1771 posts categorized "Philanthropy"

For organizational resilience and impact, focus on business model not overhead

October 21, 2020

Conflict dynamics brainstormIt has always been a source of angst for ambitious not-for-profit organizations: how to ensure they can sustain and scale up impact while also building resilience to weather financial or other shocks. Often the focus is on increasing core or unrestricted funding and covering general operating costs through grant overhead.

The COVID-19 pandemic and national responses to it have exacerbated this challenge and, in doing so, have brought into stark relief important structural problems within the not-for-profit sector. What have been perennial issues for many not-for-profits — sustaining impact, financial resilience — are now existential ones.

In recent years, even prior to the pandemic, governments, private foundations, and other donors have openly recognized the need to cover a greater portion of not-for-profit organizations' general operating costs through grant funding. That in itself is a good thing. But I do not believe this approach, on its own, will lead to the long-term resilience of ambitious not-for-profits, nor will it enable them to effectively scale impact.

What will ensure more resilience and the ability to scale up not-for-profit organizations is the pursuit of new and creative business models that fit with their missions and activities.

In this article, I draw on my and colleagues' experiences of growing Conflict Dynamics International, a sixteen-year young not-for-profit working to prevent and resolve violent conflict and alleviate human suffering arising from conflicts.

Common not-for-profit business model

A common business model for not-for-profit organizations is that the organization secures contributions from donors to fund its charitable work. This support can be for the core operations of the organization or it can be for particular programs or projects. In either case, it can be restricted or it can be unrestricted in terms of intended use. Let's call this the Contribution-Based Business Model.

With this business model, not-for-profit organizations must fund their non-program expenses through a combination of: (i) contributions for general operating support; (ii) restricted core funding; and/or (iii) institutional overhead applied to program direct costs. [1]

In Conflict Dynamics' experience, the institutional overhead on grants from non-United States governmental sources has been in the range of 7 percent to 13 percent (see below). Many private foundations allow for institutional overhead in this range also, while a few support overhead costs at a higher level (e.g., MacArthur Foundation, up to 29 percent). In our area of practice, for organizations receiving funding from U.S. government agencies, the Negotiated Indirect Cost Rate Agreement (NICRA) can cover overhead, as I understand it, up to 22 percent.

From the not-for-profit's perspective, the core value exchange through the Contribution-Based Business Model goes something like this: "We (not-for-profit) will deliver social impact; you (donor) will provide funding and other resources to support the activities towards that impact."

Challenges with this business model

In our sixteen years of working in some of the most challenging conflict situations in the world, we have learned that the Contribution-Based Business Model is not sufficient to scale the impact of our organization and ensure its resilience. Perhaps it is better suited to not-for-profit organizations working in less-volatile situations, or those that deliver predictable program services, or have reached a higher level of annual revenue.

The types of shocks we have to insulate ourselves from are generally funding shocks. Of course, the COVID-19 pandemic is a unique, seismic shock. We have been able to adapt our program activities, and at the same time we have seen the funding shock from the pandemic. Conflict Dynamics is fortunate to have many wonderful supporting partners; however, even in normal times we have on occasion experienced U-turns on donor pledges, long delays in the disbursement of funds, and non-renewal of grants when the political situation changes unexpectedly (either at source or country of implementation!).

Back to the Contribution-Based Business Model, I see a number of challenges:

  1. In recent years, many governmental donors in particular have been reducing the percentage and scope of coverage of allowable institutional overhead on grants. For the types of grants we secure for our work, the following donors allow these overhead percentages: Sweden Ministry for Foreign Affairs (13 percent); Switzerland Federal Department of Foreign Affairs (10 percent to 13 percent); United Kingdom Foreign, Commonwealth and Development Office (10 percent); European Union (8 percent); Netherlands Ministry for Foreign Affairs (7 percent); etc.
  2. Many institutional donors have pulled back on the amount of general operating support and other core funding they are providing to not-for-profit organizations, preferring instead to fund projects. A colleague recently referred to this as the "projectization" of funding. This has direct tangible impacts on the ability of the organization to grow its infrastructure, as well as impacts in terms of staff retention, professional development opportunities, staff morale, and so on.
  3. When organizations are funding their core operations through heavy reliance on program-related overhead, the organization becomes vulnerable if its programs do not continue or face funding gaps. If experienced program staff and institutional memory are lost, this places additional demands on the organization.
  4. Whether for core- or program-specific funding, this business model requires the organization to proactively pursue new grants on a near continuous basis to ensure its sustainability. The transaction costs for securing a large number of smaller individual contributions are very high, and so that generally requires that the organization first reach a certain level of revenue and capacity.
  5. The fixed overhead on program grants induces dependency on this type of funding, because organizations get stuck in a Catch-22 of having to invest significant time in program fundraising, especially when scaling, which takes away from efforts to secure the resources to sustain the core of the organization.
  6. This business model makes it difficult to break through the small- to middle-size stage of growth. This is the "too small to be big, and too big to be small" range of $2 million to $8 million in annual revenue. At $3 million to $4 million average annual revenue, Conflict Dynamics is in this range. The reason for this difficulty is that economies of scale only kick in when the organization exceeds approximately $8 million to $10 million annual revenue. At $8 million in annual program revenue and 10 percent average overhead rate, the overhead amount would be $727,272 a year.
  7. Scaling impact may require upfront investments in new programs or new geographic areas. When there is high reliance on grant-related overhead, there are generally not a lot of funds available to invest in exploring new opportunities.

Ultimately this business model on its own results in constrained and unreliable funding for not-for-profit organizations. That reality, and the consequences for intended impact have been well recognized. Several institutional donors have made commitments to provide more general operating support or restricted core funding, both prior to and during the pandemic:

Much of these commitments and intended actions focus on what donors can do to help non-profits, and they also generally focus on the same business model. Some of the proposed arrangements for donors to help grantees cover overhead costs include outcome-based funding and all-in-one project pricing.[5]

Moreover, some donors are pursuing an approach based on equity philanthropy, whereby loans and investments are made to fund not-for-profit programs. This seems best suited to organizations offering program services that generate predictable revenue streams.

Conflict Dynamics' experience of donor funding flexibility during the pandemic has been mixed: in general, there has been a marked slowdown of decision-making on new funding; one private foundation partner has provided significant grant flexibility in light of the impact of COVID-19; and most governmental donors have not afforded much flexibility with their existing grants.

A constellation of business models

If the Contribution-Based Business Model is not the way to go, then what is?

I believe that for ambitious not-for-profit organizations to build their resilience and scale impact, they need to operate with a variety of business models. This means going further than the obvious strategy of diversifying sources of funding, to diversifying the actual business model itself.

Conflict Dynamics has been exploring an approach based on a "constellation" of five inter-related business models, all oriented toward realizing greater social impact.

Business model 1: Contribution-based. I am not suggesting "throwing out the baby with the bath water"; a contribution-based business model will continue to be an important model for not-for-profit organizations. But organizations need to push for more realistic overhead percentages on program funding, longer grant periods, more funding for core expenses, and so on. In its last three fiscal years, our grant revenue for programs averaged approximately 98 percent of our total revenue....so we have more work to do here.

Business model 2: Monetization. The second component of the constellation of business models focuses on monetizing something that the organization already does. This is about extracting added value from the organization's expertise, analysis, networks, and so on. For example, Conflict Dynamics has gained a lot of experience in the monitoring and evaluation of peacebuilding programs and is in a position to offer monitoring and evaluation services, for a fee, to other organizations.

Business model 3: Unrelated business income. In certain circumstances, tax exempt not-for-profit organizations can generate revenue from unrelated business income. In the United States, the Internal Revenue Service has stringent criteria for what constitutes unrelated business income, which can be subject to tax.[6]  There are exemptions. One area of interest is rental income. During FY2018–19, Conflict Dynamics had total office lease expenses of $109,429, of which $26,782 was covered out of institutional overhead. With an approximate average overhead rate of 10 percent on program grants, we had to bring in roughly $294,600 in program grants just to cover this single expense. Ownership of a larger office property can reduce or eliminate rental costs and generate income through the subleasing of office space.

I realize the pandemic is not an ideal time to get into commercial real estate; looking to the future, however, there will be opportunities in certain areas and locations to provide other not-for-profits with co-working spaces.

Business model 4: Investments. The fourth business model focuses on investment income. Organizations can approach donors to make an initial short-term investment for the purposes of kick starting an endowment. With a one-year investment of $100 million and a fairly conservative return, the organization could realize revenue of, say, $7 million over twelve months. That would provide the initial funding for an endowment for the organization, which would in turn could provide roughly $490,000 of unrestricted revenue a year. For an organization with an annual  budget of $5 million, that represents nearly 10 percent of its total revenue.

This level of investment is not implausible; recently, the MacArthur Foundation adopted an approach in one of its program areas, the 100&Change initiative, where it makes a very large investment in a single organization over three years. Through the initiative, in year one, it made an award to Sesame Workshop and International Rescue Committee in the amount of $100 million.

Business model 5: For-profit feeder. Not-for-profit organizations can set up separate for-profit ventures with the aim of funneling the profit from the venture into the not-for-profit entity. Many large corporations have charitable foundations, and the approach here is to do the same in reverse. This assumes that the not-for-profit can design and execute a profitable business model.

This business model also affords the opportunity to seek equity investments. In addition, certain types of entities, including public benefit corporations (B Corp) in the U.S., are eligible to receive program-related investments (i.e., low-cost loans) from private foundations.

All these components should be viewed as building blocks that can be combined in different configurations, depending on the needs and capacities of the organization; they are not mutually exclusive. In other sectors, governments and foundations facilitate reduced-risk "sandboxes" to experiment with business/regulatory models. Perhaps it's time for the social sector to test these and other components in a sandbox environment designed for its own unique needs.

Where does this leave us?

When I visited the Palais des Nations — the seat of the United Nations Office in Geneva — in late 2019, I was surprised to see the direct effects of the cash-flow crisis that the UN has been battling. To cite just one small example, some elevator banks were intentionally closed to save money, and some meeting rooms were out of use. The lesson is that when it comes to business model vulnerability, size really doesn't matter.

Covering more core costs through more unrestricted funding may be necessary, but it won't be sufficient to guarantee greater resilience and enable not-for-profit organizations to scale their impact. That requires the adoption of diverse and overlapping business models. The COVID-19 pandemic surely provides added impetus for moving quickly in such a direction.

Headshot_Gerard McHughGerard McHugh is founder and president of Conflict Dynamics International. A serial entrepreneur with more than thirty years' experience in international conflict resolution, humanitarian affairs. and health care, he recently founded a new venture, AidX, to help ordinary people achieve the extraordinary. This post originally appeared on Conflict Dynamics' Medium channel and is reprinted here with permission.

Notes:

1. In this article, the term "general operating support" relates to unrestricted funding for the operations of the organization. The term "core funding" refers to funding for the core activities of the organization and can be restricted or unrestricted.

2. For more information on the Grand Bargain, see https://interagencystandingcommittee.org/about-the-grand-bargain [Accessed October 12, 2020]

3. Maria Di Mento, "Five CEOs of Wealthy Foundations Pledge to Do More to Help Charities Pay Overhead," The Chronicle of Philantrophy, September, 4 2019. Available at: https://www.philanthropy.com/article/5-CEOs-of-Big-Foundations/247063 [Accessed October 12, 2020]

4. James B. Stewart and Nicholas Kulish. "Leading Foundations Pledge to Give More, Hoping to Upend Philanthropy." The New York Times, June 10, 2020. https://www.nytimes.com/2020/06/10/business/ford-foundation-bonds-coronavirus.html [Accessed October 12, 2020]

5. These are some of the approaches identified in the work of the Bridgespan Group’s "Pay What It Takes" initiative. See: https://www.bridgespan.org/insights/library/pay-what-it-takes/pay-what-it-takes-philanthropy [Accessed October 12, 2020]. See also: Jeri Eckhart-Queenan, Michael Etzel, & Sridhar Prasad, "Pay-What-It-Takes Philanthropy," Stanford Social Innovation Review Vol. 14 №3 (Summer 2016).

6. United States Dept. of the Treasury Internal Revenue Service (IRS), Tax on Unrelated Income of Tax Exempt Organizations, IRS Publication 598 (February 2019). Available at: https://www.irs.gov/pub/irs-pdf/p598.pdf [Accessed October 12, 2020]

Evaluation has a key role to play in racial equity work

October 13, 2020

EvaluationAs a woman of color, evaluator, and nonprofit leader for more than ten years, I am encouraged to see a growing number of foundations and nonprofits embrace efforts to advance racial equity and justice.

At this uncertain moment in our history, we have an opportunity to heal, restore, and create a more inclusive and abundant future for all. It is an opportunity, however, that could disappear as quickly as it emerged — if we don’t seize it.

As we have learned over the last six months, efforts to address racial tensions and inequities and promote healing and narrative change are desperately needed. Those efforts can and should be evaluated.

The good news is that foundations and nonprofits can build on work that is already under way. Through its $24 million Truth, Racial Healing & Transformation (TRHT) initiative, the W.K. Kellogg Foundation is one of the foundations leading the way in investing in and evaluating such efforts.

Last year, my firm worked with a client to evaluate a TRHT program whose objective was to ease racial tensions and promote healing and narrative change among young people through book groups. In the process, we learned some surprising things.

A number of participants had "aha" moments — like the European-American youth who came to realize that saying the n-word, even in a song, was problematic. But there was another, more common outcome: Adult book group leaders were among those who most benefited from the program, with many saying the program helped them recognize their own implicit biases and understand what systemic racism really looks like at the level of the individual.

That unexpected outcome highlighted the need for more training and support for adult group leaders. Based on our findings, in year two of the program the client was able to enhance both the value it delivered and to foster more healing and peace-building in the community. Our big takeaway was this: nonprofits and foundations working to advance racial equity can be more effective by rigorously evaluating those programs.

Foundations and nonprofits should also foreground long-standing inequities in their evaluation efforts — inequities that often obscure root causes underlying the problem we are trying to address. A skilled evaluator can help surface such complex dynamics.

For example, when BECOME was asked to evaluate a first round of grants awarded by the Partnership for Safe and Peaceful Communities in support of innovative approaches to neighborhood safety in Chicago, we started with a literature review of violence prevention programs in other jurisdictions.

In the process, we discovered that interventions such as job programs or social and emotional skills training focus on the immediate needs of individuals. But adult violence also is linked to factors more distant — such as redlining or trauma due to heightened exposure to violence. Community violence too often is the legacy of policies that, over time, forcibly segregated communities by race and income, tilting the playing field against Black, indigenous, and other people of color. No matter how well designed an intervention might be, if it fails to address such root causes, it is unlikely to succeed.

One of the key findings we were able to share with the team at the Partnership for Safe and Peaceful Communities is that interventions delivered in a consistent fashion and coordinated with other actions had the most impact. That kind of approach is now a feature of the current iteration of the Chicago Fund for Safe & Peaceful Communities initiative.

Last but not least, we have learned that evaluation is most effective when it is culturally responsive and engages multiple stakeholders — especially those likely to be impacted by the intervention — in the process of developing questions, designing solutions, and recommending next steps based on lessons learned.

The resulting combination of learning, engagement, informed design, and collaborative implementation is much more likely to lead to programs that deliver safety and security, health and well-being, and education for all.

To create a society in which thriving communities of color and economic opportunity for all is the norm, we need to take steps now to address the root causes of poverty and racial injustice. Evaluation can help us do that.

Headshot_dominica-mcbrideDominica McBride, PhD, is the founder and CEO of BECOME, a nonprofit organization that uses evaluation as a tool to advance social justice and thriving communities.

A conversation with Mari Kuraishi, President, Jessie Ball duPont Fund

October 06, 2020

Mari Kuraishi came to prominence as president of GlobalGiving, which she co-founded with her husband, Dennis Whittle, in 2002. During her time there, the crowdfunding platform facilitated over $514 million in giving by more than a million donors to twenty-seven thousand projects around the world. In 2011, Kuraishi, who previously had worked at the World Bank, where she spearheaded the launch of the Development Marketplace, was named one of Foreign Policy's 100 Global Thinkers for "crowdsourcing worldsaving." Since January 2019, she has served as president of the Jessie Ball duPont Fund in Jacksonville, Florida.

PND recently spoke with Kuraishi — who chaired the board of GuideStar before it combined with Foundation Center in 2019 to form Candid and then served as co-chair of the Candid board during its first year — about the impact of crowdfunding on the global development landscape, her work at the Jessie Ball duPont Fund, and what she has learned about the social sector's response to urgent problems.

Mari_kuraishi_jessie_ball_dupontPhilanthropy News Digest: After seeing firsthand through your work at the World Bank the difficulty local officials and social entrepreneurs often had in securing funding for their development projects, you and your husband co-founded the world's first crowdfunding platform. Back then, what made you think individuals in developed countries would be willing to participate directly in the funding of such projects?

Mari Kuraishi: That is a very good question, because back in 2000 when we left the World Bank there actually was very little evidence that people were ready to give online, let alone to projects based thousands of miles away. To be sure, many generous donors existed, giving to brand-name NGOs like CARE, Oxfam, or the International Red Cross, but even those organizations were not yet online. Still, we were convinced that individual donors would give if they had a platform through which to do it. We were also sure that changes in technology would transform people's sense of proximity, and we knew that proximity was a key driver of generosity. What we weren't so sure about was how quickly it would happen.

PND: How has the popularity of crowdfunding and crowdfunding sites changed the international development landscape in the last dozen years or so?

MK: That's a little harder to calculate. Crowdfunding has definitely transformed giving in the U.S. since we founded GlobalGiving; online giving now represents almost a tenth of giving overall, starting from almost zero in 2000. That means more than $4 billion flowed through online giving platforms in 2019. What part of that $4 billion goes to international development projects, I can't tell you. But I do know this: in 2002, when we put up the first version of our website, we processed $25,000 in donations. This year it looks like GlobalGiving will process close to $100 million in donations to thousands of project leaders all over the world.

PND: While you were at GlobalGiving, the organization developed a framework of core values that included things like "always open" and "listen, act, learn, repeat." The emphasis on listening, on solutions developed by those on the front lines, and on continuous improvement through evidence-based learning has been adopted by many other nonprofits and foundations in recent years. Do you think what appears to be a gradual shift away from top-down funding models to more bottom-up crowdsourced models is here to stay?

MK: You're speaking right to my confirmation bias. I'm the woman who thought online giving was around the corner at the end of the year 2000. Yes, I think respecting the problem-solving capacities of communities and local leaders is here to stay. Not only are we seeing hashtags like #shiftthepower, we're seeing movements like Black Lives Matter and the Women's March come to the fore, so I cannot help but think that citizen leadership is on the rise. And perhaps I'm splitting hairs here, but it's not necessarily a shift away from top-down to bottom-up, so much as there is a scope for both types of leadership and action — just in different contexts.

PND: You are a firm believer in using data to grow and strengthen trust between funders and nonprofits. Is the sector making progress in that area, and what are some of the challenges that may be slowing that progress?

MK: Yes, I think we are making progress in the use of data to grow and strengthen trust between funders and nonprofits. First, data is easier and cheaper to collect and analyze; we have technology to thank for that. Second, we have emerging standards for what data matters — ranging from the philosophical, conceptual, and qualitative frameworks provided by movements like Leap Ambassadors, centered around the Leap of Reason initiative launched by Mario Morino, to the specific and granular, like the GuideStar/Candid Exchange profile. All of this creates a way for organizations to benchmark their own status and progress. I see three challenges in this regard: first, data scientists are still scarce and expensive in the social sector; second, not as many funders understand how to interpret the data, which means that sometimes we don't make the jump into trust-based philanthropy as readily as we might; and, finally, not everyone agrees that the corollary to greater transparency from nonprofits is more unrestricted funding.

PND: What is your take on how COVID-19 is impacting charitable giving in general and crowdfunding for development projects in particular?

MK: You should probably ask Alix Guerrier, my successor, as he's the man at the helm of crowdfunding in the midst of the COVID-19 crisis. I can tell you, though, that what I've heard from grantees at the Jessie Ball duPont Fund — who do not engage in international development — is that their traditional models of fundraising, which rely in great part on in-person events, have taken a hit, and that has spurred them to think a lot more about the potential for crowdfunding to fill the gaps.

PND: The Jessie Ball duPont Fund's grantmaking activities are guided by two strategic themes: equity and placemaking. What are the foundation's top priorities at the moment? And have the COVID-19 crisis and this summer's protests against systemic racism changed how you approach those priorities?

MK: Our priorities are in striking the right balance between seeking specific opportunities for change while also meeting the needs of our grantees and enhancing their resilience and effectiveness. To that end, we've built out an ambitious technical assistance program for grantees focused on fundraising, listening to constituent feedback, building capacity around data and equity, and achieving organizational transparency. The COVID-19 crisis really pushed us to undertake this as a hedge against the speed and magnitude of change that the crisis wrought. The protests against systemic racism redoubled our commitment to equity, which we had identified as a core direction through a strategy review we conducted last year. It has also increased the urgency I personally feel around making sure that we are not perpetuating systemic injustices through the patterns and processes of our grantmaking.

PND: As of the beginning of the year, about a third of the fund's endowment was invested in a socially responsible manner or to achieve a positive social or environmental impact. Can you tell us about the kinds of impact investments the fund is looking to make?

MK: The majority of our socially responsible investments, roughly $108 million, are in portfolios of companies that have been screened for best business practices, such as anti-discrimination, gender and racial equity, workforce development, wealth creation, and anti-pollution, among others.

About 6 percent, $18 million, is invested in high-impact funds and companies focused on affordable housing, support for small businesses, medical/social service tech, and clean energy. Illumen Capital, for instance, has a double bottom line of anticipated market-rate return and social impact. By directing capital to women- and people of color-owned businesses, Illumen finds traditionally overlooked value and doubles down by also working with financial managers to reduce their implicit biases in investing.

The Jessie Ball duPont Fund is largely place-based and about $12 million of our high-impact investments are in the communities Mrs. duPont cared about. These investments have mostly been in community development financial institutions (CDFIs) that provide access to affordable capital to developers, as well as individuals who might not qualify for traditional commercial bank loans but need money for a car, mortgage, or to capitalize a small business.

PND: Asian Americans have not always been front and center in movements for racial and social justice. Why is that, and do you think it is changing?

MK: Yes, you're right that Asian Americans are underrepresented in movements for racial and social justice. But we did have people like Fred Korematsu, who explicitly challenged the internment order for Japanese Americans all the way up to the Supreme Court — and lost — and Yuri Kochiyama, who was at Malcolm X's side when he was assassinated. Both were radicalized by their experience of internment, and perhaps that points to an answer to your question about Asian Americans and racial or social justice. Perhaps, as a community, we have tended to not tell those stories of injustice — except for extremely visible and acute events like the internment — and thereby have not mobilized our own communities. I do think that Asian-American Gen Z-ers and millennials seem to be as fired up as their peers — my personal favorite is K-pop fans mobilizing for Black Lives Matter — but I'll admit my conclusion is based entirely on an anecdote here.

PND: Your professional career has included stints at a huge, well-resourced multilateral organization, at a social enterprise startup, and now at an established private foundation. What have those experiences taught you about the ways in which the social sector responds to urgent problems and about what it might do differently to create more impact and really move the needle on those problems? Are you hopeful it will be able to do so?

MK: That's difficult to distill into a short answer, but here's a take. Large, well-resourced multilateral organizations organize their inputs and subject their business processes to scrutiny, much like large, for-profit multilateral institutions do, with one exception: their results aren't subject to competition. Social enterprise startups usually have to compete to get attention and capital to survive, but many don't have the resources to invest in other resources, such as human capital. The foundation world isn't really impacted by competition, either. I'd say that I was forced into greater accountability and transparency and soul-searching at the startup than at either of the two other places. So, the one thing I might say is that competition, channeled well, matters.

It would be good, I think, for us in the foundation and multilateral-aid worlds, to hold ourselves accountable to a greater degree of transparency, such as benchmarking ourselves to common standards. Of course, I can foresee the potential for dispute around those standards, so perhaps we just start with greater transparency and see where it leads us. But the urgency of the need to become more effective than we are today, I think, is undeniable. It's the only feasible response to what Jon Kabat-Zinn calls the "Full Catastrophe," because in the short run at least, we can't magically come up with more resources to dedicate to the growing list of challenges we face.

— Kyoko Uchida

Mexican president targets U.S. philanthropy, but it’s Mexican civil society that could take the hit

September 22, 2020

Tren-Maya-Map-07On Friday August 28, 2020, four days before I officially became the W.K. Kellogg Chair for Community Philanthropy at the Johnson Center, I knew what the topic of my inaugural blog for this platform would be.

That day, Mexico’s president, Andrés Manuel Lopez Obrador, or AMLO, as he is known, shared the results of what he termed an "investigation" into the funding of nine non-governmental organizations (NGOs) who have opposed his principal infrastructure project, the Mayan Train (Tren Maya) (Presidency of the Republic, 2020a). AMLO claimed that the organizations had clandestinely received almost $14 million in grants specifically to oppose this project from five U.S. foundations, including Ford, Rockefeller, the National Endowment for Democracy, ClimateWorks, and the W.K. Kellogg Foundation. It is important to state upfront that all the recipient organizations vehemently deny the allegations.

Given that my chair was endowed jointly by the W.K. Kellogg Foundation and the Kellogg Company 25-Year Employees' Fund, and that I have worked over the last two decades to both research and strengthen international and domestic philanthropy in Mexico, I feel a special obligation to address the accusations and innuendos made by the Mexican president.

Another motivating factor for me is that this attack is not an isolated incident. It occurs against a backdrop of increasingly hostile rhetoric and policy actions directed against Mexican civil society from the Mexican government, as well as increasing violence against environmental and human rights activists in that country, as captured by Mexico's declining score in the Freedom House Index (Freedom House, 2020). Tragically, this trend is global — in many countries, civil society is under attack (International Center for Not-for-Profit Law [ICNL], 2016).

AMLO and Tren Maya

To understand the significance of the Mayan Train and AMLO's frustration with its opponents' success, we need to go back to his election in 2018 and his campaign slogan, "For the good of all, first the poor" (Por el bien de todos, primero los pobres). He promised to lead Mexico through what he calls the Fourth Transformation, upending the corrupt, neo-liberal political and economic system that for decades has favored the rich and powerful — the "cabals of the powerful" — at the expense of the poor.

Tren Maya was to be his signature infrastructure project. The plan was to lay a thousand miles of rail around the perimeter of the Yucatan Peninsula, connecting key destinations and igniting economic prosperity by facilitating tourism and transportation of raw materials and manufactured goods. The government of Mexico estimates the cost at $6.5 billion USD and predicts it will create half a million jobs during construction and have a multiplier effect on the region's economy (Government of Mexico, 2020).

Opposition to the Mayan Train

From the start, the project has met with stiff resistance from an assortment of local, national, and international groups that believe the mega-project will bring disruption and environmental degradation. The rail line will pass through five states that hold some of the nation's most important archaeological sites and biodiverse habitats.

Soon after AMLO announced a plan for public consultation, hundreds of Mexican environmentalists, scientists, and human rights advocates published an appeal to postpone it, arguing, "High biodiversity sites must be preserved according to the most stringent international standards, taking into account the indigenous peoples who have been the guarantors of their territories and custodians of the natural and cultural wealth of our country" (Lichtinger & Aridjis 2018). Nevertheless, the consultation proceeded.

During the month-long consultation at the end of 2019, the government claimed high levels of participation and approval in both a popular referendum and assemblies aimed at indigenous groups. Local organizations cried foul. After observing the process, the Mexico office of the United Nations High Commissioner for Human Rights issued a statement that said in part, "The information presented to indigenous communities only outlined the potential benefits of the project and not the negative impacts it may cause" (United Nations, 2019). It also found that the process did not comply with "culturally appropriate" standards designed to encourage free participation and that the participation of indigenous women was especially inadequate.

Local organizations began to collaborate with larger NGOs based in Mexico City with expertise in environmental law and public policy, and it is these nine NGOs that AMLO identified in his August statement. Together, the groups launched successful court challenges and public protests, calling into question the legality of the consultation process, as well as the project's forecasted benefits and compliance with environmental regulations. At present, two of the seven sections of the project have been halted by court orders, while construction proceeds on others (Vanguardia 2020), raising the question of how the train can function if its circuit is left incomplete.

Benefactores y Opositores (Benefactors and Opponents)

AMLO claimed that these NGOs had hidden their sources of funding because they were acting on behalf of foreign interests, including multinational corporations and the U.S. State Department. He declared his role was to expose the fact that organizations were "disguised" as advocates for the environment and human rights when in fact they were acting on behalf of what he termed "cabals of the powerful" (Presidency of the Republic, 2020). He put his case succinctly on September 4:

What was wrong is that they worked in anonymity, clandestinely, without transparency, supposedly as independent non-governmental associations, so maybe they are independent, but from the people, not from the cabals of the powerful....

Thus, his criticism of the NGOs has two prongs:

  1. that their work and their funding was clandestine and opaque; and
  2. that these groups are not accountable to the Mexican people, but rather to the corporate and political interests behind their donors and therefore are illegitimate.

Let's examine each claim.

Transparency Defended

The investigation shared by the president states that the organizations' activities include filing lawsuits to stop construction of sections of the Mayan Train or the project as a whole, filing a complaint before the Inter-American Commission of Human Rights, investigating and documenting irregularities of the project, and disseminating the findings of such research (Cuevas, 2020). Given that these acts are essentially public, or need to be made public in order to have an impact, it is difficult to understand how they can be conducted clandestinely.

In a series of individual and collective statements, the named organizations have defended their work, contending that the funding they received from U.S. philanthropy was both legal under Mexican and international law and transparent, and that the grants identified were not made to them for the purpose of opposing the project (Animal Politico, 2020).

The organizations pointed out that in the table provided by the president, seven of the nine grants started well before his election in 2018, contradicting his claim that the funds were intended to defeat the project. Similarly, more than once AMLO and his spokesperson stated that some of this information was public. AMLO's administration also said the investigation was conducted by a "private foundation," but they did not identify the researcher nor the source of their information. Using publicly available data from the tax authority's transparency portal for nonprofits, a Mexican think tank called Alternativas y Capacidades found that five of the NGOs listed were charitable organizations, and of those three received the bulk of their resources from sources within Mexico (Alternativas y Capacidades, 2020).

Legitimacy Defended

This leaves the second prong of the critique: does the receipt of foreign grants delegitimize the work of an NGO?

While AMLO has leveled a rhetorical attack, many other governments have placed regulatory restrictions or outright bans on organizations receiving foreign funds (ICNL, 2016). Such restrictions often represent a government's attempt to assert its sovereignty against both foreign governments and domestic actors, denying resources to groups they perceive as "political rivals" (Dupuy & Prakash, 2020, p. 618-619). The assumptions underlying such restrictions are that "internationally funded NGOs are not well rooted in the local community," and that they "are more responsive to donors' concerns than those of the communities they serve" (Dupuy & Prakash, 2020, p. 621).

This argument does not do justice to the mechanisms for community accountability that NGOs practice and that international donors typically look for as part of their due diligence (Brechenmacher & Carothers, 2018). These mechanisms include board composition, consultation and representation, and compliance with governmental regulations and ethical standards. While there are cases of heavy-handed international funders seeking to influence and even dictate outcomes for communities and public policy, most — and particularly those foundations named by AMLO — make it their policy to respect local autonomy and support community-led development. Still, funding from foreign donors opens a potential line of attack for critics.

Why accept cross-border philanthropy?

Given that cross-border donations can present a point of vulnerability for NGOs, why do they accept them?

NGOs turn to foreign funders because local sources of funding are often quite scarce, especially for issues that risk the ire of the government — like the defense of human rights and environmental justice. Additionally, outside of the world's wealthiest nations, there are few philanthropic foundations (Johnson, 2018). While all nations have their unique expressions of generosity and vibrant traditions of mutual self-help, few exhibit a strong propensity to support formal nonprofit organizations.

Mexico's formal nonprofit sector is relatively under-developed and is heavily reliant on earned income (Salamon, Sokolowski, & Haddock, 2017). Foreign donors do not play a large role in supporting the sector as a whole, with about 10 percent of donations coming from abroad (Layton et al., 2017). This challenging context has been further complicated by actions taken by AMLO's administration:

  • It has moved to eliminate Mexican federal funding of nonprofit organizations (Technical Advisory Council 2020), which was already low compared to other nations (Salamon, Sokolowski, & Haddock, 2017).
  • The tax authority has stepped up its audits of charitable organizations and its revocations of their charitable status: in the three years prior to AMLO's presidency, there was one revocation a month. Now there is one every other working day (Tax Administration Service, 2020). One high-profile case involved the revocation of the charitable status of Mexico's largest community foundation, the Foundation of Chihuahuan Businesspersons (FECHAC), widely respected for its professionalism (González Sierra, 2020).
  • The tax authority has also imposed an income tax on earned revenue (unrelated to mission) that exceeds 10 percent of total organizational income (Council on Foundations, 2019).

These policies weaken the three major sources of domestic funding: government support, private grants, and earned revenue. With his attacks on foreign grants, AMLO and his administration are undermining all avenues of financial sustainability for Mexico's nonprofit sector.

Why cultivate domestic — especially community — philanthropy?

These actions on the part of the current Mexican administration present an important challenge to Mexican civil society. There is a growing consensus among civic leaders and international donors that the long-term sustainability and credibility of NGOs depends on a more favorable enabling environment for civil society, especially the growth of domestic philanthropy.

Many donors have sought to encourage the emergence of domestic philanthropy in developing nations (C.S. Mott Foundation, 2013; Regelbrugge, 2006). My own research has sought to provide empirical data to better understand the nature of this challenge, and my consulting work has supported efforts to encourage the development of Mexican civil society and its philanthropic sector, particularly the institutions of community philanthropy.

Community philanthropy in Mexico has shown great promise in addressing the key challenge of cultivating a culture of giving and promoting the use of institutional channels for generosity (Olvera et al., 2020). At their best, community foundations work with a broad range of stakeholders at the intersection of donors, nonprofits, business, and government, and they enjoy a unique ability to support community-led development. Their work demonstrates that, far from being independent of a community's people, they are directly engaged with and accountable to them.

(Image credit: Mayan Train Route image from Dialogo Chino.)

Headshot_Michael_LaytonMichael Layton, PhD, joined the Johnson Center in September 2020 as the W.K. Kellogg Community Philanthropy Chair, the nation's first endowed chair focused on community philanthropy. This post originally was created for the Dorothy A. Johnson Center for Philanthropy's blog and was published there on September 16, 2020.

 

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References

Alternativas y Capacidades, A.C. 2020. Analysis of Data from Fondos a la Vista. Data retrieved from https://fondosalavista.mx/

Animal Politico. 2020. Gobierno de AMLO acusa a Animal Político y a OSC de recibir recursos para atacar al Tren Maya. Animal Politico. Retrieved from https://www.animalpolitico.com/2020/08/gobierno-amlo-animal-politico-recursos-atacar-tren-maya/

Brechenmacher, S. & Carothers, T. (2018). The legitimacy menu.Examine Civil Society Legitimacy. Carnegie Endowment for International Peace. Retrieved from https://carnegieendowment.org/2018/05/02/examining-civil-society-legitimacy-pub-76211

C.S. Mott Foundation. (2013). 2012 Annual Report, Community foundations: Rooted locally, Growing globally. Retrieved from https://www.mott.org/news/publications/2012-annual-report-community-foundations-rooted-locally-growing-globally/

Council on Foundations. (2019). Nonprofit Law in Mexico. Global Grantmaking Country Notes. Retrieved from https://www.cof.org/content/nonprofit-law-mexico

Cuevas J. R. [JesusRCuevas]. (2020, August 28). Hoy se dio a conocer una investigación sobre el financiamiento de fundaciones extranjeras a organizaciones no gubernamentales y a un medio que se oponen a la construcción del Tren Maya. [Tweet]. Retrieved from
https://twitter.com/JesusRCuevas/status/1299368891525804032

Dupuy, K. & Prakash, A. (2020). Global backlash against foreign funding to domestic non-governmental organizations. In Powell, W. W., & Bromley, P. (Eds.). (2020). The Nonprofit sector: A research handbook. Stanford University Press.

Freedom House. (2020). Freedom in the World: Mexico. Retrieved from https://freedomhouse.org/country/mexico/freedom-world/2020

González Sierra, E. (2020, January 22). FECHAC’s Charitable Status Revoked. El Heraldo de Chihuahua. Retrieved from https://www.elheraldodechihuahua.com.mx/local/desautorizan-a-la-fechac-para-recibir-donativos-noticias-de-chihuahua-4732080.html

Government of Mexico. (2020). Mayan Train: Multiplier Effect. Retrieved from https://www.trenmaya.gob.mx/efecto-multiplicador/

International Center for Not-for-Profit Law. (2016). Survey of Trends Affecting Civic Space: 2015-16. Global trends in NGO law 7(4). Retrieved from https://mk0rofifiqa2w3u89nud.kinstacdn.com/wp-content/uploads/global-ngo-law_trends7-4.pdf?_ga=2.245940356.162911111.1599646423-2060145790.1598725786

Johnson, P. D. (2018). Global philanthropy report: Perspectives on the global foundation sector. Harvard Kennedy School, the Hauser Institute for Civil Society at the Center for Public Leadership. Retrieved from https://cpl.hks.harvard.edu/files/cpl/files/global_philanthropy_report_final_april_2018.pdf

Layton, M. D. (2017). Regulation and self-regulation in the Mexican nonprofit sector. Chapter in Dunn, A., Breen,O., & Sidel, M. (Eds.). Regulatory waves: Comparative perspectives on state regulation and self-regulation policies in the nonprofit sector. London: Cambridge University Press.

Layton, M.D., Rosales, M.A. (2017). Financiamiento de las donatarias autorizadas. Chapter in Butcher García-Colín, J. (Ed.), Generosidad en México II: Fuentes, cauces y destinos. Mexico City: Editorial Porrúa, Centro de Investigación y Estudios sobre Sociedad Civil, Instituto Tecnológico y de Estudios Superiores de Monterrey.

Layton, M. D., & Mossel, V. (2015). Giving in Mexico: Generosity, Distrust and Informality. Chapter in Wiepking, P. & Handy, F. (Eds.) The Palgrave Handbook of Global Philanthropy (pp. 64–87). Palgrave Macmillan, London.

Lichtinger, V. & Aridjis, H. 2020. The Mayan trainwreck. Opinion. Washington Post. Dec. 4, 2018. Retrieved from https://www.washingtonpost.com/news/theworldpost/wp/2018/12/04/amlo/

Mexican Center for Environmental Law. (2020). The defense of human rights and the environment strengthens democracy and should not be criminalized. Retrieved from https://www.cemda.org.mx/la-defensa-de-los-derechos-humanos-y-de-la-naturaleza-fortalece-la-democracia-y-no-debe-criminalizarse/

Olvera Ortega, M., Layton, M., Graterol Acevedo, G. & Bolaños Martínez, L. (2020). Community Foundations in Mexico: A Comprehensive Profile 2009–2016 – Report Summary. Mexico City: Alternativas y Capacidades, A.C., Charles Stewart Mott Foundation, and Inter-American Foundation. https://alternativasycapacidades.org/wp-content/uploads/2020/03/FundComunitarias_ENG.pdf

Presidency of the Republic. (2020a). Transcript of press conference of President Andrés Manuel López Obrador on August 28, 2020, Reynosa, Tamaulipas, Mexico. Retrieved from https://www.gob.mx/presidencia/es/articulos/version-estenografica-conferencia-de-prensa-del-presidente-andres-manuel-lopez-obrador-del-28-de-agosto-del-2020?idiom=es

Presidency of the Republic. (2020b). Transcript of press conference of President Andrés Manuel López Obrador on September 4, 2020, Mexico City, Mexico. Retrieved from https://www.gob.mx/presidencia/articulos/version-estenografica-conferencia-de-prensa-del-presidente-andres-manuel-lopez-obrador-del-4-de-septiembre-de-2020?idiom=es

Regelbrugge, L. (2006). Funding Foundations: Report on Ford Foundation support of grantmaking institutions, 1975 to 2001. Ford Foundation. Retrieved from https://www.fordfoundation.org/work/learning/research-reports/funding-foundations-report-on-ford-foundation-support-of-grantmaking-institutions-1975-to-2001/

Salamon, L. M., Sokolowski, S. W., & Haddock, M. A. (2017). Explaining civil society development: A social origins approach. JHU Press.

Tax Administration Service. (2020). Charitable Organizations Published in the DOF (Diario Oficial Federal). Retrieved from https://www.sat.gob.mx/consultas/27717/conoce-el-directorio-de-donatarias-autorizadas

Technical Advisory Council. (2020, September 02). Pronouncement of the technical advisory council of the federal law on promotion of the activities of the civil society organizations (CSOs), regarding the declarations of the President of the Republic Lic, Andrés Manuel López Obrador on CSOs. Retrieved from https://consejotecnicoconsultivo.org.mx/wp-content/uploads/2020/09/CARTA-DEL-CTC-CON-RELACION-A-LOS-PRONUNCIAMIENTOS-DEL-PRESIDENTE-AMLO.pdf

United Nations. (2019). The indigenous consultation process on the Mayan Train has not complied with all international human rights standards on the matter: UN-DH. Retrieved from https://www.onu.org.mx/el-proceso-de-consulta-indigena-sobre-el-tren-maya-no-ha-cumplido-con-todos-los-estandares-internacionales-de-derechos- humans-in-matter-onu-dh/

To help communities survive crises, trust and invest in their leadership

September 08, 2020

Kresge_fresh_lo_initiative_2Amid multiple ongoing crises, foundations are struggling with how best to support the nonprofit sector — in particular, community-based organizations working to address a raging pandemic, police violence, and systemic racism.

Led by people with a wealth of lived experience, community-based groups have long been a critical source of support for under-resourced neighborhoods struggling to rise above interconnected challenges, including insufficient access to fresh and affordable food, clean air, and safe, healthy housing.

By listening to and investing in local organizations, philanthropy has helped accelerate resident-centered collaborative approaches that have made it possible for such groups to pivot to meet immediate COVID-related needs and maintain their financial footing during an economic downturn that has forced many nonprofits to shut their doors.

One such group, the Memphis-based Binghampton Development Corporation (BDC), which works to promote people-first property development, support affordable home ownership, and train new food entrepreneurs in English, Spanish, and Arabic, hasn't missed a beat since COVID emerged as a public health crisis earlier this spring. Although the virus forced the organization to pause its regular programming to ensure proper social distancing, it is still hard at work making sure the small food businesses it supports have the resources they need to navigate these uncertain times and sustain themselves in a post-pandemic world. Recently, for example, it secured a catering deal for one local entrepreneur to prepare food for emergency medical staff, helping that small business owner earn the income needed to survive while supporting critical frontline workers.

And BDC isn't alone. Montbello Organizing Committee, a group of community organizers and developers based in Denver’s multiracial Montbello neighborhood, responded to the pandemic by immediately organizing emergency food distribution and working with partners to distribute meals to more than eight hundred people a day. In New Brunswick, New Jersey, resident-led nonprofit Elijah's Promise has provided twice-daily meals to locals out of its community soup kitchen and is serving more than three times as many meals today as it did before the virus became a concern. And through its Corner Store Witness initiative, the Chicago-based Inner-City Muslim Action Network (IMAN) and its community partners recently held a virtual convening to discuss the challenges immigrant-owned corner stores in inner-city neighborhoods are facing and what can be done to provide a path forward to long-term healing and the building of real community power. All these organizations are working locally to meet the needs of the communities in which they are embedded and are examples of the idea that in times of crisis, hyper-local investment is essential for community survival.

About five years ago, the Kresge Foundation developed a grant program, Fresh Local & Equitable (FreshLo), to support resident-led approaches to community challenges that prioritizes cultural expression and food as a social determent of health. A joint initiative of Kresge's Health and Arts & Culture programs, FreshLo intentionally integrates food, art, and creative approaches to community building to drive neighborhood revitalization equitably.

One of our top priorities is raising up resident-centered, collective action that includes the voices of those who live and work in the community. During the grantmaking process, we intentionally looked for neighborhoods that have lacked access to foundation funding — especially those in the South and Midwest. We knew that groups on the ground were already doing important community-driven work and we hoped the funding we could provide would help seed new networks, bring resident-led projects to life, and develop infrastructure that could support their neighborhoods over time.

The twenty-three community-based groups we selected were already doing the work needed to drive long-term neighborhood change — the type of work Kresge has been exploring for nearly a decade through its Creative Placemaking efforts, which are based on the idea that progress depends on a more nuanced understanding of urban inequality and how arts, culture, and community-engaged design intersect with strategies to expand opportunities for residents in low-income communities.

It was the social cohesion and vision shared by residents in these neighborhoods that excited us and created, in our view, the essential pre-conditions for long-term change. That vision also served as a vital ground wire for the collective action needed to mitigate some of the impacts related to the pandemic and structural racism.

Over the past six months, we've seen these organizations evolve their programs and services to meet emerging needs of their communities. We had a hunch that investing in resident-driven collective action and cultural solutions would help strengthen communities that had been neglected for decades; the pandemic has proven that hunch right. The results of our grantees' efforts show that place-based, culture-first investing is critical in times of crisis.

In Minnesota, Native-led community organization and FreshLo grantee Dream of Wild Health has tripled its farmland with support from Kresge. During a pandemic — when food sovereignty is paramount — the organization's sustainable farming practices, informed by Indigenous knowledge and traditions, have proven key to meeting the growing food needs of its community. Not only is the group cultivating its land to yield more fresh produce for current and future generations, it's also delivering food to elders who are at higher risk of becoming seriously ill with the virus and supporting other members of the community impacted by COVID and ongoing protests against racial injustice.

Similarly, In Oakland, FreshLo grantee Planting Justice has spent decades mobilizing people impacted by mass incarceration to work toward neighborhood revitalization and food sovereignty. Since the pandemic began, the organization has shifted work at its plant nursery to provide critical produce and smoothie distribution to more than a thousand neighbors a week. As its community faces job loss and economic challenges, it also has taken on forty paid interns, creating new opportunities for professional development and routing money to local families, supported by additional COVID-response funding from Kresge.

Like Montbello, Elijah's Promise, and IMAN, the organization's ability to quickly pivot and use resources where they are most needed is a testament to the trust it has built up and its commitment to its neighbors. Investments in social infrastructure and the leadership of groups like Dream of Wild Health and Planting Justice can only strengthen their work.

For historically underresourced and marginalized neighborhoods, and the people who live in them, responding to crises is nothing new. But they are more likely to survive a crisis when strong community connections already exist and they receive the support needed to take neighborhood-level action. The lessons from the FreshLo initiative suggest that investments in social cohesion, local leadership, and community enterprises can yield huge dividends.

The crises we are grappling with today — and those to follow — require that we lean on our neighbors. The strongest safety nets are constructed out of local knowledge, relationships, and community action, and philanthropy should do what it can to support them.

(Photo credit: Kresge Foundation Fresh Local & Equitable Initiative)

Stacey_Barbas_Regina_R_Smith_PhilanTopic

Stacey Barbas is a senior program officer in the Health program and Regina R. Smith is managing director of the Arts & Culture program at the Kresge Foundation.

5 ways to use your donor data for #GivingTuesday

September 04, 2020

Donate-now#GivingTuesday is a global day of generosity that usually takes place the Tuesday after Thanksgiving. In 2019, $1.97 billion was raised on that Tuesday alone. And this year, nonprofits have an opportunity to build on that success and generate even more support for their programs and mission.

As you and your colleagues begin to prepare for this year's event and start to brainstorm strategies to maximize your organization's success, consider how donor data can help. From conducting prospect research before the big day to analyzing the data afterwards, there are many ways that donor data can be used to elevate your #GivingTuesday results specifically and overall fundraising results more generally.

Below, we consider in more detail some of the most effective ways to utilize donor data, including:

  1. keeping your data clean
  2. identifying your best prospects
  3. segmenting your donors
  4. optimizing future outreach
  5. looking for opportunities to match gifts

Let's take a closer look at each of our recommendations for putting donor data to good use this #GivingTuesday.

1. Keep your donor data clean. We've found that it's easier to use donor data when that data is clean. Strategizing and designing a #GivingTuesday campaign with incorrect data can negatively impact relationships with donors you've spent so much effort cultivating. If you're looking for an in-depth explanation about the importance of data hygiene, check out this article from AccuData.

The easiest way to create and maintain clean data is to use a CRM (constituent relationship management) database. A CRM compiles information about each of your constituents in individual profiles, enabling you to easily access any donor's giving history, communications activity, and relationship status.

With a CRM, you can also do the following to clean your data:

  • remove duplicate profiles
  • verify that a donor's contact information is up-to-date
  • remove the profiles of donors who haven't given in many years (although you should send a final appeal to them before removing their profiles from the system)
  • search for donors who have passed away since your last communication
  • egment your donors into relevant groupings

Once you've cleaned the data, analyze it for insights that can help you craft an effective outreach strategy. #GivingTuesday only comes around once a year, so make sure your planning for it is based on the best data you can get your hands on.

2. Identify new prospects. After you've cleaned your donor data, take the time to analyze it. Part of that process is what we call prospect research. Simply put, prospect research is the process of researching your would-be supporters to see which of them is most able and willing to donate to your organization. Some of the prospects you identify through the process will become regular supporters of your organization and a few of them could even have a significant impact by contributing a major gift.

Major donors should always be a priority for your organization. Some fundraising professionals even go so far as to say that 89 percent of a nonprofit's fundraising revenue should come from just 14 percent of its donors. That's why it's important to start cultivating these relationships as soon as you can — major donors tend to give their biggest gifts to organizations that consistently and authentically engage with them.

Determining which of your supporters is most likely to be a major donor before #GivingTuesday gives you the chance to approach them ahead of time and see where they stand.

To conduct prospect research efficiently, start by filtering your donor data using wealth and charitable indicators:

  • Wealth indicators. Things like real estate ownership, stock holdings, business affiliations, and so on will give you an idea of an individual's capacity to give.
  • Charitable indicators. A donor's past giving patterns, his or her relationship to your cause, his or her political contributions history, and so on will give you an idea of his or her willingness to give.

While you can conduct prospect research manually, your best bet is to invest in a tool built for the purpose. To learn more about how all these factors can be brought together to create useful profiles of your donors, check out our Essentials for Prospect Research guide.

3. Segment your donors. You can also use donor data to segment your donors. This is a great marketing strategy and is something you should do both before and after #GivingTuesday. Why?

Donor segmentation helps you better communicate and reach out to supporters in ways that are most likely to catch their attention and encourage their engagement.

You already know that donor data is key to beginning and sustaining valuable relationships. And, as we've noted, a good CRM will store and organize all your data for effective management.

Once your data is organized in your CRM, you can start grouping supporters. Segment your database into different lists based on key metrics and then formulate different communication strategies for each one. You can, for instance, segment donors by:

  • donation frequency
  • preferred method of giving
  • engagement preference or history
  • location
  • age
  • business affiliations
  • volunteer history

All of these factors (and more) should influence how you reach out to supporters before #GivingTuesday (and afterwards). For example, you might find that younger people in your audience prefer to be communicated with via social media, whereas older folks prefer email or even direct mail.

4. Optimize future outreach. One of the best ways to increase response rates, build deeper connections, and improve donor retention is to personalize your outreach. Simply sending a thank-you email with a donor's name and the size of her gift size will help her remember you the next time she decides to make a donation.

And after #GivingTuesday is over, you're likely have a whole batch of new donors, as well as data about them that will come in handy for your future fundraising and stewardship efforts.

You can use that data to retain some of these new supporters and broaden your donor base in the long run by doing the following:

  • sending personal, targeted appeals asking for a specific contribution amount based on your donor analytics;
  • automating personalized gift receipts and acknowledgments, which can be done by using a mail-merge tool in your CRM;
  • using templated donor letters to explain to supporters how their gifts have advanced your mission and how their future gifts will continue to make an impact.

These and other ideas can help you close out the giving season on a positive note and set up additional donor-cultivation efforts in the new year.

5. Look for opportunities to match gifts. The relationship between nonprofits and for-profit businesses is changing as corporate social responsibility (CSR) policies are adopted by more and more corporations and companies step up to match donations that their employees make to nonprofits.

Unfortunately, many gifts go unmatched simply because donors are unaware that their gifts are match-eligible.

It's estimated that the nonprofit sector misses out on $4 billion to $7 billion in matching funds every year.

This #GivingTuesday, don't leave money on the table. The best ways to incorporate matching gifts into your strategy and ensure you leverage your donors' support to the maximum include:

  • embedding a matching gift database on your donation page that allows donors to look up their company and access any information it may have provided about its matching-gift policies.
  • using software that allows you to automatically look up email address domains provided by donors. If an email address is associated with a company that matches gifts, the donor will be notified of his or her eligibility.

Read more about corporate matching-gift programs and learn how you can maximize your fundraising potential by reviewing Double the Donation's corporate matching gift guide.

There are many ways to analyze and use your donor data. Whether that means identifying prospective donors, segmenting donor profiles, or just keeping your data clean, everything you do with the information you collect will have an impact on your fundraising efforts going forward. But don't take our word for it. Maximize your donation revenue this #GivingTuesday by trying out some or all of these techniques!

Sarah Tedesco_DonorSearch_PhilanTopicSarah Tedesco is executive vice president of DonorSearch, a prospect research and wealth screening company.

Leading and succeeding during a crisis

September 02, 2020

Diversity_business_people_hands_pxfuelIn the summer of 1999, Michigan State University launched the Campaign for MSU with the aim of raising $1.12 billion, the most audacious fundraising campaign in its history. A few months in, I was recruited to lead fundraising efforts for the university's Libraries, Computing, and Technology department.

I had been working in Los Angeles for several years in various development roles at the California State University system and saw the position at MSU as a logical next step, one that afforded a number of career development opportunities. As I began to get comfortable in my new role, it became clear that the traditional fundraising playbook was no longer as relevant as it had once been. The department needed an approach that combined equal parts creativity, entrepreneurial risk-taking, and a willingness to experiment. After all, we were competing with other departments and professional schools at the university, each commanding a unique loyalty and importance in the eyes of their alumni. So during football season, we capitalized on our prime location within earshot of Spartan Stadium by inviting alumni and established donors and prospects to a tailgate party. Librarians from the university would be on hand to answer questions, marketing materials and campaign flyers would be distributed, and relationships with new and sustaining donors would be forged and strengthened.

And then September 11 happened. Until then I had never been in a position to lead others during a crisis. It's one thing to come up with a creative campaign and see it through from start to finish, accepting the risks and owning the results. But what had been a competition of sorts with other university departments for scarce dollars changed abruptly after the attacks.

As I worked alongside colleagues in other departments in the days that followed, my mindset shifted from competition to collaboration. Regardless of the task at hand, the question I kept asking myself was: How can I fulfill my duties and help my colleagues be successful?

One of the keys to success in higher education development work is traveling around the country to meet donors in person and earn their trust. But in the weeks and months after 9/11 some at the university were understandably reluctant to get on a plane.

Our solution to the problem was to pursue an approach that emphasized fundraising for the university as a whole, as opposed to fundraising for individual departments. And what quickly became apparent in my in-person visits and phone calls with high-net-worth alumni was their deep, unabashed appreciation for the fact that departments that sometimes competed with each other for precious resources were now collaborating. We were a single team with a single mission: strengthen the university we worked for and loved.

Learning to collaborate during a crisis was a key building block in my leadership development. And taking collective action to achieve a unifying goal while keeping the best interests of one's colleagues in mind has never been more important than it is today.

At the Gary Sinise Foundation, where I serve as chief operating officer, the coronavirus pandemic has forced us to adapt our business model to ensure continuity in our mission — serving the nation's military, veterans, first-responders, and their families. In coordination with the marketing and communications department, we launched a dedicated campaign called Emergency COVID-19 Combat Service. Donations made to the campaign have bolstered our First Responders Outreach program and enabled us to increase the number of grants we award to underfunded fire and police departments. Since we launched the campaign on April 1, we've raised and distributed more than $1.43 million, enabling sixty-one first-responder departments to purchase 5,650 pieces of personal protective equipment and gear. Financial assistance, grocery gift cards, and other forms of support have reached countless individuals and families struggling to make ends meet.

We've also expanded our Serving Heroes initiative, delivering thousands of additional free meals to healthcare workers at hospitals across the country as well as service members and their families at military bases in the U.S. and overseas.

The ongoing success of the campaign is largely attributable to our employees making a seamless transition to working remotely. We decided at the outset of the pandemic to shift staff and resources to departments in need; for example, our events team was called on to support the outreach department, which fields dozens of calls a day and supports an untold number of veterans, Gold Star families, and others seeking various forms of assistance.

In the months since COVID-19 upended our routines, many of our employees, empowered by leadership, their peers, and their own initiative, have developed new skills, revealing unknown talents and interests that benefit not only the organization but their future careers.

As the public health emergency continues to impact communities across the United States, nonprofit organizations are dealing with multiple crises affecting not only their day-to-day operations but their internal and external stakeholders as well.

Although the economy is slowly recovering, millions of Americans remain unemployed and Americans' mental health and well-being remains precarious. And with recent protests reawakening the nation's conscience, some kind of tipping point seems to be near.

Working to address these crises at both the individual and organizational levels has forced me to evolve as a leader — one who grounds her actions in empathy — and has reinforced for me the values of collaboration and personal empowerment. As was the case some twenty years ago, the question I continue to ask myself is: How can I fulfill my duties and help my colleagues be successful?

(Photo credit: pxfuel)

Elizabeth_Fields_PhilanTopic

Elizabeth Fields is COO and Brandon Black is  senior communications writer at the Gary Sinise Foundation.

What we can learn from the Sierra Club's moment of self-reckoning

August 31, 2020

Sierra_club_history-edward-t-parsonsThe Sierra Club, that paragon of environmental activism, just did something unusual: it admitted it has a problem. In July, the nearly hundred-and-thirty-year-old organization released a statement in which it acknowledged the racial prejudices of its founder, environmental icon John Muir, as well as the harm it has caused Black, Indigenous, and people of color over the decades. 

The nationwide protests that followed George Floyd's killing in May have reenergized conversations around our collective need to grapple with the long history of racism in America. The Sierra Club's acknowledgement of its problematic origins and its sincere commitment to make amends should serve as a model for how other organizations and institutions can reckon with their own checkered pasts while not invalidating the positive work they have done over the years. Problems can only be fixed when they have been identified and named; others should take note. 

The Sierra Club is one of the nation's largest and most influential environmental organizations. Since its founding in 1892, the club has worked to preserve and create new public parks, lobbied for the protection of clean water and the adoption of renewable energy, campaigned against the continued use of coal, and promoted youth environmental education. It's co-founder and first president, John Muir, inspired many with his writings and was instrumental in creating the movement that led to the establishment of the National Park System, earning him the sobriquet "Father of the National Parks." 

Notwithstanding its achievements over the decades, the organization recently issued a public apology for Muir's harmful writings and beliefs in which it noted that his characterizations of Black and Indigenous people often played on racist stereotypes. "As the most iconic figure in Sierra Club history," the statement read in part, "Muir's words and actions carry an especially heavy weight. They continue to hurt and alienate Indigenous people and people of color."  

In its early days, the organization screened out potential members based on race, limiting the environmental engagement of people of color. Sadly, Muir's views and statements were emblematic of many of the early conservation movement's failings — most obviously the fact that the very lands being protected were expropriated by white settlers from Indigenous populations. Muir's ideal state seemed to be "the lone white man at one with nature." This exclusionary view has had long-lasting impacts, including the disproportionately low number of people of color who visit national parks today. 

A founding father who inspired a movement spanning generations but who considered the land on which it was based "free" only after its Indigenous inhabitants had been removed. A visionary whose prejudices ran counter to his overarching message — a message he and his peers couldn't and, frankly, had no desire to uphold. An iconic figure who helped move the country in a positive direction while ignoring and damaging communities of color. It's an all-too-familiar story. 

With its recent acknowledgement of Muir's failures, the Sierra Club has taken a bigger step forward than many others in the United States. Indeed, a recent NBC News/Wall Street Journal poll shows that while 59 percent of Americans believe Black people face discrimination, only 44 percent believe it is systemic and perpetuated by policy and institutions — in effect putting the burden of systemic racism on a few "bad apples." 

And while the poll also found that a slight majority of Americans, 51 percent, support the removal of Confederate statues from public spaces, an ABC/Washington Post poll that asked the same question found that only 43 percent of Americans supported the removal of such statues and only 42 percent supported the renaming of military bases named after Confederate generals. Polling discrepancies aside, the message is clear: at least nearly half of Americans believe we should continue to honor men who fought to protect and preserve chattel slavery in the United States. 

Admitting that you have a problem is the first step to recovery. Admitting that the United States has a racist past and has long ignored structures and systems that are inherently racist is not the same as saying that Americans are rotten to the core, incapable of doing good, or  irredeemable; it is, instead, an acknowledgement that we have harmed ourselves and those to whom we have a moral responsibility. Sometimes the only way to address a problem is through an intervention, but even interventions are futile without fundamental acceptance of the basic problem. The Sierra Club has begun to do the work needed to heal the damage and move forward; the rest of us should follow its lead.

(Photograph by Edward T. Parsons, "Group on Summit of Mount Brewer," 1902)

Headshot_garret_zink_PhilanTopic

Garrett Zink (@GarrettZink) is a corporate social responsibility specialist based in Washington, DC.

5 Questions for...Monique W. Morris, Executive Director, Grantmakers for Girls of Color

August 24, 2020

Launched in 2015, Grantmakers for Girls of Color (G4GC) has since grown from an online platform into a grantmaking organization focused on addressing the structural inequities faced by girls and young women of color and centering their voices in philanthropy and movement building.

Based on focus groups and surveys of girls and young women of color, the organization's 2019 report Start from the Ground Up: Increasing Support for Girls of Color identified nine types of structural barriers to the success of young women and girls of color, including disproportionately applied school discipline, insufficient financial aid, poverty and the struggle to meet basic needs, gender discrimination and patriarchal power dynamics, mental and behavioral health challenges, and exposure to community, domestic, and interpersonal violence. The study also found that funders and girls of color often frame the same issues differently.

Before becoming the inaugural executive director of G4GC, Monique W. Morris co-founded the National Black Women's Justice Institute, which works to reduce racial and gender disparities across the justice continuum. She is the author of Sing a Rhythm, Dance a Blues: Education for the Liberation of Black and Brown Girls and Pushout: The Criminalization of Black Girls in Schools, which was released as a documentary in 2019.

PND spoke with Morris about her vision for G4GC, the impact of COVID-19 on the Black community, and what the reenergized movement for racial justice means for philanthropy. 

MoniqueMorris_G4GCPhilanthropy News Digest: What is your vision for Grantmakers for Girls of Color as it makes the transition from a funder network into a grantmaking organization?

Monique W. Morris: Girls and gender-expansive youth of color live at the intersections of sexism, racism, and other forms of oppression. My charge is to do all I can to help realize Grantmakers for Girls of Color's vision of mobilizing philanthropic resources so that Black girls and other girls and gender-expansive youth of color achieve equity and justice in this critical moment in our history.

I became the executive director of G4GC at the beginning of April, just as the country had shut down because of the pandemic, and then in May we saw the beginnings of a global movement for racial justice and against anti-Blackness. As an independent entity under the fiscal sponsorship of Rockefeller Philanthropy Advisors, we are now able to shape our own future and determine how to best move forward. The needs mapping we're doing right now will help us inform that process. And while we will continue to serve as a resource for donors and funders seeking to support girls, fem(mes), and gender-expansive youth of color, we will also be increasing our capacity in the areas of research and grantmaking. 

Soon after I joined G4GC, we launched the Love is Healing COVID-19 Response Fund, our first grantmaking initiative as an independent organization, and to date we've awarded more than  $1.5 million to over eighty organizations across the country. I'm excited about what lies ahead, and we hope other funders will join us in this critical work. We have lots of other exciting partnerships and opportunities on the horizon.

PND: We hear you're planning to introduce a participatory grantmaking program. How would that work?

MWM: Yes, we believe participatory grantmaking is a critical driver of broader systems change. We see our partner organizations serving as agents of change rather than constituents. At this moment, all across the country, we're seeing girls, particularly girls of color, leading change in their communities, organizing protests, and advocating for justice. We see girls of color playing an important role in facilitating the paradigm shift this country needs and deserves.

That's why I am so excited about the Youth Advisory Committee we're forming to explore participatory grantmaking. We want to connect funders to the issues faced by girls and young women of color and help them better respond to those needs. The committee will help us figure out how to strengthen the capacity of girls of color to be active decision makers in the grantmaking process.

PND: According to Pocket change — how women and girls of color do more with less, a report published by the Ms. Foundation for Women, less than 1 percent of total foundation funding is awarded in support of women and girls of color. How do you explain that, and how can it be addressed?

MWM: In philanthropy, in academia, in the media, and in movement and policy circles, we generally adopt a male-centered approach to the fight for racial justice. If we think about Black girls and other girls of color at all, we tend to think of them as trickle-down beneficiaries of our work and investments in these issues. That has to change if we want girls — and our communities — to thrive. 

That study showed that of the $66.9 billion given by philanthropists in 2017, just 0.5 percent was awarded to organizations representing women and girls of color. That's about $5.48 per woman/girl. What it shows is that funders continue to operate with the assumption that the money they donate will "trickle down" to groups that are doing the work of empowering women and girls of color. And that is not happening. We have to be more intentional with our investments.

PND: In response to the pandemic, G4GC launched the Love Is Healing COVID-19 Response Fund, which, as you mentioned, has awarded more than $1.5 million to date. Given how the virus has disproportionately impacted African-American communities and highlighted existing health, economic, and other structural disparities, do you expect grantmaking to nonprofits serving girls of color to increase more broadly in the sector over the coming months and years?

MWM: I certainly hope so, and we are pushing with our partners to make that a reality. The COVID-19 crisis has shown how important it is that we dismantle the structural barriers that keep BIPOC girls from thriving. I wrote an op-ed in May about how, while the media and thought leaders had begun to acknowledge the harsh light that COVID-19 was shining on the racial inequities, less attention was being paid to how the crisis had exposed another ugly truth: the long-term marginalization of girls and gender-expansive youth of color. 

Unless we act now to close the disparities these kids face in every aspect of their lives, we will deprive them of their rightful opportunity to thrive and have a long, healthy life. This is a time for the philanthropic community to step up for young girls and women of color.

According to the CDC, there is growing body of evidence that suggests the virus is having the greatest impact on BIPOC communities. The majority of frontline workers — restaurant staff, cleaning crews, daycare workers — are people of color. Health care is too expensive for many of them. Organizations that had already been working to address these longstanding issues through an intersectional lens and need support are why we created this fund. The grant partners we have been able to identify and support through the Love is Healing COVID Response fund had been fighting to end the marginalization of girls of color well before the pandemic. These organizations have responded to COVID with creativity, courage, and compassion — and philanthropy, too, must meet the moment in similar fashion.

PND: Has the reenergized Black Lives Matter movement and the push to end police violence against people of color caused you to change your plans for G4GC? And are you hopeful, here in the summer of 2020, that the arc of the moral universe, to quote Martin Luther King, Jr., bends toward justice and that the United States will finally live up to the promise of its creedal documents?

MWM: It has reinforced and lent even greater urgency to our mission. We cannot continue to allow the issues and experiences impacting the quality of life for girls of color — Black, Indigenous, Latinx, Muslim, and Asian-American and Pacific Islander girls — to be relegated to the category "niche," which can lead to underinvestment and erasure that prevents the realization of their potential. It is my hope that in our efforts to provide more resources to movement work, we are able to embed a robust investment strategy that supports and ultimately provides opportunities for our girls.

This is a potentially historic moment of reckoning and reconciliation for our country around race, and I am heartened to see the beginnings of the radical transformation that those of us who do this work day in and day out have long hoped to see. But we won't get there unless we are intentional about centering the needs and lives of Black girls and gender-expansive youth. The philanthropic sector and society more broadly are not paying enough attention to the unique issues these girls face. In this moment, when more funders are asking how they can support the struggle for racial justice and anti-Blackness, we need to put Black girls and girls of color at the center of those efforts. We need to be there for the young people who desperately need our trust, allyship, and support.

— Kyoko Uchida

Donors have an opportunity to build on last year's strong giving

August 17, 2020

Closed_coronavirus_united_wayAccording to Giving USA 2020: The Annual Report on Philanthropy for the Year 2019, charitable giving increased 4.2 percent in current dollars, to $449.64 billion, in 2019, making it the second highest year for charitable giving (when adjusted for inflation). While it's too soon to tell what that will mean for 2020, such a strong show of support for the charitable sector is an encouraging sign in what otherwise is an uncertain philanthropic environment, thanks to the spread of COVID-19.

Clearly, many Americans view generosity as an important part of their lives. The Giving USA data from 2019 and the philanthropic trends we've seen in past recessions (as reported in Giving USA) can help us understand what we should expect in these uncertain times.

A strong economy in 2019 resulted in more giving by individuals, corporations, and foundations, as well as increases in giving to organizations in all but one of the nine recipient categories tracked by Giving USA — six of which recorded their highest ever giving totals (adjusted for inflation) in 2019. The analysis also found that the growth in giving in 2019 was driven by a jump in giving by individuals, which rose 4.7 percent and logged its second-highest dollar total (adjusted for inflation) ever — and which handily remains the largest single source of charitable giving at 69 percent of total giving. In recent years we've also seen giving by foundations comprising an increasingly larger share of total giving emerge as a trend; in 2019, that share was 17 percent for the second year in a row, the highest on record.

The uncertainty around the COVID-19 situation in the United States makes it almost impossible to predict when and how quickly the economy will fully recover. Giving USA found that in 2007-09, the period immediately preceding and following the financial crisis, foundation giving grew 3 percent, even as overall giving declined 12 percent. And to date in 2020, we've seen foundations increase both the number and dollar amount of the grants they make to help fill gaps created by the virus, as well as accelerated distributions from donor-advised funds.

Dunham + Company's own study found that the oldest donors, regular churchgoers, and self-described conservatives were more likely to say they would maintain their giving at last year's levels or increase it. Many also cited COVID-19 as the main reason they plan to give more. However, the study also found that many donors were anxious about the virus and its impacts, causing a quarter (25 percent) of respondents to say they plan to cut back on their giving. From where we sit, the charitable organizations that have had success since the virus emerged as a public health crisis have pivoted quickly to donor-centric communications that emphasize the challenges donors might be facing while also affirming the relevance of their missions. Indeed, a number of our clients have recorded some of the best daily giving totals in their history over the past few months.

Conversely, the organizations that have struggled are those that have not been able to pivot, for whatever reason, to online giving and/or have not diversified their base of support. I'm particularly concerned for nonprofits in education and the arts, culture, and humanities — organizations that rely on major gifts or do not have large endowments — even though giving to these sectors saw double-digit growth in 2019. If they hope to maintain both their relevancy and viability, it will be important for these organizations, once we're on the other side of the pandemic, to be able to demonstrate that they weathered the storm and are in a good position to continue serving their communities.

Ultimately, donors have an opportunity and a responsibility to make their dollars count on behalf of the organizations and sectors they care about most. We still have time in 2020 to make this a year of solid philanthropic support for the charitable sector.

Rick Dunham_PhilanTopicRick Dunham is the immediate past chair of the Giving USA Foundation and founder and CEO of Dunham + Company. He has spent more than forty years in marketing, fundraising, and organizational development for nonprofit organizations. Giving USA, the longest-running and most comprehensive report of its kind in America, is published by the Giving USA Foundation and is researched and written by the Indiana University Lilly Family School of Philanthropy.

5 Questions for...Rajasvini Bhansali, Executive Director, Solidaire Network

August 14, 2020

Launched in 2013, Solidaire Network is a collective of donors and foundations committed to ending the legacy of racism and anti-Blackness. Through programs such as Movement R&D, Rapid Response, and the newly launched Black Liberation Pooled Fund, network members have moved nearly $18 million since 2013 in support of the Movement for Black Lives and the Black-led organizing ecosystem.

Rajasvini Bhansali, the network's leader since 2018, previously served as executive director of Thousand Currents, where she helped launch a climate justice fund and an impact investment fund and led that collaborative's efforts to expand partnerships with grassroots groups and movements led by women, youth, and Indigenous peoples in the Global South. At Solidaire, she has overseen an evaluation process that resulted in the development of a three-pronged strategy — donor activism, resource mobilization, and driving a paradigm shift — aimed at moving $1 billion over ten years to social change movements.

PND spoke with Bhansali about Solidaire's activist-centered model, the meaning and implications of the reenergized movement for racial justice, and the organization's latest fund.

Headshot_Rajasvini Bhansali_solidaire_networkPhilanthropy News Digest: What kind of donors and foundations decide to become members of Solidaire? And has your membership grown in the wake of the protests that followed the killing of George Floyd?

Rajasvini Bhansali: We have over a hundred and eighty members in the Solidaire community, ranging from individuals and families with generational or new wealth to those who have established their own family or private foundation. And what's unique about our donors is that they act as "donor organizers" — working quickly to mobilize others to move critical resources to people and organizations on the front lines — and, in the process, transforming their relationship to power and wealth. Our network isn't about charity or paternalism. The only people we wish to "save" are ourselves, by doing our part to make amends for the generations of oppression and theft upon which current systems have been built.

Supporting Black-led movements and Black liberation has always been at the core of our values and grantmaking strategy. And from the start of the recent protests, our goal wasn't to grow our membership; it was to double down on those efforts. Since June, Solidaire members have committed more than $10 million to the Black-led organizing ecosystem, including the Movement for Black Lives, the Southern Power Fund, and Reparations Summer.

PND: Your Aligned Giving Strategy, which was launched in response to calls for philanthropy to fund the Movement for Black Lives, requires no reports or applications and is based instead on trust and relationships between your members and the frontline groups organizing Black communities. What does that trust-building process look like?

RB: Our goal always is to trust in the wisdom and leadership of grassroots organizers. These leaders know what their communities need and have been telling funders what they need for years, but we haven't been listening. At Solidaire, we don't want movement leaders to have to prove something to us; instead, our job is to get them the resources they need to win now and over the long term. Traditional philanthropy often takes a top-down approach that can replicate unjust power structures. We don't want our process to be another barrier. Our approach is to listen directly to the people most impacted by injustice, understand their lived experience and how current systems have failed them, and share our power and resources to help change those systems.

Our staff are critical to the process. They have a deep understanding of this space, have movement backgrounds, and bring with them relationships and a sense of curiosity about how we can do better to support movements and communities. Our donor members also have a deep interest in organizing their own families and networks to respond to movement funding needs and bring time-sensitive funding opportunities to their peers within the network.

PND: AGS gives donors a choice of four focus areas to invest in: providing direct general support to 501(c)(3) and (c)(4) groups; investing in activist-led efforts to build shared movement infrastructure; helping organizations diversify their revenue streams and achieve financial sustainability; and supporting the efforts of movement groups to translate their cultural influence into policy change and actual legislation. Are you seeing donors gravitate to one area more than others, and if so, why might that be?

RB: We try to show our donors that these issue areas are all interrelated and therefore equally deserving of their attention. What we have seen with COVID-19 is that it has laid bare longstanding inequities caused by systems and policies robbing our communities of the resources they needed to be healthy and resilient — even during less challenging times than these. While some philanthropists and foundations have increased their giving to meet the needs of the moment, many of those initiatives do not address the root causes of how we got here in the first place.

We are heartened to see how deeply our members are committed to working together to eliminate racist attitudes, practices, and policies that harm working people and communities of color. We are also moved to see our donor members working internally and externally — and with humility and courage — with communities on the front lines of social change to provide the long-term, sustained support those communities need to liberate themselves — and all of us.

PND: Launched with the goal of raising $5 million by the end of August to strengthen the Black Lives Matter ecosystem, the Black Liberation Pooled Fund just received a $20 million commitment from the Packard Foundation. How does that commitment affect your plans for the fund, if at all, and what has been the response to date from other funders?

RB: Solidaire has been committed since its inception to supporting Black liberation work by cultivating authentic, just, and right relationships with Black-led organizations and community leaders. Packard's $20 million commitment to the Black Liberation Pooled Fund over the next five years is part of the foundation's five-year, $100 million commitment to improve its grantmaking in support of justice and equity. Solidaire will pool that money with other resources to support the ecosystem of Black-led social change organizations nationally, including groups working to strengthen multiracial alliances, innovate grassroots climate justice solutions, advance the decarceration and decriminalization of Black bodies, build regenerative economic models and community wealth strategies, nurture the leadership and capacity needs of movement organizations, and imagine and create a more democratic, pluralistic, feminist future.

The response to the fund clearly has exceeded our initial goal, but movement leaders are not slowing down, and neither are we. Much more remains to be done, and seven years in, our work is only just beginning. We will continue to push forward while remaining grounded in both the immediate and longer-term infrastructure-building needs of the movement.

PND: Solidaire believes that Black-led social change is not just about justice for Black communities but about broad and deep societal transformation for all. Can you elaborate on that idea?

RB: We have to remember that the exploitation of Black and Indigenous labor, lives, and wealth has gone on in this country for five hundred years. We are way overdue for an end to the fundamental inequities on which all institutions and systems in the United States are based. We also must remember that today's movement activists and leaders are just the newest link in a long chain of freedom lovers, liberation fighters, movement builders, and believers in humanity and a shared future. We are incredibly proud to be building on the work of all those who came before us. Supporting Black- and Indigenous-led social change advances racial and social justice for all people. The Black freedom struggle in the twentieth century resulted in advances for women, people with disabilities, LGBTQIA+ folks, immigrants, and workers of all colors. Today, the work of visionary Black organizers and advocates is making broad systemic change — from defunding the police, to police-free schools, to the call for reparations and reinvestment in community well-being — not only possible but also imminent.

Fourteen years ago, I had the opportunity to serve as a management advisor for a network of polytechnics, acting as a capacity builder with a network of youth-training institutions in rural Kenya. I witnessed first-hand the institutional barriers faced by farmers, teachers, and youth workers, all of whom exhibited tremendous moral leadership, as well as the condescension and harmful top-down interventions of well-intentioned philanthropists who inserted unequal power dynamics into local community processes. I saw how the wisdom, brilliance, stick-with-it-ness, and sustainable strategies of ordinary people working to transform local conditions were rarely acknowledged, let alone honored. And as a result of that experience, I resolved to use my position of privilege to exert greater influence on philanthropic behaviors and attitudes and to truly work in service of the communities that are organizing to change their circumstances. All of that continues to inform my work today with Solidaire.

— Kyoko Uchida

International grantmaking during COVID: a focus on equitable access to education in Latin America

August 12, 2020

International grants_tinker foundationIt’s safe to say that no person or organization is having the 2020 they expected. At the Tinker Foundation, the pandemic has caused us to shift course significantly as Latin America, the region central to our mission, struggles with a once-in-a-century health, economic, and social crisis. And while our home base is New York City, we are challenging ourselves to put our assets to work for the organizations and communities at the epicenter of the pandemic there.

Like many other foundations, when the coronavirus emerged we reached out to our current grantees to offer support. At that point, in mid-March, we questioned whether it might seem "U.S.-centric" to send a communication about a virus that had not yet reached large swaths of the hemisphere. In retrospect, that concern seems quaint. By mid-May, a New York Times headline, "Latin America’s Outbreak Rivals Europe’s. But Its Options Are Worse," was sounding the alarm. As of this writing, the region leads the world in deaths from COVID-19.

As we talked with our grantees, we noted how quickly many were mobilizing amid the uncertainty (and despite, in some countries, official denials that the virus was a problem). One grantee, the Argentine fact-checking and investigative journalism organization Chequeado, repurposed travel funds from a grant to prototype a website dedicated to combating misinformation about the virus. Within weeks, they had secured additional funding and launched a regional effort with more than twenty other organizations.

Within Tinker, we recognized the need to begin taking action — just as our grantees had — while at the same time laying the groundwork for more substantive grantmaking. We started small, reallocating funds from other budget lines to support rapid-response grantmaking. These early grants prioritized the immediate needs of vulnerable populations, including the millions of Venezuelan migrants and refugees unable to work as stay-at-home orders rolled out across Latin America. Two small grants to Tinker grantee partners in Central America focused on vulnerable children affected by school closures. Another sought to support civil society organizations working to shift strategies in response to the crisis.

As we began making plans for the remainder of the year, the scale of the COVID catastrophe in Latin America became clearer. Ecuador experienced a devastating early wave of infections that collapsed the health system in Guayaquil, its largest city. Brazil, Chile, Mexico, and Peru all appeared in the list of seven countries with the highest incidence of COVID. A virus first introduced to Latin America by international travelers returning home from abroad was now tightening its grip on vulnerable populations across the region, from residents of crowded informal settlements, to migrants and refugees, to Indigenous and Afro-descendent communities.

As a midsize foundation, we knew we had to make the most of our grantmaking resources. But we had other important assets we could draw on, too, including longstanding relationships and networks, operational flexibility, and an engaged board willing to operate differently in response to a crisis. In addition to maintaining some longer-term grantmaking across our program areas, we decided it made sense to identify one COVID-related priority to focus on in the remainder of the year and give it our all.

Discussions with grantees, staff, experts, and board members all pointed to the impact of the pandemic on education, an existing Tinker program area. We learned, for instance, that by June, 95 percent of students in the region were out of school. As in other parts of the world, ministries of education, administrators, and teachers had quickly shifted gears — introducing online instruction strategies meant to replace classroom instruction. And yet past crises suggested that students would incur significant learning losses, and that many would not return to school at all, with the impacts likely greatest among students who had faced barriers to equitable education pre-pandemic.

In late June, Tinker launched a $500,000 funding initiative to help address the specific educational challenges generated by the pandemic. Over the coming months, we will partner with Latin America-based civil society organizations working to address the near-term effects of school closures. Many of these organizations have already hit the ground running, using their own resources to fill gaps, pilot innovative approaches, and support teachers and students. Additional funding can enable further experimentation and help consolidate and scale what is already working. Critically, the initiative will seek to complement and build on the priorities and initiatives of public education systems in the region.

The enormous response to our initiative highlights the urgent need for more funding for education as the virus continues to upend systems and the status quo. We received more than five hundred letters of inquiry, approximately five times what a typical call for applications from our Education program attracts. Following a review of a subset of full proposals, we will announce grants in September.

The applications we’ve received speak to the predictable but profound challenges of ensuring equitable access to education in a pandemic context — particularly in rural and low-income urban areas where students have limited access to the Internet or Internet-enabled devices. The proposed projects also demonstrate the resilience and creativity of schools, teachers, and civil society organizations, all of whom are imagining new ways to reach and engage students, as well as reinvigorating older tools like community radio. A number of applications call for investment in social-emotional learning and other efforts to address the trauma occasioned by the pandemic as a critical enabler of continued learning.

Following this round of special grants, we will work closely with our partner organizations to learn from their work and identify broader areas for research and innovation, larger-scale funding, and policy change. As a foundation that works across Latin America, we also hope to connect and convene local actors that share a commitment to protecting access to education throughout the crisis.

COVID-19 has created profound challenges across many domains — all of them competing for policy makers' and the public's attention. But when we look back on this challenging time, it may well be disruption to education that casts the longest shadow over Latin America. If millions of students fall behind or become permanently disconnected from school, the impact could last at least a generation. At Tinker, we will continue to support those in Latin America who are imagining and taking action to ensure a better future for the region’s children and young people.

Headshot_caroline_kronley_squareCaroline Kronley is president of the New York City-based Tinker Foundation. Prior to joining the foundation, she worked as managing director for strategy at the Rockefeller Foundation, leading the development of new programmatic initiatives, and before that she was a management consultant at Katzenbach Partners and at Booz & Company, where she served a broad range of clients on strategy and organizational performance.

Women and the changing face of philanthropy

July 29, 2020

Women_high_fives_GettyImages_PhilanTopicAs the current global public health crisis galvanizes people to give, women are well positioned to accelerate changes in the philanthropic landscape that are already in motion.

According to Giving USA's recently published Report on Philanthropy for the Year 2019, charitable giving in America totaled nearly $450 billion in 2019, the second-highest total ever (adjusted for inflation) and a 4.2-percent increase from 2018.

And while conventional wisdom might have predicted a decline in giving over the first three months of 2020 due to COVID-19, the pandemic has actually motivated Americans to give at a rate higher than seen in the wake of the 2008 financial crisis and after the 9/11 attacks. Further evidence of Americans' generosity was provided by Fidelity Charitable, which released a report in June showing that grant awards from its donor-advised funds since the beginning of the year totaled some $3.4 billion, up 28 percent over the six-month period in 2019.

Another survey, this one conducted by the Community Foundations Public Awareness Initiative, found an 80 percent year-over-year increase in gifts to thirty-two community foundations from March to May 2020.

"Before the pandemic started, women were increasing their giving and broadening beyond what they might normally support," Jennifer Alcorn, deputy director of philanthropic partnerships for the Bill & Melinda Gates Foundation, told Forbes. "From research and development, local food banks, giving direct relief to families across the country, to global health — women are a driving force behind the increase in giving we're seeing right now."

This shifting dynamic is best understood as a movement started by women eager to engage in philanthropy that has the potential to benefit women. According to the Boston Consulting Group, private wealth held by women grew from $34 trillion to $51 trillion between 2010 and 2016 — an increase of 50 percent in just six years. It's a trend likely to continue, as a significant amount of the private wealth projected to change hands over the next few decades is likely to be transferred to women.

What's more, it seems that philanthropy comes naturally to women. A 2017 study by the University of Zurich found that women are more likely than men to engage in prosocial behavior (defined as voluntary behavior intended to benefit others), including simple acts of kindness and donating to charity. Indeed, research supported by PayPal found that women give more to charity despite earning 19 percent less than men, and that as they age they become even more generous.

Perhaps most importantly, women are taking control of their own destiny. A study by the Women's Philanthropy Institute at Indiana University-Purdue University Indianapolis found that women increasingly are spearheading efforts focused on addressing women's issues. Specialized women's funds and foundations are going beyond grantmaking to achieve impact, engaging in activities such as relationship-building, partnerships, and policy advocacy to pursue broader social change.

All of this affirms what I have witnessed as a professional philanthropist and social activist: as women secure more power for themselves, the face of philanthropy will continue to change. It is vital that women shape those trends with intention and an eye to strategy.

One way women who engage in philanthropy can be consequential is to encourage increased support for nonprofits working to empower women and girls, including organizations focused on preventing and funding a cure for breast cancer, providing relief for women who are victims of domestic violence, and supporting female entrepreneurs. While women are exceedingly generous when it comes to donating to other important causes, just 1.6 percent of Americans' charitable giving goes toward nonprofits that work to empower and advocate for women and girls. If women better support one another, others will surely follow and increase their support for women who find themselves at risk.

Women also can more effectively support each other by approaching philanthropy strategically and with the goal of maximizing their return on investment. Individually and collectively, we can be more discerning when deciding where to give and using data to shape our decisions. Viewing giving as a business whose ultimate objective is to deliver the best result for the greatest number of girls and women almost always will amplify the impact of one's gift.

At the Ruderman Family Foundation, we use an intersectionality lens to focus our philanthropic investments: empowering marginalized communities and women to take a more active role in shaping their lives. My experience over the last twenty years has taught me that our approach to  managing challenges and creating solutions works. Philanthropy has proved to be one of the best vehicles we have to express our values and put to work our skills and expertise. I know, and my experience has taught me, that women and girls can be powerful agents of change, and it is up to  philanthropy to help them fulfill that destiny in the boldest way possible.

The tangible impact of women's giving will continue to change the world. The COVID-19 pandemic is an opportunity to accelerate this much-needed revolution.

Shira Ruderman_PhilanTopic Shira Ruderman is the executive director of the Ruderman Family Foundation.

Students still need emergency aid. Funders must step up to fill the gap.

July 24, 2020

Mother_college_student_son_GettyImages_PhilanTopicjpgIn response to the coronavirus pandemic, colleges, nonprofits, government, and philanthropy moved quickly to disburse emergency aid to students, many of whom found themselves without reliable access to food, housing, and technology after their campuses were forced to close. And with job losses affecting both working students and families, that support may have temporarily allayed the fears of students who wondered whether they would ever be able to return to school.

But for two groups of students — those ineligible for federal financial assistance, including undocumented students, and those, like student-parents, with additional financial needs — much-needed relief was in short supply. When government is either unwilling or unable to support students working to make their lives and communities better, philanthropic institutions have a duty to fill the gap. As a new school year marked by uncertainty draws closer, more emergency aid is needed, especially for students whose educational aspirations may slip through the widening cracks created by the pandemic.

While the federal CARES Act provided $6.3 billion in emergency grant funds for colleges and universities to distribute to students, the U.S. Department of Education's original guidance for the funds left out undocumented students, Deferred Action for Childhood Arrivals (DACA) recipients, and international students, creating confusion for months and in some cases slowing the distribution of aid to other students.

What's more, the funds provided by the CARES Act could only be used for food, housing, and expenses directly related to the cost of attendance, leaving many students without adequate support to continue their education. For student-parents, in particular — who need to support children as well as themselves — expenses almost always exceed the assistance provided by their schools. Even before the pandemic, the cost of food, housing, and child care — which in many states is costlier than tuition or rent — made it difficult for student-parents to complete a degree. Single mothers, for instance, are more likely than any other group of women to have started but not finished college and just 8 percent of single student-moms graduate on time.

As more funders and institutions of higher education begin to examine how their investments can be used to advance racial equity, it's also important to note that 40 percent of all Black women in college are mothers. Clearly, success in closing racial and gender equity gaps in college success will remain elusive if we ignore the needs of student-parents.

DACA recipients enroll in college at about the same rate as their peers, but they are four times less likely to complete a degree. They also are ineligible for Pell grants or other forms of federal financial aid, which makes the high cost of tuition a significant barrier to their ability to complete their education. And while mental health issues disproportionately impact undocumented students' postsecondary success, many undocumented students are unable to qualify for affordable health insurance.

With limited emergency aid available to student-parents and unavailable to most undocumented students, the long-term success of both groups is in doubt and should be a priority for philanthropy going forward.

There's no shortage of research on the economic and societal benefits of investments in these groups. The Deferred Action for Childhood Arrivals program has increased high school graduation and college enrollment rates and raised productivity and earnings among DACA recipients. Immigrants and international students make significant contributions to the U.S. economy as well as the innovations needed to address the challenges we face and keep the country competitive in a globalized economy.

Likewise, student-parents are risers and earn better grades than non-parenting students. Investing in their success not only helps them, it also benefits their children. Parents who complete a degree have access to higher-paying jobs and, on average, double their income over the course of their working lives, while studies have shown that even a $1,000 increase in salary can result in as much as a 27 percent increase in a child's cognitive development. We all benefit when committed learners are given an opportunity to realize their potential.

Philanthropy is uniquely suited to address these gaps in emergency aid funding — and many funders are already leading the way. In California, the College Futures Foundation and Mission Asset Fund created a statewide emergency aid fund that prioritizes undocumented students, foster youth, and those who are housing insecure. Edquity, which both of our organizations — Imaginable Futures and ECMC Foundation — support, joined Course Hero and Believe in Students to allow anyone to contribute to a pool of emergency funds that will be distributed to students not eligible for CARES Act aid.

Our own organizations invested in emergency aid efforts when the outbreak and subsequent spread of the virus forced campuses to close: Imaginable Futures targeted $400,000 of its emergency aid funding to student-parents and, because they have higher living expenses, required that funding be set at least $1,200 per student-parent, while ECMC Foundation made more than $1.5 million in direct emergency aid grants that went primarily to students who are not eligible for federal financial aid.

Still, as uncertainty looms over the upcoming school year, the educational dreams of 454,000 undocumented students and nearly four million student-parents hang in the balance. With the crisis likely to extend into the fall, we need more philanthropic investment in emergency aid for students left behind by federal programs. Educational equity, economic mobility, breaking the cycle of poverty, racial justice — none of these ambitious goals are realistic if students do not have the resources to succeed.

Undocumented students, DACA recipients, student-parents attend classes and study while navigating family care, financial insecurity, housing instability, and hunger. They fight for their education and their future every day. It is time we fight with them.

(Photo credit: GettyImages)

Vinice davis_jessica_haselton_PhilanTopic

Vinice Davis is a venture partner at Imaginable Futures and an investor in Edquity. Jessica Haselton is director of Education Innovation Ventures at ECMC Foundation and an investor in and board member of Edquity.

What grantees need most — a partner

July 21, 2020

NorthBergen_Healthy_Places_by_DesignFor better or worse; for richer, for poorer; through sickness and health.

You may not associate this vow with your typical funder — unless you've had the good fortune to partner with New Jersey Health Initiatives (NJHI).

Among the many things that make NJHI unique is the value it places on shifting power to communities, making longer-term commitments so that grantees have the time needed to achieve community transformation, and forming authentic relationships with grantees and partners.

NJHI was established in 1987 as a national program of the Robert Wood Johnson Foundation (RWJF). In New Jersey, RWJF's home state, NJHI plays a leading role in advancing the foundation's efforts to build healthier communities through grantmaking and investments. Since its inception, NJHI has supported more than forty statewide funding initiatives encompassing over five hundred grantees across all twenty-one counties in the state, making grants in support of youth-led initiatives, health and well-being, mental health, and community-based capacity development.

Recognizing that the communities it supports are best positioned to create the most impact and sustainable change, the organization strives to be flexible, nimble, and innovative. "We allow community partners to determine the best use of grant funds based on their specific community needs," says NJHI director Bob Atkins. "We have focused our grantmaking on engaging more voices and stakeholders in the communities in which we work, and to have them inform our thinking and approaches to making their communities healthier and more equitable."

As a community-led funder and partner focused on a single state, NJHI can make multiple investments in the same communities in ways that are strategic and complementary, rather than duplicative. "It has been exciting to see past and current grantees weave in elements of what they first received funding for five or ten or fifteen years ago," says NJHI deputy director Diane Hagerman. "We know that changes to health outcomes may not be seen for five or even ten years, so seeing work that was funded in the past resurface in a more current context speaks to the commitment of communities to make lasting change."

NJHI also recognizes that needs and context are not the same across communities, even within a single state. "We've analyzed our approach and become increasingly aware that some of our more distressed communities want help to build their own organizational and collaborative capacity," Hagerman notes. To address those requests, NJHI increased the amount of technical assistance it provides to applicants from distressed communities, many of which don't have a paid grant writer on staff.

More recently, a reimagining of NJHI's approach put greater focus on how it works with communities — as opposed to for communities. "One of the most valuable roles we can play," says Atkins, "is to set the table for grantees and community partners while they decide and create buy-in around what will help them achieve their goals." As such, NJHI leverages its influential role as connector and convener to help its community partners expand their networks and access additional resources, including coaching and collaborative learning and networking opportunities. Such investments provide exceptional returns in terms of building capacity at the community level.

"NJHI not only invests in communities, it invests in leaders and has built a movement across the state of people passionate about health equity," says Mary Celis, director of health initiatives at United Way of Passaic County. "Being a part of the NJHI family means you always have thought-leaders to problem-solve with and learn from."

NJHI's responsiveness during the COVID-19 pandemic provides another example of how it has grounded its investments in relationships. The large number of coronavirus infections and deaths in the state have underscored the important policy and systems work NJHI grantees do to address health disparities in their communities. NJHI was quick, for example, to provide timely funding resources and other critical information to grantees, and it devoted its April monthly Learning Collaborative session to an open discussion about the impacts of the COVID-19 pandemic in grantee communities. It was reassuring for NJHI grantees and partners to hear a funder be transparent about the ways in which the crisis has impacted the work it funds, and that the funder was committed to providing maximum flexibility in terms of its current grants.

The focus on developing meaningful partnerships has been critical to NJHI's efforts to reduce health disparities and create healthier communities in New Jersey. "This work cannot be accomplished alone or in silos," Atkins says. "To be effective in what we are trying to achieve requires partnering with our communities and other organizations. We don't want to simply be seen as 'the funder' — we are their partners, committed to learning from and alongside them."

That strategy serves NJHI, its grantees, and their communities well — and New Jersey is a healthier state because of it.

(Photo credit: New Jersey Health Initiatives/North Bergen Municipal Alliance)

Joanne Lee_PhilanTopicJoanne Lee is collaborative learning director at Healthy Places by Design, an organization that serves as a strategic partner for communities and those who invest in them.

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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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