1. NEW, LARGE FOUNDATION BEING ESTABLISHED BY ANONYMOUS BILLIONAIRE, ACCORDING TO NEWSPAPER; SET TO FUND HEALTH CARE NEEDS IN AFRICA

An anonymous billionaire is currently in the process of establishing a new foundation that is expected to spend $50 million annually, the equivalent of a foundation with assets of one billion dollars. The new foundation will make grants focused on improving health conditions in sub-Saharan Africa, according to a Nov. 10 article. Florida's Bradenton Herald newspaper was one of many in the Knight Ridder Newspapers chain that ran this article which explored the reasons for and the history of giving anonymously. The reporter was unable to uncover the benefactor's identity or the foundation's name. The article suggested some parallels between this anonymous donor and the duty-free shop chain founder Charles Feeney, whose Atlantic Philanthropies became public less than a decade ago. Like Feeney's philanthropy, this new donor's foundation will be incorporated offshore but staffed in New York. To further shield its identity, this foundation will donate through other entities, including other offshore institutions, the newspaper also reported.

2. HOUSE PASSAGE OF NONPROFIT 'ANTI-ADVOCACY' BILL SHOULD BE WAKE-UP CALL; A RESULT OF SECTOR'S 'PANDERING' TO CONGRESS?

Though it is unlikely to become law this year, a "Nonprofit Gag Provision" that passed as part of a U.S. House of Representatives bill establishing a new affordable housing fund should be a wake-up call to the sector -- though the call's underlying message is in dispute. In a Nov. 1 article, OMB Watch explained that the provision is "extremely far-reaching" because it would prohibit federal money from the fund going to any nonprofit that either itself engages in political advocacy, even nonpartisan voter registration drives, or is merely "affiliated" with another entity, including a corporate donor, that does. In an Oct. 26 email, OMB Watch's Gary Bass said that this "incredibly restrictive anti-advocacy" provision is just the latest example of a 20-year pattern of conservatives trying to silence the advocacy voice of nonprofits. But the fact that this time the effort actually won a majority of votes in the House should serve as a warning to the sector of the need for vigilance, he said. OMB Watch reports that the provision is not expected to come before the full Senate this year. But the provision could serve as a model for future attempts to limit nonprofit advocacy efforts in Congress.

Beyond being a wake-up call for vigilance on the Hill, Todd Cohen in his Nov. 2 Philanthropy Journal column argued that the nonprofit gag rule underscores the "history lesson that bowing to bullies is a big mistake and sure to backfire." The bullies in Cohen's formulation are the foundations and federal regulators that the Panel on the Nonprofit Sector "pandered to" with its recommendations stressing self-policing -- rather than greater government regulation -- as the best means to improve the sector. Cohen said the "philanthropic-industrial complex" is "fat and smug, breeds excess and self-dealing, and is unbridled in its hoarding of assets and its control and manipulation of the charitable marketplace." Sector leaders need courage and vision to free charity from political and philanthropic bullies, Cohen concluded.

3. IDEAS FOR FOUNDATIONS IN POST-KATRINA, LONG-TERM COMMUNITY REBUILDING OFFERED THROUGH TELECONFERENCE, ESSAY

The time is drawing near when foundations can have the most impact in helping communities affected by Hurricanes Katrina and Rita recover and rebuild, according to the November Family Giving News. The National Center for Family Philanthropy released the latest issue of its newsletter in advance of a Nov. 17 teleconference that explored how foundations offer help in rebuilding the region after short-term relief efforts have been fulfilled. The newsletter offers general ideas and tips for how foundations can help in disaster recovery, including by increasing overall giving for the year. More specific ideas and recommendations for long-term foundation support to boost the region will be offered soon by the Southeastern Council of Foundations and the Donors Forum of South Florida, once long-term needs are more fully assessed, the two associations' leaders announced during the teleconference.

In the meantime, on its Katrina Updates Web page, the Southeastern Council has posted an essay from a foundation consultant offering "out of the box" options for foundation support of the region. Steven Mayer of Effective Communities stresses that foundations should not "over-design, over-plan, or wait overly long" in offering support, and they should focus on advocacy efforts, making sure those in the region who are marginalized have some say in rebuilding activities. In his paper, Mayer also suggested that foundations should alter their traditional approach, by supporting more economic development activities and shifting their equity investments to include more companies operating in, or in some other way directly benefiting, the region.

4. FOUNDATIONS SHOULD STRESS NEED FOR NONPROFIT SECTOR REFORM TO GRANTEES AND PUBLICLY CRITICIZE ABUSES IN SECTOR, KEY SENATOR SAYS

The U.S. Senator leading the push for nonprofit sector reform says he will persist in his legislative efforts until he's confident the sector has improved. He's also calling on foundations to help him in the effort. Sen. Charles Grassley, R-Iowa, told attendees at Independent Sector's conference in October that foundations should exert their power to emphasize to current and potential grantees the need for reform and to follow the best practices and other recommendations put forth by the Panel on the Nonprofit Sector and other entities. In his remarks, he also called on all nonprofits to "stop standing silently" and be more vocal when newspapers report on serious abuses in the sector. And he questioned the sincerity of calls for greater funding for Internal Revenue Service oversight, citing the sector's surprisingly minimal lobbying in support of a recent measure he proposed that would have done just that. Though he himself sees increased funds for IRS oversight as only a partial answer to reform, he suggested that sector calls for it appears to be "nothing more than a good sound bite for lobbyists opposing reform."

Senator Grassley, chair of the Senate Finance Committee, also said at the conference that Hurricane Katrina-related matters have prevented him from introducing a complete nonprofit sector reform package this fall. Instead, he said he'll work in "piecemeal" fashion, with a first phase of reforms introduced before the year is out and then a second phase coming next year. On November 18, the Senate passed the "Tax Relief Act of 2005" (S. 2020), which contains a variety of provisions affecting charities and charitable giving, including a measure allowing non-itemizers to deduct cash contributions over $210 for individuals and $420 for joint filers; a provision permitting individuals over 70½ to make tax-free distributions from their IRAs to charities; and new guidelines for donor-advised funds. On December 8, the House passed its tax bill, the "Tax Cut Extension Reconciliation Act of 2005" (H.R. 4297), without including charitable measures. A House-Senate conference committee will try to reconcile the many differences between the two bills, including the differences in the charitable reform provisions.

5. NONPROFITS AND FOUNDATIONS HAVE STRENGTHENED OVERSIGHT AS RESULT OF SCRUTINY, TWO STUDIES SAY; ONE WARNS AGAINST GREATER REGULATION

Two recent studies of governance practices in nonprofits and foundations suggest that these organizations have reacted to recent scrutiny of the sector by strengthening their oversight practices. And one of these, a study from Johns Hopkins University, goes so far as to imply that increased regulation of nonprofits may be unnecessary or at least should be enacted with "considerable caution." Based on a nationwide, broad-based sample, this survey found nonprofit oversight practices are far more in line with Senate Finance Committee recommendations than recent "alarmist media" scrutiny suggests. Though such a survey can't independently verify nonprofits' self-regulatory practices, this report by the university's Center for Civil Society Studies finds that most boards are already significantly involved in strategic oversight functions. But only a minority has whistleblower protections in place as the Senate has recommended.

The second study from the Center for Effective Philanthropy is based on a survey of chief executives and board members at 53 large foundations. The report found that nearly 80 percent of these foundations have voluntarily established practices, such as establishing a conflict-of-interest policy and forming an audit committee, now required of publicly-traded companies under the three-year-old Sarbanes-Oxley Act. This report, Beyond Compliance: The Trustee Viewpoint on Effective Foundation Governance, focused on identifying what board trustees' perceive as foundation effectiveness. The more engaged in the business operations of a foundation a board is, the more trustees perceive it as effective, according to the report.

6. IN THE WAKE OF KATRINA, FOUNDATIONS CALLED ON TO INCREASE ADVOCACY IN POVERTY FIGHT -- AND NOT JUST POVERTY OVERSEAS

Foundations need to help strengthen government and the nonprofit sector in the fight against poverty and not just offer support after crises occur. That was one of the main themes in the discussion on rebuilding Katrina-affected communities at Independent Sector's October annual conference. Melissa Flournoy of the Louisiana Association of Nonprofit Organizations focused her comments at a special plenary session on the need for greater public policy advocacy from foundations and nonprofits to insure against government "shredding our community safety nets" and to recommit to fighting poverty and helping the most disadvantaged in society.

Part of the concern stems from the fact that some of the biggest foundations fighting poverty have in the past decade or so turned their focus overseas, according to the Nov. 14 New York Times. In the cover article of its annual Giving section, the newspaper reported that foundations and philanthropy in general offer little support for the human service needs of the poor in this country, favoring health, education, and religious institutions instead.

7. NEWSWEEKLY: FOUNDATIONS USING COLLEGES AS IDEA 'BREEDING GROUNDS,' SHUNNING PUBLICITY FOR APPEARANCE OF OBJECTIVITY

"Private, ideologically driven" foundations, both those leaning conservative and liberal, are increasingly using colleges as their idea "breeding grounds," and are doing so with little or no public awareness. So argued the Sept. 30 issue of the Boston Phoenix. This alternative newsweekly reported in its article, "Buying the Campus Mind," that foundation support for university research is increasingly geared toward politically-charged fields of academia, such as the humanities and the social sciences, where analysis is often partly subjective. And yet there has been little or no public criticism of such funding, in contrast to some vocal objections to private, corporate funding of research in the hard sciences, such as medicine. The reason, according to the Phoenix, is that most foundation funders and their university research grantees shun publicity "to maintain the appearance of objectivity." When an "eco-friendly" funder supports a research center that makes the case for greater environmental regulation, it raises the question of how much influence the funder's own perspective had on the scholarship. Alongside its article, the Phoenix printed its own lists of the top conservative and liberal funders of colleges and universities.

8. NONPROFIT SECTOR SHOULD CREATE PANEL TO PROVOKE 'CIVIC REAWAKENING,' CONFERENCE PARTICIPANTS SUGGEST

Building on the Panel on the Nonprofit Sector, the sector should create a new panel on renewing the social compact that would be charged with offering recommendations to boost the infrastructure for civic participation and provoke a "great civic reawakening." That was a predominant theme at Independent Sector's October annual conference, and was raised in several sessions including the Oct. 24 plenary that focused on how the business, government, and nonprofit sectors can work together to boost civic engagement and the social compact. John Bridgeland, president of Civic Enterprises and a former Bush Administration official, called on the nonprofit sector to convene groups and commissions addressing the key organizational and public policy barriers to civic engagement. He also called on foundations to fund what they see as the most promising civic efforts. Meanwhile, Janet Murguia of the National Council of La Raza called on foundations to recommit to century-old efforts to integrate immigrants by supporting their efforts to learn English and become naturalized citizens.

9. SURVEY: TYPICAL DONOR HAS 'RELAXED, ALBEIT UNINFORMED' VIEW OF FOUNDATIONS; UNFAMILIARITY OF PUBLIC WITH OVERALL SCOPE OF NONPROFIT SECTOR COULD BE DAMAGING IN LONG-TERM

The typical American donor has a "relaxed, albeit uninformed" view of foundations, and very few question foundations' tax-exempt privileges. That's according to a new report based on focus groups that assessed the level of trust in the sector of small individual donors. When these donors -- who contributed at least $300 to charities in the past year -- do think about foundations, the survey's report finds, they often do so in the context of small or family foundations and not large or corporate entities. And they give foundations surprisingly wide latitude about how they use their money. Produced by the nonprofit Public Agenda for the Kettering Foundation and Independent Sector, The Charitable Impulse reports that donors don't give as much leeway to nonprofits in general as they do to foundations. Also, the typical donor essentially defines the sector to be those charities that provide help to the unfortunate, not universities, museums, and other organizations that charge for services. That lack of familiarity could hurt the sector in the long-term, the report suggests, but at the moment it enjoys an overall positive, enthusiastic view.

10. REPORT DOCUMENTS SOCIAL JUSTICE PHILANTHROPY; CORPORATE INFLUENCE ON FOUNDATION BOARDS ONE FACTOR HINDERING THIS GRANTMAKING

Both a more conservative political climate and a push for results-oriented philanthropy have contributed to changes in the practice and definition of social justice grantmaking, which has also been altered by the inclusion of more corporate representatives on foundation boards. That's according to a joint survey from Independent Sector and the Foundation Center about foundation support for social justice, defined loosely as grantmaking which has the goal of increasing opportunities for society's most politically, economically, and socially disadvantaged. The field spans all major areas of foundation activity and accounts for 11 percent of overall foundation support, according to Social Justice Grantmaking: A Report on Foundation Trends.

This report includes a chapter, based on interviews with leaders from 20 social justice grantmakers, that focuses especially on the challenges hindering advancement in the field. These include: corporate board members who are less enthusiastic about the whole concept of social justice, in large part because of misconceptions; a degree of self-righteousness and exclusivity among both grantmakers and practitioners in the field, discouraging new players from entering the field; and an often top-down, funder-driven approach. Greater field coordination and strategy is needed, as is greater communication and clarity about the subject, according to the report.

11. REPORT, NEWSPAPER FIND RURAL PHILANTHROPY GROWING, WITH COMMUNITY FOUNDATIONS LEADING THE CHARGE

Private foundations have worked to stimulate rural philanthropy through several large-scale initiatives, according to a new report that estimates endowments geared to serving rural areas have total assets of $1.5 billion. The Forum of Regional Associations of Grantmakers' New Ventures in Philanthropy initiative released this report that finds rural philanthropy is growing across the country, with community foundations leading the charge. The report is a key part of New Ventures new, online Rural Philanthropy Knowledge Center, which also includes how-to resources for creating rural funds and examples of how private and community foundations have helped support rural giving.

Meanwhile, the Nov. 14 New York Times reported on the nationwide rise of community foundations in rural areas, calling it a new kind of grassroots philanthropy. This approach, according to the article, positions community foundations -- to which many residents contribute -- as a central vehicle in helping stem the "debilitating demographic downturn" affecting much of rural America by offering, for example, relocation assistance to new residents moving to rural areas.

Of Related Interest

Emphasis on Grantees' Low Overhead Costs Said to Be A Factor in Leader/Worker Pay Gap
Nonprofits may be holding down wages of their lower-level employees -- though not their chief executives -- in large part to demonstrate to donors how efficient they are in controlling their overhead, according to Christine Letts of Harvard University. Letts was quoted in a Nov. 10 Chronicle of Philanthropy cover story on the increasing pay gap between nonprofit leaders and other workers. "We're holding up organizations that don't give raises as models because we can show their overhead being so low," Letts told the newspaper. "There are very few people out there saying we should pay these people better living wages."

Related Reading

Journalist, Grantmaker Bill Moyers Stresses Need to Help Grassroots Efforts Gain Media Attention
Philanthropy at its most basic should be about spotting people at the "growing edge of things" and giving them the means to nurture their vision for a better world, according to Bill Moyers, the broadcast journalist. Moyers spoke at an Oct. 22 forum at which he gave grantmaking examples from his own experience as president of the Schumann Center for Media and Democracy, formerly the John and Florence Schumann Foundation. "In America today, you have to buy your way into the public square," Moyers said, explaining that Schumann's funding goes for boosting grassroots campaigns by helping them attract the attention of the news media by taking out advertisements, creating video documentaries, and staging publicity events. "Out of sight, out of mind is the old adage. Out of media, out of mind is now the rule," he said in his speech.