1. FOUNDATIONS CALLED ON TO BOOST GULF COAST NONPROFIT INFRASTRUCTURE; DEVELOP 'SISTER' RELATIONS, LOCAL ORGANIZING COMMITTEE

A month and one-half after Hurricane Katrina devastated New Orleans and surrounding areas in the Gulf Coast region, American foundations have already collectively pledged more than $100 million to relief and rebuilding activities, and these recovery efforts have raised well over $1.7 billion from all sources of philanthropy. But much more will be needed to help with long-term recovery efforts, and a growing consensus seems to be forming that foundations should focus on boosting the Gulf Coast nonprofit infrastructure, which wasn't extensive to begin with. In particular, Martin Lehfeldt of the Southeastern Council of Foundations suggests that foundations could offer monetary support and partner, or develop "sister" relations, with the region's community foundations, nonprofit associations, or entire communities.  In a Sept. 19 Web site post, Lehfeldt wrote that one of the greatest specific needs will be for mental health counselors and professionals to help residents cope with the disaster.

Another idea is for foundations to work through a locally-driven coordinating committee. All grantmakers, private and corporate, national and local, currently engaged in hurricane relief should form a Gulf Coast Rebuilding Committee, according to consultant Susan Raymond. Raymond wrote in her Sept. 16 Observations in Philanthropy column that such a committee would inventory and coordinate the strategies of major funders to avoid duplication of efforts, increase communication with the public agencies engaged in rebuilding, manage and evaluate the grantmaking, and ensure that a local nonprofit infrastructure is fully restored. Raymond stresses the committee should only last two years. And it could include or be led by, for example, Lehfeldt's regional association of grantmakers or the Foundation for the Mid South's Hurricane Katrina Recovery and Restoration Fund.

2. ADVOCACY ON BEHALF OF GULF COAST'S DISENFRANCHISED URGED; SECTOR MUST 'LIVE UP TO ITS DEMOCRATIC POTENTIAL'

Foundations and the nonprofit sector in general need to significantly step up their advocacy activities as the Gulf Coast recovery effort gets underway, especially to ensure that the poor who were so hurt by the hurricane aren't left out of the rebuilding process. Both Martin Lehfeldt of the Southeastern Council of Foundations and George Penick of the Foundation for the Mid South have recently made this point. On a Sept. 16 conference call organized by the Forum of Regional Associations of Grantmakers, Lehfeldt said that if the region's minority and poor populations aren't part of the rebuilding effort, the area will continue to exist on "the same fault lines of race and class."

But no one has made the point quite as strongly or as clearly as Rick Cohen of the National Committee for Responsive Philanthropy. In a Sept. 20 essay, Cohen calls on the sector to "live up to its democratic potential," something he says it failed to do prior to the hurricane, when it didn't advocate forcefully enough against budget cuts and inadequate government oversight that contributed to the damage the hurricane wrought. Cohen calls on the sector "to fight tooth and nail for the democratic right" of those displaced by the hurricane to have a say in rebuilding the region.

3. STUDY AFFIRMS NEED FOR ADVOCACY TO MINIMIZE PROSPECT OF FEDERAL BUDGET CUTS WITH MULTI-BILLION-DOLLAR CONSEQUENCES FOR NONPROFITS

A new study affirms the immediate need for advocacy at the federal level to minimize proposed federal budget cuts that it finds will have serious consequences for nonprofits. This working paper from the Aspen Institute's Nonprofit Sector Research Fund analyzes the implications for nonprofits of budget plans developed by President George W. Bush and the Congress for fiscal year 2006 and beyond. Written by Alan Abramson of the Aspen Institute and Lester Salamon of Johns Hopkins University, this paper, based on federal budget proposals developed last spring, finds that federal spending in program areas of concern to nonprofits may be reduced by up to $71.5 billion in inflation-adjusted dollars over the next five years. And that amount could rise even higher if additional cuts are necessary to offset the government's Hurricane Katrina relief costs. The paper, the first in a series of studies on the status of government funding in program areas of concern to nonprofit organizations, finds that private giving would have to increase two to three times its current rate to offset the reductions, an unlikely prospect.

4. FOUNDATIONS SHOULD KEEP BETTER WATCH ON GOVERNMENT, TWO WATCHDOG LEADERS AGREE

In a Sept. 20 essay, the National Committee for Responsive Philanthropy's Rick Cohen calls on foundations and nonprofit organizations to be watchdogs of federal and local governments and corporations. Cohen lays out a Nonprofit Watchdog Agenda which addresses his specific concerns that, in the aftermath of Hurricane Katrina, conservatives will launch their favorite social experiments - like school vouchers or support of faith-based service providers - and corporations will redevelop the region without the involvement of those who would be most affected.

And, at the national level, the federal watchdog group OMB Watch has begun calling for efforts that would push the federal government to be more responsive. The aim is to end an era of smaller government and unquestioned reliance on the private sector that OMB Watch's Gary Bass said contributed to the devastation from Hurricane Katrina. Bass explained in a Sept. 19 letter that this agenda, which OMB Watch is calling a Domestic Security Initiative, consists of five elements, including addressing the nation's infrastructure needs, protecting the environment, and investing in people, or social service needs.

5. PHILANTHROPY BLOGGER AIMS TO ENCOURAGE FOUNDATION ADVOCACY EFFORTS TO ADDRESS PERSISTENT POVERTY

A new anonymous philanthropy blogger has similar aims to NCRP's Cohen and OMB Watch's Bass (see item #4), seeking to encourage more foundations to fund advocacy efforts that try to "shift power, money and habits of mind." Foundations should challenge the basic structures that contribute to the persistent poverty in our society, this blogger, identified only as Phil Anthropoid, wrote in a Sept. 5 post to his blog, "Hail Sons and Daughters of Carnegie!" Phil Anthropoid says he works at a "medium-sized, East Coast foundation," and he named his blog to reflect his primary audience: employees at foundations, whose jobs were made possible because of Andrew Carnegie and other wealthy philanthropists.

6. ARTICLE SUGGESTS INCREASED STATE GOVERNMENT OVERSIGHT COULD RESULT IN FOUNDATIONS MIGRATING TO 'CHARITABLE-FRIENDLY STATES'

Increasing efforts to strengthen government oversight of nonprofits and foundations at the state level may encourage foundations to migrate to "more charitable-friendly states," according to an article in the July/August issue of the Philanthropy Roundtable's Philanthropy magazine. If this kind of movement actually occurs, the four states where legislators are currently most actively considering new measures to crack down on nonprofits - Texas, Massachusetts, California and New York - would likely be the most seriously affected. Written by Stephanie Silverman, outside counsel to the Roundtable-affiliated Alliance for Charitable Reform, the article focused on bipartisan legislative stirrings in these four states while noting that at least eight other states are also considering nonprofit reform. The article contends that few if any of the proposed measures are needed to punish malfeasance adequately and that better application of existing laws would do the trick.

7. SOME COMMUNITY FOUNDATIONS WILL NOT SURVIVE THE CHALLENGES OF THE NEXT 20 YEARS, NEW REPORT SUGGESTS

Some community foundations will not survive the challenges that lie ahead for them, according to a new report. Looking into the future at how the environment for community foundations may change over the next 20 years, On the Brink of New Promise: The Future of U.S. Community Foundations analyzes the increasingly competitive context in which community foundations operate, and reports that every service and product that community foundations offer is now or will soon be available from other sources.  To adapt to this new landscape, community foundations will need to focus less on operational issues such as donor services and grants management, or on trying to compete with similar entities. Instead, foundations should concentrate on serving as leaders, conveners, and advocates on behalf of the community, according to the report, part of a project funded by the Charles Stewart Mott and Ford foundations. Tools to help community foundations adapt to the future will be posted in November on the project's Web site, where the report can also be downloaded. The Mott Foundation's Web site contains still more information about the study, including an interview with the authors, Lucy Bernholz of Blueprint Research & Design, and Katherine Fulton and Gabriel Kasper of Monitor Institute.

One of the community foundation field's most prominent leaders agrees with this project's assessment. In a September Alliance Extra article on the future of the community foundation field, Peter Hero of the Community Foundation Silicon Valley writes that the greatest asset of community foundations is not their ability to make grants to community organizations. Instead, it is their role as "apolitical objective third party conveners," connecting disparate parts of the community.

8. PHILANTHROPISTS SHOULD PREPARE FOR AND BE ABLE TO WITHSTAND CONTROVERSY, ACCORDING TO MEMOIRS OF SECTOR PIONEER

Everyone engaged in philanthropy should expect to generate controversy and must be able to withstand it and plow ahead to achieve their goals. That's according to nonprofit sector pioneer Brian O'Connell of Tufts University. O'Connell writes in a new memoir that an important legacy of philanthropy is institutions, such as public libraries and kindergartens, which now seem commonplace but which were initially attacked as radical and ill advised and only gradually gained acceptance with time. In Fifty Years In Public Causes: Stories From A Road Less Traveled, published by Tufts University Press, O'Connell draws on his multiple leadership experiences in the nonprofit sector, most notably as one of the founders of Independent Sector. He identifies lessons in establishing new organizations, most of which can apply to foundation programs. There's a need to score major early successes and then communicate these widely to build momentum for even greater achievements as time goes on. Also important is admitting the factor of luck: "never be so smug as to think we did it all ourselves," he writes, or that it would be just as successful if done over again.

William Schambra of the Hudson Institute's Bradley Center for Philanthropy and Civic Renewal makes the same point about needing to withstand controversy in a Q&A interview in the September Foundation Advocacy Bulletin from the Alliance for Justice. Referring specifically to public policy advocacy, Schambra says it is controversial by nature. Merely by challenging the "intellectual status quo," public policy advocates are going to be attacked by those who disagree with their point of view, he said.

9. FOUNDATION-FUNDED FIELD OF NONPROFIT MANAGEMENT CRITICIZED FOR LACK OF RESULTS AND FOR POSSIBLY MAKING SECTOR WORSE

One major foundation and many others have poured millions into building the field of nonprofit management education and set aside significant funding for evaluation - and yet, according to Mark Rosenman of the Union Institute, even with all the evaluations it's still not possible to say that nonprofit management programs have impacted the sector appreciably. Rosenman was one panelist at a Sept. 13 discussion on the subject of nonprofit management education at The Hudson Institute's Bradley Center for Philanthropy and Civic Renewal. Moderated by the Center's director William Schambra, who has repeatedly criticized the "professionalization" of the nonprofit sector, this panel featured two representatives from the nonprofit management education field, John Palmer Smith of the University of Wisconsin-Milwaukee and Naomi Wish of Seton Hall University, and two critics: Pablo Eisenberg of Georgetown University and Rosenman. Eisenberg laid out several specific criticisms but concluded that overall, academic centers offering nonprofit management degrees have improved in the past several years. And he praised the Hudson Institute for hosting this discussion, which he said was one of the first to really analyze the field. A transcript is expected to be posted online soon.

Beyond suggesting that nonprofit management programs haven't improved the nonprofit sector, Rosenman expressed concern that these programs may, in fact, be harming the sector. He worried that the degree programs function too much merely as "credentialing mechanisms," and they overemphasize professionalization and contribute to a loss of passion among those leading the sector. The programs could also be taking attention away from the development of visionary leaders and from the ability of the sector to adequately tackle social problems, he said.

10. PRIZES DEMANDING SOLUTIONS MAY REPRESENT NEW FRONTIER FOR PHILANTHROPY, PHILANTHROPY SUGGESTS

Incentive prizes, which demand solutions to specific problems, may represent a new frontier in philanthropy, according to Philanthropy. The July/August issue of the Philanthropy Roundtable's magazine features a profile of one "philanthropist with other people's money" who has helped spark innovation in the field of commercial space travel through a recently awarded $10 million prize, and who the article says is poised to advise others on establishing or improving prizes they offer. Aerospace entrepreneur Peter Diamandis established and solicited donors for the X Prize and his nonprofit X Prize Foundation after learning that the first transatlantic flight was helped along by a philanthropy-funded prize. The magazine reports that Diamandis will unveil three new X Prizes this fall in the areas of energy, the environment, and medicine, and he is considering expanding beyond science to look at social needs such as improving education or reducing crime. Each prize will lay out a specific problem that prize nominees should seek to solve, without restricting how they attempt to solve them, according to the magazine.

Of Related Interest

All But 'Complete Control Freaks' Are Warned Against Starting Foundations, Forbes Reports
According to an Aug. 15 Forbes article, one financial adviser is recommending to most clients, all but the "complete control freaks," not to start a private foundation unless they plan to donate at least $3 million to it, which is double the threshold he set a few years back. The article implied that this adviser's position is not an anomaly. Why advise against establishing a foundation? The costs and hassles of running foundations are increasing as Congress weighs new rules to crack down on the sector and cleanup the publicized abuses at foundations, according to the article.

Foundations Extend Partnership to Boost Higher Education in Africa
Six foundations have joined together to invest $200 million over the next five years in higher education institutions in Africa, building on the efforts - and the more than $150 million already committed - during the first five years of the Partnership for Higher Education in Africa. According to a Sept. 16 press release, the Partnership's original foundations - the John D. and Catherine T. MacArthur, Ford, and Rockefeller foundations and the Carnegie Corporation - will be joined over the next five years by the William and Flora Hewlett and Andrew W. Mellon foundations. The partnership funds efforts to build core capacity and support special initiatives at select universities in seven nations: Ghana, Mozambique, Nigeria, South Africa, Tanzania, Uganda, and Kenya.

Foundation Questions Its Non-Controversial Support for Increasingly Controversial Grantee
"When a grantee's work is so much associated with something not related to the work you are funding, how does that affect your grant? I don't know the answer to that. It's something we are going to have to look at." So said Greg Shaw of the Bill and Melinda Gates Foundation, in response to an Aug. 27 Salon.com article about the foundation's support of the Discovery Institute. That Seattle think tank is gaining increasing attention for its work as one of the leading proponents of the controversial, anti-evolution "intelligent design" approach to explaining how the world was created. Shaw told Salon that the foundation's multi-year, $10 million-plus support of Discovery is strictly focused on transportation issues in the Pacific Northwest.

Nonprofits Need to Adjust to 'New Funding Priorities,' New Book Counsels
Nearly all funders of nonprofits, including foundations, are changing their funding approaches and expect their grantees to be more results-driven and business-savvy, according to a new book that counsels nonprofits on adjusting to these "new funding priorities." Author Alice Korngold, a consultant and founder of Business Ventures Unlimited, offers numerous real-life examples of nonprofits that have become more business minded, sometimes by merging with other nonprofits, in Leveraging Good Will: Strengthening Nonprofits By Engaging Businesses. She also writes that many foundations at the regional level are pooling funds specifically for economic development with a focus on entrepreneurship and innovation. More information can be found at Korngold's Web site.

Related Reading

Publication Analyzes, Offers Lessons Learned from Popular Foundation Feedback Tool
More than 50 foundations have taken part in the Grantee Perception Report (GPR), a two-year-old assessment tool of the nonprofit Center for Effective Philanthropy.  GPR provides foundations with feedback from their grantees on foundation performance and then compares the feedback to grantee perceptions of other foundations. A new publication from the Center, Turning the Table on Assessment: The Grantee Perception Report, analyzes the GPR tool and offers lessons learned, including: GPR data should be shared at all levels of the foundation, and having at least 30 grantees seems to be the minimum threshold to make the survey worth the effort.  The new report will be a chapter in a forthcoming book, A Funder's Guide to Organizational Assessment, by the Center's Phil Buchanan, Kevin Bolduc, and Judy Huang.

Funders Report Focuses on Problems Faced by Sexual Minorities
An estimated 40 to 50 percent of the homeless youth living on New York City's streets identify as lesbian, gay, bisexual, or transgendered, since most domestic violence shelters do not accept gay men or transgender people and there is rampant abuse and harassment at those that do. These are among the findings in a new report focused on the struggles of gay and transgender individuals who are poor or from racial minorities. Funders for Lesbian and Gay Issues released this report, Out for Change: Racial and Economic Justice Issues in Lesbian, Gay, Bisexual and Transgender Communities, to help funders and others understand the complexity of racial and economic justice issues. The report also offers funding recommendations and identifies nonprofits and foundations focused on addressing homelessness, inhumane treatment in prisons, immigrants' rights, and other social problems.