Posts from the ‘Equity and Ethics’ Category
August 5th, 2020
A couple of years ago, my accumulated professional careers crossed the half-century mark. Knowing that it has been an untypical journey, a number of people asked if I was planning to write an autobiography. While I don’t believe a full autobiography is warranted, I have written a pamphlet size retrospective built around lessons learned. It will be published sometime this Autumn.
While writing, I was reminded of a number of influential episodes, some of which are applicable to current developments in the philanthropy world. This piece emerges from one of them. Watch for additional posts that will address others.
“Strategy” is the constant among my five careers. Whether in the non-profit or for-profit sectors, or, in the last quarter century in the philanthropy arena, being a strategist has been the core competence that ties it all together. I learned very early on that the elegance of a strategy, the completeness of the data, and the rigor of the process are often for naught if there is not attention to implementation. There is much to say about this, and I have written and taught about this extensively. But a current discussion in our field has underscored, once again, how crucial the implementation stage is in achieving any effective strategy. In this case – the difference between listening and hearing.
The anecdote: I recently had occasion to be reminded of a project I did fairly early in my career. In my first full-time post-graduate school position, I was a young associate chaplain/faculty at Brown University. Toward the end of my first year [’71-72], a graduating senior came to meet with me. He told me he had a beef: He said that there were matters of identity that he and his friends had never discussed and, now, on the eve of graduation, realized that he wishes they had. He told me that he thought that the only person he knew who could have facilitated that much needed conversation was me.
Now, to be fair, while it was a nice compliment, there were undoubtedly lots of folks who could have facilitated that conversation; his was probably more a comment on the still existing divide between faculty folks and students even in the early 70’s. It did challenge me, though, and I subsequently began a practice that I continued for my remaining years there. [I left in 1982.]
At the beginning of every Spring semester, I would invite graduating seniors to my home for small group teas. Over the years, I learned a lot. The most sustaining lesson was this: whatever perceptions I may have had about students’ commitments and involvements based on what I observed proved to be only coincidentally aligned with what students said about themselves. I might see a student doing some particular program or activity almost every day, yet those very students would describe themselves as only very marginally connected; other students might talk about how important a project was to their undergraduate life, even though he or she might be totally invisible to others involved.
In other words, self-perception is not always aligned with how others see us. The data alone was misleading – or at least insufficient. It was a lesson that has served me well in every subsequent career, but none more so than in my journey in the philanthropy sector over the last quarter century.
Our field is fraught with opportunities for misperception. It historically has been built on a power imbalance – one side wants, the other side has. Those who want financial resources need to convince those who give that they should give to them. Built in is a challenge of perceptions. Organizations that want resources from funders try to determine what the funder really wants to hear, what will give them a tactical advantage, what is legitimate hyperbole vs dubious exaggeration, and what will give a funder the confidence that their articulated missions will best be fulfilled in supporting your organizations. Funders have our own set of desiderata: yes we want to assess all of the items presented by those seeking our funds, but we also have our own independent considerations: where does this request fit within our own priority system, how does supporting this organization or project align with our own risk tolerance, how does this request compare to other similar requests on our docket, what is the internal push and pull among family or trustees or staff, and more.
Those requesting funds rarely know all of these internal considerations – meaning that there is an endemic disconnect. They are limited by their perceptions – extrapolating from the knowable [grantmaking history, articulated missions] to the “best guess.” Proposals, whether written or oral, all reflect a best guess of what the funder really wants, but since there are so many subjective factors, there is always, by definition, the unknowable.
Some funders have made our own mistakes – that of assuming that we can take the guess work out of our decision making. It is a little less true today than it was a few years ago, but for a while, funders thought that we could apply a rigorous due diligence and metric system to make the “right” decisions. That too is wrong – and also for an important endemic reality: we fund the future, and the future is never guaranteed. We may choose to reduce the risk by supporting only well-established organizations, or well-developed programs, or sector leading executives, but…. COVID-19 only proves that nothing is assured. Moreover, the lower the risk, the lower the likelihood that creative change can occur. If, as many funders claim, we want our money “to make a difference”, it is important to remember that “difference” has to mean something will be different.
If that is true, we too have an obligation to learn how to extrapolate beyond that which is presented. But how?
This is where our field is moving in a healthy direction. There have always been some in our sector who have made it safe for potential or existing grantees to tell the whole story in honest ways, but not most of us. There have always been some in our field who know that those on the ground are more likely to understand real needs, especially in the realm of direct service/at risk populations than we. There have always been funders who have an understanding that funding the future means that some things we fund will [and should] fail, but too many still don’t have the tolerance for failure or the importance to endorse its legitimacy.
Many of the most welcome changes in the current climate in our field are attempts to address exactly these things. Initiatives such as “Trust Based Philanthropy” or “Listen4Good” or “Nothing about us without us” or the ongoing work of CEP are all very welcome attempts to rebalance. How do we as funders make it safe for grantees to tell us honestly what they need? How do we make sure that the direct stakeholders are the real beneficiaries of our intended largesse? How do we allow grantees to take enough risks toward much needed change that some will assuredly fail? These, and numerous other initiatives are pushing us as funders toward redressing gaps in our own practice and affect. The primary responsibility in making these adjustments is ours.
It is also true that not every nonprofit is guiltless. All of us on the funder side have seen organizations that have chosen to hide essential information, to reject thoughtful support as inappropriate intrusion, to be blind to their own failures, and to view us funders as inscrutably “different than us.” We as funders may have the primary responsibility to readjust our behaviors but we are not alone in this. Non-profits too need to learn how to listen – to words that may appear patronizing or distanced or judgmental or overly jargon-y, often presented in settings that are intimidating but are usually well-meaning and more often than not intended to be constructive.
All of us, yes every single one of us, has filters that align what we are told with “our own” reality. The real challenge, then, is not only listening but also knowing how to hear. Since affect and tone and setting and implicit biases [on both sides] can so easily distort, knowing how and what to absorb from feedback and shared information is a constant challenge.
As we know from so many other contexts, collecting data may be hard; interpreting that data is much harder. Creating strategies may be daunting; implementing them is much more so. And, listening may be hard; hearing is much harder. For all of our benefit, it is a skill worth learning.
June 16th, 2020
A few years ago, when the Black Lives Matter movement first arose, it was not uncommon to hear a rebuttal – “but don’t all lives matter?”
Most of those who responded that way were simply being dismissive [that is the most generous way to put it.]. However, some folks I respected really needed an explanation. They had been on the right side of activism and associations, and the last thing they could imagine about themselves is that they were participating in or affirming racism. Their genuine views were built on the concept that a society needs to be built around a vision that all are equal, have equal access, and equal opportunity. Their well-meaning but naïve response was neither malicious nor mal-intended.
Most of these folks got it after it was explained to them why the phrase mattered and, regrettably, needed affirmation from all of us.
It is now several years later, and the BLM movement has expanded – for terrible reasons. There are lots of articles and analyses about why now but suffice it to say that it isn’t hard to understand why we who are White once again need to affirm the message. Nowadays, when we hear the same rebuttal about “all lives matter” it might mean that one is genuinely clueless and doesn’t accept the truth of endemic racism in America. Worse, some don’t really believe that all lives do matter – that only White ones should. I have very little patience for either of those perspectives.
I was, though, caught short in hearing two people comment about how it made them feel. One was a First Nation/Native American and one was the child of Holocaust survivors. In each case, they wondered why their historic anguish wasn’t being recognized or, they felt, was being implicitly dismissed. Neither in any way tried to belittle the legitimacy of the BLM Movement, nor deny that it was way overdue. Their point was that they looked at their own history of delegitimization, of legal and illegal discrimination, of the death sentence that too often accompanied their ancestors, even their own personal experiences, and how easy it still seems for much of the US to not take their histories as seriously as they now seem to be taking the travails of Blacks. Their concern, separately articulated, was that as America confronts its shocking and shameful history of anti-Black racism and racist behavior, that their own narratives will be lost, and America’s empathy quotient will be used up.
Now – so that no one, absolutely no one, misreads what I am writing here – let me be explicit: this is the time for the message of BLM – it should not be diluted, delayed, or discounted. American accountability is long overdue and practices and policies that have allowed racism should be changed – yesterday. No one needs to make excuses for the profoundly effective and moving protests seen around the world, and no one needs to apologize for saying that this is the time.
If one looks at history, though, the concerns of these two are not misplaced. America’s shameful past toward First Nation/Native Americans must never be allowed to be ignored. And the resurgence of anti-Semitic acts in the USA accompanied by a frightening skepticism that there were really 6 million Jewish victims of Nazism demonstrates that the work is far from done. How does one honor those very legitimate concerns – especially as we look to what we want in the future?
When I lived in Chicago in the 80’s and early 90’s, I had the honor of being involved in a Foundation funded by the Chicago Community Trust charged with addressing intergroup understanding. One of my volunteer/leadership roles was to co-facilitate these interactions among young adults from many different religious, ethnic, and racial backgrounds. The experiences were instructive: when groups first got together, their first instinct was to view their own group’s histories in competitive terms: How many were enslaved? How many were displaced? How many were massacred? How prevalent is bigotry toward…?
That approach proved untenable as a way forward. Is there really a hierarchy of bigotry and suffering? Is that a viable or even an ethical way to have an intergroup conversation?
After a while, we developed an alternative approach: what experiences made each group and each individual feel vulnerable, fearful, or misunderstood? No one was dismissive of those feelings since they were so clearly genuine. They weren’t quantifiable. Sharing why they felt those fears led to both empathy and understanding.
However, something happened during those conversations that anticipated today in remarkably and sadly prescient ways. In every conversation, by the end, the sense was that the most vulnerable group was young adult black men. In group after group, we heard black males tell of walking down the street and watching people quickly cross the street to avoid them; we heard of being stopped by police for no reason, or being tailed by clerks in stores, or seeing people clutch their purses or briefcases on busses – or choose less desirable seats to avoid sitting next to them. Every single person who was not a young black male nodded in recognition – in every single session.
I confess I have no recollection whatsoever if we then had the data to confirm what we all now know to be statistically true: the inordinate number of deaths and incarcerations among this population. The real-life experience of being a young black male, of any young black male, is only confirmed by that data, but it was evident even then.
Those sessions led to profoundly greater mutual understanding and empathy. Once we shifted the conversation from “my pain is greater than your pain” to “let’s acknowledge that we all have reason to feel vulnerable” both the character of the sessions changed, and the mutuality of respect grew palpably.
However, what didn’t change was the facts. All of those legitimate vulnerabilities continue today, and given the current ethos and political environment fostered by the Administration, other groups can easily be added to those who met in Chicago 30+ years ago, and make a case for their own victimization and vulnerability. But young black males are still being targeted, victimized, incarcerated, brutalized, and murdered.
We learned in those gathering that one can transfer fear of the other to empathy. As we [hopefully] construct a more just society going forward, that message must prevail. And of course, it must apply to all who feel vulnerable. But even then the message was loud, clear, and poignant even if we didn’t yet have these words to tell us: Black Lives Matter.
June 4th, 2020
I have failed. Make no mistake. In what ways? Let’s look:
• The USA has not taken climate change seriously.
• The USA has not adequately addressed its endemic racism.
• The USA has enabled the greatest disparity between rich and poor in modern history.
• The USA has refused to accept that the right of women to control their own bodies should not be negotiable.
• The USA has valued gun ownership above support for education leaving a generation under-informed about history, the world, science, and so much more.
• The USA’s delusion of its own exceptionalism has reinforced self-destructive isolationism.
• The USA’s persistent and recurring xenophobia has distorted human interaction, civil society, and the respect for civil liberties.
• The USA congratulates itself on it being the land of opportunity while embedding economic classism more deeply than ever before.
• The USA, alone among industrialized societies, refuses to grant health care, childcare, and elder care to all of its citizens.
• The USA has the most misanthropic anti-Constitutional POTUS in its history.
Is this enough? It is a litany of failure.
Last week, a colleague challenged a group of us. All the evidence you need that we haven’t done enough, he said, is to look at the facts. The last 3 months have underscored the fragility of our health system and the financial well-being of millions of citizens – through no fault of their own. The last week alone has underscored the depth of our systemic and cultural racism. There have been all too many other recent examples that underscored every single item on the list.
Yes, I have failed.
Yesterday, I attended one of the most moving protest gatherings I have ever attended. It was right here in Bethesda and it was organized exclusively by high school students. Since the mid-60’s, I have attended countless numbers of protests, marches, rallies, sit-ins, teach-ins, and vigils. Most mattered; some were moving. None moved me as much as this one.
Here, in the privileged alcove of Bethesda, a bastion of presumed upscale liberalism, we listened to personal narratives of racism experienced by teenagers of color – in their lives, in their schools, by their families – in this community. One speech was read by a proxy for a student who feared for her life if she attended. Others told of dismissive attitudes by teachers, administrators, fellow students… to say nothing of graffiti and words and implicit discrimination. Right here in Bethesda.
The teenagers organized their rally to support each other – never imagining that many hundreds of us would join them; the crowd extended for several blocks. [There is a photo by a tv station showing one older bald white guy in a blue blazer sitting surrounded by several hundred teens. I wonder who that old white guy might be? For readers who might not know what I look like, I happen to fit that description.] Before beginning, the teens demanded that we all “social distance”, wear masks, and pledge to participate peacefully.
What got me, what made me weep behind my COVID-19 mask, was when a few student speakers spoke of their grandparents marching for racial justice in the 60’s when they were high school students themselves. I am older than those grandparents! Over 50 years later, we are still here. Yes, I have failed.
But, you might ask, “why do you keep saying ‘I’?” Shouldn’t you be saying “We have failed?” There are even a small number of readers who have known me long enough to say: “What about when you did this?” Or “preached that?” Or “went to the line for…?” Or called out that racist comment? Why put myself down if, perhaps, I have may have done more than some others?
And that may be true. However, this “I’ is not some hubris driven belief that I could have changed anything in that list alone. It required and still requires many to be addressing them together. But “we” is a collection of “I”s and the “we” only works when each of us, individually, accepts the burden of what each of us can do. “We” simply means we do those things with a commonly felt mission.
Also, if I am being honest, whatever I have may have done, however worthy it might have been, is less than I could have done. I may have been too reticent to speak as forcefully as I should have when I was still a person of some influence. I may have not been as visible in settings where it might have made more of a difference. I may have under-supported the social justice initiatives that have been fighting this systemic fight for much too long. I daresay most of them have no idea that I am a fellow traveler.
Yesterday’s teen led gathering left me shaken. What have we wrought that our grandchildren must experience this sense of abandonment, of fear, of suspicion, of challenge? After all, over the last several years as I settled into my mid-70’s, my apologia pro vita mea has been: “with experience comes sagacity”. It seems to be true in the philanthropy world where I have spent the last half of my career. It seems to be true in the international interreligious realm where I am still privileged to be treated like a respected elder.
Make no mistake, though, It surely is not true in knowing what to say or advise young people who are on the cusp of young adulthood looking to create a world that overcomes the failures our generation has left for them.
Yes, we have failed them. And, since, as I said above, every “we” is a collection of “I”s, it is not hyperbole to say, “I have failed.”
I and we must assure that the sad legacy of racism, misogyny, inequities, and the other cancerous and destructive failures of our society end. These young people deserve no less. If we succeed, the next generations won’t have to look back at us and wonder where we have been, or 50 years hence, have to weep as another generation painfully asks “why.”
December 5th, 2019
An earlier version of this post led some readers to infer that this was about only one incident in the philanthropy world – and read it “personally.” In fact, I intended my introduction to give an example of tendency in our philanthropy sector to sometimes be more impressed by the resources than the results. In order to eliminate the potential for it appearing to be a judgement on any one case, I have re-written this.
There is a tendency in the media, and even within our philanthropy field, to be blinded by big bucks. A nine figure gift is guaranteed to get a headline and other larger gifts are likely to get outsize attention. An Accompanying articles will mention the recipient organizations and how the money will be used in general terms, but rarely will those articles address whether the recipient is well-suited to implement such a gift, have a proven track record in the field, have a particular theory of change that makes this a potentially transformative gift, or even who else in that field may be doing important, if unsung, work in the same field.
In fact, if one looks closely at most of those gifts, we find that numerous organizations have been working in those sectors for a while, some for years. A few of these may have made some real impact, others not so much. Few, if any, though, were launched with the funding of this new gift and none ever received the attention this new gift has received. Indeed, if one were not familiar with the sector, one might conclude that a newly well endowed organization is about to plow virgin land even though it has yet to announce exactly what it intends to do. It is as if money talks more than accomplishment.
This is not a new phenomenon and represents a cautionary tale for those of us in the funding sphere. There are funders who always prefer an exciting new venture – assuming either that “new” must be better than “old” or, perhaps, if the “old” organizations really knew what they were doing, there wouldn’t have been the need for a new one. Indeed, sometimes that is true. And it has been my privilege, both as a CEO of a foundation and a trustee of others and even as a personal funder, to have been involved in launching some extraordinary and creative start-ups that really did push their respective fields into new and exciting areas.
But not always. When I was the CEO of a foundation, we also made some flawed decisions. Sometimes we overlooked quite successful, if un-showy, organizations in favor of those with more sizzle and pizzazz. Sometimes we pushed wonderful boutique organizations to reach for scale, in the process forcing them to lose the uniqueness that got them there – and all too often destroying them in the process. We occasionally were so committed to “transformation” that we underestimated the long-lasting on the ground, efforts that are always indispensable for any change to have staying power. And, let’s be honest, we too often were taken with early stage charisma more than solid competence and creativity.
That we were not alone in these missteps does not exempt us from responsibility. All too often these errors were because I was taking the lead from others who seemed to have done their due diligence. If colleagues I respected were funding them, why should I spend my time repeating what they had presumably done? Moreover, I had plenty of other due diligence or monitoring or relationship building to attend to. Why not trust those who had already made informed affirmative – or negative – decisions? Yes, even funders have a tendency toward a herd mentality. [Once, following the lead of a goodly number of fellow funders, many of whom we had previously partnered with, we made a grant to what seemed to be a successful and innovative program. Almost immediately I found the executive to be intolerable, the organization unwilling to submit required financial reports, and, literally from the day they received their commitment, they were asking to renegotiate for more. Finally, I called a couple of other funders to ask if that was their experience as well. One said: “We hold our nose and fund them anyway.” Mea culpa. I could and should have discovered that before encouraging our funding.]
There are lessons that have served me well in making subsequent judgments about grantees. More, they have served me well in reminding me of the essential humility that needs to accompany all of our thinking as funders. After all, when we fund, we fund the future, and no matter how evidence-driven or seemingly a no-brainer, nothing about the future is guaranteed. And if we are trying to fund “change”, all the more so.
I don’t want to trivialize or be dismissive of the advantage of resources. After all, far too many non-profits trying to do good and important work have been handcuffed by profoundly inadequate resources. And, there are still too many funders who hold that against them – as if poverty – even among non-profits – must be deserved and even punished. [This was written but not published before the shameful cutbacks in SNAP funding announced by our heartless pseudo US administration. In one heartless stroke, 700,000 people will lose coverage. Those of us in the philanthropy world should take note and make sure we aren’t implicitly doing the same thing in how we treat under-resourced nonprofits.]
Our field has a tendency to forget that the very term “not for profit” was coined precisely because it assumed that social service work will never be profitable – or generate surpluses. There is no doubt that cash reserves of 3 to 6 months are signs of a healthy organization; but, with government cutbacks or a history of hand-to-mouth finances, not every organization providing quality on the ground human services can imagine that kind of financial security that we as funders prefer. Should we as funders penalize them for that? This goes beyond the current, long overdue, commitment of many in our field to provide operating support; it recognizes the fragility that defines a very high percentage of on the ground nonprofits.
It is true that greater resources can allow greater impact. Sometimes those resources are hidden from view but allow an organization to have a healthy infrastructure that ensures increased effectiveness. Sometimes those resources are very visible – allowing marketing muscle to bring attention of a cause to the public so that responsible public policy can be enacted. [The reverse is also true, of course.] And sometimes sufficient resources can fund continuing r & d so that successful organizations can continue to be successful. And sometimes it is because there are only a very few organizations with the size and capacity to absorb mega gifts.
But it is also true that too often we are blinded by the money part and pay far too little attention to the underlying theories of change or whether those funds are going to where the needs are greatest or whether they will be used as effectively as a less well-funded organization might…
Around this time of year, our media celebrate voluntarism, the grassroots work that so many do throughout the year, the necessary boots on the ground of so much social service. They rarely talk about the professional staff, often underpaid, who make it happen and whose work goes unrecognized the remaining 51 weeks of the year.
It is a fair bet that the same media will give headline attention to a mega gift at any time of the year. That coverage is typically of the voyeuristic type, more engaged with the donor than on the needs the gift is supposed to address. There has been a good deal written in the last couple of years about the implications of the concentration of wealth for the nonprofit sector. Those of us in the philanthropy field are discussing the issues of equity at every conference. However, I daresay that most mainstream media haven’t paid that much attention to our heartfelt self examinations.
At this time of year, let’s celebrate generosity in all of its forms and at every level. Let’s also not get blinded by outsized gifts that may or may not accomplish what is really needed. Money talks and money matters, but in the field of real human need and social inequity, money alone does not guarantee success.
November 26th, 2019
It is hard to imagine that anyone in the philanthropy field has not participated in, read about, or been engaged with questions of “equity”. In fact, one would have to be willfully distracted to not be aware of its prevalence over the last couple of years.
Since so much has been written, said, published, and sometimes even implemented, I will take for granted that any reader of this piece does not need a primer. Our genuine concern with underlying systemic issues combined with legitimate concerns with the overt disparity of wealth distribution means that our field has both a mandate and a challenge at the same time. And to the credit of our sector, the discourse has been informed, caring, and purposeful even when there is a wide range of thinking about what all of this means – for us and for public policy.
It is in this context that I would like to comment on a program I attended recently which explicitly was marketed as a “conversation about racial equity.” [Since I don’t have permission of the organization or the speakers to publicly identify them, I will respect anonymity and trust that only a very few readers will know to whom I am referring.]
While advertised as a conversation among trustees, truth be told it was really a series of presentations. That may seem a nitpick but it does mean that I cannot say whether my responses are representative of other funders in the room or not. There is no question that the personal stories of how the presenters, persons of privilege, learned of the depth and reality of racial injustice and inequity were moving and convincing. This sensitivity has clearly influenced their philanthropic giving priorities and even the ethos of the organizations and foundations they head. One can and should applaud their honesty, sincerity, and commitments.
And yet… I kept thinking about the bottom line of how this all plays out. There was only time for one question, and the one question, by a very prominent woman of color [a relevant datum in this context], was the same one I kept thinking about – governance. Who is on the board? Who makes the decisions? What are the implications for family funders who are the source of the money and who have legal control of the money?
As one who has participated in my share of equity related discussions and has observed many more, I was struck by the absence of any reference to some of the mantras that inform our thinking: even if they didn’t use the term “participatory grantmaking” or quote the catch-phrase “nothing about us without us”, I would have welcomed something more than that they were personally awakened, their grantmaking priorities had changed, and even their staffing was more reflective of a racial balance. These things matter and I am not dismissing them.
But in response to the question about governance, the principals on the panel were unequivocal. One said “it is my money and…” Another said, “it is our family foundation and only family can sit on the board.”
This is not a criticism of those forthright and honest answers, but I would have liked a response that showed that they understood the complexity of those answers. Power and privilege are very real. It is naïve to think that there are easy ways to share them or even when or if one should surrender them, but those of us who have that power and privilege need to at least demonstrate that we understand what that means.
The absence of these sensitivities was particularly striking at this event. These are people who really care – in very personal ways, in philanthropic ways, in behavioral ways. They all demonstrated that they knew the difference between tokenism and enfranchisement. They all set a personal standard to which most in the philanthropy field should still aspire. They really do want change and want to model it as well as they know how.
I myself struggle with the line between enfranchisement and empowerment. I don’t know if and when we have a moral and ethical and historic obligation to cede at least some power in the board room, and if so, how far that should go. Especially for family funders, it is a genuine dilemma for which I can’t propose a facile solution.
But, acknowledging that, I still would have liked to see more self-awareness of the governance control dilemma from these thoughtful, caring, and committed funders. If it is that hard even for them to talk about, it is clear how far we have to go, as a field and as a nation, to really redress the deep-seated racial and social inequities that are so endemic to American society.
November 11th, 2019
Reader alert: This piece, as #354 and #355, has a clear public policy point of view that many will find political.
One cannot be in the philanthropy world, the financial management industry, or the demographic field very long without hearing about the massive multi-trillion-dollar transfer of wealth. The amounts to be transferred from generation to generation boggle the mind. Surely it is so great to be transformative.
While I am neither an economist nor a wealth manager, I have no doubt that those numbers are derived from real data. I also have no doubt that wealth managers are hyperventilating over the fees that will accrue when these monies are invested, and fundraisers for both nonprofit and for-profit funds are salivating in anticipation. [I am only slightly exaggerating but in conference after conference, I see their evident enthusiasm.]
More relevant is that I am absolutely sure that some heirs and their families will be well cared for, as they used to say a century or more ago, “beyond the dreams of avarice.” But only some, and that’s the point.
If the transfer were in anyway broad-based and really likely to raise the living standards of everyone, the demographic projections wouldn’t be as bleak as they seem. Why is it that whole swaths of millennials assume that they will not achieve the financial security that their parents had, that they see home ownership as elusive, that they wonder how health care and social security and college loans will be paid for? And what about all those McMansions that were supposed to be guaranteed nest eggs that are now waiting and waiting for buyers?
Even after one of the longest economic expansions in history, middle class incomes are barely covering what they did a generation ago and certainly don’t reflect this great run-up in stocks or provide cushions against emergencies.
Now, let’s turn to the philanthropy piece of this: Initiatives like The Giving Pledge [full disclosure, I have a very peripheral connection] are intended to give some of those billions a place to do some good. And some of the signers are being very proactive with their funds to expand their giving to non-profits or at-risk populations or systemic social issues. But many who have committed at least 50% of their net worth to philanthropy have chosen to fulfill their pledge by funding their foundations upon their death. Far be it for me to malign that decision, but let’s be honest, that means that in many cases only 5% of that money will be distributed on an annual basis and only at some uncertain time in the future. That counts and that money is certainly important but hardly a game changing transfer of wealth to the non-profit sector. To date, sad to say, under 300 billionaires have signed on. There are many others who have yet to announce their intentions.
When looking closely at this massive “transfer of wealth”, it becomes ever more evident that it is a boon to the already wealthy, and a smidgeon to the vast majority of the rest of the population. If there has been an inordinate, and morally dubious, concentration of wealth in the hands of an ever-shrinking percentage of the population over the last years, this transfer is destined to intensify and solidify that oligarchy.
There are some public policy strategies that can help that transfer be more widely enjoyed. Most of these do indeed have an impact on the highest net worth among us; none of these will have the slightest impact on their lifestyle. I am sure that these 7 are not an exhaustive list, but I do feel that together they may begin to redress some of this accumulated equity imbalance:
1. Eliminate the cap on taxable earnings subject to social security tax. That is the single most regressive tax – with a much greater burden on lower- and middle-income earners, and an exemption to the highest.
2. Tax capital gains at the same rate as other taxable income.
3. Support some sort of guaranteed medical care for everyone. I doubt such a national insurance policy will ever come close to what congress grants itself or what top executives in the corporate sector receive, but it is an inequity widely written about. [I am purposely not applying terms such as “Medicare for all” or “Obama Care” etc. They have become so loaded and weaponized that it is impossible to discuss the true underlying issue.]
4. Support policies that restore SNAP funding to levels that make the measurable difference in reducing food insecurity for children, the working poor, etc. Studies show the impact in the workplace, in school performance, and in public health when the population receives adequate nutrition – or doesn’t. The financial return to the society as a whole will more than outweigh the short-term public expenditures.
5. Support a minimum wage that doesn’t guarantee continued poverty. Assuming that the working poor can actually live on $15/hour in almost any municipality in the USA is willful neglect. The deteriorating impact on society of the growing homeless population, even of people working full time, is measurable. We can argue about employment statistics, but it is unconscionable that those numbers are on the backs of full-time workers who can barely afford housing.
6. Support the development of reliable, regular, and widespread public transportation. Those without access to public transportation are fully reliant on private automobiles. For many, that is the second largest annual expenditure after housing. And, needless to say, that impacts lower income folks the most. If one can provide the kind of public transportation taken for granted in many parts of the world, it would immediately provide an increase in net spendable income, reduce the palpable tension in the workplace caused by driving to and from work [according to several studies], and help to sustain engaged community involvement [that has dropped precipitously over the last 2 generations].
7. Restore Pell Grants and the equivalent to the levels they were originally intended. When developed, they were the second most significant source of higher education tuition funding [after the GI Bill]. Millions of lower middle-class people earned college degrees through those grants without incurring back-breaking debt. As those grants have been eroded over time, they have moved from being the “leg-up” to just another bureaucratic burden with minimal return. Simply restoring those funds to the level they were originally intended [inflation adjusted] would make a huge difference in reducing the $trillions of debt too many college graduates carry.
Now, of course, while some of this will require increases in taxes, let’s be clear -that is why we have taxes. “Tax” is not a dirty word – taxes are how we express our individual commitments to having a functioning society. An equitable tax system, without undue breaks for those who need it the least, is the truest form of a “trickle down” economy.
Now I know that some lobbyists will argue with every one of the 7 points, and I am not so naïve to think that whoever gets elected will find it simple to enact public policy that easily. But I do call upon those who will be the primary beneficiaries of the much-celebrated massive wealth transfer to lead the way. For most, it will be painless.
Several years ago, I was meeting with a very wealthy family in another country. The scion, the oldest of Gen-2, told me that he and his peers felt very bad that so many people in their community could not afford the kinds of wedding celebrations that they had. Did I have any thoughts on how they could address that social stigma and provide the less wealthy with the kinds of weddings the wealthy took for granted? I asked this fellow if he and his fellow wealthy had ever considered toning down their own over the top ostentation that only reinforced the wealth divide and played into that very stigma. It would reduce the social pressure and the need to create an entire funding enterprise. It had never occurred to him or his peers. It caught him off guard to suggest that their behavior sets the standard that leads to that perception of inadequacy and that they might have a role to play in reducing that divide.
Perhaps it is time for those whose wealth exceeds any possibility of human consumption to ask themselves that question. It might make a modest increase in taxes more palatable, and it might lead to a level of empathy that would change the social discourse in less judgmental and patronizing ways.
And ultimately make that transfer of wealth something all can celebrate.
October 22nd, 2019
Reader Alert: This post and the next have a pretty clear political point of view.
In June, the regional association of grantmakers, of which we are members, sponsored a conference on Census2020. The challenge of every census has been to produce as accurate a census count as possible so that allocation of federal dollars and Congress can reflect real needs and proportional representation. The Census Bureau readily acknowledges that certain at-risk communities are consistently undercounted, meaning, of course, that certain wealthier – and, not surprisingly, whiter – communities are over-weighted.
Next year’s census is even more challenging and is the first where an Administration has overtly tried to politicize it. Fortunately, the Supreme Court called them on it and didn’t allow a rogue question on citizenship to be a last-minute question on citizenship. Nevertheless, the damage was done and those who have developed a distrust of the government’s actions and intentions appear likely to be reluctant to participate regardless of the status of that single question.
There are many subsets of America to which this applies. Persons of color, immigrants, Hispanic and Latino populations, Muslims, those who don’t own their own homes, non-English speakers from anywhere are only some of those identified. Recognizing how crucial these numbers are for accuracy and equity, the philanthropy community throughout the United States has mobilized to help get as close as possible to full participation. June’s conference tried hard to avoid research abstractions and to focus explicitly on “interventions that work.”
Here is the kicker, though. The conference invited panelists on whom the success of these interventions depends. They are trusted intermediaries such as clergy, community leaders, social service workers, immigrant aid attorneys, and more. What we heard was that many of them were, themselves, reluctant to push their constituents to fill out the census forms. Given this administration’s abuses of personal rights, the outrageous tactics of ICE, and the assumption that there is no such thing as confidentiality as far as the government is concerned, these influencers were not prepared to put their own credibility on the line. And while they acknowledged that there has always been some of this sentiment, there was absolute agreement that the current administration breeds a level of fear and distrust among the populations who are most in need of the resources the census will yield beyond that ever seen before. People are in hiding, if not literally certainly in their willingness to comply with anything that might identify them to the government. [A reminder that the next 10 years of government allocations will rely on these numbers!]
This level of distrust is profoundly unsettling. Many of those of us who are funders sitting in those sessions were deeply troubled. The philanthropy world can assist, enable, and support local entities but very few of us are known by or are credible to the folks in the at-risk communities so if our efforts are to succeed, we need those trusted community leaders. If they are hesitant, how can or should we use our resources to address authentic issues of equity that really matter?
This post is not to provide an answer to that question but rather to show that the “trust” issue even includes us.
Which brings me to a consultation I attended yesterday, sponsored by the same regional association of grantmakers, addressing issues facing immigrant communities and an attempt to articulate ways in which the philanthropy world can make a difference Many of the issues were re-articulation of the Census2020 conference, and migrant issues will not soon go away as we have yet to address climate enforced migration that will only grow. Only an ostrich like administration can pretend otherwise.
The last question the panelists were asked was how we funders can help. There were a number of focused financial proposals, but then their answers switched to how we should or should not behave. For example, they argued, even if and when we sponsor convenings, we should absent ourselves. These groups felt that they would be too vulnerable to expose their authentic challenges, to reveal their failures, and to admit to the implications of the consistent pattern of underfunding they face.
Put simply, they don’t trust us. No, not in the way they distrust government misbehaviors but, rather, for our inability to keep our privilege in check, our power under control, or our attempts to enforce our perceptions of what they should do. These were not unsophisticated panelists who never deal with funders all the time; in some cases, they do so with real success. Yet their sentiments were unanimous.
Many readers, I know, are scratching your heads. Hasn’t our sector bent over backwards in recent years – for example, to understand how we are perceived or to engage grantee stakeholders in our decision making? These attempts were not mentioned by any of them. Whatever we have been talking about in our conferences, in our periodicals, in our classes don’t seem to have made their way into the perceptions or real-life experience of grantees.
We are paying a price, some of our own doing, to be sure, but even more by a generation or two of dissing the efficiency/efficacy/ethics of all institutions. Like it or not, whether we are on the left or right side of the political spectrum, philanthropy is part of the power landscape and our motives are perceived to be as suspect as the rest.
I don’t want to be simplistic about any of this. There are deep systemic injustices and inequity. Many of us have, directly or indirectly, been the beneficiaries. Our roles going forward are not simple [see my subsequent post expanding on this question.] And I certainly want to acknowledge the work of so many colleagues who have tried hard to make honesty and trust possible, who have listened hard to the often sobering feedback about our affect and procedures, and who have made genuine attempts to redesign funding strategies to be more authentically responsive and participatory.
But yesterday’s session underscored how far we have to go. And I don’t just mean in our grantmaking.
A healthy civil society can only exist when there is trust. It shouldn’t be blind trust, but it does require trust earned by some institutions, some people, some sectors. We in the funding world have a particular responsibility since our funding, our advocacy, and our affirmative sustaining of institutions are indispensable. No, we cannot and must not pretend that we can do it all, that we alone can correct years of sewn cynicism, or that we can easily break down the inherent power imbalance that defines us.
We must, though, learn how to make the difference at a time when there are deep breaches in belief that any institutions have the best interests of their stakeholders at heart. We need to earn their confidence that we mean it.
No, we cannot do it alone, but it cannot and will not happen without us.
October 16th, 2019
Over the last few years, the underlying ethical challenges that all of us, on both sides of the philanthropy table, face have surfaced because of far too many abuses and embarrassments in our sector. Sad, indeed. In its most recent issue, the Chronicle of Philanthropy focuses our attention on those ethical dilemmas faced by fundraisers. As most readers know, my own work on philanthro-ethics focuses on the other side, on the ethical responsibilities on the funder side of the table but the issue that stimulated this post goes back a few professional incarnations ago.
As many of you know, before I was on the funder side full time, I had a long run of executive roles on the nonprofit side. Those roles well positioned me for what I have done for the last quarter century as a funder: executives in the nonprofit sector are faced with choices between breadth and depth, the recruitment and support for professionals with great responsibilities with all too few resources, the need to understand competing stakeholders, and balancing the measures of short term successes with long term impact are all the daily work of non-profit CEO’s. Sounds a lot like the issues we funders have as well.
In the early 80’s to mid-90’s, I had CEO responsibilities for many programs with their own facilities. None of them had deferred maintenance funds, most were inadequately designed or too small for their current and projected utilization, or simply needed to be replaced, and the expansion of our system called for several new facilities. This challenge was not unique to the Hillel Foundation – it characterized a huge swath of nonprofit facilities from universities to churches and everything in between. All too many were built in the 40’s, 50’s, and 60’s by institutions so happy to get capital gifts, any capital gifts, that they never planned for or insisted upon the long-term needs of those facilities. But just because it was not a unique problem didn’t make it any less urgent. [Much of this has changed as many more funders are willing to provide much larger capital gifts to all sorts of institutions with greater sophisticated understanding of what longer term needs are.]
In another context, I would be happy to write more extensively about how we, largely successfully, managed this and set up the conditions that would preempt these capital challenges from continuing into the future. Below I mention one. But for this post I would like to tell only about one approach that I found easy to dismiss at the time but wonder how one might respond today.
One day, someone scheduled an appointment to discuss a proposal. This fellow, whose name I have long forgotten, had developed a particular expertise. He facilitated getting bond funding for non-profit organizations, especially those whose size put them below the normal bond radar. While our needs were in the $m’s, he would fold “our” bond request into a much larger public bond offering of a much greater amount. These publicly issued bonds had low interest rates and would provide all of the capital we needed for re-hab and construction projects in one easy step. Universities and hospitals and other large institutions do this all the time; no reason, he argued, why relatively smaller non-profits shouldn’t benefit as well.
But here was the kicker that turned me off immediately: when I pointed out that I couldn’t see how we would be able to repay the bond amounts in a timely manner, he tried to seal the deal by assuring me that the bonds would never really have to be re-paid. If memory serves, he said that bond holders understood the risks when buying the bonds and they would be very unlikely to come after a non-profit like ours for non-payment.
It struck me at the time as more than a bit sleazy and I politely thanked him and let the proposal finds its way to a circular file. Eventually, we did get the capital for most of our projects, and by then the board and I had developed a policy that no capital project would be accepted without an accompanying endowment. [Whatever one thinks about endowments in general, it is clear that facilities have new, predictable, and substantial costs over time that should be accounted for from the very beginning. It was a gutsy but persuasive policy that worked.]
It is now well over 3 decades since that episode. In my current roles which are now restricted to the funder side, I teach about using PRI’s to accomplish philanthropic goals. To remind those who may not be familiar with the term, a Program Related Investment is money taken from the grants side of a foundation’s ledger that can be given with the desire for or expectation of a financial return. That might be an investment in a for-profit firm aligned with the grantmaking mission of a foundation or it can be a loan to a grantee. A straightforward example of a PRI: a non-profit has a short-term cash flow crisis for any number of legitimate reasons. A foundation chooses to lend the non-profit sufficient capital to tide it over at very favorable terms. If the anticipated money comes in to the non-profit, the loan is repaid. A foundation then must re-grant that money within a certain time frame. But should the non-profit not repay the loan, the foundation must reclassify that loan as a “grant” to that non-profit. [There are more technical issues, but for our purposes this example should suffice.]
In thinking about PRI’s, I began wondering if there might be a similarity between a foundation PRI loan and a public bond. Both are for public good, both provide funds that a nonprofit desperately needs, and both carry the risk of non-repayment. [Bonds are rated according to that risk.]
To be sure, there are very different decision-making processes, different stakeholders, and different legal requirements. But in many ways there are more similarities.
Now let it be said that in the example I gave, the sleaze factor was quite relevant. It seemed ethically problematic that the sales pitch so quickly affirmed that one could take these funds and not feel any repayment responsibility. From my perspective at the time, that was an ethical non-starter.
But given what I now know about PRI’s, I wonder: was I so blinded by the sales affect that I ignored the potential effect? Had I underestimated that the bond raters and the bond buyers would do their own due diligence to determine if we would have been worthy? Had I not overlooked the pattern of philanthropic giving that rewards success – had we demonstrated success in our massive [for us] facility projects might that have changed the giving level of current and potential donors, perhaps making those repayment obligations less elusive? Had I applied a sincere but irrelevant ethics screen that delayed much needed upgrades to our facilities and service systems?
Of course, PRI’s were not very evident in those days, and hindsight is… well, you know. During my time in those executive roles, there was a long litany of ethical, moral, and even legal issues that required a clear ethics grounding if I were to do my job responsibly; if my antennae were too sensitive in this area, it was because I required them in many others.
However, ethics, unlike morality, is often choosing between two credible and often legitimate options. I now wonder if I was too quick to see only one.
September 11th, 2019
It was 3 years ago when a group of funders and advocacy groups announced the Participatory Grantmaking Initiative. It was founded on a key underlying philanthro-ethical principle – now cleverly articulated in the pithy statement: “Nothing about us without us.”
The initiative reminded funders that our power can distort our perceptions of what real needs are and our judgment about allocation of our funds. Underneath our careful diligence we are susceptible to the very same predispositions and biases as anyone else. If those most directly impacted, or at least those responsible for implementing our initiatives, are not involved in the decisions, how can we be sure that we are acting responsibly or equitably?
As our field has finally recognized, our race and ethnicity [and to a slightly lesser extent, our gender] does not always reflect those we are serving or funding. [By coincidence, this was written but not published before a recent Chronicle of Philanthropy article underscoring this point.] And, unless we are funding elite schools and museums, it is certainly true that our economic status is far removed from the at-risk or at-need populations we aim to serve. It is surely a no-brainer that there are perspectives that need to be in the room and a long overdue corrective to the all too pervasive top down process.
But whose room, what roles, which decisions are far from clear. Should or must decision making extend to the board room? Do potential grantees have a disqualifying conflict of interest if they are also decision makers? [Recusal is an obvious technical answer, but we know that if one is a decision maker, even if one doesn’t vote, her/his presence is there.] And, bottom line, empowerment aside, how do we know that who is in the room actually guarantees greater impact? Therein lies the challenge.
These are difficult questions to ask these days for several reasons:
1. At a time when all questions, yes even in our field, are viewed as political, even asking this question runs the risk of implying that I am opposed to “participatory grantmaking.” So, let me set my record straight: I have been on boards which used variations of this form of grantmaking for a long time – long before the phrase became popular. Unquestionably we did better grantmaking because of having on the ground experts in the room. No question. Moreover, as a philanthro-ethicist, I suspect that several thousand funders who have taken courses or workshops with me can attest that I have been a long-time advocate that there need to be many means of countering the power imbalances intrinsic to our field – sharing decision-making is only one.
2. A more practical challenge is determining which stakeholders should be invited into the room. We have learned from program evaluators that determining which stakeholders need to be heard is often the most challenging part of any evaluation process. If that is hard for professional evaluators, consider the challenge to foundations and other funders who want to do the right thing and include the best informants but have limited resources and time to do that research. How do they avoid the challenges that they may have cherry picked their favorites or overlooked an important group?
3. A more far reaching question is what impact matters. Often in the most intractable systemic issues, funders can have perspectives that local service deliverers cannot have. That doesn’t mean that the service deliverers are wrong – but many of them have demanding claims on their time and resources that don’t allow or justify long term thinking. How one balances those two competing claims is not easy, and the impact measures themselves may compete. At the very least, it should force us to determine which interventions are most in line with our competencies and goals, and at the same time encourage us to help think through how the other needs can best be met.
For example, there is no systemic or societal issue that can be solved by a single intervention or funding approach. There are urgent needs for immediate responses to those who are ill or homeless or hungry or displaced. At the same time, all of those require a responsive public policy that helps ameliorate the underlying issues that a short-term intervention cannot. Funders with a commitment to address systemic issues know that advocacy and inter-sector collaborations are indispensable. It is perfectly reasonable to choose which approach is best for any individual funder, but we are not exempt for doing so with an alignment with those who are addressing the needs we cannot.
Impact measures – and which stakeholders should participate in these decisions – depend very much on where one fits on the continuum.
4. Underneath all of this is the question of the larger role of independent voluntary philanthropy in an open society. If, as many argue with a good deal of historic legitimacy, it is to fill in the gaping gaps that government chooses not to fund, then there is no question that there should be a mandate to engage as many stakeholders as possible in decision making. But if, as many others have argued, private philanthropy is society’s risk capital, not subject to plebiscite or opinion polls, then one might argue that it needs to be as free as possible to take those risks and stakeholders should be informants but not have a veto on funding choices. Of course, those decisions should be done in responsible, ethical, informed, and humble ways, but to take those risks is precisely the unique role that no other institution can play.
To return to the key point: our field, created out of privilege, has a lot to answer for. Whether intentionally or not, we have a long history of not treating our potential grantees as we should and knowing how to understand real needs and equity in making our decisions. Participatory Grantmaking is surely one of the correctives we should make to is to bring stakeholders into the funding process. As we see, even with the best of intentions, that approach is often easier articulated than implemented.
August 28th, 2019
This post is another that is worth revisiting several years since its first publication. I have made some very modest revisions to account for changes in what I am doing where, but otherwise it is intact. Your thoughts are welcome.
A few weeks ago, a philanthropist friend forwarded an op-ed regarding ethics for funders. [I like to give credit where credit is due, but the source of the op-ed wasn’t included.]
In reading it, I found myself amused – not because the author was off base, but because it was so clearly written by a fundraising expert who was expressing some exasperation with the overreach of some funders. It is quite true that there are ethical limits to what a funder and grantmaker can request and require from a grantee, and it is useful for funders to hear how they are perceived by the other side of the table. But in many ways, the author’s points are too easy and in other other ways do not go deep enough into the ethical and best practice issues between funders and grantees.
I have been teaching funders since 2000, for many years at NYU’s Academy for Funder Education, now at UPenn’s Center for High Impact Philanthropy, and through our own Institute for Wise Philanthropy. In those courses, we spend a great deal of time unpacking this very complex area. This has also been a key topic of interest in several recent conferences of foundations and grantmakers. Here are 10 key points to help funders stay on the right side of right:
1. Power Imbalance Most funders do not willfully or purposely abuse the role of funder although, to be sure, some do and some do egregiously. Most however are simply unaware of the appropriate boundaries and cross them innocently. Most of these transgressions occur because of an insufficient awareness of the implicit power imbalance and the concomitant and enthusiastic willingness of a potential grantee to do whatever possible to encourage a gift or grant.
2. Philanthropy Law Most funders know the basics of philanthropy law but are less clear on their ramifications in their daily application. For but one example, “self dealing”, always illegal, is not the same as “conflict of interest” which is more nuanced and subject to board-determined policy.
3. Law vs Ethics What is legal is not always the most ethical. For example, the law permits a foundation to pay an attorney or investment manager who sits on its board. Many of us in the field feel that this creates ethical dilemmas for a board’s decision-making autonomy. I for one feel strongly that best practice should be to separate those roles – either one sits on the board or is a compensated professional but not both at the same time. This matter has little to do with funder-grantee relations but a great deal about internal foundation decision-making.
4. Interlocking Boards One area about which there is conflicting consensus is the propriety of a foundation staff or board member sitting on the board of a grantee or vice-versa. We have developed some guidelines to help foundations figure out what makes sense for them. Suffice it to say that there should be a clear alignment between grantmaking process and the policy regarding interlocking boards.
5. Honoring Commitments.. Sad to say, too many funders don’t fully grasp that public benefit organizations rely on receiving their grants on the dates promised. They pay staff, rent space, run programs anticipating that income. A grant letter should be viewed as binding on both the grantee and funder. This problem is more typically evident among unstaffed or outsourced foundations, but it should never be. It is a commitment and it is an ethical lapse not to pay on time.
6. Transparency of Procedure. Many of us have written about what transparency might mean in the contemporary grantmaking world; it has become the subject of much debate. One thing which should not be subject to debate is the expectation that a funding organization makes its procedures known and clear. That process can range from stating that no unsolicited proposals will be accepted, or that there are very specific conditions for consideration or anything in between. An organization searching for funding should be able to ascertain in a clear way who is eligible, what information will be required and when, when they can expect to be notified of decisions, etc. There are no ethical mandates that any one way of doing these things is superior to another, but there are very clear ones that processes should be consistent and evident.
There are numerous other important ethics and best practice issues which every funder should address, and in many cases establish foundation policies. But since the issue of funder – grantee relations is the one which precipitated this post and garners the most attention, let’s turn to some of the sticky issues:
7. Funding for Success. The challenge for a funder is to give the most effective amount toward a project or organization to provide the greatest likelihood that the project will succeed – or at least come close to their expectations. One way NOT to do that is to automatically discount any request. Doing so may save a funder money in the short run but may well guarantee mediocrity in the long run. Now, to be fair to funders, non-profits have been known to pad budgets and a funder often has to work hard to figure out what is really necessary or appropriate. But the key to setting the right amount is to be comfortable that the amount given will make the likelihood of success greater. It is also true that inexperienced organizations may ask for too little – or in their naivete don’t realize what will really be necessary. Such miscalculation from a large university or museum is inexcusable; from a small neighborhood center or start-up may be understandable. This organization may well be understaffed and each of the staff has multiple responsibilities. If one thinks their idea or project is worthy, no reason to punish their insufficient training. Help them know what they understated or omitted. While on the surface this may not appear to be an ethical issue, it veers into it if a funder’s funding pattern makes failure or mediocrity likely. It also underscores the need for those who solicit funds to not play games with exaggerated claims and padded budgeting.
8 Staff and Benefits. Another area where funders, mostly innocently, tend to compound a the challenges for non profit success is to have conflicting expectations. How often do we hear funders bemoan the inability of the sector to retain the best and brightest while at the same time putting pressure on hard pressed groups to cut their budgets? If, say, 80% of a budget is staff, what ends up being cut is salary, fringes, or f.t.e.’s. Funders should hold their grantees to standards of personnel practices which they would expect of a quality run organization, and fund accordingly. [While much has been written about overpayment of a few executives in this sector, in fact the issue of underpayment is far more common.]
9.Leading Them On -or, the Walking $ Sign. Site visits are wonderful ways for a funder to learn about an organization. Yet nothing raises the anticipation level higher than the word that “a funder is coming: a funder is coming”. Organizational execs send memos to their staff to the effect: “clean up your room and dress up”. A site visit makes all the sense in the world if there are really open questions about a grant request or as a way to monitor one already given which can be answered best by seeing for oneself. By all means. But funders need to be aware that when they walk into a room they are not simply flies on the wall, but rather the center of attention. People stop what they are doing, or adjust their activities for your benefit. [I could tell so many stories here, but I imagine that any experienced funder has his or her own litany.] If there is no real decision-making or monitoring, or, especially, if you have no real interest in funding a particular place or project, look for less intrusive ways to satisfy your philanthropic curiosity. Your very presence will lead a non-profit into the assumption that you are open to a proposal or have made a decision to fund them.
10. Expectations and Relationship After the Grant is Given. In my experience, this is the area most fraught with potential frustration. Funders should clarify, when a grant is given, what they expect. Whether this has to do with monitoring or evaluation or recognition or any of a long list of other relationship areas, funders have an obligation to not leave a grantee guessing. This will allow a recipient to give you what you want to know – or to determine if you are overreaching. [To take an extreme example, a $10,000 gift to a major university is not going to get a named chair; the same gift to a food pantry may be the largest gift in its history. The responses and expectations should be quite different. Similarly, it is important for funders to set expectations which are proportional to the size of the gift and the abilities of an organization to respond. A hospital or university or major museum should have no problem producing reports in a timely manner; there should be more reduced expectations from a small 2 or 3 person start-up.
This list in no way defines all of the ethical and best practice issues for funders. It is not even the full list of what we cover in working with and teaching funders, and, indeed, in the years since this was first written, the complex issue of equity and inclusion have moved to the center of our discourse. In a subsequent postings, I have explored the charged area of intervention by a funder into the work, mission, or priorities of a grantee. Until then, I invite you to add your topics to this list and to make this a robust discussion so that we can enhance the quality and standards of those who are entrusted with funds to make the world better.