posted on: Monday, March 15, 2010

By Aaron Dorfman

“If I were running the country, I would …” We’ve all thought of this phrase at least once in our lives.

On Tuesday and Wednesday, hundreds of grantmakers will converge on our nation’s capital to educate Members of Congress and their staffs on the critical role that philanthropy plays in our society, and to advocate on key issues that affect the sector. The Foundations on the Hill (FOTH) event is organized by the Council on Foundations and the Forum of Regional Associations of Grantmakers.

I hope that legislators and their staffers will use this opportunity to learn what they can about the important and varied ways that philanthropy is serving communities across the country. There is, no doubt, some great philanthropy being practiced: some funders are creatively supporting direct services during the recession, others are investing in research to solve important problems, and still others are building nonprofit capacity so organizations can be more effective at meeting the needs of our communities.

But we all know that there are many ways that foundations fall short of their potential, too. So FOTH got me thinking: If I were a legislator or Hill staffer meeting grantmakers from my district or state, what questions would I ask?

I invited several colleagues to share their questions.

From Akaya Windwood, president and CEO of Rockwood Leadership Institute, a nonprofit that provides training on leadership and collaboration to individuals, organizations and networks for social change:

• Legislators have feedback mechanisms called elections. If politicians don't meet the needs and expectations of their constituencies, they tend to lose their jobs. What are the feedback mechanisms by which foundations insure that the needs and expectations of their consituencies are met?


• If philanthropists are the venture capitalists of the social sectors, what are ways in which foundations can become bold and nimble enough to support risky but potentially breakthrough ideas?

From Daniel Dodd, executive director of Step Up Savannah, a collaborative of organizations, businesses, and government agencies that seeks to move families toward economic self sufficiency:

• How are foundations working to ensure that grantees are involving low income individuals and minorities into the decision making process when developing poverty reduction strategies or programs?
  
• How are foundations ensuring that funds are being allocated evenly geographically across the country? (It has been our experience that the South is particularly overlooked.)

From Steven Mayer, director of Effectiveness Communities LLC, and architect of Justphilanthropy.org, a website that presents six pathways for philanthropy to be more intentional in its support of racial and social justice:

• Using a metaphor to present an opportunity for exploring the role of philanthropy… If it’s raining cats and dogs and you discover that society’s roof is leaking, do you believe foundations and nonprofits have a role in fixing the roof, or should they be concerned only with cleaning up the mess? Should they (or shouldn’t they) partner with local or national government in their response?
  
• What percentage of a foundation’s or nonprofit’s endowment should be invested in ways consistent with its charitable purposes? (or at least not inconsistent with it)?

From Bill Watanabe, executive director of the Little Tokyo Service Center, a neighborhood-based social service nonprofit that serves Asians and Pacific Islanders of L.A. County:

• How do you define success in the effective use of your foundation grant dollars? Some foundations seem to think that funding systemic change is the ultimate success and direct services is only "band-aid."

From Jan Masaoka, editor of Blue Avocado, an online magazine for community nonprofits:

• Why is that you foundations always talk about all the public good you do in the world, but the main thing that gets you riled up with Congress is when we talk about changing estate taxes, charitable contribution taxes, and other things that would basically tax the rich people that control foundations? Are you more about the public good you say you do, or the private good that you actually advocate for?

These terrific questions speak to the concerns that many of us have on the critical role that philanthropy plays in our society. The points raised by Akaya, Jan, Bill, Daniel and Steven allude to the critical rights and responsibilities of foundations and other institutional funders, and the difficult but necessary task of striking a balance between the two when developing grantmaking strategies.

Bill’s question on the value of direct services, juxtaposed with Steven’s question about fixing the roof, serves as an important reminder that foundations need to look at ways to meet the immediate needs of vulnerable communities while also working towards more lasting solutions to complex social problems.

Both of Daniel’s questions give voice to the frustration felt by those who get left out, and who aren’t often the beneficiaries of philanthropic giving.

Jan’s question speaks to the real frustration that many have with how foundations position themselves when advocating on the Hill.

Here are 3 questions I would add:

• How has your foundations responded to the economic crisis? Did you maintain a steady grants payout, or did you increase or decrease your giving? Why?
  
• How do you think about diversity at your institution? How diverse is your board and staff?
  
• Do you provide your grantees multiyear and general operating support? Why or why not?

What do you think of the questions posed in this commentary?

If you were a legislator or congressional staffer meeting with foundation executives, what questions would you ask?

Aaron Dorfman is executive director of the National Committee for Responsive Philanthropy (NCRP).

Photo by Danilo Rizzuti/Freedigitalphotos.net

posted on: Tuesday, September 15, 2009

Gary Snyder

As the confidence in the charitable sector sinks, where are its leaders with lifeboats? Are the leaders indifferent or just out of synch? Who is going to lead us out of this precarious path of mistrust and disengagement?

There is no silver bullet to guide us out of the quagmire that philanthropy faces. However, all roads lead to the need for change. Our donors don’t trust us, the regulators don’t believe us, and our stakeholders doubt we are delivering the goods. All believe that beneficence, forethought, and self-discipline of our forefathers have gone by the wayside. The sector must take a hard turn and reflect on the way it is conducting its business.

Some believe that the entrenched incumbency has become a major obstacle to a better course. We have seen several examples of a head-in-sand mentality.

We saw one example of it when the National Committee for Responsive Philanthropy (NCRP) report, “Philanthropy at Its Best,” suggesting, yes suggesting, that the sector look at another approach to grant makers. No mandates, just consideration. Those with deep-rooted aversion to change obviously saw it as a threat and started to attack. The attacks came from those seeking to maintain the status quo, one of which was the Wall Street Journal, whose opinion was published without even seeing the final recommendations.

Gara LaMarche of Atlantic Philanthropies noted that the NCRP suggestions were merely aspirational and nothing more. It was intended to be a basis for discussions, but some apparently thought that it was an assault on their privileged positions.

Whether or not if you liked their positions, one must respect those that at least defended their positions. Some leaders didn’t even comment on the NCRP document. Being silent must have been a surprise to many of the 120 funders that backed the NCRP principles and supported the leaders organizations.

Sitting on the sidelines on critical issues is no way to direct the sector’s destiny. Such denial has led to excesses in government intervention as well as abuse.

We have seen this silence in the past and at the expense of a large part of the charitable sector. In negotiations with the Senate Finance Committee, charity representatives quietly rolled over and asked for vigorous oversight and increased resources for oversight and education “for the many nonprofits that have no idea that there are a set of expectations.” This was done without ever taking the lead and addressing the problems themselves.

Many small and medium agencies, as a consequence, which were not represented at the table, have been subjected to government fiats. They believe that the standard-bearers’ priorities do not comport with the calling of good leadership. Many think that keeping their jobs seemed to be more important than finding tough solutions.

This lack of action is in stark contrast to the Council on Foundations approach. When it was challenged as philanthropic resources were down 40%, the Council of Foundations didn’t duck the problem and became proactive. That activist approach should be at the top of any leader’s job description.

Moreover, nonprofit leaders failed to take a position on President Obama’s proposal to limit charitable deductions…a most important piece of legislation facing the charitable sector. It failed to do so because it was “Solomon’s choice” between benefits to charities or healthcare.

Another essential trait of leaders is to have the courage to call things as they truly are, with no sugarcoating. Unfortunately, despite all evidence to the contrary, philanthropic leaders seem to believe that the annual multi-billion dollar nonprofit fraud is limited to ‘a few bad apples.” That position contradicts all other indicators in which nonprofit fraud, as a percentage, exceeds that of the for-profit and government sectors by considerable measure. Such dismissive mischaracterizations do not serve the sector well.

Nonprofit fraud is one matter that has failed to be adequately addressed. As a result, many believe that trust indicators in the sector are moving in the wrong direction. Some blame the decline in contributions and confidence on the economy. That is too easy. The trend line was established at the height of the economy.

Many believe that the sector would be stronger had it been more proactive. All of the aforementioned point to the need of charity leaders to critically look at the need for change. Reform may make a real difference, but the change metric must be first acknowledged; then addressed. Doing nothing will not stop the smoldering of the charitable sectors fate. Leaders must be sensitive and attentive to the needs that they serve. With outside pressures and new realities mounting, the current status quo, wait-and see leadership is unacceptable.

So, who is going to step up and take the mantle?

Gary R. Snyder is the author of Nonprofits: On the Brink. He is a frequent lecturer and author of articles in numerous publications and blogs. His email is http://gary.r.snyder@gmail.com; website: www.garyrsnyder.com, phone: 248.324.3700. He is a member of the board of the National Committee for Responsive Philanthropy.

posted on: Thursday, July 23, 2009

Speaking at the Council on Foundations conference on rural philanthropy, former president Bill Clinton told attendees, “The foundation activity in rural America has been woefully inadequate.” The conference was held at Clinton’s presidential library in Little Rock, Ark.

While he challenged grantmakers to do more in rural America, he also challenged rural charities to be more creative in their work and create hope for their constituencies. According to Business Week, Clinton said, “Why do you think people in rural America are so dismal? Because they think that tomorrow is going to be just like yesterday. It's not because they're poor, but because they're stuck in a rut they can't get out of.”

Rural areas often experience the same marginalized status as the urban poor. In 2006, the Metropolitan Policy Program at the Brookings Institution collaborated with the Community Affairs Offices of the Federal Reserve System to examine concentrated poverty in America. Concentrated poverty refers to an area in which 40 percent or more of the population is living at or below the poverty line. Their study, “The Enduring Challenge of Concentrated Poverty in America,” found rural poverty rates as high as 45.6 percent (in McKinley County, NM) and led to a policy forum in 2008 that produced an agenda for steps to reducing concentrated poverty.

In a 2007 report, Rural Philanthropy: Building Dialogue from Within, NCRP presented strategies for grantmakers to strengthen their rural work. These included: flexible grantmaking to build strong nonprofits such as multi-year general operating support and appropriate technical assistance; supporting intermediaries; collaborating with other funders and; building local endowments through such entities as community foundations.

While President Clinton emphasized the role of nonprofits in rural areas, Rural Philanthropy found that in 2001 and 2002, only 184 of the 65,000+ foundations even gave grants that could be classified as targeting rural development. Of those 184, the W.K. Kellogg Foundation and the Ford Foundation accounted for nearly half of the grantmaking. Clearly, more foundations can play a stronger role in supporting rural development.

Given the opportunities presented through the stimulus package Clinton noted in his speech (such as investments in alternative wind energy that could benefit rural communities), foundations are presented with an opportunity to partner with their rural grantees and ensure that their constituents’ voices are heard as the process of distributing stimulus funds continues.

Julia Craig is a contributing author of Criteria for Philanthropy at Its Best, and research assistant at NCRP.