Tuesday, November 27, 2007

Philanthropy advertising

I took a quick look around to see what I could see in terms of developments in end-of-year philanthropy advertising.
"The quotes/italics are my interpretations of the ads"
[The brackets indicate where I saw the ad]

"But wait, I wanted a toaster...."
  • Wells Fargo's new "Wrap it Up" campaign notes that the bank will make a donation to local schools, the Red Cross or Save the Bay for each new customer account opened between now and December 31. A new version of embedded giving. [SF Magazine, Dec 07]
"Let your partners speak on your behalf..."
  • Ads for the San Francisco Foundation feature local attorneys, speaking about how they trust the Foundation to do right by their clients. (everyone wins) [SF Magazine, Dec 07]
"Play to their egos. And hint at John D Rockefeller"
  • Fidelity asks, "You know how to make money. But do you know how to give it away?" [The New Yorker, Nov 26, 2007]
"Just manage the money"
  • I noticed an odd trend in [The Atlantic, December 2007]. There were lots of financial advisers advertising (2 ads totaling 3 full pages, including inside cover, from US Trust/Bank of America, 1 page for Fisher Investments, 2 page spread for Morgan Stanley, and 1 page for the (worth reading) Public Affairs book, Encore by Marc Freedman). Maybe Atlantic readers are all newly and unexpectedly wealthy for whom philanthropy is a secondary consideration? Philanthropy is a part of the services offered by all these advertisers, but it is definitely not the focus of these ads.
"Only if you are going to give to us..."
  • Two alumni magazines have lots of ads for wealth management, but again the only clear mention of philanthropy is a full page (inside back cover) ad to "invest with Stanford's endowment." I would imagine charitable gift funds, wealth advisers, philanthropy advisers, etc would like to reach the Ivy+ audience - is it possible that these magazines don't take these ads? [Yale Alumni Magazine, Nov/Dec 2007; Stanford, November/December 2007] On another subject altogether, these magazines are chock full of ads for assisted living facilities - the selling point of which seem to be the high number of alums and faculty who live there - summer camp for smarties as we grow older and frail(er)...
"We're all about making money. Oh I suppose you might want to give some of it away."
  • In [Fortune, Nov 26 2007] I saw no mention of giving or philanthropy in any of the advertising. [The Economist, November 24 2007] had one Wells Fargo ad for private banking services that included a sentence on "...a scholarship for your Alma Mater." [Business Week December 3, 2007] came up empty. Portfolio has an ad for NetJets featuring Tiger Woods (a play to young wealth) and lots of financial firms pitching their tax advantaged offerings; WIRED has several "green" gadgets and cars, but no direct philanthropic pitches, and Fast Company just sent me an invitation to their 2008 Social Capitalist Awards in January - but I don't know what ads they're running this month.
"Give for good. Don't just give stuff."
  • Page A13, National Edition, [New York Times], November 27 is a full page ad for....giving to charity rather than giving stuff. According to the ad:
"Let's redefine Christmas. By putting more Thanksgiving in it. ...

Give people donations to their favorite charities. And request that they give donations to your favorite charities....

The sole purpose of this message is to facilitate charitable giving. Please pass it on."
The only note about who paid for the ad is a small print sidebar noting that "The Dalio Family Foundation does not solicit donations from the public." The Dalio Family Foundation is a $25 mm+ independent foundation, based in CT and founded by the head of Bridgewater Associates, one of the nation's largest hedge ($20 bb+ in assets under management). Interesting to note that the founder of The Clear Fund and Givewell.net - one of the cooler experiments* underway in philanthropy right now - is a former member of the company's staff.

This "Giving" ad is notable for several reasons, 1) it is pitching philanthropy for the sake of philanthropy, 2) It is not underwritten by a financial firm, a philanthropy advisory service or a fundraising nonprofit, 3) It is "issue agnostic" - give where you want to, says the ad (OK, OK I know there are those who are getting ready to blast me that the mention of Christmas disqualifies the ad as agnostic, but I think its more about the giving season madness than the holiday), 4) It makes me smile to see a foundation get the point that they have a vested interest in the rest of the philanthropic capital market - a subject near and dear to my heart, 5) based on comparable data, the ad probably cost about $65,000 - which would make the expenditure qualify as a pretty significant grant for most foundations, 6) The New York Times has a lot of readers. There may be lots of impact from this ad. And, as far as I can tell, there isn't any way for the funder to know what kind of impact the ad had....it is just a message, in a respected medium, at a certain time of year...

Without a doubt, the New York Times "giving" ad is the most interesting to me. My thoughts on the others, for those readers who seem to have lost their sense of irony or their ability to realize when my tongue is firmly in cheek, should be seen as little more than my musings on a market, at this particular time of year. And, I'll keep looking - I've got other hard source to check - Sunday's Times Magazine, the WSJ, Harpers, Inc., Vanity Fair, Forbes, Technology Review, Traveler, etc. etc.

As soon as I turn of the Ad Blocker on my browser I'll search for online philanthropy ads. Facebook supposedly had 100,000 ads launch within hours of allowing advertising to run on the platform. Wait a minute, on second thought, I'm going to keep my ad blocker settings as is, and let you tell me what you notice in online advertising for charitable giving....go ahead, email or comment and let me know.

*I am on the board of The Clear Fund.

Bad day for charities

Just heard this on the radio - Mark Everson, formerly of the IRS, has been ousted as CEO of the Red Cross after just six months - after having a "relationship with a subordinate."

That makes five leaders in six years at The Red Cross - time enough to have dealt with 9/11, Katrina, Rita, Southern California Fires, several Midwest floods...

And then there is the mess at the Smithsonian. And the Astor family accusations.

Monday, November 26, 2007

"Making a list, checking it twice..."

Yes, its that time of year - list making time.

  1. I'm working on my top ten philanthropy buzzwords of 2007.
  2. I'm also getting ready to check back in on my 2006 list of "PhilanthropyHype" to see what stuck, what mattered and what was, after all, nothing more than hype. But you have to wait till New Years Eve (or thereabouts for that good stuff).
  3. The New Jew has a list of "Jewish Billionaire Heiresses," adapted a list compiled by Forbes', which is multi-religious.
  4. And Geneva Global and Barron's just published a list of Ten Wise Givers. Hats off to Geneva Global/Barron's - its deliberately not just "big guys" AND they share their methodology. (Full disclosure - we helped. A wee bit.)

I'd make a list of lists, but frankly, that is sooo 2006.

Saturday, November 24, 2007

Buzzword 7 - Social stock exchanges

Some of this year's buzzwords are pure blather. (Here are links to the previous buzzwords for 2007)

Others describe ideas that I think are at the leading edge of change in philanthropy. This one - Number Seven - Social Stock Exchanges - is just such a buzzword. For more about this phenomenon - opportunities to invest in equities in social enterprises - here are some key resources:

Sample Social Stock Exchanges

Information on Social Stock Exchanges
Other perspectives on Social Stock Exchanges
There are several reasons I think these exchanges will stick around and cause some significant changes in how we think about social enterprise - most of which have to do with the relationships between markets and transparency and consistency. More thoughts on this are here and here.

Social Stock Exchange - number seven on the buzzword list, but definitely one that's more than just a phrase.

UPDATE ON Q4 Giving - Fact or Fiction - check out the comments on my question regarding Q4 Giving - and thanks to those who wrote in.

Wednesday, November 21, 2007

A sector-wide logic lapse (collapse?)

Have you ever really thought about how anomalous is our obsession with nonprofit overhead ratios?

Think about it this way - in what other area of your life do you deliberately seek out the product, service, location, or experience that is being made available in the cheapest possible fashion? We don't pick restaurants because they forgo cleanliness, we don't buy clothes we think will fall apart, we don't choose schools for our kids because the administration is keeping costs down and not supporting teachers, and we don't make travel arrangements because we know the airline we've selected skimps on maintenance.

As far as I can tell - only in choosing nonprofits is there an active illogical pursuit of "less is better." Is it because we are so crass as humans that we (donors) don't care about the quality of the services that nonprofits provide to their clients - who are only in some cases the same people as donors?

It makes no sense to me and never has. I think the tools that have been developed to help donors understand administrative and operating ratios have done a disservice by emphasizing these "facts" without asking larger questions, providing some context, and actually clarifying the limitations on their utility.

Not only are these ratios not useful data, taken out of context or without consideration for other issues they are misleading. They happen to be computed and made widely available because they are easily computed AND somewhat comparable. That's it. That's like using street addresses to compare universities or fax numbers to compare vendors - you can get the information, but so what?

If the money and energy and time that has gone into computing these ratios had been put to use in developing even remotely legitimate metrics of impact, performance, or even activity we'd all be a lot better off. This December, Alliance Magazine, the must-read journal about the global social sector, will publish an issue dedicated to the state of impact evaluation. This interview with Fay Twersky, Director of Impact Planning and Improvement for the Bill and Melinda Gates Foundation, is worth reading.

Lets move the conversation forward and not settle for measuring what we can, but look for ways to measure and analyze what matters.

(This post is an expanded version of a comment I left on the SVP Seattle blog in response to their very useful list of "10 things we'd like to tell every new philanthropist")

Tuesday, November 20, 2007

Giving in Q4 - fact or fiction?


Go ahead, ask anyone who gets snail mail. Or anyone in fundraising. Or anyone in estate planning, wealth management, or tax advising. They'll tell you, "The fourth quarter is the busiest time for charitable giving." Geez, if you'd asked me I would have told you this also. Just as we "know" that retailers turn profitable for the year on "Black Friday," we all know that most giving happens in the fourth quarter, during Giving Season, right? Well, wrong. Or, rather, maybe we don't know what we think we know.

I went looking for the stats. I wanted to compare Q4 giving in the US to Q4 retail spending ($474 bb, National Retail Federation) or Q3 airline profits ($1.6 b net income for the top 10 US airlines, Dallas Morning News) or the cumulative value of 2007 mortgage write-offs for major banks ($60-70 bb, Financial Times).

So I have all kinds of things to compare the Q4 giving number to, but, alas, I have no number. I've checked AFP, Foundation Center, Giving USA, CoF, and made some calls - I can't find a quarterly breakdown of giving.

I suppose I could create my own index and start computing a representative number...or I could divide the $300bb in 2006 by 4 ($75 b) (but that assumes giving is equal across all quarters) so I'd have something to compare to the numbers above.

Help me out folks - are there numbers, over time, to document whether Q4 is the busiest time for giving?

Monday, November 19, 2007

Mutual Funds for the progressive philanthropist

New Progressive Coalition will open its mutual funds to the public tomorrow. These are the exemplary product demonstrating several of the key themes of this blog:
  1. Donors lead with their values, and they want their financial portfolio (investments, charitable giving, and political contributions) to reflect those values;
  2. The philanthropic industry has two kinds of products - financial and knowledge products, and a diverse and growing set of institutions that sell them;
  3. Advisory services are on the rise;
The mutual funds are cause-specific - health care, environment - and strategy inclusive - meaning they hold a mix of charitable organizations and political advocacy groups. The goal - get the job done using whatever tool is effective - which is another theme of this blog.

Friday, November 16, 2007

GlobalGiving Guaranteed

What if you are a donor adviser, and one of your clients follows your advice, make a gift, and is then unsatisfied with the outcomes? If you are GlobalGiving, you give that donor his/her money back. Its called GlobalGiving Guaranteed.

I love this idea. Its simple. It requires quality, consistency, and an ability to define success (otherwise you can't define failure). I also like that the way it came into being, which you can read about on Dennis Whittle's blog.

Thanks Dennis, for trying out this idea. This kind of experimentation is what we need to get from where we are to a new kind of philanthropy.

Wednesday, November 14, 2007

Really, its for a good cause. Sucker!

Free Rice purports to be a vocabulary test masking as a fundraiser for the UN. Sad thing is, its actually a vocabulary test masking as an ad server, while the rice you donate does seem to go to the UN World Food Program. The real money is in the ad clicks - companies support the site, you click on their ads, they pay the website for the click. That fee is no doubt more than the cost of the 420 grains of rice you'll earn before you realize you've wasted another 10 minutes of your day.

Beware - embedded giving is not always what it seems. Particularly in the case of iGive - a site that lets you designate "your favorite cause" as the recipient of funds donated by merchants when you make purchases. Most of the causes run along the line of "my trip to Hawaii," or "Mama needs a new pair of shoes." The site explicitly states "Any cause in the U.S. or Canada qualifies - and 501(c)3 nonprofit status is not required." So go ahead, shop on. Just don't consider it charity. And don't try to write it off.

Tuesday, November 13, 2007

Embedded Giving - actually, we have NO idea about numbers

My sincere thanks to Lindsey Siegel of CECP who corrected my inaccurate assumptions about how and where embedded giving gets aggregated and counted. Turns out corporations are not factoring it in to their contributions - at least not those who participate in the CECP surveys.

Thanks Lindsey. The money is not in that pool, so its not part of the $191+ million.

I am glad to have been corrected on this. I still have two questions, however:
  1. Where does this money get counted? (the dollars and nickels donated by customers who bring their own grocery bag, add $1 to their drug store bill for juvenile diabetes, or send $1 through their ATM to a disaster relief agency, etc. etc.)
  2. How much money is given away this way and is it increasing (as everybody I've asked seems to think it is)
Please let me know, if you know. And send me your examples of embedded giving - I'll catalogue as many as I get and celebrate the most unusual ones in a later post.

You know you've become an issue geek when...

...you regret not being able to attend a law school conference on "Taxing Philanthropy." Conference was held at Columbia U on Nov 9 and included the following key topics:
  • Subsidizing Charitable Contributions: Incentives, Information and the Private Pursuit of Public Goals,
  • Is Income Tax Exemption for Charities Special? The Issue is Investment Income,
  • Taxing Philanthropy
I'm not a lawyer, not a big fan of taxes, and go to far too many conferences already. This discussion intrigues me for several reasons:
  1. I've long maintained that tax codes and regulatory structures are the true levers of change on philanthropy;
  2. I've been following the discussion about variable tax structures for different giving choices rather closely;
  3. I've proposed a few far -fetched tax and other structural schemes myself, mostly in hopes of sparking a useful discussion;
  4. I'm thinking a lot these days about what grant making philanthropic organizations could look and act like, if they were less shaped by institutional isomorphism and more strongly influenced by the missions, opportunities, strategies, and technologies of today's diverse, global, connected, digital world.
You can download the agenda for the Columbia conference. If anyone who went cares to point me to blog coverage, public notes, key takeaways, or even - gasp - video coverage - please do.

Monday, November 12, 2007

Devolution to nonprofits and the markets

Photo Credit: Center For Environmental Health Photo, via Washingtonpost.com

Devolution - the shifting of responsibilities once met by the federal government to state or municipalities - is nothing new. Nor is devolution to nonprofits anything really new. Devolution to market entities also isn't new, its just called "privatization." So, this post isn't new, its just an update on some amazing examples of where this is happening and how it relates to a constant theme of this blog - the blurring of sectors, the shifting roles of public, private and independent.

The American federal government gave up its responsiblity for risk assessment years ago when it defunded the Office of Technology Assessment. Denise Caruso wrote an entire (must-read) book on methods and alternatives that have developed in academic and nonprofits to fill that gap.

More recently, the Consumer Product Safety Commission has asked Congress NOT to give it any more money or staff, (please let us be defunded) even as lead painted toys and poison-spiked dog food spread across the country. A California nonprofit, the Center for Environmental Health, has (literally) taken mattes into their own hands, measuring lead in toys and lunch boxes and negotiating with retailers to pull these items from their shelves.

And then there is the outsourcing of libraries. Library Systems and Services, a privately held Maryland company is now running "public" libraries for communities in Texas, California and Tennessee.

I'll say it again, the revenue stream and markets of providers for public goods is not what you think it is.

Friday, November 09, 2007

Designing new foundations

Quick, name an organizational type that has barely changed since 1913? Publishing companies? Wrong. Hospitals? Wrong. Museums? Wrong. Internet search companies? Huh?

The correct answer is philanthropic foundations. The organizational chart for the original Rockefeller Foundation is remarkably similar to the org charts of most (not all) staffed foundations today. At the top you have a board of directors, and then a CEO/President/E.D. (assuming a corporate, not trust, structure). Then you have a person or department that manages investment decisions, a person/department that manages grantmaking/programs, and a person/department that runs the organization/finances/communication. Nowadays, you might have a chief technology officer as well – wasn’t all that necessary back in JDR’s day.

So imagine the task that falls to today’s chief technologists at philanthropic foundations. The world around them is all about open source, interactivity, social networks, and the wisdom of crowds. They face the daunting tasks of trying to integrate the principles of this networked, open, collaborative, user-as-technologist world into organizations where decision-making processes are tightly guarded and almost entirely internal. Some approach this challenge by helping their program or other colleagues put web 2.0 tools into use in practical ways – using delicious tags to save news clippings of common interest to a single account, where all on staff can access them. The nice thing about an experiment like that is it comes at almost no cost, allowing the foundation technologist to follow Google’s lead and “experiment often, fail fast.” Some foundations that focus on youth programming have recognized the choice to avoid building expensive standalone networks, and are launching groups on Facebook so that the young people can share ideas there. Age sensitivity is tricky here; I recently heard a 24 year old bemoan that fact that “we don’t use Facebook the way college kids do today.”

CTOs at other foundations focus on the principles that underlie hyper-sexy, omni-accessible free tools like blogging, wikis, or mashups, and not on the tools themselves. These leaders are supporting their program peers who fund open access research to “walk their talk,” and post funded proposals to the web where others can learn from them. Others use internal blogs to facilitate discussion across program areas or function departments, inviting in expertise from the finance office to a discussion of affordable housing strategies, for example. *

Either way, the real challenge is trying to fit new tools into old cultures. This is never easy; even when the skills of those you are bringing in seem to be good fits. In a recent Newsweek (November 12, 2007) article on Google’s Associate Program Manager recruiting style, the CEO noted "“Earlier attempts to hire veterans from firms like Microsoft had awful results. "Google is so different that it was almost impossible to reprogram them into this culture.”" Google’s approach – recruit for those with “no experience” and launch them into leadership positions inside Google culture.

So what’s my point? Rather than trying to fit people or technology into old cultures, its time to completely re-imagine the structure of grantmaking organizations. Here are a few suggestions for how the grantmaking entity of the 21st century might be built, by first looking around at what we know about work, resources, and change.

1. Crowds make better decisions than individuals; diverse crowds make even better decisions. Ethnic, racial, gender, class and experiential diversity should be built into decision making teams that are seeking to understand a challenge, imagine new solutions, and seek out financial leverage. Imagine you sought to establish a grantmaking organization that centered around this principle of diverse groups – today’s typical foundation is not what would come to mind.

2. Foundations have investment staff that identify and find specific investment managers by certain types of expertise. They then “outsource” the managing of a certain chunk of endowment assets to that manager, review progress toward goals on at least a quarterly basis, and actively seek a mix of managers according to the foundation’s agreed upon portfolio strategy. Program decisions should be made the same way. Program staff should articulate strategy and set criteria for selection, then look for expert partners who would make the direct grants, manage partner relations, and report on metrics. One advantage of this approach – the expertise of these expert partners (read: investment manager) can be easily leveraged – lots of foundations can bet their “education” strategy on the same explicit set of metrics and goals. The cost of foundation work would go down, the aggregation of resources would go up, and the use of shared metrics and concrete goals would increase. The market would function to make sure there was both a range of partners, and that they succeeded as promised – those that wouldn’t, would go out of business. The range of entities that might play this outsourced program investment role is wide and diverse – nonprofits, consulting firms, commercial media outlets, public agencies – an attribute that should lead to competitive creation of identifiable niches, markers of success, and more standardized metrics.

Some steps in this direction are already visible. Warren Buffet effectively outsourced his program staff needs to his expert partner, the Gates Foundation. The Milken Institute is making big bets to cure prostate cancer, and actively seeking partners that can shape the downstream funding sources through its work with the Center for Accelerating Medical Solutions and FasterCures. Outsourced, leveraged, competitively chosen program experts – not your father’s foundation staff.

3. We are experiencing a “bubble” in philanthropic prizes. Mission related investing is also getting a lot of attention these days. These might both good things, if used as part of a more comprehensive “funding change” framework. For example, many of the new prizes are being made available to do what prizes do best – engage a variety of entrants, including many who would not otherwise be known to the funder; leverage the entrants financial resources and ego – contestants in prize competitions foot the majority of the bill; and attract media attention and a spirit of sport to issues that might otherwise seem drearily sociological, such as increasing exercise options for young children or finding new financial innovations in the health care system. Rather than letting this phenomenon run the usual media attention cycle (Wired, Tired, Expired), foundations ought to be thinking about how the fundamental economic incentives between prizes and grants work within the issues (and issue lifecycles) they care about; and develop funding strategies that align to their goals and are inclusive of these funding tools (investments, loans, grants, prizes, technical support). Then, the organization should be structured to best support either the type of funding or the mix of funding being applied.

4. Think about where the information you need to achieve philanthropic progress lives. Think about how you can best access, share, and deploy that information to achieve your goals – through closed-door analysis? Open source idea generation? By using copyleft principles – that anything you create can and must be made available to be re-mixed by others? Perhaps the most fruitful point of leverage on the issue you care about is wider access to ideas or knowledge? You might benefit from considering the way the Public Patent Foundation works or the Clinton Foundation’s efforts to “organize markets for social good.” Open, collaborative information and the deliberate valuing of shared re-use. That would be different.

5. Think about your resources in light of broader trends and capital sources for the changes you seek. Where are the resources fueling the work you care about coming from? Other philanthropists? Government contracts or fee for services (the two largest sources)? Double bottom line investors or socially oriented funds such as the Pandemic Fund managed by the venture capital firm, Kleiner, Perkins? If you are a commercial medical research firm, nonprofit endowments might be the best source of growth capital for you, consider the role that the Cystic Fibrosis Foundation plays in funding breakthrough research in that arena. There’s a different way of valuing your assets.

6. Finally, what if success really mattered to grant making philanthropies? Perhaps a set of industry practices that motivates and rewards success might work. We have several systemic ways of changing behavior for industries – regulation, tax code changes, investigative journalism, or the introduction of new market types. The foundation field has developed several efforts that hint at this, from market feedback loops such as the CEP effectiveness survey, to ethics and standards of practice, to rapidly growing “giving marketplaces” such as globalgiving or kiva.org or donorschoose. Where’s the philanthropic structure that will do what eBay did to garage sales, craigslist did to classified ads, gasoline engines did to horse drawn buggies, or reality shows and YouTube are doing to television screenwriting?

As we begin another annual “giving season,” it would be wonderful if those who are about to make significant decisions about their charitable choices, as well as those who advise them, those who benefit from those choices, and those who already work in an organization in just this kind of moment would consider things with an eye to the present and future. Historically, these decisions have centered around a donor or family’s values regarding tax benefits, financial returns, family purposes and social goals they hope to address. In the best cases, these considerations informed the choices around structuring charitable gifts, using some well-known structural choices like a foundation or a supporting organization. Today’s donors ought to consider those same values, but remain wide-eyed and imaginative in terms of current and future organizational possibilities

Remember, problems change, solutions change, and the type of resources that are useful change. The organizations that fund this work should change also. Foundations have several kinds of portfolios that need to be managed – investment portfolios, program portfolios, intellectual property portfolios, and portfolios of financial supports. The most efficient and effective structure to assess, implement, and reassess the development and management of these portfolios in 2007 is unlikely to be static, it’s unlikely to be closed, and its unlikely that it was first built in 1913.

*These are real examples but I didn’t ask permission to name names. Those who are doing these things might jump in here and identify yourself. Feel free to share some other thoughts as well.

Tuesday, November 06, 2007

More on embedded giving

I just came back from running errands. At almost every store I was "offered" the opportunity to "give a little extra" for charity - this is what I call embedded giving. Charitable gift cards - which I predict will be a big hit this coming giving season - take this even further. I've been trying to figure out how much money gets raised this way. I'm not having a lot of luck, but I've had the chance to talk to some interesting people and read an interesting report. Here's what I'm learning:

According to the Committee Encouraging Corporate Philanthropy, corporate giving comes in three forms: as direct cash from the company, as corporate foundation cash, and as non-cash (product or pro-bono donations). The 2006 breakdown for the 136 companies surveyed was as follows:
  • Total given (cash and product): $11.2 billion
  • Percentage direct cash: 44% ($490 mm)
  • Percentage Foundation cash: 36% ($403 mm)
  • Percentage non cash: 20% ($224 mm)
These data are drawn from a sample of companies. However, their $11.+ billion in giving is a large portion of the $12.7 billion total corporate giving reported by Giving USA.

In addition to the source of their giving (cash, foundation, in-kind) corporations self-identify whether their gifts are "charitable" or "strategic" (read: marketing). For each type of giving above, the following percents are identified as "charitable":
  • 39% of direct cash = $191 mm
  • 53% of corporate foundation cash = $213.5 mm
  • 56% non cash = $125.4 mm
I assume that my "embedded gifts" of pennies, nickels and dollars are added in to the corporations' giving in the "direct cash" category. And, for the sake of argument, I'll assume it is then counted in to the charitable portion of that giving.

So here's my question - what part of the $191 mm that corporations write off for charitable direct gifts is actually the accumulation of credit for my (and your) dollars, nickels, and pennies?

And here's another question for consideration - did you know that 47% of corporate foundation giving is explicitly considered marketing dollars?

I'm ever more convinced that we need to seriously rethink our definitions of "capital for social good." And absolutely sure that only a small portion of philanthropy will actually be counted in whatever we decide - because the rest is either marketing dollars or subsidized investment capital.

Saturday, November 03, 2007

Buzzword #6 - Embedded Giving

"What if every major event or financial transaction had philanthropy built-in?" That question was raised back in June by Matt over on xigi.net. It gave rise to the creation of our sixth buzzword of 2007 - embedded giving.

Embedded giving is the (apparently) increasingly common practice of building a philanthropic gift into another, unrelated, financial transaction. For example, rounding up your phone bill to make a gift to charity. Or using your own grocery bag and donating the nickel that the store gives you to a local homeless shelter. Or using a specific search engine because it donates a small portion of its advertising revenue to charity. Or mistaking that line on your credit card receipt for the place to calculate the tip, only to discover you've just made a gift to fight childhood hunger. Or adding $1 to your drug store, grocery store, gas station purchase to fight juvenile diabetes, MS, or any other number of diseases.

But here's the thing about embedded giving. No one is counting it. Some of the corporations that sponsor these opportunities count the gifts in their total charitable giving. Others count it as part of their marketing budgets. There's no consistency and no breakout of numbers, so we really don't know how much money is raised this way, for what, and by whom.

Embedded giving is all about making the giving easy for individuals. This ease also makes it painless - another dollar here, a few cents here. Few individuals can even remember what they donate to in this way; and no one reports it.

So what happens if we make giving so easy we forget about it? And if we actually "embedded giving" into every transaction, isn't that another way of making something a tax? After all, the folks who sell E-Z passes and other toll passes to motorists know full well that making it easier and faster to get through the toll booth, also makes it easier and faster to increase the toll rates.