Are You an Accidental Techie?

By Maru Willson, Exponent Philanthropy

Are you the go-to person for technology in your office, but “technology” isn’t in your job description? Then you’re an accidental techie, a common role in small offices.

computerExponent Philanthropy member Rachel Ayn Pickens, program officer at the Irene W. and C.B. Pennington Foundation, became an accidental techie because she was young and had prior experience with social media.

“Everyone assumes Millennials will know what to do because we grew up with technology,” says Rachel. “Age may have something to do with finding yourself in an ‘accidental techie’ role, but it’s not everything. It has more to do with wanting to learn and being willing to teach yourself what you need to know.

Adopt this mantra early and use it often: Technology is a partner in achieving our mission. Technology can be a game changer for small organizations, helping to drive your mission further, faster. Connecting new tech to your mission is vital in gaining buy-in from stakeholders in your organization.

Think about your organization’s needs. Rely on your organization’s needs as a guide. It’ll help you avoid the trap of purchasing the latest technology just because it’s new, or because someone else insisted you should.

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New Data Demonstrates the Power of Small-Staffed Foundations

By Ruth Masterson, Exponent Philanthropy 

Foundations that work with few or no staff—the largest segment of the philanthropy community—are achieving outsized impact across the country and around the world.  


Today, Exponent Philanthropy released the 2015 Foundation Operations and Management Report, the premier benchmarking resource for small-staffed foundations and their advisors.

Join Exponent Philanthropy today for access to the Foundation Operations and Management Report and other member benefits. Access to this year’s report is a member-only benefit.

Based on data collected in mid-2014, we learned that member foundations granted an estimated $4.4 billion to local, national, and international causes in their most recent fiscal year. They have an estimated total fair market value of $87.8 billion, up from $74.1 billion at the end of 2012.

We also learned other important things about our member foundations:

  • Member foundations use lean operations, spending just 14 cents in charitable operating costs for each dollar of grants awarded. One-quarter of foundations surveyed operate with no paid staff; of those with paid staff, one-third have only one staff member.
  • An estimated 158,000 grants were awarded by member foundations collectively, down from an estimated 203,000 a one year earlier. Median grant size increased from $15,415 to $19,116 during that time, suggesting foundations are giving fewer grants but increasing grant size to maximize impact.
  • Giving-By-Top-Funding-AreasWhereas the majority of grants went to local communities, 21% of foundations surveyed give internationally—indicating a notable role for small U.S.-based foundations on the international stage.
  • Member foundations demonstrate leadership by reviewing grantmaking strategies regularly (74%), using information from grantees to inform grantmaking (62%), and collaborating or meeting regularly with other funders (58%).
  • Member foundations saw a significant increase in returns on their investments, reporting average returns of 14.1%, up sharply from 9.7% reported in the 2013 Foundations Operations and Management Report.
  • Members are generous in their giving. Median qualifying distributions were 5.19% of noncharitable use assets, or an average of 6.50%, exceeding the required 5%.
  • Member foundations are adding impact investments to their portfolios. Thirteen percent of foundations surveyed engage in impact investing, and these members maintain an average of 41% of their portfolio in impact investments.

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Shaping a Foundation’s Future While Honoring Its Past

By Stephanie Fuerstner Gillis, Arabella Advisors

We’ve had the great pleasure of serving as the grantmaking and foundation management partner for Kathleen deLaski and the deLaski Family Foundation for the past three years. The foundation brought us on to help it adapt its mission, vision, and goals in a way that makes the most of the current board’s knowledge, networks, and expertise, and allows it to respond to current challenges—all while remaining true to the foundation’s and family’s legacy.

Sitar Arts Center

Students and instructor at Sitar Arts Center, a deLaski Family Foundation grantee

Kathleen deLaski’s parents, Donald and Nancy, formalized their giving in 1999. The foundation grew and eventually supported three main areas: arts and history, health and well-being, and education, mostly in the DC metro area. In 2005, Kathleen and one brother joined the board, and, shortly before Don died in 2012, Kathleen became president of the foundation. She and her two brothers were faced with a challenge that many family foundations face: How do they set a course for the future while honoring the past?

The first thing we did was to look across the foundation’s grant portfolio and ask what the giving strategy has been. Whereas Don had never expressed an interest in articulating a formal strategy, Kathleen and her brothers recognized a common approach: all the foundation’s giving was relationship-based and rooted in mutual trust. Don had invested in the leaders rather than simply the organizations themselves. And, as his children only learned after they took on the foundation, to these leaders, Don’s mentoring and business advice was just as important as the grants he made.

“A relationship-based strategy can be really effective, but it’s more of an art than a science,” says Kathleen. “The concern I have is that, if every donor employs it, it can start to look like the for-profit start-up world, with lots of small ideas being incubated in silos and the expectation that 80 or 90 percent will fail. That’s not such a good model for philanthropy. So we refined the strategy to concentrate new grantmaking on supporting social visionaries in areas where we have expertise.”

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The Pulse: Project Support Under Fire, Why Some Teams Are Smarter

By Andy Carroll, Exponent Philanthropy

I regularly explore trends influencing philanthropy by spotlighting articles, reports, and essays in the media. I cast a wide net, venturing beyond philanthropy and traditional topics to consider a variety of ideas, innovations, debates, and critiques. Read previous posts in the series 

Philanthropy’s Attachment to Project Support Comes Under Fire

Philanthropic entrepreneur Paul Shoemaker, founding president and a board member of Social Venture Partners International, joins the growing chorus calling upon funders to offer more general operating support to nonprofits. Shoemaker points out how damaging it would be if the CEO of a private sector firm were barred from shifting resources from different revenue streams according to need and opportunity. Nonprofits need to be able to adjust to changing circumstances, he asserts. And restricted grants compel organizations to distort their accounting and operations, forcing “orgs to cut corners [and] allow higher costs into line items, which can ultimately amount to cracks in the ethical foundation of an NGO.”

According to Forbes writer Tom Watson, as more foundations and donors call upon nonprofits to deliver measurable impact, they may be undermining the prospects for that impact by focusing too much on project grants, failing to build the long-term capacity of these organizations. This is especially true today, he points out, as government support for nonprofits is cut, and as needs for human services increase. “I’d love to see more philanthropists, foundations, and giving companies focus on building organizations for the long term, investing in staff ability and systems, and providing resources for organizational stability. When well-meaning board members tell my clients that organizations should “operate more like businesses,” this is what I think of.”

Women Still Make Less for Equal Work in Nonprofit Sector

Tom Watson also takes stock of the persistent gender gap in compensation and leadership—in the economy as a whole and the social sector. In its annual report on nonprofit compensation,  GuideStar found that women who are nonprofit chief executives made 11% less on average at organizations with budgets of $250,000 and 23% less at organizations with budgets between $25 million and $50 million. Our compensation data among member foundations (login required) echoes this trend, with female foundation CEOs earning less than male counterparts, even with more experience. Research by both GuideStar and BoardSource also reveals a continued disparity in executive leadership, with women often leading smaller nonprofits but lagging as chief executives of larger organizations. For example, according to BoardSource, organizations of medium size (over $1 million) or large (over $10 million) employ female chief executives at a rate of just 37%.

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Strengthen Your People Powers

By Janice Simsohn Shaw, Exponent Philanthropy

Philanthropy, from the Greek word for “to love humanity,” is inherently a human enterprise.

In this business of helping to solve complicated social problems, we’re bound by the opportunities and challenges of working with other people to do so. It can be emotional work, and it’s work that involves very diverse people who span different generations, politics, cultures, genders, educational and professional backgrounds, and the list goes on.

Whether you’re managing asset growth, tackling generational succession, refining your mission, or simply doing the work at hand to serve your philanthropic goals, being attentive to the human elements can strengthen your philanthropy and make it more pleasurable.

At Exponent Philanthropy, we look at a number of skills and approaches that can help you develop the “people powers” necessary to work sensitively and effectively with those around you. Some call these topics soft skills, but we think that name downplays their importance in guiding your philanthropy through moments of change as well as its status quo. We call them effectiveness skills instead, and explore topics such as:

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Three Actions I Believe Any Philanthropist Should Consider

By Stephen Alexander, Exponent Philanthropy

Last month, a poignant statement from my colleague’s essay firmly planted itself in my subconscious: “Vaclav Havel’s message is a powerful yet intimate one, calling each of us to pretend no longer, and to summon the courage to step out, speak out, and live in truth.

Powerful, isn’t it? This week, as the call shifted to the forefront of my mind, I realized just how powerful this statement really is, and how important it is that we, as philanthropists and as a nation, help each other step out from behind the curtain, speak out against fragmentation and decay, and speak up for the rights, values, and ideals that make our country a land of opportunity.

The call brings to mind three actions that I believe any philanthropist—or citizen—should consider.

1. Model the behavior we want to see. As we know, an active, engaged, and educated civic society is a key component of any prosperous, modern democracy. Thankfully, many funders are leveraging their unique positions to be the bridge-builders we so desperately need to tackle the awesome challenges we are facing and will face in years to come. These funders, many of whom are system leaders, almost always start with listening. They employ core competencies: seeing the larger system, fostering reflection, and shifting from reaction to co-creation.

Read more about system leaders (Stanford Social Innovation Review) 

Whether they recognize it or not, bridge-builders, system leaders, and other change-makers model the behavior they want to see every day. For inspiration, look no further than Kelly Ryan, CEO of Incourage Foundation. Kelly and her colleagues have made a participatory culture their top priority, and their community has taken bold steps to own its collective future, about which Kelly has written on her blog.

2. Lift up leaders with strong moral compasses. These days, it can feel like far too many leaders let capital gains or personal profits guide their actions. Luckily, philanthropists have the ability to develop, encourage, and lift up leaders committed to the well-being of people and communities nationwide. 

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Engage Stakeholders for More Effective Grantmaking

We’re pleased to share this resource co-created with our colleagues at Grantmakers for Effective Organizations (GEO), who have developed a Smarter Grantmaking Playbook to help funders better understand and act in the best interest of grantees.

A growing number of funders believe they can be more effective by meaningfully engaging their grantees and other key stakeholders. Many insights they need to solve problems and do a better job as philanthropists reside in the communities they serve.

  • What are doing to engage the people and the communities you serve?
  • Do you have a clear sense from grantees and other nonprofits how your grantmaking practices contribute (or don’t) to their success, and what you can improve?
  • What can you do to build stronger, more open, and more honest relationships with your grantees and other stakeholders?

Stakeholder engagement is the art and science of becoming more connected as a funder. It means reaching beyond the usual suspects for information and ideas; listening and applying new learning about how to strengthen your giving; and involving a wider audience of individuals and organizations in your decision making. Stakeholder engagement does not mean reaching out to anyone and everyone. Rather, the focus is on those audiences who are most affected by your philanthropy and able to offer valuable insights, and whose buy-in is critical to success in achieving your mission.

The risks of not doing this work include frayed relationships with grantees and communities, insufficient understanding of key issues and trends, and a lack of support and buy-in for their work among key constituencies.

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Growing Into a Board Member Role

By Diana Tyler Heath and Molly Tarrant, Arabella Advisors

One of the most rewarding elements of advising families is watching their engagement deepen and their family bonds strengthen, often through the addition of next generation board members who are passionate about making an impact and who bring new skills and perspectives. As we’ve seen with many of our clients, when done thoughtfully, introducing young family members to philanthropy can help shape their worldview, develop their professional skills, and bring them great personal rewards.

Students at Kabanga Protectorate Center (Tanzania), a Palmer Foundation grantee and refuge for children with albinism

Students at Kabanga Protectorate Center (Tanzania), a Palmer Foundation grantee and refuge for children with albinism

Peter Lischick, current treasurer and member of the board of directors of The Palmer Foundation, is one such next generation board member. The Palmer Foundation turns 25 next year and has been in existence nearly all of Peter’s life. Like many family foundations, its early structure was relatively informal and reflected the annual giving and interests of its founders, Peter’s great-grandparents. When the foundation’s assets were fully vested, his grandmother took over leadership of the foundation and his mother and other members of her generation joined the board. They set out to involve the next generation at a young age.

When Peter was nine or ten years old, he joined his two brothers and a cousin on a junior board. “I served as the vice president by virtue of being the second oldest of the group. Our parents kept the board very structured, and taught us about Roberts Rules of Order, sourcing and evaluating grant proposals, and conducting discussions in a respectful and productive manner,” he says.

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Is Bullying Part of Your Board Meetings?

By Ruth Masterson, Exponent Philanthropy 

You won’t find bullies on every board, but, when you do, they can be very disruptive—creating surprisingly high levels of stress for fellow board members and damaging the integrity, effectiveness, and impact of the board’s work.

Be careful not to assume the other party to any difficult conversation is a bully. Some people engage in bullying behavior only in certain situations, such as on the board but not at home. Others have developed a strong, regular habit that permeates all their relationships. In either case, if you find yourself face-to-face with someone who is bullying you or others on your board, use your recognition of the behavior as a first step toward managing your response and helping your board thrive.

Recognize a Bully

Although some bullies have low self-esteem, most have a combination of high self-esteem and deep shame; they use aggression to distract others from aspects of themselves they don’t want others to see.

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20 Tips for Your Form 990-PF

By Akilah Massey, Exponent Philanthropy

Tax season will be here before we know it, and regulators estimate that at least 25% of all IRS Form 990-PFs have errors. Is your private foundation’s annual tax return among them?

Below are tips for private foundations from our primer Filing the Form 990-PF.

Part I

  • Column c—Most foundations should leave this column blank. Only private operating foundations and foundations with income from charitable activities use this column.
  • Line 2—If the foundation is not required to attach Schedule B, be sure to check the box.
  • Line 18—Reflect the foundation’s share of payroll taxes (e.g., Social Security, Medicare) here. Allocate any portion paid for the production of income to column b, and include only the charitable portion in column d.

Part IV

  • Column b—Be sure to indicate whether each security sold was purchased or donated.
  • Line 2—Make the best use of capital losses by using them to offset gains and decrease the excise tax on net investment income. Since losses cannot be carried backward or forward to other years, consider whether to strategically sell appreciated assets in the same year you will have losses.

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