Featured Guest Blogger

Dr. Sherece West is president and CEO of the Winthrop Rockefeller Foundation in Little Rock, Arkansas. She will be participating in a panel discussion on philanthropic leadership at the SECF Annual Meeting in November.

 

I recently read a blog post from Pablo Eisenberg entitled, “The Social Innovation Fund: Innovation for What?” In it, Mr. Eisenberg criticized the Obama Administration’s Social Innovation Fund for focusing too small an investment on only a few large, well-known nonprofits and engaging only a small number of very large foundation supporters.

 

In particular, Mr. Eisenberg points to rural communities that will essentially be left out of the game, and notes an opportunity for innovation that the fund will certainly miss:

 

Thousands of small nonprofits in rural areas and in regions currently underfunded by philanthropy are in desperate need of financial support. To meet this need, the Administration could use the Presidential bully pulpit to urge the foundation community to create new, large rural and regional foundations with the capacity to reach out to these overlooked nonprofit organizations and their communities.

 

Working in Arkansas, a predominantly rural state, I completely agree with Mr. Eisenberg’s criticism of the Social Innovation Fund and about missed opportunities in rural philanthropy, and I hope he’ll speak more to that during his live debate at the SECF Annual Meeting. But I also think that those of us who live in rural states bear our share of the responsibility for changing the game. Before we create “new, large rural and regional foundations,” those of us who are already working in rural areas need to ask ourselves some serious questions:

 

• What are we going to do to make rural America a priority for national funders and the federal government?

• What are we going to do to attract public resources to leverage our grantmaking and make scalable best practices?

• What are we going to do to influence public policy decisions?

• What are we going to do with our limited resources to be part of the solution as opposed to continuing to perpetuate the problems through grantmaking practices and approaches?

 

I can think of three things.

 

First, we can become advocates.  We can help policymakers in Washington correct their misconceptions of rural America as an agrarian Utopia and help them see the true challenges of joblessness, poverty and out-migration that rural communities face. We can inform the process of advocating federal dollars so that rural localities could collaborate on initiatives that would benefit broader regions. We can go to the Hill and talk with our congressional leaders about funding formulas. We can support research that informs the policy debate. We can bring in technical experts to help us consider the best short?term and long?term approaches. We can use our convening power to spur conversation and educate policymakers and advocates about what is best for our rural communities.

 

Second, we can be activists. Philanthropy is sometimes called the research and development arm of society. At our best, we can use our unique role to identify and understand the dimensions of deeply rooted social problems, test strategies to address them, and serve as a catalyst for change. The creation of new economies in rural areas with livable wage jobs; building the capacity of our nonprofit infrastructure to play its vital role in rural society; and bringing to scale the outstanding work of many of our nonprofits to provide services and supports to rural citizens — all of these are more likely to happen with activism. I know that “activism” is a scary word to most funders, but we need to get over our fear and begin collecting good data, educating our constituencies to develop community change goals and actively influencing how resources are attracted to and used within our communities.

 

And finally, we can be accelerants, the catalysts for change that light a fire under rural grantmaking. Nationally, more needs to be done to grow the capacity of our vitally important community foundations in rural areas and the affiliate structures in those areas with affiliates. But community philanthropy must include those who live and work in rural communities as part of the solution and not simply as the recipients of benevolent gifts. Foundations and communities must join together in collective or collaborative strategies for community change.

 

Yes, Mr. Eisenberg is right. Rural America deserves philanthropy’s attention. But it’s up to us to make sure we get it.

Our featured guest for this post is Bruce Trachtenberg, who has been the executive director of the Communications Network, a nonprofit that promotes the effective use of communications in philanthropy, since May 2006. Before that, he worked for the Edna McConnell Clark and Wallace Foundations, and several for-profit companies.This post is a re-post from The Communications Network blog.

I just finished reading a brief, but unfortunately "sobering" (their words) report from the Center on Effective Philanthropy (CEP) that also doesn't mince any words in describing what it calls a failure of foundations to keep their grantees well informed about how they were responding to the economic downturn over the past couple of years.

Based on surveys of over 6,000 grantees from 37 foundations across the country, CEP found that:

• Nonprofits do not perceive funders to have communicated their responses to the economic downturn clearly, if at all.
• Nonprofits report that funders have offered them little useful help in responding to the challenges of the downturn. 

The report goes on to say:

If anything, CEP researchers Shahryar Minhas and Ellie Buteau, PhD, understate the point when they write:

More than just helping them feel included in their funders' plans, the report reminds that it's unrealistic to expect grantmakers and grantees to work together in harmony toward common goals when one of the two is ill-informed. As the report states:

From its vantage point, CEP says says to improve grantee/funder communications foundations need to:

• Clearly communicate with grantees about their own responses to the economic climate.
• Be involved helping grantees consider changes they are making in response to the economic climate.
• Work to build better relationships with grantees, particularly by taking the time to understand the goals and strategies of grantee organizations.

While calling the overall findings "bleak," the report did find some bright spots.  These included, The Cleveland Foundation, which is cited as among the top ten funders on how grantees measured the value and usefulness of foundation communications with them about the economic impact. 

The full report is available here.

This guest post comes from Gilbert Miller, a trustee of the Beloco Foundation in Columbus, Georgia. Gilbert is participating in a panel discussion of next generation trustees at the SECF Family Foundations Forum, entitled "Where You Lead, I Might Follow — Perspectives from the Next Generation. 

 
I am not alone!

Those words keep coming to mind at every session of this year's Family Foundations Forum. It's long been the secret shame of our foundation that things weren't as 'together' as they may seem. We disagree on grant requests, we have a hard time assessing positive change and gift effectiveness, we often struggle with what our 'next steps' should be. Sometimes it feels like we're just not adequate enough to be tasked with the awesome responsibility of granting funds to the communities and efforts we love so much.

But it turns out, we're not alone.

The 'we' I now refer to includes over sixty members of the Southeastern Council of Foundations, from family foundations across the Southeast. They, too, share the same concerns and face similar struggles behind their own closed doors. Their difficulties are very much like those I have faced. The relief that brings is comforting, to say the least.

What's more, the power to reference each other's challenges and share in the solutions and outcomes has already benefited our foundation tremendously. The network of individuals here, from all backgrounds and experiences, has provide a deep well of knowledge to draw from. A simple suggestion of a pie chart in a meeting this morning solved a long-standing issue of how best to communicate current requests and their relationship to our capacity to give. That's just one 'ah-ha' moment. There were dozens of others by lunchtime.

Entering the SECF's afternoon session, my 'we' and I are emboldened and hopeful. We stand together knowing that somewhere among our shared experiences are answers to long held questions. We know that our faults can be fixed and that our futures will be bright. We can finally rest in knowing that, while the work ahead may prove difficult, our success is no longer in question. We now have friends who have been there; friends who are on the other side, showing us the way; friends who offer help whenever it is need.

We are not alone.

Susan Price is Vice President of the National Center for Family Philanthropy, and a featured keynote speaker at the upcoming SECF Family Foundations Forum in Charleston, SC, May 2-4. Click here for more information and online registration.

I recently returned from a week of storytelling camp. This is a great opportunity offered periodically by a family foundation trustee in Connecticut to a small group staffers from various nonprofits. The camp was led by Donald Davis, a nationally recognized storyteller from North Carolina, who believes that telling stories and listening carefully to others’ stories can further greater understanding and bridge divides among people. He urged us take our time in telling our stories because details paint a clearer picture for the listener. It reminded me of the time a few years ago when I participated in the Southeastern Council’s family foundation forum in Mobile, AL. I was surprised to see on the agenda that the first hour was listed as “Introductions.”
 
As a bit of a Type A personality who favors fast-paced programs, I couldn’t fathom how it would take that long for the participants to say their names and identify their foundations.  Turns out, each one told a  little story, combining various pieces of their family’s philanthropic history, their grantmaking and something about a recent success or current challenge. The introductions took up every bit of that hour. And it was the best part of the program!  I was enchanted with the passion of the speakers, and Iearned so much about how they go about their work. I shouldn’t have been surprised. We know from research that family foundation representatives who attend conferences tend to rank “networking” a bit higher than “attending concurrent sessions or plenaries,” not because the formal program isn’t valuable, but because connecting with peers can have the biggest payoff over the long term. We want to hear the stories. Some of the best ideas come from other foundations who have “been there, and done that.”  Connections made at a conference can last a lifetime. I can’t wait to attend this year’s forum to hear everyone’s stories—in the hall, at a meal, or during a session. Take your time telling them. I’m not in a hurry.
 
 
Susan C. Price
Vice President
National Center for Family Philanthropy

Cookie Sprouse is executive director of The Chapin Foundation in Myrtle Beach, South Carolina and has worked in family philanthropy for more than 25 years. As a grandmother herself, she has a strong personal passion for fostering philanthropy in future generations.

 

I just registered for the Family Foundations Forum in Charleston, May 2-4, and I’m already so excited I can hardly stand it. This meeting is always very special to me, because it is the one time each year when I can get together with a small group of other family foundation staff and trustees and talk comfortably about the things that really matter. It’s where, instead of feeling like a number, I can feel like I’m among, well, family.

 

Gatherings like these are important in any profession, but I think especially so in philanthropy. There is a great deal of intimacy in our work, between our foundations and the communities we serve, and among those who govern us. Having an intimate setting in which to feel “safe” as you learn, make connections and even admit your weaknesses is really a blessing. It’s an opportunity for professional and personal development that I would hate to miss.

 

Plus, I have to admit that being in Charleston this year gives the whole thing an extra layer of charm. I was reared 70 miles from Charleston so I consider myself a “Carolina Low Country Girl.” The month of May will be a beautiful time! In addition to a really solid and exciting program, there will be plenty of opportunities to enjoy the amenities of the Holy City! In particular, I’m looking forward to the Low Country boil on Sullivan’s Island and a special reception at The American College of Building Arts. Historic and architectural preservation are strong in Charleston, and the city provides a perfect backdrop to our discussions of stewardship and cultivating future generations.

 

If you haven’t had time to register yet, I hope you will. (It’s so easy!) I’d love to see you among my friends in family philanthropy in Charleston!

 

- Cookie Sprouse

 

 

 

Ron Hagan is a featured speaker at the upcoming SECF Conference on Investing for Foundations, April 22-23 in Atlanta. Click here to learn more or to register.

Standards are something that most of us accept as part of our everyday life.  They have become such an integral part of our existence that the average person gives little or no thought to everyday products and services, and how they work.  Standards make modern conveniences possible: light bulbs fit into lamps, electronic files are transferred over the Internet, trains move between states because the tracks are the same gauge, and the list goes on.

 

The American National Standards Institute defines a standard as "a recognized unit of comparison by which the correctness of others can be determined."  Simply put, standards make life safer and help organizations operate more efficiently.

 

In spite of the vital role that trustees of foundations play in protecting the economic health of charitable institutions, uniform standards that define how they should perform their fiduciary duty do not exist.  The investment community compounds the risk for donors caused by the lack of a fiduciary standard.  For example, procedures vary greatly from one investment firm to another for selecting and monitoring money managers and the securities in which they invest.  The reason; firms that provide investment advice, manage mutual funds, and offer alternative investing programs have yet to adopt common rules.

 

Imagine if airplane manufacturers had no standards to guide the way wings are made.  Many airplanes just would not fly and there would be no commercial aviation industry.  Yet tens of thousands of transactions, affecting the accounts of donors and beneficiaries, are handled every day without a recognized standard for managing the investment decision-making process at foundations.

 

No better example of the catastrophic effect of the lack of standards exists than events of September 11, 2001.  In the communications world, interoperability is very important.  It is a word that describes how electronics equipment exchanges information directly and satisfactorily between devices and their users.  On September 11th, many emergency response agencies were unable to communicate due to the use of different communications equipment and frequencies.  The Department of Defense reported later that hundreds of people died on September 11th due to the lack of a needed communication standard.  Because of the unfortunate lessons learned at the Pentagon and the World Trade Center, local, state, and federal emergency agencies are all looking for universally accepted interoperability standards and equipment to enable radio and telephone communication between responding units.  Sadly, their efforts are too late to save victims of the 9/11 attacks.

 

While it is unlikely that people will die from the lack of fiduciary standards, the economic threat is wreaking havoc.  Massive fraud cases like the Madoff and Stanford Group’s Ponzi schemes gained their start because fiduciary standards were missing.  Although more subtle, a just as serious danger lurks.  The difficulty fiduciaries have in benchmarking investment firms’ practices, due to the absence of standards, sets up the potential for the depletion of asset values from undisclosed fees and conflicts of interest.

 

The lack of standards to guide the conduct of fiduciaries is primarily responsible for the uncertainty felt by trustees and members of investment committees.  Confusion and chaos in committee rooms are symptoms of a similar situation that existed on a wide scale right after World War II.  The realignment of nations quickly showed that a less regional and more global economy was forming.  In order to ensure that products and services could move across borders, standardized ways of making them were needed to guarantee their quality.  Just as countries needed standards to make global commerce safe and profitable, so, too, foundations need uniform process standards for its fiduciaries and their investment providers.

 

Ronald E. Hagan

Chairman of the Board of Directors - The Investment Fiduciary Leadership Council

www.iflcouncil.org

 

 

Ron Hagan has served as chairman of the non-profit Investment Fiduciary Leadership Council since 2008.  He is also President and CEO of Roland|Criss which is a Professional Fiduciary Organization serving foundations and pension plans in a named fiduciary capacity.  Ron has a lengthy career in helping trustees develop their oversight skills in the four disciplines for fiduciaries; governance, controls and practices, administration, and investments.  Prior to joining the Roland|Criss team he was a Senior Vice President and member of the Executive Committee of the First National Bank of Commerce where he served as a fiduciary on its Asset Liability Management Committee.  Earlier in his career Ron was a Principal with Booz, Allen & Hamilton.  His duties at Booz, Allen included advising executives of Fortune 500 companies on prudent fiduciary processes.