1. THE FUTURE OF PHILANTHROPY: DRIFT OR MORE INTERCONNECTEDNESS?

It's quite possible that twenty years from now the philanthropic sector will have "simply drifted, failing to adapt to the demands and opportunities of a new time." That's the "status quo" scenario of philanthropy's future suggested by a foundation-funded, multi-year study by Katherine Fulton of the Monitor Institute and Andrew Blau of the affiliated Global Business Network. The sector would be wise to combat this "drift" scenario, according to the two authors. And the best way to do this is by working for better collaboration and more interconnectedness between philanthropists. Fulton and Blau foresee even greater media and Congressional scrutiny of philanthropy in the future and thus greater disappointment over the sector's performance. While Fulton and Blau are encouraged by the proliferation of philanthropic networks, they also raise concern that too many of these collaborative bodies will not have the resources to be compelling centers of learning, knowledge, and action.

Fulton and Blau have developed several publications and resources, all available for free online. These resources are intended to help grantmakers and others who care about philanthropy build a more effective field. Funded by the W.K. Kellogg and David and Lucile Packard foundations, the report Looking Out for the Future is the centerpiece of the effort, offering a concise overview of organized philanthropy today, how it has changed in the recent past, and how it may change in the near-term future. Fulton and Blau provide present-day examples of foundations that have altered their approaches to be more effective or more responsive to their grantees. And they also include very imaginative, yet realistic, scenarios of how philanthropy might look in the future, as a result of pressures for accountability and demands for effectiveness, as well as demographic changes.

2. FOUNDATION DIRECTOR: MORE SCRUTINY OF FOUNDATIONS MIGHT LEAD THEM TO BE BOLDER, MORE EFFECTIVE

According to one philanthropy leader, foundations are too reluctant to be bold or controversial, and yet few criticize the lackluster performance that results from this timidity. At an April 21 issue forum sponsored by the Center for Public & Nonprofit Leadership at Georgetown University, Gara LaMarche, director of U.S. programs at the Open Society Institute, said that foundations need even more scrutiny than they're now getting. He argued that there's currently no consistent, credible source criticizing and investigating the sector's work in the way that at least major newspapers monitor business leaders and politicians. LaMarche was one speaker at this discussion, "The Cost of Caution: Advocacy, Public Policy and America's Foundations." Most of the panelists seemed to agree with LaMarche's contention that mainstream foundations are reluctant to take public stands on issues or to allow their grantees to "be a little bit loud," as panelist Cecelia Munoz of the National Council of La Raza put it. That has contributed to the failure of progressive causes to keep up with conservative efforts, LaMarche suggested. The ability to help shape public policy or effectively advocate for causes requires a little rabble rousing, all five panelists or respondents seemed to agree.

A transcript of this Issue Forum is expected to be posted online shortly. Another foundation-related panel discussion, "Safeguarding Charity in the War on Terror," will be held by the Center on June 14.

3. PHILANTHROPY CAUSES HARM TO SOCIETY BY INCREASING INEQUALITY, ACCORDING TO PROFESSOR

A forthcoming book, Beyond Good Intentions: Learning to Do Good, not Harm, in Philanthropy, which Indiana University Press expects to publish next year, will examine the various ways in which philanthropy actually causes harm to society. In his chapter in the edited volume, Rob Reich of Stanford University observes that harm can be caused by poor planning and execution that worsens, rather than ameliorates, problems, or through simple arrogance or vanity. However, Reich's main worry is about philanthropy that fosters greater inequality in society. In his paper, Reich contends that philanthropy, which is subsidized through government tax breaks, should do more to encourage greater equality in society, and that ultimately greater incentives need to be established to address this shortcoming. Philanthropists should work to boost the standing of society's disadvantaged, Reich suggests. As an example of his charge that government-subsidized philanthropy often exacerbates social inequality, Reich cites the flow of private donations to wealthy public schools, while poorer schools must get by with limited public funds. Reich's chapter was released in draft form for an April 15 discussion sponsored by Georgetown University and Virginia Tech University as part of their Inter-University Workshop on Accountability and the Nonprofit Sector.

4. SEMINAR: SOCIETY WOULD BENEFIT FROM MORE CRITICISM OF EDUCATION GRANTMAKING; MORE PUBLIC POLICY SUPPORT ALSO NEEDED

Like the Open Society Institute's Gara LaMarche, Frederick Hess of the American Enterprise Institute told attendees at a Washington gathering that foundations have created an environment where they encounter very little criticism and where there is very little "straight talk" about philanthropy. "And I think we're all the poorer for it," Hess told participants in a day-long seminar at AEI, which he organized specifically to criticize education philanthropy. Comments from the diverse panelists Hess assembled suggested external criticism is rare for at least two reasons. Reporters don't go beyond superficial reporting on the subject because they don't know enough or don't have the confidence to do so. And there's no incentive for a grantee to admit that its foundation-funded program has not been as effective as it could have been.

Ten papers were prepared in advance of the seminar (and all of them, plus presentation materials, are available online). These papers will be published together as a book that Harvard Education Press will release in the fall. Based on his analysis of investments in public policy research and advocacy, Andrew Rotherham of the Progressive Policy Institute suggested that some foundations may avoid funding elementary and secondary education because the politics are much more "rough and tumble" than at either the pre-elementary or higher education levels. And separately both Rotherham and Jay Greene of the Manhattan Institute for Policy Research write that education grantmakers are focusing much too little of their attention on public policy and research. Greene calls these "higher-leverage activities," since they require fewer private dollars than direct program funding but ultimately can raise more money for programs through increased public funding.

5. RESEARCHER STIRS CONTROVERSY BY SUGGESTING FOUNDATION EDUCATION PROGRAM OFFICERS ARE 'OUT OF THE MAINSTREAM'

The most controversial presentation at the American Enterprise Institute seminar was based on a paper by Tom Loveless of the Brookings Institution. The paper surveyed education program officers and compared their responses to questions about student behavior with those of the general public. Loveless reported that program officers' opinions often differed drastically from public opinion - he described them as being "out of the mainstream" - though this was less the case for foundation staff who had teaching experience. As a result of the current mismatch, Loveless recommends that foundations hire program officers who have been teachers, as well as seek out staff who are "traditionalists or non-progressives" and appoint an outside review committee to evaluate grant portfolios. Several audience members questioned Loveless's research and his recommendations, including William Porter of Grantmakers for Education, who had almost nothing positive to say about his paper.

6. TWO FOUNDATIONS WORK TO BOOST CHARTER SCHOOLS BY SPONSORING SCHOOLS AND HELPING THEM FIND SUITABLE BUILDINGS

Two foundations have announced initiatives to boost the charter school movement. Later this year, the Thomas B. Fordham Foundation will become the first private foundation to sponsor charter schools. According to a press release issued last fall, the Ohio Department of Education gave the foundation approval to authorize and supervise charter schools and to hold them accountable for delivering results and obeying laws. The foundation is currently identifying the charter schools in the Dayton area that it will begin sponsoring in the 2005-2006 school year. It hopes its efforts will serve as a model for other foundations and nonprofits hoping to advance the charter school movement.

Meanwhile, the Ewing Marion Kauffman Foundation has created a fund to help charter schools overcome what it says is their greatest obstacle: obtaining suitable buildings in which to operate. The Kauffman Foundation, in partnership with Greater Horizons, an affiliate of the Greater Kansas City Community Foundation, will provide one dollar for every two dollars contributed from other funders, up to $5 million, to its new Building Block Fund. The Fund will help defray the costs associated with operating charter schools nationwide, according to a Question and Answer document released by the foundation. Its presence, and its work in providing credit enhancement, should help charter schools attract needed capital by overcoming the reluctance of banks to loan money and of landlords to provide affordable long-term leases. For more information, contact the foundation's Bob Litan, vice president for research and policy.

7. COMMUNITY FOUNDATION LEADER RECOMMENDS FOREIGN COUNTERPARTS AVOID U.S. APPROACH; FUND SOCIAL JUSTICE INSTEAD

Community foundations, particularly those operating in the developing world, must be committed to social change and social justice, according to Emmett Carson of the Minneapolis Foundation. Carson spoke at the Worldwide Initiatives for Grantmaker Support's meeting, "Community Foundations: Symposium on a Global Movement," held in Berlin last December and supported in part by the Charles Stewart Mott Foundation. In his plenary speech, Carson warned against community foundations in the developing world being modeled after the donor-focused approach of U.S. community foundations, arguing that this approach, for starters, doesn't work in countries where there are few wealthy citizens and when so many people are struggling to survive. It's easy to avoid social justice grantmaking, Carson said, but doing so threatens the key justification for foundations' existence within a democratic society. It could also have the unintended consequence of convincing disenfranchised citizens that their only means to gain attention is to act outside the democratic system, possibly through other-than-peaceful means.

8. SOCIAL CHANGE ADVOCACY AN INCREASING FOCUS OF FOUNDATION GIVING TO INTERNATIONAL CAUSES, ACCORDING TO REPORT

Social change advocacy is receiving increased attention from foundations that give to international causes, according to a report surveying the field of global philanthropy promotion. This report, Promoting Philanthropy: Global Challenges and Approaches from the foundation-funded International Network for Strategic Philanthropy, also indicated that efforts to enhance indigenous philanthropy and engage new philanthropists are receiving increased attention in global philanthropy promotion initiatives. So, too, are new broad-based strategies such as advocating for legal reform, public awareness campaigns, and donor education. Among other hurdles, the field is still hampered by a lack of philanthropy watchdog groups and strong research organizations in many countries, according to the report's authors, Paula Johnson of Harvard University, Stephen Johnson of The Philanthropic Initiative, and Andrew Kingman of Allavida.

Allavida also sponsored, through its Alliance magazine, an online discussion focused on the topic of international giving. Housed at the Skoll Foundation's Social Edge site, Getting Global Giving Going focused on increasing giving in general terms, with special attention to getting individuals in the developed world to give to those in need elsewhere. But a consensus also seemed to form around the need for increased support for self-directed, "home-grown institutions" in the developing world that don't simply carry out the wishes or demands of international philanthropists.

9. REPORTS HIGHLIGHT TWO PHILANTHROPIC-LED EFFORTS TO BOOST DISTRESSED REGIONS; IN NORTHEAST OHIO, MID SOUTH

Two efforts to boost the economy and philanthropy in economically distressed areas of the country have issued reports on their efforts. One, focused on Northeast Ohio, including Cleveland, called the approach "regioning." This foundation collaborative, the Fund for Our Economic Future, recently issued its first annual report describing what it has achieved in its first year and what it will work on in the years ahead, including the establishment of a Dashboard of Regional Indicators. This Dashboard will provide information on the region's economy and opportunities for grantmakers to help it improve, according to the 2004 annual report, We the Region.

The Mid South Commission to Build Philanthropy, meanwhile, recently culminated 18-months of study with a report offering recommendations for the philanthropic leadership in the tri-state region of Arkansas, Louisiana, and Mississippi. Funded by the Ford Foundation and released by the Foundation for the Mid South, this report, Where Hope and History Rhyme calls for a benchmark study of the region's nonprofit sector and makes a variety of other recommendations. It also sets a goal for regional foundations to increase by 300 percent in the next five years the financial resources they devote to promoting racial, social, and economic equity.

10. FIRST-EVER SURVEY OF GIVING TO GAY ISSUES FINDS GROWING POOL OF FUNDERS, BUT STILL LIMITED SUPPORT; JUST 0.1 PERCENT OF ALL GIVING

Over a quarter of the nation's 50 largest foundations are funding efforts of concern to gays and lesbians, according to a first-ever survey of the field. However, overall support for sexual minorities works out to be just one-tenth of one percent of all foundation giving. Funders for Lesbian and Gay Issues released the first of what it intends to be an annual survey documenting funding for sexual-minority issues. The organization hopes to have more complete data as the survey becomes established, and it also plans to analyze more closely the patterns of giving by geographic region as well as giving for social change vs. giving for social support. Lesbian, Gay, Bisexual and Transgender Grantmaking by U.S. Foundations is based on 2002 data, when the same-sex marriage issue wasn't yet as prominent as it is now. Even so, marriage and other related gay civil rights concerns already received the highest percentage of funding, or nearly one-fourth of all funding for gay causes. And 29 percent of total support for LGBT issues in 2002 came from private foundations started by gay men or lesbians.

Of Related Interest

Advice Offered for Small Foundations to Make Better Use of Advocacy, Communications
A pioneer in the foundation communications field, Frank Karel urges small and local foundations to "take a long, serious look" into how they might better use communications and advocacy to advance their objectives. A former communications director at the Robert Wood Johnson and Rockefeller foundations, Karel received a 2005 leadership award from Grantmakers in Health. In his acceptance speech, he spent most of his time providing examples of how he's helping a small, family foundation in Washington, D.C., the Trellis Fund, where he is a trustee, influence local policymakers through support for needed research and communications. Meanwhile, GIH has released an Issue Brief that provides other examples of foundations that have begun to engage in advocacy, including what the report calls media advocacy. Funding Health Advocacy includes strategies to enlist board members to support policy and advocacy efforts, often the biggest hurdle for not doing so.

New NCRP Report Defines Social Justice Philanthropy, Encourages Foundations to Take Part
Progressive and mainstream foundations need to "stop experimenting with philanthropic dollars and start using them in a coherent and consistent way," according to the National Committee for Responsive Philanthropy. That coherent and consistent way, according to a new NCRP report on the subject, is through social justice philanthropy, or the practice of supporting nonprofits working for structural change and greater opportunity for those who are politically, economically, and socially disadvantaged. Social Justice Philanthropy: The Latest Trend or a Lasting Lens for Grantmaking? seeks to help shape this relatively new concept of giving and encourage those "supposedly progressive funders" who are not already funding social justice causes to do so.

Conference, Competition to be Held Next Month for Nonprofits with For-Profit Aspirations
The third annual conference for nonprofits and foundations to talk about making money and not just giving it away will be held June 9-10 in Jersey City, N.J. Organized by the Yale School of Management-the Goldman Sachs Foundation Partnership on Nonprofit Venues, the conference focuses on helping nonprofits that wish to supplement their charitable activities with business income, a practice known as social enterprise. At the conference, the final National Business Plan Competition for Nonprofit Organizations will be held, at which 20 venturesome nonprofits will compete to win monetary and business-planning assistance.