Foundation Executive

If You Don't Tell Them, Who Will?

Tuesday, June 15, 2010 by Guest Blogger

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:

When asked how clearly, if at all, foundations had communicated with grantees about their response to the economic climate, 30 percent of grantees indicate that no such communication had occurred. Of those grantees that did report receiving communication, 22 percent indicate that their funder’s response to the current economic climate was unclear. This is almost three times the number of grantees that rate other communications from their funders as unclear.

Grantee comments about funder communication during this difficult time highlight the importance of, as one grantee says, “candid discussions of [foundation] priorities during the economic downturn.” Another grantee comments that “with guidelines changing, I feel a need for more frequent communication and reassurance. I fear that our funding could be swept away as the economy changes.”

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

Good communication matters. The less clear grantees find their funders to be in communications about what they are doing in response to the downturn the more likely they are to indicate that their funders have not helped them respond to the current economic climate.

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:

Grantees face significant demands while coping with the reality of fewer resources. Grantees who have found their funder’s response to be helpful tend to perceive their funder as having a better understanding of their organization’s goals and strategies. It is important that nonprofits have, as one grantee points out, “the help of the foundation staff in understanding the impact[of the current economy] and interpreting what that will mean for the [foundation’s] grantmaking.”

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.

"Quality Time" for Family Foundations

Friday, April 9, 2010 by Guest Blogger

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

The Lack of Standards Can Kill!

Tuesday, April 6, 2010 by Guest Blogger

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.

Do we leave the fate of philanthropy to business?

Friday, March 5, 2010 by Betsey Russell

In a recent column in Business Lexington, Anne Nash, a philanthropic advisor in Lexington, Kentucky, offered a fairly comprehensive summary of the ways in which the field of grantmaking is beginning to shift. In short, the lines between traditional grantmaking and business models seem to be getting more and more blurred. Perhaps one day, it will be difficult to distinguish between a grantmaking foundation and business empire.

Not that I completely disagree; there are plenty of arguments out there for adopting a more rigorous and results-driven approach to investing one's social capital. And no doubt new charitable foundations rules and regulations, along with ongoing foundation legislation, will evolve in response to these new trends.

While it's great that a growing number of corporate and business leaders and thinkers are eager to make their marks in the philanthropic sandbox, it's also true that no one understands the real challenges of foundation grantmaking like those who have been toiling here for decades. That's why it's so critical that foundation executives and trustees make their voices heard among state and national policy and law-making bodies. And one of the best places to do that is at Foundations on the Hill, March 16 and 17th.

It's still not too late to sign up. The more of us who visit the Hill, the louder our voice and the stronger our influence as our field grows and changes. Get the details on the SECF Foundations on the Hill webpage.

To add your name to the list, contact Helen Ishii, Director of Member and Government Affairs, Southeastern Council of Foundations, (404) 524-0911 or helen@secf.org.

See you in DC!

The Challenge Grant as Foundation Marketing Tool

Wednesday, December 16, 2009 by Betsey Russell

Today I read an article about the importance of challenge grants by Michael Kaiser, CEO of The Kennedy Center for the Performing Arts on Huffington Post. He writes specifically about the arts and arts grantmaking, but his points are well taken - particularly this one:

"Too many organizations that receive this first big grant build the infrastructure to support their new, increased programming without thinking about the day the grant period ends."

Amen, brother. And this goes for foundations as well. Sure, there's the regular work of administering a multi-year grant and the occasional story about it in the annual report or newsletter, but foundations usually miss the boat when it comes to really tapping into their ability to share their messages and mission in a truly meaningful way with others in their community.

Kaiser says,

"I have long lobbied foundations to make their grants to smaller organizations in the form of challenge grants. A challenge grant must be matched by other contributions, often by new gifts or increased gifts from existing donors. By forcing the organization to build a new, larger donor base during the grant period, the transition when the grant is over is eased. The foundation's money might be gone but the new donors attracted by the match help fill the void.

But many foundations simply do not want to do the oversight work required of administering a challenge grant. And if the foundation is not far-sighted enough to give a matching grant, the organization must be disciplined and smart enough to create its own challenge grant. The senior staff and board must use the grant period to build its donor base. A serious, concerted effort to attract new donors must be pursued."

Obviously, a challenge grant creates a solid marketing opportunity for any nonprofit, but think of what if can also do for the foundation. A community foundation, for instance, could offer its own donor advisors the opportunity to contribute to the challenge and subsequently mobilize a corps of brand ambassadors. A private or family foundation could convene community discussions about the arts (or homelessness, or whatever the issue) during the challenge grant period to stimulate more engagement and elevate its reputation as a servant leadership organization. Corporate grantmakers could couple the challenge grant with a cause marketing opportunity, engaging customers with the nonprofit in question while promoting their own corporate social responsibility. Foundation executives of all stripes could serve on discussion panels, provide newspaper editorials, or even serve as a media resource for the issue addressed by the challenge grant.

None of these are "one-off" opportunities. They can continue throughout the life of a challenge grant.

In engaging in marketing activities of this type, the foundation wins by elevating its profile as an engaged, caring member (even leader) of the community. The nonprofit wins through increased opportunities to cultivate more donors (which is also a win for the foundation). And the community wins through greater understanding of the issues it faces and the people and organizations that are tackling those issues.

We Exist, Therefore . . .

Wednesday, December 9, 2009 by Suzanna Stribling

Like my earlier post about the death of conferences, many have predicted the decline of associations in light of the many online, tailored connections that professionals now enjoy. For those of us working in philanthropy, where it seems a new association or “affinity group” pops up every day, this is news indeed.

So I ask myself, why do associations exist? Why does SECF exist? (Full disclosure: I’ve just sat for the Certified Association Executive exam so I've been thinking a lot about this...

Kevin Holland, on his blog Associations Inc., says: “Associations do not exist to "associate." They exist to promote the interests of the constituencies they represent.” He calls associations to task for merely duplicating “best practices” across various types of associations – meetings, newsletters, blogs, etc. – without really learning about the unique needs of their respective members and finding the point of collective leverage for them.

This year, SECF has spent a lot of time crafting a new strategic plan to better serve the private foundations, family foundations, community foundations and corporate grantmakers who gather under the SECF umbrella to promote their common interests. One of its elements is about just that – promoting the interests of philanthropy in the southeast by supporting the development of state-based grantmaker associations.

Why? Because if philanthropy is going to have a strong voice, it must mirror the political structure we live in – the federal, state, local model. Grantmakers must come together along geographic lines, not because they don’t also need to work globally, but because that’s where the point of leverage is. Associations work along a continuum, from technical assistance to one member to policy action on behalf of the whole. All the elements of association work are helpful to a field but it’s that work to congeal the collective voice that is most challenging and holds the most rewards.

We are your association. You pay your dues every year. Why do you think it’s important for us to exist?

Why Foundations Need to Embrace Social Media

Thursday, December 3, 2009 by Betsey Russell

You have to love it when you come across someone else's blog post that says exactly what you were thinking — only more articulately.

It's easy for me, as a consultant, to tell foundations that they should be using social media. But it's even better when the argument comes from a foundation executive. In this case, I recommend a recent post on What We Give, the blog of Larry Blumenthal, director of social media strategy, Robert Wood Johnson Foundation. Read his post "Why Foundations Need to Embrace Social Media" (I co-opted his title for this post) that appeared in the Philanthropy News Digest, or his thoughts about the challenges for foundations in adopting social media, or about how online interactions are key to "doing transparency the right way."

I congratulate Larry - and I've subscribed to his blog. Like a growing number of his colleagues, he recognizes all the objections and hurdles to using social media — but he also realizes that it's a venue that is critical to the future of effective philanthropy.

Stephenson Delivers Compelling Testimony on Philanthropy Resources

Thursday, November 19, 2009 by Mike Howland

Three cheers for John Stephenson, Executive Director of the J. Bulow Campbell Foundation in Atlanta, for testifying this morning at the House Ways and Means Oversight and Income Security and Family Support Subcommittees Joint Hearing on "Food Banks and Front-Line Charities: Unprecedented Demand and Unmet Need." (Click here to view his written testimony.) If you've not done it, I assure you that the first-time experience of testifying before Congress is quite intimidating. Yet Mr. Stephenson appeared confident in every respect as he offered clear, concise and compelling testimony in articulating the challenges facing the Atlanta Food Bank and other charities struggling to meet basic human service needs in the wake of the "Perfect Storm" wrought by the recession and the spike in unemployment. He explained how foundations like his have expanded the scope of their giving beyond traditional bricks and mortar projects to special grants to the food bank and other front-line charities.

Mr. Stephenson also outlined three ways Congress can facilitate greater philanthropic investment in meeting these overwhelming needs: (1) Continue to defeat any moves to cap charitable deductions; (2) Enact the single, revenue-neutral excise tax proffered in H.R. 4090/S. 676; and, (3) Extend the rollover of IRAs to charities without penalty, and expand the provision to include donor-advised funds at community foundations per H.R. 1250 and S. 864. Mr. Stephenson was followed in his testimony by Brian Gallagher, CEO of United Way Worldwide, who echoed his support of those three measures.

We thank Mr. Stephenson for his courage, and for the time and energy he invested in preparing and delivering his testimony and travelling to Washington. Let's hope Congress listens and acts!

By the way, 2009 was the first year that Mr. Stephenson, a former Southeastern Council of Foundations Board Chair, participated in Foundations On The Hill. Now this! Clearly, he recognized that the stakes for philanthropy on the government affairs front are at an unprecedented high. What about you? Please consider writing your Representative and Senators with your own stories about your foundation and community, encouraging them to embrace these critical proposals. And plan on joining Mr. Stephenson and your foundation colleagues who will convene on Capitol Hill for the next Foundations On The Hill March 16-17, 2010.

Let the Philanthro-Networking Begin!

Tuesday, November 10, 2009 by Betsey Russell

There are already many people arriving in Memphis for the Southeastern Council of Foundations Annual Meeting, and watching people greet their colleagues is truly uplifting.

Foundation executives, trustees, and staff of all stripes are converging here in the Peabody for three days of intense discussion about grantmaking resources, philanthropy policy, foundation legislation, and success stories and best practices from around the region. The content of this meeting will no doubt be phenomenal, but there's another lesson that's quickly learned by watching this group gather: Philanthropy is, and always will be, best facilitated through human interaction.

The family foundations, corporate grantmakers, community foundations and private foundations gathered here all share a common passion to serve their fellow man. We will talk in depth about strategy and practice, internal concerns and external perspectives. We will engage in discussions about education, health, art, community development, economics, leadership, communications, governance, the environment, effectiveness, partnership, advocacy and stewardship. But we will also share the joy that the work of philanthropy brings, and relish the face-to-face dialogs that are harder and harder to come by.

Relationships that are born and/or sustained throughout the year via technology will become stronger with a handshake or a hug. New ideas will be generated. Meaning and feeling and passion for those ideas will be communicated with facial expressions and tone of voice.

In other words, we're all here together to truly appreciate one another and strengthen the work we do.

It doesn't get much better than this.

Keep Charitable Deduction Issue Fresh for Policymakers

Tuesday, November 3, 2009 by Mike Howland

When foundations descended on Capitol Hill March 25th for the annual Foundations On The Hill visits, the major issue preoccupying foundation executives and trustees was the Obama Administration proposal to limit the deduction for charitable contributions by wealthy individuals. Many were surprised that the first major initiative emerging from an Obama presidency presumed (because of the President's previous experience with foundations and non-profits) to be pro-philanthropy was a seeming strike against charity and apple pie. How could we contemplate any move that might deter contributions to food banks and homeless shelters with unemployment and foreclosure rates escalating rapidly?

The Senators and Representatives with whom the Southeastern Council of Foundations delegation met were quick to reassure us that they felt the proposal defied logic as well. Their reaction at the time was bipartisan and virtually unanimous against the proposal.

In the ensuing months, the non-profit sector--or at least much of it--has championed the notion that capping the deduction for charitable donations is a recipe for poor public policy. Myriad umbrella groups, including the Council of Foundations, American Society of Association Executives and Association of Fundraising Professionals, petitioned Senate Finance Committee Chairman Max Baucus with a cogent, collaborative letter urging preservation of the deduction. It has been terrific to see non-profit and philanthropic infrastructure groups unite and, for the most part, speak with one strong voice.

However, there is a danger of the voice of philanthropy being muffled in the larger debate over health care reform to which the limit on deductions has been--at least so far--inextricably linked. And, let's face it, health care reform is sufficiently important that it should dominate the airwaves. But, if the charitable deduction limitation becomes law as a tradeoff for changes in our national health care system, let it not transpire because philanthropy neglected to weigh in forcefully one more time before the vote.

The importance of non-profit infrastructure groups weighing in on this issue cannot be overstated. However, there's nothing more compelling than individual grantmaking foundations and charities articulating poignantly how such a limit on deductions may inhibit the capacity to serve people in the policymaker's own backyard.

Paint the picture, and send it in today!

Our Conference is Not Dead!

Friday, October 30, 2009 by Suzanna Stribling

In the race up to our annual meeting in Memphis, I was startled to find in my inbox a link to Nathaniel Whittemore’s post “The Conference is Dead…(Does Anyone Care?).”

Well, I care.

We’ve spent countless hours over the past year working to welcome more than 500 foundation executives and trustees to an event that we proudly think of as the premier gathering of philanthropic leaders in the South. It’s been that way for 40 years and we’ve not seen much drop off in this year's attendance in spite of the dire predictions about meeting budgets, travel restrictions and too much to do.

Whittemore goes on to explain that what he really means is that “the conference model we have today - keynotes, plenary sessions, networking breaks, etc - is dead. And good riddance.”

I couldn’t agree more.

I’ve spent the last week planning for several face-to-face gatherings of our members and have given a lot of thought to the content of these events, always mindful of the best ways to serve our members. We’re constantly talking about how to make meetings fulfilling for members – What do they want? What do they need? What will inspire them? How best to facilitate sharing? And reviewing what I know to be true about our members -- grantmakers:

They’re smart – working for the common good -- whether it’s the arts, health or education -- takes know-how and the ability to perceive the interconnectedness in communities. No ostriches here.

They’re accomplished – most of our members came to the field after significant achievement in other fields.

They’re lonely – that thing about “you’ve had your last bad meal?” True. It’s also true that many grantmakers work alone and straddle the sometimes uncomfortable space between their grantees and their trustees. There aren’t a lot of people in the community that have their kind of job.

They’re challenged – it really is harder than it looks.

They’re very busy.

So, what I’ve learned is that all we really have to do is get them in a room together and provide useful tools for them to get the most out of their time together. From each other. Not from talking heads.

So here’s our pledge: we won’t have plenary sessions or panels or keynotes in 2010 unless they are knock-your-socks-off good. And we’ll always provide the open space for you to learn and share, be nourished and inspired, have fun and get the professional value you expect from us when you’ve taken the time to come together.

Dead? Or deal? What do you think?

Save the dates and don't miss SECF's 2010 Conference on Investing for Foundations at the J.W. Marriott Hotel in Atlanta and the Family Foundations Forum at the Charleston Doubletree in the Historic District, May 2-4.