many of these issues.

We also don't want to see social sector leaders be daunted by the prospect of creating a new nonprofit entity. Nathaniel Heller is among those who have argued that too many projects and startups avoid the initial work of creating an independent nonprofit organization. There are also other options for structuring certain types of projects and networks (e.g., decentralizing work across members of a network).

Before diving into all the different models out there, project leads and their supporters will want to explore what it is they need and want. In TAI's case, we scoped out and prioritized the needs of the collaborative, including issues related to governance, administration, financial management, and human resources. We recommend others do the same: nailing down what it is you really want to accomplish and what you need to do it is invaluable information for key stakeholders as they consider the options available. It also will help if fiscal sponsorship is the model you decide on, as most sponsors will be eager to know more about your needs with respect to financial reporting, vendor management, hiring, and so on.

Funders are already embracing the fiscal sponsorship model. What are the implications for the nonprofit sector long term? If more projects are fiscally-sponsored, what might that mean for more traditional nongovernmental organizations (NGOs)? From where we sit, it seems that a growing number of NGOs are trying to capture the spirit of fiscal sponsorship with initiatives of their own, especially international NGOs, where the demand for fiscal sponsors who can hire international staff is great.

For their part, nonprofit leaders need to be aware of this trend and consider its relevance for their organizations. A growth industry often generates disruptive ripple effects. Pay attention to how new pilots, startups, networks, and collaborations in your issue area are being structured and how those changes might be shifting donor expectations. Are there ways to take advantage of these changes by offering sponsorship opportunities to others? Is there an opportunity to take advantage of the expertise and experience of another organization to incubate a new idea, spin out a project that has gained some traction but needs more support to generate impact, or create something with a fixed timeline? Maybe you’re just tired of the never-ending struggle to pay the rent and keep the lights on and are ready to let someone else worry about fundraising while you devote yourself to the cause or mission. If any those sound familiar, then fiscal sponsorship is a model you may want to consider.

Michael Jarvis is executive director of the Transparency and Accountability Initiative, a global funders collaborative committed to building a more just, equitable, and inclusive society. Jenny Lah is an independent consultant who specializes in strategy, research, and organizational development, mainly in the international development sector. She has consulted with TAI as well as several other international networks on fiscal sponsorship and governance issues. Please note: the material above has not been reviewed by a lawyer. Organizations considering becoming or using a fiscal sponsor should get advice from an attorney with experience in nonprofit law.

Pediatricians Say Racism Is Devastating to Black Children — Let's Get to the Root Cause

It's amazing how often the news media give big play to an academic report that tells us something black mothers already knew. Another example of the truism that nothing is considered real until white people discover or acknowledge it. Does that seem harsh? Consider the splashy coverage given to a recent policy statement from the American Academy of Pediatrics titled The Impact of Racism on Child and Adolescent Health (16 pages, PDF).

AAP's statement warns that the health dangers posed to children by racism "have become acute" and that racism, including racism experienced by the mother, "can have devastating long-term effects on children's health." It's received plenty of favorable news coverage.

But with all due respect, every black mother in America has known this for as long as there have been black mothers in America. And we didn't need an academic statement to tell us. Every precious baby to whom we have given birth over the course of the last four hundred years has come into a world that profoundly devalues black life.

What may be new to us is the devastating detail contained in the report: "The stress generated by experiences of racism may start through maternal exposures while in utero and continue after birth with the potential to create toxic stress. This transforms how the brain and body respond to stress, resulting in short- and long-term health impacts on achievement and mental and physical health. We see the manifestations of this stress as preterm births and low birth weights in newborns to subsequent development of heart disease, diabetes and depression as children become adults."

This should set off alarm bells across the black community, particularly among black mothers.

We urgently need to find a way to protect the health and well-being of our children in light of this deepening health crisis, the recent mass shootings in which children were among the victims, and the resurgence of white supremacy.

Let's begin with AAP's entirely accurate description of racism as "a socially transmitted disease passed down through generations leading to the inequities observed in our population today."

Exactly right. Here in the United States and around the world, black children are seen as "less than" — less beautiful, less lovable, less capable, less intelligent, less worthy, less valuable.

AAP has made a range of reasonable recommendations using the usual language from our culture's standard dictionary on racism, including "racial equality," "racial equity," "institutional structures," and "implicit and explicit biases." They point to the need for strategies to "optimize clinical care, workforce development, professional education, systems engagement and research in a manner designed to reduce the health effects of structural, personally mediated, and internalized racism, and improve the health and well-being of all children."

These are all good ideas, but we've heard some version of them before.

What's missing is a diagnosis and a cure that get to the root of the problem.

So, what can we, black people, do to open the door to fresh recommendations that will yield something new and much better for our children? We can pinpoint the root cause of all the harms AAP describes. It is the myth of black inferiority.

That myth — or as I prefer to call it, the lie — of black inferiority, was devised centuries ago to justify the enslavement of African people. It dehumanized black people and placed us and our children at the bottom rung of humanity.

Do you wonder why, with all the constitutional amendments and legislation and court decisions aimed at promoting racial equality, the same problems persist — and seem to be getting worse? It's because the lie continues to negatively affect the world's perceptions of black children and black children's perceptions of themselves.

The lie is at the root of the glaring disparities between black and white children in health, safety, education, employment, wealth, mass incarceration, and nearly every other area of life. It is the reason why our children's lives are devalued. It is the reason why doing anything while black can be dangerous, even deadly.

The lie of black inferiority is at the root of countless lost dreams, lost hopes, and lost lives. As a black mother, I say that unless we, black people, insist that pediatricians and anyone else concerned about the well-being of black children have the insight and courage to name and aggressively address that root cause, our children will continue to pay the price.

Enola Aird, Esq., is founder and president of the Community Healing Network, a not-for-profit organization based in New Haven, Connecticut. Since its founding in 2006, CHN’s primary mission has been to actively address the psychological damage that people of African ancestry have suffered because of the centuries-old "lie" that black people are inferior. In collaboration with the Association of Black Psychologists, it currently is leading a global movement to train thousands of Emotional Emancipation (EE) Circle support group leaders across the diaspora to heal the wounds of racism and create a new culture of emotional healing, wellness, and empowerment in black communities.

Ten Years of Millennial Research: What I’d Do Differently

It's finally here — the final Millennial Impact Report, the culmination of a decade of research conducted by the Case Foundation and research teams I led into cause behaviors of the generation born between 1980 and 2000.

Any project of that magnitude — we interviewed more than 150,000 millennials, held hours and hours of focus groups, compiled and analyzed reams of data, and wrote volumes of narrative — begs the question: Would we do it all over again?

Absolutely — albeit with some tweaks based on what we've learned.

When we launched the project in 2008 — and over most of the next ten years — making assumptions about millennials seemed to be a favorite pastime of many of the people we interviewed or spoke to. We heard that millennials were lazy and more entitled than any  generation before them. They believed they deserved big salaries right out of college, and when reality hit they moved into their parents’ basement (still the most enduring cliché about young Americans in this age group).

Put it all together and you got the biggest assumption of all: there was no way millennials would want to get actively involved in causes.

When we set out to learn about millennials, it wasn't to prove (or disprove) our own assumptions; it was to better understand their real motivations and behaviors. So we designed the research process to be an ongoing journey of discovery. I wouldn't change a thing about that.

But in looking back at our journey, there are some things I wish we had explored further:

We ignored stereotypes — but did we miss part of the picture? Although we all were aware of the often superficial things said and published about millennials (how could we not be?), and maybe disagreed (or agreed) with some of it, we did our best to ignore the most egregious assumptions and clichés. While the data we collected disproved most of those stereotypes, we know millennials heard and were paying attention to them; in fact, they often were repeated  back to us in surveys and focus groups when we asked millennials how they thought others perceived them. Looking back at some of those sessions, I can't help but wonder whether and how much millennial stereotypes actually helped influence millennials' approach to causes and cause-related work.

Here's an example: we discovered that many survey respondents and focus group participants believed millennials were careful to discuss issues and causes only with close friends and,  concerned that doing so could lead to tense conversations or nasty disagreements, were reluctant to share their opinions about such things with family or colleagues. Was that actual behavior they had observed, or were they simply recycling the stereotype of millennials as conflict-averse? And to what extent were non-millennials' perception of millennials influenced by exposure to such stereotypes? Today I not only wonder how much generational dynamics influenced the responses we collected, but how they might have affected the willingness of survey respondents and focus group participants to share their views — or "hear" the viewpoints of others.

We didn't examine how generations influence each other — and they do. We looked at what was happening in the moment and not necessarily how generations had influenced each other to arrive at that moment. The reality, of course, is that every generation is affected by and affects other generations.

Boomers, for example, didn't one day decide that they needed to work crazy hours to get ahead; they grew up with parents and grandparents who themselves had grown up during the Depression and imbibed that earlier generation's work ethic.

Gen X, labeled cynical and unfocused at first by parents and older siblings who didn't understand them, grew up and became entrepreneurs and passionate volunteers committed to more causes than any generation before them.

It shouldn't come as a surprise, therefore, that millennials were slapped with unflattering labels right out of the gate by career-focused boomers and entrepreneurial Xers. Members of both of those generations worked hard for their successes — even as they created new work cultures and ideas about work-life balance that millennials took advantage of.

We tracked behaviors — but didn't track who and what was influencing those behaviors. Nearly everyone possesses a certain degree of empathy, the very human impulse to help others. Whether we suppress this impulse or act on it often is a function of other aspects of — and people in — our lives. Over the ten years of the project, we inquired and tracked many cause-related behaviors, but we could have delved more deeply into the influences — or absence thereof — that drove them.

If we are to create real, meaningful social change, it is important we understand the influences that shape (and challenge) our actions and engagement. That's why the research we're involved in now, Cause and Social Influence, is looking beyond individual behavior into the who, what, how, and why of influence. I look forward to sharing our findings in October!

In truth, no generation has ever lived up to the initial public persona foisted on it by previous generations, and generations being critical of each other is nothing new. Expressions like "In my day, we had to [fill in the blank]" or "We were lucky to [fill in the blank]" will always be part of the inter-generational conversation because…well, that's just human nature.

But thanks to the research we've been doing, we are beginning to understand that these generational generalizations are detrimental to the conversations we need to have if we are to advance the kind of change we all want to see. Millennials were never too lazy or self-centered to be politically aware and active, to volunteer for and give to causes, or to passionately want to create change that helps others live healthier, happier, and more fulfilling lives. And now, as they enter the most productive years of their lives, we can only begin to imagine what that change will look like. I, for one, can't wait to find out.

I encourage you to download the final Millennial Impact Report, Understanding How Millennials Engage With Causes and Social Issues: Insights From 10 Years of Research Working in Partnership With Young Americans on Causes Today and in the Future. And to stay abreast of our new research on influences, follow us at causeandsocialinfluence and @causeinfluence.

Derrick Feldmann (@derrickfeldmann) is the author of Social Movements for Good: How Companies and Causes Create Viral Change, the founder of the Millennial Impact Project, and lead researcher at Cause and Social Influence.

A Tale of Two Donations

Earlier this year, I made a $15 donation to a small nonprofit and also pledged a planned gift, potentially worth six figures, to a huge charity. Guess which organization did a better job of followup?

Prompted by one of those "Thanks to a generous donor, all donations made TODAY will be matched!" appeals, I made the $15 donation online. As with most online donations, within minutes of pressing the "Donate" button I received an acknowledgment of my support.

But what was truly astonishing was what happened over the next two weeks: not only did I receive a written thank-you personally signed by the executive director by regular mail, I also received a phone call from a staffer thanking me for my generosity.

The potential six-figure planned gift was made in person, in the charity's office. I was there for a meeting and learned by happenstance that every time the organization was mentioned in a will or named as a beneficiary of a retirement fund, an anonymous donor would make a substantial gift to the group. I had long admired the charity's work, had made numerous gifts in support of its efforts in the past, and years ago had designated a percentage of my retirement account, upon my death, to its cause. With pleasure, I signed the pledge card, knowing that my potential future gift would also have an immediate impact on the organization's bottom line. I was thanked in person for my gift and was told I'd be invited to an event for those who had committed to making similar gifts.

Months have passed since that day and I have yet to receive a written thank-you note — either via email or regular mail — for my pledge, nor any formal welcome to the organization's planned-giving society. No one has asked me to document the pledge or share the name of the investment company that manages my retirement fund. I have received no communiqués spelling out how my future gift will make a difference. Nor, for that matter, have I received any information about a donor event.

The organization that received my modest $15 donation raises less than $2 million annually, has a small staff, and, according to its financial filings, depends on the generosity of about a dozen individuals for approximately half of its funding. Given its size and relatively narrow donor base, one could argue that it needs to enthusiastically steward all donors and supporters who come its way.

By contrast, the second charity is many times larger, in both budget and staff headcount, and has an experienced, professional development office — which makes it all the more puzzling that the organization has made no effort to date to acknowledge my planned gift. After all, if the donor of such a gift does not feel valued and appreciated, there's nothing to prevent him or her from changing the named beneficiary of the gift.

To be clear: I am still committed to the mission of the second charity, and my primary motivation for making my pledge was to ensure its good work continues after I am gone — not because I need someone to say "thank you."

But in the ever-crowded marketplace for philanthropic dollars, a charity cannot assume that others will feel the same way.

According to Giving USA 2019: The Annual Report on Philanthropy for the Year 2018, there are at least two emerging trends that should worry leaders in the nonprofit sector: 1) the 1.6 percent year-over-year increase in dollars donated by individuals in 2018 was almost entirely driven by gifts of $1,000 or more, even as the number of people who gave fell by 4.5 percent and the number of new donors fell by a worrisome 7.3 percent; and 2) the nearly $40 billion total in charitable bequests in 2018 was essentially unchanged from the 2017 total (and down 2.3 percent in inflation-adjusted dollars) — despite rising mortality rates among the Silent Generation (those born before 1946) and the oldest boomers (those born after 1946).

Put simply, the data suggests that charities which ignore both ends of the giving spectrum — new, lower-level donors who might one day become bigger donors, as well as those who care enough about a cause or organization to include it in their estate plans — do so at their own peril.

My small charity of choice knows what means to have a donor-centric culture. As for the larger one, the jury is still out.       

Ellen Flax (www.ellenflax.com) served as the director of a public foundation and as a program officer and consultant at several large family foundations and now works as a philanthropy consultant.

Family Funders: Always Important in Rural Communities

The history of the United States is a history of wealth created in rural America: timber and wood products in the Northwest and Northeast; fossil fuels in Appalachia, the Southwest and Rocky Mountain region; textiles in the South. Related philanthropic funds have been created alongside these industries — often in the form of multi-generational family commitments to rural communities. With the renewed focus today on the challenges and opportunities confronting rural America, it’s a good time to take a look at how rural philanthropy fits into the philanthropic field as a whole, as well as at how the evolving field of rural philanthropy is helping to support more and better philanthropic investments in rural communities.

One narrative about rural philanthropy holds that rural America has received far fewer philanthropic dollars over the years on a proportional basis. This is true. The best data we have indicates that rural philanthropic investment comprises just 7 percent of  total private foundation grantmaking, while rural America accounts for 20 percent of the U.S. population — and 90 percent of the land! An equally compelling narrative, however, is that rural-serving foundations — often family-governed — are a strong and consistent factor in helping rural communities face the future with a sense of optimism. Over the years, family foundations like the Blandin Foundation in Minnesota, the Ford Family Foundation in Oregon, the LOR Foundation in Wyoming, the Orton Family Foundation in Vermont, and the T.L.L. Temple Foundation in Texas have made long-term commitments to rural community success.

A question I’m often asked is: How does rural philanthropy differ from urban foundation work? The answer lies in both tactics and cultural context. Much urban philanthropy is focused on the development and implementation of large-scale best-practice models around specific issues — health, education, early childhood development, and so on. Grants are made to large staffed nonprofits with the aim of reaching thousands (if not tens of thousands) of constituents, and funders often dictate the specifics of the intervention and the outcomes. In effect, the funder is contracting for results.

The best rural philanthropic work operates differently. The emphasis is on place, not on a specific issue or intervention. It’s an approach that reflects how people live and work in rural communities — often wearing multiple hats (teacher, pastor, coach,  civic committee chairperson) concurrently. There may not be a large, well-oiled, local nonprofit to serve as the primary recipient of the grant. Instead, funders typically look to alternative anchor institution such as libraries, community colleges, or parks and recreation departments to administer the grant and work closely with smaller nonprofits that can do the job but may need extra support in order to expand their services and impact. The scale of the work is also different. But while the numbers might be smaller, the opportunity to do transformational work is significant.

Increasingly, equity is a part of many urban funders’ mission and funding strategies. While it is defined differently depending on the issue and outcomes, it always involves long-term disparities in access and opportunity for historically marginalized people. Many rural communities also struggle with divisions around race and ethnicity, and newer versions of these divisions have come into play with the arrival of new immigrants across rural America. The best rural philanthropic work recognizes and works to create equity around opportunity. This might entail broadening the voices that are heard in a rural community, bridging divides around broadband and health care, or opening up access to higher education for those previously shut out.

At the same time, rural communities can be dominated by close-knit leadership structures that leave lots of people on the outside looking in. Because of its historic roots in many of these communities, family philanthropy often is in the best position to promote and support inclusion and ensure the future viability and success of these communities.

One new philanthropic player in many rural communities is the healthcare conversion foundation. Created from the sale of nonprofit healthcare assets to for-profit providers, there are now more than three hundred and fifty of these foundations nationally, and many of them are rural-based or have a large rural footprint mirroring the service area of the original nonprofit. The opportunity for long-term rural-serving family foundations to collaborate and leverage their efforts with these newer conversion foundations is an underappreciated and -developed part of the rural philanthropic landscape. In the best circumstances, deeply rooted family funders can serve as mentors and connectors for the conversion foundations as they get the lay of the land while helping to diffuse the confusion and anxiety that often results from a large influx of new philanthropic capital into small and often underresourced communities.

Family philanthropy was present in rural America long before there was ever a "field" of philanthropy. Going back to the nineteenth century, families that prospered in America gave back by building schools, hospitals, and libraries. With that history to draw on, and with the technologies and philanthropic expertise developed over the last quarter-century at their fingertips, today's family foundations have a golden opportunity to support the kind of long-term systems change needed for rural communities to thrive. Fortuntaely, there are many willing thought and funding partners out there eager to be part of their efforts.

PhilanthropywoRx founder Allen Smart is a national spokesperson and advocate for improving rural philanthropic practice. A former interim president, vice president of programs, and director of the Health Care Division at the Kate B. Reynolds Charitable Trust, Smart recently served as project director for a national rural philanthropic project partially supported by the Robert Wood Johnson Foundation and based at Campbell University in Buies Creek, North Carolina. He also regularly consults with regional and national foundations on rural and philanthropic strategy. A version of this post originally appeared on the National Center for Family Philanthropy site.

Helping California Students Access College Financial Aid

As underserved communities continue to struggle, philanthropy is stepping up to ensure that nonprofits serving those communities are able to apply for and receive the support they so desperately need.

The Spark Grant program, a new initiative of the Michelson 20MM Foundation, aims to disrupt the slow and often opaque traditional foundation grant application process. The program gives organizations aligned with Michelson's mission a quick and easy way to apply for grants of up to $25,000. Unlike with a traditional grant, applicants to the Spark Grant program receive a decision on their proposals in just fifteen business days. The rapid turnaround makes Spark Grants particularly well suited to project-based initiatives designed to increase the number of underserved learners enrolled in postsecondary opportunities or help students earn a college or vocational credential that positions them for a well-paying job.

College Affordability

Michelson 20MM is passionate about making higher education more affordable for more people, particularly in this moment, when postsecondary education has never been more critical — or more expensive.

According to Sarah Goldrick-Rab, a professor of sociology at Temple University in Philadelphia, the rising cost of higher education puts college out of reach for many, if not most, students without some form of financial aid.

"The real price of attending college is higher than what colleges care to admit," says Goldrick-Rab. "The solution is making public colleges and universities accessible to everyone, like we do for high school, and operating under the assumption that everyone needs financial help."

In order to secure the financial aid they need, however, students must fill out the Free Application for Federal Student Aid (FAFSA) — the tool used by the federal government to determine financial aid eligibility. Unfortunately, many students have never heard of FAFSA or, if they have, are not successful in filling it out, which often results in them receiving either no aid or far less than they should. (It's also common for students who received aid for their first year of school not to re-apply through FAFSA in subsequent years.)

Enter Education Trust-West

Education Trust˗West is one of the first recipients of a Michelson 20MM Spark Grant. Founded in 2001 to address educational disparities experienced by low-income students and students of color in California, the organization works to ensure that students from underserved populations have access to a high-quality education while closing the opportunity gap between those students and their white middle-class peers.

"In the past two years in California, nearly a half million high school seniors didn't complete a financial aid application," says Tyler Wu, a higher education policy analyst at the organization.

The issue was elevated a year ago with the passage of California Assembly Bill 2015, which goes into effect in time for the 2020-21 school year. AB-2015 requires that every high school in California provide information to students about financial aid applications at least once before they enter twelfth grade — a step that has proved to increase financial aid completion rates. With the passage of AB-2105, says Wu, there is an urgent need for tools and resources that ensure the implementation of the law in ways that maximize educational equity for low-income students and students of color.

Education Trust˗West will use its $25,000 Spark Grant to fund the development of a California Digital Financial Aid Awareness Toolkit — a set of resources designed to improve awareness and understanding of FAFSA among high school and district administrators, counselors, and teachers and ensure that low-income students and students of color fill out the application successfully.

"Our goal is to get these resources in the hands of more educators around the state," says Wu, adding that the project will enable Education Trust˗West staff to meet with local and community educators and walk them through the toolkit, with the goal of boosting application rates statewide and putting more low-income students and students of color in a position to apply for the financial aid they need to go to college or vocational school.

The second round of the Spark Grant program opened for applications on August 5. Do you have an innovative education project that could benefit from an expedited grant? We’d love to hear from you.

Mayra Lombera is director of strategic initiatives at the Michelson 20MM Foundation.

Building the Community We'd Like to See

President Trump recently made disparaging remarks about Baltimore that made headlines across the country. His comments stoked anger and outrage. He tarred Baltimore with a broad and reckless brush without offering even a token gesture of support from his administration.

This president has learned it is easy to throw stones. He hasn't learned how to pick up stones and build. Instead of tearing us down, Baltimore needs leaders at the state and federal levels who are committed to building.

Like many American cities, Baltimore struggles with the long-term consequences of disinvestment and segregation: aging infrastructure, dwindling resources, and too few opportunities for young people.

And so our city celebrated the creation of the historic Baltimore Children and Youth Fund as a beacon of hope and possibility, and as a commitment to the city's most important resource for the future: our young people.

BCYF was launched in 2015 by Mayor Bernard C. "Jack" Young, who was then the president of the Baltimore City Council. The fund was approved by voters in November 2016 with more than 80 percent support. The non-lapsing fund is supported through an annual set aside of property tax revenue.

Baltimore is only the third city in the nation to create such a fund, and it is the only fund of its kind that has included a racial equity and community participatory lens in grant selections. You will not find this sort of program anywhere in the country.

Why does this matter?

When Freddie Gray died in 2015, many of us came to realize that our institutions, including public and private, weren't setting young people up for success. While a host of needed reforms were launched to address community and law enforcement relationships, a glaring question remained: How do we show our young people we are willing to invest in their future and provide entry points to help them find opportunity and long-term success?

BCYF is an important step forward in answering that question.

Community leaders agree. With less than $11 million available, the fund received $75 million in grant requests through nearly five hundred grant applications.

In its first year, BCYF granted $10.8 million in funding to eighty-four organizations. The grantees were a mix of small organizations and established nonprofits working on everything from mindfulness and mediation to financial literacy. Notably, 63 percent of the organizations funded in the first year were African American-led.

In what city does this happen? It's happening in our city. It's happening in Baltimore.

Too often when community leaders gather to outline solutions to various problems, they fail to include directly impacted people. Not this time. The fiscal steward Associated Black Charities and a team of professionals offered over three thousand hours of help to grantees who may have been new to the funder-grantee relationship or in need of added capacity to ensure maximum impact.

Before BCYF ever issued grants, they held community design sessions, technical assistance workshops, and trainings to ensure the community was prepared to complete the grant application and access resources. As a professional grantmaker with an extensive career in philanthropy, I know that this level of engagement between a funder and the community is rare.

For our president, spewing insults has become the standard response to criticism. He seems to want to drive us apart.

But in Baltimore, we know we can only succeed if we all move forward together. Just as a relay race involves multiple runners, sustained support for children, youth, and young adults requires multiple partners at the local, state, and federal levels.

The Baltimore Children and Youth Fund is a groundbreaking start. Let's build on it, and programs like it, to shape the future we'd like to see for our city.

Patrick McCarthy, PhD, retired in December as president and CEO of the Annie E. Casey Foundation, a position he held for nine years.

Most Popular PhilanTopic Posts (July 2019)

It's August, and here on the East Coast the living is...steamy. Not to worry. Our most popular posts from July will cool you down and make you smarter....

• Stop Differentiating Between Program and Administrative Support (Jessica Johansen)
• Women's Movements Hold the Key to Gender Equality — So Why Aren't Donors Funding Them? (Françoise Girard)
• 12 Tips for Filling Out/Submitting Online Applications (Allison Shirk)
• Candid Deepens Commitment to Communities (Zohra Zori)
• Open Educational Resources: A Viable Alternative in a Changing Landscape (Ryan Erickson-Kulas)
• Eight International Philanthropists to Watch (Nick Scott)
• An Engaged Board Is a Fundraising Machine (Jeb Banner)
• Three Shifts Philanthropy Needs to Make to Better Design and Evaluate Social Change (Srikanth Gopal)
• Changing the Way Candid Serves You (Zohra Zori)

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Black Wealth 2020 Adds HBCUs to Its Economic Empowerment Agenda

The short-term economic impact of historically black colleges and universities (HBCUs) is $15 billion — rivaling that of corporations such as Bank of America and its more than 177,000 employees.

 

Yet according to the U. S. Department of Education, approximately 60 percent of all black college students have no expectation of a family financial contribution to their education. That's far lower than that for whites, for whom the number is approximately 30 percent. And it's approximately 48 percent for Latinos and 38 percent for Asians.

 

The economic impact of HBCUs, their struggle to stay afloat, and the dire financial disparities faced by HBCU students are the reasons that Black Wealth 2020, a catalyst for black economic equality, recently decided to add HBCUs as a forth leg to its three-pronged approach to growing black wealth (the others are black-owned businesses, black banks, and black homeownership).

 

"We've got to keep on pushing this agenda. And hooking up with HBCUs is a big way of doing that," said Michael Grant, former president of the National Bankers Association and a founder of Black Wealth 2020 in a meeting just before the principals voted unanimously to acknowledge HBCUs as being "central to strengthening the American economy."

 

"If we're serious about building black wealth," Grant added, "how can we not have a focus on our youth and the next generation?"

 

The expansion of the organization's vision was inspired, in part, by a presentation by Dr. Lezli Baskerville, president/CEO of the National Association for Equal Opportunity in Higher Education and a principal of Black Wealth 2020.

 

"But for HBCUs, there would be no African-American middle class today. And that's a documented fact," Baskerville told the group. "Just the existence of HBCUs in our communities — even the ones that are not thriving — ends up collectively generating about $15 billion in short-term economic benefit. And that doesn't include anything other than what the institutions and their employees and students spend in surrounding communities."

 

Robert Smith's Morehouse initiative challenges black community on its support for HBCUs

 

In an initial move to encourage support for HBCUs, Black Wealth 2020 principals have also sent a thank-you letter to billionaire businessman Robert Smith, chairman/CEO of Vista Equity Partners, who touched hearts across the nation when he announced he would pay off the student loans of the Morehouse College class of 2019.

 

The letter applauded Smith, saying, "With student debt nationally at over $1.4 trillion and with the average college student leaving school $30,000 in debt, your gift not only relieved an enormous financial burden from...Morehouse [students] and their parents, you have challenged all African-Americans of means to think bigger about how to use their wealth to improve the lives of others within our race."

 

Members and supporters of the Black Wealth 2020 coalition include the National Association of Black-Owned Broadcasters; the U. S. Black Chambers, Inc.; Delta Sigma Theta Sorority; the National Bankers Association; the Collective Empowerment Group; the National Association of Real Estate Brokers; the National Black Caucus of State Legislators; the National Urban League's Marc Morial; the National Association for Equal Opportunity; Rep. Maxine Waters (D-CA); former Small Business Aadministration deputy administrator Marie Johns; John Rogers, CEO of Ariel Investments; Andy Ingraham, CEO of the National Association of Black Hotel Owners, Operators and Developers; and Marcia Griffin, CEO of HomeFree-USA.

 

"We thought it fitting that a coalition committed to building wealth should take the opportunity to acknowledge and praise your commitment to uplifting our people," the letter to Smith said in closing.

 

HBCUs struggle for funding — to the detriment of the nation

 

In her presentation to Black Wealth 2020 on the state of HBCUs, Baskerville made the case that student loan debt is inevitable for students whose families cannot help them pay for college. But, she noted, financial issues also hinder even good students from making it through college.

 

Baskerville drew heavily from a report compiled by economist Bill Spriggs, who has argued that HBCUs are the key to diversifying the tech industry, currently among the top-paying industries in the United States.

 

"In the pipeline of people who generate wealth in the African ancestry community, there is not today a challenge in terms of blacks getting into college," said Baskerville. "[Spriggs'] data shows that there is no disparity in the percentages of African-Americans from high-needs areas and whites that are enrolling in college. The gap happens after they get in. It's not that they're not prepared and could not thrive, given the opportunity; it's that once they get in, they don't have the dollars."

 

Among other facts Baskerville cited from the Spriggs report:

• Despite the financial challenges faced by many institutions and the students themselves, HBCUs are performing above average and do very well in moving students from low-income families into the top 20 percent of income distribution.
• Many non-HBCU universities now have more students from the top 1 percent than from the bottom 40 percent.
• With a declining number of white students in the general population and a growing share of low-income students, HBCUs are an underresourced asset for the U.S. economy.

According to the U.S. Department of Education, there are currently a hundred and seven HBCUs operating in the United States. All  struggle with funding.

 

HBCUs Punching Above Their Weight (36 pages, PDF),  a recent report from the United Negro College Fund, the premier fundraising organization for HBCUs, says that despite their difficulties, HBCUs are still succeeding beyond expectations.

 

"Given their small average size and a history of being underresourced, the enrollment, degree and economic impacts of HBCUs on African Americans in their respective states are significantly greater than one would expect," the report states.

 

Principals of Black Wealth 2020 have vowed to push for the growth of HBCUs as part of their respective agendas and encourage other major organizations and the general public to join them.

 

"It means that for nearly a hundred and fifty years, we've had institutions of higher learning that have produced some of the best and brightest African Americans, and we still recognize the benefits that accrued to the African-American community because of historically black colleges and universities," said the Rev. Dr. Jonathan Weaver, a Black Wealth 2020 principal who represents the Collective Empowerment Group, an economic initiative involving approximately eight hundred black churches. "It's only fitting that Black Wealth 2020 would have a relationship through which we can find ways to collaborate and partner to create even greater synergy within the African-American community with historically black colleges and universities."

 

Hazel Trice Edney is the president/CEO of Trice Edney Communications and a former editor-in-chief of the NNPA News Service.