posted on: Wednesday, February 10, 2010

“I have always depended on the kindness of strangers.”

- Blanche DuBoise, A Streetcar Named Desire




Photo by: Francesco Marino/freedigitalphotos.net

Playwright Tennessee Williams’ famous line also holds true on the philanthropic stage. After all, where can strangers offer more kindness than in philanthropy—where grantmakers and nonprofit leaders depend on each other—and where so many people in need depend on the grantmaker-nonprofit partnership?

Last week, Arabella Advisers, the Washington Regional Association of Grantmakers (WRAG), and PNC co-hosted a panel discussion on bolstering the impact of philanthropy. The animated discussion focused on two reports: Arabella Adviser’s High-Impact Giving Opportunities: Philanthropy That Makes a Difference and WRAG’s Beyond Dollars Investing in Big Change: How Washington Area Grantmakers are Creating Lasting Impact. Although Arabella and WRAG each published independently and included different case studies, when I read the reports in sequence, I thought they equipped grantmakers with clearer advice. Overall, I viewed the strategies WRAG identified (timing and momentum, a strong voice, leveraging resources, and true partnerships) as four tools necessary for approaching any philanthropic initiative. Then, Arabella’s report suggested four philanthropic initiatives (policy advocacy, broad alliances, mission investment, and public-private partnerships) that I thought grantmakers could better pursue with the tools from WRAG’s report.

The reports shared similar messages, but the most prominent common denominator was a simple concept: partnerships. However, don’t let the simplicity detract from its significance; partnerships should be the foundation to any grantmaking strategy. Grantmaking suffocates in silos, especially in a vastly interconnected world that reaps tremendous rewards from partnerships between grantmakers and nonprofits, as well as governments, businesses, and people in need.

Partnership Benefits:
Both reports and the panelists championed the importance of partnerships, but more can be said on the topic. Foundations benefit from partnerships during every stage of the grantmaking process.

While researching a new grant opportunity, for example, partners increase the knowledge base. Think tank scholars, professors, reporters, practitioners, retired experts, and counterparts at other organizations all hold fortunes of insights and information, and they are only conversations away. Before making a funding commitment, a grantmaker can pool resources and overcome barriers to entry by partnering with another grantmaker who shares programming goals. If grantmakers forge partnerships, they will dedicate more resources to programming. Partnerships are not vehicles for grantmakers to deliver static, one-time gifts to nonprofits. Rather, I believe grantmaker-nonprofit partnerships are proof of dynamic relationships between likeminded people who see grants not as charity or hand-outs, but as instruments of social justice.

Partnership Responsibilities:

Although the reports and panelists touched on the responsibilities grantmakers and nonprofits accept when they form partnerships, partnership benefits received more time and attention. Thus, I wanted to continue the conversation of partnership responsibilities. Interestingly, however, the responsibilities I enumerate below can become benefits. By identifying and executing each of these responsibilities, the impact of philanthropic funding expands.

(1) Conduct background research:
Understand both the big picture and the nuances of a given situation (and determine if, when, and how you can replicate best practices).

(2) Learn everyone’s role:
Who is the lead decision-maker? Who comprises the supporting cast? Who labors backstage, and how can you ensure that their accomplishments receive earned recognition? How can your performance enhance the performances of others?

(3) Read from the same script:
Share a common definition and prioritization of goals (short-term and long-term), strategies for achieving those goals, and benchmarks for achieving those strategies. For example, is your goal to create better schools? Well, how do you define “better”? Does better refer to teachers? If so, are you referring to better teacher quality or quantity? What metrics will determine if the abilities or number of teachers are met? Then, consider whether deficiencies in teacher quality and quantity are the core problems, or if they are symptoms of deeper problems in the education infrastructure.

(4) Plan the length of your run (multi-year grants):
Even the largest foundations have finite resources, and they still shoulder the burdened of saying “no” to many worthy causes. So, when foundations do say “yes,” they must grant both funding and adequate time for the funding to begin reaping success. Sometimes, unrealistic expectations of certain one-year grants can lead to failure.

(5) Encourage audience participation:
Guarantee that the goals you share with your partners align with the needs of the community you serve. If realignment is needed, listen to community members and adapt. Don’t squeeze the proverbial square peg in the round hole. Also, consider the long-term value of civic engagement, advocacy, and/or community organizing (and realize that your audience may have a different lexicon for these ideas).

Christine Reeves is field assistant at the National Committee for Responsive Philanthropy (NCRP).

posted on: Tuesday, February 09, 2010

By Aaron Dorfman

I’ve been trapped in my house since Friday night due to the recent blizzard here in the national capital region. And even with all the time spent shoveling and playing in the snow, I managed to make time to catch up on some philanthropy-related items.

Ten days ago, the Foundation Center launched an important new initiative meant to encourage greater transparency among foundations, and one thing I did while snowed in was play around on the site. In a blog post announcing the project, Foundation Center President Brad Smith wrote:

“With the launch of a new public Web portal, www.glasspockets.org, the Foundation Center reaches back to its founding values. We believe strongly in philanthropic freedom, the kind of independence that allows foundations to be innovative, take risks, and work on long-term solutions to some of the world’s most vexing problems. But the best way to preserve philanthropic freedom is not to hide behind it; rather, foundations increasingly need to tell the story of what they do, why they do it, and what difference it makes.

“Why transparency? Foundations use private wealth to serve the public good for which they receive a tax exemption in return. While some have argued that the tax exemption does not legally compel foundations to behave in any particular way, foundations' challenges are more perceptual than legal. No sector -- government, church, business, or charitable -- gets a free pass in the world of 24/7 media, blogs, YouTube, Twitter, crowdsourcing, and digital everything. Why should foundations? Collectively, America's foundations control more than $500 billion in assets, spend some $46 billion a year in grants and on programs, and, in some localities and on some issues, are the major players. And as foundations strive to become more strategic and effective, their impact and influence will grow -- as will the curiosity, praise, criticism, and scrutiny they attract.”

The site provides a clear assessment of whether or not individual foundations make certain information available to the public. For example: does the foundation make available on its website its 990PF return? Does the foundation provide information about its diversity practices? Does the foundation have a mechanism in place to get feedback from grantees? In all, the site tracks 22 difference practices and provides direct links to the information on the foundation’s website.

I found the site fascinating, and I am hopeful that it will create additional pressure for foundations to adopt some of these practices and become more transparent. In perusing the site, I found myself wondering about a few notable philanthropic giants:

Why doesn’t the Hewlett foundation provide information about its diversity practices? Surely they must be sensitive to how they are regarded on issues of race, considering the often contentious debate over AB 624 in California. Why not proactively communicate about these issues with the community?

Why doesn’t the Ford Foundation have any way to get feedback from grantees? Considering the major overhaul they gave to their grantmaking programs recently, one would think the foundation would want to have a way to systematically get feedback from its nonprofit partners.

Why doesn’t the Gates Foundation share information about its executive compensation process? Their new CEO earns nearly one million dollars per year, yet he was already extremely wealthy before taking the job as head of the foundation. The former Gates Foundation CEO took only $1 in annual compensation. Wouldn’t it be a good idea for the foundation to explain publicly the process it uses to set executive compensation?

In writing this blog post, I wanted to spread the word and encourage others to explore the GLASSPOCKETS site. And I also wanted to find out what readers of NCRP’s blog think. Will the site put additional pressure on foundations to adopt some of these practices? If so, why – and is that a good thing? If not, why not?

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

Photo credit: Suat Eman / FreeDigitalPhotos.net

posted on: Friday, January 29, 2010

A People's loss in the United States: Howard Zinn, historian who challenged status quo, dies at 87

On Wednesday, as the nation rightly focused on the President’s first State of the Union address, we lost a revolutionary thinker with the passing of political activist and historian Howard Zinn. Probably most known for his seminal A People’s History of the United States, Zinn’s contributions are too great for this post to do any justice to. That said, the Boston Globe published a great piece, which includes many of the sentiments that I share. Sometimes, things just can’t be said better than others have. So in the words of the Globe staff, Noam Chomsky and Ben Affleck, here are my views on the significance of his loss.

From the Globe: “For Dr. Zinn, activism was a natural extension of the revisionist brand of history he taught. ’A People’s History of the United States‘ (1980), his best-known book, had for its heroes not the Founding Fathers -- many of them slaveholders and deeply attached to the status quo, as Dr. Zinn was quick to point out -- but rather the farmers of Shays' Rebellion and union organizers of the 1930s.”

My addition: If you’ve never read this book PLEASE GO OUT AND GET A COPY NOW! When we think of our country, many of us do so in the ways that the writers state. But remember, it was community organizing and advocacy that led to: a) our freedom from the Empire; b) the abolition of slavery; and c) the women’s rights movement. When everyday citizens are active, we make change happen. When we work together as a community, our impact is even greater. And if you’re a regular reader of this blog, you know that we’ve been documenting the high “return on investment” of funding directed towards advocacy, organizing and civic engagement under our Grantmaking for Community Impact Project.

From Noam Chomsky: “Dr. Zinn's writings "simply changed perspective and understanding for a whole generation. He opened up approaches to history that were novel and highly significant. Both by his actions, and his writings for 50 years, he played a powerful role in helping and in many ways inspiring the Civil rights movement and the anti-war movement."

My addition: Chomsky and Zinn have forever changed my perspective on myriad issues. Ranging from the intellectually “jargon-esque” writings to the Boston University strike referenced in the Globe article, Zinn always will be of significant influence on the way I think and act. Academia is all well and good and I love the epistemological. But when we talk basic civil and human rights grounded in that “jargon,” that’s what really gets me fired up! Not only is there power in numbers, but there is always hope for a better tomorrow when we’re civically engaged and active.

From Ben Affleck: “"He taught me how valuable – how necessary – dissent was to democracy and to America itself. He taught that history was made by the everyman, not the elites. "
My addition: Now we’re really talking! Without dissent, there is no democracy and vice versa. All points of view are equally valid and everyone’s voice counts. If we agreed on everything, would we ever change existing structures and institutions that might be unjust? Our first amendment rights may be guaranteed by the Constitution but they’re an essential piece of how we treat each other. (And PLEASE feel free to disagree with anything here – seriously, that is what the comments are for and I’d love to engage in some constructive dialogue). As I noted in Values chapter of Criteria for Philanthropy at Its Best, the role of dissent is an essential component of policy advocacy and leads to a more just and inclusive society in which all of us are better off.

In Dr. Zinn’s own words: "From the start, my teaching was infused with my own history. I would try to be fair to other points of view, but I wanted more than 'objectivity'; I wanted students to leave my classes not just better informed, but more prepared to relinquish the safety of silence, more prepared to speak up, to act against injustice wherever they saw it. This, of course, was a recipe for trouble."

Hm … how does one add to the man himself?! Well, all I can say is this: Education is necessary, but not sufficient. It’s the second piece of acting on that huge knowledge base whenever we see injustice anywhere which, from my perspective, is one of the primary purposes of being educated. As my mentor john powell points out to me sometimes, in Jefferson’s mind, one wasn’t a citizen of this country simply by virtue of being born here. One had to earn that citizenship and the means to earning it was an education.

So, why education? Because, as Dr. Zinn said, education prepares us to speak out and ACT out against inequity. And if you watched the SOTU last night, you couldn’t have missed the emphasis on education reform and this administration’s commitment to ensuring high-quality education for our country’s children and youth. It’s time to take a big step back from our current system and really see what works and what doesn’t and how, working together, the civic sector can complement federal and state level government work like the “Race to the Top fund” to level the playing field in education. (Check out this excellent article written by NCRP board member Pete Manzo on this issue).

As we celebrate the many successes and acknowledge the challenges we still confront after one year of the Obama administration’s being in office, I hope each of us will take the time to reflect on what Zinn’s passing really means for us as a country. What does his work mean for us today? Will we find common cause and work together to help our country emerge stronger and better from the critical crossroads we confront? I sure hope we will and though my heart may be heavy from the loss of such an influential and brilliant man, my spirits are lifted when I think of the work he’s made possible and the millions of lives he’s touched in so many ways. Thank you for everything Dr. Zinn – I’ll certainly never forget you.

Niki Jagpal,
Research & Policy Director

posted on: Friday, December 18, 2009

By Julia Craig

The New York Times recently ran a story chronicling the disproportionate effects of the recession on elderly Americans living in rural areas. Citing a new report from the Center on Budget and Policy Priorities, the article documents the ways in which state budget woes affect the elderly in rural communities, often out of sight of the general population. According to the report, 24 states have made budget cuts to services for the elderly this year, and more are expected in the future.

In addition to difficulty accessing social services, rural elderly have seen their churches close over the years. Many of the people featured in the story are widows or widowers and their children no longer live in the area. The accompanying slideshow brings the numbers to life, portraying the difficulties of growing older in communities with little support infrastructure.

Rural communities are aging as young people leave for education and work opportunities elsewhere; the decline of farming and manufacturing has led younger residents to migrate to more urban areas. This means the new generation is not available to care for aging family members, which used to be a mainstay in agrarian life.

What does this mean for philanthropy?

According to a research we conducted for Criteria for Philanthropy at its Best released in March this year, over a three-year period, just 1.5 percent of grant dollars could be classified as intended to benefit what the Foundation Center classifies as the “aging/elderly/senior citizens.”

And in our 2007 report Rural Philanthropy, NCRP found that stereotypes of life in rural America deterred some funders from investing there. Further, rural nonprofits expressed frustration at feeling cut off from access to foundation resources, sometimes simply by virtue of geography. Attracting and retaining staff is particularly difficult with limited funds.

It seems that the odds are stacked up against the elderly living in rural America. But philanthropy can do something. Here are some ideas:

• Identifying infrastructure gaps. Help sustain organizations that will support and promote rural nonprofit community interests, including those serving the elderly. A strong nonprofit infrastructure is part of the social fabric of American communities.
• Monitor trends. Foundations can’t replace the role of public investments in services for vulnerable communities, but by monitoring trends, philanthropy can identify gaps in government support and target those needs.
• Change perceptions. Funders can support organizations that conduct and disseminate research and other information on rural issues so that grantmaking priorities and public policy reflects more accurately the realities faced by rural Americans.

What do you think? Are there other ways that foundations and other grantmakers can help rural Americans, including the elderly? Share your thoughts in comments!

Image: dan / FreeDigitalPhotos.net

Julia Craig is research associate at the National Committee for Responsive Philanthropy (NCRP).

posted on: Tuesday, November 24, 2009

by Julia Craig

Last week, NCRP Executive Director Aaron Dorfman, Senior Research Associate Lisa Ranghelli and I attended the 38th Annual ARNOVA conference in Cleveland, Ohio. During the opening plenary on Thursday evening, David Abbott, CEO of the George Gund Foundation and chairman of the Fund for our Economic Future of Northeast Ohio, told the inspiring story of the Fund’s work collaborating with nonprofit and foundation partners to improve economic opportunity in the Cleveland region.

Together, the Fund’s nearly 70 members raised more than $60 million to address the structural economic problems in particularly hard-hit post-industrial northeast Ohio. Each member contributing more than $100,000 over three years has one vote in the decision-making process, a governance structure that means, as Abbott noted, no member always gets its way, which is a novel concept for many foundations. The Fund came about because a number of foundations wanted to better address the crisis nonprofits were facing and effectively respond to their partners’ needs.

Abbott gave a few examples of how this has played out, such as by helping nonprofits respond to new federal funding opportunities and brokering collaboration among nonprofits in the human services field. But, he said, this is not the real opportunity for funders. “To me, the real opportunity is to marshal our philanthropic resources to make a difference in the underlying conditions that put nonprofits and our communities in peril. That is especially true in the older industrial communities of America where the market forces that have stripped us of much of our capacity have not recovered… because the issues are deep-seated and structural.”

The Fund has taken a regional approach to the problem and focused on increasing northeast Ohio’s relevance in the global economy. The Fund has leveraged its investments in start-up ventures with nonprofit partners into greater venture capital for high-growth companies. The Fund has even drawn attention to the ways in which local government structure contributes to economic costs, prompting citizen involvement in advocacy to change decision-making structures.

Abbott told the story of a highly successful philanthropic collaboration, but he also recognized the precariousness of the partnership. Foundations are not used to giving up their individual power to collective will, and as Abbott said, “The individual response to need makes us feel good – especially if we ignore the inadequacy of that response.”

Abbott recognized that current members of the fund may lose interest and it may lose its ability to respond to the economic structural problems of the region in a meaningful way. He also noted that philanthropists tend to be overly optimistic about what they are achieving because they usually operate in a world of “isolation and adulation” that doesn’t always reflect reality. Collaboration, then, is a risk: it involves stepping out of that bubble and potentially “foregoing effusive praise.” This is an important message for funders to hear and understand.

The Fund represents something unique in philanthropy, as does Abbott’s perspective as a foundation leader. He recognized the temptations of individual action and the challenges of taking the long view. He also acknowledged that some have questioned whether it is the role of private philanthropy to make investments in economic development and structural change, but pointed out that one of the main reasons for the Fund’s genesis was that its members saw a void. Abbott ended his talk on an upbeat note, hoping that other regions will see the success of the Fund and develop their own meaningful funder collaborations. His message of the urgency for collective action was one that resonates with NCRP’s values.

Aaron, Lisa and I were excited to hear a philanthropic leader expressing these ideas. What do you think? If you were at ARNOVA, what did you take away from Abbott’s speech? Are foundations doing enough to address the problems of the recession? Does the Fund for our Economic Future represent a viable solution for other regions? Leave your thoughts in the comments.

Julia Craig is research associate at NCRP.

posted on: Monday, November 23, 2009

By Kevin Laskowski



Philanthropy has exploded in the past two decades. There are more foundations, funds, ways to give, and dollars being given than ever before, but is the sector growing too fast?

A new survey of 185 family foundations from the National Center for Family Philanthropy reveals a “troubling” statistic:

Only about half of all responding foundations (53 percent) have [a conflict-of-interest policy]. Having such a policy indicates the board has discussed the issue and has awareness and explicit expectations of board members regarding potential conflicts of interest. Twenty-six percent reported having a written code of ethics, and only 18 percent have a formal process to review legal compliance issues. Forty-six percent of the foundations said they currently do not have any of these (see Figure 4). (emphasis added)

This finding is an important barometer for the sector as a whole. Family foundations comprise more than half of the foundation field at large. They account for roughly half of all giving, assets, and new gifts and bequests from donors among independent foundations. According to the Foundation Center, both the number and giving of family foundations has doubled since the 1990s.

The Association of Small Foundations discovered similar statistics among its members in its 2008-2009 Foundation Operations and Management Report. In that survey, 58 percent of respondents reported having a conflict of interest policy.

Looking at this new survey from NCFP, it seems that a significant number of family foundations take their obligations to the public trust seriously. One way that foundations and other charitable organizations can signal that they take seriously the need for accountability and transparency in their operations is to adopt and implement policies that support ethical behavior. These include policies on conflict of interest, whistleblowers, and executive compensation. However, the number of foundations that haven’t adopted these hallmarks of well-governed organizations is of concern, especially when conflict of interest policies and codes of ethics are so readily available.

Despite the best efforts of the field’s grantmaker associations, it would seem that many philanthropies just don’t know that this information is available or how important these policies are. NCFP surveyed a random sample of family foundations—not its members or the more accessible members of regional or national associations. Eighty-four percent of respondents were members of the donor family, and few respondents reported board members attending conferences and making use of association events and resources.

NCFP President Virginia Esposito contends that, since family members volunteered this information, it’s unlikely that the lack of certain policies is an intentional oversight.

“Given how many families took the time to fill this out with care and candor, we don’t believe that this is anything other than a lack of awareness about what these policies are and how they can enhance grantmaking process,” she says. “It’s more the product of a field that has grown so fast it has outpaced our ability to regulate or socialize it.”

Read more about ways that foundations can be more accountable and transparent in Chapter 3 of Criteria for Philanthropy at Its Best.

What do you think? Given how the field of family philanthropy has grown so large, so quickly in recent years, what can be done to spread the word regarding the need to adopt policies and practices that promote ethical behavior within organizations?



Kevin Laskowski is a Field Associate with the National Committee for Responsive Philanthropy. Kevin previously served as Program Coordinator at the National Center for Family Philanthropy and assisted in developing the survey mentioned here.

posted on: Tuesday, November 17, 2009

By Robert Espinoza

At Funders for LGBTQ Issues, a national philanthropic group that studies US foundation giving to lesbian, gay, bisexual, transgender and queer (LGBTQ) communities, a flash bulb in our annual research shed light on a lingering disparity.

In 2007, our research tracked 71 foundations in the US that gave roughly $3.6 million to organizations explicitly serving LGBTQ people of color. Considering that the broader philanthropic portrait contains more than 72,000 foundations giving nearly $43 billion, support for LGBTQ people of color revealed itself as a blip, an almost invisible pixel.

Sociology teaches us that societal barriers play out through our economy, public and institutional policies, mass media and everyday interactions. They rear their heads as bigotry, stereotypes and unfair representations. They persist from generation to generation, seemingly intractable and often coded in values of individualism. “If the lone, talented public figure can make it,”—goes the myth of meritocracy—“why can’t everyone?”

And yet for decades, studies have emphasized how deeply embedded discrimination, produced across generations, has critically impacted the quality of life and self-advancement of communities of color—despite the same level of individual effort. For LGBTQ people of color, these conditions are exacerbated by attitudes and structures that treat people differently based on their sexualities and their gender identities and expressions.

As evidence, a growing body of research continues to demonstrate this "heightened vulnerability" among LGBTQ people of color—to health risks, verbal and physical violence, and institutional discrimination, among other areas. LGBTQ people of color also face the disregard of institutions; they are relatively unexplored as research topics and rarely considered as constituencies affected by public policies or in need of culturally and linguistically sensitive services.

So what happens when organizations that were set up to reverse these conditions receive little support from philanthropic sources? What becomes of a healthy civil society when its most vulnerable populations remain impoverished? Is this how philanthropy upholds its purpose?

A few weeks ago, as part of our multi-year Racial Equity Campaign to raise philanthropic support for LGBTQ communities of color, Funders for LGBTQ Issues released a landmark web site that begins portraying the realities of these diverse communities. This toolkit aims to reach grantmakers of all types, providing multiple entry points for foundations with unique interests and approaches.

The Racial Equity Online Toolkit compiles original grantmaking tools, publications and commentaries from foundation and nonprofit leaders around the country. It reminds us that inequality has a geographic footprint, that hardship changes shape across neighborhoods, towns, cities and regions. Funders in any locality can be change agents.

The stories featured in this toolkit also demonstrate the potential of working across difference, understanding the root causes of inequality and forging solutions that originate in the communities where hardship is most deeply felt. It’s a flash bulb that illuminates the nature of inequality, as well as some avenues for addressing it.

More importantly, it’s a flash bulb for funders who crave focus, an additional lens, a more complete picture.

Please visit the Racial Equity Online Toolkit at http://www.lgbtracialequity.org/.

Robert Espinoza is the director of research and communications at Funders for LGBTQ Issues.

posted on: Friday, November 06, 2009

by Yna C. Moore

Many in the philanthropy world is in the midst of some soul searching – What is philanthropy? What is the role of philanthropy in the world today? How do foundations – of all shapes and sizes - fit in the complex world that makes up the charitable sector? Are there things we can do better? If so, what does “better” look like?

In the article “Philanthropy’s Commitment to the Common Good” published in Responsive Philanthropy, Alison Goldberg, who coordinates Wealth for the Common Good, talks about the dual purpose of private philanthropy – to promote the common good and to serve the interests of wealthy families. Wealth for the Common Good is a network of wealthy individuals and business leaders who support policies that promote economic equity and fair taxes.

She writes, “As long as private philanthropy exists, it’s likely there will be a need to accommodate the interests of donors and their descendents and strike a balance between personal priorities and the common good. But right now, that balance is skewed in the wrong direction.”

She raises three interesting points:

• The higher the taxes on high-income and wealthy families, the more money is given to foundations
• Philanthropy can’t be a substitute for government to provide critical services, but government rely on income and taxes to generate the money to support these efforts.
• Our current tax system may appear progressive, but it’s really not. Tax cuts for the wealthy from the past 30 years has shifted the burden to wage earners.

Read Alison’s full article and other postings on philanthropy’s role in society.

Tell us what you think:

Yna C. Moore is communications director at the National Committee for Responsive Philanthropy (NCRP).

posted on: Friday, October 23, 2009

by Julia Craig

More for Mission (M4M) recently conducted a survey to determine the levels at which its members designated assets for mission investing. And there’s great news: the 39 surveyed M4M members reported that foundations currently engaged in mission investing plan to significantly expand their portfolios over the next two years. M4M defines mission investing as including both program-related investments (generally below market rate investments serving a programmatic purpose), and market-rate investments (usually provide market-rate returns as part of a social mission).

At the end of 2008, respondents had 4.7 percent of their assets in mission investments. By the end of 2009, respondents expected to have 6.9 percent of their assets in mission investments, growing to 23 percent by the end of 2011. This would be an impressive almost-four-fold increase in assets for mission investing among respondents over the course of two years!

When asked about their motivation for participating in mission investing, majority of respondents named responsibility and alignment of identity: “Foundations noted that they were essentially motivated by a desire to advance institutional responsibility – that investors have a responsibility to hold institutions accountable for their social and environmental impact. Others noted that they saw mission investing as a way to reflect the values and mission of the foundation rather than contradict them.”

In Criteria for Philanthropy at its Best, the section on commitment calls on grantmakers to invest at least 25 percent of its assets in ways that support its mission. This includes program-related investments, market-rate mission investments, shareholder activism, and other strategies to leverage the massive capital foundations hold in their non-grantmaking coffers.

Kudos to those foundations participating in More for Mission for committing a significant proportion of their assets for mission investing and leading by example.

Do you think mission investing is an effective strategy for foundations seeking to leverage their assets to achieve impact beyond grantmaking? If so, what would spur more foundations to sign on to the M4M campaign? Let us know what you think in the comments.

Julia Craig is research associate at the National Committee for Responsive Philanthropy.

posted on: Friday, October 02, 2009

By Niki Jagpal

A few days ago, we received a thoughtful response from Michaelon Wright regarding Criteria for Philanthropy at Its Best. He raised some really important issues,

“I read your publication and the first thing that comes to mind when I think of Philanthropy at its Best is delivering sustainable, desirable outcomes, replicatable outcomes. Using methods for measuring an organizations (non-profits) effectiveness in delivering the outcome. Holding the non-profit accountable for how funds are spent, keeping overhead in check and delivering services effectively and efficiently. We as a philanthropic community have been literally throwing our money away on organizations that enable behavior contrary to becomming a responsible, productive member of society and organizations that are overhead intensive and employ staff not sufficiently trained or motivated to deliver results. The problem has not been not enough money thrown at societies ills, it is that there has been little to no accountability for results. Continous funding of an organization for a period of years does not necessarily make that organization more effective. Funding needs to be strictly based on results achieved. Frankly I do not think any of your criteria will improve the ability of Philanthropy to make a difference in the communities they serve. The focus for too long has been on increasing giving and unfortunately not on attaining the desired results.”

I very much appreciated his feedback. Different perspectives and opinions that lead to constructive and informed debates are an important way for us to find common ground and work together to strengthen our sector as a whole. It’s exactly this kind of discussion we all need at this critical time. As Gara LaMarche, president and CEO of the Atlantic Philanthropies and one of our board members said when we released the book:

“What [Criteria] does, in my view, very usefully, is engage in a debate that's been going on in philanthropy for the last several years-that is a debate about philanthropic impact and effectiveness. And that debate, in my view, has for the most part been somewhat sterile and technocratic. ... What it needs to do is have more content, which connects the question of effectiveness to the change you are trying to make in the world. I think [Criteria] makes an enormous contribution to that. ...”

I don’t disagree with Michaelon that grantee organizations ought to be evaluated based on outcomes. But I think it’s equally important that grantmakers be held to the same accountability measures – an emphasis on the outcomes and impact that an institution has on the issues related to its mission and donor intent. As we note in Criteria, just as profit is the bottom line for gauging impact in the private sector, impact is the best measure for our sector’s effectiveness.

When foundations provide core support and multi-year grants, nonprofits are better able to focus on outcomes and results achieved than when they have grants that restrict them to specific programmatic activities. We believe that grantmakers can provide these types of grants and hold their nonprofit grantees responsible, and we provided examples of funders in the book who’ve seen real impact by partnering with grantees in this way.

He’s right that multi-year funding doesn’t guarantee effectiveness. But effectiveness is influenced by a grantees’ ability to respond to the communities it serves. And often, one can’t predetermine what the results of a given intervention will be, nor if other more urgent issues or opportunities to achieve results that benefit our communities might arise. Would you agree that the impact on communities is the best measure of how effective grantee and grantmaking institutions are?

For far too long, most members of our sector have worked in silos, with many notable exceptions. Now’s the time for us to move beyond that approach, to see each others as partners in pursuit of the common good and to truly rethink the grantee-funder relationship.

I’d like to thank Michaelon for sharing his thoughts and invite others to join in this conversation so we can continue this long-overdue discussion about what really matters to make the civic sector the best complement to public and private sectors’ work for the betterment of our society.

PS – I encourage everyone to review this page on Criteria where we address many misperceptions of this book and its intent.

Niki Jagpal is research & policy director of the National Committee for Responsive Philanthropy (NCRP).

posted on: Tuesday, September 29, 2009

According to recent survey data from The Chronicle of Philanthropy, the median pay increase for charity executives in 2008 was seven percent. This information comes with a host of caveats: nearly one-third of respondents indicated that executives accepted pay cuts, and many of the salaries were set before the full force of the current recession was anticipated. Nonetheless, the data on foundation executive salaries bears examining, particularly given that many foundations are informing their nonprofit partners that the state of the economy is forcing grantmaking cutbacks.

As noted above, the median pay increase in 2008 among large charities and foundations was seven percent. In 2008, inflation averaged 3.8 percent over the course of the year; a full percentage point higher than the average in 2007. In this way, it doesn’t seem that charity leaders were necessarily putting their own interests above their charitable missions. Yet, given the intractable socioeconomic problems that the recession has exacerbated, now more than ever foundations must commit themselves to their missions and invest in their nonprofit partners. Of the 29 percent (57 of 195) of the set that indicated they either received no increase or took a pay cut, the median amount of the cut was ten percent. Most foundations on the list of those taking no salary increase or pay cuts were community foundations. Several nonprofits and foundations also made cuts affecting staff other than the CEO. The median CEO salary for the 148 foundations in the set was $458,461. A handful of large foundation executives earned upwards of $1 million. Additionally, 30 large nonprofit top staff – mostly hospital, university and arts organizations - earned between $1 and $4.7 million.

In the Ethics chapter of Criteria for Philanthropy at its Best, NCRP states that foundations should adopt policies and practices that support ethical behavior, including establishing reasonable, not excessive compensation. Many factors are important when determining appropriate compensation, including the size of the organization, the scope of the executive’s duties, remaining competitive with the private sector, the geographic location of the work, and so forth. However, the new information from the Chronicle’s survey seems to indicate that despite the need to scale back grantmaking at nearly every foundation in the country, many executives are not personally feeling the effects of endowment losses. Even the perception that executives are overpaid leads to the loss of public trust: a crucial element of foundation and nonprofit success.

The pieces related to the data published by The Chronicle indicate that most in the sector expect more pay cuts and fewer raises in the coming year, given that foundations are still reeling from endowment losses sometimes topping 35 percent. Earlier this year, NCRP board member Pablo Eisenberg wrote in The Chronicle about rising nonprofit executive pay. He suggested caps on nonprofit executive pay; not an outrageous idea, considering recent agreement at the G20 summit to regulate pay at financial institutions to prevent abuse.

Are you concerned that foundation and nonprofit executives are risking the public trust with their behavior? How do we determine reasonable, not excessive compensation, given all of the factors described above? I’d love to hear your thoughts in the comments.

Julia Craig is research assistant at the National Committee for Responsive Philanthropy

posted on: Monday, September 28, 2009

by Yna C. Moore

This month, the National Committee for Responsive Philanthropy (NCRP) is launching “InspirationPhilanthropy,” a series of stories on foundations and how their grantmaking reflects the spirit of Criteria for Philanthropy at Its Best in the “real world.”

Every two months, we will feature a foundation that is meeting or exceeding the benchmarks and illustrate what values, practices and governance enable their leadership. We hope this will encourage and spark thoughtful examination among other foundation leaders of their own practices.

We’re kicking off the series with the New Mexico-based Con Alma Health Foundation, which was among the 108 foundations in Criteria that allocated more than 50 percent of their grantmaking to serve marginalized communities. It also was among the 132 foundations that provided at least 50 percent of their grants as multiyear funding. In addition, the foundation has been supporting advocacy, organizing and civic engagement efforts of nonprofits in New Mexico, and it is looking to further increase their grantmaking for these types of activities.

Excerpt from InspirationPhilanthropy: Defining Success and Leading By Example – The Story of Con Alma Health Foundation

Leading With Values

Foundations have become well equipped to build mission statements and goals that aim to achieve the greatest impacts, and building a plan of operations that supports the work has become a reasonable task. What often is more challenging is creating a lens or culture of practice. Con Alma Health Foundation proves that developing and leading with values ensure that mission, goals and practices add up to be more than the sum of all the parts.

From an inclusive approach to decision-making to the diverse governing statewide board, the foundation seeks to take into account the geographic, ethnic, gender, age, socioeconomic and other factors that represent the diversity of the peoples and communities of New Mexico. Their Community Advisory Committee provides advice and recommendations to the Board concerning the performance of the foundation in achieving its charitable purpose and mission. The foundation has six core values that guide its policies, operations and grantmaking … Read more.


Tell us what you think about InspirationPhilanthropy or the story of Con Alma Foundation in your comments!

Yna C. Moore is communications director of the National Committee for Responsive Philanthropy (NCRP).

posted on: Wednesday, September 23, 2009

by Aaron Dorfman

Sometimes a watchdog wags its tail.

People are used to NCRP barking at foundations in our role as watchdog. But today, I want to point out some promising developments that caught my attention the past couple of weeks. The Boston Foundation and the Pittsburgh Foundation both completed new strategic plans recently that merit praise.

The Boston Foundation’s press release about their plan states that the foundation will provide significantly more general operating support in the coming years, rather than favoring restricted project grants. They also intend to provide larger grants over longer periods of time. I can almost hear the nonprofits in Greater Boston shouting, “Hallelujah!”

Previous research by the Center for Effective Philanthropy, Grantmakers for Effective Organizations (GEO) and NCRP has shown that long-term general operating support contributes to nonprofit effectiveness and is the kind of support nonprofits value most. GEO’s just-released report, On the Money, once again makes a compelling case for why grantmakers should leave the restrictions behind if they hope to boost nonprofit performance. The Boston Foundation is not the first community foundation to make this shift, and I hope they won’t be the last. Paul Grogan, president and CEO of the foundation, is to be commended for this move.

According to the Pittsburgh Tribune-Review, “The Pittsburgh Foundation is broadening its grantmaking — delving into the environment and advocacy — so it can become more of a community leader.” This, too, is a welcome shift. Foundation support for policy engagement is desperately needed at this time. NCRP’s Grantmaking for Community Impact Project has been documenting the incredible impact of foundation funding for advocacy and community organizing, and we’ll be releasing the third report in the series next week in Minneapolis. I applaud the leadership of Grant Oliphant, the foundation’s president and CEO, for embracing this important role.

Of course, announcing good intentions in a strategic plan is only one step. Nonprofits and community residents in Pittsburgh and Boston are counting on their community foundations to live up to the ideals represented in these plans and to implement them well.

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

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: Wednesday, September 09, 2009

by Niki Jagpal

On September 3rd, the Woods Fund of Chicago sent out an announcement to its listserv stating that this grantmaker is choosing to employ a racial equity lens in its funding. As the announcement states, “This addition comes after significant analysis, discourse and consideration on both an internal and external basis. It is informed by many sources, including foundation colleagues, grantee partners, the Philanthropic Initiative for Racial Equity, the Racial Justice Funder’s Roundtable, and the grantmaker’s guide by GrantCraft entitled 'Grantmaking with a Racial Equity Lens.'”

The announcement also includes the foundation’s new racial equity principle, which states that “The Woods Fund of Chicago believes that structural racism is a root cause of many challenges facing less-advantaged communities and people and serves as a significant barrier to enabling work and eradicating poverty. The Woods Fund encourages and supports organizations, initiatives, and policy efforts that lead to eliminating structural racism. Success in this area will be evident when there is equal distribution of privileges and burdens among all races and ethnic groups, and when a person’s race or ethnicity does not determine his or her life outcomes. … Woods Fund is committed to raising awareness in the philanthropic community to support this work.”

I’m delighted to learn that the Woods Fund will use a racial equity lens in its grantmaking. Already an exemplary grantmaker in many ways, I drew on the Woods Fund's work when writing Criteria for Philanthropy at Its Best: Benchmarks to Assess and Enhance Grantmaker Impact. At the time of that writing, I noted how Deborah Harrington, president of the Woods Fund, identified the problem with implicit versus explicit articulation of racial justice language. I quoted Harrington before the Fund embraced explicitly a racial equity lens in making our case for more foundations to consider doing so. In her words: “[racial justice is] implicit in our guidelines and mission statement, [however] the lens is poverty, not race, and by addressing poverty, we are generally looking at people of color but not saying it directly.”

I also noted the contributions of organizations mentioned in the recent announcement in making the case for why racial equity offers the potential to transform philanthropy, including foundations and civic sector nonprofits. Organizations such as the Kirwan Institute for the Study of Race and Ethnicity under the leadership of dr. john a. powell, the Center for Social Inclusion, the Applied Research Center and the Philanthropic Initiative for Racial Equity are currently engaged in critical work that emphasizes the importance of explicit racial language and identifying the intersections of race, place and opportunity among other issues. The groups are working toward what many call “catalytic” or “transformative” change. And grantmakers like the Woods Fund, Funders for Lesbian and Gay Issues and many more are including explicitly racial equity lenses in their grantmaking that supports some of these groups.

It’s about acknowledging the legacy of our past in influencing access to life opportunities for communities and individuals. As the Woods Fund’s recent announcement makes clear, trying to solve these problems by using proxy terms instead of confronting directly our root problems or trying to solve problems with a “top down approach” that doesn’t respond to the real needs of communities is like trying to put out a wildfire with a hose. That’s where the importance of community organizing comes in, an area where the Woods Fund has, and continues to, lead by example.

Finally, using a racial equity lens will, I hope, make the Woods Fund’s multi-issue work even more impactful. We can’t solve problems in isolation by focusing on one issue at a time, nor can our community work in silos. It’s only by building our alliances and support for each other that we can truly hope to make a difference. As dr. powell once said to me, “Small problems hurt us by enticing us to see things as separate, while big problems are more likely to be seen relationally. … It is important for foundations and communities not only to do multi-issue work, but to see issues in relationship.” [Note: he’s way more articulate than I and we’re fortunate to have him as a member of our research advisory committee.] The Woods Fund has been exemplary in this aspect, already funding community organizing and participatory public policy, and importantly, the crossover of the two issues. That’s just what dr. powell’s talking about – seeing issues in relationship to each other. I’d say that’s the essence of strategic philanthropy – a holistic approach to problem-solving that produces real benefits for all of us. There are great stories of the widespread benefits from policy engagement of disenfranchised populations through nonprofit groups on a range of issues such as health care, living wages and civil rights from a series of reports we’re producing in our Grantmaking for Community Impact Project.

A big h/t to the Woods Fund and Deborah Harrington for their decision to include a racial equity lens in their grantmaking. I share Harrington and the Fund’s hope that “by incorporating a racial equity lens into our guidelines and criteria, in some small way we can begin to model and promote racial equity practices within our own foundation and the greater philanthropic community.”

I definitely think they can promote racial equity practices in the broader philanthropic community – what about you?

Niki Jagpal is research and policy director at the National Committee for Responsive Philanthropy (NCRP).

posted on: Thursday, August 27, 2009

By Kevin Laskowski

In a previous post, I noted the announcement of a Philanthropy Policy Project and highlighted NCRP’s potential contribution to the discussion. Our Criteria for Philanthropy at Its Best could provide an excellent starting point for the Project’s discussions of social inclusion, diversity, accountability, transparency, ethics, effectiveness, and more.

At the same time, I hope this Policy Project is a sign of a philanthropy more willing to change the rules—and not only those governing itself. As NCRP prepares to release its third Grantmaking for Community Impact report, I’ve been thinking about philanthropic involvement in public policy more broadly. I’d like to see this Policy Project set its sights high so that we don’t forget what all this policy is really about.

Because I’ve heard this before. The banking and investment sector created a number of fascinating financial vehicles that few understood or questioned. We called it financial innovation. We moved money around, and we called it profitable and productive. It made some people very rich.

Now our sector is fantasizing about the possibilities presented by its own new toys. These instruments are designed to facilitate a certain type of philanthropic activity, activity that’s already possible in a lot of ways, but we’re assured the tools will make philanthropy easier and more effective. Now the Policy Project proposes to contemplate the regulatory environment that will best facilitate and incentivize these capital flows. What prevents all this from turning out the same way? Nearly three years ago, Business Week was discussing the securitization of microloans. The Wall Street Journal reported earlier this month on the coming “bubble” in microfinance.

For all our engagement in policy, we may end up simply moving money around. The process may get a new alphanumerical designation. Intermediaries will take their cut and call it “innovation,” but that’s not change anyone believes in anymore. If philanthropists wish to dip their toes in policy discussions with real impact, there are matters that could use the Policy Project’s attention, ingenuity, and collective resources more.

If the past year has taught us anything, it’s that philanthropy is not as independent a sector as it might think. The greatest threat to philanthropic assets is not inefficient capital flows, or those who might reinterpret donor intent, or those campaigning for greater diversity on foundation boards, or a regulation-happy Congress. None of those things ever wiped out a third of our foundations’ philanthropic wealth. That took an increasingly unstable, unequal, and unsustainable world economy. Philanthropy may not seek profits or votes, but it remains at the mercy of those who do.

What policy changes would create a foundation that was, in the words of the F. B. Heron Foundation, “more than a private investment company that uses some of its excess cash flow for charitable purposes?” What policy changes would transform our sector into something more than an emergent effect of forces beyond its control? What kind of tax policy, economic policy, industrial policy, environmental policy, or health-care policy would support the stability and growth of philanthropic capital? Because these policies affect our organizations and their missions by orders of magnitude that dwarf anything that typically occupies the Taste section of the Wall Street Journal.

And philanthropy as a field is woefully unwilling to engage in these debates, ultimately to its own detriment. Our sector’s ability to weather public scrutiny hinges on how it deals with the weightiest of public concerns. What if, instead of weathering economic ups-and-downs as the inert beneficiaries of capitalist largesse, foundations stepped up as a group to influence the economic decisions being made? To make sure that, whatever changes came, they were equitable and sustainable? The public would leap to its defense should an enterprising congressperson ever seek to capitalize on scandal. As it is, even the civically engaged can’t name a foundation on their first try. And the benefits that philanthropists do create often do not trickle down to communities that may need them the most, leaving us without perhaps our best champions—the public we serve.

Are we moving toward a more prosperous, more equitable, more sustainable state of affairs, or is our greatest genius in creating “new” philanthropic instruments? A Policy Project that confined itself to narrow sector issues and the endless contemplation and reproduction of the giving tools already in use would be a recipe for irrelevance.

Bernholz says, “This is a perfect opportunity to invite nonprofit and philanthropy professionals, social entrepreneurs, social capital market makers, data wonks, think tanks and others to reimagine the regulatory and policy structures that guide and inform philanthropy.” It’s a perfect time for us all—perhaps led by philanthropy—to reimagine the regulatory and policy structures that have guided and informed our public life in general. And, thankfully, we already have a word, a true giving vehicle, for that discussion: democracy.

“What policies or regulations would improve philanthropy?” It’s a great question, but the discussion shouldn’t stop there. What policies or regulations would improve our world? And what is our field’s role in championing those changes? Philanthropists have got to start going there.

That’s not a shot on the Policy Project, just a vote for pushing the conversation through the sterile, inward-looking ground of giving vehicles and incentives to the more fertile, productive frontier of what all this philanthropic policy is for. Philanthropies can convene panels and exert collective power at the drop of a hat when it comes to things like charitable incentives or combating perceived threats to those incentives. However, when it comes to the policies that will do more to determine our shared impact and common fate than any proposed tweak to the accounting rules, we don’t have much to say, at least not together.

“What would better philanthropy look like?” For starters, better philanthropies would band together for something more than the continued comfort of their individual assets. Here’s hoping the Philanthropy Policy Project goes there.

Tell us about your own hopes for the new Philanthropy Policy Project in comments.

Kevin Laskowski is Field Associate at the National Committee for Responsive Philanthropy.

Proposing a Philanthropy Policy Project, Lucy Bernholz asks what better philanthropy would look like and what policies would guide it. The new placeholder blog for the project carries the tagline: can we change the rules to change the world?

A careful re-examination of the policies governing philanthropy could provide great insight into our sector and we could make great strides in encouraging effective philanthropy. In the past, NCRP has weighed in on the regulatory environment that would help improve the foundation world. NCRP applauded potential reform of the excise tax and directing that money to IRS oversight, which would remove the disincentive to higher payouts and improve enforcement.

More broadly, NCRP recently outlined what it thought exemplary philanthropy looked like in Criteria for Philanthropy at Its Best (and it goes beyond a simple call for diversity):

• More grant dollars benefitting “marginalized communities,” including low-income persons, racial and ethnic minorities, women and girls, people with HIV/AIDS, people with disabilities, senior citizens, immigrants and refugees, victims of crime and abuse, offenders and ex-offenders, single parents, and LGBTQ citizens


• More grant dollars for advocacy, organizing, and civic engagement


• More general operating support


• More multi-year support


• Grant requirements commensurate with the size of the grant


• Larger foundation boards that include diverse perspectives


• Ethical, transparent boards


• Payouts that go beyond the legal minimum


• Investing assets in accordance with your mission

Overall, we think, and our endorsers think, that the sector would be more effective, and the world would be better off if more grantmakers adopted policies along these lines. That’s not necessarily a matter for regulation. Many funders have seen the value in these practices without government intervention. The Philanthropy Policy Project would do well to tackle the issues of social inclusion and diversity, accountability, transparency, ethics, and more and to work toward compelling, ambitious benchmarks. The Criteria provide an excellent starting point.

But the conversation shouldn’t end there. In an upcoming post, I’ll discuss my concerns and hopes for the project.

Kevin Laskowski is Field Associate at 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.

posted on: Thursday, July 16, 2009

By Aaron Dorfman

The Foundation Center released yesterday a new report about social justice grantmaking. The press release announcing the findings in Social Justice Grantmaking II claims that there is “renewed interest” from grantmakers in supporting social justice. As a percentage of total grantmaking, giving for social justice climbed from 11 percent in 2002 to 12 percent in 2006.

You can download for free a 12-page summary of the report, or order a hard copy of the full report for $40. I was privileged to serve on the advisory committee for this project, and I recommend ordering a copy of the full report if you want to get the detailed insights provided by extensive data analysis and interview findings.

What has been your experience? Are funders more willing to support social justice causes (such as efforts on anti-poverty, environmental justice, improving access to health care and others) now than they were a few years ago? What do you think needs to happen to help speed up the growth in social justice funding? In what year do you think we’ll reach the point where 25 percent or more of all foundation grant dollars are for social justice causes?

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

posted on: Tuesday, July 07, 2009

By Aaron Dorfman

David Freddoso, a political reporter for the National Review and its online affiliate, which describes itself as “America's most widely read and influential magazine and web site for Republican/conservative news, commentary, and opinion,” recently published two commentaries in the Washington Examiner attacking NCRP and our Criteria for Philanthropy at Its Best. In the first commentary, he claims that Criteria is part of a “money grab” by liberal nonprofits. In his second piece, he accuses NCRP of manipulating foundation data and claims that there is no “crisis in philanthropy.”

What’s particularly interesting about both pieces is how Freddoso summarily dismisses the need for change in the current philanthropic sector by labeling efforts to address shortcomings as a leftist conspiracy. His readers are made to believe that there’s no room for improvement in how our nation’s foundations operate. Unfortunately, Freddoso got it all wrong.

First, Freddoso misrepresents NCRP’s motives for publishing Criteria. Both columns assert that NCRP seeks to regulate philanthropy on these issues and that our recommendations are about mandates. This is simply not true, and I have stated as much on more than a dozen occasions since the release of the publication this past March. The most thorough exploration of this can be found in the transcript of a debate with representatives from the Philanthropy Roundtable, an association of conservative foundations, held on May 28th at the Hudson Institute in Washington, D.C.

NCRP’s goal in publishing Criteria was to generate robust discussion within the field about issues we feel are critically important. That has been happening, and we’re pleased. If we wanted legislation, we would have drafted legislation.

I gave a speech at the Philanthropy Roundtable’s annual conference last year where I called for increased mandated disclosure for foundations. Near the end of my remarks, I shared my thoughts about having Congress tell foundations where to put their money:

“I don’t believe that politicians should decide where foundation dollars go any more than I believe the government should mandate how much protein should be in a frozen pizza. The dangers of that kind of political meddling are too great, and the independence of foundations should be protected. That independence, after all, is what allows foundations to contribute most meaningfully to a vibrant democracy.”

Second, Freddoso argues that NCRP’s data are flawed. He claims that because many grants are coded without any specific intended beneficiaries, NCRP has understated the actual benefits from philanthropy to underserved groups. There is some truth to this argument, and we acknowledged as much in Criteria; grants that are intended to benefit all of society also benefit marginalized populations to some degree.

But in the chapter on Values, we make a case for foundations to pursue “targeted universalism” with their limited dollars. We argue that investments strategically targeted to benefit the most marginalized in society have benefits for those groups and for society as a whole. And we also point out that programs intended to benefit all of society often are not particularly effective at reaching the most vulnerable. (Read previous blog posts on targeted universalism and marginalized communities.)

Liberals don’t have a monopoly on the concept of targeted universalism. The idea is credited to the liberal scholar john a. powell, who runs the Kirwan Institute for the Study of Race and Ethnicity at Ohio State University. But conservative scholar Chester E. Finn, Jr., a senior fellow at the Hoover Institution and chairman of Hoover’s Task Force on K–12 Education, also advocated this approach in a recent commentary in the Washington Post. In that piece, Finn argues against universal preschool, saying that dollars can be more efficiently and effectively deployed if targeted for the specific benefit of those children who are most at risk.

Additionally, there clearly is a need for improving the way foundations report on the beneficiaries of their grantmaking, and how these are coded by the Foundation Center. Larry McGill, the Foundation Center’s vice president for research, wrote a thoughtful post on this very issue on the blog PhilanTopic as he talked about the numbers we used in Criteria and the results of a new report by The Philanthropic Collaborative. (We also explored the seeming inconsistency in a recent blog post by Julia Craig.)

Freddoso is not the first to use such a divisive tactic to discredit the recommendations in Criteria. (Read Philanthropy’s Real Enemy?) Thankfully, not all “conservative” thinkers share his feelings about the value of our contribution to the field. William Schambra, director of the Bradley Center for Philanthropy and Civic Renewal at Hudson Institute, made the following remarks recently:

“For all the talk in recent years about philanthropy’s need for transparency and accountability, our foundations by and large continue to discuss their work in a language that is obscurantist, pretentious, and faddish. They seldom if ever lift their sights from the operational details of their work to the larger ends that philanthropy should serve in a democratic republic. If nothing else, the NCRP’s report presents a well-articulated argument about philanthropy’s appropriate ends as well as means. It has therefore provoked a conversation that will in fact promote accountability and transparency in the only way that can ever be accomplished in a free democracy, namely through vigorous debate about our moral purposes in language that we can all understand.”

One final observation: it’s not uncommon for some folks to get NCRP’s name wrong; it is a mouthful after all. But surprisingly, Freddoso and the Washington Examiner butchered our name in both commentaries. As a news junkie, I value accuracy and fairness in the writing of the journalists and news outlets I follow.

Fortunately, efforts by the likes of Freddoso who think that philanthropy is entirely as it should be do not ring true to most thoughtful observers. A large group of experts and practitioners in the charitable sector—liberals and conservatives—believe that there is an urgent need for change in how philanthropy is practiced.

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

posted on: Monday, June 29, 2009

By Yna C. Moore

Bernard Madoff received a 150-year sentence from a federal court in New York today. He was given the maximum sentence, but for many individuals and organizations that have lost an estimated of more than $13 billion to his Ponzi scheme, this brings little consolation.

Among Madoff’s victims were nearly 150 foundations, 105 of which lost between 30 to 100 percent of their assets to Madoff. What can other foundations learn from their mistakes and hopefully avoid being scammed by the next slick operator?

In today’s The Huffington Post, Aaron Dorfman summarizes the findings of Learning from Madoff: Lessons for Foundation Boards. He noted that more than 80 percent of those foundations that showed poor judgment by investing heavily on Madoff had four or fewer individuals serving on their boards. There was also a marked homogeneity among the trustees.

The results of the study puts into question the ability of these small, homogenous groups to make the best decisions for their organizations.

According to Aaron and the study, foundations need to have at least five trustees with a diversity of perspectives to serve on the board. In addition, trustees must implement and maintain conflict of interest and investment policies, and disclose demographic information of the institution’s board and staff.

Were you surprised about the findings regarding board size and diversity among the foundations victimized by Madoff? What do you think about the recommendation to have a minimum of at least five individuals serving on a foundation’s board?

Yna C. Moore is communications director at the National Committee for Responsive Philanthropy.

posted on: Friday, June 26, 2009

By Julia Craig

A new report from The Philanthropy Collaborative, a Washington-based coalition of nonprofit and local government officials, estimates that 68 percent of health-related grant dollars from 2005 to 2007 was designated for “minorities, the economically disadvantaged, and other underserved groups.” This translates into $5.5 billion of institutional grantmaking funds over the three year period. The report’s author, Phillip L. Swagel, PhD, wrote: “One can only conclude from these findings that foundations have played the role expected of them in supporting those in our society who need the most help – and have done so in a financially significant way.”

Broad Benefits: Health-Related Giving by Private and Community Foundations examined both Foundation Center data on intended beneficiaries for health-related grantmaking and conducted additional analysis of a sample of 200 grants that were coded as health-related but not as intended to benefit marginalized groups.* The report found that 31.4 percent of grant dollars could be explicitly categorized as benefitting those with the least wealth and opportunity. Further, 53.4 percent of the foundation dollars from the additional 200 grants analyzed counted as benefiting such groups. Swagel extrapolated this to conclude that 53.4 percent of all grants not designated for marginalized communities could in fact be categorized as such. (68.6 percent of total health-related grant dollars). Hence, the 68 percent figure: 31.4 + (0.534 x 68.6).

The difficulty of relying on data from the Foundation Center’s sample and the (often inconsistent) 990PF form is one that researchers in the philanthropic sector know well. As Swagel showed, it is possible that some grants not previously marked as benefitting specific populations are in fact intended as such. By focusing on health-related grants – the largest category of giving according to the report – Swagel was able to dig deeper into the data. He also discussed the challenge of coding, even within his own sample of 200 unspecified grants.

Swagel explained his process using the example of a $74,929 grant from the Cleveland Foundation to Catholic Community Care. While the grant was initially categorized as benefiting the elderly, Swagel determined that based on Catholic Community Care’s mission and the demographics of the Cleveland area population, 40.5 percent of the grant could be designated as benefiting minorities and the economically disadvantaged. This example further highlights the difficulty of determining what “counts” when it comes to grantmaking for marginalized communities. An illustrative estimate seems to be the best possible outcome rather than a definitive number.

If you are familiar with NCRP’s work, you are probably asking yourself: If Swagel found that over 2/3 of health-related grant dollars are intended to benefit marginalized groups, why did NCRP write in Criteria for Philanthropy at its Best that just one in three grant dollars (or 33 percent) across all categories can be designated as such? Swagel posited the 2/3 figure only after conducting additional research on his 200 grant sample; the Foundation Center data initially categorized 31.4 percent of health-related grant dollars as benefiting underserved populations.

Swagel concluded that his findings highlight the importance of his grant-by-grant analysis. I agree: the deeper the researcher is able to dig to find answers, the better. However, the results remain illustrative, particularly given the subjectivity of the process of evaluating the additional grants. This study contributes to the ongoing discussion in the field about who benefits from philanthropy, why this is a crucial question for grantmakers to be asking themselves, the challenges of measuring intended beneficiaries and the need to improve reporting and data gathering.

Previous posts by Niki Jagpal, Kevin Laskowski, and me have discussed the importance of “targeted universalism” – essentially the reason why understanding who benefits from philanthropy matters. Targeted universalism holds that in order for society as a whole to improve, there must be a specific focus on those with the least wealth and opportunity. This is in contrast to a “trickle-down” approach, or one that assumes benefits will reach those at the bottom if applied to the general public. Further, by addressing the needs of those with the least wealth and opportunity, targeted universalism provides benefits to all people. Funders should ensure their grants are reaching those on the margins; in Criteria we call for 50 percent of grant dollars to be designated this way.


*The TPC report cites 11 constituencies per available Foundation Center data: racial and ethnic minorities; the economically disadvantaged; people with disabilities; victims of crime or abuse; people with terminal illness; people with AIDS; immigrants and refugees; lesbians, gays, bisexuals, transgendered individuals; ex-offenders and current offenders; substance abusers and; single parents. NCRP utilized nearly identical categories in its analysis for Criteria.