Curiosity as Catalyst for Personal Renewal, Community Transformation

By Andy Carroll, Exponent Philanthropy

At some point in our life and work, we ask ourselves,

Is there more to know?
Is there more to experience?
Is there more impact or change we can make?

It’s not that we’re ungrateful for what we have. It’s that we get restless, frustrated, fatigued. We heard somewhere that philanthropy was about taking risks, empowering people who have great ideas, catalyzing change.

Instead, our days and weeks are filled with an endless cycle of elaborate funding processes. Our well-intended efforts to steward resources responsibly and minimize risk accumulate over the years. Applications, reports, and evaluations bury us. Preparing for foundation board meetings devours weeks. Gradually the paper and process takes over, crowding out people, relationships, and time to learn, reflect, and evolve. We lose track of philanthropy’s purpose and soul.

Fatigue also comes from not seeing or feeling impact. Problems and issues persist over years and decades, and sometimes only get worse, in spite of continual funding and attention.

We wonder, Is there more to philanthropy than this? Is there another way?

The next time you ask, hold onto that question and don’t let it slip away. Take it seriously, embrace it, hold it close. Then—act on it. 

Here is one path.

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Try These 7 Methods to Get to a Giving Focus

The Foundation GuidebookExponent Philanthropy recently revised The Foundation Guidebook, our signature publication for those new to foundations or philanthropy. Below is an excerpt from the 128-page resource. Get your copy >>

Many foundations use a combination of methods to settle on a focus. Once you consider the approaches that follow, it is important to recognize when you may need help. Some boards are able to facilitate productive discussions themselves, but others have greater success by engaging outside facilitators. Because agreement on a focus is of paramount importance, money for a consultant, if needed, is money well spent.

Board members often must do the hard work of clarifying their own values and passions before they can articulate them for the entire board. Don’t be surprised if it takes more than one meeting to arrive at consensus on a focus.

The following are some drivers for finding a common focus among decision makers.

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Let’s Talk About My Money

By Sasha Rabsey, HOW Fund

Here I am sitting at an international funders’ conference as a human rights philanthropist, listening to stories of environmental destruction, and of loss of culture, dignity, and life at the hands of corporate greed and government avarice. Let’s use the word everyone in this room uses as if they just smelled rotting garbage: capitalism.

I am a white woman of wealth and privilege due to the success of smart investment, and luck. Outside the walls of this conference, our society seems to have great veneration for wealth and material accumulation and, as much as I don’t want to, I include myself in this statement. But how does that fit with my role as a funder of social justice and human rights?

“At the very least, I believe I can be a social justice funder and human rights defender who is full of contradictions.”

I am deploying my personal wealth to support and stand in solidarity with people who face and fight oppression and inequities on a daily basis. The very same dollars that I earned in the capitalist system are being used to break that system down, one grant at a time. I see my contribution as a responsibility and not merely as a means to feel better about myself. However, here is where disdain creeps in: my giving does make me feel good and sometimes even better about myself. What does this say about me?

Coming out about this contradiction makes my heart pound with anxiety. I don’t want to be judged for the origins of my wealth; I just want to be loved for giving it away. My secret hope is that if I show my solidarity, then no one will question how I’ve come into my “dirty lucre.” “This green paper pouring out of my pockets means nothing to me… really, I swear.”

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Making the Early Grant, and Very Often the First

By John Richardson, Blackstone Ranch Institute

“When we first came to you, all we had was an idea. Blackstone’s early support for the climate/forests idea helped to precipitate a vast wave of organizational, scientific, and programmatic activity that has culminated in placing it at the top of the international agenda.”

Jan Hartke, Partnership Director of the Clinton Foundation, 2011

Blackstone Ranch Institute is a funding initiative established in 2006 that is part of the Black Family Foundation in Erie, Pennsylvania. We are known among our grantees as a nimble, flexible, eclectic, and quick-moving funder that provides money and early strategic advice without burdensome process or bureaucracy. When we started, we decided to keep a small board of directors, to disperse grants quickly to take advantage of moments for action, and not to confuse our own organizational growth with effectiveness.

We have directed our resources at inspiring new initiatives in the growing domain of environmental sustainability, from the design of new cities to the protection of biodiversity. We have been able to seed new initiatives that have grown into national and global networks, campaigns and programs that have multiple impacts at different levels, and often set a template or tone for future developments in a particular field of practice. We have developed an understanding of social profit as a way to measure the value and integrity of our impact as funders, and discovered that our niche is the early grant – very often the first grant – at the inception point or critical early growth point of a new initiative.

But behind the nimbleness, flexibility, and eclectic inclination is some early discipline. Straightforward funding criteria, clear conceptual and philosophical boundaries between what we will fund and not fund, and a rigorous devotion to our operational principles allow us to be nimble and to take early, experimental risks with things that often have more potential than proven track record at the time we offer the funding. We have discovered that we will not have the former freedoms without the latter standards.

Some of the basic lessons that we have learned, and questions that we have asked ourselves when presented with a new request, include the following:

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What’s Your “Type”? Complex New Regulations Highlight Importance of Supporting Organization Classification

With careful due diligence, private foundation funders should be able to assess whether to give the green light to a supporting organization grant, or whether additional steps are necessary.

By Nancy McGlamery, Adler & Colvin

For funders, especially private foundations, the federal tax rules governing supporting organizations can be important. Grants by private foundations to certain types of supporting organizations are subject to expenditure responsibility and may not be counted toward the private foundation’s annual 5% minimum distribution requirement.

The complexity of the rules governing supporting organizations, updated on February 19, 2016, can be daunting, and most foundations need only focus on the “type” of a potential supporting organization grantee to determine if they must modify their grantmaking process or reporting with respect to the grant, or to consider whether to make the grant at all.

Please see below for some general information about supporting organizations and the new regulations. If you find yourself with questions about a grant to a supporting organization, we encourage you to seek legal counsel.

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Impact Investing: A Foundation’s 15-Year Journey to Catalytic and Direct Investments

This post is an excerpt from the complimentary resource Essentials of Impact Investing: A Guide for Small-Staffed Foundations, created by Exponent Philanthropy and partners Mission Investors Exchange and Arabella Advisors. Want to align your investments with your mission? Download your copy >>

By Jesse Fink, The Fink Family Foundation

When my wife, Betsy, and I formed the Betsy and Jesse Fink Foundation [now The Fink Family Foundation] 15 years ago to help solve large-scale environmental problems, we were faced with a big question: how could a foundation of our size be impactful when hundreds of billions of dollars are needed to achieve our mission globally?

We started with two core principles. First, as former entrepreneurs, we wanted to be catalytic—to take risks to prove new models, so that larger funders with less risk tolerance would feel able to adopt them, too. We focused most of our funding on seeding new organizations and pilots in the Northeast, where we have strong local relationships and knowledge.

Second, we recognized that the scale of environmental problems dwarfs available philanthropic capital, so we needed to find impact leverage wherever possible. This led us to invest in scalable solutions, such as innovative business models, technology, human capital, and market-based solutions. Once we began supporting market-based solutions programmatically, we recognized that we could also push the field forward through impact investing (which we called “issue-based investing” before there was a common name for it).

We first researched and implemented a half dozen PRIs, including more traditional loans for low-risk land conservation projects, as well as higher risk loans for unsecured food hubs and food recovery projects. We also made a few small investments in third-party funds focused on clean energy. We learned from some of the failures and saw the huge potential of the successes, and decided to make mission-aligned impact investing a core of our work.

Recently, we asked our long-term trusted advisor Mark Cirilli, co-founder and managing director of the impact investing advisory firm MissionPoint Capital Partners, to help draft a comprehensive impact investment strategy and policy for our foundation. The resulting document, built in partnership with our trustees and team, codified a few core values that have driven our work:

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Proud But Not Satisfied

By Henry Berman, Exponent Philanthropy

At the time, I was part of a team that chose not to fund a reading program.

One of the biggest factors that influenced our decision not to provide funding was their choice of literature. I honestly don’t recall the exact titles, but suffice it to say the program was using works by Malcolm X and James Baldwin to engage the youth they were trying to teach. With our totally different backgrounds, we felt they should be reading Mark Twain or Louisa May Alcott.

What the hell was I thinking?

I proudly professed I wanted to help kids learn to read, yet in retrospect I can’t imagine being any more rude, patronizing, or inappropriate. What makes it worse—what has really bothered me all these years—is that I was so incredibly detached from the very people I was trying to help.

My point is this: We need a strong understanding of the people we are affecting; the situations we are trying to impact. That means actively listening to the ultimate populations we are trying to help; listening to all the perspectives that influence their world, not ours.

This story, my story, was part of my opening remarks last week to nearly 1,000 at Exponent Philanthropy’s 2016 National Conference. It wasn’t easy to share so openly among so many. But the message was too important.

As I stated later in my remarks, “We should all be proud. But we should not be satisfied.” Vast inequities persist in today’s world, and we must persevere in our belief that something better is possible. We cannot do that without acknowledging our biases, sharing our lessons, and doing the work it takes to achieve more for our communities and causes, however uncomfortable that work may be.

As the conference unfolded and its themes emerged, it became clear that we are indeed proud but not yet satisfied as a community of funders. Here is just some of what I observed. 

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Off and Running at the 2016 National Conference

Kickoff for "Coaching for Effective Philanthropy"

Yesterday’s preconference kickoff for “Coaching for Effective Philanthropy”

PhilanthroFiles is on a quick hiatus this week for the 2016 National Conference, and we look forward to bringing you a conference recap here next week.

In the meantime…

Watch your email for daily highlights from the conference. Sign up for our email newsletter >>

Join the conversation on Twitter using #ExPhil16.

Mark your calendar for these upcoming educational programs:

990-PF Tax Seminar
January 24 | Washington, DC

Master Juggler Executive Institute
6-month program launching April 5-7 in Washington, DC

Next Gen Fellows Program
6-month program launching June 12-13 in Washington, DC

October 15-17 | Denver, CO

2018 National Conference
September 28-30 | Philadelphia, PA

We’re so grateful for the nearly 950 participants joining us at the conference and our conference supporters.

Fighting Poverty With Big Data: A New Tool for Nonprofits and Their Funders

By David Jeffrey, National Commander of The Salvation Army

Poverty is one of the trickiest social issues to define, understand, and alleviate because of its complexity: it affects many aspects of life in a uniquely vicious cycle. But only when it is properly defined and understood can effective action be considered. Nonprofits need to deeply understand the issues they are working to solve; just as important, their funders need reliable tools for smart decision-making and accountability.

The Human Needs Index (HNI) is such a tool. Created by The Salvation Army in partnership with the Indiana University Lilly Family School of Philanthropy, the HNI uses a wealth of service data to provide a new, in-depth look at need in the United States.

Active in every zip code, The Salvation Army is the largest nonprofit provider of social services, meeting basic human needs across the United States. Each year, approximately 30 million people are assisted through myriad local programs in more than 7,600 facilities nationwide.

As part of our donor stewardship, we have closely tracked and measured our services from the start, producing a treasure trove of data that the HNI now leverages.

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Youth Philanthropy: Collaborative From the Start

By Nathaniel James, Exponent Philanthropy

Originally featured on GMNsight, a professional journal written for and by the members of Grants Managers Network

In philanthropy, it seems everyone is talking about collaboration. The more we aspire to work together, the more we find that effective collaborations require patience, practice, and sometimes teach hard lessons. Earlier this year, Michael Moody wrote that aspiring collaborative donors “face distinct challenges related to their own capacity and power [and] their tolerance for risk and transparency.”

So, whereas we understand the rewards of collaboration to be high, collaboration is still hard. But what if this is just a phase for philanthropy?

Panel at Youth Philanthropy Connect 2016 International Conference

This summer, I participated in the international Youth Philanthropy Connect Conference, aptly titled “Building Tomorrow, Together: The Future of Philanthropy,” and I observed an ease of relationship-building that could one day transform our field. There I saw the future of philanthropy, those in the 8- to 21-year-old set for whom collaboration is a central part of who they are and how their first experiences unfold.

Over five years, the conference has grown to 58 participating organizations and 180 participants. During the launch presentation on the new site, we learned that the global youth philanthropy field has distributed over $15 million in grants since 2001, making it a distinct new entrant into the larger nonprofit sector and one whose influence is just starting to be felt.

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