Philanthropy Information Retrieval Project

Report #111: March 12 - 31, 2003

The Philanthropy Information Retrieval Project aims to identify and report, in a timely fashion, new ideas and other developments that might significantly affect the field of philanthropy in the years to come. In contrast to other bulletins that usefully report on today’s breaking news, this newsletter tries to look “over the horizon” and identify issues early in their life cycle. The newsletter was begun by the John D. and Catherine T. MacArthur Foundation in 1996 and was transferred to the Aspen Institute in 2003. Burness Communications, Bethesda, MD, prepares the copy. As the publication’s editor, I welcome your comments and suggestions at: abramson@aspeninstitute.org. – Alan J. Abramson, Director, Nonprofit Sector and Philanthropy Program, The Aspen Institute

1. ISTOOK-LIKE HOUSE PROVISION WOULD RESTRICT NONPROFIT ADVOCACY IN 'SLIPPERY SLOPE' FASHION, WATCHDOG REPORTS; PROVISION TO BE DROPPED, FOR NOW

National organizations that successfully fought proposed federal legislation eight years ago to limit nonprofit advocacy have just helped stave off, for the moment at least, a similar Congressional proposal. Legislation introduced March 19 in the House by Rep. Michael Castle (R-Del.) to reform the Individuals with Disabilities Education Act contained a provision to prohibit all advocacy, whether publicly or privately funded, of certain nonprofits. The watchdog group OMB Watch reported in a March 26 email that the provision prohibits “federal relations,” which OMB Watch reasons covers every conceivable type of government interaction of nonprofits. It would go beyond lobbying, itself prohibited in another provision of the bill. But after several days of organized protest from nonprofits, OMB Watch reported in a March 31 update that the nonprofit anti-advocacy provision was to be dropped from the bill later this week. OMB Watch cautioned that House staffers are considering attaching the provision to this bill at a later point or to other legislation, and in a way that may affect greater numbers of nonprofits than originally proposed. OMB Watch says this “slippery slope” approach is reminiscent of the heavily criticized Istook Amendment and subsequent proposals that would have restricted broadly defined “political advocacy” of all nonprofits. For more information, see www.ombwatch.org/article/archive/169/.

2. FOUNDATIONS TRY CREATIVE APPROACHES TO COPE WITH REDUCED ASSETS, CENTER REPORTS; INCREASED SUPPORT FOR NONPROFIT OPERATIONS

Many foundations are trying creative approaches to maintain or increase grantmaking during the current economic downturn and reduced foundation assets, reports the National Center for Family Philanthropy. The Center found that these approaches include cutting foundation administrative costs; offering below market rate loans – known as program-related investments – to nonprofits instead of grants; and dipping into principal assets to maintain if not increase past years’ payouts to nonprofits, even when doing so threatens to spend the foundation out of existence. The Center offers these insights for foundations in its timely, new publication, Giving Until It Hurts – Coping with A Tough Economy. The publication, available for a fee at www.ncfp.org/publications-passages-current.html, also counsels foundations to support grantees with more than money by offering them relevant materials or scheduling more informal meetings so that foundation staff and grantees can get to know each other better.

The Center’s publication also reported that some foundations are offering more funding for nonprofit operating costs and less for new programs, and the March 6 Kansas City Star confirmed that this is happening in that city. At least three of the city’s largest foundations are putting up less money for new projects or capital campaigns and more for the costs of nonprofit operations, especially those nonprofits providing for the community’s social needs, the newspaper reported.

3. PUBLICATIONS REPORT CORPORTATIONS ARE INCREASINGLY UNDER PRESSURE, INCLUDING FROM FOUNDATIONS, TO IMPROVE SOCIAL PRACTICES

The pressure on corporations to improve their practices is increasing from various corners, including from foundations, according to two publications. The Conference Board, in a recent publication, said that too few American business leaders recognize the global impact of recent U.S. corporate scandals or the related need to increase activities to ensure that business delivers adequate social and environmental results. This nonprofit’s publication Across the Board reported on the now-mainstream acceptance of corporate social responsibility, or corporate citizenship, which the article said may soon become a “hygiene factor,” or – much as governmental diplomacy – a prerequisite of doing effective business in today’s world. It pays for businesses to be good beyond any public relations benefit, the report suggested, because there is: increasing investor and nonprofit activism on matters of corporate social concerns; increasing global reach of news media about corporate activities; and increasing regulatory pressures. See www.conference-board.org/publications/atb/articles/voglJan03_01.cfm.

An article in the March/April Foundation News & Commentary advocates for foundations to step up their activism as major investors in corporate America. Caroline Williams of the Nathan Cummings Foundation writes that too many foundations – more than half, according to a recent Council on Foundations survey – essentially neglect the influence they could have on improving corporate conduct by delegating stock proxy voting to outside investment managers or services. Williams even offers anecdotal testimony of Cummings’ past ineffective corporate oversight in her plea for foundations to “mind the store.” See www.foundationnews.org/CME/article.cfm?ID=2425.

4. FOUNDATIONS SHOULD FUND IDEAS, FORMER FOUNDATION HEAD RECOMMENDS

How has the Milwaukee-based Lynde and Harry Bradley Foundation, the country’s eighty-third largest foundation in terms of assets, managed to have an impact on national policy debates that is disproportionate to its size? In a recent lecture, Michael Joyce, the foundation’s former president, suggested that the Bradley Foundation’s strategic approach to funding “ideas” – particularly conservative ideas concerning school choice, welfare reform, and faith-based initiatives – has helped the foundation to maximize its impact. The Bradley Foundation and the John M. Olin Foundation, another foundation that Joyce led, have funded ideas by providing long-term, core support to universities, think tanks, journals, and other institutions for student fellowships, senior scholars, communication activity, and the like. As for why more foundations aren’t supporting the development and dissemination of ideas, Joyce suggested that lack of donor and board interest and impatience may be among the chief obstacles. In his remarks, Joyce added that conservative thinkers have barely begun to tackle environmental, health, international civil society, and labor issues, and these areas may be the focus of increased attention in the years ahead. Joyce spoke on March 28, 2003 as part of the Waldemar A. Nielsen Issues in Philanthropy Seminar Series at Georgetown University. The text of his remarks will be available in the next month on the web at http://csvos.georgetown.edu.

5. FOUNDATIONS ARE ESSENTIAL TO DEMOCARCY, BUT MUST FUNCTION APART FROM POLITICS, FOCUSING ON THE LONG TERM, BRITISH CONSULTANT SAYS

Foundations seem to be essential to the functioning of democratic states, but only so long as foundations’ grantmaking avoids the short-term perspective of electoral politics, according to one British foundation consultant. Steven Burkeman writes in the latest online edition of Alliance Magazine, published by the British nonprofit Allavida, that a new contract between foundations and the government is needed to ensure that each fulfills its purpose. Burkeman focuses the article on the government-foundation relationship in the United Kingdom, but his proposal could easily be imported to the United States.

Among Burkeman’s many points, the principal one seems to be that foundations should concern themselves with addressing long-term needs since they are able to avoid the periodic election cycle and therefore can undertake politically unpopular projects, projects that take years to show results. Burkeman says that foundations should not be “playthings for society’s ‘haves,’” only concerned with benefiting the trustees or satisfying the benefactor. Burkeman also writes, though, that foundations should not be “conventionally accountable,” working to please the public as politicians do: foundations, he says, should be accountable in the sense that they are transparent and honest about grantmaking successes and failures. See www.allavida.org/AllianceExtra/foundations_and_the_state.htm.

6. ONE COMMUNICATIONS-SAVVY FOUNDATION OFFERS PLENTY OF ADVICE TO OTHERS IN NEW PUBLICATION; FOCUS ON MISSION, GRANTEES CRITICAL

All communications from a foundation should in some way relate to its overall mission and should focus on grantees and their work, the California Wellness Foundation suggests. The communications-savvy foundation has produced an exhaustive review and summary of its communications activities over the past five years that offers significant insights for other foundations. This publication, Reflections on Communications Strategies That Accent Grantees, stresses that grantees should be the focus of public communications efforts because they are usually ignored or offered few opportunities to contribute to policy changes or propose solutions about the “very issues that disproportionately affect their lives.” In the publication, the foundation also explains its “open-door” policy toward potential grantees (which hasn’t resulted in being inundated with funding proposals), its downplaying of new grant announcements (because journalists aren’t interested), and its efforts to keep information up-to-date (by repackaging and expanding old reports to better suit a timely concern, for example). See www.tcwf.org/reflections/2003/feb/.

7. FOUNDATIONS CAN HELP TURN AROUND THE NUMBER-NEARLY FOUR IN FIVE OF DEPRESSED YOUTH NOT RECEIVING TREATMENT, HEALTH GROUP REPORTS

Emerging research on depression shows that early treatment can prevent or reverse changes in the brain, but unfortunately most depressed children do not receive treatment, Grantmakers in Health reports in a March 10 Issue Focus. Calling it a “lost opportunity” that only 20 percent of children with serious emotional disturbance receive treatment, the article identifies several ways that foundations could help improve the situation. These include: funding early intervention programs targeting preschools; expanding access to mental health services in schools; and supporting changes in local mental health systems serving children. The article is available in PDF format at www.gih.org/usr_doc/childrens_mental_health.pdf.

Of Related Interest

Illinois-Based Literary Magazine Envies Foundations in Minneapolis

Foundations in Minneapolis have essentially created a literary scene there thanks to their strong support for the written word, according to the Illinois-based literary magazine Context. Published by the Center for Book Culture, Context featured a satirical back cover in its latest edition that contrasted the literary support of Minneapolis foundations to the situation in Chicago where, the magazine reports, literature has been all-but ignored in some recent awards to Illinois arts groups. The article is not available online; the Chronicle of Higher Education reported on the matter in its March 14 issue.

Related Reading

Newsletter Focuses on Philanthropist’s Efforts to Help Alleviate Poverty in Developing Countries

What has emerged as arguably the biggest trend in the area of international giving, micro-credit loans, might only become more prominent if one former Microsoft executive succeeds in his efforts. No, not Bill Gates; Mike Murray. The February-March issue of Global Giving Matters, co-published by the World Economic Forum, features a profile of Murray, who is the benefactor of the Crystal Springs Foundation and a founder of Unitus, a three-year-old micro-credit financier. According to the newsletter, micro-credit involves loans to poor people in the developing world to help them develop businesses and become self-sufficient. Unitus doesn’t offer micro-credit loans to individuals itself, but instead offers funding and consulting services to help existing micro-credit institutions expand quickly and efficiently. In addition to the profile of Murray, the newsletter includes a round-up of developments in the field, including information on an advocate for philanthropy in Turkey and an American foundation that works with poor youth in South Africa, where the founders’ daughter was killed. See www.globalgivingmatters.org.

Note to Readers

We would appreciate your offering us information that we can include in a future edition. If you have an item you believe would be helpful to your colleagues, please e-mail it to Doug Rule at drule@burnesscommunications.com. Thank you in advance for your cooperation.

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