Innovations in the Philanthropic Sector

A must read! What is next for Philanthropy (Monitor)

Katherine Fultons latest work is out. A follow up to her groundbreaking study Looking Out for the Future (produced by the Monitor Institute), What’s Next for Philanthropy is the latest in their decade of work.  The report:

• Explains why innovators are challenging the status quo—and what change could look like in the next decade.
• Identifies 10 “next practices” that are emerging despite the barriers to change.
• Illustrates how funders can combine the next practices to achieve their goals through coordinated, diverse, open and adaptive strategies.
• Discusses the shifts in data, tools, incentives and leadership that can accelerate progress toward the vision.

You can download the full report here

 

New Resources for Effective Philanthropy

Rockefeller Philanthropy Advisors received a three-year, $3.7 million grant from the Bill & Melinda Gates Foundation to launch a program designed to arm emerging donors with the knowledge to become effective philanthropists.

They will develop guides on issues as donor motivations and interest areas, philanthropic approaches and strategies, family roles and personal involvement, operational questions, and impact assessment. Featuring real-life case studies, the guides will offer examples designed to provide context and inspiration and, once completed, will be available free of charge through a new donor resource section at the RPA Web site that will also feature profiles of donors, philanthropically active families, and various supporting documents, resources, and links.

"Giving away money can be a relatively simple process; however, giving it effectively is an entirely different matter," said RPA board chair Kevin P.A. Broderick. "Helping donors create thoughtful, effective philanthropy is our sole mission and we are grateful to the Gates Foundation for providing core resources toward that goal.

Endowment Earnings Make Up Lost Ground in 2009

A recent study by the  Commonfund Institute found endowments held by foundations and nonprofits grew by an average of 21 percent last fiscal year. While it is certainly great news, keep in mind that this gain does not make up for the sharp declines of 2008. Those declines averaged 26-percent  in 2008.

Even though they made back some of the losses, many foundations and charities cut back further on giving and spending. Fifty-five percent of community foundations,gave less in 2009, while only 16 percent said they gave more.

The Community Foundation of Utah gave more - but this was our first year of giving!

 

The X Prize Foundation offers $10mm to fix the gulf

The X Proze Foundation which regularly offers cash awards for solutions to large-scale technological challenges, is building its latest $10-million competition around the BP oil spill.  Here is the application!

New loan program for cash strapped health charities in Colorado

The Colorado Health Foundation is launching a $3 million loan fund to help its "safety net" grantees offset delayed Medicaid payments from local government. The fund will help grantees that have strong operating ratios, a diverse income stream, and a stable management structure. Charities that meet this threshold will be able to apply for loans ranging from $50,000 to $300,000. Organiaztions impacted by the Medicaid payment freeze will ge thteir loans in just one week. The program will be administered by NCB Capital Impact in Arlington, Virginia. They are structuring the 4 percent interest rate loans, which are renewable annually, like revolving lines of credit. The foundation will only serve as an investor and will not review or approve applications for the program.

"For a number of reasons, nonprofits often don't have traditional and short-term working capital tools available to them," said CHF vice president of philanthropy Kelly Dunkin. "This is particularly true in today's banking environment. The Loan Fund [will provide] borrowers [with] short-term loans in larger amounts and at an interest rate well below what traditional lenders offer."

Gates, Buffett encourage nation's wealthiest to give half

Bill and Melinda Gates together with Warren Buffett have begun a campaign to encourage the nation’s billionaires to give at least half of their fortunes to charity.

The roots of the Giving Pledge campaign can be traced to a meeting in May 2009 where Bill Gates brought together some of the nation’s wealthiest philanthropists and discussed ideas including how to encourage wealthy Americans to give more.  Beginning with the Forbes list of the four hundred wealthiest Americans, the campaign will encourage the nation’s super-rich to pledge at least 50 percent of their net worth to charitable causes, either during their lifetimes or at death.

If the Forbes 400 take up this challenge, they could give an additional $600 billion or more to charity.  To put that in perspective, total charitable giving in the United States has topped $300 billion in each of the last three years.  According to IRS records and estimates by Fortune, the wealthiest Americans gave between 8 and 11 percent of the total adjusted income to charity in 2007. 

According to Buffett, anyone who is rich has thought about what to do with his or her money. “They may not have reached a decision about that, but they have for sure thought about it,” Buffett told Fortune. “The pledge that we’re asking them to make will put them thinking about the whole issue again.”

Learn more.

Program-related investments support organizations

In a time when many nonprofit organizations are struggling and there is little support for potentially impactful projects, many foundations are beginning to rely on loans, loan guarantees, and program-related investments, or PRIs, as a way of supporting these organizations without diminishing their assets.

Private foundations are required to disperse 5 percent of the market value of their assets as a condition of their tax exemption.  With the drastic decline in the stock market in 2008 and 2009, the amount that must be paid has likewise declined.  Because of this, many foundations across the country have begun to rely on program-related investments.  Program-related investments are similar to grants in that they put money toward projects that have financial need.  However, unlike grants, they also provide a return of the principle to the granting foundation, enabling them to put more money to work in the community.

Using a PRI, the Community Health Foundation of Western and Central New York was able to provide a $650,000 loan to Community Care of Western New York to begin an initiative that allowed more than two hundred rural elderly people to remain in their homes. 

More information.

Giving While Living (Atlanic)

This new report "Turning Passion Into Action: Giving While Living" from
Atlantic Philanthropies outlines the practice of giving while living, as exemplified by the foundation's founder Charles F. Feeney. The report covers motivations, strategies, the giving vehicles used and step-by-step recommendations for people considering (or seeking gifts from) like donors. Includes profiles of philanthropists who chose to give away the majority of their wealth while still alive. Download here

Online giving up 14%

Online giving increased 14 percent in 2009, according to the latest index on Web-based fund raising by the software company Convio, which provides fund-raising and other programs to nonprofit clients. Read the study here.

Rethinking Corporate Giving (Chronicle of Philanthropy)

A must read if you like the way the CF of Utah is apprachign corprate engagement!

"The days of corporate philanthropy being about cutting checks for charity dinners and new buildings are over—or if they're not, they should be, and fast. That was one of the messages at the conference here this week of the Committee Encouraging Corporate Philanthropy, which gathered leaders of company foundations, giving officers, and corporate executives.

The conference's discussion was influenced, in part, by the release of a report conducted for the nonprofit association by McKinsey & Company, called Shaping the Future: Solving Social Problems Through Business Strategy. The report says companies need to be much more engaged in solving social and environmental problems. Traditional philanthropy is not enough, it says. Corporations need to find opportunities to use their business skills to advance social causes. Doing so can generate financial benefits.

Individual giving down again

Individual charitable giving totaled $217.3 billion in 2009, down some $11.2 billion from the estimated $228.5 billion given by individuals in 2008, a new report from the Center on Wealth and Philanthropy at Boston College finds.

To be published in the July/August issue of the Association of Fundraising Professionals' Advancing Philanthropy magazine, the report found that last year's 4.9 percent decline in individual giving (also known as household giving) followed a similar decline in 2008, when individual giving was down 6 percent from the previous year. This year, in contrast, individual giving totals are expected to range from $222 billion to $227 billion, a year-over-year increase of between 3 percent and 4.5 percent.

Movement Building (Marguerite Casey Foundation)

Reviews the creation of the Marguerite Casey Foundation in 2002 and the Equal Voice for America's Families campaign in 2007 as a family-led movement for social change philanthropy. Offers lessons and guidance on movement building, with case studies. Upload here.

Katherine Fulton on the future of philanthropy (TED Video)

http://www.youtube.com/watch?v=_mLeSPk3ddE

How to Raise $88 million at your event (PND)

Invite George Soros. Ask Sting and Stevie Wonder to entertain. Don;t forget Michael Bloomberg. Oh and make sure Wall Street feels a special need for some good PR.

Here is their press release. And they do support fantastic groups so  ... feel free to feel jealous, but in a good way.

Robin Hood, the city's leading poverty-fighting organization, last night raised $87.8 million at its annual benefit with 100 percent of the donations going to organizations that generate measurable results for New Yorkers in need, as Robin Hood's board underwrites all of the event's costs. All event donations were matched 1:1 through a special challenge grant from global philanthropist George Soros and the Robin Hood Board of Directors.

The benefit was co-chaired by Robin Hood Board Vice Chair Lee Ainslie of Maverick Capital, Jamie Dimon of JP Morgan Chase and Eric Schmidt of Google. Brian Williams served as host for the 21st annual event, while Jimmy Fallon and Seth Meyers provided entertainment. Surprise guest Sting came out on stage to play for the crowd and Stevie Wonder capped the evening off by performing for the more than 3,800 guests who gathered at the Jacob K. Javits Convention Center for the fundraiser.

"Fifty-five percent of babies born in New York City are born into poverty, and we have to change that," said David Saltzman, Robin Hood's Executive Director. "Tonight our incredibly generous donors made a big investment towards saving lives of New Yorkers in need."

 

Great advice for grantmakers from VPP

From Caroline Preston's blog by way of CFU Trustee Patrick de Freitas

Nonprofit groups say it takes them 25 to 30 hours to apply for a grant. Yet most of the grants being awarded are probably $15,000 or less.

That's much of what's wrong with philanthropy today, Bill Somerville, founder of Philanthropic Ventures Foundation, told an audience of young grant makers here at the first conference of Emerging Practitioners in Philanthropy. He said the figures on grant size were based on information from the Foundation Center.

"This is absurd; it's patronizing," Mr. Somerville said. "Philanthropy needs reform."

Mr. Somerville, whose foundation does "paperless" grant making and promises a 48-hour turnaround on grant decisions, urged young foundation officials to help grant makers become smarter, faster, and more responsive. His directives included:

• Get out of the office. "I don't think you can do philanthropy from behind a computer," he said. "But in most of America, that's what seems to be happening." He talked about the importance of meeting grantees, identifying excellent community leaders, and working in partnership with them.
• Be modest. "It's not your money, it's not your power," he said. "We need them [grantees] as much as they need us."
• Get out of your comfort zone. Mr. Somerville talked about standing in line for an hour-and-a-half at a welfare office recently, something he did to expose himself to new people and experiences.
• Reduce the paperwork. Mr. Somerville talked about how, at his foundation, he will give out a grant based on a conversation with someone whose organization he knows. He then writes all the information he says is necessary for an audit. "It's a paragraph," he said.
• Build trust. Mr. Somerville said grant makers need to trust grantees. If they don't trust the people they are giving money to, he said, then they shouldn't be giving that money at all. Mr. Somerville also said grant makers need to trust themselves to make good decisions. They can inform their decision making by getting out of the office and establishing relationships with people.
  Make grants when money is needed. "Forget your schedule," he said. "You can have more impact with smaller grants if you do it when the money is needed."
  Be wary of "academic philanthropy." "Those who are talking about it aren't doing it," he said. He also bemoaned the fact that the field is drowning in jargon.
  Let grantees tell you how to measure success. They know the work and what success looks like, he said.
  Lower your expectations. "No one is going to solve poverty," Mr. Somerville said.
  Embrace risk. Mr. Somerville suggested that grant makers set aside a pot of money for risky investments.
  Share experiences on what didn't work. Like rock climbers who must write down their mistakes so other climbers can avoid them, foundations should write down and share their failures so others can learn from them, he said.
  Avoid isolation. Visit grant makers at other foundations, he said.

What makes an effective foundation? (Center for Effective Philanthropy)

Download this new report on what makes a foundation one that nonprofits enjoy - and benefit from - working with. It is based on grantee surveys - so they actually spoke with nonprofits! - and explores the role of the foundations' interactions, communications and the role they each play in reaching their common goal of creating a real impact. Outlines key predictors of strong relationships, exemplary program officers' experiences, and suggestions for improvement.

Heirs to Give More With Less (WSJ)

This morning's WSJ has an artcile describing how philanthropists managing family foundations have had to be especially diligent in imparting the skills that their children need to carry on the philanthropic tradition, while also showing them how to "stretch a dollar,".

They cite data from the Foundation Center showing U.S. foundations lost nearly $150 billion in assets in 2008 -- nearly as much as they had awarded during the four years prior! The result? One in five foundations cut back their grantmaking in 2009 and expect to give less in the next few years.

According to the article, parents have formed junior boards of directors or foundation committees so their heirs can lern the ropes by developing a foundation Web site., running 'mini-foundations', etc.

They have also pooled their giving. For example, since 2007, nearly two hundred donors in their twenties and thirties have donated 1 percent of their annual income to the One Percent Foundation, an online giving circle for young philanthropists started by thirty-year-old Daniel Kaufman.

Read the full piece here.

Foundation giving will be down (Greystone)

Graystone Consulting and the Association of Small Foundations report:

• 49 percent of small and mid-sized foundations in the country intend to make changes to their spending and grantmaking policies in 2010
• many say they plan to cut their grantmaking budgets
• 14 percent of respondents cited portfolio liquidity as a pressing concern
• 20 percent of did not have an investment policy statement;
• 18 percent did not have a rebalancing policy;
• 61 percent did not intend to change their asset allocation,

Download the report here

Very wealthy giving less (PNC)

A new study from PNC finds that the recession has resulted in the very wealthy cutting back on their giving "to protect their seven-figure or higher assets". Main findings:

• donation totals of $1 million or more were made by 15 percent of PNC's ultra-wealthy (with $5 million or more in assets) in 2007 to 1 percent in 2009.
  28% of all respondents reported plans to cut back on their charitable giving in 2010 compared to 13 percent reporting an intention to increase.
  25% of the ultra wealthysaid that they were concerned about their "ability to give to charities" compared to 16 percent of respondents with assets between $500,000 and $1 million.

The study had 1,046 respondents over half with more than $1 million in assets, the remainder had more than $500,000 in assets.

Corporate Giving in 2009 (Philanthropy Journal)

Giving by U.S. companies was mixed during the worst recession in decades as some trimmed their philanthropy, others gave more and most predicted 2010 would be flat, Reuters reported March 5 read here.