There are somethings money can't buy, like smart, dedicated people across a nation doing really interesting work in the world of social change. Just north of the United States is a small nation known as Canada. We American progressives yearn for the colder climes on a regular basis, for the politics of our friends above are much closer to those we would wish for at home. I've also been noticing some very interesting players in the Canadian philanthropic/nonprofit/social sector. Here are three:
1. Community Foundations of Canada
2. Social Capital Partnershttp://www.socialcapitalpartners.ca/financing.html
3. Common Ground. Nonprofit technology consulting focused on networks and affinity groups.
There are somethings money can't buy, like smart, dedicated people across a nation doing really interesting work in the world of social change. Just north of the United States is a small nation known as Canada. We American progressives yearn for the colder climes on a regular basis, for the politics of our friends above are much closer to those we would wish for at home. I've also been noticing some very interesting players in the Canadian philanthropic/nonprofit/social sector. Here are three:
Posted by Lucy Bernholz at 12/28/2004 09:11:00 PM
To read the full blog, click Philanthropy 2225
OK, here's another idea - Sustainable endowments. Foundations - most of them - are here in perpetuity. Their endowments are all about the future. Why don't foundations and their CFOs take the lead in creating financial vehicles that also are about the future - sustainable resource-backed financial products. How about funds based on the future, non-extractive value of old growth redwood trees? Or the 100 or 200 year value of pristine watersheds? Intact ecosystems? Renewable energy funds? Shouldn't there be a way to match the long-term existence of endowments with long-term sustainable investment strategies? And if any entity is well-positioned to imagine, pilot, and create such products, permanent endowments would seem to fit the bill.
Posted by Lucy Bernholz at 12/28/2004 01:19:00 AM
The staff of Blueprint R & D has selected the recipient of this year's gift. Changemakers, is "a national public foundation that models and supports community-based social change philanthropy. We work within the philanthropic sector to shift WHERE money is directed -- to address root causes of social and environmental problems -- and HOW it is given, urging individual donors and philanthropic organizations to become more accountable, strategic, inclusive, collaborative, democratic, and creative." For mor eon how the staff made this decision - and the other worthy organizations that we couldn't afford to support - please download: Blueprint 2004 Gift.doc
Posted by Lucy Bernholz at 12/27/2004 06:52:00 PM
In Michael Lewis best selling books, Liar's Poker, we learned of the ways and means of bond traders. The book captures the creativity and destruction inherent in the world of financial markets, including the wizardry, salesmanship, and opportunism that can lead to new financial products. The story turns around Louis Raineri, a Solomon Brothers manager who created mortgage-backed securities, changed the regulations to allow their sale, ushered in a housing boom, lowered mortgage rates for consumers, generated hundred of millions of dollars in business for Wall Street, helped precipitate the Savings & Loan crisis, and lost his job for his efforts.
Lets hope the same doesn't happen to Frank Altman, of the Community Reinvestment Fund, who has performed the same act of creating new financial products - this time for the social sector. Inc. Magazine named Altman one of their Entrepreneurs of the Year, and their
story captures the nuance, risk and opportunity better than I ever could.
Here's to seeing an idea become action and a step toward a real social sector financial market.
Posted by Lucy Bernholz at 12/16/2004 06:34:00 PM
Social Dividend Reinvestment: Idea #3 for new sources of philanthropic capital.
We all know about pro bono contributions to the social sector. Lawyers do legal work, designers produce reports, CPAs sit on boards and help keep the books in order. These contributions are enormous and the social sector wouldn't function without them.
Can we build on this resource and draw direct financial support from it? In those subsectors where nonprofits and commercial providers both function - health, for example - nonprofits make up 85% of all hospital facilities and the majority of all medical teaching programs. Yet they are considerably disadvantaged compared to their commercial brethren when it comes to raising capital. Moody's Investor Services, which grades bond worthiness in many industries, has downgraded 9% of its nonprofit hospital portfolio to below investment grade.
Given the convergence of nonprofit and commercial sectors, the infrastructure of financial services that exists for commercial investment, and the need for new capital sources for philanthropy, can we find ways to draw capital for the social sector directly from the financial services that underpin so much of the economy?
What if there were a "social dividend" drawn from all financial transactions in health care facilities financing that would a fund a "trust" for nonprofit facilities. The percentage could be tiny and still throw off a large enough revenue stream to make a difference. Instead of (in addition to?) taxing hotel patrons to finance the arts, what if there were a Social Dividend drawn from Hollywood movie receipts to fund educational programs for the next generation of film directors, artists, and producers? How about a dividend on textbooks, test prep, and school construction companies that would fund such a trust for education?
President Bush has made it clear that he believes in the "Ownership Society" and is actively promoting tax reform that would reward investments and dividend income. The administration is also pushing hard to make trillions of dollars of social security resources available for investment in corporate stocks and bonds. The nonprofit and philanthropic sector has an enormous incentive right now to look at these revenue streams as capital for the work they do in the public good. Looking for social returns on investment is a start. But building social dividend incentives into corporate investments and financing is where the money is.
Does this exist already? Got a better idea? Want to make this happen? Email me at firstname.lastname@example.org or comment on this post at Philanthropy 2225.
Posted by Lucy Bernholz at 12/16/2004 03:18:00 AM
To read the full blog, click Philanthropy 2225
For the problem statement to which this post is a brainstorm, scroll down to "The $25 Billion Question: December 14, 2004"
How about values-screened mutual funds that draw donors to issues and grow everyone's gifts? Here's how it might work:
Environmental groups and foundations band together to develop a strategy for addressing an issue, lets say ocean pollution. They pull together the criteria by which other organizations that work on ocean pollution could address the issue and each contribute to a set of meaningful outcomes. They vet the organizations against the criteria (the criteria are public), they get agreements from the organizations to work together as set forth in the strategy and toward the outcomes, and they then turn to "NPO mutual fund purveyor" to market the fund, lets call it the "Clean Oceans Fund." The Clean Ocean Fund is then open for investment: anyone can get in, big foundations, individual donors, charitable gift funds, etc. The criteria and vetted organizations list serve as prospectus, regular progress reports toward the common outcomes serve as quarterly reports. Community foundations, charitable gift funds, private banks, private foundations, networks of grantmakers, ocean communities can all get into the fund and monitor the progress toward the objectives. A small fee (no load!) is built into the price of investment (Only $9.99 per Trade! Think online trading) that pays for marketing, due diligence and performance monitoring by the NPO Mutual Fund Purveyor. The dollars invested go to the groups in the fund.
Repeat across issue areas - education programs, campaign reform, health access, independent film creation, etc.. Market through every available philanthropic financial purveyor as time-saving, return oriented, funds screen based on values and issues.
Existing efforts to work from: Funding Exchange docket online
How does it fill the $25 b gap? By encouraging more donors to participate, by giving everyone access to credible, independent information, and by making the price of entry low, more people with small discretionary resources can get in the fund.
Posted by Lucy Bernholz at 12/15/2004 01:58:00 AM
Philanthropy is facing a $13-25 billion annual drop off in capital inflow as a result of the estate tax repeal. This is the estimate provided by the Congressional Budget Office if the repeal at its 2009 scheduled level was in effect today.
So, where are we going to find $25 billion? Some will point to the "intergenerational transfer of wealth" and say "There! Over there! There it is!"
I don't think its quite this easy. Sure, some of the wealth built by the WWII generation and now passing to baby boomers goes to philanthropy. But this is actually the same river of revenue from which the estate tax repeal will be diverting resources. It seems a bit much to just sit back and hope the river is big enough that the dam doesn't really get in the way.
Starting now and continuing for the next few days, I'll give you a few other ideas on how to find and cultivate new sources of philanthropic revenue over the next 5-10 years. These are half-baked ideas. Most may be unworkable, but some might have some stickiness.
We know one thing - we need to keep growing philanthropic revenue, and the estate tax repeal is not likely to help that cause. So lets start brainstorming and maybe we'll get somewhere. Comments are more than welcome on these ideas, the need to address the issue, how to take it further - perhaps we can get a real conversation going or even real R & D on new philanthropic financial products.
1. Community Remittance Funds
Immigrant remittances from the US to countries of origin like Mexico, the Philippines, and China aggregate into the billions of dollars annually. These billions are made up of millions of small gifts, coming together at both the point of origin (the immigrant community) and the point of focus (the home towns). How can we capture the similar community commitment that exists between intra-national communities? Rural to urban migrants? Generational migrants?
What if we could focus on aggregating the millions of small gifts from the hundreds of thousands of people who leave small towns for big cities but want to come back? (or leave big cities for the suburbs and want to give back?)
Community foundations are in the right place to do this, but they can't pay their overhead when they focus on lots of small gifts. Commercial gift funds have the infrastructure to reach all the smaller givers, but aren't going to invest in marketing to them.
Perhaps we can package these little gifts into big gifts, where the economies of scale make sense for community foundations or commercial funds to support the aggregating of little gifts into big gifts. After all, investment banks package individual mortgages into big securities, lenders package credit card debt, and community foundations package local gifts with outside matches.
Can we package the small into the big, securitize the package, and move the resources to where they're intended to go? Can we create a fee structure to do so that supports the transactional process? Might the transactional process itself be some sort of new philanthropic resource?
Three good things to realize about smaller givers as a market - 1) they aren't now influenced by the estate tax, so the repeal won't change their behaviors, 2) they already provide the majority of philanthropic giving, and 3) they come in every shape, size, race, creed, denomination, and preference - they are everywhere, and we have more and more tools to find them and help them find each other.
Posted by Lucy Bernholz at 12/14/2004 10:02:00 AM
Imagine you could look into the future and see a time when a sum equal to the total amount of your work and that of all of your peers, would be eliminated by the stroke of a pen. Fanciful idea, eh? And depressing, too.
Yet that is precisely what institutional philanthropy faces five years from now with the estate tax repeal.
Philanthropy is very good at discussing how hard it is to quantify change. But this is an act we can measure quite accurately. The Congressional Budget Office estimated that if the law which goes into full effect in 2009 had been in effect in 2000, charitable giving would have dropped by $13-25 billion. The lower number in that range is very close to the total amount of corporate contributions in 2003; the higher number is actually greater than the total Foundation giving in 2003. You can read the full report here.
In other words, an amount equivalent to all of the gifts of all American foundations will disappear from the revenue stream for nonprofits in 5 years.
So now that we can see into the future, what are we going to do about it? I'll post a few of my thoughts over the next few days, as well ideas I know others are pursuiing. I'd welcome your input also.
Posted by Lucy Bernholz at 12/13/2004 11:18:00 PM
The following is from the November issue of the Aspen Philanthropy Letter, an email newsletter sent out by Alan Abramson of the Aspen Institute's Nonprofit Sector Research Fund. Considering this morning's post on the Reece Committee, Rockefeller Foundation, and Alfred Kinsey, the following is remarkable (!)
"1. CONGRESS CALLED ON TO INVESTIGATE FOUNDATIONS FOR 'ANTI-AMERICAN FUNDING,' 50 YEARS AFTER REECE COMMITTEE
A Congressional investigation into foundation practices is needed to expose activities that "seek to de-legitimize the American regime," according to John Fonte of the Hudson Institute. Fonte led a discussion at Hudson's Bradley Center for Philanthropy and Civic Renewal Nov. 30 based on a working paper that documents his allegations of "anti-American" funding from foundations.
In arguing that foundations sometimes support regime-threatening initiatives, Fonte points specifically to foundation funding of organizations which feel that the American system is inherently racist and therefore illegitimate, and to foundation support of groups that reject the traditional notion of assimilation of immigrants in favor of group rights, consciousness, and advocacy. [EMPHASIS ADDED BY LB] ...Congress ought to help foster a debate within philanthropy about foundations' responsibility to "perpetuate the American regime."
Last time I checked, Americans were constitutionally guaranteed the right to NOT "perpetuate the American regime." At least this is how I would read - and how the Supreme Court has read - the following: "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the Government for a redress of grievances." This sentence, which Mr. Fonte may think doesn't apply to American philanthropic foundations, happens to be the First Amendment to the U.S. Constitution.
At the risk of ending the day by repeating myself from this morning, What can we learn from history?
Posted by Lucy Bernholz at 12/13/2004 06:00:00 PM
I went to see Kinsey yesterday. With all the hullabaloo about Liam Neeson's and Laura Linney's performances, the movie reviews missed at least three key points about this film. It may be the first Hollywood hit to feature a philanthropic foundation (Rockefeller). It is one of the few to use a congressional committee as part of a key plot twist (the Reece Commission, also known as The House Committee to Investigate Tax-Exempt Foundations, 1954). And the movie demonstrates that, when we talk about the impact of philanthropy, we need to extend our time horizon from 3 to 30 or 50 years.
Given the enormous sigh of relief that organized philanthropy breathed last week upon the end of the 108th Congress, now is a good time to think about what history has to teach us regarding philanthropy, risk taking, public opinion and public oversight.
Philanthropy provides private resources a role in public life. It can be used to advance democratically-supported decisions about public resources, as it often does in complementing health, family support, or educational programs. It also provides avenues for the pursuit of minority or alternative views, as it often has done in the arts, scientific research, exploration, and, yes, health, family support and educational programs.
Unfortunately, the balance between minority and majority opinion are not always in the forefront of public oversight or private action. Nor are we culturally predisposed to bring a long-term sensitivity or a historical understanding to how these balances shift over time.
It is much more likely that the catalysts to public interest in nonprofit action will be driven by immediate crises or opportunities. For example, the need for public revenue has definitely increased attention to exempt resources. At the state and municipal level, the assumption that large landholdings and enormous real property holdings will never contribute tax revenue to local communities is a constant source of "town/gown" or "town/church" frictions.
Of course, rational issues like public and private resources are not always the real cause of overseer's interest in philanthropy. In the throes of the McCarthy era, the Reece Committee's chair himself stated, "The Congress has been asked to investigate the financial backers of the institute that turned out the Kinsey sex report last August." ( Pomeroy, Wardell. Dr. Kinsey and the Institute for Sex Research. NY: Harper & Row, 1972, p. 375).
The interest in foundations writ large stemmed from moral outrage at the sex research of Alfred Kinsey and - following the money - to the foundation that supported him. Political and moral disagreements would reappear in Congressional interest in foundation support of voter drives a decade later and in funding for human rights in Palestine four decades later. The most recent presidential election brought this opportunistic attention behavior to a new level, as charges of anti-Americanism leveled against Teresa Heinz Kerry drew from politically-motivated "analysis" of the family foundation she heads.
This is not to say that investigations of philanthropy are only catalyzed by political differences or moral outrage. There are other reasons that regulators have turned (and should continue to turn) their attention to the nonprofit sector. Abuse of tax exempt status to cover up financial shenanigans, for example. Violation of the public trust. Tax fraud and self-enrichment. These actions should draw attention to a sector that fundamentally rests on the public trust.
Ideally, we would proudly support ongoing calibrating that protect both the public good and private rights. Finding the balance between them is tricky in the best of times. In times of great political division or on issues of morality (what issues are not?) or in times of great power inequities, such balancing acts require ongoing feats of circus-level acrobatics.
Of course, one key component of maintaining your balance on the high wire is to keep your attention on a fixed point in front of you. Successful acrobats don't look at their feet - they keep their attention out in front. As we navigate the high-wire balancing act of public and private rights in the here and now, we should remember to look up and ahead. Keeping our eyes on the horizon keeps our balance intact as we take small steps forward. History has taught us this - and Kinsey brings it the big screen: We need to take a long-term view when we act, both philanthropically and in public life. Change takes time and time brings changes.
For more on the accuracy of the movie, see the history of the Kinsey Institute. For alternative views of the movie, Google "Kinsey Rockefeller" and you'll find plenty of voices blaming the Foundation and the scientists for what they see as today's moral failures.
Posted by Lucy Bernholz at 12/13/2004 08:03:00 AM
Those of us who remember John McPhee's classic New Yorker story on David Brower will be very interested in an interview with Robert F. Kennedy Jr and Christine Todd Whitman in the November issue of Outside Magazine. As in McPhee's story, which became his 1977 classic Encounters with the Archdruid, two national figures see the environment as profoundly important and in terrible jeopardy. They connect seemingly-unrelated issues and argue about the systemic ramifications of certain actions in a way that reassures of us the ability for deep thought in this moment of "campaign-oversimplification-fatigue."
Of course, the beauty of the piece is that Kennedy's and Whitman's agreement ends at the starting premise of a threatened environment and the need for cars with greater gas mileage. The piece is a highly charged debate about how to protect the environment, the role of regulation and markets, and who should care. They both are eloquent in arguing that,"Good environmental policy is always good economic policy," as Kennedy put it.
More important, however, are the logical connections drawn between the negative environmental impact of regulatory loosening of media policy, such as the abolition of the Fairness Doctrine in 1987 and more recent FCC actions that encourage media consolidation. By making it harder for diverse opinions to be heard on broadcast TV, radio, and in newspapers, these "non-environmental" policies have had profound (negative) environmental effects. Similar logic is used to show how campaign finance reform might be the most important policy issue facing environmentalists, who otherwise stand no change of drawing politicians away from big-spending, big polluters.
The proper roles of regulation and the market are the key points of contention for Kennedy and Whitman, other environmentalists, media experts, and politicians.
What this published debate helps us see are the intricate lines of reasoning that connect so many disparate elements of our regulatory, market, and social systems. Perhaps Kennedy and Whitman's roles as environmental voices predisposes them to systems thinking.
The article is an easy read and useful reminder for the rest of us - systems are complicated. What may look like an indirect force on the issue you care about, could, in fact, be the most direct route of influence. As philanthropists think about their programmatic strategies in the arts, education, health or whatever, the systemic connections matter. And as we think about philanthropy - and its nature as a regulated industry - we need to think about how the systems we've created require that we connect disparate ideas and forces to argue our points of view and develop visions of improvement.
Posted by Lucy Bernholz at 11/12/2004 11:30:00 AM
Hey, if Kevin Kelley can tell you what he thinks is cool, so can I. Here, in no particular order, are several websites of organizations, or ways of working, or opinions on the future that I think thoughtful philanthropists could check out. They are basically cool resources that I have found that have made me ponder their potential for philanthropy.
If you think of a way that these resources or others like them are applicable to philanthropy, let me know.
Cool idea sites
ShouldExist || Good ideas, prototype reviews, group projects
I Called It!
Global : Ideas : Bank
International Chindogu Society
Ideas for philanthropic action
Information for Development
Small Change Network
Community Giving Resource
Strengthen the Good
Posted by Lucy Bernholz at 11/11/2004 10:19:00 AM
Last night's election coverage couldn't help but make me think - about becoming an ex-pat, about the differences between and among us, and about data.
I watched as much of the coverage as I could stand over at a friend's house. TVs in two rooms with remote control experts in charge of making sure we never had a commercial break. Pizza, salad, beer - it might have been the Superbowl or Oscars except for the kids lying on the floor coloring in the states - red or blue - in pull-out electoral collage maps of the U.S. Personally, I'm thrilled that politics finally got our attention as a nation the way sports and entertainment usually do. And sad that the electric tone of the coverage was due at least as much to the sense that we might have another dramatic and divisive stand-off as to the interest in an actual outcome.
CNN leased the NASDAQ data center to show state by state, county by county, minute to minute results. Wolf Blitzer could barely control himself. All afternoon (here on the west coast) he was promoting the coverage and the fancy technology bells and whistles the station now had at its disposal. The message, "Hey, our data might not be accurate, and we might not learn the results tonight, but boy, will it look cool on these room-sized screens covering all four walls!"
OK OK, so television news is cut-throat business and everyone needs a gimmick. And as a nation we seem to love data: sports statistics, box office returns, political polls, polls of the polls. Heck, Jon Stewart hosted John Zogby - a POLLSTER - the other night. I can see it now - pollsters as the next rock stars!
Our love of data ties in nicely with our national obsession with wealth and power (Yes, that is my partisan read of the election results). We know that markets run on information, information is power, and that this is the age of the knowledge economy.
So, here's my question. Why do we still expect the philanthropy to run on such crummy data? Our data sources are admittedly years out-of-date (Foundation Center), inaccurate (the 990s that fuel GuideStar), and incomplete (no global data, no data on 5/6 of the US foundations' giving, etc. etc.) We cannot improve philanthropy or nonprofit action without better data. We need real trend data on giving, we need complete information on the firms in the industry and the products they sell, we need ratios of private to public investment in social issues, we need comparative data on global remittances and international philanthropic revenue.
How can we improve politics? Let me count the ways. How can we improve philanthropy? Let me get the data.
Posted by Lucy Bernholz at 11/03/2004 01:30:00 PM
Despite (or perhaps because of) my training as an historian, I spend a lot of time calling the shots about the future. So here's the big one- just make sure you remember that you read it here first.
2005 will be known as the year the software industry found and forever changed philanthropy. (see previous post - Time to learn some new dance steps)
The preceding few years were the year(s) that consulting firms found philanthropy.
(So here's the prediction....)
2006 and beyond will be known as the year that financial innovation finds philanthropy. We are about to see the introduction of all kinds of new financial products for managing your giving. There will be new ways to handle investments (donor managed investments - DMIs - have already arrived) and new ways of packaging nonprofit debt, selling equity stakes, and making loans. As an industry we will see many new products and more robust and dynamic - though not necessarily better - revenue streams for nonprofit activity.
We'll also see new ways of aligning social mission with investment strategies (investing resources for sustainable growth) and a lot of activity from new firms seeking to shift even a small portion of the hundreds of billions of endowed US dollars to new products (e.g. perpetual trusts). This will be exciting. Like all new markets, it will take some time for the clear winners to be declared and for real improvement to be seen. But we will get closer to having capital markets for philanthropy that are more visible, rational, and accessible. And it will get started in 2005. If you'd like to know more or why, email me. And, remember, you read it here, first.
Posted by Lucy Bernholz at 10/15/2004 10:01:00 PM
This is the year that software vendors found philanthropy. At the just-concluded annual Conference for Community Foundations at least two new technology companies garnered a good deal of attention. Both of these companies, Collaborative Standards (www.cstandards.org) and Kintera (www.kintera.com) are relatively new. Both have new products and new products focused on grantmakers. Even younger efforts, like Newdea (www.newdea.com) are still in BETA versions. Other companies, including Telosa (www.telosa.com) and FoundationSource (www.foundationsource.com), aren't new companies but are running new marketing campaigns.
So why all this action now, in a market that has been "owned" for years by two or three firms and in which mergers and consolidation have been the storyline for a decade?
Perhaps it has to do with the attempt by community foundations to create a "buyer's collective" and push for the products they need. This took place in 2002 - two long years ago - when 20+ community foundations created a $4 million Funding Syndicate to build the technology the field needed to compete with international financial service firms and their technology platforms. The syndicate and the associated Technology Steering Committee (www.cftech.org) have planned, mapped, and shopped ideas for new technology products for community foundations.
But I don't think the Steering Committee, the Syndicate, or the $4 million is the real reason these companies and products are now available. No, I think what we're seeing is a long delayed, ripple effect payoff for nonprofits from the late 1990s economic boom.
After all, both Kintera and Collaborative Standards explain on their websites that they were founded by philanthropists. Individuals who were successful technology entrepreneurs and business leaders. Who have had plenty of time to get to know philanthropy. And nonprofits. And who were smart enough to recognize the creation of the Tech Syndicate not as the signal of "game over," but as a collective plea for help. After all, these folks know a market when they see one. And there's nothing better than the 20/20 vision of newcomers to look at something and see all the nonsense that old timers have been taking as givens. Like the unhappiness of the customers of those 2 or 3 software firms. And the size and scope of a market that could support a new company (or two). And the slow slow slow pace of collective action when it involves nonprofit entities trying to corral competitive commercial vendors.
So they jumped in and launched products in less than two years (Collaborative Standards) or went public in a not much longer period (Kintera). But here's the beautiful twist on the whole story. These companies are not really interested in the foundations as a market. Certainly not the 600 American community foundations, their 500 international brethren, or even the full bucket of 65000 US foundations. None of these adds up to a big market. Especially given the lack of business pressure on most of those foundations to operate efficiently, coupled with their antagonism toward (and potentially regulatory pressure to avoid) spending money on operational supports.
No, what these software companies see is the nonprofit market beyond the foundations. After all, while there are 65000 foundations, there are many more than 1.5 million nonprofits (US only). And while foundations control more than $450 billion in assets, they don't (and never will) spend the vast majority of it, and will always seek to spend the least amount possible running their shops. Most of them also lack any real business pressure to improve their services, improve customer relations, or make life easier for those they support.
Now compare that with the millions of nonprofit organizations, which collectively account for more than 5% of GDP, are accountable to multiple constituencies, operate in highly competitive subsectors, and strive to lower their cost of business while improving services. They need software, they need upgrades, they need interconnectivity and they need to pay for all those things and more.
Here's the real irony. Foundations have been putting nonprofits through the wringer for years and nonprofits have put up with it to get the foundations' money. Now, the tech companies come along and are already looking over the heads of the foundations to the nonprofits, for therein lies the real market worth competing for. In the age-old dance between foundations and nonprofits the steps have always been dictated by who has the money. From the perspective of the software industry - and its potential investments in innovation, efficiency improvements, and new cool tools - the money, and the power, lies not in the foundations but in the nonprofits. I wonder how this dance goes...?
Posted by Lucy Bernholz at 10/15/2004 08:48:00 PM
Thanks to my colleague, Jack Chin, for finding this (Well, at least I think a 'thank you' is in order)
The Capital Research Center, a right-wing think tank that monitors the nonprofit sector, is now publicizing ideological ("radical left" to "market right") as well as transparency ("poor performance" to "high quality perfornance") ratings on foundations and non-profits? This must be a new feature since not many foundations have been rated yet.
Near as we can figure, the criteria applied to rating foundations is grants to organizations that CRC finds objectionable.
Posted by Lucy Bernholz at 10/15/2004 06:44:00 PM
I don't have any science to prove this, but I'm betting that philanthropy is on it's way back to glamour child, media darling, good news growth.
As for data, I could point to the non-decline in giving reported by Giving USA, the increase in phone calls we're receiving from startup foundations, the "booming" sales of my book or a general uptick in positive media attention. Mostly my gut - which called it correctly in 1997 before the boom, is calling again for philanthropy to come roaring back into the public mainstream "good news" columns and off of of the scandal sheets.
Perhaps the final data point tipping me toward this feeling is this - in the Fall, ABC TV will premiere The Benefactor, a reality TV show starring Mark Cuban (multi-millionaire founder of Broadcast.com and owner of the NBA Dallas Mavericks). The game will focus on contestants meeting challenges set by Cuban, all in pursuit of $ 1 million to pursue their dreams. ABC plans to air the show right before Monday Night Football - one of TV's all-time prime time slots.
At the same time, Pamela Andersen's support for Olympic gymnastics hopeful, Mohini Bhardwaj, made headline news on the sports, entertainment and business pages. Meanwhile, in the arts, Joel Fan, a college friend of Yo Yo Ma's who went on to make a computer industry fortune, has started a foundation to connect wealthy executives with artists who need sponsors. This endeavors was chronicled in the August issue of Inc. Magazine, noting that Fan bought a new apartment, a new car and started a new foundation (not unusual behavior for donors).
These aren't groundbreaking philanthropic endeavors by any stretch of the imagination - but they are symbolically important. Three highly visible celebrities (or their friends) start putting money behind causes and the media follows right along.
We may not be far from the hype and glam of 1999 and 2000 when star philanthropists were regular features on the covers of Time, Business 2.0, Entertainment Weekly, People, and Fortune.
So, the billion dollar questions are:
1) Now that we have experienced both the rise and the fall of media coverage of philanthropy, are we as an industry any better equipped to use this access and good will to our advantage?
2) Have we learned anything about the media and public will that might be useful in this concurrent period of regulatory interest in the field?
Posted by Lucy Bernholz at 7/06/2004 02:37:00 PM
Access to information, the common good, and freedom of creativity are critical concepts for the progressives among us. Lucky for us, David Bollier and friends are at it again - check out the State of the Commons Report and the new Blog by Bollier, On The Commons. This is good and important stuff for philanthropists to consider.
There are a few philanthropy-focused blogs out there, and some, such as GivingSpace seem to have some far-reaching ideals. For a more proven approach, check out
Green Media Toolshed.
Posted by Lucy Bernholz at 6/19/2004 05:01:00 PM
The thinking in my last real post, on invention and innovation, was stirred up again by yesterday's (June 14th) New York Times, which ran several stories in the business section on related topics.
First up, a piece on how the Finnish Technology Award Foundation has granted Tim Berners-Lee a million dollar plus Millennium award for his work in conceiving of the World Wide Web and making sure that it was built around license-free technology. What isnotable about this story is the role the philanthropic dollars play in celebrating the freedom afforded to us all by Berners-Lee's approach, not its investment in making his work possible in the first place. The story does a nice job of describing just how significant his "patent-free" approach was in how we all intereact with the Internet today. Given that he was working for the European Particle Physics Lab at the time of hid invention, registering for a patent and requiring licenses would have been the more traditional course.
Second, and the same page in the Times, was a story on the costs to one researcher to his funder (The Robert Wood Johnson Foundation) when he sought proper licenses for the video clips he collected in a medical educatioN DVD. The story, Permissions on Digital Media Drive Scholars to Lawbooks explains that the DVD's use of tv and movie footage cost $17,000 in fees and royalties and took months to navigate the different laws and requirements. All for 3 minutes of footage. The result (besides the DVD) is a conference called "Knowledge Held Hostage: Scholarly versus Corporate Rights in the Digital Age," that will look at the implications for fair use of information now that the questions are far more complicated than xeroxing (or to avoid a trademark dispute, let me change that to copying) course readers.
So how do we want our philanthropic dollars spent on knowledge? As fees to television studios for reprint permissions? To create knowledge for the commons? To protect the rights of artists and creators and their ability to earn just rewards for their creativity? The list of links on this blog under Open Source links present several organizations that are dealing with these issues. Please see, in particular, Creative Commons and Public Knowledge. And let me know what you think.
Posted by Lucy Bernholz at 6/15/2004 11:15:00 AM
The ManyOne Network Foundation is yet another example of the continuing re-configuration of private companies and philanthropic assets. We need, as an industry, to keep our eyes on these arrangements as a developing resource.
Posted by Lucy Bernholz at 6/13/2004 04:59:00 PM
Foundations like to talk about innovation. But how does it happen? Maybe we're looking at the wrong thing. The May 2004 edition of Technology Review, the MIT Journal of Technology (and my father's alumni magazine that I learned to love as a kid) is all about the processes and practices of invention.
Similarly, designers know to how to design new things. Take a quick look at the June 2004 issue of Fast Company, or I.D. Magazine, and you'll learn more about design than one ever could from reading social policy journals or philanthropy magazines. We need to expand our reading lists if we're going to find analogs and methods for social investing.
Posted by Lucy Bernholz at 6/11/2004 03:39:00 PM
Well, we know that the percentage of income that Americans give hasn't moved much in the last 20-30 years, hovering around 1.8% of gross domestic product every year since 1971 according to Giving USA. And we know that the wealthiest of us give the least (as a percentage of income). A new survey by NewTithing Group finds that if the wealthy gave at the same percentage as the less affluent (1% of income instead of less than 1/2 of 1%) the difference would be almost $42 billion a year in additional funds for charity. No chump change, that.
So, with all the new products and services in philanthropy how come the pie isn't getting that much bigger? What can we do to boost the rates at which Americans give? Maybe this is an issue that the nonprofit and commercial vendors in philanthropy can work on together - increasing the philanthropic capital available to the sector.
We'll talk later about why more isn't enough, and just making the pie bigger won't solve the challenges of philanthropic capital systems, but for now, what ideas might we pursue for making the whole bigger?
Posted by Lucy Bernholz at 6/08/2004 11:29:00 AM
Imagine if you could tap into the expertise of every other organization doing the work you care about or funding the work you care about? Imagine you could access an online network of documents, testimony, video, evaluations, project reports, program summaries of all the NGOs working to fight hunger or foster creativity or prevent the spread of AIDS. The information would be out there for you to find when you needed it. In addition, you could add your thoughts, comments, and expertise on a topic or project and put ideas out there to trusted colleagues who would be able to try those ideas in their locations, add to them, edit them, or propose fixes for things that don't work. Let's pretend we can do this:
A local effort at neighborhood improvement has shown great results. More and more residents are involved in street watches and block parties, some small businesses have opened their doors, and a community bank is in the process of opening a small storefront branch. The efforts have been led by a group of local parents and grandparents who made it a priority to attend public hearings, learn how the city's decision making systems work, and advocate on behalf of their neighborhood. A small part of the success was supported by a local family foundation that often made grants to the block association for food and games at the block parties, but the rest of the changes have come through the leadership and endless energy of the neighbors. The changes are small but noticeable, and in a city with too little housing, wealthier denizens of the city have "discovered" the neighborhood and started buying homes in the area as they come on the market. In one case, such a purchase led to the eviction of one of the neighborhood's leading advocates, who had rented a flat in the house for more than 25 years. Recently, two more of the village elders have passed on. The neighborhood association is pre-occupied with infighting about priorities and arguing about the effects of these newcomers. Its last three meetings have led to nothing but bad feelings, and two city commission hearings were missed because the group couldn't get organized.
At the same time, a large national foundation interested in neighborhood revitalization also has "discovered" the area. Seeing the good changes that were made in the last several years, the Foundation wants to support more of the same. It is unaware of the current transitional state of the neighborhood leadership and assumes that the work that has occurred was led by a small number of nonprofit community organizations in the city, not one of which is located in this neighborhood.
What will happen....? How could the neighborhood pass on a torch of leadership, reset its priorities, bring together the new residents with the long-timers, and take advantage of the financial (and possibly other assets) of the Foundation? On the flip side, how can the Foundation learn more about working with neighborhoods in a positive way, find out who and how these changes have occurred, and avoid partnering with "the wrong" folks just because they are easier to find?
One way would be to tap into the knowledge and experience of the thousands of neighbors and foundation staff/board members who've been involved in neighborhood change in the last decades. Some of this expertise is in writing, and various affinity groups focused on US neighborhood grantmakers offer a good place to start. But every neighborhood is unique and what the Foundation needs is a way to learn enough about the area (before making decisions) so that it can ask the right questions or look for the right information from its peers. It needs a network of ideas, resources, people, past lessons, into which it can tap by asking good questions, framing a situation, and learning more about how to proceed? Are community conversations appropriate? Should it listen to the community development nonprofits? Can it send someone to attend the neighborhood association meetings? Should it send someone to walk the streets, hang out in front of the corner produce shop where a small clan of neighbors gathers every morning for coffee? Ride the buses and eavesdrop?
This is the everyday challenge of well-intentioned philanthropists, and one that could be addressed if information in the philanthropic realm were treated with the same ethos as information in the world of open source software. Some basic assumptions guide the way Open Source works - collaboration makes stronger tools. More heads are better than one. Many people working on the same problem will find more answers and more options than just a few people. The final ideas are owned by, and available for use by, everyone.
When it comes to investing in neighborhoods (or culture or health care or education or any of the issues philanthropy invests in), there is much to be gained by stepping back and taking stock of some of these open source premises. Ideas gain power the more they are used. Philanthropists interested in outcomes have much to gain from using the public experience and expertise of others to inform their strategy and then feeding their experiences back into that public idea stream so that it continues to adapt and get stronger.
For more on open source see
Steve Weber, The Success of Open Source, Harvard University Press, 2004.
Posted by Lucy Bernholz at 6/07/2004 10:54:00 AM
In Part One of this post (Aggregating resources, part one - scroll down to next posting) I introduced the approach to problem solving posited by Bjorn Lomberg, a controversial Danish economist. Lomberg brought nine really smart people together (all economists, four of whom have won the Nobel prize in their field) and had them run cost-benefit analyses on proposals to address major global problems from AIDS to global warming. The experts came up with ranked proposals and price tags for achieving major change. See
I asked about the validity of the approach - why don't we bring smart people together to vet proposals for major change. Everyone would win, theoretically: those who have a vested interest in promoting the change, those affected by the issue, and those who either directly or indirectly provide the financial resources to funders of such efforts (taxpayers - directly through government revenue or indirectly through tax subsidies for private philanthropy).
Now I want to add a twist. If nine people are so smart, what about 9 billion? After all free markets, the lottery, race track bets, football odds - all depend on the widsom of many. They rely on the understanding that groups as a whole are smarter than the smartest person in them. James Suroweicki, financial columnist for The New Yorker, shows us how this works in his book, The Wisdom of Crowds. We all actually now that it works (and rely on it to do so) whenever we agree to pay market price for retail goods, buy stocks on the exchange, or place a bet on the odds-on favorite.
So what if we really brough democracy and philanthropy together and used "decision markets" to rank proposals for funding social programs? Perhaps we let the experts pull together the proposals and then use the rest of us to vote on the proposals.
Perhaps we would find out, once and for all, that all those experts really do now how to make smart decisions for allocating resources. Or erhaps it would work out like the old saw about monkeys and dart boards making better decisions than stock brokers and fund managers. Either way, I say its worth a try.
Posted by Lucy Bernholz at 6/05/2004 01:44:00 PM
Some ideas just make people mad. Bjorn Lomborg did this in 2001 when he published The Skeptical Environmentalist, which disputed the claims of the environmental movement and accused it of being sensationalist. He's at again, this time enlisting nine reknown economists (4 of whom are nobel prize winners) to prioritize the world's problems and allocate resources to them: Copenhagen Consensus
From conquering AIDS to ending hunger to enforcing environmental treaties, the experts ranked ten issues using cost-benefit analysis. They issues/proposals they assessed and the ranking they assigned them are below:
1 Diseases Control of HIV/AIDS
2 Malnutrition Providing micro nutrients
3 Subsidies and Trade Trade liberalisation
4 Diseases Control of malaria
5 Malnutrition Development of new agricultural technologies
6 Sanitation & Water Small-scale water technology for livelihoods
7 Sanitation & Water Community-managed water supply and sanitation
8 Sanitation & Water Research on water productivity in food production
9 Government Lowering the cost of starting a new business
10 Migration Lowering barriers to migration for skilled workers
11 Malnutrition Improving infant and child nutrition
12 Malnutrition Reducing the prevalence of low birth weight
13 Diseases Scaled-up basic health services
14 Migration Guest worker programmes for the unskilled
15 Climate Optimal carbon tax
16 Climate The Kyoto Protocol
17 Climate Value-at-risk carbon tax
(Some of the proposals were not ranked and so are not listed above)
I'm not really that interested in the outcomes of the group's work. Cost benefit analysis doesn't make me think the life of a child orphaned by AIDS is any more (or less) valuable than the life of a child orphaned by hunger. But I am interested in the approach - the idea of bringing disparate experts together to vet proposals for addressing identified issues.
So here's a question: if this approach holds any merit (and the private foundations*, Ministry of Environment of the Danish government, and The Economist Magazine - all sponsors of the work - must have assumed it did) why don't we try it more often?
We could use the financial resources (money and access) of private and public funders to pool intellectual resources (experts) who would put forth and/or vet proposals for addressing identified issues. After all, so what if ten groups modeled after the Copenhangen group came up with one viable proposal for each of ten issues - who's to say we can't marshall the necessary resources to implement those proposals? What we need is aggregation of approach and funding - not consensus on a single issue.
After all, when Lomborg and colleagues were done, their list of priorities "only" costs US $50 billion, less than 1/5 of the amount Americans give in charity each year. Count in public resources and the rest of the world's philanthropy, and it becomes clear that we can afford the money for real change, if only we could put our minds to it.
*Private funders include The Tuborg Foundation; The Carlsberg Bequest; and The Sasakawa Peace Foundation and SPF-USA
Posted by Lucy Bernholz at 6/05/2004 01:06:00 PM
The Annie E Casey Foundation's Kids Count is one of those philanthropic endeavors that deserves highlighting IMHO*. Just released for 2004 and available at Kidscount Databook, the websiteprovides longitudinal data on the "state of childrn" in all 50 states. The data can be easily accessed, graphed, and formatted for use in policy analysis, reports, testimony, research, and by the media.
This has become such a powerful tool it is practically taken for granted by children's organizations, policy makers, foundations, researchers, and advocacy groups. My only question is this - does the Foundation know just how valuable this tool is?
*In my humble opinion.
Posted by Lucy Bernholz at 6/04/2004 11:27:00 AM
Well, the development of new products in philanthropy continues apace. The innovation has moved to the back office, where new companies such as Foundation Source and trusted names such as Fidelity Investments, which provides the services through a subsidiary, National Charitable Services, offer complete administrative services to support foundations and donor advised funds. The biggest purveyor of private label back office services to support donor advised funds is The National Philanthropic Trust which manages these funds for 8 major financial firms including American Express, Bank of America, JPMorgan Private Bank, and Morgan Stanley. (Disclosure: I am on the advisory board of NPT).
What are these companies selling? Pure back office functionality - check processing, grant distributions, account reconciliation. They also can manage all the administrative and regulatory filings for accounts, and in the case of Fidelity's subsidiary, National Charitable Services, they'll provide customer support to your donors as well.
Clearly, there is an opportunity to outsourcing the technical processing of account management and grants distribution. Is this a good thing? I think so. First, these companies have automated the drudgery that keeps most foundation board members (i.e., family volunteers) from enjoying the privilege of giving away money. No one likes to balance the checkbook or fill out the 990 forms for the IRS - so why not let these companies do it for you?
As these companies compete for business, they have all the more incentive to make these tasks cheaper and more automatic - Foundation Source offers its clients a quick eligibility checker that can let grant applicants screen themselves in or out of a donor's interest areas online and immediately. This saves time for both the nonprofit and the funder. As these companies compete (NPT is a registered 501 c 3 charity; Foundation Source and National Charitable Services are commercial entities), they will bring down the costs of the transactional parts of grantmaking while also building robust, remote, easily customized systems that could support a small family foundation, thousands of donor advised funds, and even large staffed foundation operations.
They might also develop some interesting and useful auxiliary products. For example, it won't take too long for these companies to be hosting databases of grant information that will rival The Foundation Center's giving database in size, though certainly not in public accessibility. Each company will hold detailed information on donor advised funds, donors, and giving patterns - information that hasn't existed on this scale before. They'll also be rich in market research on the services, products and information that individual donors and small foundations will pay for.
While these new datasources may rival what the information we now collect on giving, they also will be proprietary, Limited as it is, The Foundation Center's data on 10,000 US Foundations is available for public use and purchase and is the basis for most industry research. These new data sources will have a treasure trove of information - that could provide the best news lenses on industry trends - but the databases will be owned by the companies that build them, and how and if they are available to or used for industry research remains to be seen.
How will existing philanthropic institutions respond to these new products? Will we see large staffed foundations - almost all of whom "hate" their grants software, can't make it "talk to" their financial packages, and operate completely separate systems to manage their investments - migrate to these systems that have been built as aggregate, integrated, online tools from the start? Will the data these firms gather on individuals and institutions be used for industry analysis, proprietary gain, or both? Will new metrics on giving trends flow from these new tools and service providers as complements too or replacements for the industry databases now maintained?
Any and all of the above are possible. I'd bet on these newcomers - who have launched themselves with competitive zeal - to be the rapid innovators and automators of all parts of the financial management process. I'm also counting on them to capitalize on the data they collect on donors, giving, and nonprofits.
Just like donor advised funds in the early 1990s, these back office systems are important harbingers of a new era in philanthropy. They're low cost. They're automated. They're designed to be customized on a mass scale. And they're the product of competitive, commercial interest in the philanthropic marketplace.
I think this a great thing for philanthropy. Creating resources that people need and will pay for - this is how we should be promoting philanthropy. I hope the established "data purveyors" are worried about these newcomers. I support all parts of the philanthropic industry to take the approach that "data matter," "the customer matters," and that the tools and products we create should bring people, passion, and information together.
These development also show that what was once joined (financial management and knowledge about philanthropy or social issues) continues to be rendered. We are continuing down the path of having two distinct product lines in philanthropy - financial management products (such as those discussed above) and knowledge products. These two products came bundled as one for so long - in the form of staffed foundations or community foundations - that many thought they couldn't be unbundled. But they have been effectively decoupled in recent years, and the key question is what new forms will emerge as services and products are re-bundled and re-packaged for the 21st Century philanthropic marketplace.
Posted by Lucy Bernholz at 6/02/2004 12:40:00 PM
On Wednesday of this week, The New York Times reported that Mayor Michael Bloomberg had donated $15 million to NYC institutions. Noted in the column, (available at
http://www.nytimes.com/2004/05/26/nyregion/26gift.html) was the fact that the Mayor made the gift to the Carnegie Corporation of New York. Yes, that Carnegie Corporation - the independent foundation established by Andrew Carnegie in 1911 and steward of almost $2 billion in assets.
This little fact doesn't seem to have stirred up a lot of attention, but it should. Why would Mayor Bloomberg, already an active, experienced philanthropist, make a gift to an independent, endowed foundation? Well, I haven't had the chance to ask either the Mayor or President gregorian of Carnegie (though I'd like to), but I would guess its because both sides recognized the value of this kind of exchange. The Mayor gets - for no cost - the experience, wisdom and due diligence of the Corporation's professional staff. Carnegie's folks get more money to support the causes they know best. The only thing that didn't work out was the Mayor's hoped-for anonymity
What is so smart about this? Many big endowed foundations have invested lots of money in hiring experts and commissioning research. These folks know what they're doing and how to do it. Other philanthropists don't need to reinvent the wheel - they can actually use the expertise of the staffed foundation to advise (and manage) their giving, and not build their own duplicative, expensive infrastructure to do so. Similar deals have worked at the Charles and Helen Schwab Foundation http://www.schwabfoundation.org/, a long time supporter of programs serving people with learning disabilities. The Schwab Foundation has been able to use its staff to guide the financial resources of other interested donors, without causing those other donors to spend time or money to learn what Schwab knows. Its efficient and it works. There should be more of it.
Posted by Lucy Bernholz at 5/27/2004 08:54:00 AM
What would you say if you had the chance to speak directly to a hundred or so potential philanthropists? What matters about philanthropy today?
Its a $240 billion a year industry in the United States, yet each individual piece tends to act in isolation from the others
People starting to think about philanthropy now have the chance to ask some hard questions about how they use their financial, human and intellectual resources:
-- Which financial product(s) make the most sense for me in terms of organizing my philanthropy and achieving my social goals? Do I start a foundation? Work with others in a giving circle? Join an online community of donors focused on my issues? Buy a gift fund from my private bank or work with my community foundation?
-- How do I know which of these financial products will help me achieve my goals? How to I assess them? How do I manage a portfolio of these options to the best ends?
And what about the people? How does human capital best work to achieve philanthropic ends?
How do I to be involved in the work? With whom do we need to work? How do we capitalize on the changing demographics of our communities to ensure the work is done in just, equitable, and effective ways, whether I'm interested in environmental preservation or human services?
Finally, where is the "philanthropic industry's brain trust?" How do I find out what else is being done and who else I can work with? How do I learn about trends and pressures on philanthropy? What have others who've worked in this field learned about saving whales, bringing technology to low income communities, feeding the hungry, or conducting medical research in ways that get drugs to poor people?
Posted by Lucy Bernholz at 5/25/2004 10:28:00 AM
The fracturing effects of infrastructure
I've been thinking about the organizations that support philanthropy for a long time. Called the infrastructure by some, these groups mostly consist of membership associations that provide networking, research, some connections to policymakers and a small, relatively quiet voice on behalf of nonprofit institutional philanthropy.
What is nonprofit institutional philanthropy, you ask, and why does it have its own infrastructure? I¡¦ll answer the first question first. Nonprofit institutional philanthropy refers to tax-exempt entities that exist to make philanthropic contributions available to society, either by making grants or by operating programs supported by the income earned off of an endowment. Essentially, they come in a couple of different flavors:
- public foundations,
- independent foundations,
- community foundations,
- corporate foundations, and
- operating foundations.
There are 65 ¡V 70,000 organizations that fall into these categories in the United States. Not too long ago, this short list constituted not only a part of the landscape for institutional philanthropy, but most of it.
This is no longer the case. Commercial vendors of financial products focused on philanthropy have proliferated, the most well-known being Fidelity Investments Charitable Gift Fund, a pre-teenager born in 1992 that now ranks as one of the nation¡¦s largest philanthropic institutions. Philanthropy has become a leading product line for the nation¡¦s financial firms. Heavily advertised, philanthropic products are an important instrument in helping these banks and fund management firms provide ¡§full-service¡¨ to their most sought after clients, the wealthy. The vendors of these products constitute the commercial side of institutional philanthropy. Although the number of institutions on this side of the aisle is much lower than the number on the nonprofit side, the assets being managed and the numbers of donors choosing products from the commercial vendors have been growing rapidly since first introduced. In fact, evidence is increasing that the customers who use the products offered by institutional philanthropy - both nonprofit and commercial ¡V are increasingly likely to have accounts with both types of vendors.
So why does nonprofit institutional philanthropy have its own infrastructure? It is certainly not the fastest growing segment of philanthropy. Despite the numbers of foundations and the size of their annual giving (~$40BB US in 2002), they still pale in comparison to the size of giving done without benefit of any institution. More than 80% of the giving in the United States (or more than $192 BB US) comes from individuals giving by themselves directly to the organizations or causes they care about most.
ramble ramble lost in the woods here?
How will standards set back the field?
How will the exclusivity of certain CF¡¦s lead to fracturing?
The unintended consequences of standards
Posted by Lucy Bernholz at 4/28/2004 02:26:00 PM
Conference planning in the 21st Century
The Council on Foundations is holding its annual meeting in Toronto, from whence I post this. What is new at this year's meeting? Other than the Canadian location - not a lot. I've become jaded, no doubt, but this conference makes me think that the telecommunications revolution has really hit home in a way that conference planners have basically missed. Its not just that email, conference calls, and blogs reduce the need to meet in person for information sharing purposes. Its the fact that people at conferences spend all their time connected electronically to their offices. For example, every time a session ends here in the Hilton/Sheraton monolith, the doors swing open and dozens of people stream from rooms, already with cell phone to ear or dialing madly on their TREOs. No more shmoozing in the hallways or talking about the session you just sat in - everyone comes here physically but leaves their brains tied to the office. Is this better than before? Should we all stay home? When do you take time to think? What is the value of this type of forum anymore? Why am I here?
Posted by Lucy Bernholz at 4/26/2004 01:26:00 PM
If the Omidyar Foundation changes legal status from nonprofit to commercial, does that mean there will be a "foundation conversion foundation" spin off?
For more on the new Omidyar Network see http://www.dailyreviewonline.com/Stories/0,1413,88%257E10982%257E2045514,00.html/
Posted by Lucy Bernholz at 4/16/2004 04:01:00 PM
Fiddling while Rome Burns
OK, things are not as bad as when Emperor Nero blithely ignored the collapse of civilization around him, but they're pretty bad. And recent reactions on the left/central/mainstream foundation front to the latest NCRP report on politically conservative foundations only makes me think we're really not putting our resources where they need to be.
Here's what I mean. NCRP has just published the third in a series of studies dating back to at least the mid 1990s on the strategies and successes of politically conservative foundations. These reports (available at provide independent analysis of foundation grantmaking strategies, well placed in the context of larger political, social and economic trends, and draw careful assessments of what worked and didn't work from the perspective of the foundations involved. The newest one, Axis of Ideology, and its predecessors go on to make useful recommendations about how these foundations achieve their goals. The recommendations draw on such easy to implement strategies as staying the course for the long-term, funding core operations, taking the lead from the nonprofits, funding advocacy, and working with other funding peers.
What's amazing about this? Several things. First, this is perhaps the best example of useful evaluation of foundation grantmaking and its done not by the foundations doing the work but by a truly independent organization. Not only that, the organizations that support NCRP are at the opposite end of the political spectrum from those funders being studied in this work. Yes, you heard that correctly, the left funds the NCRP so it can continue to study the right and point out how successful the right is in advancing its agenda - that must clearly be taken as a sign of evaluative success when those working against you say "yes, they've got it right." Second, the recommendations that NCRP draws from studying the politically conservative foundations continue to cause much conversation among other funders, but very few have tried to operate in the same way in pursuit of progressive (or even centrist) political goals. In other words, we act amazed each time these studies come out, but we don't change our behavior.
Finally, and here's where the fiddling comes into play, in the years since NCRP and Sally Covington first brought to light the remarkable success of politically conservative foundations in supporting the advance of their agenda, center and left foundations have not just not adopted the same kinds of sucessful strategies to advance a different agenda, they've focused on completely other issues. What do I mean? Since 1997 the politically conservative foundations have continued to provide core operating support to their nonprofit partners, to stay with organizations through thick and thin, and to fund advocacy. Meanwhile, the center/left/mainstream (present company included), have put enormous resources into studying grantee satisfaction, investing in knowledge management, building capacity, creating affinity groups, studying the professionalization of philanthropy, launching communications and evaluation offices, and otherwise focusing on improving their own operations. We seem excessively concerned with how we operate as funders and not with what we accomplish.
Maybe its time to really focus on advancing the missions and goals of center or left or progressive or mainstream foundations and not be so concerned with issues that matter most to the very small circle of professional foundation executives, advisors and consultants. In other words, its time to get the job done, not worry so much about how we do it.
In other people's words (other links that may be of interest:)
Talk with the folks at Stanford Stanford Social Innovation Review Forum
Get on the Social Edge http://skoll.socialedge.org/<>
Posted by Lucy Bernholz at 4/16/2004 03:54:00 PM
Semi-random thoughts: The paradoxes and oxymorons of philanthropy
Individual philahnthropic actors can't accomplish much alone, yet individual philanthropic actors must lead.
Outcomes and strategy seem important, but do they narrow the field away from issues where philanthropy should lead?
Philanthropic foundations are endowed in perpetuity (most of them) yet plagued by short attention spans.
Best evaluation done in philanthropy are the NCRP analyses of politically conservative foundations. NCRP funded by politically centrist and left foundations. What's so good about the NCRP reports as evaluation?
- Independent analysis
- Long term time frame (30 years)
- Makes recommendations that others could follow regarding funding strategies (be responsive, support operations, stay the course)
- Center and left focus on operational changes and advances (evaluation, outcomes, grantee perception reports, knowledge management). Right of center funders focus on accomplishing a goal.
So why are the so few adherents to these recommendations?
Why do we act as if they're news each time NCRP releases a new version of these analyses (now date back to mid 1990s)?
Posted by Lucy Bernholz at 4/13/2004 12:52:00 PM
Politics and philanthropy
I've just returned from the Donors Forum of Wisconsin's annual meeting. Now, I'm a New Yorker living in San Francisco and thus bring all the coastal biases there are about the middle of the country. I've never been to Wisconsin before. Sure, I know about the State's illustrious history in terms of progressive politics as well as their more recent experience as home to many welfare reforms and voucher experiments - not quite the stuff that makes progressives proud.
Well, the philanthropists and nonprofits at last week's meeting should be proud. Regardless of where you fall on the political spectrum, one thing must be very clear to all of us who toil in the independent sector - its too polite and too apolitical. I've been to many -- too many -- philanthropy conferences in my time and I have never heard anything remotely controversial spoken from the podium. No one disagrees, no one says "I don't think that is the right strategy," and certainly no one has ever said, "They're promoting a political agenda that I don't agree with and that I think needs to be countered." Yet that is essentially what happened last April 8th outside of Milwaukee.
Gara LaMarche of the Open Society got it started by discussing the recent NCRP report, "Axis of Ideology" about the politically conservative foundations. This is appropriate, since Wisconsin is home to Bradley and several other of the larger conservative foundations. Bradley was, in fact, one of the co-chairs of the meeting. After LaMarche made his plenary comments about the need for philanthropy (center and left) to have a voice and use it, to take a stand for the politics that undergird their programs, he made direct reference to the success of the conservative foundations in doing so.
He got a response. I don't know if Mr. LaMarche was there to hear it or if he had left, but one of the Bradley Foundation Board members rose to the challenge to speak directly on behalf of the Foundation's programs and the values they believe they are promoting. He, in turn, was followed by a board member of another Wisconsin foundation, who noted that "since the political gates have been opened," let us use our voice. He offered an open question to the assembled hundreds,"What will you tell your children, 25 years from now, about where you stood on the issue of gay marriage?" Implied in his comments were the idea that, 25 years from now gay marriage will be a given in our society.
Given the setting of the meeting, only the podium speakers got to air their thoughts. But my hat is off to all of the aforementioned for using the podium for its true purpose.
Posted by Lucy Bernholz at 4/12/2004 02:37:00 PM