WATCHING: Tax Reform Provisions With Implications for Philanthropy and Charity

U.S. CapitolBy Sue Santa, policy and legal consultant

For several years, we’ve been hearing promises of comprehensive tax reform. Both Congressional leaders and the Trump administration voice their commitment, and we’re told the President will release a plan soon. The President is slated to address Congress on February 28, so we may get signals then of what he has in mind. Congress too is fine-tuning its plan.

Congressional leaders aim for comprehensive tax reform to achieve several broad goals:

  • Simplify an overly burdensome and confusing tax code;
  • Lower rates and broaden the base (i.e., remove many deductions, loopholes);
  • Spur economic growth;
  • Level the playing field for U.S. corporations; and
  • Reinstate “fairness.”

Exactly how this will be achieved, at what cost, and whether those costs will need to be offset with tax revenues are issues that remain to be resolved. We also don’t know if a truly comprehensive overhaul—addressing both individual and corporate taxes—is achievable. It’s a monumental aspiration at a time when there’s very little agreement in Washington—in Congress, with the Administration, and within the political parties—beyond broad concepts. In the end, we might see slimmed back efforts.

With all this uncertainty, why should we be vigilant now? Don’t we have time? No, we don’t.

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Are You Funding What Works?

Exponent Philanthropy thanks the Annie E. Casey Foundation for partnering to deliver a 3-part “Improving Outcomes for Children & Families” webinar series. This post is based on one part of the series: Evidence Based-Approaches to Grantmaking. View the 90-minute webinar on evidence-based approaches to grantmaking >>

In today’s age of data, measurement, metrics, and evaluation, are you surprised to learn that public systems serving children and families (e.g., health, education, child welfare) have been slow to adopt tested, effective programs on the community and state level?

“Unfortunately, when it comes to improving outcomes for vulnerable children and families, the science of evaluating programs has moved much, much faster than the science of implementing them,” said Suzanne Barnard, director of Annie E. Casey Foundation (AECF)’s Evidence-Based Practice Group. “There is a big gap between knowing what works and using what works in practice.”

For example, we know that prevention is key to improving outcomes for children. Tested, effective programs that minimize risk factors (e.g., family conflict, academic failure) and maximize protective factors (e.g., social skills, positive relationships with adults) have been proven to positively affect outcomes over time, and can be embedded into community, school, or family life.

So why does uptake remain low? AECF posed this question to public sector leaders, revealing three barriers to uptake:

  • Not knowing which programs are best for the children being served
  • Needing guidance on implementation
  • Not knowing how to pay for the programs

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Foundation Catalyzes Change in Support for First-Gen College Students

Exponent Philanthropy recently released its annual Outsized Impact report, an e-publication filled with funder stories and stats to illustrate the power of those who give with few or no staff, including the story below. Read the full report >>

By Elaine Gast Fawcett on behalf of Exponent Philanthropy

At seven years old, Treven Treece of Morristown, Tennessee, decided he wanted to go to college. He would be the first in his family to do it. With no one to guide him, Treven had no idea how college worked. He applied to the University of Memphis and, as a first-generation college student, won a First Scholars® award that he says changed his life.

The Suder Foundation in Plano, Texas, created the First Scholars program in 2009 with a goal to dramatically increase the graduation rates of first-generation students like Treven—those who were the first in their family to go on to higher education. Entrepreneurs Deborah and Eric Suder had endowed scholarships prior to help mid-range academic, needs-based students get to school. “We naïvely thought that financial aid would assure their success. This was not the case,” says Eric. They learned that only 36% of first-generation students nationally were graduating. First-gen students face distinct challenges that many legacy students do not: They are less academically prepared, often more financially strained, and have a harder time transitioning into college.

First Scholars“When we started First Scholars, there were limited programs geared solely toward first-gen students, and those in existence focused on the freshman year only,” says Eric. “We reasoned that if we could address and mitigate, or even eliminate, the challenges common to many first-gen students, then we could bridge the gaps to help them stay in school and graduate.”

First Scholars awards incoming cohorts of 20 first-gen students $20,000 over four years at its six active university partners. Students engage in holistic programming that tends to their academic and financial needs as well as personal, professional, and social needs.
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Getting Out Into the Community: Identifying Gaps and Leverage Points for Change

By Carol Gallo, The Y.C. Ho/Helen & Michael Change Foundation, and Jenna Wachtmann, Ball Brothers Foundation 

Originally posted to GrantCraft’s blog

scanning-fb-li“It must be so fun to give money away!” It’s a reaction we’ve all heard when we tell people we are staff members or board members of a grantmaking organization. And yes, it is fun…but it’s also hard work. Good grantmaking – as we know – is about far more than reading piles of proposals or signing big checks; it’s about identifying needs, evaluating potential solutions, and thoughtfully employing dollars to make an impact.

At last year’s Exponent Philanthropy National Conference in Chicago, we presented a session with GrantCraft’s Jen Bokoff about doing just this—identifying priority needs and leveraging points for change, whether in a specific geographic region or around a particular issue area. The room was packed with foundation staff and board members interested in practical tips and tricks for “scanning” the landscape in order to inform good grantmaking.

Missed the session? Here are the top ten ideas we presented to fit a variety of timeframes, budgets, and operating styles.

1) Get your boots muddy

As grantmakers, often our best and greatest insights come when we get away from the comfort of our offices. We need to take time to really listen to and experience first-hand the work of those we fund. This is Jenna’s “muddy boots” theory. As a program officer, she keeps a pair of boots on hand that she wears to site visits to nature preserves, construction sites, etc. And they are very muddy! The insights that come from being on-the-ground (literally!) are critical for good grantmaking.

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Thinking Big & Bold: How the Kendall Foundation Is Transforming New England’s Food System

By Mary Anthony, 1772 Foundation

In late summer of last year, Andy Kendall put foot to pedal on a Trek bicycle in Portland, Oregon. Forty days and 4,000 miles later, he rolled into Portland, Maine. At the 1772 Foundation, we were not surprised to learn of his feat: a two-wheeled version of the significant accomplishments he has made at the Boston-based Henry P. Kendall Foundation. Though established in 1957, this foundation crackles with the energy and entrepreneurial spirit of a start-up company.

Five years before the cross-country trek, Andy and his staff began to put pedal to the metal to meet monumental challenges in the New England regional food system. We have been following Kendall’s success with great interest as he exemplifies what we believe are the best qualities of effective, dynamic philanthropy.

UMass dining hallOne of the best examples of Kendall’s impact is at UMass Amherst where the foundation is behind a bold transition, made possible by one of the many strategic food system grants they have made throughout New England. This campus has a total food budget of more than $21 million. With help from the Kendall Foundation, they have made a firm commitment to sourcing food thoughtfully, using local whenever possible, with back-up defaults to regional sources and those using “sustainable, humane and organic sources.” This effort resulted in a 38% increase in local sustainable food purchases by the largest university in Massachusetts.

This project and others funded by Kendall exemplify the aspects of dynamic philanthropy that we try to emulate:

Food VisionVision with a strong footing. Recognizing the merits of, and providing support for, a report entitled A New England Food Vision, Kendall Foundation embraced the vision of “50 by 60” (from Food Solutions New England). That is, by 2060, 50% of New England food will come from New England. This document is a thorough, pragmatic look at what it will take to reach that goal in terms of acres of farmland, types of food, dietary requirements, etc.

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Philanthropists Must Reset Government Leaders’ Expectations

By Sue Santa, legal consultant

Two weeks into the new administration finds both major political parties, as well as many of Washington’s systems, on uncertain footing.

Republican control of the executive and legislative branches has not automatically ensured a unified agenda; the President is not a typical Republican, and the House and Senate are not fully aligned on priorities. The slim Republican majority in the Senate means that a few votes cast outside of party lines can disrupt expected legislative wins. Adding to the uncertainty, many of the 600-plus federal appointments that come with a normal transition of administrations remain unfilled, putting government agency work plans on pause.

Despite the political tumult, the current administration already has provided considerable clues to its general direction (and even early action) to those of us who focus on the nonprofit sector: decreased federal expenditures on social programs. Recent actions toward repeal of the Affordable Care Act, the predilections of many secretary nominees, and the hiring freeze all point toward shifting priorities and shrinking federal budgets.

Government leaders, unfortunately, may be presuming that the nonprofit sector—and philanthropy generally—will step in to fill any vacuums in service or funding created from federal pull-backs. But these expectations do not align with the math. As David Callahan, writing in Inside Philanthropy, notes in his recent article, the nonprofit sector accounts for just 5 percent of GDP, and Americans’ annual donations to charity would fuel the federal government for only about 34 days. Nonprofit organizations, some of which rely heavily on government funds, would tell you that resources are already insufficient.

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New Report Details Shifts in Foundation Operations

By Henry Berman, Exponent Philanthropy

2017-fomr-cover_page_01More small-staffed foundations are engaging in activities beyond traditional grantmaking, according to Exponent Philanthropy’s 2017 Foundation Operations and Management Report released yesterday.

The only study that captures benchmarks for foundations that operate with few or no staff, which comprise the vast majority of the philanthropy sector, the report details trends in foundation grantmaking, operations, investments, and governance, based on responses from 495 association members.

Join Exponent Philanthropy for access or order your copy >>

The report highlights upward trends in strategies for increasing impact, including:

  • Reviewing grantmaking strategies regularly
  • Sending board members to conferences or education
  • Bringing in speakers or resources from the field
  • Gathering feedback from grantees about the foundation

strategiesforimpact

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Right-Sizing a New Risk Toolkit for Your Needs

By Maya Winkelstein, Open Road Alliance, and Henry Berman, Exponent Philanthropy

risk-toolkit-title-page-2The world of funders and philanthropists is quite diverse. Yet regardless of our size, focus, or decision-making process, we all have two things in common: First, we all want our dollars to result in real impact and change. Second, no matter how we deploy those dollars, the impact we seek is not a sure thing. In other words, every grant and investment we make carries risk.

As described in an earlier blog post, The Missing Piece of Modern Philanthropy, few funders think about, discuss, or plan for the unexpected in their work. As a 2015 survey shows, 76% of funders don’t even ask their grant applicants ‘what could go wrong,’ and when funders don’t ask, grantees don’t tell. This missed communication matters deeply, because when funders and grantees ignore risk, we jeopardize the impact we seek to achieve.

Now there is a tool to help.

In 2016, a 25-member group, called The Commons, spent six months working to create a baseline Risk Management Toolkit including how-to guides, templates, and sample protocols that any funder can adapt or adopt for its own uses.

To help small-staffed foundations, families, and individual donors more easily navigate the toolkit, we offer the following key takeaways and three “top tools” to consider to bring a greater risk awareness and practice to your work.

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What Funders Say About Their Philanthropy, Then and Now

By Cynthia Schaal, Exponent Philanthropy

Philanthropy follows its own journey of learning and discovery for every donor, board member, and professional who gives. For our association members, who give as individuals or as part of small-staffed foundations, that journey can feel lonely and isolating at times.

Yet what we have come to know in our decades of working with foundations, families, and individual donors is this: The philanthropic journey has more shared experiences and ambitions than any individual may realize along their own path.

Case in point: a session at last fall’s National Conference welcoming 100+ conference newcomers.

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Why Our Community Foundation Partners With State Legislators to Improve Policies and Address Needs

By Rose Bradshaw, North Texas Community Foundation

Texas State CapitolThe Texas Capitol is big. The tip of its dome is almost fifteen feet taller than its counterpart in Washington, DC. Decisions made there impact almost thirty million people. When you enter the building, you can feel the seriousness, history, and purpose. For anyone who believes in democracy and representative government, it is downright awe-inspiring.

Recently, I found myself again walking its corridors, but this time was different. Our foundation was leading a policy briefing on foster care for legislative staffers from across Texas. More than 75 staffers from some of the most influential senators and representatives had gathered to learn what they could do to improve policies impacting the most vulnerable children in Texas. Our legislative sponsors were key committee chairs from both the Senate and the House of Representatives.

We were not lobbying. We were educating our state legislators about the real conditions in their districts and about solutions that have been tested with our private dollars.

The federal courts have ordered Texas to fundamentally reform its foster care system. For the past three years foundations and donors in our community have committed resources to enable ACH, a leading child welfare organization, to develop an effective, community-based approach to foster care. Now the Texas legislature is interested in implementing this community-centered approach statewide, a strategy that philanthropy has proven to work.

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