Southeastern Council of Foundations

The Philanthropy Witch Hunt Grows

Wednesday, March 10, 2010 by Betsey Russell

I had to read this article in the Palm Beach Post more than once to believe it was true: "Give us bigger slice, local leaders urge MacArthur charity." It seems the commissioners in Palm Beach County, Florida don't like the way the Chicago-based MacArthur Foundation's board is distributing its grants. It's founder, John D. MacArthur, who died in 1978, spent a great deal of time in his well-loved Palm Beach, and local politicians say that his foundation's giving should match that legacy.

The fact that a community is disgruntled about how or what a foundation funds is nothing new — but the fact that local political leaders are challenging that foundation in the press is indicative of a new era. What used to be quiet, private criticisms are now publicly splashed across news media. We all realize by now that society by and large does not realize what foundations do and how they add value, but now the issue has become critical as policy makers, from Congress to local county commissions, are questioning foundation practices and looking at foundation regulations - and assets - with a new eye.

The Philanthropy Awareness Initiative (PAI) will soon release a report that will show just how much (or how little) local policymakers know about foundations, and PAI's leader, Mark Sedway, will share findings and discuss the implications at the SECF 2010 Annual Meeting in Mobile, AL this November. I'm not optimistic about the results of that report, but I am eager to hear Mark's take on it all.

Maybe it is just a "witch hunt" in a time of economic strife, but those of us in the foundation world have no one to blame but ourselves. Philanthropy information has been notably absent in conversations about public policy for decades. We should have been sharing our stories long, long ago.

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!

Corporate Grantmaking through global volunteerism

Friday, February 19, 2010 by Dot Neale

I would be interested in others' experiences with corporate grantmaking through international programs which strengthen the home company as a global enterprise and provide valuable professional development for employees to be more effective leaders in the world market.... an innovative approach to corporate grantmaking. Note a recent article in the British HR Magazine:

http://www.hrmagazine.co.uk/news/features/968670/Motivation-Corporate-Social-Responsibility---Engaged-doing-good/

I have experienced some of the impact of programs like this as I have worked with a number of IBM Corporate Service Corps teams referenced in this article which IBM sends to developing countries. The excitement, company loyalty, and improved global leadership skills are evident.... all while donating a valuable service The program has similarities to a 'corporate' Peace Corps.

Overlooking Basics Leads to Scandal

Thursday, January 14, 2010 by Betsey Russell

I must confess I've derived some chuckles and a lot of incredulous head-shaking as I read news lately about the sole trustee of the New York-based Judith Rothschild Foundation who disappeared for several months and left 17 grantees without their promised grant checks, which totaled about $100,000.

You can get the details — which read almost like fiction — from articles in the New York Times or the Wall Street Journal. But long story short, the foundation was created by the late Judith Rosthchild, a New York artist, to help share the story of her own work and foster new artists. She named her friend, Harvey S. Shipley Miller, as the sole trustee.

That would be mistake number one, wouldn't you agree? Aside from the ethical considerations of having a single trustee, we often talk hypothetically about what would happen if a key leader were "hit by a bus." According to Mr. Miller, who recently resurfaced, this wasn't far from the truth. He claims he was badly injured in a fall at his home months ago and has been unable to communicate all this time. If we take him at his word, then that's all the more reason to have a plan in place for communication for any grantmaking foundation, no matter what the size or scope.

Sounds like Mr. Miller would benefit from SECF's upcoming Essential Skills and Strategies for Grantmakers workshop. If he were to attend, he'd learn some of the basic ins and outs of foundation rules and regulations from seasoned veterans in the field — including key points on ethics and communications. He'd also get his hands on some valuable philanthropy resources that would definitely inform his grantmaking.

He can't attend, but you certainly can! The two-day workshop takes place in Atlanta March 3-4. Click here to learn more, view the full syllabus and register.

Foundations Must Help Media, Public Understand Philanthropy Information

Wednesday, January 13, 2010 by Mike Howland

An article in the January 10 Arkansas Democrat-Gazette, "Transition from Sparks Hospital to Charitable Entity a Long Process," is noteworthy in two respects: it is a great example of a local reporter, Laurie Whalen, reaching out for a larger perspective on philanthropy, setting up a foundation and foundation regulations; and it underscores the importance of having foundation officials who are accessible to the media, willing and capable of explaining philanthropy policy in terms that the average reader can digest and comprehend.

In this instance, Heather Larkin, president and CEO of the Arkansas Community Foundation in Little Rock, offered a very helpful explanation of health conversion foundations, while articulating that transparency and accountability must be hallmarks of all foundations. Kudos to Whalen and Larkin for helping Arkansas citizens to understand the challenges and nuances involved in the creation of the Fort Smith Regional Healthcare Foundation out of the sale of the non-profit Sparks Regional Medical Center to a for-profit health care provider and simultaneously increasing public awareness of the extraordinary benefits that foundations offer their communities.

Why Effective Philanthropy Isn't Democratic

Monday, January 4, 2010 by Betsey Russell

I've been mentally wrestling lately with the tension that appears to be growing in our country between democracy and philanthropy. (It's a fun mental exercise when one is pretending to nap in order to avoid an excess of familial love over the holidays.)

For those of you who are sticklers for semantics, in my mental arguments, I consider democracy in the purest form: one person, one vote. I also simply "philanthropy" to mean "charitable giving."

The Chase online giving debacle and the concept of "voting" for philanthropic decisions brought this question to a head for me. After announcing with great fanfare that they would provide a transparent way for Facebook users to determine how $4 million in corporate philanthropy would be disbursed, Chase took down their public scoreboard and reined in their process when the top vote-getters turned out to be causes that Chase found to be too controversial. The result has been some significant brand backlash for Chase.

But even if Chase hadn't chickened out, would this approach to giving really have been effective? What knowledge did the thousands or millions of voters bring to the process other than the know-how to click a button when asked?

For me, it underscores something that I've stated before: effective philanthropy is NOT a democratic undertaking. Instead, philanthropy is a very personal method of providing support to a cause or addressing an issue that resonates with the giver or givers. While I do believe that a variety of educated perspectives help strengthen understanding and result in better decision-making, I think opening that process to the masses simply makes it a free-for-all or popularity contest.

One of the best means that I've seen of combining a focused approach AND a variety of perspectives to make effective giving decisions takes place at the Atlanta Women's Foundation. Their grantmaking committees extend beyond the board of directors to include women of all races and from all economic strata. These women gather together several times over the course of the grantmaking process, attend site visits together, and have passionate, intense discussions about which organizations will have the greatest impact on Atlanta's most vulnerable women and children. It's a heart-wrenching process that I've been through more than once.

And there is never, ever, a single vote taken.

It's not a democracy. It's an educated, informed consensus. It leaves open questions and possibilities for the next go round, and engages its participants far beyond a simple "aye" or "nay." It's very hard work — and educating broader audiences about its effectiveness is even harder. But it beats a popularity contest any day.

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?

Community Foundations -- Linchpins in the Philanthropic Infrastructure

Tuesday, December 8, 2009 by Suzanna Stribling

Leslie Lilly, President & CEO of the Community Foundation of Palm Beach and Martin Counties, recently posted an excellent opinion piece in the Sun Sentinel, noting the importance of community foundations' contributions in Florida and across the country.

I have been fascinated by community foundations since I started working in the field back in the mid-80's. At the time, I was in New Haven, Connecticut, where the local community foundation, under the leadership of Helmer Ekstrom, was forging new ground in a number of social areas and bridging the difficult donor chasm of Town and Gown in a community where Yale University dominates the landscape.

Shortly after that, I had the pleasure of working for Alicia Philipp at the Community Foundation for Greater Atlanta when she hired me to help launch what's now the Georgia Center for Nonprofits. Alicia has a long history of incubating important missions, from the arts fund to AIDS fund to the women's foundation -- she's the walking example of Mr. Woodruff's famous remark about how much can be accomplished when folks aren't concerned about getting the credit.

Since that time I've watched the community foundation field grow at a tremendous rate and continue to mature in ways both expected and surprising. In the current environment, across the South, community foundations have played an important leadership role. Not only do they raise and distribute much-needed unrestricted cash to the front lines, they have convened difficult conversations, challenged donors to think in new ways about the needs of their communities, and led the way in listening and responding to local nonprofits.

At SECF, our membership includes all kinds of community foundations -- small ones, big ones, old and new ones. But whether they are powerful players or struggling nonprofits, they have become key ingredients in the broader recipe for a healthy philanthropic community. We value community foundations and recognize the vital role they play in our field -- bridging donors and nonprofits in flexible ways and helping lead other foundations in their communities with new grantmaking knowledge and skills.

Here's to another year of health and growth for CFs!

New Leadership in Foundations is on the Move

Tuesday, December 8, 2009 by Suzanna Stribling

In this week's Chronicle of Philanthropy, Pablo Eisenberg exhorts foundations to take a closer look at their program officers when looking to hire new talent, noting a recent Council on Foundations report that over 80% of foundation leaders hired between 2004 and 2008 came from outside the foundation.

Here at SECF, we couldn't agree more and we're doing something about it. Our Hull Fellows program, a leadership development effort launched in 2001 and aimed at those new to philanthropy, now boasts over 150 alumni. This year, as part of our new strategic plan, we'll be reinventing the program, under the leadership of Kathryn Dennis, President of the Community Foundation of Central Georgia. We'll be adding an annual mentoring component, matching seasoned foundation leaders with those new in the field and connecting alumni in new ways that allow them to continue learning and growing together.

We believe leadership development is key to a strong philanthropic environment and we want our members to be well-versed in the broad array of knowledge, skills and strategies it takes to be a visionary grantmaker. Gene Cochrane, President of The Duke Endowment, is helping us craft new ways to develop and deliver strong programs in this area. With the help of our extraordinary members and their willingness to give of their time and talents to each other, we'll be working to develop the next generation of philanthropic leaders in the South . . .

from the inside out! Stay tuned!

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.

Effective Philanthropy Takes Time

Monday, November 23, 2009 by Byron Harrell, Sc.D.

Dr. Elinor Ostrom of Indiana University won the 2009 Nobel Prize in economics for her research into the role of voluntary associations in solving a wide range of public challenges. Typically, society manages its “public assets” (i.e. fish in the ocean, lumber in public forests, etc.) in one of two ways in order to avoid uncontrolled consumption. First, society treats the public asset like a private asset and submits its consumption to market forces. A good example is offshore oil leases in which potential users competitively bid to lease the “land” and extract oil. Second, society can manage public assets through regulation. An example of regulation is the issuance of fishing licenses that limit the species and number of fish that can be pulled from public waters. In theory, the public’s interests are protected through these two approaches.

Dr. Ostrom won the Nobel Prize for her work exploring a third way to govern the use of public assets known as “voluntary agreement”. Over many years, she documented dozens of examples in many countries where consumers of public assets voluntarily reached agreement to limit and control consumption and users were often more satisfied with the results than under marketplace or regulatory schemes. Voluntary agreement is based on the principle of “reciprocity”- -the belief that the beneficial acts of one party obligates others to reciprocate with equally beneficial acts. Reciprocity also develops trust and improves cooperation.

Deeply imbedded in the concept of voluntary agreement is evidence that it works best from the bottom up. Grassroots groups and users of assets who are closest to the scene reach more effective and durable rules than top-down efforts. Apparently, empowering the people who have the most at stake to regulate the use of a public asset is the key ingredient. How these rights are defined through “rules of the road” such as policies, practices, court decisions, and other official acts seems to be a big help in governing these scarce public resources. Dr. Ostrom has provided us with an empirically rigorous demonstration of these propositions around the world.

This is where foundations should pay close attention to advocacy that starts with grassroots support. The formula that has worked for years in philanthropy is a three-pronged approach to (1) build a large group of local supporters in favor of an effective social intervention (such as a nurse-family partnership based on a well-researched model), (2) independently evaluate a demonstration project to show that it works, and (3) advocate for the elimination of public policies that resist wide-scale adoption and expand public policies that support adoption. All too often, foundations take a “build-it-and-they-will-come” approach before considering best-practices, evaluation, or advocacy. This is known as the “Lone-Ranger” approach which most often leaves them mired in perpetually funding programs that rightfully should qualify for public financial support.

Admittedly, it will take a long time to build grassroots coalitions of the right people, start community interventions that use best practices, and develop advocacy maps so that grantmakers know in advance the public policies they want to change. However, the Lone-Ranger alternative rarely succeeds.

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.

Philanthropy by Popular Vote?

Wednesday, November 18, 2009 by Betsey Russell

As a communications professional, I was in awe of Barack Obama's campaign for the presidency. He reached through the Internet and tapped the passion of thousands of people who had felt disenfranchised by the political system. He mobilized them and created a dramatic shift in the way politicians now view the public.

To my way of thinking, that was a resurgence of true democracy: one person, one vote, re-engaged via social media. Not everyone liked it, of course, because it did tip the balance of power and shake up the status quo.

That said, it calls into question the value of evaluating and mobilizing popular will versus taking a more studied and strategic approach to creating change.

Now, I see this same question coming from inside the philanthropic sector. It started with Facebook's "causes" pages and other social media outlets, where like-minded individuals could rally around shared concerns, pool donations, get engaged as volunteers. But earlier this week, FastCompany posted an article about the new Chase Community Giving Program, a collaboration between Chase and Facebook that will allow users to vote on how Chase will spend $4 million from its corporate philanthropy fund. There are 500,000 charities in the running.

According to the article, "The charity receiving the most votes will receive $1 million, the top 5 runners up will get $100,000 each, and 100 finalists will get $25,000 each. It's all money that Chase would give to charities anyway, but this is the first time that the bank is crowdsourcing its decisions."

"Crowdsourcing," or abdicating?

To say I have mixed feelings about this is an understatement.

On one hand, I'm excited that hundreds of thousands of Facebook users might engage in thoughts of philanthropy, learn about what different nonprofits are doing, and hopefully ignite a personal spark of giving and engagement that will pervade their behavior going forward and result in an even more generous society going forward. I recently heard Aaron Dorfman of the National Center for Responsive Philanthropy cite studies showing that the wisdom of a semi-educated crowd often resulted in better decisions than a homogeneous panel of "experts." That could be true, depending on your definition of "better decisions."

On the other hand, there's the danger that the "winners" in this type of contest are the nonprofits with the best social media engines, not the best or most effective programs. As nonprofits and foundations increasingly come under attack for not doing enough, popular support could be a tempting way to fend off proposed charity or foundation legislation or negative press. I worry that strategic philanthropy could go the way of politics — where popular support at all costs becomes the prize, rather than actually creating a positive impact. Support will come at the expense of doing the more difficult work of demonstrating true effectiveness.

That leads to a point about corporate social responsibility. Are the leaders of Chase's corporate giving just going to become keyboard jockeys? Have they all been laid off? Is crowdsourcing Chase's new attempt at free outsourcing? Or is it just a way to avoid making some tough decisions?

The blog Modern Giving examined a few of the pros and cons of crowd sourcing in July, including a description of the John S. and James L. Knight Foundation's Knight News Challenge as an example. (To me, the News Challenge was a great example of crowdsourcing ideas in a more defined and effective way.)

Don't get me wrong: I believe that crowdsourcing is here to stay. I also believe that it may prove to be an effective tool for raising awareness and potentially creating positive change.

But I also think it won't make the difficult task of explaining the work and the value of private foundations, family foundations, community foundations or corporate philanthropy any easier.

What to YOU think?

Dan Pallotta Speaks at SECF Conference in Memphis

Wednesday, November 11, 2009 by Tom Keith

Author Dan Pallotta spoke during the opening session of the SECF Annual Conference in Memphis this afternoon. Pallotta is author of the book "Uncharitable". He challenged the audience to think differently about the non profit sector. He argued that non profits are being judged by an antiquated system that does not measure the results of an organization's efforts to make impact but more about their spending ratio of program expenses to overhead. He suggests this is a flawed approach and I agree. It is also difficult for talented smart young people to consider the non profit field because of the stigma around the amount of money a non profit professional should be paid. Also, virtually no money is budgeted or even tolerated for non profits to invest in marketing and public relations. Most must rely on the obligatory public service announcement which often airs during the early hours of the morning. Although risk taking could reap significant rewards, non profits are often expected to limit risks often at the expense of potential success. I thought Dan Pallotta was thought provoking and passionate, I felt as though not all of those in the audience agreed with his views. I do agree that a few self appointed watch dog groups judging non profits is questionable. However, we can't get lost in a spending free for all without any attention given to expenses. What the number or percentage needs to be, I cannot say but I do see his point. We are never going to solve major social issues without some kind of system change and non profits need to have the tools necessary to affect that change. Otherwise, according to Dan P, nothing gets done and that is a real waste of time and money.

Taking Control of the Conversation

Wednesday, November 11, 2009 by Betsey Russell

We just heard Dan Pallotta, author of Uncharitable, speak about how nonprofits (and foundations) need to banish the word "overhead" from their lexicon and change the focus of donors and foundation regulations from the percentage of the gifts given that go to operating expenses to a focus on what really works.

In other words, said Pallotta, we need to take control of the conversation.

In my opinion, the new communities and discussions fostered by online communications tools and social media will play a huge role in that. We saw it with the presidential election in 2008, and we can see it going on now.

Only mere weeks ago, the nonprofit KIVA garnered attention when it was pointed out that the way in which it uses donations wasn't necessarily what donors thought. KIVA and some of its intelligent advocates took control of that conversation, and I believe that KIVA has emerged stronger than ever as a solid, effective investment - and I have no idea what their "overhead" is. Nor do I care.

There is a wealth of information and opinions that we can tap into and spaces where we can discuss and create a new conversation about philanthropy and the nonprofit sector within the realm of cyberspace.

Foundations of all sizes, stripes and opinions can and should be a part of this discussion. Who's ready to take control of the conversation?

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!

Are "social investors" the only true philanthopists?

Tuesday, November 3, 2009 by Betsey Russell

I saw a post this morning from the Faith Based Philanthropy blog of Paul T. Penley, senior research analysts at the philanthropic advisory firm Excellence in Giving. In his post, Penley essentially says that if donors give just to prove themselves generous or selfless, then their philanthropy (love of human kind) becomes philegy (love of self).

(My first reaction was: "Okay. I can see that. But in this economy, as nonprofits are struggling to deliver vital services, who really cares what a donor's motivation is? Let's take what we can get.")

Continuing his train of thought, Penley says that,

"In true philanthropy we are not satisfied with good intentions or generous amounts. Rather the measure of our generosity has become meaningful and lasting impact. Our hearts yearn to change the lived experience of people in need, and nothing less will do. We educate ourselves, seek advice, analyze past giving, and strategize for the next move to ensure that our hearts’ desire to transform lives is realized."

Am I reading this wrong, or does it sound like "social investors" are now the only true philanthropists?

Sorry, I don't buy it. You can be extremely strategic and still be self-serving. And you can be completely selfless and anonymous and create great change in one human's life without making even the slightest dent in the trials of man writ large.

I don't think faith and selflessness are determined by wisdom or sophistication in giving. And I believe it takes all manner of givers, motivations, strategies and styles of giving to make the fabric of philanthropy.

I'd also love to hear someone other that the cadre of "philanthropic advisors" weigh in on this debate.

Foundation folk? Private philanthropists? What's your take?

Crisis Grants Also Have Value

Monday, November 2, 2009 by Tom Keith

I have been reading a lot of different articles over the past few months trying to gain as much insight as possible about the woes of philanthropy and non-profits in an ongoing recession. I read that this recession will be a test of the fortitude and viability of the nonprofit sector and only the strong will survive. I have also read that donors are being more selective than ever and more focus is going to be implemented by Foundations across the country.

There is nothing wrong with focus and expecting results from your investments. However, a real balancing act for Foundations is the long term impact grants and the short term “crisis” grants. Now don’t get me wrong, I am not advocating that we trade impact grant dollars for crisis grant dollars but we cannot ignore the demand for them.

As a funder in a poor state, we have received more grant proposals in the last 12 months from Free Medical Clinics (9), Food Banks and Soup Kitchens (13), Homeless shelters and temporary housing facilities (14), and clothing venues (3) than in any single year over the past 13 years. People are hurting and they are lining up outside of these facilities in very large numbers. Meanwhile, these organizations are suffering the consequences of a poor economy as their dollars continue to dwindle.

The balance I referred to earlier is about paying attention to your social environment and filling the gap even if it does not have a long term impact. We are willing to invest some of the Foundation’s funds for these purposes.

Philanthropic scholars and theorists would likely tell us we are wasting our money because there is very little to measure with these kinds of grants and you really don’t show that you’ve made much of a difference. Well, so be it.

Let’s call it tithing to our religious institutions. We give 10% of our grantmaking budget for the purpose of basic needs and crisis situations because the demand is so great. In this community, all you have to do is drive past the homeless shelter or soup kitchen at 5:00 in the afternoon and the line goes on forever. Drive down to the food bank and people are lined up out the door and around the building. Those are all the indicators we need for those funds.

It is the true meaning of "evidenced based” because we have seen it with our own eyes. We all have difficult decisions to make and we certainly want to make the most pragmatic ones. Let’s not forget those who are victims and are faced with the consequences of all the things that have gone wrong over the last year or so. We can call it our own version of TARP or bailout money if it makes us feel any better.