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Archive for the ‘Philanthropy’ Category

Sunday’s New York Times article on Google.org caught my attention. The Times is one of the few daily papers that cover the philanthropic sector, and it does so with the same seriousness it applies to developments in business and government. It is attentive to new philanthropic models that are being tested and refined, and offers a snapshot of a work in progress.

One such experiment is Google’s philanthropy arm, Google.org, or DotOrg for short. Structured as part of the for-profit company, it reflects a fundamental shift in corporate philanthropy.  Whereas corporate foundations used grants and employee volunteer time as their only tools, increasingly corporate executives work to assure that social outcomes are intrinsic to their company’s value chain. Many believe that the right business decisions can unleash market forces that, in turn, can drive positive and sustainable social change.

What sets DotOrg apart is that it is embedded in a search giant in the Information Age, a time when decision-making and authority are decentralized, and the individual, for better or for ill, reigns supreme.

It may be that many of the world’s most daunting problems, as well as their solutions, will be the aggregate effect of millions of individual choices—whether they be to limit the water and energy we consume; to resist taking up arms; to engage in healthy practices; or to vote, and demand that that vote be counted.

Informing those choices can be the ultimate form of philanthropic leverage.

No one understands that better than the executives and employees of a company whose first maxim is “focus on the user and the rest will follow.”

And, so Google has blurred the lines between the company and the philanthropy, naming its brilliant VP for New Product Development as DotOrg’s leader, embedding DotOrg program staff in product teams, and fostering a smart and deep collaboration between Google’s public-spirited engineers and external experts in large problems like poverty or climate change. Their combined talent has produced such products as PowerMeter, which allows the user to track home energy consumption, and in the aggregate, to contribute to mitigating climate change. Google Earth Engine allows the user to monitor deforestation in real time, informing efforts to promote the responsible use of this vital natural resource. Google Crisis Response and Resource Finder enable individual and group relief efforts after natural and man-made disasters. By informing individual choice and action, DotOrg hopes that these products can help to advance the social good more broadly.

Critics argue that these innovations are important mainly in the rich world where computers are ubiquitous. That may be true today. But the introduction and rapidly spreading use of “smart” phones, which provide internet access, is changing that equation.  In the short term, Google has work-arounds like SpeaktoTweet, which shows that states cannot deny the oxygen of unfiltered information to a public yearning for a better life.

But, over the long term, the company’s most significant contribution will likely be its decision to translate the world’s knowledge into the languages of the developing world. Leveraging that innovation will be DotOrg’s largest opportunity to harness information technology to social change. The combination of automated translation and connective technologies can change our world.

The Times article is critical of DotOrg’s prior leadership for making similarly bold claims, thereby raising expectations to a level that could not be met in a period short enough to match our attention span. Fair enough. Perhaps it would have been wise to have been quieter during the philanthropy’s “quiet phase,” as DotOrg defined its goals and honed its method. New models take time to develop and prove their worth.

While that criticism may be fair, in the scheme of things, it seems unimportant.

Like the rest of us, Googlers could not and cannot foresee the full social, economic and political implications of providing the world’s knowledge to those who were previously isolated by poverty or politics. (Although Google Chairman Eric Schmidt co-authored a deeply thoughtful Foreign Affairs article on the subject.)

But Googlers do know one thing, and that is the level at which large decisions will be made–and that is at the level of the individual.

Even for a giant like Google, with 31 billion searches each month, that knowledge alone is humbling—and hopeful.

—Jane Wales

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In their rush to gain an end of the year tax deal, elected leaders postponed hard choices. In the process, they denied the government the revenues it needs to either respond to unforeseen crises or deliver on promises made.

At the same time, wary corporate decision-makers reported that uncertainty over tax and fiscal policy had discouraged them from creating jobs or making R&D investments essential to prosperity.

As self- imposed constraints limit the agility of these two important sectors, a third—the non-profit sector—worries that the 2010 Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act may have a cascading effect, further impoverishing state and local governments, shifting the burden of providing social services from the public to the non-profit sector. Moreover, its leaders fear that the estate tax provisions may reduce incentives for wealthy individuals to make the no-strings-attached donations and bequests that free the sector from the constraints of politics and markets.

Our tax structure has long reflected the value we place on the nonprofit sector’s ability to take risks and try out new ideas without fear of political or market reprisals. Income and inheritance taxes have encouraged donations and bequests, as well as the creation of tax-exempt foundations. As a result, our nation has a diverse charitable sector comprised of grantees and grantors who are tackling issues at home and across the globe. Free from the need to garner votes or generate profits, they needn’t test the political winds before offering services to the most marginalized Americans. Their reach extends to the developing world, where they have created or supported “social enterprises” with for-profit business models for providing off-grid communities with renewable sources of energy. And, globally they have even entered into public-private partnerships to effect high policy, as Warren Buffett did in making his $50-million gift to the UN’s politically-hampered and resource-strapped International Atomic Energy Agency. That grant will help to create a “nuclear fuels bank” upon which states committed to nonproliferation can draw to meet their energy needs.

Whether the tax deal will limit the freedom of non-profits to achieve such salutary outcomes is a matter of intense debate. But, it is up to us to ask and answer that question before the law’s review in 2012. An election year is a particularly poor time for political risk-taking. Policy-makers will need to be armed with the facts, and buttressed by a clear and unswerving sense of the sector’s purpose.

First the data: The law extends several provisions that can affect charitable giving—and provides time to gather data on their effect. It extends Bush-era tax cuts at all income levels and continues favorable treatment of capital gains and dividends. It delays a requirement that high-income tax-payers reduce their itemized deductions, including for charitable gifts. It exempts older taxpayers from treating up to $100k gifted to charities from their IRAs as taxable income. But, what worries some nonprofits is the 35% cap it places on inheritance taxes, while exempting estates of $5m or less. Many analysts argue that these estate tax provisions will remove incentives for bequests as well as giving-while-living aimed at reducing the size of the taxable estate. Others contend that estate tax considerations play a negligible role in the decision to give, but can influence the size of the gifts made. They draw on the 2004 predictions of the Congressional Budget Office, which anticipated a drop off in the number and size of bequests. Indeed fewer dollars were donated in this way during the phase-out of the estate tax, from 2008-2009. But, that year’s economic contraction is likely to have had far greater effect. More time in an improved economic climate can yield more data on which policymakers can base future choices.

And, the purpose – As we undertake that analysis, it is essential that we come to a shared view of the reasons for charitable organizations, and their tax-exempt status, in the first place. Americans value nonprofits because they can take actions and generate ideas that may be unwelcome, unpopular, and unprofitable in the short run, but produce true societal benefit over time. In the process, they can help identify and tackle truly hard problems when others cannot. Among the hard problems nonprofits can help address is the need to get our country on a financially sustainable course. Nonprofits have already contributed by sounding the alarm, providing analysis and offering policy options.

The deficit dilemma has helped to highlight the hurdles political and business decision-makers face when it comes to calling for sacrifice. Elected officials must respond to caricatures of their views repeated in 24 hour news-cycles. Business leaders are required to produce shareholder value as measured in quarterly returns. The nonprofit sector may be the only one that can afford to ask tough questions, test novel solutions and build consensus from the ground up.

In considering our tax laws in 2012 our goals should be straight-forward: to regain our ability to solve problems as a nation. Preserving the nonprofit sector’s freedom to help tackle society’s next hard problem is an essential first step.

—Jane Wales

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Over the past few days, the New York Times has offered a telling glimpse into the varied nature of the nonprofit sector and the ways in which it touches our lives—from day-to-day services to high policy. The Times coverage also offers insight into our shared instinct to preserve a sector that has the agility to help address market or policy failures.

Saturday’s paper reminded us that America’s increasing numbers of unemployed rely upon nonprofit food banks and other charitable services when their government benefits are exhausted. Another article reports on one of the most significant developments in nuclear non-proliferation policy—the establishment of a global nuclear fuel bank—enabled by a $50-million gift from philanthropist Warren Buffet to the UN’s resource-strapped and politically hampered International Atomic Energy Agency. The bank would provide low-enriched uranium to states seeking nuclear power, in exchange for their returning the spent fuel and foregoing the indigenous capacity to produce their own fuel, including that which is weapons grade. Thus, the nuclear fuel bank would control the cycle of nuclear production and its associated dangers.

It is against this backdrop that a debate erupted within the nonprofit sector over proposals to alter the tax treatment of the donations on which it relies. The Times covered that as well, treating it as more than an industry’s special pleading. The debate’s starting point is that deficit reduction will require the combination of reduced spending and increased revenues. The question is whether tax breaks for charitable gifts are off limits or on.

A range of organizations from think tanks, advocacy and service groups to churches, temples, universities and hospitals have long benefited from the tax write-off their benefactors enjoy. And, in the past decade there has been an explosion in the creation of new foundations, tax exempt endowments established to advance social causes. The introduction of these new philanthropic players with bold ambitions has created benefits not only for our society but also for others across the globe.

Our tax code reflects the importance we place on the freedom that these philanthropies and other nonprofits enjoy. Reducing charitable deductions could adversely impact a nonprofit’s ability to raise or grant the funds needed to fulfill its mission. The change would occur on the heels of a recession that has already reduced foundation endowments and individual givers’ accounts, forcing their grantees to make do with less. Moreover, as national, state and local coffers have shrunk, nonprofits have stretched to make up for the resulting reductions in government services, providing a safety net for America’s most vulnerable families.

But the impact on nonprofits of a changed tax treatment is likely to be as varied as the non-profits themselves—not to mention the philanthropists that support them. Donors are motivated by a range of factors. Tax relief is among them, but how much is not known. In order to judge whether it is right or wise to ask this sector to sacrifice further, policymakers would need to know the risks and benefits to society as a whole.

While that analysis is undertaken, it would be useful to come to a shared view of the reasons for the favorable tax treatment in the first place. Americans value the sector because it is unconstrained by the need to win elections or generate profits and can therefore take actions and generate ideas that may be unwelcome, unpopular and unprofitable today but produce true societal benefit tomorrow. In the process, they can help identify and tackle truly hard problems.

Among the hard problems the sector can help us address is the need to get our country on a sustainable course.

The sector has already contributed by sounding the alarm and offering specific options for financing the obligations we undertake as a country over time. The continued search for solutions will not only test our willingness as a citizenry to share in the sacrifice, but also our ability to think strategically, ask and answer knotty questions, explore novel solutions—and to imagine. These are the strengths of the nonprofit sector.

While the sector can and will continue to contribute in these ways, informing a larger process, it may also choose to shoulder a greater sacrifice. Whatever choices the sector and we make, let’s never sacrifice the sector’s independence from political and market constraints.

We must and they should preserve the sector’s freedom to help us solve society’s next hard problem.

—Jane Wales

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“Social media powers social networks for social change.”

Beth Kanter and Allison Fine offer that thesis in The Networked Nonprofit: Connecting with Social Media to Drive Change. They argue that transformation can result from online technologies, including social networking sites, blogs and wikis.

In recent weeks, the New Yorker’s Malcolm Gladwell has stirred debate by criticizing this and other broad notions about the power of social media. In an article, Gladwell suggests that, at best, social media can make things more efficient. However, such technologies cannot fundamentally alter the status quo or foment social revolution.

Maybe not—though both Kanter and Fine took to their respective blogs to contest Gladwell’s claims, which are driven by a focus on past efforts at social activism and protest. Activism is not the only way to bring about social change, however. And technology advances have altered society (think of the introduction of steam, of the printing press and of the automobile) providing a new status quo. Finally, small changes can lead to bigger things. But not always better things.

In their book, Kanter and Fine focus in part on the way foundations operate, and on the way the next generation of “digital natives” will give: responding to causes rather than individuals and organizations. The authors contend that future individual givers will be inclined to join or support a network of people and organizations that collaborate to tackle an issue. And foundations have given rise to crowd-source grantmaking, as I’ve discussed in previous blogs.

Kanter and Fine believe that transparency will increase in the nonprofit sector. They envision more organizations operating with a “hive” architecture, rather than hierarchies or in silos. And they imagine that everyone in a hive organization, not just an organization’s leader or communications staff, would be engaged in true, two-way interactions with people on the outside.

Even if, citing Gladwell, “the revolution will not be tweeted”— and there has been too much hullabaloo over technology’s power— social media offer tools, which, when used to full advantage can promote transparency, collaboration and a new openness to ideas from unusual sources. Surely these are values to promote, especially in the world of social change. But— as Digg and its Digg Patriots demonstrate—this tool can be used to distort as well as to discover. Intentions matter.

—Jane Wales

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Thanks to a decades-long focus on improving access to college, nearly seven in ten Americans today enroll in some form of postsecondary education within two years of leaving high school. That’s a record number, and it is impressive. But it also obscures another reality. Lurking in the shadows is a more sobering statistic: Not much more than half of college students—some 57 percent—earn a bachelor’s degree in six years.

In short, colleges are getting more people to start a race they cannot finish. In fact, college graduation rates are increasing in every developed country except for the United States, according to Grantmakers for Education (GfE). Individual success is hindered, as is the nation’s competitive global edge.

Over the past couple months the college dropout issue has been getting the increasing attention it deserves. Last month, President Obama called for the nation to regain the world lead in college completion by 2020. (The US currently ranks No. 12.) Philanthropy is stepping up, too. The Bill and Melinda Gates Foundation just launched a $12-million initiative with the National League of Cities to boost college graduation rates in four cities. The Intel Foundation, led by Shelly Esque and championed by Intel CEO Paul Otellini, has sponsored competitions to incent and reward achievement in science and math, thus encouraging dazzling stars in the next generation, not only to do well in high school, but to excel in college and in life. And the Lumina Foundation has announced a $14.8 million, four-year national effort to help adults with “some college”—even those decades removed from attending school— complete their degree.

Over the summer GfE released From Access to Success, a funders guide to improving college graduation rates, relating key themes from a spring meeting in Washington with prominent researchers, higher education leaders and officials from the US Department of Education. In addition to describing the reasons too many students don’t complete college, the short GfE guide offers ideas for funders. Among these: Convene K-12, higher education and private industry leaders to better define college- and career-readiness; help schools and districts strengthen the quality of student counseling and college preparation; and help build will among policymakers and the public to support adequate funding of community colleges, which are entry points for many into the larger, postsecondary system.

But in addition to dangling carrots, the guide also offers prodding with sticks. It calls on grantmakers to hinge institutional support on efforts at improving college retention, including better tracking and analyzing of data. According to the guide, basing funding on course and degree completion rather than mere enrollment will push schools to focus on true progress.

—Jane Wales

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Of all the pressing issues confronting the developing world, cancer gets comparatively short shrift. And yet, a majority of new cancer diagnoses come from developing countries.

The fact that these countries are significantly less capable to care for the afflicted than, say, the United States, where cancer has been a leading health priority for many decades, means that cancer is “a time bomb waiting to explode,” says Princess Dina Mired of the King Hussein Cancer Foundation. At last month’s Clinton Global Initiative, Mired said that addressing cancer depends on a sophisticated medical infrastructure above and beyond traditional health care. Much of the world is ill-equipped to tackle the disease, and increasing numbers are dying because they can’t reach or afford adequate treatment. As such, it’s disturbing that cancer is not a part of any global health agenda, Mired asserted.

A special session on the topic at CGI offered a rare spotlight on this global issue, which has striking parallels to HIV/AIDS in the level of ignorance and stigma surrounding it. For example, widespread concern that the disease is contagious leads victims to refrain from publicly disclosing their status. In turn, a lack of visible cancer survivors leads people to think it’s always a deadly disease, or less common than it really is. And then there’s the omnipresent issue of gender discrimination and the need for funding to specifically advance women and girls, a major theme at CGI this year as it was last. When it comes to cancer, for example, some women in the developing world who get a diagnosis of breast cancer forego a mastectomy for fear of losing their husbands, according to Felicia Knaul of the Harvard Global Equity Initiative.

Paul Farmer of Partners In Health and the Harvard Medical School called for the creation of a Global Fund for Cancer, one focused on all areas of need, from prevention to diagnosis to care. But, a recent study from the Antwerp Institute of Tropical Medicine, as reported by VaccineNewsDaily, found that single disease campaigns in developing countries “interfered significantly with routine health care delivery.”

So, while cancer demands greater global attention and care, this work should be approached in such a way as to strengthen the general health infrastructure in developing countries, rather than compete with it for needed funds.

—Jane Wales

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A century ago, the Rockefeller Sanitary Commission, the precursor to the Rockefeller Foundation, helped eradicate hookworm in the American South. Today, the ClimateWorks Foundation, financed by a funding collaborative, is helping to catalyze measurable reductions in carbon emissions.

What these efforts have in common, according to venture philanthropist Mario Morino, is a focus on outcomes-based practices that produce “meaningful, measurable, sustainable benefit for those served.” Morino argues in a four-part series of online essays that too many in the sector focus on the how of measurement without enough thought as to what they are measuring and why. Keeping the end goal in sight is key: to help inform efforts  to achieve real social impact, using the right information to guide action.

The Aspen Philanthropy Group (APG), 25 leaders in philanthropy, has come to a similar conclusion. Having identified a lack of alignment around approaches to measurement and evaluation (M&E) among grant-makers and between grant-makers and grant-seekers, the group charged the Aspen Institute’s Program on Philanthropy and Social Innovation with conducting a year long review. The Program found that grant-makers and their grantees tend to gather as much data as possible in search of evidence of impact. This approach has often resulted in expensive evaluations that are onerous for grantees and have often failed to yield the data needed in the time required for informed decision-making. As a result, the data have gone unused. The Aspen program recommended instead a “decision-based” approach to M&E, characterized by:

  • A shared purpose of informing decision-making and enabling continuous learning;
  • A shared expectation that data will be gathered in a timely fashion and in a manner that does not place an undue burden on grantees; and
  • A shared commitment to placing data gathered in the public domain so as to advance field-wide learning.

The Program plans to publish an edited e-volume on the topic, with chapters written by many of the foundation presidents who are Aspen Philanthropy Group members. It will list open source tools for grant-makers developed by expert organizations ranging from McKinsey & Company to Grant-makers for Effective Organizations (GEO), the Foundation Center to FSG Social Impact Advisors and Donor Edge. Most importantly, it will partner with likeminded organizations, donor advisors and donor educators who have relationships of trust with philanthropists who wish to apply M&E principles to their grant-making strategies. The purpose of this consensus-building effort is to move away from evaluations as audits to evaluations as sources of usable knowledge, thus enhancing the efficacy of the sector as a whole.

Morino, of Venture Philanthropy Partners, shares the goal of advancing a norm. His purpose: to take outcomes measurement “from being the nonprofit world’s most anxiety-provoking topic to one of its most powerful forces.” Large, private foundations are natural catalysts, he says. He’s also encouraged by the creation and work of the White House Office of Social Innovation and Civic Participation.

His proposal is to create a high-profile, cross-sector coalition to offer the philanthropic equivalent of the technology industry’s “missionary sell” to push for change – “ferreting out, supporting and sharing the results of … early adopters.” He goes so far as to name names, recommending people like Rajat Gupta, formerly of McKinsey & Company; Bridgespan’s Tom Tierney; Michael Bailin, formerly of the Edna McConnell Clark Foundation; author/consultant Jim Collins; and the Corporation for National Service’s Steven Goldsmith. He would likely find many other leaders and converts including remarkable grass-roots collaboratives of grantees and their funders in various issue domains, such as Strive or the Cultural Data Project. Each has been successful in setting standards for their field and would add to any consensus building effort. Morino’s purposes, and those of the APG, will be well served by the combination of a bottom-up as well as a top-down effort.

Marino calls on this “Dream Team” to lead a “Doing Good Better” initiative to, among other things, build knowledge about managing to outcomes through an open-source repository of tools, best practices, profiles and the like; provide strategic and tactical help through better recruitment and identification of qualified consultants; and generate greater support from funders of general operating costs, which are needed to develop the necessary technology systems and human processes.

There is a remarkable array of open source tools for strategic philanthropist seeking to measure outcomes, for which a roadmap would be handy. And a normative shift is in the making. A long-time missionary for measuring outcomes, Marino’s voice is essential and his recommendations wise.

–Jane Wales

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