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Archive for the ‘Philanthropy’ Category

Foundation officers often mistakenly seek to apply scientific principles to complex social problems. And, civil society is endangered by an increasing market mentality on the part of new nonprofit leaders, says Stanford University’s Bruce Sievers.

Sievers’ book, Civil Society, Philanthropy and the Fate of the Commons, offers specific steps for philanthropy to improve the way in which it tackles various social problems and enlivens civic life. Sievers argues that efforts to strengthen civil society deserve a central position on the philanthropic agenda since it’s a prerequisite for the achievement of most other philanthropic goals.

For many decades now, Sievers writes, foundations have attempted to apply scientific theory to such social problems as uneven access to public goods, including quality education, affordable health care, a clean environment and opportunities for robust civil engagement. Success has been elusive because of the random nature of human affairs, which runs “counter to the scientific vision of prediction and control.”

Sievers is quick to add that it is useful to employ data when seeking to make informed judgments about grantmaking. His key argument is that getting to a solution of a social problem is difficult, and expectations of perfect solutions or complete results should be tempered by the knowledge that “social problems…are not straightforwardly solvable through the direct application of the techniques of laboratory science”.

While seeking to demonstrate impact is a good thing, it cannot always be achieved. “While it is not unreasonable to expect that [charitable] contributions will yield some evidence of beneficial results,” writes Sievers, “the exaggerated emphasis on metrics in the form of substantive accountability is becoming a driving force in the field, creating unrealizable expectations and a distortion of organizational priorities.” Today’s most pervasive societal problems are those that philanthropy, of all the sectors, should be most adept at tackling. But Sievers says it has limited its ability to do just that by more narrowly focusing programs and promising market-like results.

The solution, Sievers contends, is for foundations to focus on inputs—processes— more than outputs, or results. Foundations should work in true partnership with others, especially those most affected by a problem or proposed solution. And they should guide their work based on practical, local knowledge, not top-down management based on abstract theories.

The Aspen Philanthropy Group, a gathering of foundation leaders, has identified the process of measurement and evaluation—both of foundation strategies and individual grants—as a topic for study by the Aspen Institute’s Program on Philanthropy and Social Innovation. The program has convened a series of working groups of experts in various issue domains to identify broad principles and practices in the M&E space that can lead to the twin goals of continuous learning and informed decision-making. More on this later when the team reports out to the APG in late July.

— Jane Wales

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Life ain’t fair. Foundations pay full value to the for-profit consultants who advise them, but often fail to cover the true costs of the same services when offered by non-profits. How often have nonprofit leaders been tapped to provide advisory services to a foundation’s grantees or skills training for the foundation’s program officers, without thought of compensating the leader’s host organization for his or her time?  How many grants cover direct expenses but do not cover the true costs of a program or project by including indirect expenses? The Ford Foundation will pay 10% overhead. The Knight Foundation will pay none. Thus, each borrows from the grantee’s other sources of revenue, such as membership dues, registration fees or those increasingly rare general operating grants from other foundations or donors.

It turns out that governments do the same. The Government Accountability Office (GAO) surveyed nonprofits that receive federal grants and contracts and found that 88% are not reimbursed for their full costs. Some receive nothing at all for their indirect costs. Further, many of the federal grants managed by states are inconsistent in their treatment of indirect costs.

Federal agencies permit nonprofits to retain a share of contract funds for indirect costs, but when state and local governments administer the grants, each follows its own practices. The GAO offered the example of a US Department of Health and Human Services grant program, for which Wisconsin allows a reimbursement to nonprofits of up to 14% for indirect expenses, while Maryland provides no overhead at all.

In the meantime, for-profit contractors are usually able to recover true costs, while their non-profit colleagues may get as much as 20% less as a result of a government’s policy with respect to reimbursement to nonprofits.

Something is very wrong, especially given that many non-profits are often far leaner and more cost-conscious than their for-profit counterparts. Let us hope that the GAO report inspires a rethink at a time when governments are increasingly shifting their responsibilities to the social sector without the resources required to meet them.

—Jane Wales

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School may be out for the summer, but there’s no break for ideas and debate about the best—and worst—ways for funders to help fix America’s education system. Certainly engaging with policymakers is critical. In a later post, I’ll discuss the issue of foundations’ increasing interest in and effort to influence education policy.

But one specific education idea that has gotten less attention than it deserves is the need to help those whose native language isn’t English.

It’s not just children of immigrants who are “English Language Learners,” but also those who live in linguistically homogenous communities. And it’s not just students in those states, including California, Texas and New York, with a history of immigration and multi-language environments. In fact, ELL populations are growing everywhere, and the fastest increase is occurring in states such as South Carolina, Indiana and Delaware, where school systems are less familiar and less equipped to help non-native English speakers. That’s according to 2009 data from the Migration Policy Institute as cited in a recent web seminar sponsored by Grantmakers for Education (GFE) and Grantmakers Concerned with Immigrants and Refugees (GCIR). The two organizations have teamed up for a two-day briefing to be held next week in New York, exploring how funders can address ELL needs at various stages of youth development, from pre-school to elementary and secondary education to out-of-school time.

The recent web seminar—from which presentation slides and an audio recording are available—specifically focused on a “two-generation” approach to literacy: working with parents as well as students. Parents are “their children’s first and life-long teachers,” and engaging them is the key to success. For example, Joanna Brown of Chicago’s Logan Square Neighborhood Association talked about how her association helped to develop lasting relationships between parents and teachers, through after-school workshops and evening meetings. Before such efforts, teachers were skeptical of how much parents could help them in their work. And many parents were suspicious that the teachers had ulterior motives, such as reporting on their immigration status.

Helping non-native English speakers become fluent both enhances their opportunities and enables them to contribute fully to society more broadly. Improved quality of life and enhanced social cohesion are among philanthropy’s most ambitious and important goals.

—Jane Wales

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Did foundations do enough in the economic recession? Clearly it is too early to say.

But the Philanthropic Collaborative has found reason to crow. Its new preliminary report offers analysis of a limited set of data—a sample of 2,672 grants totaling $472 million made by foundations in response to the crisis between 2008 and 2010.  A full report is due in December, but Responding in Crisis: An Early Analysis of Foundations’ Grantmaking During the Economic Crisis suggests that the majority of foundation grants went to states facing the severest mortgage delinquency problems as well as those encumbered by especially high unemployment rates. Foundation support was based on need: “Foundations responded in a targeted and timely manner, with grants appropriately directed toward communities with the most need,” the report boasts, calling the development “even more exemplary” in light of the fact that the foundations’ own assets took a beating in the recession.

The report’s lead author, Douglas Holtz-Eakin of the American Action Forum and former director of the Congressional Budget Office, served on a May 7 panel discussion at the Hudson Institute, where the Collaborative’s report was officially released. Also on the panel was Aaron Dorfman of the National Committee for Responsive Philanthropy, who called the report too sweeping in claiming success based on a sample that Dorfman said amounted to less than 1 percent of all grants over the period. He also took umbrage with the report’s assertion that foundations have been timely in responding to the crisis. Rather, Dorfman noted that the general grant application process seems as slow and cumbersome as ever, and in a time of economic uncertainty, foundations seem to be taking longer to make grant decisions. He went on to identify five things philanthropy should have done—and ultimately, could still do—to adequately respond to the crisis, from being more flexible in grantmaking to offering more support for advocacy and community organizing.

Actually, all panelists—which also included Steven Lawrence of the Foundation Center—agreed with one audience member, a foundation representative, that foundations are likely to be more skittish about offering multi-year grants as a result of the crisis because such longer commitments limit flexibility. That’s not promising.

The Collaborative’s report indeed may be a case of being too sanguine at a time when society is just emerging from recession. But it does contain useful examples of important work undertaken in times of economic stress. And, from that we may draw lessons.

—Jane Wales

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Many were thrilled to see that the Kellogg Foundation had made a $75-million commitment to attacking racial disparities in communities across the country. It brought to mind the superb work of Anne Kubisch and her colleagues at the Aspen Roundtable for Community Change— whose work on structural racism remains among the most thoughtful approaches to analyzing and acting on this insidious problem. And so I turned to Anne’s colleague Keith Lawrence— and this is what he had to say:

“Hats off to the Kellogg Foundation for publicly adopting racial equity as a central grant-making principle!

“This is a bold step by a major philanthropic sponsor of initiatives designed to eliminate racial disparities in communities across America. It’s bold because a racial equity perspective explicitly challenges a number of faulty ‘wisdoms’ about race and its connections to familiar socioeconomic outcome patterns, and about the appropriate posture for philanthropy in this arena.

“Kellogg’s recent decision to transform itself into an anti-racism organization sends an important message to those who would believe that President Obama’s election signaled the end of race in America. While that historic development is a great leap forward for our democracy, and a welcome reminder that large numbers of voters hunger for a politics of hope and connectedness, it should not cloud our recognition that we still have a long way to go in truly extending opportunity to all Americans. Thankfully, old-fashioned, in-your-face racism has receded and most of us now consciously embrace colorblind values. But we’re not yet a colorblind society, because our opportunity systems and institutions maintain racially patterned inequalities without, for the most part, intentionally setting out to do so. Kellogg understands that racial privilege and disadvantage have been deeply inscribed into the physical, cultural, economic, institutional, and psychological spaces we navigate daily. Racially inequitable norms and practices in the employment, housing, criminal justice, health and other key sectors still combine to keep far more individuals of color on the margins than can reasonably be explained by their individual shortcomings. Personal responsibility isn’t irrelevant, but its contribution to chronic racial group inequalities is dwarfed by the effects of public policies, institutional practices and unconscious biases that continue to perpetuate racial disparities.

“By stepping up and reframing its race work in this way, Kellogg also sends an important message about the niche philanthropy occupies in our democracy.  Americans have always relied on secondary institutions to extend democratic equality: public schools, trade unions, political parties, religious organizations and, among others, philanthropy. These “equalizing institutions” help create a common social fabric as well as additional opportunity pathways for those without social advantages. The extent to which philanthropic foundations have given a broader cross section of the public access to areas and opportunities once the exclusive preserve of elites—such as higher education, the arts, or specialized training—has been part of this equalizing stratum. This wholehearted embrace of a racial equity grant-making standard speaks loudly to others in this sector about what they can do to help our democracy achieve its full potential and substance”.

Keith could not have put it better. I am eager to hear the thoughts of others on Kellogg’s big bet, the work of the Aspen Roundtable on Community Change and the combination of research and action that is required.

—Jane Wales

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Last week, Time Magazine feted its 100 Most Influential people “who affect our world” at a gala that would be hard to match— with musical performances by Taylor Swift and Prince, a comic interlude by actor Neil Patrick Harris, a brief talk by Bill Clinton and toasts by Sarah Palin, scholar Elizabeth Warren and actor Ben Stiller. But what was striking about the evening were the less glitzy among the honorees: social entrepreneur Valentin Abe, who also gave a toast to Haitians struggling to restore their country; microfinance pioneer Michael Sherraden of the Global Assets Project; Avarind Eye Clinic’s Dr Naperumalsamy, and other remarkable leaders effecting change around the world.

Perhaps the powerful story is that of Chen Shu-chu, a market woman from Taiwan, who saves her meager salary so as to support orphans and to build a library in her school. Over the years, she has given the over $30,000, and now plans to establish a fund to provide education and health care for the poor.

Her first trip outside of this vegetable seller’s home village was this foray into New York’s worldly elite. Surrounded by those who had spent the equivalent of her annual earnings on their glittering attire, Chen wore a business suit selected by Taiwan’s Foreign Ministry (for which she insisted on paying). Such indulgences have no place in the life of Chen Shu-chu, who lives on three dollars a day, so that she can give the remainder to others.

How many of us with much larger earnings could be just a bit more frugal so as to put our funds to a larger purpose? I dare not count the ways I have expended my salary on unnecessary items with the full knowledge that others lack the basic necessities of life. It is one thing to know. It is another to act.

While my dinner invitation was the result of a small article I wrote, Ms Chen’s was the result of lives she had changed. That is true in her village in Taiwan. It was also true that night in New York City. For much as we all enjoyed the well-known speakers and the polished performances, Chen Shu-chu, my modest table companion, will remain the keynoter in my mind.

—Jane Wales

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Much as Haiti can serve as a test case for philanthropic efforts to rebuild a country destroyed by natural disaster, Detroit is emerging as a model for renewal domestically.

Carol Goss of the Skillman Foundation pointed out the promise in Motor City in a March 26 article in the Detroit News: “We can be a model of how to turn around a city and a region.” Skillman is just one of several foundations collaborating to rebuild and rethink all aspects of the city, from its residents’ educational needs to city planning to the arts.

Philanthropic efforts to revive the city’s arts—particularly in establishing a “creative corridor” downtown—are drawing extra attention. “If we could ever try out all these ideas we’ve been cooking up about the arts as an engine of urban renewal—and really do it—this is the place to do it,” said Andras Szanto of AEA Consulting in a March 29 airing of WNYC Radio’s Soundcheck. The show’s host, John Schaefer, compared Detroit to  New York some three and four decades ago, when first punk music and then hip hop culture emerged as vibrant art forms and breathed new life into the city before becoming global cultural forces

Detroit does indeed offer a promising case for foundations: The city was struggling more than most American urban centers before the recession. And its nonprofits have long been too dependent on the severely depressed automotive industry.

But the clock is ticking: The Kresge Foundation’s Rip Rapson told the News that the philanthropic effort has about 18 months to achieve its goals. And alarm bells are already sounding. The News quoted several community leaders skeptical of the efforts, seeing the work as a “takeover” from what appears to be an emerging, unaccountable “fourth branch of government.”

The ever-astute Bruce Trachtenberg wrote in a March 26 post to the Communications Network’s blog that such concerns testify to the still large gap between the public’s understanding of what foundations do and what motivates them—something the Philanthropy Awareness Initiative documents. Independent foundation consultant Bob Hughes wrote in an April 6 post to the Center for Effective Philanthropy’s blog that it’s not just that foundations need to be more open about their activities. A sustained conversation is also required so that the public and organized philanthropy can be aligned.

It will take the whole village of Detroit—as elsewhere—to bring about true social change.

—Jane Wales

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Despite popular perception, it’s not one single product, epiphany or “a-ha” moment that drives innovation. From Thomas Edison’s light bulb to Apple’s multi-functional personal devices, innovation happens when a network adapts and executes using a new approach or technology.

Those were key lessons imparted by Andrew Hargadon of the University of California-Davis, speaking on April 25 at a mini-plenary session on social innovation and philanthropy at the start of the Council on Foundations’ 2010 Annual Conference. This was the kickoff to the conference’s social innovation track, which also included sessions with Chip Heath, co-author of the book Switch, and Gabriel Kasper of the Monitor Institute.

Also at the conference Kasper, co-author of the 2008 Kellogg Foundation report Intentional Innovation: How Getting More Systematic about Innovation Could Improve Philanthropy and Increase Social Impact, noted that there are five steps to getting to innovation: from establishing a culture that embraces it, to identifying opportunities for focus, to diffusing and sharing with others in the field. Both Hargadon and Judith Rodin of the Rockefeller Foundation shared specific ideas for and examples of foundations advancing innovation. So did one audience member, who volunteered that philanthropy can be the driver to lead innovations in fields struggling to adapt to a rapidly changing world, most notably K-12 education and print journalism.

More generally, though, Hargadon said foundations should take advantage of their already established networks and connections to look for and advance innovations. They should also invest in individuals and organizations with the potential to build or expand a network around new ideas, helping them to take root.

Rodin said that philanthropy, long a field focused on innovation, needs to re-imagine its approach in the 21st Century, focusing as much on innovations in organizations, markets and processes as on ideas or individuals. In this century, innovators don’t need a laboratory, according to Rodin: Everywhere is and can be a laboratory for innovation. She also noted that the best innovative ideas are to be found as a result of collaboration and partnership— in other words, networks of foundations, as well as partners in other sectors, working together.

—Jane Wales

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Hats off to Jean Case, who, like Bill Gates, has come forward to share mistakes made and lessons learned in her recent blog. As two of the biggest names in philanthropy, one could argue that it is easy for them to make admissions of error. After all, who is going to fire them? But their very stature makes then easy targets, and their assets mean that their bets matter.

Philanthropists often prefer anonymity and their giving can be quite personal. But the challenges strategic philanthropists are trying to solve are public ones. Their grantees are expected to be transparent and these foundation leaders are modeling that behavior. Efforts like the Foundation Center’s Glasspockets initiative can help, but even more so can the words of those philanthropists who dare to—even feel obliged to—share their experiences.

If we all took a page from the book of Bill Gates and Jean Case—and the many Global Philanthropy Forum members who eagerly share errors made—we can make mistakes matter. Each offers a teaching opportunity. A commitment to learning is a distinguishing feature of strategic philanthropy; tales of failure can be the source of its future success.

While acknowledging that crowing about flops remains rare in any sector, let’s celebrate and emulate those who share triumphs and failures.

—Jane Wales

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If Congress were to double or triple the private foundation excise tax, asks Joel Orosz of Grand Valley State University, “does anyone truly think that there will be a groundswell of support for foundations” that resist? In a March 10 guest post to the Center for Effective Philanthropy blog headlined “Déjà vu (or 1969) All over Again?”, Orosz suggests it’s too late for foundations to react effectively to stem a possible backlash against the sector. Still, the philanthropy professor counsels foundations to take steps on their own to improve practices, including training employees to be more professional and more accountable to nonprofits.

Orosz is just one of several commentators recently suggesting that a growing populist fervor in society isn’t just anti-government, but anti-institution—and a threat to philanthropy, one that can’t be summarily dismissed and should propel changes. For example, in Small Change: Why Business Won’t Save The World, Michael Edwards wrote that foundation leaders will vociferously resist and complain about the many suggestions he makes in the book calling on Congress to require more transparency and accountability from foundations. But Edwards, a senior fellow at the think tank Demos and the leading skeptic of philanthro-capitalism, says that public and political pressure will eventually build and force changes in the sector. Similarly, in a February 25 Chronicle of Philanthropy opinion piece, the Hudson Institute’s William Schambra argued that philanthropy’s increasingly business-minded approach is at odds with the populist mood of the American public on both ends of the political spectrum. He thinks the tide is turning against foundations.

To help improve the situation, Thomas David of the Community Clinics Initiative argues that foundations should show they’re making sacrifices in this economy along with everyone else. It should not be a time of hunkering down, cutting grantmaking, trimming staff and expenses or focusing on re-growing endowments. Instead, David writes in an essay published by Grantmakers in Health (GIH) that foundations should make some big bets, ease up on control of grantees and practice mission-related investing. In other words, take risks that put them on the line in ways that might tangibly, not just symbolically, benefit nonprofits in a time of need. More specifically, David advises foundations to increase their grantmaking this year—even if they’re one of those already exceeding 6 percent payout. He complains that over the past couple of decades, foundations have evolved to become more risk averse than ever; they’re so focused on assets that growth is their priority, not giving.

David’s hard-charging essay is just one of several included in Taking Risks at a Critical Time, released in March in tandem with GIH’s 2010 annual meeting. Foundations hesitate, according to this publication, in part because of an over-reliance on proven practices, unwarranted anxiety about engaging in public policy and avoidance of failure of any kind, despite the fact that a healthy proportion of failures in a grant portfolio is a sign that a foundation is successfully venturing in new territory. The lead essay includes examples of “risk taking in action,” efforts to improve health.

Tom David is not optimistic, however. He essentially calls foundations fair-weather friends to nonprofits: “It is at times like this that nonprofits, who like to think of foundations as allies in their struggles, have learned not to count on their friends when they need them most.” I wonder. It is not the role of foundations to support nonprofits based on need, but rather based on merit, because doing so fits a larger strategy—one that produces a social benefit. I have a good deal of faith that foundations will do their best to achieve that end. But the way in which they do it must take into account the public mood, and even distrust that these observers so powerfully describe. No institution is being given a pass, particularly one that is seen as opaque while claiming to advance the public good. “Trust us” has never been an adequate response to doubters.

—Jane Wales

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Baby boomers are hanging on, and next generation leaders are waiting—and waiting—their turn.

According to Trading Power, produced in partnership with the Council on Foundations, Andrea and Charles Bronfman Philanthropies’ 21/64, Emerging Practitioners in Philanthropy and Resource Generation, this is the first time in history that society is experiencing a delay in leadership transition, as people live longer and retire later. The economic recession has further delayed retirement plans, leaving baby boomers in positions that even they expected to have left by now. And some seasoned leaders are turning to a model of “leadership expansion” rather than “leadership transfer,” sharing leadership duties with younger employees. Some retain an executive emeritus role. Others take a sabbatical while potential successors serve in “acting” capacities.

In each instance the elder leader needs to respect new ideas coming from his or her younger partner, according to the report. If the philanthropic sector fails to tap the next generation’s skills and knowledge, the emerging leaders will simply move on to sectors that will.

But would younger workers stay put, even if they had a clear path toward a leadership position? The Pew Research Center’s ongoing study, The Millennials, contrasts the attitudes of Generation Xers and Millennials with that of aging Boomers. Pew finds that expectations about career advancement differ between younger and older workers; Millennials in particular are accustomed to the idea that they will – indeed, must – find their own path of career advancement. In other words, they may jump among organizations, and sectors, in any case.

And it turns out that the same demographic trends that are driving later retirement within the nonprofit sector are affecting movement of Boomers across sectors. On Friday, The New York Times ran a story that explores what boomers are doing with the “bonus decade or three added to the average life span.” The article quotes Stanford professor Laura Carstensen: “The culture hasn’t had time to catch up. All the added years of life have been put into leisure, and that’s crazy.” The Times story details an organization called Civic Ventures that is placing longtime managers and professionals from the for-profit world in nonprofit positions uniquely suited to their skills. Opportunities like this point to the positive effects that this “bonus decade or three” from Boomers could have on the nonprofit sector.

But to the extent that the nonprofit world is characterized by more leaders than leadership positions, the notion of offering sabbaticals for executives has gained salience. According to a recent report by Deborah S. Linnell of Third Sector New England and Tim Wolfred of CompassPoint Nonprofit Services, sabbaticals allow the next rung of leaders to learn new skills and take on new responsibilities during the director’s absence. And they often continue to have enhanced responsibility and authority upon the director’s return, sharing leadership tasks. A sabbatical can serve as a dry run for a future transition, according to this report, Creative Disruption.

Jossey-Bass has also published a volume on the subject of nonprofit leadership, collecting previously published articles, research studies and essays from experts in the field—including Bridgespan’s study on the sector’s pending “leadership deficit”. Edited by Indiana University’s James L. Perry, The Jossey-Bass Reader on Nonprofit and Public Leadership stresses the importance of cultivating, sharing and delegating leadership throughout nonprofit organizations.

This is probably true now more than ever as the nonprofit sector grows bigger in size and importance. Part of increasing the sector’s impact has to include more investment in the development of its employees.

So, if you find yourself waiting, and waiting, apparently you are not alone. The question is, are the career development opportunities enriching your lives, and readying you for the moment when it finally comes.

—Jane Wales

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