Report #148: July 2008

1. SEVERAL FOUNDATION COALITIONS HAVE STEPPED UP EFFORTS TO ADDRESS MAJOR ISSUES, FROM POVERTY TO HOMELESSNESS
Several coalitions of foundations have stepped up efforts in this election year to deal with major issues affecting all of society, including poverty, homelessness and the housing crisis. Spotlight on Poverty and Opportunity is an effort by foundations to help set the country’s policy agenda about poverty for the years ahead by specifically engaging presidential candidates in substantive discussions about the issue. In addition to a website and a new report showing a fast-paced commitment to the issue in state governments, the initiative will also convene a fall session with the presidential candidates or their representatives. Meanwhile, the Partnership to End Long Term Homelessness will hold dialogues on this issue in conjunction with the Democratic and Republican conventions this fall. The partnership, which says adequate, affordable and accessible housing is the solution to ending homelessness, has also drafted Funding Principles for Ending Homelessness and is hoping to get at least 100 funders to sign on by the end of the year.

The Living Cities foundation consortium is also acting in part to drum up national and federal interest in addressing the growing issue of home foreclosures brought about by the sub-prime lending-fueled housing crisis. The consortium announced in June grants in eight initial cities supporting development of local models to acquire foreclosed homes in ways that help keep intact neighborhoods that have been hit hard by foreclosures. According to a June press release, the ultimate aim is to provide blueprints for communities around the country should federal aid for such activities become available.

The Hewlett Foundation was one of six foundations behind a more detailed report released last year by California Environmental Associates that also stressed the need for philanthropy’s help in pushing for stricter building codes and utility regulations. Design to Win: Philanthropy’s Role in the Fight Against Global Warming was commissioned to help foundations figure out what would be most helpful to fund, reporting that even a limited set of philanthropic interventions can have a profound impact on global carbon output. Current grant-making for climate issues totals about $200 million, according to the report, and an additional funding of about $600 million is needed annually to implement key strategies in the fight.

2. FOUNDATIONS CAN HELP END GENOCIDE THROUGH ADVOCACY, PANELISTS SUGGEST; ATLANTIC REPORT SAYS ADVOCACY ‘MAKES SENSE’
Even though they know it’s how to change the world, foundations still shy away from advocacy, according to one nonprofit leader. At a session focused on genocide in Darfur at the Council on Foundations conference in May, Ruth Messinger of the American Jewish World Service said that few foundations have given funds for advocacy work on Darfur – even for media advocacy – and that most funding has focused on humanitarian efforts. At this session, Mark Hanis of the Genocide Intervention Network said new information technology and new media are keys to advocacy, helping people be better exposed and informed on issues. He added such leverage didn’t exist in past genocides: “We really can end genocide in our lifetime.”

And a new report suggests a growing number of foundations are embracing advocacy as a means of changing government policy and business practices through research to raising awareness about issues, such as genocide in Darfur. That’s according to the inaugural issue of Atlantic Reports, Atlantic Philanthropies’ new series of short publications. Why Supporting Advocacy Makes Sense for Foundations provides an overview of why funders should consider investing in advocacy, examples of successful, foundation-funded advocacy efforts and key questions for philanthropists and foundation staff to consider in thinking about advocacy. It also offers tips on funding advocacy, among them: asking grantees for their opinions without relying solely on their analysis; identifying adversaries and planning for their response (a recognition that by choosing to advocate one position, you inevitably argue against other); and coordinating efforts with other funders advancing the same position to maximize effectiveness and avoid working at cross purposes.

3. FOUNDATIONS NEED TO HELP BUILD ALLIANCES BETWEEN SECTORS BEFORE A DISASTER STRIKES; REPORT SUGGESTS GREATER ADVOCACY COULD HAVE LESSENED HURRICANE KATRINA’S DAMAGE
In response to the 2005 Gulf Coast hurricanes, according to a recent report, "Too much money was squandered on inefficient and ultimately ineffective government policies," and the chief problem was that the voices of local organizations and people hardest hit by the storms were not heard in setting policy. Power Amidst Chaos: Foundation Support for Advocacy Related to Disasters, from advocacy organization Alliance for Justice, reports that foundations need to offer more longer-term and less-restricted support for grantees, especially for advocacy and public policy-engagement efforts, and need to develop their own advocacy work internally, through multi-foundation coordinated efforts or local intermediaries. But above all, foundations need to help build local alliances between the public and nonprofit sectors to help ensure that infrastructure needs and emergency planning have been addressed before a disaster strikes.

The publication identifies 10 principles for foundation support of effective disaster-related advocacy. Chief among what’s needed in every part of the country: strong nonprofits that understand and employ the full range of advocacy strategies to make the needs known of the community’s marginalized and disadvantaged, who will be most affected. Community pressure is needed, according to the report, to ensure appropriate safety measures are taken, the government is held accountable for dangerous decisions and inaction, and medical care is provided to those who need it.

4. REPORTS SAY FOUNDATIONS MUST TAKE FUNDING RISKS IN RESPONDING TO DISASTERS, BUT MUST BE PATIENT, LOOK FOR GAPS IN NEED
Foundations must be willing to take risks and overcome their "inherent cautiousness” in funding unfamiliar organizations responding to a disaster, but they also must be patient and wait to commit some portion of grantmaking for when "gaps" become apparent after initial relief support. That's according to Best Practices in Disaster Grantmaking: Lessons from the Gulf Coast from the New York Regional Association of Grantmakers. Based on New York funders’ experience in helping the Gulf Coast rebuild after the 2005 hurricanes, the report also calls on funders to collaborate with colleagues to develop a practical, user-friendly information resource identifying community needs and grantmaking opportunities. Among its “practices to avoid,” the report cautions foundations to avoid being “paternalistic" in the wake of a disaster, instead letting affected communities determine what they need for recovery. They should also not force nonprofit collaboration; disaster recovery is not the time for nonprofits to be developing radically new programs.

Another report also calls on patience in responding to an emergency. According to a new Grantcraft publication, there’s a counterintuitive need in an emergency, when everybody’s in need, to take time, “slow down a little bit,” and establish specific eligibility criteria and working systems. That will make grantmaking more effective over the course of disaster recovery. Funding in the wake of Hurricane Katrina is one case study among five profiled in Grantcraft’s Grants to Individuals: Investing in People and their Communities. The guide says grants to individuals can benefit both the funded individuals and the communities of which they are a part. But it cautions that grants to individuals can be even more difficult and certainly more personal in nature than those to organizations. The primary question in creating a grants-to-individuals program is not, “Which individuals do we want to support?” It is, “What do we want to achieve?”

5. VARIOUS CALLS MADE FOR FOUNDATIONS TO TAKE MORE RISKS IN EVERYTHING THEY DO, FROM GRANTMAKING TO COMMUNICATIONS
Matthew Bishop of The Economist says that if a new golden age of philanthropy is to be realized, the sector needs to take much greater risks than it has and to step outside of its comfort zone. The need for foundations to take more risks in everything they do was a major underlying theme at the Council on Foundations conference in May. At a mini-summit on the economy, Bishop called on foundations to invest and fund early on bright ideas that may not succeed. At a conference session on the future, Theresa Fay-Bustillos of the Levi Strauss Foundation said foundations, on their own, need to be willing to withstand controversy and protest, and take real risks to work on issues that will affect society in the future, not just deal with those of the present. Susan Raymond of Changing Our World further proposed at this session that all foundations should allocate 10 percent of grantmaking to risk. Raymond said that foundations should learn and fund the edges of some problems that no one is really working on right now or at least not working on very deeply.

Meanwhile, a former Internet entrepreneur says that foundations need to take risks and expect failure even in the realm of communications. Marc Fest, now in charge of communications at the John S. and James L. Knight Foundation, was quoted in a May 1 Chronicle of Philanthropy article about foundations' increasingly sophisticated communication practices – particularly using interactive online technologies, such as message boards and social-networking sites. He said a foundation has to fail to succeed. “What everyone is starting to grasp is that if you want to keep up with the rapid change around you, you also have to practice rapid-fire change and experimentation,” according to Fest, who says such trials must be praised even when they fail.

6. AUTHORS CALL FOR CREATION OF RESEARCH COLLABORATIVE; ONE OF 10 POLICY PROPOSALS OFFERED TO STRENGTHEN SECTOR
At least three recent publications have called for more research into the nonprofit sector through creation of a new collaborative or information clearinghouse, as discussed in this and the next item. The need for a Strategic Nonprofit Research Collaborative is one of 10 policy ideas to improve the sector included in a new Aspen Institute publication. Mobilizing Change: 10 Nonprofit Policy Proposals to Strengthen U.S. Communities synthesizes key ideas offered by leading thinkers in the field. Such a multi-sector research collaborative, according to this publication, would support high-quality, independent analysis of the sector. It would employ sophisticated Web-based communications practices to inform both research and practice and ensure that the sector and policymakers have access to the latest thinking on emerging challenges and opportunities.

This Aspen publication calls for establishment of a national bipartisan commission to explore how government can better work with and strengthen nonprofits, foundations and the entire social sector. Its 10 policy proposals are offered as a starting point of discussion for the commission. Among these ideas are four aimed at improving financing available for the sector, including modifying tax law to allow hybrid entities mixing business practices and charitable missions to receive program-related investments, such as a law recently passed in Vermont. A related idea is to revise the foundation excise tax, either by making it a flat rate or reducing it, and ensuring that the tax’s revenue goes toward enforcing nonprofit regulation. Establishment of a federal Small Nonprofit Association modeled after the Small Business Administration is one of six ideas offered that would help build overall nonprofit capacity, along with work to expand recruitment and retention of leaders in the sector.

7. TWO PAPERS REVIEWING NEW AREAS OF PHILANTHROPY CALL FOR RESEARCH CLEARINGHOUSE BUILDING ON E-COMMERCE ADVANCES
Two social entrepreneurs have written a paper calling for a social enterprise research clearinghouse along the lines of Nexis or Amazon, using e-commerce technology such as that of music download services or purchase recommendation engines. Jed Emerson of the Edna McConnell Clark Foundation and Joshua Spitzer of the Sun Ranch Institute note that consumer-driven e-commerce innovations may offer the next advances in the sector in a paper for Oxford’s Skoll Centre for Social Entrepreneurship. From Fragmentation to Function: Critical Concepts and Writings on Social Capital Market’s Structure, Operation and Innovation offers six initial ideas to help improve what they call “social capital markets”: social enterprises broadly defined to include nonprofits and businesses that specifically aim to add social value. The online marketplace of ideas they propose would facilitate publishing, distributing, cross-referencing and controlling quality. Too much research into social capital markets lacks quality, cannot be considered objective and is too focused on case study and anecdote.

8. REPORT SAYS PHILANTHROPIC DIVERSITY HAS BEEN IMPACTED IN PART BY ITS GREATER COMPLEXITY; WOMEN’S ADVANCEMENT SHOULD BE STUDIED
The civil rights and identity movements of the 1960s and 1970s fueled a focus on creating a more diverse philanthropy sector, but according to a new report, momentum has slowed since the mid-1990s, even as the country has gotten more diverse. Why? According to the Rockefeller Philanthropy Advisors’ Philanthropy in A Changing Society: Achieving Effectiveness through Diversity, one reason is that the growing sophistication around diversity has made it overwhelmingly complex to many, leading to inertia. Still, there’s growing recognition among foundations that the greatest challenges facing society – in health care, security, poverty, the environment and beyond – could and should benefit from collaborative thinking and collective experiences of those who are disproportionately impacted by them. The report, which reviews how the field’s approach to diversity has evolved over time, notes that the entire foundation field has become overwhelmingly female. More analysis is needed about the successful advancement of white women in philanthropy, it concludes, since lessons could be drawn from that to inform strategies targeting racial and ethnic minorities. RPA will issue two additional reports that will delve deeper into the newest strategies and models for promoting inclusiveness throughout the sector.

9. MORE RESEARCH CALLED FOR INTO RELATIONSHIP OF FOUNDATION DIVERSITY TO EFFECTIVENESS; ALL-INCLUSIVE ‘DIVERSITY’ FOCUS MAY SHORT SHRIFT SOCIAL JUSTICE EFFORTS
More research is needed into the relationship between a foundation’s internal diversity and external impact or effectiveness, and the role of foundations relative to issues of diversity and equality in the larger society. In addition, more research is needed about the boards and CEOs of foundations, focused on their values and experiences and how they came to power. That’s according to a report summarizing discussions from a forum held last fall and cosponsored by the Council on Foundations, the nonprofit research association ARNOVA and Foundation Center. Proceedings form the First Annual Researcher/Practitioner Forum on the State of Research on Diversity in Philanthropy reports that the concept of diversity could lend itself to multiple agendas regarding both research and practice. For many forum participants, the meaning of diversity goes beyond demographics to include organizational culture and practices. But the expansive nature of the term actually limits its utility to other participants, who suggest the broader definition waters down a need to focus on issues of power, racism and discrimination, or on social and racial justice.

10. FOUNDATION OFFICIAL DRAFTS ‘PRINCIPLES OF SELF-RESTRAINT’, CALLS ON FOUNDATIONS TO FUND MORE SECTOR RESEARCH, SOCIAL JUSTICE
With humility and self-criticism in short supply among foundation leaders, it will take more than a “conversation” to encourage them to live up to social and political obligations. So Michael Edwards of the Ford Foundation has drafted a series of what he calls “principles of self-restraint,” grouped in six areas, from a commitment to transparency and accountability, to a commitment to democracy, to a commitment to modesty. Edwards included these in his recent publication criticizing the claims of philanthrocapitalism. (See item #11 for information on this publication.) Specifically, Edwards calls on foundations to: dedicate 10 percent of annual payout toward philanthropic research to help improve learning in the sector; include grassroots voices, community organizers and labor representatives on foundation boards; and spend at least 50 percent of annual payout on “social justice philanthropy,” tackling causes, not just symptoms, and increasing power and voice of those left outside the mainstream. He also calls for independent impact evaluations for any tax-exempt activity above a certain size, and requiring foundations above a certain size to compile a publicly available summary of all evaluations every five years, soliciting feedback from grantees and independent experts. Edwards suggests voluntary support of his principles might garner more publicity and exert pressure on others to improve their performance.

11. FOUNDATIONS SHOULD DO WHAT THEY CAN TO IMPROVE UNEQUAL ECONOMIC SYSTEM, ECONOMIST WRITER SAYS, CALLING FOR MORE BUSINESS-LIKE TRANSPARENCY; ‘PHILANTHROCAPITALISM’ DEBATE
The current economic system, with its increasing disparity between rich and poor, may be unequal, but society is stuck with it for a good while, according to The Economist’s Matthew Bishop. At a mini-summit at the Council on Foundations conference in May, Bishop called on foundations to constructively engage the super-wealthy to use their money for good by helping newcomers to philanthropy work as constructively and democratically within our current system as they can. Bishop further called on foundations to lead efforts for greater transparency and accountability. He said the media wants to know more about the sector and that there needs to be analysis about the Ford Foundation that’s as deep and thoughtful as analysis about Starbucks and other publicly traded corporations.

12. FOUNDATIONS SHOULD LEAD MOVEMENT FOR SLAVERY REPARATIONS; NEW DOCUMENTARY MAY SPARK SUCH A CAMPAIGN, ACTIVIST SAYS
Foundations may very well carry the greatest responsibility for leading a movement for reparations to account for slavery and racial inequality in the United States, says Peter Deitz of the social change website Social Actions. Deitz blogged for Tactical Philanthropy during the Council on Foundations conference in May, where a documentary focused on the slave trade and its lingering implications was screened and discussed at a special event. Several foundation officials at the event inquired about helping lead the effort toward reparations – or “reinvestment,” as one representative said is a better, more effective and inclusive term. In his post, Deitz said many foundations can likely trace their endowed privilege directly or indirectly to the slave trade. He writes of his hope that the documentary, Traces of the Trade: A Story of the Deep North, airing in June on PBS, might spark a reparations campaign organized by philanthropists using “web 2.0” tools to advance the movement, as well as encouraging family and private foundations to explore the sources of their own wealth.

13. FOUNDATIONS CALLED ON TO FUND CLIMATE CHANGE AS BROADLY AS ITS EFFECTS; ALSO CALLED ON TO COUNTER NUCLEAR INDUSTRY
Echoing other foundation representatives, Maria Blair of the Rockefeller Foundation says climate change is wrongly perceived by too many funders as an environmental issue when in reality it impacts every dimension of society and needs to be better funded and viewed as a social issue. The April issue of the New York Regional Association of Grantmakers’ NYRAG Memo focuses on the environment, and especially the need for foundations to provide more support for the environmental justice movement, which incorporates a civil rights analysis of environmental decision-making. Blair says foundations need to look for leverage points in tackling such a huge, complicated issue like climate change, but that they need to stop thinking of it as a separate problem, unrelated to core programmatic issues. The Environmental Grantmakers Association has released a new guide to help various funders incorporate the issue into their funding strategies. Confronting the Climate Challenge recommends a “climate lens,” a perspective considering climate change in all strategic decisions, helping address its community, economic, health and social impacts.

In another historically-minded chapter, Peter Dobkin Hall of Yale University writes that increasing demands, and even legal requirements, for more public disclosure of nonprofit financial activities is creating what he calls a “new regime.” This regime replaces nonprofit scrutiny by “often toothless regulatory bodies” with scrutiny from the general public. Such public disclosure empowers the public to make informed judgments about whether organizations are worthy of support, Hall writes. It also often provides the information needed to spark journalistic exposes and initiate civil litigation.

14. TO COUNTER LACK OF AWARENESS AMONG EVEN ‘ENGAGED AMERICANS’, FOUNDATIONS CALLED ON TO PUT NAMES, FACES TO THEIR WORK
It’s critical that foundations put names and faces to their work, according to panelists at a Council on Foundations conference session focused on improving public understanding about foundations. The discussion was initiated in response to a new David and Lucile Packard Foundation-funded survey from the Philanthropy Awareness Initiative (PAI) finding that nearly 9 in 10 of the most actively involved American citizens cannot cite from memory an example of a foundation’s work on an issue they care about. Fewer than half of these “engaged Americans,” as the report calls those holding community-leadership positions, could even offer the name of a foundation from memory. To help improve this state, Susan Dentzer of Health Affairs and PBS’ The News Hour with Jim Lehrer called on foundations to tell how they helped one person in a way emblematic of their complex work in helping many people. Jane Wales of the Aspen Institute said that if being more public seems the best way for a foundation to advance its goal, then it should break the tendency toward humility or anonymity and put its face out there. But foundations should be careful to avoid adding to clutter in an over-advertised, over-marketed environment, said Kevin Klose of National Public Radio. He stressed the value of providing narrative storytelling about foundations’ work. Among other things, PAI plans to issue a report offering ideas shared at this and other discussions.

15. TRUST IS KEY TO SUCCESS IN DONOR ADVISORY FIELD; REPORT SAYS IT’S STILL A COTTAGE INDUSTRY, WITH NEW TECHNOLOGY SET TO SHAKE IT UP
Despite significant increase in public visibility and the number of wealthy people engaged in philanthropy, the donor advisor field is still a cottage industry in its infancy, with most practitioners having no training in philanthropy. That’s according to a recently released study based on interviews with 75 advisors to the wealthy, ranging from accountants to estate attorneys to institutional development directors to philanthropy advisors. The single most common word people used to describe the source of success in donor advising, no matter type of advisor or work, was trust, according to the Human Interaction Research Institute. The institute will release a book based on this William and Flora Hewlett Foundation-funded study, Donor Advisors and Philanthropic Strategy, and the study will eventually be posted to its Website, but a free copy can be requested by email. Among other findings, the report says technology is emerging to help the wealthy have a more direct involvement with beneficiaries or allow them to take a do-it-yourself approach to philanthropy, developments that will force advisors to change practices and business models to remain competitive.

Of Related Interest

Project: Communication, Contact Between Foundations, Nonprofits Would Improve Grant System
The current system of application and reporting is largely excessive, redundant and impersonal, and leaves grantees with insufficient funds. That’s according to Project Streamline, a collaborative initiative of the Grants Managers Network and six other philanthropy associations plus the Foundation Center. The project is soliciting comments online about its report Drowning in Paperwork, Distracted from Purpose. Clear communication and personal contact would go a long way to improving flaws such as the enormous variability in what foundations are looking for from grantees. The report offers four core recommendations for foundations, including the need to question grant processes – “Are we really going to use this? Is there another way to get it?” – and developing a streamlined application and reporting form for small grants, to ensure grantees expend effort in seeking a grant that is commensurate to its size and type.

Initiative Wants Nonprofits to Develop Fan Clubs to Get Around ‘Lose-Lose’ Grant Process
Following on Project Streamline findings, another initiative notes that the limited funding available for nonprofits and the significant work required to obtain donated funds is a “lose-lose scenario”: nonprofits are exhausted, overcommitted, even derailed, and funders are often unsatisfied with performance, and then shift funding elsewhere. Ashoka’s Citizen Base Initiative says nonprofits can become more self-sufficient and ultimately achieve greater social impact if they free themselves from the “chronic dependence on unpredictable and unsustainable” foundation funding. Instead, they should develop a broad base of citizen support analogous to a fan base of a sports team or to members of a church, converting its supporters and beneficiaries into its own citizens, according to the Initiative.

Writer Says Clearinghouse of Think-Tank Research Needed to Protect, Advance Policy Ideas
Another writer has called for creation of a research clearinghouse along the lines of those proposed in items #6 and #7 above. J.H. Snider, a fellow at Harvard University, has called on foundations to finance an authoritative online clearinghouse of think-tank research with new tools to facilitate peer review. In a March 20 Chronicle of Philanthropy opinion piece focused on what he says is a need to protect policy ideas from plagiarism, Snider writes that a research clearinghouse would provide an authoritative, time-stamped citation for think-tank research, which now is often self-published. It might also persuade foundations to sponsor Pulitzer Prize-like awards for innovative public-policy ideas, which would provide further incentive to create rather than copy socially valuable public-policy innovations.

New Resource

Toolkit Produced to Help Donors of Color Apply Social-Justice Lens to Increase, Improve Giving
Changemakers, a national nonprofit that works to increase the number of donors using a social-justice lens in their giving, has produced a new toolkit that aims to expand donor education and engagement to speak to and be inclusive of diverse communities of color. It’s also intended to encourage mainstream foundations to engage with and provide more support to communities of color. Developed in partnership with Hindsight Consulting and a result of a two-year foundation-funded pilot project, With Knowledge Comes Change: Essentials for Diversity in Giving (EDG) Toolkit provides 10 curriculum modules based on principles of social change and community-based philanthropy that help donors examine current giving practices, challenge themselves to become more strategic in their giving, and support the health and sustainability of their communities and beyond. Changemakers is offering train-the-trainers workshops and technical support in conjunction with this new toolkit.

We would appreciate your offering us information that we can include in a future edition. If you have an item you believe would be helpful to your colleagues, please e-mail it to Doug Rule, who prepares the report’s copy. Thank you in advance for your cooperation.

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