Henry Berman

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New Report Details Shifts in Foundation Operations

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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

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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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It’s Day One of the Trump Era: Let’s Defend Philanthropy

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By Henry Berman, Exponent Philanthropy

No matter whether your candidate won or lost the race for president on Tuesday, philanthropy was dealt a serious blow during the 2016 election race.

Never in our history have the roles of two candidates’ giving records and foundations been so prominently in the spotlight, as reporters uncovered allegations of possible wrongdoing at both the Trump and Clinton foundations and grappled with basic questions about just how generous—or self-interested—they were. History was made when those topics became part of the televised presidential and vice-presidential debates this fall.

To be sure, many people in philanthropy would have been overjoyed if the real issues we all grapple with were the ones getting so much visibility. Perhaps the candidates could have challenged each other over the merits of paying nonprofits to cover their overhead costs or earmarking money for specific projects. Or they could have debated the value of volunteering and other types of contributions that benefit charities versus donations of cash.

But instead, all that Americans, and indeed a worldwide audience, heard about the topic of philanthropy were charges of wrongdoing.

Continue reading in The Chronicle of Philanthropy >>

Henry BermanHenry Berman is CEO of Exponent Philanthropy. Through his experience as a foundation co-trustee, donor advised fund holder, and Exponent Philanthropy member since 2003, he brings a firsthand understanding of the needs of members to his role. Follow Henry on Twitter @Berman_Henry.

Proud But Not Satisfied

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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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The “Other” Investment Policy Statement

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By Henry Berman, Exponent Philanthropy

To create change, improve lives, or find a cure, philanthropists must approach their work as an investment and not simply as a gift. By definition, gift giving requires nothing in return. So when our sector talks about major gifts or big givers, we lose track of what effective philanthropy should be: a carefully constructed investment with a clearly articulated return.

For 13 years, I have been co-trustee of a $20 million, small-staffed foundation. I also serve as CEO of Exponent Philanthropy, America’s largest association of funders. Every day, I meet passionate philanthropists who strive to create outsized impact. Without exception, they are good stewards of their philanthropic assets and pay careful attention to best practices in managing financial portfolios.

A detailed investment policy statement (IPS) is one best practice used by foundations and other philanthropists. Using strategies such as diversified allocations, risk assessment, and asset rebalancing, the IPS is well known in the world of foundation investing as a prudent financial management instrument with many benefits: coordinated investments, a focus on specific goals, and clear communication. For example, if your mission involves being able to respond immediately to a natural disaster or emergency, you’ll want to keep a predetermined amount of cash on hand. An IPS provides this direction and increases your opportunities for success.

I contend there is another kind of IPS—relating to grant giving rather than investment strategy—that can serve as a useful guide for philanthropists.

Continue reading on the Stanford Social Innovation Review blog >>

Investing in Infrastructure

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By Henry Berman, Exponent Philanthropy

Today, along with 20 other organizations representing the breadth and depth of those who serve the nonprofit sector, Exponent Philanthropy added our name and support to the Investing in Infrastructure letter being shared with the foundation community. The letter clearly articulates the case for support, and I urge you to take the time to read it, digest it, and act.

Over a year ago I wrote in this space about the importance of funding overhead:

Call it overhead. Or administrative expenses. Look for it as a line item in a proposal or perhaps as a request for general operating expenses. That really doesn’t matter. What does matter is that funders—whether foundations, trusts, individuals, or giving circles—understand what it takes to run a nonprofit. We can buy all the books we want for a literacy program, but, if the school can’t afford to heat the building, it isn’t hard to recognize that no learning will take place during the winter.

Those of us who work in the infrastructure community are also nonprofits. But remember, being a nonprofit is a tax classification, not a way of doing business. In fact, each of us in the nonprofit sector must operate as businesses. That means we have heating and cooling bills as well as payroll tax obligations to meet. We have phone bills, office copiers, and postage costs. And of course we have salaries for the hard-working, talented, and committed people who are the engines that make any nonprofit operate successfully.

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My Observations About Good Deeds Done Well

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By Henry Berman, Exponent Philanthropy

I spent a lot of time in and out of the hospital last fall. I wasn’t the patient, although in countless hours beside my wife’s bedside, I had considerable time to think, observe, and learn. Thankfully, with much credit to her doctors and medical team, all signs are now positive.

What became evident to me early in our ordeal is the incredible parallel between philanthropy and the delivery of medical care. Doctors, nurses, and support staff of all types were regular visitors to my wife’s bedside. Some came with urgency, whereas others had the luxury of accommodating her, as when the physical therapist offered to return later upon arriving to find my wife sleeping. Each brought a desire to help her improve, just as we each in philanthropy share a desire to bring about change or sustain progress.

Whereas many aspects of our hospital stays were the same, the variations provided a window into how people deliver care under varying circumstances. Over time I watched as different nurses brought an important daily injection. Most came in with a smile and a reminder of the medical purpose. They would engage in conversation and offer a choice of arm or leg for receiving the shot. Others (only a few, thankfully) came in, barely said a word, and, in a matter-of-fact manner, administered the injection before leaving. The injection’s effect on the body was the same, yet its impact on the mind was considerably different.

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In Tribute to a Founder and Champion

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By Henry Berman, Exponent Philanthropy

We lost a piece of our organization this week. Alan Egly, an Exponent Philanthropy (then ASF) founder and former board chair, passed away Sunday evening, at home surrounded by family.

Alan approached his prognosis with humility, understanding, and humor. His plan was to make sure his children stocked the bar fully, and he considered having a party while still able to attend.

Rob DiLeonardi, another former chair and early leader, shared his memories of Alan and recollection of an early association meeting in Chicago’s frigid winter temperatures.

At some point, we took a break, and Alan and I were alone in an elevator heading down to another floor. We were both very tired, and, as the doors closed we were silent, both staring at the floor numbers as they blinked by. Then, whether from exhaustion or excitement or fear or some combination, he suddenly burst out laughing. He turned to me and said, “Are we all crazy?” I said, “Probably,” then joined him in laughing. We were crazy, but we were also right, and the proof is the fact that Exponent Philanthropy is not only still existing, but thriving.

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New Video Series and Campaign Calling for Your Philanthropy Lessons

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By Henry Berman, Exponent Philanthropy

Unlike in any other business, our fellow funders in this business of philanthropy are not our competitors. They’re our colleagues, mentors, confidantes, champions, and friends. And we need one another to maximize our collective impact.

Today, made possible by the candid sharing of some of our industry’s most inspiring funders and their sage grantee partners, we are pleased to announce a new 9-part “Philanthropy Lessons” video series produced by Exponent Philanthropy, funded by the Fund for Shared Insight, and released in partnership with The Chronicle of Philanthropy.

In each video, funders and their grantees share lessons learned throughout their careers—words of wisdom they have gained along the way. By sharing openly and honestly, they offer ways for each of us to be even more efficient and effective in creating the change we want to see in the world. Their openness also serves as a model we can follow in sharing our own lessons learned.

The corresponding campaign calls for you to share your most important philanthropy lessons. I encourage you to watch the videos and share your philanthropy lesson online or on social media using hashtag #MyPhilLesson.

Today, we release two videos in the series. Others will be released monthly through June. Please share the videos widely, then take a few minutes to share your most valuable philanthropy lesson on each video theme.

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New Report Details How Foundations Create Change

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By Henry Berman, Exponent Philanthropy

Small-staffed foundations are using a variety of strategies to make their grant dollars go further, according to Exponent Philanthropy’s 2016 Foundation Operations and Management Report, released today.

Join Exponent Philanthropy for access to this member benefit or order your copy >>

Exponent Philanthropy members are a powerful force for change, and many are achieving outsized impact, the result of strategies that allow each dollar granted to result in more than a single dollar’s worth of impact.

Among its 60-plus pages of data on grantmaking, governance, investments, and administration, the new report identifies seven strategies that lead to outsized impact among member foundations. Ranked by the percentage of members that engage in them, they include:

  1. Making general operating support grants: 80%
  2. Making multiyear grants: 68%
  3. Using information received from grantees to inform grantmaking: 64%
  4. Collaborating with other funders to increase impact: 61%
  5. Making capacity-building grants: 58%
  6. Convening grantees or organizations: 37%
  7. Making grants for advocacy work: 28%

Some 85% of Exponent Philanthropy member foundations engage in two or more of these strategies to help them achieve outsized impact.

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