Big-Dollar Philanthropy Gets the Broad-Brush Treatment

(David Jacobs is director of foundation information management at the Foundation Center. In his last post, he claimed to be shocked – shocked! – that the IRS was subjecting conservative and Tea Party organizations applying for tax-exempt status to extra scrutiny.)

Is big-dollar, high-profile celebrity philanthropy really just for show? That's what Guy Sorman, a City Journal contributing editor and public intellectual in France, seems to think. Writing in the fall issue of CJ, Sorman cites a CNN story from March that begins: "Bill Gates is putting out a call to inventors, but he's not looking for software or the latest high-tech gadget. This time he's in search of a better condom."

"Incongruous as the story seemed," writes Sorman,

the former Microsoft titan had joined the struggle against sexually transmitted diseases. The Bill and Melinda Gates Foundation was offering a $100,000 start-up grant to anyone who could design a condom that didn't interfere with sexual pleasure. Rachel Zimmerman, host of public radio’s CommonHealth, called the Gates Foundation's initiative "truly inspired." But was it? After all, the latex industry has pursued the same goal for decades and devoted many millions of dollars to the effort. What's the point of a philanthropist trying to do what the market is already doing?

Call this philanthropy for show, a kind of celebrity giving designed for a mediatized age, based on grand gestures, big dollars, and heartwarming proclamations -- but too little concern with actual results, which often prove paltry, redundant (as with the condom initiative), or even destructive. The American media often revel in controversy, so one might expect that the gap between expansive promises and disappointing outcomes would prompt intense journalistic interest. But for the most part, would-be statesmen-humanitarians -- such as Bill Clinton, Gates, and Al Gore, along with entertainment-world benefactors like Oprah Winfrey and academic superstars like Columbia development economist Jeffrey Sachs, have gotten a free pass for their good philanthropic intentions. They and their cohorts deserve closer scrutiny....

Trouble at the IRS: What Were They Thinking?

(David Jacobs is director of foundation information management at the Foundation Center. In his last post for PhilanTopic, he blogged about an Open Data Master Class presented by the World Bank.)

Like many Americans, I was shocked to learn last week that the Internal Revenue Service had targeted conservative and Tea Party organizations applying for 501(c)(4) tax exempt status for additional review prior to last year's elections. And like many Americans, my shock turned to disgust this week as additional details -- including the alleged leaking of confidential donor information -- emerged, showing the scandal to be more serious than initially disclosed.

Regardless of whether you believe what happened in Cincinnati was an act of political malfeasance or just a case of monumental governmental ineptitude, the fact that it did happen should be sending shockwaves through the nonprofit sector. One of the bedrock principals of organized philanthropy and nonprofit advocacy in America is the idea that such activity should be tax advantaged, regardless of cause or political orientation, and that, when it comes to the nonprofit sector, the IRS should always operate in a fair and impartial manner. The thought that that might not be the case in every instance should bother and disturb all Americans.

Open Data Master Class

(David Jacobs is director of foundation information management at the Foundation Center. In his last post, he wrote about the bankruptcy of Solyndra LLC.)

Recently, Foundation Center staff participated in an Open Data Master Class presented by members of the World Bank, which has made all of its data freely available to the public. Over the course of the day-long session, staff learned how to use easily accessible Web platforms like GeoCommons to mash up geographic information and data from multiple sources to create informative, eye-opening maps on almost any subject imaginable.

Why is this important? Well, in addition to data-rich organizations like the World Bank, a number of donor country governments are beginning to make all sorts of valuable data available to the public as part of the so-called open data movement. Among the biggest and most accessible date troves are those amassed by the U.S. government and its frequent "special relationship" partner on the other side of the Atlantic, the UK. These open data sites, along with the World Bank site, offer a wealth of economic, development, and demographic information.

However, as many of you know, releasing gigabytes of data in context-free tables and hard-to-read files doesn't guarantee transparency or do much to advance knowledge. In fact, it can have the opposite effect, thanks to something called information overload. Which is why it is so important for programmers, GIS experts, information specialists, and others to be able to access this data and filter it in ways that can reveal valuable hidden nuggets of knowledge. A good example of this is the funding map on our new WASHfunders portal, which makes use of both free and professionally managed data to show private- and public-sector funding for clean water and sanitation projects by country and region.

Mission-Related Investing: A Cautionary Tale

(David Jacobs is director of foundation information management at the Foundation Center. In his last post, he wrote about journalism, objectivity, and foundation funding.)

Always eager to find ways to leverage their assets while advancing their organizational mission, foundations increasingly are turning to a new tool in the grantmaking toolbox: mission-related investments (MRIs) -- i.e., investing a portion of their assets to achieve both financial and social gains.

Such investments are still relatively new territory for many foundations. And as with anything new, we've see some early missteps that provide valuable learning opportunities for the field. Case in point is the bankruptcy of Solyndra LLC, a presidentially-hyped solar energy equipment manufacturer that received significant investments from the George Kaiser Family Foundation (among others), as well as more than half a billion in government loan guarantees.

According to a recent article in the Washington Post, Solyndra offered a unique solar-panel technology and the promise of four thousand "green" jobs. But the design proved to be too expensive to compete in the marketplace. The foundation attributed the loss of its investment in Solyndra to "the company's inability to overcome serious challenges in the marketplace, especially the drastic decline in solar panel prices during the past two years caused in part by subsidies provided by the government of China to Chinese solar panel manufacturers."

While the fallout from the bankruptcy may not be apparent for some time, it's not too early for those engaged in or considering MRIs to focus on some key takeaways that have presented themselves in the wake of the company's demise:

Journalism, Objectivity, and Foundation Funding

(David Jacobs is director of foundation information management at the Foundation Center. In his last post, he asked whether diversity can be legislated.)

Last week, in an interesting article about how the Bill & Melinda Gates Foundation's funding  of non- and for-profit media has made it a force in journalism, the Seattle Times asked the question: "Does Gates funding of media blur the line between journalism and advocacy?"

Citing recent Gates-funded pieces aired by ABC, PBS, and Public Radio International (among others), reporters Sandi Doughton and Kristi Heim suggested that the foundation's grants to media organizations "raise obvious conflict-of-interest questions: How can reporting be unbiased when a major player holds the purse strings?" But direct funding of media organizations, said Doughton and Heim,

is only one way in which the world's most powerful foundation influences what the public reads, hears, and watches.

To garner attention for the issues it cares about, the foundation has invested millions in training programs for journalists. It funds research on the most effective ways to craft media messages. Gates-backed think tanks turn out media fact sheets and newspaper opinion pieces. Magazines and scientific journals get Gates money to publish research and articles. Experts coached in Gates-funded programs write columns that appear in media outlets from The New York Times to The Huffington Post, while digital portals blur the line between journalism and spin.

The efforts are part of what the foundation calls "advocacy and policy." Over the past decade, Gates has devoted $1 billion to these programs, which now account for about a tenth of the giant philanthropy's $3 billion-a-year spending. The Gates Foundation spends more on policy and advocacy than most big foundations -- including Rockefeller and MacArthur -- spend in total....

That strategy has caused some experts to express concern about the ability of the world's wealthiest foundation to shape and influence public discourse related to areas in which it has a stake. "Even if we were to satisfy ourselves that the Gates Foundation were utterly benign, it would still be worrisome that they wield such enormous propaganda power," says Mark Crispin Miller, professor of media, culture, and communications at New York University.

Can Diversity Be Legislated?

(David Jacobs is senior editor of the Foundation Directory and related products at the Foundation Center. The views expressed in this post, his first for PhilanTopic, are his own and do not necessarily reflect those of the center.)

Readers of this blog are no doubt familiar with the diversity initiatives being "voluntarily" undertaken by leading California foundations. Those initiatives were developed after the California Assembly passed a bill last January that would have required all foundations in the state with assets of more than $250 million to report not just the race and sex of their grantees’ board and staff members, but the race and sex of their own board and staff members as well.

Writing in the winter edition of Manhattan Institute's City Journal, Heather Mac Donald provides some much needed pushback ("Never Enough Beauty, Never Enough Truth") against the idea of government inserting itself into philanthropy and philanthropic decision making:

The legislation was steaming its way through the California Senate when California's ten largest foundations promised to pump hundreds of millions of dollars into minority-led nonprofits in exchange for the bill’s withdrawal. But the fuse had been lit. Similar diversity efforts have been spotted in various stages of development in Florida, Illinois, Michigan, New York, New Jersey, Texas, and Pennsylvania. And at the federal level, Xavier Becerra, a congressman from Los Angeles who serves on the powerful House Ways and Means committee, has warned foundations: "If you don’t police your own, you’re going to be policed."

A foundation that remains colorblind in giving and hiring is suspect, even criminal, in other words. The congressman has threatened government intervention if foundations don’t spend more on minorities and the poor....

The current economic downturn makes the prospect of shaking down foundations even more alluring. Federal and state governments, increasingly deprived of tax revenue, will likely to cut back on their payments to nonprofits. Meanwhile, foundations made $43 billion in grants in 2007. As the Greenlining Institute [which supported the legislation] put it: "Just beyond the desert [of government funding] there is a rainforest flowing with philanthropic dollars."