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 supportive.  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.    SENATE MAY HOLD HEARINGS NEXT YEAR ON FOUNDATION ABUSES, NEWSLETTER REPORTS; WOULD CONSIDER OPTIONS TO INCREASE GIVING, IMPROVE OVERSIGHT

The Senate may hold hearings on foundation abuses next year to consider options to encourage more annual foundation giving and measures to improve the Internal Revenue Service’s oversight of nonprofits, according to the Dec. 15 EOTR Weekly. This publication, from the nonprofit watchdog Tax Analysts, reported on comments made at a recent Washington conference by a Senate Finance Committee staffer.  The staff member said there is widespread concern in Congress and at the IRS about media reports of abuses by foundations. Faulting the sector for failing to police itself, this Senate staffer said that there is a growing feeling in Congress that the IRS’ Exempt Organizations Division needs to have more authority and resources and should take steps to encourage more giving by foundations in return for their tax break.


2.    RECENT FEDERAL GUIDELINES ARE RESULTING IN ‘DRAMATIC’ DECREASES OF FOUNDATION FUNDING IN THE MIDDLE EAST, NONPROFIT LEADER SAYS; FOUNDATION CENTER SURVEY CITES GUIDELINES’ EFFECTS

International giving guidelines issued in the past year by the Treasury Department are turning nonprofits into “mini-intelligence agencies” and are “dramatically curtailing” foundation funding in the Middle East, according to a Nov. 30 Boston Globe op-ed. Kevin Murray of the U.S.-based nonprofit Grassroots International wrote in this op-ed that these anti-terrorist financing guidelines, currently voluntary and open to public comment, are “sweeping and onerous.” One standard, for example, would require foundations to investigate the external associations of all individuals associated with any overseas organization they fund. The real goal is to limit progressive dissent, Murray suggests, and he reports that “many foundations,” citing financial limitations but privately expressing political concerns, have closed or cut back democratic funding in the Middle East, where democracy advocates are increasingly threatened from all sides. OMB Watch, a Washington-based watchdog group, called for the withdrawal of these guidelines months ago.

The guidelines were also cited by a new survey of international giving as one factor that could lead to further decreased foundation aid to overseas efforts this year. This Foundation Center survey reported that between 1998 and 2001 foundations more than doubled their estimated support for international giving, to $3.3 billion, but estimates for 2002 showed a slight decline, to $3.1 billion. Support for international health and education overtook international development as the top priority of international funders, according to the survey.  Moreover, the impact of Sept. 11, 2001 was reflected in new projects focused on conflict resolution and relief assistance in Central Asia and the Muslim world.


3.    INTERNATIONAL GIVING APPEALS TO TODAY’S LEADING GIVERS, ACCORDING TO BUSINESS WEEK; MAGAZINE DEBUTS ANNUAL CORPORATE GIVING RANKING

International giving is of significant interest to the country’s wealthiest donors, according to the Dec. 1 Business Week. Narrowing the increasing disparity of income between rich and poor around the globe is one of the primary concerns of today’s leading givers, the magazine suggested in the issue, which featured its annual ranking of the nation’s top living donors. The magazine also featured its first-ever annual ranking of corporate giving, which it based on companies’ self-reports due to what it said was a lack of independent benchmarks.  Several in-depth articles rounded out the magazine’s giving series, exploring some of the issues in philanthropy today, including the difficult yet “refreshing” approach of some who give large amounts with near-anonymity.


4.    AS ONE EFFORT TO FIGHT TERRORISM, FOUNDATIONS SHOULD HELP ESTABLISH A PUBLIC-SERVICE ROTC, PHILANTHROPY ARTICLE SUGGESTS

A government equivalent of the military’s ROTC should be developed by funders as a means of deepening our understanding of world religions and cultures, according to one nonprofit leader.  In an article in the November/December issue of the Philanthropy Roundtable’s Philanthropy magazine, Harvey Sicherman of the Foreign Policy Research Institute suggests strategies for foundations to use to complement U.S. government efforts in fighting terrorism. Through his idea of a foundation-funded public-service ROTC, major universities would train a “corps” of student specialists, who would commit to serving a set number of years in public service as linguists and area studies experts, with heavy emphasis on North Africa, the Middle East, and Southeast Asia. Sicherman also suggests in his article other strategies for philanthropists to boost education, research, and organizations that directly and indirectly aid “victory over terrorism.” This issue of Philanthropy also includes an article briefly profiling nine donors’ efforts, developed since Sept. 11, 2001, that aim to combat terrorism.


5.    NONPROFIT THINK TANKS BECOME VEHICLES FOR LOBBYING, EVEN AS MANY NONPROFITS AVOID LOBBYING BECAUSE OF LEGAL CONFUSION

Though most nonprofits remain unaware of their legal right to lobby or advocate, an “idea laundering” movement has taken root that employs nonprofit think tanks to influence policymakers, according to the December Washington Monthly. The magazine features two articles on the success at federal lobbying that the think tank the American Enterprise Institute has had. The magazine also reports on the expanding use by corporate and other lobbyists of “phony” grassroots nonprofits and even journalists to influence policymakers. Expect more think tank-affiliated journalists to appear along the lines of economics columnist James Glassman, who is also a fellow at AEI, one article says, as “journo-lobbying” takes off as one more way lobbying firms and nonprofits can influence policymakers.

Still, a recent survey from a Tufts University professor reports that significant numbers of nonprofits avoid discussions with legislators at all costs because of an unfounded fear that the Internal Revenue Service stands ready to reprimand any lobbying activity they might undertake. Jeffrey Berry wrote a Nov. 30 Washington Post op-ed that nonprofits could do far more lobbying than they do, and they should, since they are the best advocates for society’s disadvantaged. The op-ed, and another that appeared in the Nov. 27 Chronicle of Philanthropy, were based on his recently published book, A Voice for Nonprofits, written with David Arons, formerly of Charity Lobbying in the Public Interest, with support from the Aspen Institute’s Nonprofit Sector Research Fund and other funders.


6.    CALIFORNIA ATTORNEY GENERAL CONSIDERS APPLYING FOR-PROFIT REGULATIONS TO NONPROFITS, U.S. NEWS REPORTS

California’s Attorney General, Bill Lockyer, is considering ways to apply laws regulating corporate governance to the state’s nonprofits, according to the Dec. 8 U.S. News & World Report. The weekly news magazine featured a special series on giving that included an article summarizing recent controversies over alleged foundation excesses. The article reported that Lockyer is considering adapting elements of a federal corporate reform law passed last year, including financial reporting and board independence rules, in an effort to enhance transparency among nonprofits.


7.    FOUNDATIONS SUPPORT ‘ANTI-CORPORATE VIOLENCE,’ CONSUMER CHOICE RESTRICTIONS IN ENVIRONMENTAL FUNDING, AND OBESITY PREVENTION EFFORTS, CONSERVATIVE GROUP ALLEGES

Several large foundations are at least indirectly supporting violence against corporations and restrictions on individuals’ choices, according to a mostly corporate-funded activist group. The Center for Consumer Freedom posted a Nov. 19 article on its Web site that listed three examples of foundation-funded nonprofit environmental activities that it says “promote violence,” referring to destruction of profit-yielding inanimate objects owned or controlled by corporations. Articles posted on the site on Dec. 2 and on Dec. 4 took two other foundations to task for having “little faith” in people’s ability to be responsible for their own food consumption and exercise. Calling nonprofits focused on combating the spread of obesity nationwide “food cops,” the Center said that the most commonly cited statistics on obesity – relating to obesity-led deaths, prevalence, and costs – are “just plain wrong.”


8.    CALIFORNIA NONPROFITS WORRY THAT CRITICAL OUT-OF-STATE MEDIA COVERAGE MAY LEAD TO REDUCED LOCAL GIVING

A California newspaper reported on the anxiety of local nonprofits in response to a critical Dec. 3 Boston Globe article that exposed foundation wrongdoing. The third article in as many months in the Boston Globe’s investigative series on foundation excesses reported on two foundations that have engaged in profitable real-estate ventures and offer high pay and perks to their trustees, practices generally forbidden by federal tax laws. The Dec. 5 Desert Sun of Palm Springs, Calif., carried an article focused on its hometown H.N. and Frances C. Berger Foundation, which both the Sun and the Globe reported spends millions of dollars more a year on administration than on grants and generously pays its president and trustees. But the Sun focused much of its article on several Berger Foundation grantees, who expressed shock and anxious support for the foundation, and suggested that the foundation did not deserve critical media coverage since it would only encourage the foundation to shift its support outside the area. “I think if we perpetuate that negative publicity in the local area it will have a tremendous impact on them” and encourage them to move, one told the Sun.


9.    SMALL FOUNDATIONS LESS LIKELY THAN LARGE COUNTERPARTS TO COMPENSATE BOARD MEMBERS FOR SERVICES, ACCORDING TO SURVEY

Less than one-fourth of all foundations in a membership survey compensate board members in any way for their service, though the larger the foundation, the more likely trustees were to receive compensation. The Association of Small Foundations recently released its 2003 Foundation Operations and Management Survey based on responses from nearly 40 percent of the association’s 2,900 members, which have an average asset size of about $15 million. The survey also found that expenses for investment and administrative purposes totaled an average of only 1 percent for responding foundations, though the association reported its suspicion that members are not fully reporting their investment costs. The survey, available for a fee to non-members, also found that the average payout rate of responding foundations last year was 8 percent, or considerably higher than the norm.


10.    SURVEY: LESS THAN HALF OF GRANTS FROM WASHINGTON-BASED GRANTMAKERS STAY IN THE REGION, AND MOST OF THESE GO TO LARGER NONPROFITS

According to an annual survey from Washington Grantmakers, less than half of the grants from D.C.-area grantmakers go to organizations within the region, and more than half of these go to larger nonprofits located in wealthier city neighborhoods. The Dec. 8 Washington Post reported on the group’s survey, which featured its first-ever geographical analysis of grants. The survey also found that giving in 2002 increased by about 10 percent even as more than half of the region’s foundations lost assets that year. The Post reported in its article on several efforts to increase private donations to small, lesser-known local nonprofits that could potentially help address the geographical disparities in future years.


11.    GRANTMAKERS CAN HELP ADDRESS DIRE BUDGETARY PRESSURES FACING HEALTH CARE ‘SAFETY NET’ PROVIDERS, TWO PUBLICATIONS SAY

In California alone, nonprofits that form the state’s health care safety net will collectively encounter a $3 billion budget shortfall over the next five years if they continue to serve patients at the current level, according to a new publication. The California Wellness Foundation recently released Reflections on the Safety Net: A Case for Core Support that urges other foundations to fund community-based clinics and related “safety net” nonprofits that serve as poor and underserved individuals’ only option for medical care. The affinity group Grantmakers in Health cited the foundation’s report in its Nov. 24 Issue Focus, offering tips for grantmakers to strengthen safety net providers, a group that has shrunk in number due to budget pressures to cut costs. Grantmakers can help health providers, according to the publication, by strengthening their capacity to serve vulnerable populations efficiently, by supporting community-based health plans, and by educating policymakers about the need for changes in health care financing and delivery.


Of Related Interest

U.S. News Profiles Gates Foundation’s Patty Stonesifer, Who Gives Credit to Foundation Forebears
The giving series published in the Dec. 8 U.S. News & World Report included a profile of Patty Stonesifer, who credits several long-established, large foundations for helping guide her work as co-chair of the Bill and Melinda Gates Foundation. The profile
was written by Kent Allen, a senior editor at U. S. News.


Related Reading

‘Taxeaters,’ Otherwise Known as Nonprofits, Run New York Politics, City Journal Says
Nonprofits have aligned themselves against the interests of taxpaying individuals and businesses so successfully that they effectively control New York City’s political process and political agenda, according to the Autumn 2003 edition of the conservative Manhattan Institute’s City Journal. The institute’s senior fellow Steven Malanga, a former executive editor of Crain’s New York Business, writes in an article that powerful public-employee unions and community nonprofit groups – he calls them “taxeaters” – have replaced party bosses in control of city hall. And they always ask for more, he writes: more city workers with more pay, more social services, more pensions, more benefits, and “more job-killing taxes.”


Note to Readers

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