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

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?

A question

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,1413,88%257E10982%257E2045514,00.html/

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<>

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.

Donor education.

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)?

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.