Deep Listening Starts Here

By Henry Berman, Exponent Philanthropy, and Jen Lachman, Lachman Consulting

Listening. It’s a skill we’ve been talking about a lot here at Exponent Philanthropy.


First, because we believe that listening is an essential skill for effective philanthropy. When—and only when—we listen deeply and humbly to those we serve, can we learn about their true needs and how we can partner most effectively to create meaningful change.

And second, because most people (grantmakers not excluded) are not as good at listening as we’d like to think. Listening deeply to another person takes real focus and attention, and our multitasking brains and fast-paced environments present endless distractions that make it hard for us to really tune in to what someone is saying.

At Exponent Philanthropy, we’re committed to closing this skill gap and helping our members become better listeners. At our CONNECT conference in October, we’re offering a Listening Workshop that will help attendees learn, practice, and apply deep listening skills.

Jen Lachman, co-facilitator of the CONNECT Listening Workshop, offers some suggestions for how you can deepen your listening.

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Community Foundations: Balancing Community Needs and the New Donor Mindset

By Laura McKnight, Embolden

Your community foundation is working hard to get your donors involved and help them understand the importance of supporting not only their own favorite causes, but also the most pressing community needs identified by your team and board of directors.

You are also closely watching key trends in philanthropy:

  • Families want to be involved in philanthropy and philanthropic legacies are community treasures to be passed down through the generations.
  • Nonprofits in your community expect to see a benefit from the rising philanthropic investments in our society.
  • Donors want to be associated with philanthropic institutions that are committed to transparency, results, and data-driven strategies.

You want to maximize these trends to grow your mission. If you are like many community foundations, though, you are facing a challenge as you balance two seemingly competing factors:

  • Community needs. The needs in your community keep growing. Nonprofits’ requests are growing. This makes it even more important for you to grow your unrestricted funds and your own operating endowment.
  • New donor mindset. You are watching social impact grow as a priority in today’s culture, and you know philanthropy is an important part of your donors’ lives. Donors enjoy a wide range of social impact activities, including giving money to nonprofits, volunteering, serving on boards, purchasing products that support a cause, recycling and respecting a sustainable environment, celebrating at community events, and marketing favorite charities.

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Thoughtful, Informed Philanthropy in the Wake of Disaster

By Henry Berman, Exponent Philanthropy

Nature is at once powerfully beautiful and destructive.

August’s awe-inspiring solar eclipse brought us together regardless of our stations in life. However different in heritage, race, politics, wealth, interests, or beliefs, we all share our planet.

In contrast to our awe at the solar eclipse, those outside Harvey’s and Irma’s cones of destruction have, from the comfort of our homes, borne witness to unbearable conditions ranging from loss of property to loss of life. As these storms deliver unimaginable destruction with wind and water, many westerners are facing forest fires that likewise consume all in their paths.

Our thoughts and prayers go out to all those affected by disasters, and we send our admiration to first responders, women and men of the National Guard, and others risking their own safety to help.

As philanthropists, many of us are in a position to offer assistance, and we should. From prior disasters like these, we know disaster recovery is not a short-term endeavor. Many will face a long road ahead.

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Succession Planning: Becoming New After 40 Years

By Mally Cox-Chapman, Benefactory Philanthropic Advisors LLC

Most conversations on succession planning turn to how to bring on the next generation or whether to sunset the foundation. Eldon and Betts Mayer thought differently. They wondered if their community on an island in Maine would be willing to take on their family foundation. Three years later, the fund has an engaged board of directors and over 450 donors.

Here’s how they did it.

Maine’s Chebeague Island has 350 year-round islanders and over 2000 summer residents. Three miles by five miles, the island has no bridge to the mainland. It does have a general store, a lovely hotel, and a thriving boatyard, where both lobstermen and recreational boaters coincide. Chebeague also has ten nonprofits that perform many functions that government usually does.

Over the past 40 years, Eldon Mayer has been a moving force for most of the island’s nonprofits, including a superb library, a recreational center that has both a basketball court and a pool, and a high-quality day care and early childhood learning center, open year-round.

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Why We’re Sending 12 Members of Our Family Foundation to a Single Conference

By Erin Bird, Tracy Family Foundation

Diana Bittner was excited. She was inspired. She was ready to learn. As a trustee of the Tracy Family Foundation (TFF), Bittner was one of seven TFF members from across the United States who converged in Phoenix, Arizona, to attend the Exponent Philanthropy’s 2015 CONNECT Conference.

Bittner and her fellow TFF trustees spent three days discovering innovative new ideas, networking with other foundations and their attendees, and building a more close-knit group within the foundation.

“It was very inspiring to meet so many individuals from different types of foundations who were all so passionate about what they do,” said Bittner, a third-generation (3G) Tracy family member. “But at the end of the day, it was a true bonding experience for all of us in TFF. We were all invested in being there and excited to share our experiences from the day with the others from our group.”

Four generations of Tracy Family Foundation

4 Generations, 100 Members Strong

TFF was founded in 1997 by the second generation Tracy family members (2Gs) to honor their philanthropic parents and give back to the community in which they grew up.

The organization’s mission is to “provide resources to organizations that foster the values of Robert and Dorothy Tracy—a Catholic/Christian belief, honesty, integrity, fairness, and a strong work ethic. The Foundation seeks to proactively strengthen Brown County in Illinois and the surrounding Region by investing in the education, youth, families, and the capacity of these communities. The Foundation is also the vehicle for developing a philanthropic spirit among Tracy family members.”

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Considerations for Hiring an OCIO—Take the “T” Test

By Erika McDaniel, Glenmede, an Exponent Philanthropy Platinum Sustaining Partner

The term Outsourced Chief Investment Officer (OCIO) has gained popularity in the investment industry as investment consultants, banks, and small wealth management firms are now offering OCIO services to foundations, endowments, and nonprofits.

You may be considering this model instead of the self-managed or consultant model used in the past.

Below we include the “T” test to help your organization evaluate potential OCIO providers.


Does the OCIO have an investment philosophy and process that is time-tested, disciplined, and proven?

Your OCIO should have an investment philosophy that is well-articulated, research-driven, and time-tested as well as an investment process that is explainable, repeatable, and disciplined. The strongest OCIO firms can clearly explain where ideas are generated, who evaluates ideas, and how portfolios are constructed. Their philosophy and process should prove consistent over the long term, not wavering or chasing the latest fad.


Does the OCIO have a team of experts solely dedicated to serving organizations that are similar to yours—in size, scope, mission, goals, objectives, and time horizon?

OCIOs that lack depth of team, show high levels of instability and turnover, or have a retail focus should raise flags during your evaluation. It is important to find a partner who has deep understanding of the unique challenges faced by charitable organizations and is able to leverage a multitude of resources to help you meet those challenges.


Is the OCIO transparent about the services offered to your organization and the fees associated with those services?

During your evaluation the OCIO should be clear and transparent about fees; it should be easy to understand account-level fees, underlying manager fees, and any additional fees that may be assessed based on the services provided.

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New to Grantmaking? I Was Too

By Amy Liebman Rapp, Alex Cares for Grieving Youth

Within hours of the September 11 World Trade Center terrorist attack, my voicemail and email were overloaded with requests for services from corporations, mental health agencies, and schools. All were looking for assistance in how to help adult survivors cope with the sudden traumatic death of their loved ones and support the grieving children and teens whose parents had died in the towers.

I accepted several challenging opportunities that included working with the American Red Cross and the Aon Corporation, but the most intriguing call came in early 2002 from a board member of a recently formed charitable foundation called A Little Hope.

The founder, Cantor Fitzgerald bond trader Whitney Siderman Michaels, was on her honeymoon in Hawaii with her husband Evan, while Cantor Fitzgerald’s corporate headquarters, located on floors 101 to 105 of the North Tower, were destroyed. A staggering 658 employees died. As Whitney and Evan attended numerous memorial services, they witnessed many bereaved children now having to face life without their mother or father and wanted to find a way to offer them hope for the future.

The board of directors were seeking a mental health professional with expertise in childhood bereavement to join the board and wanted to meet with me. In addition to my clinical thanatology (death, dying, and bereavement) practice, I had been president of the board of a nonprofit children’s after school organization and had an extensive business background. After meeting the founders, I agreed to become the foundation’s clinical advisor and a (volunteer) founding board member. The first fundraising gala in lower Manhattan took place just three months later in June 2002, and more than $200,000 was raised.

The strategic plan was to establish a granting organization that would provide emotional support for the surviving children of September 11 who experienced the death of a parent. Many of the board members were highly skilled individuals working in the corporate sector (hedge funds, banking, accounting, law, and insurance), but no one had any previous board experience. I realized that with prior board experience and a current network of colleagues in the bereavement field, the executive committee of A Little Hope was looking to me to spearhead the granting initiative.

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10 Foundation Activities That Call For Additional Care

Private foundation trustees and staff oversee countless activities, from setting direction and selecting grantees to reviewing policies and investing assets. Several foundation tasks—some mandatory, some voluntary—call for additional care.

All are worth your careful consideration to help you be financially savvy and legally compliant, and to help you take full advantage of your foundation’s flexibility.

Reducing your excise tax

Foundations must pay a small excise tax on net investment income each year. The tax is currently 2% of net investment income minus certain expenses, although it is possible to qualify for a 1% rate if, generally speaking, your current year’s expenditures exceed by 1% of net investment income your average expenditures over the past 5 years.

It is difficult for private foundations to qualify for the reduced rate every year without forever increasing their payout rates and depleting their assets, but many foundations miss the opportunity every few years. To see if a small increase in distributions would qualify you for the 1% rate, be sure to calculate your qualifying distributions a month or two before the year’s end. Some foundations accelerate their distributions to qualify.

Engaging in transactions with foundation insiders

Self-dealing rules prevent private foundations from entering into a broad range of transactions with foundation insiders, known as disqualified persons, unless specific exceptions apply. No topic within the private foundation rules raises as many questions and concerns as self-dealing, because the rules can be counterintuitive and the penalties steep.

To avoid self-dealing in all cases, be sure to understand the rules and take care when hiring or leasing space from foundation insiders, inviting guests to galas or fundraisers, paying personal pledges, compensating trustees and staff, and paying for family travel with foundation funds—activities that lend themselves easily to self-dealing. Consult knowledgeable legal counsel before engaging in any transactions with insiders.

See Exponent Philanthropy’s publication How to Avoid Self-Dealing >>

Choosing alternative investments

A relatively new class of investments, known as alternative assets or alternatives, has become an increasingly popular way to address limitations in traditional equities and fixed income securities.

Alternatives offer a range of risk, return, and diversity and encompass a wide array of products, including hedge, private equity, real estate, venture capital, and commodity funds, and funds of funds. They may be limited partnerships, limited liability corporations, regular corporations, or trusts.

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Charlottesville Lessons: Listen to Those We Serve and Learn From Our Blind Spots

By Henry Berman, Exponent Philanthropy

When events as horrific as what happened in Charlottesville erupt, many of us in philanthropy are struck with sadness, outrage, disgust, depression, shock, and terror.

While we take in all the information we can—especially the insights of trustworthy analysts and commentators—we ourselves start doing the usual punditry. We issue calls for action. We offer to provide more money and new programs to educate Americans and ourselves about hate groups, racism, and diversity. We make pledges to operate in new ways.

But let’s face it: If we really expect to make a difference, each of us needs to change how we act, and to better understand how our own biases too often get in the way of nonprofit and philanthropic leadership.

Continue reading in The Chronicle of Philanthropy (subscription required) >>

Henry Berman

Henry Berman became Exponent Philanthropy’s CEO in 2011, previously serving as acting CEO, board member, and committee member. Through his experience as a foundation co-trustee and Exponent Philanthropy member since 2003, he brings a firsthand understanding of the needs of members to his role.

A Compass Only Works When You Trust It

By Henry Berman, Exponent Philanthropy

In philanthropy, like in life, we have relatively little ability to control disruptions, internal or external, and the big changes they often portend.

Although we may anticipate an influx of assets upon the sale of a business, or predict the arrival of the next generation, most of us can’t really manage the exact timing and collateral effects of these events.

This begs the question, What defines how each of us reacts to disruption?

In a word: values. As we think about, worry about, and react to disruptions, we do so through the lens of our own values.

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