posted on: Thursday, May 23, 2013

By Niki Jagpal and Kevin Laskowski

Editor’s Note: This blog post originally appeared in PhilanTopic: http://pndblog.typepad.com/pndblog/2013/05/the-state-of-philanthropic-giving-in-2011.html

Image courtesy of kibsri / FreeDigitalPhotos.net

Anyone working in the nonprofit sector knows the value of measurement. If something is important -- whether it's your own impact and outcomes or a field-wide trend -- you measure it. Somehow, some way, you track it.

NCRP recently completed an analysis of 2011 foundation giving based on our own Criteria for Philanthropy at Its Best: Benchmarks to Assess and Enhance Grantmaker Impact guidelines. In the past, we examined average giving over three years to monitor trends in giving to underserved communities and for social justice, as well as general operating support and multiyear funding.

This year, we've moved to analyzing data annually in the hopes of providing the sector with real-time information on emerging trends and associations. The figures are based on the Foundation Center's grants sample database, which comprises grants of at least $10,000 awarded by more than one thousand of the nation’s largest grantmakers, representing approximately half of the grant dollars awarded by U.S. foundations in 2011. Grantmakers can use the information to see how they are performing compared to their peers, as well as as a guide for future strategy. Grantees can see which funders are providing vital types of funding in support of transformative change.

The Philanthropic Landscape 2011 reveals important changes in the philanthropic ecosystem:

• In The State of General Operating Support 2011, the share of foundation dollars classified as general operating support (also known as "core support") increased from the 2008-10 average of 16 percent to 24 percent in 2011. A welcome and hopefully lasting shift, the increased share to general operating support is the highest NCRP has seen in recent years.
• In The State of Giving to Underserved Communities 2011, we found that 42 percent of foundation grant dollars were classified as benefiting underserved communities such as economically disadvantaged persons, racial and ethnic minorities, women and girls, disabled persons, and other groups. That is up slightly from 40 percent of grant dollars in the 2008-10 period.
• In The State of Multi-Year Funding 2011, nearly 90 percent of funders reported making no multiyear grants. The Bill & Melinda Gates Foundation alone accounted for 60 percent of the $7.2 billion in multiyear grant dollars awarded in 2011.
• In The State of Social Justice Funding 2011, the share of giving to social justice declined from an average of 15 percent of total grant dollars in the 2008-10 period to 12 percent of grant dollars in 2011. Conversely, the number of grantmakers providing our proposed level of 25 percent of grant dollars for social justice work increased from 76 to 94.

When we restricted our analysis to only those grantmakers that reported some level of giving toward each benchmark, we saw important, if incremental, progress. It appears that, in the aggregate, once funders begin to intentionally identify the beneficiaries of their grantmaking or prioritize social justice, general operating, or multiyear support as a part of their strategy, they increase or maintain that commitment.

This suggests that we are making progress toward creating a more responsive, effective, and accountable foundation sector. There are sizeable groups of funders that understand the benefits of engaging and empowering vulnerable communities and the nonprofits that work with them. Our challenge remains to engage with and help foundations see the value of awarding both more grants and more grant dollars in these ways.

Part of the solution is accurate and expanded reporting, along with a willingness to adapt to the variable needs of the communities served by the nonprofit sector. We urge you to make a commitment to report the particulars of your grantmaking to organizations like the Foundation Center and to pay particular attention to providing information about the nature, purpose, duration, and intended beneficiaries of your grantmaking.

In addition, take stock of your own numbers and compare them to those of your grantmaking peers. E-mail us at research@ncrp.org if you'd like to learn more about how your foundation appears in the data.

Last but not least, as we continue to analyze trends and report on them, let's all collectively ask ourselves whether the field is doing all it can to make the world a more inclusive, just, and democratic place. Engage in critical self-reflection and ask yourself: Are the communities we care about seeing the benefit of our grantmaking? What role does public policy, advocacy, and civic engagement play in our strategy and in the work of the nonprofits we support? What role could it play? Are we providing enough long-term flexible support to achieve the results we hope to see? Are we doing enough to see the results we all hope for?

Use those answers to inform and adjust your strategy. With a more responsive foundation community, the causes and communities we all care about will see real results.


Niki Jagpal is research and policy director and Kevin Laskowski is senior research and policy associate at the National Committee for Responsive Philanthropy (NCRP). Both frequently blog about the role of philanthropy in society. You can follow NCRP on Twitter @ncrp.

posted on: Wednesday, May 22, 2013

By Aaron Dorfman

For those of us who care deeply about effective philanthropy that contributes to a more just and equitable world, it’s important that we measure our progress (or lack thereof) from time to time.

Today, NCRP released the latest fact sheets in "The Philanthropic Landscape" series, this time studying the giving of the nation’s largest 1,121 grantmakers in 2011.

There are some hopeful signs that more foundations are giving in ways that benefit those that need philanthropic support the most, but only time will tell if the welcome trends will hold.

The Good News
 
We’re seeing steady, exciting improvement in giving to underserved groups and a welcome increase in general operating support.

• The State of Giving to Underserved Communities 2011 shows that the share of foundation grant dollars intended to benefit marginalized communities is up slightly to 42 percent, an increase from the 40 percent average from 2008–2010. Meanwhile, one in five grantmakers was giving 50 percent or more for marginalized communities in 2011, compared to only one in eight from 2004–2006.
• The State of General Operating Support 2011 reveals the highest proportion of grant dollars for general operating support we’ve seen in some time. Reported share of foundation dollars classified as providing this vital type of funding increased from 16 percent in 2008–2010 to 24 percent in 2011. 

The Not-So-Good News

A few trends in multi-year giving and social justice grantmaking are cause for some concern.

• The State of Multi-Year Funding 2011 confirms again that nearly ninety percent of foundations still do not report any multi-year funding.
• The State of Social Justice Philanthropy 2011 notes that social justice grantmaking decreased to 12 percent of total grant dollars in 2011 from 15 percent on average from 2008–2010. Part of that decline can be attributed to the sample size; the 2011 sample includes significantly more funders than our previous sample, including double the number of foundations that do not report any social justice grantmaking. However, an encouraging finding is that there are now 94 “serious” social justice funders, foundations that provided more than a quarter of their grant dollars for social justice. This figure has nearly doubled since the 2004–2006 sample.

Getting Beyond the Choir 

Throughout all of the fact sheets, a larger lesson emerges: once funders commit to qualities of philanthropy at its best – such as grantmaking that benefits and empowers marginalized groups, distributing multi-year and general operating support grants and reporting on grantmaking—they tend to increase or maintain that commitment.

The challenge for those of us who care about strengthening our communities and the nonprofits that serve them is to get the message beyond this choir while continuing to encourage those that are already singing.

The Annie E. Casey Foundation, A Glimmer of Hope Foundation, Northwest Area Foundation and The Melville Charitable Trust were among the grantmakers that reported at least 50 percent in giving that explicitly benefited underserved communities as well as 25 percent toward social justice grantmaking.

The California Wellness Foundation, Weingart Foundation and The Jacob and Hilda Blaustein Foundation were the funders that gave at least 50 percent of their grants in the form of general operating support as well as multi-year funding.

Let’s all encourage other funders to join them. The causes and communities we all care about depend on it.

Aaron Dorfman is executive director of the National Committee for Responsive Philanthropy (NCRP). Follow NCRP on Twitter (@ncrp).

Image courtesy of Renjith Krishnan/freedigitalphotos.net
 

posted on: Monday, May 20, 2013

by Aaron Dorfman

The federal government shouldn't be in the business of picking winners and losers regarding which charitable organizations its employees can support with their donations. But that's exactly what will happen if some new rules currently under consideration get approved.

The Combined Federal Campaign (CFC) is the world's largest workplace charitable giving campaign. Since it was established by President John F. Kennedy in 1961, the CFC has raised more than $7 billion for thousands of charitable organizations across the country and the world, thanks to the generous donations of federal employees. Last month, the U.S. Office of Personnel Management (OPM), which has regulatory oversight of the CFC, proposed new rules that would dramatically shift which charities are eligible for donations through the CFC. Here's some historical context.

Thirty years ago, the organization I now lead, the National Committee for Responsive Philanthropy (NCRP), was instrumental in expanding the range of nonprofits that federal employees can contribute to. We argued that all legitimate charities with 501(c)(3) tax status should be allowed to participate, including groups that engage in advocacy, policy reform or community organizing. Prior to our campaign, traditional service providers were eligible for participation while advocates and organizers were excluded. A charity that provided shelter to homeless people could fundraise in the CFC because its work could be classified as "services," but one that primarily advanced affordable housing through research and policy advocacy could not. After a long-fought campaign including dozens of allies, the eligibility criteria was expanded to include any group that "provides or conducts real services, benefits, assistance, or program activities."

On May 16th, my organization submitted comments to OPM stating concerns about the proposed new rules. My primary concern is that the proposed rules would not only make it harder for advocacy organizations to be considered eligible, these would also open up the possibility of significant burdens being placed on smaller- and medium-sized organizations. For example, under the proposed restructuring of how the CFC is managed, local engagement that is an integral component of workplace giving would be eliminated. Additionally, there is an overuse of the terms "services" and "benefits" rather than "program activities," which poses a real threat in terms of how the eligibility criteria will be interpreted if the rules pass. This is why the resounding absence of the term "program activities" from the proposed rules is a serious cause for concern.

NCRP's Grantmaking for Community Impact Project researched 110 local and regional advocacy and organizing nonprofits operating in 13 states over a five-year period. The project documented $26.6 billion in benefits for taxpayers and communities, and found that every dollar grantmakers and other donors invested in policy and civic engagement provided a return of $115 in community benefit.

And it isn't just the high return on investment that's a reason to protect nonprofit advocacy. Organizing and advocacy are among the most impactful tools to effect long-lasting change in our society. From the Civil Rights Movement to women's suffrage to enacting strong environmental protections, advocacy has played a central role in ensuring that nonprofits and the communities we serve have agency and voice in our deliberative democracy. It is an integral part of our country's history and character and one that should be supported more, not less, regardless of the giving vehicle.

If OPM doesn't revise its proposed rules to clarify what types of organizations would be eligible, many nonprofits, regardless of political ideology, have a real cause for concern. Organizations ranging from The Heritage Foundation to Planned Parenthood, the Brady Center to Prevent Gun Violence and the Family Research Council could lose important funding that supports the diversity of our sector.

The rules have the potential to undo three decades of progress and inclusion, and I urge others to join me in opposing the arbitrary restrictions. All nonprofits that have and maintain 501(c)(3) status should be eligible to participate in the CFC. There should be no discrimination against organizations that primarily achieve their missions through advocacy.

OPM is accepting public comments on the proposed new rules through June 7, 2013. I encourage you to submit comments and protect advocacy organizations from possibly being excluded from the CFC.

Aaron Dorfman is executive director of NCRP. He frequently blogs about the role of philanthropy in society. Follow NCRP on Twitter (@ncrp).

This post originally appeared on The Huffington Post.


Image courtesy of winnond/freedigitalphotos.net

posted on: Sunday, May 19, 2013

By Renjith Krishnan | Freedigitalphotos.net

Here is a roundup of some of last week's interesting news and postings on philanthropy and nonprofits:

• Passing the buck from the IRS to the FEC to Congress
  by Lucy Bernholz  |  Philanthropy 2173
• Don’t Let the IRS Scandal Hurt the Work of Charities
  by National Council of Nonprofits
• Rockefeller Family Fund: Finding the ‘Tip of the Spear’ to Advance Economic Justice
  by Alexandra Walker  |  Advocacy Unleashed
• Should foundations be "all in" on their charitable missions?
  by Bruce DeBoskey  |  Denver Post
• Charities Want More Insight Into Grant-Making Decisions, Says Study
  by Maria Di Mento  |  The Chronicle of Philanthropy
• Philanthropy and Inequality
  by Robin Rogers  |  Stanford Social Innovation Review
• Report Examines Philanthropy's Response to Changing Demographics in America
  Philanthropy News Digest

Follow NCRP on Twitter to receive news and other information from the philanthropy and nonprofit communities.

posted on: Thursday, May 16, 2013

By Aaron Dorfman

Image courtesy of antpkr / FreeDigitalPhotos.net

As I reviewed “Foundation Transparency: What Nonprofits Want,” the latest publication from the Center for Effective Philanthropy (CEP), I had an overwhelming sense of déjà vu. So I dug deep into the archives to find reports on the subject produced by the organization I now lead, the National Committee for Responsive Philanthropy (NCRP).

In May 1980, NCRP released Foundations & Public Information: Sunshine or Shadow? It was a scathing report that took foundations to task for their reticent approach to sharing information, and it launched a decades-long commitment by NCRP to promote increased transparency. The report explored why foundations should be accountable and transparent, and also the inadequate government requirements at that time. It ranked and scored 208 of the largest philanthropies using a rigorous methodology and found that 60 percent of foundations in the sample did not meet an acceptable standard of transparency. Just 4 percent were found to be “excellent.”

The methodology included a heavily weighted assessment of whether foundations provided the kinds of information that nonprofits most desired, including information about grantmaking interests and policies, and how grant applications were evaluated and decisions made about which organizations to fund.

I see many parallel findings between that report and CEP’s excellent new report. A full 33 years later, nonprofits are still clamoring for more information about how foundations make funding decisions and they want clear and open communication about priorities. They want to know whether it’s worth their time to cultivate a relationship and pursue funding. And despite an explosion of glossy annual reports and fancy websites, leaders of grant-seeking organizations are still highly frustrated by the lack of clear communication about a central element of foundation activity, namely how foundations decide which organizations to fund.

Foundation Transparency surveyed 138 nonprofit leaders, and I was unsurprised to see many of the respondents reference a desire to know how foundations assess their own performance and the impact they have. It only seems fair that since foundations are requiring this from grantees, that they be willing to be accountable for articulating impact, too.

Some of the findings suggest to me that nonprofits really want foundations to function as true partners. For example, the fact that an overwhelming majority of respondents wanted to know more about what foundations are learning indicates that grantees want learning to go both ways.

The CEP report doesn’t explore the regulatory framework for foundation transparency, nor does it explore in-depth the arguments for why greater transparency may be warranted. But another report released this year does revisit those questions. The Philanthropy Roundtable published in March 2013 Transparency in Philanthropy: An Analysis of Accountability, Fallacy, and Volunteerism.

As I reviewed Foundations & Public Information in light of the Roundtable’s current offering, I was struck by how little the arguments in favor of greater foundation transparency have changed since 1980. The original NCRP report looks at the partially-public nature of philanthropy, which is revisited by the Roundtable (though our organizations obviously come down on different sides). The partially-public dollars argument asserts that because of the preferential tax treatment afforded to foundations, a high level of transparency and accountability is owed to the public and grantees. NCRP repeated and expanded on this argument in our 2009 publication Criteria for Philanthropy at Its Best: Benchmarks to Assess and Enhance Grantmaker Impact.

In 1980, NCRP devoted some attention to why greater transparency is in the self-interest of foundations and how it might improve their effectiveness. This topic is explored robustly in the Roundtable’s new report, Criteria, and is touched on in the CEP report. Because I see additional regulation as unlikely in the near future, the link between effectiveness and voluntary transparency merits further exploration.

Speaking of regulation, there has been some increase in activity around this in recent years, though nothing has actually changed for more than 20 years in terms of mandated disclosures. Most philanthropy insiders are familiar with efforts by the Greenlining Institute to pass AB624, which would have required new disclosures for the largest foundations in California. Fewer are aware of quieter efforts by the Philanthropy Roundtable to pass legislation in several states banning efforts similar to AB624.

The last substantive change that shaped the current required information disclosure in the IRS form 990-PF can be traced to when NCRP worked with Senator Dave Durenberger (R-Minn.) to influence the IRS to change what it required in the form. Those changes contributed to helping the Foundation Center produce the best data available about the sector. An abbreviated version of how NCRP’s efforts on transparency evolved, including the Durenberger intervention with the IRS, can be found on page 10 of this look back at NCRP’s history.

What I’m left with is a sense that, on the issue of transparency, the more things change, the more they stay the same.

Coincidentally, around the same time as I was reviewing the new CEP publication and beginning to think about crafting this blog post, Bob Bothwell invited me to join him on a Friday evening for a baseball game at Nationals Park. Bothwell was NCRP’s executive director from its inception in 1976 until 1998. I am reminded again of how important it is for those of us from a new generation who are leading nonprofits and foundations to intentionally nurture connections to our history, even while we attempt to take our organizations in new directions.

And in case you’re wondering, the Washington Nationals beat the Cincinnati Reds 1-0, and Jordan Zimmerman pitched a one-hitter.

Aaron Dorfman is executive director of the National Committee for Responsive Philanthropy (NCRP). He frequently blogs about the role of philanthropy in society. Follow NCRP on Twitter (@ncrp).

This post was originally published on The CEP Blog.