The Pulse: Nation’s Awareness Builds of Widespread Hardship and Poverty, Toll on Children

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  

Slowly, inexorably, like the rise of inequality itself, the United States has come to recognize the depth and breadth of economic hardship across its communities. CEOs of major corporations and presidential hopefuls from both parties—Republicans and Democrats—have added their high-profile voices to growing distress about widespread poverty and deprivation, rising income inequality, diminished social mobility, and the expanding achievement gap between poorer and wealthier children. The issue has become bipartisan, mainstream, and a constant in public discussions.

Why has hardship reached the spotlight now? Several developments have come together:

  • The persistence of widespread and deep poverty, despite recent job growth, and regular reporting of hardship in national and local news;
  • The finding that many new jobs do not pay enough to keep families above the poverty line;
  • The growing gap between rich and poor, and regular reporting of this trend in the media;
  • Studies that show rates of poverty and child poverty in America higher than those in most other developed nations around the world;
  • Research on brain development that illuminates the damaging, long-lasting impacts of economic stress on children, raising concern that the future for millions of American children is being compromised;
  • Widespread acknowledgement, after years of questions, that deprivation does play a major role in limiting students’ ability to learn and meet benchmarks for educational attainment.

Child poverty in particular has garnered widespread attention as an urgent moral challenge for the nation.

There is growing recognition that left unchecked, hardship will expand, creating the conditions for even greater inequality. 

Let’s explore these issues through recent articles.

The Deep Costs of Child Poverty in America 

John D. Sutter, a writer at CNN, recently examined child poverty by focusing on hidden poverty in Silicon Valley, California. America has the developed world’s second highest rate of child poverty, with 1 in 5 children living below the federal poverty line. Only Romania is worse. In Silicon Valley, where housing prices have skyrocketed, two parents can work full time and still be homeless. Children growing up in poverty suffer toxic stress and are more likely to drop out of high school, go to jail, have kids out of marriage, experience lower IQs, and end up poor as adults. The costs nationally are estimated to be $500 billion a year, in economic losses, health care, and crime. Sutter asserts that child poverty is a moral issue as well as an economic and humanitarian one, because children have no power over their economic circumstances, and the consequences of poverty are likely to limit their opportunities and incomes throughout their lives. He highlights four proven strategies, which would cost less than the $500 billion that poverty exacts each year: housing subsidies, raising the minimum wage, expanded and affordable early childhood education, and cash for poor families.   

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Bringing the Next Generation on Board—at Its Own Pace

By Betsy Erickson, Arabella Advisors

It’s a lesson teachers and parents know well: No two people learn in exactly the same way or at exactly the same pace. And it’s a lesson worth bearing in mind for those seeking to create pathways for family members to engage in a shared philanthropic legacy. Arabella Advisors has worked with families for over 10 years, and we have learned that an important ingredient for success is to allow family members to decide for themselves when and how to engage in the family’s philanthropy.

We love telling the story of Bill Clarke, founder of the Osprey Foundation and our client for the past seven years, who has embraced a very flexible approach with his own foundation—one that has resulted in deep, personal, and satisfying engagement from each of his children and their spouses.

Bill established the Osprey Foundation 11 years ago to empower individuals and communities through education, health, economic opportunity, and human rights in a sustainable way. In the beginning, he didn’t know exactly where he wanted to invest his resources, much less how his three children, who were then in their early 20s, should be involved. “I wasn’t thinking about bringing them on the board right away, but I knew that we had all been involved in mission work, development, and foreign travel, and that they’d be interested in becoming more involved eventually.”

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Program Notes: Quilt Charts Make the Case for Diversification

Following each quarter close of 2014, Stephen Campisi, CFA, Director, Institutional Investments, U.S. Trust Bank of America Corporation, led a market update conference call for our members, providing a look at the quarter’s events and their effects on the investment markets, and guidance on how this information might be used in the fiduciary’s role as a steward of an organization’s financial assets.

Read the Q4 2014 Quarterly Market Update

Overall, Q4 2014 was a modest quarter and 2014 provided a modest return to investors, according to Steve Campisi on the February 17 conference call. He shared general thoughts on the Q4 market performance and then took a closer look at commodities, directing attention to the quilt chart (see below, or Table 5 of the Quarterly Market Update).

Quilt charts are so named by the investment industry because they are reminiscent of colorful block quilt patterns. Their purpose is to visually show performance of investments over time, and advisors often use it as a visual testament to the benefits of a diversified portfolio. Stocks, bonds, commodities, real estate, and any other kind of investment has the potential to swing wildly, and investing across asset classes will help you weather bear and bull markets.

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5 Ways Relationships Matter: Tips From Foundation Executive Directors

By Janice Simsohn Shaw, Exponent Philanthropy

For a number of years, it has been our privilege to offer programming and resources geared to the unique needs of foundation executive directors.

Most come to this work from outside philanthropy, through a mix of skill and serendipity, and work up, down, and across their organizations, often as sole-staffers or in very small offices. Managing everything from the mundane to the sublime, they truly live up to the moniker we’ve given them: Master Jugglers.

Last week, we brought together three foundation EDs for a well-attended conference call on ways to find, hire, and support those who serve in this role. The three EDs span geographic areas, ages, and paths to philanthropy, and together we discussed lessons learned, board–ED dynamics, juggling and prioritizing, and much more.

One subject emerged repeatedly: the role of strong relationships.

Here’s what we heard about how relationships play into the professional success and personal well-being of foundation EDs.

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Voices of Emerging Leaders in Philanthropy

By Stephen Alexander, Exponent Philanthropy

Join me to explore the values and visions of emerging leaders of a social-minded generation. Below is an excerpt from my recent conversation with Kerry McHugh, vice president and program officer at the Helen J. Serini Foundation, and 2014 Exponent Philanthropy Next Gen Fellow. 

Kerry McHughYour foundation is relatively new. What are you most proud of so far?

We were founded in 2012, so our first grants were made in 2013; 2014 was our first full year of grantmaking. Just in those first two years, we’ve really honed in on our mission and made sure that our grants tie back to what we want to achieve in our community. We fund organizations that provide opportunities for at-risk and low-income youth and their families; that’s a broad subject to begin with, but even over the past 18 months, our focus within that umbrella has become much stronger. Obviously, we’re far from perfect, and we’ve got a lot of work on focus and impact ahead of us.

It takes a lot to focus. Our foundation reached a point relatively quickly where the number of grant applications surpassed our annual grantmaking budget. When you get to the point where you have to start turning people away, it forces you to focus on your mission.

What do you enjoy most about your work?

Right now, because the foundation is so new and I’m new to philanthropy (joined the foundation in 2014), I’m enjoying the learning aspect: looking for resources related to philanthropy and best practices in grantmaking, and even more so getting to know the nonprofit community in Maryland. It’s amazing the work that people are doing to improve their communities across the state, and I’m constantly astounded by the number of organizations out there I never knew existed.

It’s really impressive and exciting how welcoming those in philanthropy have been. Those who have been doing this for years have been really accepting of me as a newcomer, and couldn’t be more excited to share experiences and knowledge. I’ve worked in other industries where the opposite is true, with high levels of competition making people hesitant or unwilling to share their knowledge. In philanthropy, I’ve found there’s a sense of being in this together as a community.

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5 Fundamentals Foundations May Overlook

By Lauren Kotkin, Exponent Philanthropy

Mary Phillips of GMA Foundations at February's Foundations 101 Seminar

Mary Phillips of GMA Foundations at February’s Foundations 101 Seminar

Foundation trustees gathered last month for our daylong Foundations 101 Seminar, co-hosted by Southeastern Council of Foundations and led by colleague Mary Phillips of GMA Foundations, an Exponent Philanthropy Professional level Sustaining Partner, with support from U.S. Trust philanthropic advisor Mary Stokes and attorney Marc Lane.

More than a few points stood out as essentials that can be easily overshadowed or overlooked as funders go about the complex work of giving well.

Know where your founding documents are and what they say

A nonprofit’s articles of incorporation and bylaws, or a trust’s trust instrument, are legal documents that outline how a foundation will be governed. 

What ought to be in an organization’s bylaws

“The founding documents are the board’s blueprints for building the foundation,” says Mary. “These documents should be part of each board member’s orientation and a chapter in the foundation’s operating handbook. Trustees should be as familiar with the founding documents as they are with their own backgrounds.”

Trustees have a duty to understand what the documents contain and what they mean; staff members will also find them helpful in their work. Yet far too often, they are filed away and forgotten. In our recent survey of member foundations, 7% were unsure whether they represented a nonprofit corporation or a trust—a telling statistic. 

If faced with a governance question or quandary, consult your founding documents first. Guidelines on minimum number of board meetings, board member term limits, voting policies, and much more are often addressed in your founding documents. If your board amends its bylaws, be sure to notify the IRS when filing your annual tax return.

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How Well Do You Listen to Grantees?

By Ruth Masterson, Exponent Philanthropy 

According to Exponent Philanthropy’s recent member survey report, our foundation members often want to learn about “gathering feedback about the foundation from grantees.” This is a smart question to ask. Grantees are donors’ partners; they have information and perspective that is valuable to you as a funder.

The good news is that many funders already listen to their grantees. Almost two-thirds (62%) of Exponent Philanthropy member foundations use information from grantees to inform their grantmaking, and 38% gather feedback from their grantees in a systematic way.

Grantmakers for Effective Organizations has found the same in its research:

But not only can it be hard to set aside time to ask and listen,
the power dynamic between grantees and funders (wherein grantees want to stay on funders’ good sides) is a powerful one that strongly influences what your grantees may be willing to say.

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Tips on Building a Career in Philanthropy

By Stephen Alexander, Exponent Philanthropy

For career-minded professionals working in philanthropy—whether in program or administrative roles at foundations, philanthropy support organizations, consulting firms, or academic centers—the field can be a difficult space to navigate. Career paths tend to be limited and unconventional, and, although funders are making great strides in going public with their giving, the field has yet to overcome its tendency toward anonymity.

Last month, I had the opportunity to participate in an open and honest conversation with Kathleen Enright, CEO of Grantmakers for Effective Organizations, on building a career in philanthropy. Many thanks to EPIP DC for organizing the program.

Here are my takeaways—some offered candidly by Kathleen and others from my personal experience.

How do I pursue a career in philanthropy?

The answer isn’t what we might want to hear. Job openings are rare, and a direct approach—zeroing in on a specific organization—isn’t necessarily fruitful or wise. So what steps can you take?

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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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