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Posts Tagged ‘Chronicle of Philanthropy’

Everyone has gripes with the ways in which government tax dollars are put to use. Especially now, knee-deep in tax season, some dream of a tax-free, libertarian society. It certainly has done that for those associated with the anti-tax Tea Party Movement.

But philanthropist Chuck Collins argues that the public debate should focus on the reasons for collecting taxes in the first place. The debate is “stuck” in anti-tax rhetoric, designed to appeal to the Tea Party Movement, Collins says. Along with Alison Goldberg, Collins is leading a campaign for progressive tax reform aimed at the post World War II goal of expanding the middle class and meeting collective needs ranging from public education to physical infrastructure. These two philanthropists are gearing up for Tax Day—April 15—by recruiting more colleagues to join their cause to provide a progressive counterweight of sorts to the Tea Party activists. Collins says the goal is to “bear witness” to the need for a tax system that produces a more equitable society. It should also produce more philanthropy.

As detailed in a March 24 Chronicle of Philanthropy online discussion and in a March 25 Bolder Giving teleconference, Goldberg and Collins’ organization, Wealth for Common Good, specifically aims, among other things, to end Bush-era tax cuts for those with annual incomes over $235,000, close overseas tax havens, reinstate the estate tax and create an additional top tax bracket for high incomes. Taken together, they assert that their proposals could generate more than $500 billion per year in revenue. Their organization is also considering ways to use the tax code to encourage more charitable giving aimed at reducing inequality. During the Chronicle of Philanthropy chat, Goldberg said that foundation boards and grant decisions should also be opened up to include representatives of the communities supported by their grantmaking.

The proposals contained in Wealth for Common Good reflect and respond to a growing worry about income and wealth disparities in our society. And philanthropy has a role to play in providing thoughtful solutions. As Goldberg wrote in a Jan. 13 post to the New Voices of Philanthropy blog, “the funding community can’t afford to be absent from these debates.” For the television news would have us believe that the tea Party Movement is the dominant—perhaps even the sole—voice.

—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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The Chronicle of Philanthropy will host a discussion this Thursday, June 11th, on how foundations can manage themselves in this recession with an eye for long-term health.  Follow the discussion live, this Thursday at 12 noon Eastern Time here.

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The Chronicle of Philanthropy announced today two live discussions that will focus on philanthropy in this difficult economic climate.  The first takes place tomorrow, Tuesday April 14th at 12pm ET, and will cover strategies for making grant proposals stand out from others in competition for funding.

The second will address how the recession has affected international philanthropy – both in diverting international funds back to domestic purposes, and also in how it is straining international aid groups abroad.  This conversation will take place on Thursday April 16th at 2pm ET.

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From a $100 million microfinance fund begun in 2005, Tufts University officials say they are now reaping the benefits.  The fund has been invested solely in microfinance initiatives, and provides economic self-empowerment for the poor along with financial returns for the university.   Just last year, Tufts earned $6.6 million in dividends, money that has “helped counter a decline in the school’s endowment and supported faculty research, student aid, and a program to help Tufts graduates working in government and nonprofit jobs repay student loans,” according to a Chronicle of Philanthropy post today.

The $100 million for the fund came from Pierre Omidyar, founder of  Ebay and co-founder of the Omidyar Network with his wife Pam (see our earlier post on Pam here).  Both Pam and Pierre are Tufts alumnae.   According to the Tufts press release, the Omidyar donation “is the largest single gift in the history of Tufts University as well as the largest private allocation of capital to microfinance by an individual or family.”

Our hats are off to Pam and Pierre, two outstanding members of our GPF community.

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The Chronicle of Philanthropy notes that the stimulus package passed yesterday by the Senate leaves out several measures that nonprofit leaders had proposed to ease the impact of the economic climate on philanthropy.  Some of the ideas left out include a $15 billion bridge-loan fund and a “flat” excise tax for private foundations.  Read the full article here.

Read more about the status of the stimulus package here at the NY Times, and read Jane Walesop-ed on how Obama should partner with philanthropy from last month in the SF Chronicle.

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