Each month, Family Giving News highlights new articles, studies, and research on emerging trends in family philanthropy. These articles explore options for giving as a family, effective grantmaking strategies, and a variety of key issues and challenges facing today's family philanthropists. If you have a suggestion for a future edition of FGN, please email Sarah Trzepacz or contact the National Center at 202.293.3424.
Trouble in Foundationland: Looking Forward, Looking Back
January, 2004, The Hudson Institute (Washington, DC)
Peter Frumkin, professor of public policy at Harvard University, examines the furor over the proposed H.R.7 legislation to increase foundation payout requirements, and how the history of philanthropy in America has informed and fueled the current debates on effectiveness and accountability. Frumkin discusses how a fundamental ideological shift in the way foundations viewed themselves, the "professionalization" of the field, and increasing concern about transparency following the Tax Reform Act of 1969, all contribute to the current philanthropic climate. He explores the positive and negative impact of the changes on the field of philanthropy and postulates the effects of the still-debated H.R.7 legislation.
Trust and Transparency: Private Action in Public Space
March 9, 2004, WGBH Forum (Boston, Massachusetts)
Peter Karoff of The Philanthropic Initiative hosts a panel of experts as they discuss issues of governance, transparency and accountability in philanthropy today. The panel includes a cross-section of professionals and academics in the philanthropic field: Dorothy S. Ridings, President and CEO of the Council on Foundations, former Massachusetts Attorney General Scott Harshbarger, and Hauser Center senior research fellow Marion Fremont-Smith, among others.
Mergers that Make Sense
March 31, 2004, San Francisco Chronicle
Just as donors are looking to collaborative grantmaking as a means of stretching resources depleted by recent economic woes, the nonprofits they fund are combining forces to maximize the impact of scarce grant dollars. Ideally, these mergers encourage cooperation among nonprofits with similar goals and/or operating areas, and eliminate competition; however, many of these "marriages of convenience" have a tough road ahead. While conflicts concerning mission, initial administrative cost hikes, and the non-profit tendency to vigorously defend independence have sunk some mergers, others, like California's Women's Foundation, have succeeded in weathering the storm.
After Holding the Line for Two Years, Foundation Giving Declined in 2003
April 5, 2004, The Foundation Center (New York, New York)
The Foundation Center reports that repercussions of the economic slump of the last few years are beginning to be felt in the philanthropic community as foundations record their first decline in giving since stocks began to flag. "Foundations are not immune to economic cycles. . . Just as the boom of the late 1990s enabled foundations to increase their giving at an unprecedented rate, so too has this recession and prolonged stock market downturn led to a reduction in foundation giving," said Sara Engelhardt, president of the Foundation Center. All the news isn't bad, however, as the economy is beginning to show signs of rebounding: half of the foundations surveyed reported that they expected to see their giving increase between 1 to 10 percent in the next year.
NW Philanthropy Puts on a New Face
April 12, 2004, The Oregonian
A $25 million grant to Portland's Employers for Education Excellence (E3) given jointly by the Meyer Memorial Trust and the Bill and Melinda Gates Foundation, is indicative of a trend towards collaborative grantmaking in the Northwest. Although the recent economic slump and the failure of many dot-com ventures put a slight damper on giving in Seattle and Oregon, these factors have fueled a spirit of cooperation among "loner" foundations. No longer content to simply write checks, these new family donors are interested in rolling up their sleeves and getting directly involved in the charitable works they fund.
With Success Comes Responsibility
April 15, 2004, Alternet.org (San Francisco, California)
As the Marguerite Casey Foundation reports $121 million in growth as the economy begins to rebound, Ruth Massinga, president of Casey Family Programs, and Luis Vega-Marquis, the foundation president and CEO, debate the cost of such fiscal growth to the very people they are attempting to help. They grapple with the clear relationship between the stock market surge which empowers their giving, and disturbing economic trends that cause the ranks of the poor to swell: a decline in median family income of more than $1500, drastic increases in insurance premiums, and a spike in the amount of credit card debit incurred by low-income families. Vega-Marquis and Massinga urge grantmakers to "be constantly aware of the choices we make with our portfolios and vigilant to the consequences of our economic decisions."
The Upper-Middle Class and Middle Rich Donate Lower Percentage of
Wealth
April 22, 2004, New Tithing Group
A recent study shows that people with an adjusted income of $200,000 to $10 million donated a substantially lower percentage of their asset wealth than did people in lower income brackets. The report also indicates that average tax filers in this income bracket missed out on the significant tax benefits of charitable giving; as a group they could have saved half a billion dollars in capital gains taxes. New Tithing Group proposes donor-advised funds as a convenient solution to potential donors in this group, as they require little administrative hassle for donors while providing tax benefits.
"Listening to Grantees: What Nonprofits Value in their
Foundation Funders" Study is Released
April 26, 2004, Center for Effective Philanthropy
Because nonprofits are dependent on foundation funding to pursue their initiatives, it is often extremely difficult to collect meaningful feedback on how well or poorly their grantor-grantee relationships are working. The Center for Effective Philanthropy has gathered confidential information from a survey of thousands of grantees funded by 30 large private and community foundations. Goals and hopes for the study are high, says the Center's Executive Director, Phil Buchanan: "Our objective in our surveying has been to break through this dynamic by gathering confidential and comparative data on grantee perceptions of foundations. We then distill what we learn for the benefit both of individual foundations and the foundation field generally.”
The Urban Institute Releases the Findings of Its Effectiveness
Study
April 27, 2004 The Urban Institute
This study of 1,192 grantmaking foundations with at least one staff member shows that although there is awareness of the importance of effective grantmaking strategies, few foundations actual put them to use. These practices, which include: soliciting advice from experts outside the foundation, seeking guidance from community leaders, and requesting grantee feedback are in use in less than half of all foundations. The study also finds differences in how foundations define effectiveness based on the type of foundation—community vs. independent—and its size. The study's impact on the future of foundation philanthropy could be large: "This research provides the first comprehensive look at how foundations view their own performance," says Kathleen P. Enright, executive director of Grantmakers for Effective Organizations. "Future efforts to improve philanthropic performance can now be based on solid data that acknowledge the heterogeneity of the field."
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