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Posts Tagged ‘Philanthropy’

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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Think the debate over health care reform is over? Not a chance— and not just because Election Day is fast approaching. President Obama signed the Patient Protection and Affordable Care Act (PPACA) in late March after nearly a year of debate and deliberation. But the real work is only just beginning: Implementing the law at both the federal and state levels.

And so, Grantmakers in Health has called upon foundations to ramp up funding for public education about the legislation, as well as to build local capacity to implement it. Working to generate and sustain public support over the next few years will be critical if the law is to withstand efforts to repeal or undermine it before it has had a chance to take effect, according to Implementing Health Care Reform: Funders and Advocates Respond to the Challenge.

Moreover the Grantmakers alliance says that the issue should concern even those funders working outside of the health and heath care area. For starters, the report explains, the law touches on issues beyond health and health care, incorporating issues about workforce, income security and equity among racial and ethnic populations. But perhaps the most important reason the report argues that non-health funders should play a role in health care reform: the success— or failure— of the law could affect other public policy issues in the future. As the GIH publication puts it, the bill’s high profile and broad reach means that successful implementation could help restore public trust in government and demonstrate government’s positive role in improving lives. Wouldn’t that be something?

Although the focus—and controversy—has been on provisions expanding health insurance, the PPACA encompasses significant changes affecting virtually every aspect of the health system, from information technology to training to delivery system. The aim is to restructure the health care delivery system to make it more focused on prevention and primary care, reduce costs and improve quality. Indeed, it’s more complex and broader in scope than Medicare or Medicaid, and will be enacted in stages over the next four years, with many of its provisions requiring extensive planning and preparation.

Based on interviews with 43 funders and advocates, the GIH publication reports on foundations’ early implementation activities and plans. It also offers recommendations for further engagement and support. The organization will further discuss the report and hear from several funders engaged on the issue in a Sept. 8 conference call for members at 2:00 PM EST. (Email to register.) The report suggests that funders should work harder to coordinate and collaborate their efforts, within a state or on a regional level, learning about what their colleagues are doing. In particular, funders could work to create pooled funds for specific issues, activities or localities. And larger funders could seek out small, community and nonhealth funders, soliciting their expertise or advice on education, poverty or workforce issues as they relate to implementation.

More specifically, the report calls on philanthropists to fund efforts to explain the law in ways that people— including grantees— can understand, overcoming skepticism, as well as to target groups who might benefit from the early provisions, such as the uninsurable, seniors with prescription drug costs and small businesses. Another critical need is for philanthropists to help state government officials take on the local tasks of implementation. The latter will be a particular challenge, as states are constrained by budget deficits, staff reductions and anticipated turnover due to the fall elections. So foundations could identify ways to partner with local or state government, according to the report—if not direct funding for personnel or programs, then helping them apply for federal grants or support data collection and evaluation.

“Never before has there been such a national framework in place for major health systems change,” GIH reports.

The potential is certainly there—now, to make it real.

—Jane Wales

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Imagine if countries competed with each other to create the best environment in which social innovation can occur. And imagine if social entrepreneurs were actively encouraged and supported in countries around the world.

Two consultative bodies affiliated with the World Economic Forum (WEF) – its Global Agenda Council on Philanthropy and Social Investing and the Global Agenda Council on Social Entrepreneurship – are aiming to make those ambitions a reality. These bodies are just two of 60 interdisciplinary entities part of the forum’s Global Redesign Initiative, which is seeking ways in which international institutions or arrangements should be adapted to meet contemporary challenges.

“Particularly in the wake of the global economic crisis,” according to WEF’s Klaus Schwab, “we need to rethink our values, redesign our systems, and rebuild our institutions to make them more proactive and strategic, more inclusive, more reflective of the new geo-political and geo-economic circumstances, and more reflective of inter-generational accountability and responsibility.”

Everybody’s Business: Strengthening International Cooperation in a More Interdependent World summarizes and reports on proposals from the WEF’s global councils, focused on specific challenges, from health to economic growth to poverty to sustainability. The Council on Philanthropy and Social Investing, chaired by The Economist’s Matthew Bishop, proposes development of a Social Competitiveness Index that would inspire countries to become more socially innovative. More broadly, the goal is to help analysts and policymakers catch up with the revolution that has been taking place in the social sector for the past decade or so – to “chart its evolution going forward and show countries how to make the most of this opportunity.”

The Council on Social Entrepreneurship, chaired by J. Gregory Dees of Duke University, proposes development of a Global Alliance of Social Entrepreneurs, guided by the Schwab Foundation for Social Entrepreneurship. This alliance, among other things, would establish a Consultative Group for Research to Advance Social Entrepreneurship (CGRASE) similar to the World Bank-hosted Consultative Group to Assist the Poorest (CGAP), which has become world-recognized for its role in advancing microfinance. CGRASE’s mission would be to conduct research on and promote policies supporting social entrepreneurship, including working to have the UN designate 2011 the “Year of the Social Entrepreneur.”

Beyond philanthropy and social entrepreneurship, other ideas proposed include: creation of a global financial risk watchdog; development of a strategy to improve the diet of the poor; establishment of a new business model for humanitarian assistance with better coordination among all sectors; and establishment of an Ocean Health Index to strengthen information available about marine life. The report authors are currently seeking public debate and refinement about the many ideas contained. And this fall they will convene meetings to further discuss and develop these proposals, culminating in the forum’s annual meeting in Davos, Switzerland, next January.

The report concludes that today’s global challenges require a more integrated and proactive approach, with new or upgraded international institutions and greater international cooperation: “No network exists that is sufficiently interdisciplinary, interactive and international to overcome these barriers to collective intelligence and action.”

— Jane Wales

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Six months after a 7.0 magnitude earthquake ravaged Haiti, much attention has shifted to other needs and other crises elsewhere. But the Caribbean nation is still very much in crisis, and, as the Wall Street Journal reports, there’s still too much rubble and too little progress. With a new hurricane season now bearing down on the region, the situation may very well get worse before it gets any better.

In addition to helping to provide for continued relief and humanitarian assistance, philanthropy will be an essential player in long-term rebuilding. And the University of Pennsylvania’s Center for High Impact Philanthropy has conducted research and analysis to identify some of the most fruitful long-term philanthropic opportunities. Haiti: How Can I Help? Models for Donors Seeking Long-Term Impact outlines ways in which donors can help Haitians develop the capacity they need to build a brighter future for themselves, their communities and their nation.

The guide focuses in three interrelated “pillars of socioeconomic development” – health, livelihoods and education – and notes that promising nonprofit models already exist in these three areas.

In health, the guide emphasizes supporting community-based primary care systems because the chief causes of sickness and death in Haiti – from infectious diseases to injuries to complications during childbirth – continue to be mostly preventable and treatable.

With regard to livelihoods, the focus is on enabling households to provide for themselves by building assets and promoting environmentally sustainable ways to make a living. Finally, in education, the focus is on addressing the needs of children. More than one million Haitian children currently have no access to schools, in part because schools are physically or financially out of reach. The community schools model, focused on rural residents, helps overcome these barriers, and it also helps address the high teacher turnover by recruiting teachers from the local villages.

Working in these three key areas of development may not only provide long-term help, but short-term signs of progress as well. Haitians, and the global community at large, are in dire need of some good news.

–Jane Wales

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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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