Philanthropy Information Retrieval Project

Report #116: Sept. 15 – Oct. 26, 2003

The Philanthropy Information Retrieval Project (PIRP) reports on new ideas and other developments that may affect the field of philanthropy in the years to come. In contrast to other publications that cover today’s breaking news, PIRP generally highlights emerging issues that may be visible only on the horizon. In line with its role as an early alert system for the field of philanthropy, PIRP intentionally includes items that are critical of current practice and policy as well as reports that are approving. PIRP was started in 1996 by the John D. and Catherine T. MacArthur Foundation and was transferred to the Aspen Institute in 2003, where it is currently funded by the Robert Wood Johnson and Northwest Area Foundations. Burness Communications, Bethesda, MD, prepares the copy. As the publication’s editor, I welcome your comments and suggestions. – Alan J. Abramson, Director, Nonprofit Sector and Philanthropy Program, The Aspen Institute

1. RECENT MEDIA SCRUTINY APPEARS TO SPUR INCREASED GOVERNMENT OVERSIGHT OF FOUNDATIONS

Heightened media scrutiny of foundation trustee fees may be leading to increased government oversight of charities, at least at the state level. Attorneys general in California, Massachusetts, and New York are following up on findings from a wide-ranging investigative report on the subject in the Oct. 9 Boston Globe. As part of a new “Charity At Home” occasional investigative series, the newspaper reported on large salaries and related fees paid to foundation trustees around the country, particularly at smaller family foundations. The article, if not the new charity series itself, seemed provoked at least in part by a September report from the Georgetown Public Policy Institute by Christine Ahn, Pablo Eisenberg, and Channapha Khamvongsa that found that nearly two-thirds of large foundations and four-fifths of small foundations paid fees to their trustees. The report called for more research on the subject of foundation trustees, and recommended limits to foundation trustee fees, as well as greater governmental oversight of foundations. An Oct. 10 Globe article quoted several nonprofit leaders and philanthropy observers suggesting that “there’s a ton of abuse out there” among foundations, and that the Internal Revenue Service and attorneys general have neglected their duties to guard against abuse in philanthropy.

2. JOURNALIST EXPOSES WHAT HE CALLS RACIST FUNDING BY 'UNSCRUTINZED' FOUNDATION SECTOR

An investigative journalist and author has turned his sights to the “completely uncharted and unscrutinized” sector of foundations and corporate philanthropy, exposing what he alleges is racist funding. Edwin Black charged in an Oct. 18 artic le in Canada’s National Post newspaper that some American foundations are conducting their own foreign policy, “funding hate speech” that is “anti-Zionist,” anti-Israel” and “anti-American” through funding of Palestinian organizations. Black wrote several articles the week of Oct. 20 in the New York Sun, quoting an American Jewish Committee (AJC) official alarmed about the lack of attention paid to foundation funds, which “can be used in a way no one can imagine.” The AJC is now discussing action it could take to revoke the tax-exempt status of one major foundation it finds particularly egregious, as well as to push for greater government oversight of foundations to make them more accountable, according to a Black article in the Oct. 21 JTA.

A month earlier, on Sept. 18, Black had discussed his new book about last century’s eugenics movement on NPR’s The Tavis Smiley Show, noting that several American foundations supported this “elitist” movement that furthered the Nazi effort at white supremacy and ethnic cleansing. A review of the book, War Against the Weak, in the Oct. 5 New York Times, said that Black exaggerated foundation funding of anti-Semitic science and distorted foundation intentions of “creating a superior race.”

3. FOUNDATIONS ARE MORE CONCERNED WITH PERPETUATING THEIR EXISTENCE THAT IN ADDING SOCIAL VALUE THROUGH THEIR INVESTMENTS, FOUNDATION FELLOW SAYS

The average foundation focuses only a very small percentage of its assets – its annual payout rate – towards its social mission, focusing the rest on maximizing its financial value, according to a foundation fellow. Jed Emerson, a senior fellow at the William and Flora Hewlett and David and Lucile Packard foundations, writes in the most recent issue of the Stanford Social Innovation Review about the lack of connection between grantmaking and asset investments at the majority of foundations. This makes it a distinct possibility that foundations are investing in companies at odds with their grantmaking efforts. It also highlights the fact that the majority of foundations are more concerned with perpetuating their own existence than in maximizing their social and environmental value, Emerson contends. He identifies five primary ways foundations can address this weakness, from taking an advocacy role with their investments in mainstream companies, to investing in socially responsible companies, to offering low-interest loans and below market-rate investments in nonprofits.

4. NONPROFIT LEADER CALLS ON FOUNDATIONS TO MORE DIRECTLY INVOLVE GRANTEES IN MAKING GRANT DECISIONS

Too many foundations play a “year round game of financial hide-and-seek” with grantees that stymies effective grantmaking, according to one nonprofit leader and journalist. Mark Winston Griffith of Central Brooklyn Partnership wrote in an October article of the foundation-funded Gotham Gazette online newspaper that foundations need to be more sensitive to the everyday realities of the community groups and neighborhoods they fund. In his article, Griffith identifies the contradictions between what foundations expect of their grantees and what they themselves practice, and he calls on foundations to make multi-year grants that support the entire grantee organization and not just a particular program. Local organizations should help set foundations' local funding priorities as they are closest to the front lines, Griffith said.

5. REPORTS DOCUMENT OPTIONS, PITFALLS, AND SUCCESSES WITH FOUNDATION PUBLIC POLICY EFFORTS; FOUNDATIONS' PUSH FOR SCHOOL CHOICE PROFILED

Two new reports suggest that foundations are increasing their public policy efforts, in part due to what they report are increased opportunities for influence in a “decentralized” policy arena. The Center for Philanthropy and Public Policy at the University of Southern California released these two reports last month. The first, Foundations & Public Policymaking: Leveraging Philanthropic Dollars, Knowledge, and Networks documents the options and pitfalls for foundations seeking impact in public policy. The second report offers concrete examples of foundation successes in influencing public policy related to school choice. Focusing on efforts in California and New York, this report, Found ation Engagement in Education Policymaking: Assessing Philanthropic Support of School Choice Initiatives, documents foundations’ financial support, information dissemination, and creation of networks in promoting public charter schools and school vouchers.

6. FOUNDATION CENTER OFFERS PAPERS EXPLORING CORE FOUNDATION PRACTICES; POLICY COMMISSIONS EFFECTIVE AT PROMOTING PUBLIC POLICY

A policy commission is a rarely used but potentially effective tool for foundations to promote public policy change on a major issue, especially if the issue is either early or late in its life cycle. That’s according to one paper from the Foundation Center’s new foundation-funded Practice Matters: The Improving Philanthropy Project. Ten papers will be issued through the project exploring core foundation practices, according to the project’s Introduction. Four of these were released in September, including Acts of Commission, which identifies the characteristics of successful policy commissions. Where an issue is in its life cycle is critical, according to the report. If an issue is early in its life cycle, a commission offers the opportunity to frame the public debate, while late in the life cycle a commission aids in evaluation. The other three reports released by the Center last month focus on the use of intermediary organizations, attracting and managing talent for foundations, and foundation efforts for community change.

7. FOUR MAJOR HIGH-TECHNOLOGY PHILANTHROPISTS ANNOUNCE INCREASES, PLANS FOR AMBITIOUS GIVING, FROM EDUCATION TO GLOBAL HEALTH

High-technology philanthropy is returning to the public spotlight as four major players increase their giving or announce specific giving plans. The Oct. 14 San Jose Mercury News reported on eBay president Jeff Skoll’s recent doubling of charitable assets to $300 million, quoting one Silicon Valley philanthropy leader who suggests that Skoll “exemplifies the spirit, imagination and creativity” of high-technology expertise applied to giving. The newspaper cited the Skoll Foundation’s recent achievement in indirectly boosting Kenya’s gross domestic product through its giving to launch agricultural businesses in the country. The Oct. 2 Wall Street Journal reported on the recent ballooning assets of the Austin, Tex.-based Michael and Susan Dell Foundation. Now at over $1 billion in assets, Dell Computer Corp. founder Michael Dell’s family foundation takes a direct approach to its giving, focusing on child development and education, the newspaper reported.

The Oct. 6 San Francisco Business Times reported on the growing pains of the Gordon and Betty Moore Foundation as it gears up to annually distribute up to $200 million of its nearly $5 billion assets. The foundation, created by the Intel Corp. founder, will work to improve its communications to nonprofits about what it expects from its grantmaking for the environment, science, higher education, and San Francisco Bay Area projects, according to the article. The Business Times also reported on efforts the foundation has decided not to fund because of lack of results, such as environmental education.

Meanwhile, the Bill and Melinda Gates Foundation announced an ambitious $200 million initiative in conjunction with the National Institutes of Health that aims to direct more scientific attention to health problems affecting the developing world. An article in the Oct. 17 Seattle Post-Intelligencer reported on the initiative’s focus on 14 critical scientific impediments to improving global health, including development of a single-dose vaccine containing all the basic childhood immunizations delivered orally, as well as a safe genetic method to stop insect-borne disease.

8. FOUNDATIONS BEHIND MARKETING OF AFRICAN AIDS AWARENESS EFFORT, DISTRIBUTION OF CONTROVERSIAL EMERGENCY CONTRACEPTIVE PRODUCT

Foundations are behind efforts to increase AIDS awareness in Africa and to expand use of an emergency contraceptive product. A September issue of the Inside Corporate Philanthropy e-newsletter reported on a foundation-funded effort to “brand” AIDS prevention techniques to South African youth. The article suggested that the effort seems to be increasing AIDS awareness. Meanwhile the Oct. 3 Wall Street Journal reported on a for-profit company’s purchase of a “morning-after” birth-control pill from a nonprofit founded several years ago by women’s health activists with foundation funding. Barr Laboratories’ plans to distribute, probably over-the-counter, the contraceptive product Plan B could raise its sales considerably. Traditional makers of pharmaceuticals were reluctant to distribute the product due to anti-abortion groups’ protests.

9. FOUNDATIONS IN MINNEAPOLIS AND WASHINGTON, DC REGIONS BEHIND PUSH TO BOOST REGIONAL GIVING, NEWSPAPERS REPORT

Two newspapers reported on foundation efforts to improve giving in two regions of the country generally considered to be hotspots for philanthropy, Minneapolis-St. Paul and Washington, D.C. The Sept. 14 St. Paul Pioneer Press reviewed the progress of the Twin Cities’ arts and culture scene over the past thirty years, attributing it in large part to efforts of locally-based foundations and corporations. Meanwhile, the Oct. 26 Washington Post, in several Business section articles on charitable giving, reported on two resources coming next month from two local foundations, and a separate advertising campaign from the local grantmakers association, to boost individual giving in the region.

Of Related Interest

Journalism Professor: Newspaper’s Killing of Nonprofit Story Typifies Media’s Neglect of Sector

The cancellation by a newspaper publisher of an about-to-be-printed news story is a telling example of the news media’s neglect of nonprofits, according to a foundation-funded journalism professor. Edward Wasserman wrote an Oct. 20 opinion piece in the Miami Herald questioning why journalists ignore the “vast and immensely powerful industry” of nonprofits and foundations, offering examples to support his claim. Wasserman was reacting to actions of the publisher of the Portland (Ore.) Business Journal, who in September cancelled a feature article on a local nonprofit’s expansion plans because, at least publicly, she didn’t think the story was news or at all relevant to her readers. The action prompted the paper’s top two editors to resign.

Forum of RAGs To Host ‘First-Ever’ National Conference in February on Advancing Philanthropy

The Forum of Regional Associations of Grantmakers will host what an Oct.6 press release calls the first-ever gathering of practitioners, volunteer leaders, and donors from across the country to discuss efforts to attract new philanthropists and help existing philanthropists become more effective. To be held Feb. 4-6 in Washington, D.C., the Forum has posted a call for sessions on its Web site.

Related Reading

Philanthropy Magazine Profiles Foundation’s Spend Down Plans Aimed at Impacting Policy

The Philanthropy Roundtable’s September/October Philanthropy magazine profiled one small conservative foundation that has decided to spend down roughly half of its assets to have a “lasting impact on public policy.” The article] identified the seven organizations to which the foundation will grant well in excess of $5 million over the next several years to, among other goals, help increase the number of “conservative public intellectuals” and counter the influence of liberal women’s organizations in the courts and colleges.

Report Maps Efforts That Blend Social, Environmental, and Economic Value

A new report by Jed Emerson, Sheila Bonini, and Kim Brehm explores the activities of practitioners, investors, and philanthropists engaged in intentional efforts to achieve a blend of social, environmental, and economic value. In their paper, “The Blended Value Map: Tracking the Intersects and Opportunities of Economic, Social and Environmental Value Creation,” the researchers identify five “silos” of blended value activity: corporate social responsibility, social enterprise, social investing, strategic philanthropy, and sustainable development. For each silo, the report literally maps key issues, information resources, resource organizations, initiatives, and leadership examples. Emerson, who is affiliated with the Stanford University Graduate School of Business and the Hewlett and Packard Foundations, and his co-authors call for more coordinated action across silos in order to increase the effectiveness of organizations that are pursuing both economic returns and social/environmental impact.

New Resources

Database, Journal Offer Examples, Lessons of Helping Nonprofits Build Capacity and Sustainability

A foundation-funded database has been established by the nonprofit Human Interaction Research Institute offering the only public, searchable collection of nonprofit-strengthening programs offered by foundations, according to an October press release. The Philanthropic Capacity-Building Resources (PCBR) Database already contains 273 profiles, with new listings to be added regularly and research forthcoming based on analyses of these programs.

Meanwhile, the Support Center for Nonprofit Management has recently released its 2003 edition of the Journal for Nonprofit Management, which focuses on “Fostering Sustainability.” Articles in the journal focus on research findings about financial vulnerability of charities, among other useful topics for foundations focused on helping nonprofits.

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. Thank you in advance for your cooperation.