The Pulse: Philanthro-Shaming, Benefit Corporations

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   


Economists and historians compare our current age to the Gilded Age of the late nineteenth century, an era of enormous fortunes when the gap between poor and wealthy was magnified. In a recent essay, Benjamin Soskis from George Mason University notices another similarity: during both eras, the public placed pressure on the wealthy to donate generously. Soskis goes on to assert that public pressure should not be about how much the wealthy give, but on how effective and relevant their philanthropy is. And, he says, “Philanthro-shaming” will not damage voluntary impulses of philanthropy. “If anything, appreciating that the public really does take their philanthropic commitments seriously should inspire more giving, and giving that is more closely attuned to the nation’s needs. But philanthro-shaming should be the beginning—and not the end—of a civil and engaged conversation about philanthropic means and ends.”

Giving Circles Popular With Minorities, Women, Younger Donors

New national surveys of American households offer insight into who participates in giving circles, groups of people who pool donations and give together. Based on these surveys, the Chronicle of Philanthropy reports that “Americans of African, Asian, and Hispanic descent participate in giving circles at much higher rates than whites: 21 percent for blacks versus 10 percent for white non-Jewish donors, for example.” Also, “among non-Jewish whites, women make up two-thirds of all giving-circle donors.” A leader of the Connected to Give research calls on nonprofit organizations to use the findings to uncover donor trends and engage giving circle participants as potential partners and board members.

Benefit Corporations Codify and Establish Themselves as a Field

NPR takes a look at “benefit corporations”—companies that seek a profit and also offer tangible benefit to society—and the growing infrastructure that supports them. A firm called B-Lab certifies companies devoted to communities and the environment by analyzing a company’s operations, policies, and relationships with labor and suppliers. Also, 27 states have created a legal status for benefit corporations; the legal protection ensures that “a shareholder can’t sue a benefit corporation for valuing the environment as much as profit.” Though some states don’t keep track of numbers yet, at least 750 benefit corporations are known to exist, and as many as nine states are considering establishing the legal framework. As an executive at B-Lab puts it, a benefit corporation is a way “to bake your morals and your missions into the DNA of your company.”

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Horizontal Is the New Vertical

By Henry Berman, Exponent Philanthropy

The article below is featured in Exponent Philanthropy’s just released e-publication Outsized Impact, a first-of-its-kind report on trends shaping philanthropy with few or no staff. As practiced by small-staffed foundations, donor advised funds, giving circles, and individuals who choose to give big while keeping operations lean, this unique style of philanthropy is popular, powerful, and on the rise. In the report, more than a dozen thought leaders share their insights on how these philanthropists are achieving outsized impact across the country and around the world. Download the report

Historically philanthropy has, for the most part, operated in a vertical mode. At the top were the institutions and individuals holding the most money—and often operating with the most infrastructure. Below them was everyone else, including smaller organizations and individuals, and those seeking funding. The hierarchy, for those at the top, meant it was easy to be less connected to the communities and causes they supported. For funders at the bottom, it meant being less visible and less understood, working in the shadows of those at the top.

But no more.

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Want to Create a Giving Circle? Here’s a Checklist.

By Jessica Bearman on behalf of Exponent Philanthropy

According to a new report, one in eight American donors has participated in a giving circle—nearly half under the age of 40—and participation in a giving circle can both strengthen social connections and help turn participants into committed philanthropists.

Creating a giving circle—a collaborative philanthropy in which individual donors pool their money and other resources, and decide together how and where to give them away—is a creative and fun process. Although there is no one right way to organize a giving circle, considering certain factors will help ensure good leadership, thoughtful processes, and sustainability.

The following guidelines, adapted from the Forum of Regional Associations of Grantmakers’ Giving Circles Knowledge Center, can be a useful checklist for decision making when creating and running a giving circle:

Set Goals and Structure

The group or individual organizing the giving circle may want to make decisions about the composition of the circle in advance of an initial meeting. It can, though, be highly motivating to involve founding members in shaping the circle.

  • Who will be responsible for setting the schedule, communicating, and steering the group? (This responsibility can fall to an individual or a small group.)
  • What is our mission?
  • What specific goals do we want to achieve?
  • What is our giving circle’s name?
  • Will we use a small circle, formal organization-type giving circle, or loose network approach?

Some groups change over time, so these decisions might not be final. Set up an initial operating structure that works for you.

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The Why and How of Saving Our YMCA

By Alan Egly, Doris & Victor Day Foundation

What do you do when a key community resource is about to go under?

Due to poor management, our community’s YMCA faced closure. Its third year of emergency funding requests to fund its $600,000 debt and avoid bankruptcy were again unsuccessful. Funders had all but given up, except for our board and staff at the Doris & Victor Day Foundation and a few others who weren’t ready to jump ship—at least not completely.

Although our group lacked confidence that the YMCA’s management could turn things around, we weren’t ready to lose an excellent and much-needed facility that served a community with a significant number of low-income residents. We also recognized the importance of helping the YMCA and our city of Rock Island, Illinois, avoid the shame that would come with a bankruptcy.

One of the Day Foundation’s directors began to think creatively about solutions, suggesting the city might be willing to take on the facility. After meeting with the city manager and Department of Parks and Recreation, it became clear that the city was willing to take on the facility but not with its current financial obligations. What wasn’t clear was how to cover the financial obligations and convince the YMCA board that this was the best solution.

This would take several months of negotiations.

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Inverting the Power Imbalance: Testing a New Grantmaking Program That Enables Nonprofits to Do Their Jobs

By Suzanne Skees, Skees Family Foundation

Excerpted from the original post that appeared on Seeds of Hope, the Skees Family Foundation blog, on June 28

It sounds ludicrous—and it is: Often we donors throw roadblocks in front of the very programs we seek to support. Requiring reams of application pages, hours of preliminary meetings, and acrobatics of performance if and when we fund, is crazy-making for the social entrepreneurs and nonprofits we supposedly trust to solve our most entrenched environmental, financial, educational, and social problems.

This is not just theory. It’s not overworked, underpaid employees whining. We’ve gleaned an inside view of this reality through field visits with and story gathering for our partners, some of the world’s smallest grassroots organizations. Because our grants are tiny and our ambitions are mighty, we’ve always approached our work as if the time we give to partners’ communications, strategy, program development, and fundraising matters more than money. Our multifaceted style of partnership allows us to see a lot more than our partners’ websites, fundraising events, and annual reports. We try to work with them and for them, rather than the other way around.

No one engaged in grantmaking or impact investing wants to believe we’re thwarting our partners’ best intentions. I tried for years to convince myself that the power imbalance between the donor and recipient didn’t have to exist, if only we approached people with honesty and humility. But guess what? It does. To change that dynamic, we asked, could we change the structure of how we give?

Seeking Ways to Bring Greater Efficiency to Grantmaking

We wondered, when we undertook a landscape analysis of our own funding area (global access to education and jobs), if nonprofits could operate more effectively if they didn’t need to spend so much time, energy, and yes, even funding, on chasing down the next grant dollar. [Editor's note: See Project Streamline's Guide to Streamlining, a set of tools to help funders reduce the burden on grantees and themselves]

Our grantmaking committee and all-family board engaged in some wonderfully deep conversations about our intentions. Since we have such a small budget (~$150,000), we want to direct every dollar for maximum impact. We agreed on some core objectives:

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White House “Insider” Inspirational – Changes Are Coming to Philanthropy

By Floyd Keene, Triple EEE Foundation

Recently I attended a special reception at Exponent Philanthropy headquarters. In attendance were fellow board members, D.C. area foundation leaders, corporate partners, and a special guest from the White House: Jonathan Greenblatt, Special Assistant to the President and Director of the Office of Social Innovation and Civic Participation in the Domestic Policy Council. As Director, Jonathan leads the Office’s efforts to use human and financial capital to bring attention to community solutions.

Jonathan was kind enough to join us even though he had a very busy day. At a White House conference that day, the administration announced a number of actions to stimulate impact investing, including $1.5B in commitments from a group of dedicated private and philanthropic entities.

At the reception, Jonathan described the conference and President Obama’s views on philanthropy and public/private partnerships. My fellow board members told me that I beamed during Jonathan’s entire presentation. I cannot disagree. Never before had I heard a speaker talk about conceptual topics, where I felt like he was plucking them directly out of the beliefs of my heart and the depths of my soul. At the conference, and in the press, the Obama administration indicated the following, with my reactions stated in italics:

1. President Obama’s new stress on philanthropic initiatives was inspired by a site visit to the B.A.M. (Becoming a Man) program run by Youth Guidance in Chicago. The visit helped spawn My Brother’s Keeper, a far-reaching Presidential initiative announced in February. 

Whenever I hear this story, I almost have trouble keeping it together. My foundation has long supported Youth Guidance, which began B.A.M. as a small pilot program several years ago. To now see it inspire an entire Presidential initiative is indescribably moving.

2. The Obama administration believes that governments and philanthropists alone cannot solve social problems. Rather, the private sector must be a key player in addressing social concerns.

This thought—almost an irrefutable reality—is rapidly becoming the mainstream view. It implies a changed world of philanthropy not considered possible 10 years ago. Jonathan’s words reminded me of a belief I have held for years: World hunger will not be solved by a big food drive. It will be solved by one brilliant entrepreneur, who figures out how to make money by solving world hunger. 

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The Pulse: Boost for Impact Investing, Economic Effects of Climate Change

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  

How Scarcity of Time Locks the Poor Into Cycles of Hardship

Citing recent studies of time scarcity, a writer in the New York Times describes how the daily struggles by low-income people to meet basic and immediate needs consumes all their available time and mental capacity, undermining their ability to make better decisions, perform effectively, and plan ways to improve their income and opportunities. “Attention is finite,” she observes. “The poor are under a deadline that never lifts, pressure that can’t be relieved. If I am poor, I work or I churn until decisions like buying lottery tickets begin to seem like attractive alternatives.” She advocates simplifying sign-up processes for government programs and offering immediate and easy ways for people to save money.

Powerful Innovations Can Be Simple Ones

Anti-hunger advocate Bill Shore profiles one technique for alleviating time pressure on low-income people. In the Chronicle of Philanthropy, Shore explains how the new “community eligibility” provisions, passed by Congress in 2010, will eliminate “school meal applications and fees in high-poverty neighborhoods, reducing administrative burdens for schools and families and stigma for children.” The change will likely add thousands more kids to the federal School Breakfast Program. Says Shore, Innovation does not necessarily require innovation labs, expensive consultants, new technology, and the other things popularly associated with it. Instead, it may mean a small common-sense tweak that is far enough upstream to change the entire trajectory of a program.”

Impact Investing Enters the Big Time

Impact investing got a huge push from a coordinated effort by the White House and several large foundations to commit a collective $1.5 billion, and from a new report that offers policy recommendations to nurture more such investing. The new investments will support affordable housing, clean energy, quality education, workforce development, and work in other fields. The report by the U.S. National Advisory Board on Impact Investing offers recommendations to remove regulatory barriers, develop next-generation financial instruments and models, and provide incentives for new private impact investment.

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At the Table: Women Leading Philanthropy

By Andrea Pactor, Women’s Philanthropy Institute at the Indiana University Lilly Family School of Philanthropy

Foundations deal with complex issues. It is difficult enough to navigate those waters without considering the impact of gender on leadership, decision making, and organizational culture. Yet it is clear from a variety of disciplines – marketing, management, and leadership among them – that men and women are different and what works for men may not work for women. This is true in philanthropy too.

Women are deeply involved in foundation life, serving as donors, trustees, board members, volunteers, and staff. Although the more than 40,000 family foundations with assets of nearly $300 billion in 2011 represent a large swath of philanthropy, virtually no research has examined how gender affects these fast-growing and increasingly important organizations. The same is true for donor-advised funds with assets of $45.4 billion in 2012.

The Women’s Philanthropy Institute at the Indiana University Lilly Family School of Philanthropy applied its understanding of gender differences in philanthropy to many lively conversations on the topic at its April 2014 symposium, #WomenLeading Philanthropy.

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After 400 Requests for Funding, We Refined Our Grantmaking Goals in These 4 Steps

By Mary Anthony, 1772 Foundation

Ever thought about doing an in-house “quick and dirty” strategic plan for your giving? To be honest, I hadn’t either. But after receiving 400 requests for funding in the first year after establishing an additional focus of sustainable agriculture and food systems work, we knew we had to do something.

The requests covered a wide array of projects: urban farming, barn restoration, new farmer training, heritage breeds protection, food hub development, and farmer’s market development, to name just a few. Clearly, we had to narrow this down to a field in which we could work diligently over time to make a real impact. Because it was just one segment of our granting portfolio, and not our main focus of historic preservation, we decided to tackle the process of narrowing this field ourselves.

Using a very practical, measured approach (and avoiding as many strategic planning buzzwords as possible), we were able to develop a focused plan for the sustainable food systems segment of our granting. We engaged in the following process:  

1. We asked trustees individually about desired impact:

  • Why does this field of interest matter?
  • What is the change you would like to see in the world within this focus area? (invoke Magic Lamp if needed)
  • What would success look like?
  • Who are the “thought leaders” or stakeholders in this field you would like interviewed?
  • Which programs or organizations do excellent work in this area?

2. We compiled all the answers and sent a “ballot” to all trustees asking them to choose the three they felt were most important. We tallied results and sent them back out to trustees. 

3. We chose 5-10 “stakeholders” to interview based on results of the trustee survey. We asked the stakeholders: What will it really take to make these desired changes happen? Is it foundation money, or is it something else? We compiled the information gleaned from the stakeholder interviews and sent the results to trustees.

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A New Breed of First Responder

By Henry Berman, Exponent Philanthropy

Most people run from fearful situations. Perhaps it’s the natural instinct for self-survival. When I think about exceptions to this phenomenon, first responders immediately come to mind. Firefighters. Police officers. EMTs. They respond to those instances where there is danger and risk, but also the opportunity to help.

Others who face—in fact, sometimes looks for—difficult situations are the many philanthropists who want to make a big impact. They are firmly rooted in their communities and well positioned to identify opportunities to be catalysts for change.


Exponent Philanthropy CEO Henry Berman and member Emily Tow Jackson at National Press Club Newsmakers event (June 16, 2014)

Consider Exponent Philanthropy member Emily Tow Jackson from Connecticut, executive director of the Tow Foundation, founded 25 years ago by her parents. Rather than react to situations out of fear, Emily and her foundation have decidedly taken the approach of looking for solutions that often get overlooked. It’s an approach that she says is common among today’s philanthropists.

Speaking to a Newsmakers gathering at the National Press Club in Washington, DC, on June 16, Emily described how foundations such as hers, with five staffers and operating with minimal infrastructure, leverage their philanthropic investments  for  tremendous impact—in her case, primarily in the areas of medical research, juvenile justice, and journalism education.

I was privileged to join Emily on the panel along with Andrew Hastings, chief development officer of the National Philanthropic Trust. Stacy Palmer, editor of The Chronicle of Philanthropy, moderated the news conference, titled “The Diverse Power of 21st Century Philanthropy.”

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