Posts from the ‘Philanthropy Trends’ Category
#385 – I’m Not Traveling; Why Should my Money? The Surprising COVID-19 and Racial Inequity Dilemmas for Funders
June 15th, 2020
NB: This was written but not published prior to last week’s announcement by 5 major foundations of issuing debt as a way to get more money to the field. In many ways, that extraordinary development only underscores the dilemma discussed here.
As you may recall, when the COVID-19 quarantine began, I extended an offer to any funder anywhere to provide a pro-bono problem solving session. This post in an extrapolation of some underlying themes that I have gathered from those conversations and from the slew of many articles on funding choices at this time.
What has emerged for me is an interesting challenge from funders of less than mega-means. Choosing where to put funds comes down to hard choices, and those who fund on the local level/place based, are particularly sensitive to the implications of saying yes and no. Yet over the last few years, many of those funders became aware of the need to address systemic issues and were more open to funding national initiatives, sometimes at the expense of place-based funding. [Please see #293, 27 Dec 2017 and #337, 26 May 2019 regarding the significant continuing role for place-based funding, even when a funder is fully aware that the local organizations being funded can never aspire to the excellence of world-renowned organizations in the same fields.]
I cannot imagine that any funder or foundation is unaware of the financial challenges facing all non-profits, and the catastrophic challenges facing some. [I recommend the very recent survey published just this week by CEP on the unevenness of funding at this time.] Surely all funders know that their long-time grantees are in need. And, hopefully, every funder is aware of at least one local collaboration to address the massive local needs – even if that hasn’t previously been a core priority.
Moreover, it has been gratifying to see that hundreds upon hundreds of funders are learning that this is not a time for complex reviews, clever new initiatives, and burdensome reporting. It seems from the data that I have seen reported by others and anecdotal [no claim that it is scientific] evidence, most funders have either sent more money out the door, plan to spend more this year, or have committed themselves to funding new or ongoing needs in the next grant cycle.
Most of this is local.
At the same time, never has the need for systemic redress been more glaring. The funding community had been coming around to understand that band-aid type funding of societal needs of all sorts is far too short-term and nearsighted. Acknowledgement of the role of advocacy, providing support for national organizations addressing systemic issues, and seeing how existing funding aligns with underlying systemic needs has finally been high on the agenda. Both the pandemic and the BLM moment have starkly underscored the validity of those needs.
However, I am hearing, given how massive the local needs are, how can one justify diverting resources from “here” to “there”? Shouldn’t that be the job of the deepest pocketed funders whose focus is rarely place-based directed? Even if “woke” to the needs, perhaps this is the time to pull back from those national initiatives to focus on this place? After all, the putative systemic issues are visible right here – on our streets, in our schools, in our neighborhoods, in our policing, in our healthcare, in our workplaces.
I don’t disagree with the logic of this thinking, and for many it is a very valid way to go. But I also want to remind of the importance of not losing a connection with the groups with a larger and summative perspective, whose expertise allows alignment between current urgent need and optimal policy so that local funders don’t inadvertently reinforce counterproductive systemic causes, whose analyses of experiences elsewhere might provide a more laser focused use of local funds, and whose understanding of the political landscape might provide leadership in much needed policy reform.
Perhaps a single example will illustrate – and please excuse that this is a summary that elides some important local details: A couple of years ago, not long after we moved to the DC area, the government was shutdown for an extended period of time. The shutdown was felt throughout the country but, not surprisingly, hit the DC area hardest. Many in the local funding community stepped up with a variety of palliatives to alleviate very real hardships faced by many thousands of furloughed government employees and contractors. When the government re-opened, a meeting of many locally based funders was convened to address lessons learned. At the meeting, I [still a newcomer] asked if there had been any conversation with or utilization of material prepared by the Center for Disaster Philanthropy. To my surprise, no one in the room had heard of the CDP. As the local funders listed all the things they had learned and their commitment to document those learnings, it struck me that they had spent a long time largely reinventing the wheel – when, in fact, they could easily have adapted many of CDP learnings from many other natural and human-caused disruptions.
It is true, of course, that all politics is local – and most funding for many funders is and should be local. But just as local politics does not and cannot address systemic issues without national policy change, so too local place-based funding without a connection to the larger context in which we operate is insufficient.
Many of us would like to hope that the societal lacunae exposed by COVID-19 and by endemic racism will make this the time to finally address the systemic in real and transformative ways. So, while we absolutely must increase our support for and engagement with our local communities, we do need, as well, not to lose sight of the knowledge and wisdom that can come from continued engagement with organizations and affinity groups that extend beyond our own backyards. It need not be “either/or” but should be “both/and”.
May 20th, 2020
Full disclosure: As discussed below, we have been educating philanthropists, families, and other funders in many settings and under many different sponsorships since 2000. Until now we have resisted suggestions to offer funder education courses or seminars directly through our Institute for Wise Philanthropy. For the first time, we are seriously contemplating offering limited-attendance on-line workshops. This post shares some of our thinking as we move ahead with our planning. To be clear: these webinar/workshops are not intended to supplant the superb funder education program at the University of Pennsylvania Center for High Impact Philanthropy with which we are delighted to be connected. However, that program is restricted to principals, trustees, or chief professional decision makers of grantmakng institutions. For all other funders, please keep in touch and watch for our offerings.
Between zooming and cooking, there is still a lot of time to write and think these days. Thank you to so many of you who have commented both publicly and privately on my numerous posts on various media regarding funders’ roles now and in the “next normal” period. There are many more pressing issues at this moment in time than how one educates those who give money, but it is how I have spent a good chunk of my professional life over the last 20 years so it shouldn’t be too surprising that it has been on my mind during the last couple of months.
To remind readers who may not be familiar: Since the foundation I was heading closed in 2002, I have chosen to spend a good deal of time responding to requests to offer workshops and courses for families, philanthropists, and foundations in many places around the world. Some of those have been at NYU and UPenn, some for associations and what are now called Philanthropy Support Organizations, and some for individual funders and foundations.
When I first started doing this in a formal way, not wanting to develop a top down curriculum, I consulted with the organizations most prevalent in our field at the time: the Council on Foundations, the Association of Small Foundations [now Exponent Philanthropy], the National Center for Family Philanthropy, and the Forum on Regional Grantmakers [now the United Philanthropy Forum.] The courses were then jointly conceptualized by what was then known as the New York Regional Association of Grantmakers [now PhilanthropyNY.]. I asked them all one simple question: “What should a funder know?”
There was so much alignment in their answers that it was relatively easy to create a curriculum based on consensus “core competencies” of grantmaking. As the world and our field have evolved over the years, the curriculum has been updated regularly, but the basic concepts and structure have remained viable and vital. I am proud to say that several thousand funders around the world have been direct beneficiaries of that model. Further, it significantly informed my own boutique “philanthropy advisory” model, and it is the underpinning of my quite extensive international speaking.
So much has been called into question over the last couple of months, it is forcing me to think about what philanthropy education for funders should look like in the “next normal.” Has this fine-tuned and well-tested curriculum become too dated for funders who have been rethinking strategies, changing ways of relating to their communities and grantees, accepting the overwhelming reality of the systemic disconnects and need for public advocacy, and even what it means for us to have independent and autonomous decision making about where our public benefit resources should be spent? Or, conversely, has all of this reinforced the value of such a structured, sequential, and carefully considered curriculum as a basis for knowing how to make the hard decisions with which we are all faced?
A lesser but no less challenging question is what the optimal viable medium for this kind of education should now be. 100% of what I have done until now has been predicated on “in-person.” The occasional webinars I have presented have all been for groups where everyone knew each other and had prior in-person experiences. Group learning among funders with an educator in the room, is very different than a group of pictures on a screen with an active chat button. Philanthropy education for funders, built around the core competencies mentioned above, has been most credible when a funder hears the questions other funders are asking, what challenges they face, how they respond to the same sets of questions. And what about confidentiality? Funders want to talk in safe, discreet, and confidential spaces. [see #3b below]. Have we developed sufficient confidence in newer media that this discretion can comfortably migrate – or would it, ipso facto, be one of the inevitable losses that would accrue to accepting fully on-line courses?
3. Educators and Students:
Moreover, given emerging issues identified by such initiatives as “Participatory Budgeting”, “Trust Based Philanthropy”, DEI practices, etc., not only must we examine the content of the curriculum but also both who should be imparting knowledge and who should be in the room.
a. Who should teach:
On the whole, our field has relied on funders to teach funders. To be sure, not every funder is a good educator – something that anyone who has attended sessions at philanthropy conferences can attest. However, a good educator who is a funder with multiple experiences has a much deeper internal data base to respond to the realities of other funders. As our field has become more diverse and the relevant experiences and values are expanded, it raises the expectations of what the content should be and the challenges of determining who should provide it. This issue is probably the easier of the two challenges to address. After all, over the years, we have readily added issues of equity in both our philanthro-ethics and in our strategy units. And there is a long history of inviting co-presenters with a variety of backgrounds and expertise to be co-educators, many of whom reflected much of the now-current diversity lens.
b. Who should be in the room:
The question of whom we should invite/permit into the funder education room is far more complicated. All of us on the funder side are well aware of being “walking dollar signs.” There are few places we can enter without being solicited. Over the years of teaching funders, I am consistently asked to guarantee that no one hoping to raise or manage funds will be there, and every philanthropy conference requires a similar commitment from all attendees and speakers. Sadly, that concern is not ill-founded; I have seen it abused when the participation rules have been loosened or when someone simply cannot resist the temptation to sell to wealthy funders. Yet if we are now talking about developing a new relationship between funders and nonprofits, if we take seriously the “nothing about us without us” mantra, if we believe that our advocacy requires a full mutuality, is the implication that we need to develop a new model that removes the divide and invites funders and the npo/ngo side of the sector together? Or would the funder community consider that a step too far? Is there a way to have separate education for funders precede subsequent joint learning?
4. Systemic Change.
The final question has to do with the centrality of systemic change as a new primary essential core competence. We have always underscored that understanding the interconnection between public policy and private philanthropy is a sine qua non for contextualizing where our field is and where it has come from. Once aware, we have felt, it would be hard to make a grant, any grant, without thinking about what its relationship to existing or preferred public policy. Is it better to support that local food pantry or support advocacy for increased SNAP funding? Or both? Is it better to fund that in-school arts project or to advocate for the restoration of those funds? Or both? You understand.
But COVID-19 has laid bare the scope of systemic dysfunction that leads to food insecurity, fiscal uncertainty, health-care vulnerability, the fragility of our cultural institutions, and yes, instability of our civil liberties and civil society. It is one thing to make sure that funders know of the legitimacy of advocacy funding; that is something we have taught all along. Perhaps, though, we must now say that any philanthropy education that doesn’t start with the centrality of our role in addressing systemic questions is insufficient and doesn’t fully acknowledge our unique role.
There are a lot of changes that await us as we delicately and thoughtfully move into a “next normal.” Those changes do and will touch every part of our lives. If there has ever been a time when our philanthropy work matters, it is now. It matters best when that work is informed by a deep and profound understanding of what our roles should be and how we can best play those roles. We have endorsed that mandate for a long time. Looking at the “next normal,” it would be irresponsible for those of us who are philanthropy educators to avoid the serious discussion about what a funder should know now.
Dear reader: Your thoughts and reactions will certainly inform both our continuing work and our new offerings going forward. I urge you to share them with us and your colleagues.
May 15th, 2020
This is our 12th article for funders, philanthropists, and foundations regarding COVID-19. As always, we welcome your thoughts and reactions to any and all.
Two decades ago, noblesse oblige was still the standard rationale for funders to be charitable and philanthropic. If asked why one gives, the answer was likely to be “to give back.” With riches come responsibilities.
The underpinning of that thinking is that there are those less fortunate who need something that a generous gift might provide. While most funders had opinions about which organizations or causes they cared most about, on the whole giving had a social context, in every sense of the word. Some of that social had to do with communal leadership responsibilities; some had to do with responding to peers’ requests. Most funders didn’t assume that they knew better than those who worked in the fields they funded about how best to use the money, only that the recipients certainly needed it.
Approximately two decades ago, a mostly healthy corrective began to supersede that rationale. For all sorts of reasons, the subjects of all too many books and articles that one can read on this subject, loyalty was summarily discounted as an imperative for supporting organizations, and measuring impact became the new value-added. After all, why continue to support a literacy initiative year after year if people still cannot read? Why do organizations dealing with homelessness warrant support if there are still so many homeless? The motivation for giving thus morphed from altruism to efficacy.
At first, there was denial from legacy institutions. Despite the growing anecdotal and statistical evidence to the contrary, those 20th century institutions convinced themselves that this was simply a temporary or transient aberration. When people got older, got married, got jobs, had kids, their giving patterns would revert to the past practices of their parents and grandparents. As time went on, as the change became more pervasive, it also became more persuasive, and many of those organizations had to pivot to find ways to catch up to the zeitgeist. Some did and some never did.
In the meantime, newer funding models emerged, all of which were based on some sort of measure of impact. There are a variety of models of those systems, often differing on what the true bottom line of effectiveness is, how far out a longitudinal perspective must look, which stakeholders or sectors have the greatest claim, how subjective the giving might allow or how comparatively demanding the objective claim, how “profit sector” they behaved, and more. Not only did funders not feel any assumed loyalty to organizations, but their giving was increasingly conditional. “We will fund this – IF you do that” or “We will fund that as long as you can demonstrate that our metrics are being met.” Not only did it reflect the changed motivation for giving, but it changed the way organizations had to deal with funders.
Implicit in all of these changes was a set of assumptions that have proven all too specious. It assumed that funders knew better than the experts what would work, how to do the work, and what constituencies deserved service. After all, funders made their money in the for-profit world; that alone, they believed, demonstrated that they must know more than those who are stuck in the non-profit world. [Need I say more?]
Over time this led to the institutionalization of attempts to develop standard ratios – such as “overhead” to program, or appropriate balance of sources of income, or cash reserves. Using these new metrics, some organizations began to rate nonprofits, and woe to one whose rating slipped. Eventually, though, most of the raters saw that they were imposing a very limited and limiting set of metrics to a very complex field. Did it really make sense to use the same rating system for a local food pantry as for a university? And if that food pantry were to have a mediocre rating but was the only one in a food desert neighborhood, would that be sufficient reason to discontinue funding it?
Thus, over the last few years, more sophisticated means of determining impact have been developed. [including, inter alia, the cutting-edge methodology developed by the UPenn Center for High Impact Philanthropy with which I have a part time connection.] These looked more deeply beyond simple-to-measure efficiency and to longer terms effectiveness as a means to decide where to put substantial funding. There is no doubt that our funding world was developing ever more useful way of making sure that our resources were used to bring about the changes we hoped for and in the ways that made the best use of our money.
Then COVID-19 hit.
And, suddenly we recognized that, for all of our sophistication, for all of our rigor, those non-profits on the ground doing the daily hard work were certainly better equipped to know where the immediate needs are, where the preferred interventions should be, how to spend precious dollars, and which skills are most applicable. Our field – or at least 700+ foundations and philanthropy support organizations – avowed [or perhaps acknowledged] that our reporting systems, our proposal systems, our laser focused funding approaches [and perhaps even our investment policies] were no match for the needs of the moment.
Maybe, we had strayed too far from the long standing, seemingly dated noblesse oblige rationale for giving. Maybe our demand for metrics, too often based on our categories, contingent on our priorities, reflecting our own systems overwhelmed the reason for philanthropy in the first place. Maybe, we are being reminded, that altruism is a social value, and that our own demands for systematic analysis everywhere along the line may be handcuffing those whose real job is to provide services to those in need.
Over 20 years ago, my first published article on philanthropy was entitled: “Hubris vs. Humility”. At that time I was the CEO of a major foundation, and I learned how easy it is for us to think we know everything, how fortunate we are to have the resources to try to make a difference, how seductive the power imbalance – and how arrogant so many of my colleagues appeared. [Of course, I never was. 😊] But I also recognized that, not only was that ethically problematic, but it was also pragmatically wrong. After all, it meant that grantees were less likely to be fully honest, that it allowed us to pretend that we are never wrong, and it allowed us to function in a self-referential bubble.
Over the last couple of decades, our field became so committed to the efficacy of impact and results that we often forgot about the nobility of “giving back.” COVID-19 seems to have forced a rebalancing. Perhaps a bit overdue.
Endnotes: I know my colleagues in the field quite well and can anticipate some rebuttals, so permit some addenda:
• Yes, funders sometimes do have perspectives or expertise their grantees lack. But even when a funder is more “right”, implementation should rarely be top down and requires a relationship that allows the “right” and the “real” to become aligned.
• Yes, of course there were always funders who wanted results – even in the days of noblesse oblige. But before the days of impact and metrics, the norm was more typically that funders gave, nfp/npo’s spent.
• Yes, due diligence and program evaluation is indispensable. But too often due diligence and the post program evaluations go way beyond gathering information that will truly inform our decisions. If we as funders don’t need the info, why impose extra work on grantees?
• Yes, there is great value in research as a basis for sophisticated decision making – but… One admittedly extreme contrary example: in an Advanced Grantmakers course I taught a few years ago, I invited a guest speaker who was considered the national expert on a particular then- hot initiative in the field. It turned out that the expert whose work was widely published, had never met with any foundation, never worked in a foundation, never spoke with any practitioners. I am sure that no one knew more about the research or the laws related to that initiative than the guest speaker. However, the “expert” was fully unable to answer a single question on its functional application from the room full of very experienced funders. Surely this is indeed an extreme example; it does, though, remind us that research that isn’t rooted in real experience is simply a contribution to general academic knowledge, but of questionable value to those who must make decisions on its basis.
• Yes, I agree that there are certain times when a restricted gift serves the grantee organization. 2 examples: when a non-profit wants to explore an initiative beyond its core budget; or, perhaps, when it is for a capital project. But in general the tendency of some funders to give only restricted gifts, to be unwilling to fund infrastructure of that same organization, to give for a year at a time, to give less than the amount necessary for the project to succeed, etc. typically handcuffs the recipient organization and limits the ability of that organization to bring the impact the funder claims to want. Our funding should enable the greatest likelihood of the success of a project. That doesn’t mean there should be no limits; it does mean that a funder must make sure the relationship with grantees is open, honest, and trusting. Given the power imbalance, that relationship only works if we as funders enable it to.
• Final point: Yes, it is true that I have been teaching and advising funders on how to make good decisions for a long time and hope to continue to do so. So, I don’t want to appear disingenuous in my statements about overreach in due diligence. My hope is that we as funders “right size” our processes and decision making – to make our own lives and the lives of those whom we empower with delivering services easier.
May 10th, 2020
This post is a continuation of a series of responses to COVID-19. It was first written mid-April, but wasn’t published until now. It continues some themes originally discussed in #365, published on 18 March, and #366, published on 22 March. Since I first wrote this, a number of colleagues have begun addressing philanthropy strategy from a variety of perspectives, some echoing what I wrote then and here, others who take quite alternative views. Hopefully, this will add to our field’s very robust discourse.
Before exploring this question further, let me associate myself with the broad range of foundations, philanthropy support organizations, and other funders who have committed ourselves to increasing payouts, smoothing processes, and being agile during this extraordinary time. It is the right thing to do at what is surely an unprecedented time – at least in scope. The pandemic has exposed the not so hidden but easily overlooked fragility of much of the volunteer sector, the deep-seated racial and class divides in American society, the price of government’s years of retreat from a commitment to the welfare and health of most Americans, and, en passant, the all too often inscrutable and byzantine ways in which our funding community works.
It has been right that we as a field have demonstrated an agility rarely seen before and played substantial roles in literally putting our money where our mouths are.
But that is not the same as throwing our strategies out the window. And it is here that I call for caution. A few key points:
1. History has taught us that we, as funders, need to keep some of our powder dry. After disasters, compassion giving is quite widespread. But disaster exhaustion follows close behind. It isn’t clear if COVID-19 will follow the pattern but there is certainly reason to feel it will. After all, people are stretched, foundations are reaching way beyond normal giving patterns, and the government is printing money. After this stage stabilizes, whatever that may mean, will funders feel that it is time to move on or catch up even as the long-term impact is still being felt?
2. Moreover, there is likely to be some sort of recession. Even if employment returns some of the millions to the workplace, most projections assume some permanent losses. And while the markets have shown more resilience than the general economy, a rapid upswing is unlikely and therefore there won’t be replacement funds for the beyond-typical spending of the moment.
3. No one can fully anticipate the full scope of residual or recovery needs. Will there be food shortages as some predict? Will there be a surge in needs for psychological care as some others predict? Will our education system discover that it is in disarray and needs sorely needed funds just to get back to its prior less-than-adequate place? Will the numbers of non-profit closures raise new and severe issues of basic services to the most at-risk communities? Will the forces of xenophobia, racism, antisemitism, Islamophobia, Sinophobia have become so emboldened that we have overt social disruptions? None of these scenarios is very farfetched, and each would require real attention from funders.
Therefore, it is imperative that funders, especially foundations, resist the urge to spend it all now. Even if this is the proverbial rainy day that we have been saving for, there will be clean up for a long while for which we need to be prepared.
Moreover, if we had done our strategy work well in the past, we should have strategies to guide us through these and any unplanned times. If we always did the same kind of funding to the same institutions, we wouldn’t need to devote too much time or energy or thought power to the “what-ifs” or to competing claims. [It is a legitimate if limiting funding approach.] For most of us, we need strategies because we must make choices among competing legitimate causes. And since one never knows when something unanticipated comes along, we need strategies that can inform our responses at those times as well. Therefore, every organizational strategy needs to leave room for flexibility of implementation. If a strategy doesn’t allow for an implementation that can respond to the unknowable, it is too stringent a strategy.
Now, there is a difference between pure compassion giving, i.e., simply responding to the emotion of the moment, and flexibility in one’s strategy which allows an adaptability consistent with established priorities, values, and an understanding of where one’s resources can be most effectively used. Agility is not the same as anarchy.
Foundations and independent funders have a unique and enviable combination of attributes that should inform an effective and appropriate strategy guiding our decisions: Because foundations and independent funders have no plebiscite, no election to prepare for, no funds to raise, we can exercise both the vantage of thoughtful perspective and the agility to apply them in careful and adaptive ways. No other institution can claim that level of autonomy and that combination.
Thus, I would argue that, even if a foundation chooses to spend more of its endowment, change its allocation process, and revise its own ground rules, or an independent funder chooses to alter our “normal” way of giving, that need not and should not mean that we must cast aside our carefully articulated and crafted strategy. This message has never been more important to underscore than now, during the COVID-19 Pandemic, when pressures are so great on all of us.
April 30th, 2020
This post announces a new, fully gratis, offering to philanthropists and other funders.
Over the last 3 decades, the philanthropy world has been my professional home. I have had the honor of leading foundations, advising many funders from around the world, and teaching or speaking to many thousands more in 40 countries. As with so many of us in the philanthropy and foundation world, I feel that it is a crucial time to give back.
Many of us have increased our financial giving despite – or perhaps because of – the sharp economic decline.
This offer goes beyond that and builds on my expertise: I am now offering a FREE problem-solving session of up to 30 minutes to any funder who wishes [to the extent that my schedule permits, of course.] All you have to do is send a message to [email protected]
[The “fine print”: This is not intended to replace a full consultation that many philanthropy advisors offer; it is ONLY to coach through a specific problem. Also, I am not an attorney so I don’t offer legal advice – but I am happy to respond with best practice advice. Finally, I know virtually nothing about fundraising so please don’t schedule a time hoping that it will help identify funds for a project, investment, or organization.] #philanthropy
April 24th, 2020
Over the years, there have been both great advantages and great disadvantages to being an independent voice in the philanthro-eco-system.
After the foundation of which I was CEO closed in 2002, I made the choice to play an independent role as an educator, advisor, speaker, writer, and thinker about philanthropy. Having been an employee – albeit at a fairly high level – for the entirety of my professional life until that point, I decided to see what it would be like to be my own boss and to take full responsibility for my own words, involvements, and my own professional destiny. [for those readers who want to discuss the risks/rewards of that choice as they may apply to you, please be in touch directly – we can set up a time to chat.]
On the whole, that choice was a good one. I discovered that there were real opportunities to say and do things on both a professional and volunteer leadership level that might have required approval – or disapproval – in prior contexts. There were invitations to speak and teach in many places around the world that may not have been possible with executive or organizational obligations. And, perhaps most telling, I discovered that people were suddenly hearing my “voice” that, in the past, seems to have been hidden beneath a subconscious political sensitivity to the institutions in whose employ I was – even if I was the CEO.
There are also some significant disadvantages, though. In much of the philanthropy world, the question is “whom do you represent” determines which boards you sit on, which committees you are invited to, which task forces include you. While I surely have sat on many boards, committees and task forces, there were many more on which I might have wished to be a part that were addressing matters close to my heart and my expertise. And while I am not complaining about the depth of our own pockets, they are not deep enough to warrant others automatically making space as an independent player.
In the current COVID 19 context, this reality means that there are many statements, conversations, webinars, and conceptual considerations to which I am an outsider. When I – or our Institute for Wise Philanthropy – is invited, we eagerly participate, or sign on, or endorse, but rarely are we at the drafting table. I wish it were otherwise, but it does provide an opportunity, perhaps even an obligation, to take a broader view of what is happening now, what probably will happen, and what must not be allowed to happen to our field, and our nation as a whole.
I don’t know any more than any reader does about the sane and reasonable timeline for our current quarantine. I do know that it has exposed and underscored deep and abiding issues for all of us, philanthropists and philanthropoids included.
It has underscored that the human need for connection encourages creative uses of existing technology in ways that will surely change the way we do workplace and the way we do family – even when our in-person lives return. It has underscored that we do have control over our climate if we behave in ways that reduce pollution and the waste of natural resources, that public behavior matters – and that public policy matters more. [While I am sure deniers will continue to deny, the overwhelming evidence of cleaner skies over cities around the world is only one proof-text among many.] It has proven that the absence of a reasonable and equitable national health system is a death sentence for too many, and an injustice for all. It has proven, as if such proof were still necessary, that underlying and systemic racism – and other forms of xenophobic hatred such as anti-Asian-bias, anti-Semitism, Islamophobia are too close to the surface and too present in attitude, behavior, and impact. And it has proven that American claim of equal access and equal rights are all too hollow in the face of overwhelming evidence of a permanent underclass. [I am sure others can add to this list.]
This moment in time has also shown the vulnerability of organizations and institutions in stark and ominous ways. A society that chooses to rely on the voluntary sector to provide for essential human services, to address food insecurity, to enable much of our education system, and to care for our infirm and elderly suddenly finds that a voluntary sector can only do so much to provide palliatives to a deeply fragile system.
Lesson #1 What Must Change: We must not return to a normal which maintains systemic injustice. There are structural inequities, there are conceptual injustices, and there are entrenched bigotries that are destructive and simply wrong. There may be room for discussion about how to redress these systemic matters, but not whether they must be redressed. Without doing so, I am afraid that our nation will implode from within.
It is true that our sector, i.e., the funder community, has responded with alacrity and impressively to our current disruptions. Many foundations have made new funds available, many have made – at least temporary – changes in the way we do business, many have recognized anew that our missions cannot be fulfilled without profound trust in the nonprofits that implement our funding, and many have joined together in unprecedented collaborations and joint efforts. The scope of what needs to be done to respond and rebuild is massive and far beyond the capacity of our sector, but it is certainly true that we can stand tall in our response.
A larger and more long-term question has to do with sustainability: of the nonprofit world, of our altered tactics, and of the world as a whole. No serious person imagines that we will return to an unchanged world – but that doesn’t mean that our practices will or should change. Or if they should, in which ways? And who should decide?
For example, I would hope that no funder ignores the evident and demonstrable class and race chasm in the USA. But even if one recognizes that consideration of “DEI” needs to inform our grantmaking, there are various credible ways to do so: advocating public policy change, supporting intermediary organizations, funding local direct service entities, etc. I personally endorse certain practices and associate myself with the joint statement of 700 US foundations about utilization of our funds at this extraordinary time. Yet I continue to feel that, in the rush to provide resources where they are desperately needed – a flexibility that is indeed a crucial value-added of our field, we don’t surrender our other value-added asset – the ability to have strategies that take a thoughtful long view independent of contemporaneous political pressures. After all, as we look back to lesson #1, it is certain that the systemic societal inequities will outlast the pandemic and will demand every bit as much of our attention and funding. To do our work well, we need to combine both of those values – flexibility and perspective. [I will be offering a recorded webinar on this subject to be available for public viewing on Monday, 27 April.]
Lesson #2 – What Shouldn’t Change: The philanthropy field must continue to play its crucial role as a funder and thought leader. There may be exigencies that require short term funding adjustments, but our strategies should reflect longer term endorsement of our distinctive role. Hopefully, all of us have a strategy that allow both.
If it is true that our strategies should not be cavalierly disregarded as events unfold, it is also clear that it is time to underscore many of the best practices that have developed in our field. For many of us, as my clients and students know, these practices are well established; for many others, the emergence of the work of CEP, GEO, NCRP, and TBP are welcome correctives to deeply entrenched and often out of date practices.
To take just a few examples:
a. There needs to be an open and honest relationship with grantees and potential grantees. . We want to know what a grantee really needs to be successful, what is in the way of that happening, and what measures will truly show those things. And only funders can make that a safe place to be. Many funders are clueless about how the power imbalance, even when unintended, distorts that openness and gets in the way of an honest dialogue.
b. There needs to be a simplifying of what we ask of applicants for our funds. In teaching this over the years, I have learned that most funders want to ask as much as possible but only use a small portion of that information to make a decision. Why impose that extra work on the applicants, and ourselves, if it doesn’t really inform our decision?
c. Most grantees would benefit from unrestricted grants and most projects need more than one year to implement. There are important exceptions to both, to be sure, but our norm should be that, if we trust a grantee sufficiently to invest our money, we should give them the greatest chance to utilize their expertise.
d. We need to assure that our grantmaking enhances the professionalization of any program or organization we fund and not inadvertently reinforce the shameful pattern of undercapitalizing the sector we presumably believe in.
e. There needs to be proportionality of what we ask and require of our grantees, reflecting the size of our grants, and the capacity of the grantee. It may seem equal to ask every grantee for a quarterly report, but not equitable if one of those grantees is a 3-person neighborhood-based startup and another a well-established research university.
Lesson #3 – What Should Change: Best practices in the funder world have made major progress toward more open, honest, streamlined, and constructive relationships between funders and grantees. This doesn’t render strategy irrelevant, only that this way of thinking and behaving is likely to achieve a funder’s desire strategy in a more effective and less burdensome manner.
As we are now thinking through what will emerge, it is crucial for our field to take the lessons of these weeks and apply them to what will become normal and normative. Our work won’t end when the doors are open again but will call for us to play even more crucial roles during the forthcoming weeks and months – to do what we can and should do best.
March 31st, 2020
Addendum: Not so surprisingly, just hours after this was first published, I began reading of webinars addressing the particular challenges facing arts and culture institutions. More to the point, I also saw certain politicians staking out the position that it is inappropriate for bail-out government funds to be available to this sub-sector. Hopefully this post will help articulate some of the dialectic regarding this realm.
In this post, I return to philanthropy-practitioner questions and practices – this time for those who fund in the Arts and Culture realm. As of this writing, I have not yet seen any larger discussion of this issue, although I anticipate that we will in the coming days and weeks. I welcome thoughts and reactions.
The question has been raised if it is legitimate or even ethical to continue funding in this area in the face of the overwhelming human urgency of COVID-19. COVID-19 is about life and death; arts and culture are about quality of life. What is a funder to think given that stark a comparison?
Similar questions have been raised in the past – during recessions, natural disasters, human caused disasters. “Compassion funding” – the very human and humane responses that we all feel at these times seems to weigh heavily toward an argument for a suspension of “quality of life” causes when so many are struggling with basic needs. Let’s get these people healthy or back on their feet and then we can get back to these “extras”.
That argument, though, is rebuttable. Even if one believes that the urgency of the moment outweighs the long term, it may be a short-sighted decision to discontinue all funding to this sub-sector. At the end of this thing, whenever it will be, we will need to re-engage and rebuild those organizations that add to the nature of what it means to be human, or perhaps better said: art and culture are not “additions” but essential.. Are we better off with shuttered centers and bankrupt organizations that would need to be created anew?
If history is any indication, the answer is that we should do what we can to sustain this sector, in some way, since gearing back up is much easier than starting back up.
The next question is: which ones? Is it more important to guarantee that the largest, wealthiest, most prestigious ones are kept whole since they serve the largest portion of the population on a regular basis? Or conversely, can we assume that those are also the organizations that do and will receive money from the deepest pocketed donors, governments, and endowments, so we should focus on the smaller entities that perennially exist on a more fragile financial base?
Part of the answer has to do with one’s funding style and priorities. For a “place-based” funder – that is, a funder whose giving priorities are primarily connected to a particular city or region, sustaining local institutions with which they have had meaningful relationships over time may be the most appropriate and compelling approach. One’s funding at this time may not be sufficient to keep the organization whole, but it may be enough to keep it alive. That support should involve cash, of course, but it may also include contracting for expertise in helping all regional nonprofits during times of enforced transition. A singe consultant may well serve to advise an entire cadre of at-risk institutions.
We know from past crises that there will be both consolidations and fall out. And there will be time for that down the road. But forcing those kinds of hard and strategic choices in a time of crisis is exactly the wrong time to force existential decisions. That is especially true in this particular time of COVID-19 when no one can know what kinds of earned revenue will be possible or when physical spaces will be open again. And no one can fully know what kind of economic downturn has begun.
The issue is more complex for the larger legacy institutions. Most of us were aghast to read that the Washington based NSO laid off its entire orchestra the same day it received a guarantee of an infusion from bailout funds. It creates a conceptual dilemma for funders: If we believe that those legacy institutions are national treasures that deserve taxpayer support, then we might argue that private philanthropy should be reserved for those institutions that don’t receive that support. But here, even with taxpayer funding, the leadership acted in what appear to be self-destructive ways, or at least, with severe myopia. Whatever the correct longer-term answer, it is certainly true that modest pocketed funders will not be able to make up the difference for those large legacy institutions. Better to leave their philanthropy to places where their funding will make a/the difference.
It has become fairly much the norm in the last two weeks for funders to agree to remove restrictions from existing funding, simplify their application and decision processes, speed up their payment of grants, and dig deeper into reserves. All of this applies to arts and culture funding as well – but with one additional caveat: funding should be built around the commitment by the recipient boards to keep their organizations alive – even if not whole -until, as we suggest above, the time is right to take the hard look at what we need to do to keep a robust arts and culture community functioning well into the future.
There will be very, very hard decisions ahead about which groups and institutions survive, consolidate, merge, or, sadly, close. But the option should never be to surrender our commitment to the quality of human experience as provided by the “arts and culture” sector. History has taught us no less.
#365 We’ve Been Here Before – Lessons from Past Challenges to the Philanthropy Field in the Time of COVID-19
March 18th, 2020
“Everything that can be said has been said, but not everyone has said it.” This expression has been variously attributed to Winston Churchill, Abba Eban, and who knows who else.
As I have written and re-written this post over the last week, I have tried hard to avoid saying what so many of my colleagues in the philanthropy space have been saying. I do want to humbly express my admiration to our field for stepping up so quickly, thoughtfully, and, yes, even eloquently. The assertive actions and ambitious outreach I have observed demonstrates that our field is acting in assertive and proactive ways rarely seen in past crises.
Therefore, rather than reiterating those recommendations, these few comments are intended to underscore or articulate a few thoughts that seem understated by many. They are informed by what we have seen and learned from past crises – some caused by human behaviors and misbehavior, and some caused by acts of nature.
Among those lessons:
1. Our field has both short term and long-term capabilities.
a. If there has been one consistent message from this field, it is this: In the short term, our grantees face short falls, diminished contributions, and, depending on the grantee, increased demands for services. Since the US government and even many States have shown themselves to be pokey payers, many direct service agencies face the dilemma of long time wait for reimbursements. Contributions will be diminished and delayed. This is not the time for our grantmaking to be clever; it is the time for us to be flexible. To reiterate, I want to applaud our sector in affirming this point in so many ways.
b. Less stated but very important: We have also learned that we need to keep at least some of our powder dry. There are unanticipated demands, organizational re-alignments, and systemic dislocations that deserve attention – long after the crisis, whatever crisis, has passed from the headlines.
2. Our field needs to underscore our flexibility and agility in our spending policies.
We have just emerged from 11 years of a bull market. Any foundation or private funder would have had to be remarkably counter-trend to have earned only 5% each year over these years. In past economic downturns, some foundations adjusted their “base” corpus to a prior date or number so that there would greater ability to respond to genuine challenges faced by their grantees. This may be one of those time. For US based foundations, the recent change in the excise tax calculation makes this kind of spending adjustment much easier.
3. Our field needs to use all the arrows in our quiver.
a. If organizations are struggling with cash flow for reasons beyond their control, a revolving loan fund may prove useful. For US foundations, this would qualify as a PRI and can be a very effective support vehicle.
b. If the fields we are funding are suffering because of short-sighted public policy, advocacy can/must be a powerful tool to get the attention of policy makers. We know that the entire philanthropy capacity can never solve major systemic challenges alone, especially of the sort we are now facing, we can only accomplish what we are committed to with a concerted affirmation of the need for responsive and responsible public policy.
c. Our field has made great strides over the last few years in learning how to collaborate with each other, and with those who are directly responsible for implementation – sometimes called grantees or partners. The current reality – with both extreme economic dislocation and profound human vulnerability – calls for us to continue to model this welcome change in our behavior.
d. All of this is happening at a time when civil society has been at risk in the USA and elsewhere in the world. [The subject of a longer and more in-depth conversation, to be sure.] We must accept a mandate to become a stabilizing force at a very fragile moment in history.
This list is not intended to be complete nor to replace the extraordinary advice offered by so many, especially about how we work with grantees. It is simply an attempt to emphasize a very few of those recommendations that may not have been as widely articulated as some others.
The current challenges are not short term. Recessions, even those that are short lived, have always had severe implications for the most vulnerable. Add to that the recognition of how universal our human vulnerability is. Our work is only just beginning, and we will be called upon to rely on our depths of empathy and test the range of our sector’s capacity to continue to provide a source of support. We must.
February 11th, 2019
When I first started writing this article, it was intended to focus on how and why “Medicare for all” has become a screen for concepts of equity and fairness in the United States. Indeed, it has become an early metric for where on the Liberal/Progressive continuum Democratic 2020 candidates position themselves.
In an addendum below, I will address my thoughts on this question, but as I was writing them, I realized that my key issue has more to do with the gaping chasm between those few who have and the massive numbers of those who don’t.
Most readers, I am sure, recall the “Occupy Wall Street” movement of a few years ago. There were some tactical and strategic errors that their leadership made so the initiative fizzled. Yet, it did serve the purpose of changing the vocabulary of how we discuss the impact of public policy on matters of wealth accumulation. We became friendly with some of the key organizers and felt comfortable associating ourselves with the main thrust of their rhetoric. We are very far from underprivileged ourselves, but, as the chant went: “we are [among] the 99%”.
We were not the only ones in our position to join in the marches. I, for one, chose to wear my customary bow ties and bespoke suites since I wished to, semiotically, emphasize that this was about policy and policy includes all of us. Professionally and personally, we know many people who do fit into that 1% category and most [but far from all] of them readily acknowledged that there was inequity, injustice, and a disproportionate disparity between the very wealthy and everyone else. Many wealthy and super-wealthy people were more than willing to affirm, at least in private, that the protesters were correct, and they and other people of great wealth could easily double their own taxes and not feel a thing.
It appears, though, that their own lobbyists didn’t get the memos so when the tax sham was passed in the current administration, it only widened the divide. I haven’t done a survey myself, but I suspect that many of the same wealthy folks I spoke to in the Autumn of 2011 would privately give the same answers regarding equity and taxes. But now that we have an administration and cabinet led by those with extreme wealth, it appears that the special interests of the wealth class take precedence over everything else. That means a willingness to push to violate decades old contracts for social security and Medicare for the masses of people in order to preserve those tax reductions for the few.
History doesn’t look kindly at this vast a wealth divide and those who want to learn from history should look very carefully about whether our current inequities are sustainable.
I for one feel that the only way to preempt some of those cataclysmic possibilities is through a change in public policy toward taxation. [Just as Medicare for all has become a metric in the political discourse, so has the issue of whether wealth above a certain level needs to be taxed at substantially more progressive rates. [None, we should note, are arguing for the rates that existed during the Eisenhower years.]
When I have publicly articulated these advocacy positions in some circles, one of the predictable objections is that I am advocating a redistribution of wealth. They are quite correct – but after all, I rebut, how to explain the growing wealth divide except by a legal wealth redistribution in the other direction. Rhetoric aside, all some of us want is to redistribute societal resources to a more equitable balance. Some of us think it is simply unacceptable for hunger, illiteracy, poverty, to exist because of policies that reward “wealth beyond the dreams of avarice.”
We in the philanthropy world are in a sensitive place in this conversation. After all, much of the best-known philanthropy exists because of the decision by those who have accumulated more than they think they will ever need to have some of their personal resources transferred to public good. But even though the resources are transferred, a huge amount of control remains, the power imbalance is sustained, and, if done without sensitivity, becomes just another display of privilege.
It is my view that philanthropy should always understand our role vis a vis public policy. We alone cannot eradicate systemic social ills. Our analysis of the best use of our financial and other resources should always include a determination of what each sector can and should do more effectively. I cannot imagine anyone believes that private voluntary philanthropy is equipped to eradicate hunger, illiteracy, homelessness, disease, and public safety on our own. We may have a role – there is legitimate debate about how extensive that role should be – but none can seriously believe that we have the capacity to solve the problems on our own.
That does mean that addressing public policies and social weal, including about taxes is essential to what we are about. As unique and distinctive as our sector may be, it may not, must not, exempt itself from addressing the inequity that tax policy fosters.
Of course, that will have an impact on our foundations, and our own wealth accumulation. It is a fair price to pay to correct for the radical, systemic, but fully legal inequity that has only become much worse since the Occupy Movement chanted and marched.
In many ways, our philanthropy sector is ideally suited to take the lead on this. Since we are identified with the privileged class [even though only few of us are at the rarified mega level], our voices carry a moral suasion to policy makers, and affirmation to those in need and at risk. We know that our legal and moral legitimacy mandates our commitment to public good.
We must affirm that there are profound risks to the stability and future of our nation if we don’t.
Addendum: Some thoughts on “Medicare for all”
On the surface, this should be a no-brainer:
1. The USA is the only first or second world nation with no societal commitment to provide health care to all of its citizens as a matter of right and justice [and practicality].
2. Any insurance plan is more financially viable when it includes low risk as well as higher risk. Medicare is expensive now because it is restricted to the highest user population. It would assuredly be more affordable for all if it included all.
3. Many people misperceive that Medicare is a gift offered by a benevolent Congress. In fact, all of us have paid for it from the day we first earn a pay check. To date, it has been a contract where the payback is only offered to seniors and certain others.
4. Medicare for all is NOT the same as a government run health system. Quite the contrary, we choose our own plans and physicians, with Medicare being the insurance of first claim. It is a total [and often willful] misrepresentation when anyone decries government run health care as the same as a single payer insurance program.
5. If the money individuals and companies now pay for private insurance were added to the mix, it is highly likely that the gross cost of medical insurance would drop. [I will trust folks at places like the Peter Peterson Foundation to crunch the numbers.]
6. It will eliminate the uninsured, a major drain on health care institutions. One way or another, those costs are rolled into the fee determinations we now pay. If there are no uninsured, there will be lower costs for all of us.
7. Most Medicare recipients also purchase supplementary insurance plans though the private insurance market. There shouldn’t be any reason that that cannot continue as an option..
There are legitimate concerns
8. Even if the long-term costs will prove to be lower, there will be transition costs. While I believe those transition costs will be temporary, I am not naïve to the fact that they will exist.
9. An entire insurance industry will need to be restructured and, from a political perspective, that won’t be simple even if the larger public policy benefit is clear.
10. For many employees, health care insurance is covered by employers. [Those coverages are far stingier than they used to be.] That shouldn’t be a long-term issue since it simply would require employers to redirect their payments to payroll taxes from private insurers, but, as in 9, it will require a comprehensive transition.
As I see it, this is pretty straightforward. Why do we hear that it is too radical, un-American, or too expensive?
For some, any increase in government involvement in anything is anathema. It doesn’t matter whether it is financially beneficial or more humane – they simply don’t believe in the active role of government. To those folks, there isn’t much I can say since those ideologues have their minds made up.
For some, there is fear of change even when they acknowledge that profound inequities exist in our current system. To those we need to provide quick wins and a commitment to as little bureaucratic log jamming as possible.
For some, there is still a widely held perception that, for all of its faults, the current US system is superior to others. Sadly, the data doesn’t demonstrate that now, even if it ever was true,, but we need to find ways to show individuals that their own access to health care will be easier and less expensive than what they currently have.
And if any have doubts, all they need to do is ask those of us who are currently beneficiaries of Medicare what we think. Millions would be thrilled if they could have it too.