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4 posts from June 2021

It's time to build a better behavioral health system

June 10, 2021

Mental_healthOur nation's collective mental health has been severely challenged since the start of the COVID-19 pandemic.

Now, as we begin to envision our post-pandemic future, it's important to take a step back and recognize that our behavioral health system needed improvements even before COVID-19, and that it's time for philanthropy to consider taking new approaches to funding and advocating in this area.

For more than a year, the isolation caused by the social and physical distancing necessitated by the pandemic and the ongoing stress created by the disruptions to our daily routines have impacted all of us — and those conditions have led to a massive spike in mental health issues. According to the Kaiser Family Foundation, an astonishing 41.1 percent of adults reported symptoms of anxiety disorder and/or depressive disorder in a January 2021 survey, nearly four times the average seen between January and June of 2019.

The toll has been especially heavy for our most vulnerable neighbors. Isolation has had a tremendous negative impact on the elderly and the young, while the daily stress of living through the pandemic has been especially intense for people of color, families living below the poverty line, the precariously housed, individuals with pre-existing physical or behavioral health problems, and single parents.

Foundations nationwide have recognized these risks and rallied to provide emergency funding to help support many of the urgent mental health needs created by COVID-19. The New York Community Trust (NYCT) — the community foundation where I oversee grantmaking in the areas of health, behavioral health, and biomedical research — has funded efforts to provide mental health counseling to frontline workers and technology to enable mental healthcare providers to connect with patients virtually and ensure that hard-to-reach populations receive the services they need.

These rapid-response efforts were, and remain, critical as we attempt to address the mental health crisis created by COVID-19. But we must now recognize that our system, as currently designed, is not built to accommodate the great need that already existed before the pandemic.

Prior to COVID-19, our systems for delivering mental health care were failing to help the majority of those in need of such support. In 2019, an estimated 51.5 million U.S. adults experienced a mental illness — roughly one in five people over the age of 18 — yet only 44.8 percent received mental health services.

This massive gap is largely the result of our healthcare system's lack of capacity to serve those who need help. Compounding the problem is the fact that even if there were enough trained providers to meet the need, many Americans do not have the means to afford it.

The human and economic cost of this failure is substantial. Each person with an untreated mental illness is a person who struggles to maintain steady employment and help support their family. Our criminal justice system is stretched beyond its limits, in large part because of the extraordinary number of incidents involving individuals who are experiencing behavioral health crises — the very challenges that also prevent millions of Americans from taking care of their physical health.

Imagine if we could rebuild our behavioral health system so it provided the ongoing care that's so clearly needed. Not only would we help those 51.5 million Americans with their mental health, we would create a better workforce, strengthen families, lessen the strain on our police departments and courts, incarcerate fewer people, reduce the number of people experiencing chronic physical health conditions, and increase lifespans. In other words, by putting a focus on mental health, we would be taking a critical step in addressing myriad social issues — and equipping our nation for a healthier and more prosperous future.

Yet for decades, despite our support for well-meaning interventions, both philanthropy and government have fallen short in addressing America's mental health crisis. Instead of improving mental healthcare systems, we've mostly invested in programs that address urgent needs and those in crisis — certainly an important aspect of care, but not the only one.

It's time to take a new approach. Philanthropy and government have an opportunity to join forces to make meaningful structural changes that will help millions of Americans who are not receiving the treatment they need to lead healthy, productive lives. And these changes are not as difficult, or as costly, as you might think.

For example, NYCT, along with Well Being Trust and the Sunflower Foundation, commissioned the Bipartisan Policy Center to study how to better integrate primary health care and behavioral health care. By taking steps to diagnose and treat behavioral and physical health in tandem, rather than separately, the center estimates that we can help improve outcomes for as many as a million Americans over the next ten years.

When I joined NYCT more than two decades ago, a mentor shared the adage “form follows finance.” A twist on the early twentieth-century architecture and industrial design principle of “form follows function,” it is perhaps more relevant than ever to the provision of behavioral health services.

The center's take on better coordination of care between behavioral and physical health is a clarion call for philanthropy to push for better coordination of delivery and financing systems. The federal government and several states have begun to advance models of care that prioritize outcomes over volume and pay for care that is delivered with this in mind.

This is a good start. But philanthropy must do more to ensure that its resources — modest as they are, compared with the country's healthcare spending, which by some estimates is almost 20 percent of our pre-pandemic GDP — ensure that financing aligns with a priority focus on coordinated care across all delivery systems, whether they be hospital- or clinic-based, or in community settings.

It behooves philanthropy to continue to pay attention to many of the root causes of mental and emotional distress that is so prevalent in communities across our country, often referred to as the social determinants of health — the conditions under which people live, work, and learn. Because historical inequities across the board — but especially within the context of race — have hampered such an approach, it is important that our funding address the complex challenges of inadequate insurance coverage, a stressed workforce, and the critical role of non-clinical providers in the delivery of services.

Finally, if America is to achieve a behavioral healthcare system that cares for those in crisis and enables them to manage chronic conditions, philanthropy has a critical role to play in advocating to ensure that financing actually supports such a system.

And for those of my colleagues who work at a community foundation or a grantmaking public charity that can legally engage in lobbying efforts, I entreat you to use that option. Let us imagine and work toward a healthcare system that covers the entire person — mind and body — and makes a healthier, more prosperous, and more equitable America possible.

Irfan_Hasan_NY_community_trust_PhilanTopicIrfan Hasan is deputy vice president for grants at the New York Community Trust, where he oversees health, behavioral health, and biomedical research grants.

What the donor-advised fund payout rate means for philanthropy and how it fits into the bigger charitable giving picture

June 08, 2021

Those of us who work with donor-advised fund (DAF) donors every day know that they are caring, committed, and creative givers. We also know they use DAFs for both their long- and short-term giving. This has never been more apparent than in the past year, when grantmaking from DAFs skyrocketed in response to the COVID-19 pandemic. While generosity is not a calculation, the DAF payout rate is an important philanthropic benchmark.

What is the DAF payout rate?

The DAF payout rate is a calculation of grantmaking dollars awarded from DAFs to charities relative to the total charitable assets in those DAFs. More simply: it's how much DAF donors granted compared with what they could have granted.

How should we calculate payout rate?

Candid uses a formula to estimate payout from private foundations that National Philanthropic Trust (NPT) replicates in our annual Donor-Advised Fund Report. The Candid formula is:

This year's grant $$ ÷ Previous year's charitable assets = payout rate

For 2019, the latest year for which aggregated data is available, the formula is:

FY19 grants ÷ FY18 charitable assets

or $27.37B ÷ $122.18B = 22.4% payout

NPT uses the Candid formula for several reasons. First, like DAFs, private foundations are widely used giving vehicles for both short- and long-term philanthropy, so using the formula creates a useful point of comparison between the two types of vehicles.

Second, the formula is not just an industry standard, it's practical. The Candid formula reflects common budgeting techniques — that is, plan for the current year based on the prior year's income and expenses and factor in the remaining balance (if any).

Third, other payout-rate formulas ignore certain practical and particular aspects of giving to and from DAFs, such as the time between the date of contribution and the availability of the funds for grantmaking. More on this below.

A look at other ways to calculate payout rate

Since there is no mandatory payout requirement for DAFs, there are several reasonable ways to calculate it.

Thumbnail_DAF Payout Blog_Chart_2

The "Three-Year Average" and "Five-Year Average" methods use the average of the charitable assets held by DAFs over two different periods. These formulas are also allowed by the IRS as a way for private foundations to calculate their payout. Using multiyear averages can smooth out any "lumpiness" in either major contributions or grants. However, for fast-growing giving vehicles such as DAFs, it also generally underestimates charitable assets available, as the year with the highest total — typically, the most recent year for which aggregate data is available — is averaged with lower values from earlier years.

The "One-Year" method, a formula that NPT used to calculate DAF payout in our annual Donor-Advised Fund Report prior to 2014, uses grants and charitable assets (plus grants) in the same year to calculate payout. This formula assumes that every dollar contributed to a DAF can be immediately granted out, which can have the effect of overestimating the value of assets that are truly available for grantmaking.

For example, a donor who contributes to her DAF in the last days of December (and receives her tax deduction at that time) will recommend grants from those DAF charitable assets the following year and beyond.

How do we put the DAF payout rate into context?

The Candid method offers the best point of comparison. As a vehicle for giving, private foundations are similar to DAFs, and this method most accurately represents payout by using numbers that reflect the amount granted relative to what is definitively available for grantmaking.

It's also worth noting that private foundation payouts can include eligible operating and administrative expenses, such as staff salaries, overhead, and administrative expenses. By contrast, DAF payout takes into account charitable grantmaking only and does not include any of the DAF sponsors' operating or administrative expenses.

Using the Candid method, DAF payout is typically at least four times higher than that of private foundations. While foundations typically grant out the legally required minimum of 5 percent of their assets annually, the DAF payout rate has been above 20 percent for each of the last ten years.

All of the proposed formulae show that the DAF payout rate is historically and consistently higher than that of private foundations. And as such, it helps us understand that DAF donors are committed to the charities they support over both the short and long term.

DAFs provide substantial and sustained support

A consistent DAF payout rate is good news for charities. DAF donors have proven that they are a sustainable source of charitable support. They give dependably across economic cycles (yes, DAF donors gave at a 20+ percent payout rate through the Great Recession); through political seasons (no, there's no need to worry that campaign giving reduces charitable giving by DAF donors); and in the face of great challenges (natural disasters, global pandemics, mass social movements, etc.). The data is clear: DAF donors are committed to the long-term viability of nonprofits.

The DAF payout rate is an important metric, and it's not the only way to measure philanthropic activity from DAF donors. Grantmaking from DAFs has nearly doubled over the last five years — a clear signal that DAF donors are active givers. In fact, growth in grantmaking from DAFs (93 percent) has outpaced growth in contributions (80 percent) to them over that period.

DAF donors' response to the COVID-19 global pandemic — which saw grantmaking from DAFs soar 33 percent on a year-over-year basis — is yet another indication of their philanthropic commitment. So is the fact that they have irrevocably donated money to DAFs that can only be used for philanthropic purposes.

While there is no magic formula that can make people give, DAF donors have consistently chosen to do so quickly and generously.

Andrew Hastings_NPT_PhilanTopicAndrew Hastings, chief development officer at the National Philanthropic Trust, the largest national nonprofit manager of donor-advised funds, has twenty-five years of experience in the philanthropic and nonprofit marketplace. To read NPT's annual Donor-Advised Fund Report or COVID Survey, visit NPTrust.org.

Venture philanthropy: The secret weapon for unlocking biomedical research's full life-changing potential

June 04, 2021

Eye_retina_gettyimages_batkeMore than a year into the COVID-19 pandemic, there has been much reflection around "lessons learned" across all sectors. In the biomedical research space, we've seen science meet the urgent need for safe and effective vaccines at miraculous speed to contain the spread of the virus. The mRNA technology used in some of those vaccines has broad implications for future treatments for a variety of other viruses, cancers, and diseases and is a clear indication of how far science has evolved in a short period of time. Imagine what treatments and cures could be unlocked — with the necessary funding.

In the United States, public funding for basic research has long come from the National Institutes of Health, but the U.S. government lags other advanced economies in the amount of funding it provides for the translational research required to convert basic science into tangible patient treatments. And while more public funding for biomedical research at the critical clinical trial stage is essential, it is going to take public, private, and philanthropic dollars to ensure that biomedical research into promising treatments and cures doesn't wither on the vine. Federal programs such as the Cancer Moonshot, state-level initiatives like the California Institute for Regenerative Medicine, and promising legislation aimed at providing private-sector loans to companies developing novel treatments for disease and disability are all helpful — but still leave a funding gap. There needs to be a third leg to stabilize those public- and private-sector efforts, and we believe that third leg is philanthropy.

As successful entrepreneurs and venture investors, we see our donations as investments in the mission of the nonprofit organizations we support. We each have a personal connection to the mission of the Foundation Fighting Blindness: one of us has experienced loss of sight from retinitis pigmentosa as a young adult, and the other has raised two sons with vision impairment caused by Stargardt disease. Based on our personal experiences, we have a keen understanding of what it is like to be a patient or have a loved one waiting for life-changing treatments to become available.

For fifty years, thanks to the generosity of donors, the Foundation Fighting Blindness has successfully funded research in pursuit of treatments and cures for the entire spectrum of inherited retinal diseases (IRDs) and dry age-related macular degeneration (AMD), which together affect more than two hundred million people globally. Yet, more needs to be done. The key discoveries made in labs need to make it into the hands of industry-led therapy developers to conduct clinical testing and win FDA approval. But a gap in funding often prevents this progress, and in this case, the science is now outpacing the funding.

To bridge this funding gap, the Foundation Fighting Blindness created the Retinal Degeneration Fund (RD Fund), a nonprofit, pure-play venture philanthropy investment vehicle designed to help accelerate the technical aspects of the organization's mission and advance its financial goals. Our respective family foundations contributed significant capital to launch the fund, which allowed us to be more involved in the organization's work by funding highly visible activities in biotech startups and spinouts. We've taken concepts and techniques from our venture capital finance and business management experience and applied them to our philanthropic goals of accelerating the progress on treatments and cures, while positioning the organization for long-term sustainability.

Launched in late 2018 with $72 million under management, the first fund is now 90 percent committed, with nine investments plus reserves. This invested capital has attracted an additional $400 million in capital to date from institutional co-investors and has produced its first exit with the sale of Vedere Bio to Novartis for $280 million, enabling the organization to plug a financial gap in its long-range science spending plan and roll over significant funds to seed Fund 2. 

We take comfort in knowing that the venture philanthropy model already has been successfully scaled by the Bill & Melinda Gates Foundation, the Cystic Fibrosis Foundation, and the Juvenile Diabetes Research Foundation, just to name a few. One key element is to manage it professionally and deliberately; one cannot just wander into biotech equity investing without experience, deep scientific know-how, and world-class advice and oversight. The RD Fund has an independent board of directors with expertise spanning retinal biology, clinical ophthalmology, finance, and entrepreneurship, and the board works closely with an executive management team with significant operational, strategic, and leadership experience. Importantly, the fund is able to rely on an international scientific advisory board and leverage the organization's patient registry and clinical consortium. In other words, the brain trust of the Foundation Fighting Blindness and its venture arm have the collective scientific and business acumen to best determine what is or is not an investible mission-related opportunity.

We are encouraged by venture philanthropy's ability to reap a return to be re-invested in furthering an organization's mission, especially in times of economic uncertainty. Most important, our experience has demonstrated that jump-starting the pipeline for treatments and cures through venture philanthropy holds real promise as a viable, scalable approach for addressing other underserved diseases impacting so many.

(Photo credit: GettyImages/Batke)

Gordon Gund_Paul_Manning_PhilanTopicGordon Gund is chair and CEO of Gund Investment Corporation; after losing his sight from retinitis pigmentosa in 1970, he co-founded the Foundation Fighting Blindness with his wife, Lulie, and others. Paul Manning is founder, chair, and CEO of PBM Capital; both of his sons were diagnosed with Stargardt disease.

What COVID-19 has taught us about the humanitarian system and women's rights organizations

June 02, 2021

CFTA_feminist_humanitarian_networkWhen the COVID-19 pandemic struck — and with it came public health measures including stay-at-home orders — women's rights organizations (WROs) the world over were quick to sound the alarm: Gender-based violence (GBV) would increase. Women and "marginalized" groups would be disproportionately impacted by the pandemic, and the inequality they already face would deepen. The gendered impacts of crises are well documented, and COVID-19 would be no different.

WROs acted swiftly to address those issues, working to strengthen community-based mechanisms to ensure that women could report GBV and expect a response. Organizations adapted their systems and approaches to ensure that women could continue to access critical services during lockdowns, including psycho-social support, maternal and newborn child health care, and sexual and reproductive health services. WROs also advocated for recognition of the impacts of the crisis on women's rights and called for funding to be targeted to mitigating those impacts.

While responding to the pandemic and its fallout, WRO members of the Feminist Humanitarian Network (FHN), a collective of women leaders working together to transform the humanitarian system into one that is guided by feminist principles, saw an opportunity: Here was a moment to document the essential role WROs play in humanitarian action, to capture the work that they do, any time an emergency occurs, to ensure that women and "marginalized" groups aren't left out of relief efforts.

FHN member organizations — of which 70 percent are WROs working in the Global South and 30 percent are international non-government organizations (INGOs) and organizations based in the Global North — are working to achieve a global humanitarian system that is responsive, accountable, and accessible to women and the diverse organizations that serve them, and that challenges rather than perpetuates structural inequalities. A pervasive lack of recognition of WROs as humanitarian actors and leaders is just one of a number of critical issues that FHN is working to change.

The current humanitarian system and the actors it is comprised of (governments, United Nations agencies, INGOs, and national actors) systematically exclude women and their organizations from all phases of humanitarian action, from funding to decision making. WROs are rarely invited to contribute to national planning processes for humanitarian response or to sit on emergency committees. When a funding call is made, WROs rarely receive the information, and when they do, rarely succeed in their grant applications.

Needless to say, the impacts of this exclusion are enormous. Women's needs — and indeed, the needs of "marginalized" groups, such as people with disabilities, refugees, and the LGBTIQA community — go unaddressed as a result. WROs and women-led organizations, which often represent diverse groups of women and their communities, are uniquely positioned to highlight the needs of those they work with and ensure that they are addressed. When the leadership role of those organizations is undermined, basic requirements like including sanitary supplies in relief distributions and ensuring that distribution sites are accessible to people with disabilities are overlooked.

In addition to presenting an opportunity to showcase the role that WROs working at grassroots, local, and national levels play on the frontlines of humanitarian action, COVID-19 offered a snapshot of the global humanitarian system — how the current system works and the challenges it presents for WROs in the Global South — the patriarchal and colonial practices embedded in the system that are at the root of the lack of recognition, lack of access to resources, and exclusion that WROs experience.

And so FHN members in Bangladesh, Kenya, Lebanon, Liberia, Nepal, Nigeria, Palestine, and South Africa – conducted research to document their own humanitarian leadership, and that of their peers in the response to the pandemic. Their findings have been published in a series of national reports and a global report entitled Women's Humanitarian Voices: Covid-19 through a feminist lens. The reports highlight multiple critical barriers presented by the humanitarian system that undermine the leadership of WROs, and describe not only their ability to respond to crises but their long-term sustainability as essential women's rights actors working to protect and advance women's rights.

In six of the eight studies, WROs were unable to access donor funding, in large part as a result of excessive due diligence requirements that these organizations, working around the clock to respond to the emergency with limited resources, were (particularly in times of crisis) unable to fill. Instead, WROs undertaking critical work — ensuring that women with disabilities were able to meet basic needs throughout the crisis, for example — funded their efforts with their leaders' personal resources or funds contributed by the community. At the same time, women and their organizations were excluded from decision-making processes — left out of planning undertaken by international and national actors and from emergency response committees at all levels.

And yet those organizations persevered, working collectively in the "spirit of sisterhood" to challenge injustice, demand that their voices be heard, and work to influence the response efforts — and ensure that women's needs were addressed in each context. WROs continue to take action so that women are not left behind in the COVID-19 response and women's rights are advanced through humanitarian action.

For many of us working in the humanitarian sector, the pandemic has re-emphasized much of what we already knew: Emergencies exacerbate gender injustice, in part because the humanitarian system reinforces existing patriarchal social structures by excluding women from funding and decision making. Women's Humanitarian Voices: Covid-19 through a feminist lens has captured the creativity, resourcefulness, and deep feminist approaches of WROs in the Global South and has presented a powerful argument for why that system must change.

To be part of that change and to create a system that is inclusive of all and creates sustainable, transformative change, humanitarian actors across the system must immediately increase support for organizations advancing women's rights, in the form of direct, long-term, flexible funding. They must recognize their expertise and follow their leadership. A feminist humanitarian system is not only possible; it is critically needed and requires every humanitarian actor — including, importantly, donors — to take action.

Holly_Miller_Naomi_Tulay_Solanke_PhilanTopicHolly Miller is lead at the Feminist Humanitarian Network, a global collective of women leaders working together to achieve a humanitarian system that is guided by feminist principles. Naomi Tulay-Solanke is executive director of Community Healthcare Initiative and a member of the Feminist Humanitarian Network Steering Committee.

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  • "[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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