1. CONGRESS SAID TO BE PLANNING INVESTIGATION OF LEVEL OF PHILANTHROPIC FUNDING OF MINORITIES; RESPONSE TO INSTITUTE'S RESEARCH, ADVOCACY

Several members of Congress are planning a hearing to explore the issue of philanthropic giving to minority communities, according to the California-based Greenlining Institute. The hearing would build on a similar session held in April in the California State Assembly. The Greenlining Institute reports that members of the Congressional Hispanic, Black, and Asian/Pacific Islander caucuses — led by Rep. Xavier Becerra (D-Calif.) and including Reps. Melvin Watt (D-NC) and Mike Honda (D-Calif.) — are planning the hearing. Date and details are still to be determined. The Greenlining Institute has just issued a summary of the April 24 hearing in California, called by six legislators representing the state's Latino, Black, and Asian/Pacific Islander caucuses to discuss a "possible crisis of diversity in philanthropy." The state's assistant attorney general in charge of charities spoke at the hearing, as did representatives from nonprofits and corporate philanthropy programs and four officials from some of the state's largest foundations, including the James Irvine and California Wellness foundations.

The Greenlining Institute is helping push for these legislative investigations based on what it finds are "markedly inadequate" levels of foundation giving to "minority-led nonprofits." The Institute conservatively estimates that such giving by the nation's largest independent and community foundations accounts for only 3 percent of total grant dollars. In a recent report, Fairness in Philanthropy, the Institute acknowledged serious limitations in its data collection methodology, including the unwillingness of most foundations to participate in the Institute's survey. The Institute will hold a roundtable discussion with nonprofit and foundation leaders in July to discuss ways to improve the methodology for developing foundation diversity statistics. And it plans to issue another report in August that will rate 40 foundations on their diversity efforts. Meanwhile, the Fairness in Philanthropy report recommended that foundations: conduct a self-assessment of their grantmaking to determine how much funding is allocated to minority-led nonprofits; do a better job of tracking data on the ethnic make-up of grantee boards and staff; establish a community advisory board to provide input on foundation practices; and establish inclusive diversity practices for foundation hiring and board composition.

2. FORD FOUNDATION OFFICIAL CALLS ON PHILANTHROPY TO SUPPORT AN ACTIVIST ROLE FOR FOUNDATIONS

Foundations should support needed change in society, and be prepared for criticism from those who hold a more "static" view of the role of philanthropy, according to the Ford Foundation's Barry Gaberman. Gaberman was honored by the Council on Foundations with the 2006 Distinguished Grantmaker Award at its annual conference, and he used the occasion to describe his vision of a nonprofit sector that goes beyond merely providing services or supplementing government activities to purposely challenging the status quo in society. In his speech, Gaberman contrasted this activist role with a more passive view that sees foundations as mainly embracing the status quo and providing legitimacy to existing government policies.

The latter view has been expressed by, among others, the Hudson Institute's John Fonte, who wrote a November 2004 working paper arguing that Congress should investigate foundation practices that "seek to de-legitimize the American regime." Fonte cited numerous examples of what he believes are delegitimizing foundation initiatives, including some undertaken by the Ford Foundation. Gaberman didn't specifically mention Fonte in his speech, but he did say the view that foundations should uphold the status quo has solid intellectual underpinnings and can't be dismissed easily. He challenged organized philanthropy to confront this view forcefully, in part by following through on 10 foundation attributes, including the ability to take on sensitive issues that public institutions shy away from; the capacity to undertake activities that are not profitable or sustainable through earned income; and the opportunity to fund advocacy organizations, which is not always looked on kindly by public officials.

3. PHILANTHROPY CALLED ON TO EXPERIMENT WIDELY, ACT QUICKLY TO HELP SOCIETY ADAPT TO SWEEPING CHANGE

Philanthropy needs to act quickly and experiment vigorously to address significant challenges, according to at least two speakers at last month's Council on Foundations' annual conference in Pittsburgh. In his closing plenary speech, former U.S. Speaker of the House Newt Gingrich suggested that the U.S. may be about to experience the greatest amount of change since the American Civil War, because of expanded scientific knowledge and fierce economic competition with India and China. Gingrich suggested foundations would be better off by: offering more awards and prizes instead of grants, focusing less on efficiency and more on effectiveness, and encouraging more community participation. Foundations need to be "dramatically" more transparent, flexible, and accountable, Gingrich said.

Meanwhile, at a conference session designed around a book he recently authored, Washington Post writer and editor Joel Garreau said that traditional foundations risk being left behind in an impending sea change in philanthropy, in which the most nimble and quickest organizations will gain prominence in the public's mind. Garreau focused his presentation on the major implications for society of modern science and technology advancements. Unlike previous "outward" advancements in agriculture or transportation, he said today's advancements are more "inward," aimed at modifications in the human mind and body. Philanthropy has a vital challenge to help guide technological enhancements such as memory pills and smart machines, to improve performance or overcome disability, in ways that help more than harm society, Garreau said. Such advancements will require major rethinking and restructuring in the issue areas that foundations fund.

Audio recordings of sessions at the Council on Foundations annual conference, including Garreau's, are now available for purchase through a special order form.

4. FOUNDATIONS CALLED ON TO INVEST IN INDIVIDUALS AND CULTIVATE NEW COMMUNITY LEADERS

Besides urging foundations to experiment widely and act quickly to help our society adapt to changes, several speakers at the Council's annual conference last month said that foundations should invest less in institutions and more in individuals. In his opening plenary speech, author Richard Florida said that society needs new ideas and new energy, and that foundations can help find and support the people who have these ideas and energy. Meanwhile, the Washington Post's Joel Garreau said at his session that foundations can help our society adapt to rapid and wholesale change by scanning the globe for people coming up with solutions. The solutions don't have to be ideal or long-term fixes, but rather just "good-enough" for the time-being or appropriate for addressing single, small problems. Others can then adapt the most promising solutions for other contexts and larger-scale problems.

Speakers at a session discussing disaster relief funding stressed the need for foundations to develop new leaders. Susan Berresford of the Ford Foundation said that disasters can actually have some positive long-term consequences, by empowering people to become more involved in civic activities and advocacy. Foundations should seek out potential new community leaders, who may not even see themselves as leaders at the time of the disaster. Angela Glover Blackwell of PolicyLink agreed with Berresford at this session, which primarily focused on the HurricaneKatrina-affectedGulfCoastregion. The region has few established community activists with expertise in crucial rebuilding activities such as housing, Blackwell said, and foundations can help address that deficit.

The Aspen Philanthropy Letter will issue a special supplement in the coming weeks reporting on other noteworthy ideas for foundations — in particular about developing new leaders and thinkers, responding to disasters, and engaging in public policy — that were shared at various sessions during the Council on Foundations' recent conference.

5. FOUNDATIONS SHOULD PLAN QUICKER, MORE CREATIVE RESPONSES TO DISASTERS, ACCORDING TO REPORT OFFERING LESSONS FROM HURRICANE KATRINA

In response to Hurricane Katrina, foundations outside the GulfCoastregion acted too cautiously, funding mostly obvious national entities providing immediate relief and missing an opportunity to strengthen the local nonprofit sector. That's according to a new report offering recommendations for future disaster relief efforts, issued by the Nonprofit Sector and Philanthropy Program of the Aspen Institute. Weathering the Storm: The Role of Local Nonprofits in the Hurricane Katrina Relief Effort, written by former foundation executive Tony Pipa, highlights what it suggests was the largely overlooked contribution of local nonprofits in the Katrina relief effort. These local nonprofits had little access to donors outside the GulfCoastregion, who sent most of their money to large national organizations, such as the American Red Cross. The report recommends that Congress create a special designation which, in "exceptional crises only," requires the Red Cross to contribute five percent of its overall fundraising for a particular disaster to locally-based agencies.

But the report also offers specific recommendations for foundations in disaster relief efforts. These include: planning for quicker and more creative responses to catastrophic events, such as by shifting grants previously restricted to programs into unrestricted funds or by accelerating payments on planned multi-year grants to local nonprofits in an affected area; playing a significant leadership role during immediate relief by partnering with local community foundations and other intermediate organizations such as the United Way; and loaning executives to affected areas or placing staff on the ground during relief efforts.

6. EFFECTIVE FOUNDATIONS GENERALLY HAVE DIVERSE BOARDS AND STAFF, ACCORDING TO NEW BOOK

There's a strong link between foundations considered effective and those that have institutionalized, nuanced understandings of diversity, including gender diversity, according to a new book based on interviews and focus group discussions with more than 250 foundation and nonprofit officials. Foundation consultant and University of New Mexico-affiliated researcher Mary Ellen Capek and TuftsUniversityprofessor Molly Mead co-wrote this book, Effective Philanthropy: Organizational Success through Deep Diversity and Gender Equality. The book defines effective philanthropy as philanthropy that has the greatest positive impact in the sectors foundations choose to fund. Further, it was most often described in interviews as "democratized" philanthropy, or giving that involves mutually respectful relationships between funders and grantees. This giving typically lasts over the long-term and builds on deep knowledge of the work and significant involvement in programmatic decision-making.

But the key is diversity, the authors stress; more diverse foundation boards and staff have a better shot at practicing effective philanthropy. This is so in part because diverse foundations appreciate "the insidious, often subtle and unacknowledged preference for 'normal,'" and they work to overcome what some consider proper or status-quo conventions about practices and acceptable behavior that often hamper creative thinking and innovation. The book grew out of the authors' previous work for the W.K. Kellogg Foundation. The foundation asked them to make the case for the importance of foundations funding of programs and organizations that specifically address the needs of women and girls. The California Wellness, Jessie Smith Noyes, and Philadelphiafoundations are three of six foundations the book presents as case studies of success in "capitalizing on deep diversity."

7. CONSULTANT CONCERNED ABOUT POSSIBLE GOVERNMENT INTIMIDATION OF FOUNDATIONS

A lawyer for one foundation working on issues perceived as unpopular by the Bush Administration advised the foundation not to engage in public policy or strategic discussions by email, even though its funding activities are perfectly legal, according to Stephen Viederman. A foundation consultant and former president of the Jessie Smith Noyes Foundation, Viederman shared this anecdote and other alleged examples of "challenges to democracy" and intimidation of nonprofit activity as part of a speech he made last fall to a philanthropy conference in Australia. The speech was excerpted in a recent issue of Philanthropy New Zealand's Philanthropy News, but a more complete version is available by contacting Viederman. Viederman did not identify the foundation in question in his speech, and he asked the Aspen Philanthropy Letter to withhold the name because of the sensitivities involved. The foundation "is not backing down" in its programmatic work, Viederman said, though he suggests that other foundations may not have such fortitude. He called on the American philanthropic community to provide more support to community and watchdog groups to hold government and other powerful entities accountable to all citizens.

8. FOUNDATIONS' POTENTIAL TO BENEFIT SOCIETY IS 'LARGELY UNFULFILLED,' ARGUES NEW BOOK CALLING FOR MORE CREATIVE APPROACHES

The foundation sector has put too much focus on capturing and spending new pools of philanthropic dollars — on money — and not on providing new, robust rationales for the existence and effectiveness of foundations in a democracy. That's according to a new book from Helmut Anheier of the Universityof California, Los Angeles and Diana Leat of London's CASSBusinessSchool. < I>Creative Philanthropy offers a series of case studies and vignettes of foundations in the UKand Australiaas well as the United States — including the Wallace and Annie E. Casey foundations, the Pew Charitable Trusts, and conservative foundations in general — that the authors consider to be taking a creative approach. Anheier and Leat write that creative foundations act as both entrepreneurs and underwriters of new conversation, debate, and change, and they view their role not merely as grantmakers but as change agents. But for foundations to become creative actors, Anheier and Leat argue that a cultural change is needed for more openness. Among other lessons drawn from the book's case studies: foundations need to develop a culture of self-criticism and regularly conduct "radical reviews" of how they carry out their work. And they need to commit to their initiatives for the long-term, often for 10 years or longer.

9. HUDSON INSTITUTE ESTABLISHES GLOBAL GIVING INDEX, CALLS ON FUNDERS TO CREATE STRONG SECTOR IN DEVELOPING COUNTRIES

International donors should make a top priority of creating a strong philanthropic sector in developing countries, helping them set up new tax structures, corporate matching programs, and community foundations as well as training budding entrepreneurs in practices of corporate citizenship and philanthropy. That's according to the Hudson Institute's Carol Adelman, whose Center for Global Prosperity has released the first annual Index of Global Philanthropy. Building on two previous Hudsonstudies on the subject, the Index was established to demonstrate that common measures of international aid, which only track government assistance, are outdated and incomplete. The Index estimates that U.S.foundations gave $3.4 billion for international efforts, and total U.S.private aid for international causes, including volunteer time and product donations, totaled some $71 billion, or more than triple U.S.government assistance. The Index includes a section with essays highlighting international giving efforts, including support from several foundations to strengthen universities in Africa, and U.S.community foundations' efforts to ensure that money sent back home by immigrants in the U.S.is well spent.

Such remittances from migrant workers account for nearly two-thirds of the Index's $71 billion total. The Index identifies ways in which such remittances can help boost a developing country's economic infrastructure and reduce poverty. But because such money transfers mainly within families, without any explicit intent to serve the broader public good or anything beyond the immediate or extended family, the April 16 Washington Post editorialized that it's problematic to consider this foreign aid.

10. LAW JOURNAL: FOREIGN AID HAS BEEN INEFFECTIVE IN FORMER SOVIET UNION BECAUSE IT HAS BEEN GEARED TO EFFORTS DRIVEN BY FOREIGN DONORS

Western aid to Russia and countries formerly part of the Soviet Union has been ineffective because donors have spent money and initiated programs that have little to do with what was really needed in the recipient countries, according to the International Journal of Not-for-Profit Law. The May issue of the Journal featured a special section reporting on developments related to philanthropy in Russia and the Newly Independent States in Eastern Europe. In her paper for this section, Sada Aksartova of Hosei University in Tokyo, Japan, questions the value of the nongovernmental organizations, or NGOs, that foundations and foreign donors helped create and spread in the region after the Cold War. Aksartova argues that the reason there's been a demonstrable lack of success with civil society efforts is that NGOs have weak domestic support and don't comport with Russian ideas for what's needed to better society.

Meanwhile, Stanford University lecturer G. Pascal Zachary seconds the notion that foreign aid isn't very effective because donors display a "surprising cultural illiteracy" in the countries in which they work. Zachary wrote an essay in the Spring Stanford Social Innovation Review about his observations, over many years, of aid programs in Africa. Donors and grantees observed by Zachary often revealed a lack of knowledge of the history, social practices, and thinking of the people they're trying to help. They also often failed to adapt or momentarily suspend their own cultural attitudes and practices to be more in line with those of Africans, sending the signal that "American values trump African values."

11. FOUNDATIONS NEED TO RECOMMIT TO VOTER ENGAGEMENT EFFORTS DURING 2006 ELECTIONS; NEW PUBLICATIONS OFFER IDEAS

Efforts to build on the significant growth of voter engagement efforts that occurred during the 2004 elections have been hindered by a rapid and dramatic funding decline since then. That's according to one of three recently released publications from the Funders' Committee for Civic Participation. This report, Voter Engagement Evaluation Project, offers a "Top Ten" list of lessons for funders gleaned from 2004 efforts, including the importance of collaboration among funders and among grantees, and the need for early, non-election-year funding and planning. Along with Grantmakers Concerned with Immigrants and Refugees, the Funders' Committee has also issued an action brief for funders about engaging new American citizens in the civic and political life of their communities. New Americans Vote! Advancing Social Change and Strengthening U.S. Democracy reports that foundation investments have been crucial to starting and sustaining many promising projects for advancing social change through increased civic participation of those who are often unintentionally or intentionally excluded. This action brief includes another top ten list of lessons, this one about "embedding voter engagement work in immigrant organizing."

The Funders' Committee also issued a legal guide to help those foundations concerned about low levels of voter participation and the impact on overall civic engagement, but confused by the complex laws and regulations governing such involvement. Voter Registration, Education and Ballot Campaigns features a frequently asked questions section as well as a legal summary about funding electoral participation, written by three legal experts in the field. Both this legal guide and New Americans Vote! can be requested by contacting the Proteus Fund.

12. SURVEY: FOUNDATIONS SHOULD SUPPLEMENT GRANTS TO NONPROFITS SERVING LOW-INCOME NEIGHBORHOODS WITH MANAGEMENT ASSISTANCE

Foundations should supplement grants to nonprofits in low-income neighborhoods with management assistance to help them become more viable and to fulfill their mission. That's according to a ten-year analysis of the nonprofit sector in New York City. This survey from the New York City Nonprofits Project of the City University of New York found some cause for concern amidst healthy growth in the sector between 1992 and 2002 of some 43 percent, significantly faster growth than in the city's public and private sectors. By 2002, annual revenues at city nonprofits totaled more than $43 billion, according to the survey, but virtually all the expansion in revenues occurred among the very largest organizations and those in affluent areas. Also, few nonprofits are moving quickly enough to diversify their revenue sources. Small, local nonprofits in low-income neighborhoods are struggling to continue operations, not only because their funding is more limited than the funding available to their larger, more affluent counterparts, but also because they face more difficulties meeting management and administrative needs, according to the survey.

Of Related Interest

Survey: Foundations Need to More Accurately Report Expenses, Compensation
Foundations need to be educated about the importance of accurate reporting on Internal Revenue Service Forms 990-PF and 990, since it is through these forms that policymakers and the public learn about how foundations spend their funds. That's according to Foundation Expenses & Compensation: How Operating Characteristics Influence Spending, a recent survey of reported finances at the 10,000 largest independent, corporate and community foundations. This joint study from the Urban Institute's Center on Nonprofits and Philanthropy, the Foundation Center, and Guidestar found that 30 percent of foundations reported no charitable operating and administrative expenses and 66 percent reported no compensation of staff or trustees. The larger the foundation the more likely it was to report expenses and compensation, but there was also greater efficiency with size, with large givers reporting lower expense-to-charitable-distribution ratios.

New Initiative Launched to Help Stem Impending Crisis in Nonprofit Leadership
The main funder behind a much-discussed recent report about a crisis in nonprofit leadership has responded by launching one of its largest grant programs ever. The Eugene and Agnes E. Meyer Foundation launched the three-year, $2.2 million Rewarding Leadership initiative to increase the training, networking, and professional development opportunities for nonprofit executive directors in the Washington, D.C. metropolitan area. As part of the initiative, the foundation will also offer annually a two-year grant of $100,000 to five area nonprofit executives for leadership development purposes that could include continuing education or efforts to strengthen the board and senior management team. The Meyer Foundation co-produced the Daring to Lead 2006 survey, finding severe burnout among nonprofit leaders nationwide, a majority of whom expected to leave their jobs soon because of a lack of support or career advancement.

New Resources

Report Offers Recommendations for Foundations to Prepare for Avian Flu, Other Disasters
Since it is inevitable that there will be more natural and man-made disasters, foundations should devote more anticipatory planning and resources to disaster preparedness, management, and relief. The Council on Foundations recently issued a report about preparing society for the prospect of an avian flu pandemic, based on a January symposium the Council convened. Avian Flu and Philanthropy's Response reports that the United States is not ready to handle an outbreak of this virus for which there is currently no vaccine. The report highlights actions foundations should take now in the event that this flu begins spreading, but the actions also apply generally, in helping with other disasters. These actions include helping identify trusted community leaders to turn to in communicating information to specific community groups; supporting use of innovative technology for immediate notification and mobilization; and helping assure community support exists for employed individuals without sick leave or other paid leave.

Website Serves as Meeting Ground for Funders Working to End Chronic Homelessness
A new funding partnership is working to end chronic homelessness nationwide as part of a 10-year effort to raise public awareness about the issue and the "cost-effective solution" of creating supportive housing units. The Partnership to End Long Term Homelessness has launched a new website to serve as a meeting ground for current or prospective funders tackling the issue. The website includes a searchable knowledge center of case studies, best practices, data, and trends in the field, according to a May 1 press release. Four private foundations, including the Rockefeller Foundation and the Melville Charitable Trust, helped found the Partnership in conjunction with the Corporation for Supportive Housing and the National Alliance to End Homelessness (NAEH). A Partnership Funders' Briefing will be held July 17 in Washington preceding the NAEH annual conference.