Several years ago, The Chronicle on Philanthropy published an op-ed that was, shall we say, a bit inappropriate. In it, the author made all sorts of claims about his philanthropy advisory services – that he was the “first” and “only” one doing what he was going to do. It incurred a lot of anger from many in the field – correctly rebutting the author’s claim of originality or uniqueness. [In fairness to the Chronicle, there was an acknowledgment that this one slipped through the cracks.]
\nAt the time, my first reaction was exactly that as well. But after I thought about it, I remembered something from very early in my own career that has served me well over the years. I began my career in the academic world. Each year a new group of students would arrive filled with ideas about how the world should work, and therefore how their university world should work. Some of the ideas were creative and innovative; some were tried and true; most were not likely to be successful.
\nAfter a couple of years, I would hear the same ideas presented each year. My first reaction was to think “we tried that” or “we already did that”. And then I caught myself. After all, these students didn’t try that or do that. If they didn’t see it, it didn’t happen - yet. The more I thought about it, I realized that is quite consistent with what university education is all about. Would we say that no one should have the same interpretation of Plato that last year’s students had? Of course not. So why should we begrudge or stifle students who wanted to do programming or activities that had been tried before even if unsuccessfully.
\nMore to the point, maybe the idea was always great, but the timing wasn’t. Or there wasn’t the right “champion”. Or there was something sufficiently different this time that it was worth another try. Inventing the wheel is going to be an “aha” moment no matter how often it is reinvented. Hopefully, it won’t take too long to subsequently appreciate that someone had already figured that out a minute or two ago.
\nThe recollection of those early academic years has served me well, especially in my work in philanthropy. There are lots of folks who publish insightful articles not knowing that lots of us said or wrote similar things a decade or two or more ago. Or articulate “new” approaches to grantmaking or equity or grantee relations or decision making that will or should change our field, not being aware that these very ideas have been used or taught for a long time.
\nHey, that is how it should be. And after all, even if we said, did, or taught all these things, they wouldn’t have to be rediscovered if WE had been so effective in changing the way our field works. Part of learning is to discover something anew. If you hadn’t seen it, read it, heard about it, it is as if it hadn’t happened. And as I have learned, there is a great deal that I take for granted about how to do philanthropy wisely, ethically, thoughtfully, impactfully that is new to lots of other funders.
\nSo, why this mea culpa? I recently learned of a new initiative about an aspect of our field that has been near and dear to my heart for over two decades. Whatever the intent, the public articulation of this initiative came across as if it was something brand new. [you will notice that I am purposely being vague; I don’t want to litigate the content or impugn the people involved, only my own reaction to it.]
\nI confess that I didn’t respond to learning of this in the way my earlier advice would have mandated, or in a way that endeared me to those involved. After all, as I said, the subject is very important to me, particularly as I am in the Autumn of my career. I lost sight of what really does matter to me – the widespread acceptance of this not so new idea. I suspect a more considered collaborative and supportive response would have been more salutary and would likely have advanced more effectively what I really care about. And perhaps this IS the right time, and these ARE the right champions to get there.
……..
Now, by this point you may be asking why I have published a personal mea culpa that really only applies to a couple of colleagues. The reason is that there are many others in our field who fall into a similar trap all the time. To illustrate I will give only one example – that of the wide range of responses to the “Trust Based Philanthropy Project.”
When that working group first went public, lots of folks celebrated that it was the right message at the right time, redressing a flaw in longstanding funder behavior and grantmaking practice. This group of respondents hadn’t known of the approach – it was new for them. Another group privately and publicly asked what was new about this: it was a method they used and had been advocated by many for a long time. And some quicky looked to find the weaknesses in it or questioned whether it was a valid long term and widely appliable strategy given their long-time experience. To the credit of the project leaders, their literature added an acknowledgement that what they were advocating was not brand new, but they wanted to put some principles and guidelines on the table especially since these principles were still far from normative or normal practice. And to be sure, not every approach to funding applies in every situation. [viz. a recent article on endowments: #476 https://wpi.one/yAbDe ]
\nBut that was insufficient for some of the long-term users who felt they needed to go public to show what they themselves have learned over the years – long before this initiative was around. Some of those criticisms were trivial or took the principes ad absurdum as a way to discredit them. By doing so, they made the error I made. Instead of celebrating a welcome corrective to widespread philanthropy practice even if others had previously learned something along the way, they put themselves in positions as antagonist rather than collaborator.
\nThe philanthropy world is, thankfully, getting larger, more diverse, and therefore more complex. The last thing we need is to continue our unfortunate tradition of silo-ization and implicit competition. If there is a message both from my experience and from the single example I presented, it is incumbent on those of us with long time experience and knowledge to welcome, celebrate, and collaborate with those who may not know of what we did, said, wrote, or know. For them, like it or not, if they didn’t see it, it didn’t happen.
\nYes, I have had to relearn my own lesson and, as the title of this essay implies, hope that I have healed myself sufficiently to advance the common good. It is a lesson for our entire field.
\n", "url": "https://wisephilanthropy.institute/insights/478-physician-heal-thyself-a-mea-culpa-but-not-only-mea", "title": "#478 Physician Heal Thyself - A Mea Culpa, but not only Mea", "date_modified": "2024-04-15T14:00:00.000Z", "author": { "name": "Richard Marker", "url": "https://wisephilanthropy.institute" } }, { "id": "https://wisephilanthropy.institute/insights/477-culture-the-secret-sauce-to-effective-philanthropy-strategy", "content_html": "By now, most of you have heard the caveat “culture eats strategy for lunch” [attributed to many]. As one who has made “culture” the centerpiece of strategy thinking and planning for many years, I have come to believe that the statement is wrong: without culture, there is no strategy.
\nMany of you, I know, have seen my webinars or participated in seminars or courses where I have played this concept out in depth. [For those who haven’t and would be interested, I’d be happy to offer it again.] In this brief overview, I will lay out a big picture outline of how this works. My focus, of course, is how this works in philanthropy, but I have been assured that the structure is easily transferrable to other sectors as well.
\nThere are three types of “culture” that inform all strategy. They are there even if the strategists or organizational participants are unaware of them. The most effective strategic thinking is built on an awareness of all three. However, as I will reiterate below, the goal is not to create a Venn Diagram of the 3 but to understand how each informs our thinking about our philanthropic decision making.
\nThe first is “external culture.” Every individual, business, and organization is impacted by the laws, the behaviors, the history, the ethos, and even the aesthetics of where we/they reside. External culture defines and clarifies the context in which we do what we do. True, in a global and ever more transient world this is often not as simple or straightforward as it was when most of us functioned in local communities or had place-based commitments and experiences. But all one needs to do is read travel guides to learn that external culture is the grounding of all social interactions – and they can differ widely.
\nThe second is “organization culture”. There is no shortage of material on this but that doesn’t mean it is universally applied or understood. I went into more depth on this in a recent piece [#473 - https://WPI.ONE/KDUvD], but suffice it to say that misalignment of organizational culture is a sure predictor of staff turnover and convoluted and dysfunctional decision making, Indeed the only way any meaningful strategy can be effectively implemented is if there is both an understanding of the existing organizational culture, and prescriptions about what adaptations for alignment would be necessary.
\nThe third, and least utilized or understood is the “cultural assumptions of those in the decision-making room.” As many of you know, I suspect, the traditional strategy approach is to begin with “mission/vision” and go from there. In essence, that process attempts to articulate a consensus on underlying values and purpose as the driver for strategic decision making. All well and good – in theory. In practice, though, developing that consensus often looks for facile commonalities that mask underlying disagreements or at least differing instincts. These different instincts in the philanthropy world often surface at the decision-making table. Even when there may be agreement about priorities, there are often disagreements of style and affect. Moreover, too often those at the table view these differing cultural instincts as character flaws and not simply generically valid alternative approaches.
\nTherefore, I argue that the starting point for any strategy process begins with understanding the assumptions of others in the room. Yes, some of this has to do with values – the most frequent way this issue is addressed. However, that is an insufficient metric. Often people can share the same values and even priorities but how those values are expressed can diverge. And how they inform funding decisions can belie those shared priorities. So this process looks to uncover the unarticulated cultural starting points.
\nThis brief piece does not attempt to walk you through the process I have used and taught for a long time. [For those interested in learning more, in addition to webinars and workshops, there is an entire section in “Saying ‘Yes’ Wisely: Insights for the Thoughtful Philanthropist”, However, that book was last published in 2011. Moreover, it was written for a pre-publication 2009 edition. The conceptual framing is still useful but is not as I might write it today, a full 15+ years later.]
\n…..
\nA few concluding comments:
\na.\tThis is NOT a Venn Diagram process. Each of the three indispensable components of the culture-strategy process stands on its own. Each informs the other but there is not a magical overlap that represents the ideal. This is especially so since #3 does not require consensus, only understanding. A well-functioning family foundation can have very disparate cultural assumptions of those who make the decisions. What matters is that the others understand and respect them even if they don’t agree.
\nb.\tWhat about the classical “mission/vision” thing? Yes, it still matters but I recommend doing that at the end of the process, not the beginning. Doing so at that time is likely to yield a more nuanced and useful result. Moreover, the audience and purpose for the “mission/vision” is likely to have emerged with more distinct clarity as the process has unfolded.
\nc.\tStrategy thinking vs strategic plans. You will notice that I studiously avoid talking about strategic plans. Too many of such documents sit on shelves, are outdated the day they are endorsed, cannot ever anticipate every transformative world event, and too often don’t build in the necessary agility to really guide a living breathing evolving organization. Even scenario planning the currently popular alternative model, only goes so far. What does matter is for decision makers to embrace a strategy-thinking mentality – knowing how to weigh competing claims for resources, knowing when to move beyond programmatic stasis, knowing how to apply their competencies to unanticipated changes. While they don’t tell the whole story, without engaging the three types of culture, none of that is likely to happen.
\n", "url": "https://wisephilanthropy.institute/insights/477-culture-the-secret-sauce-to-effective-philanthropy-strategy", "title": "#477 Culture: The Secret Sauce to Effective Philanthropy Strategy", "date_modified": "2024-04-11T12:00:00.000Z", "author": { "name": "Richard Marker", "url": "https://wisephilanthropy.institute" } }, { "id": "https://wisephilanthropy.institute/insights/476-the-endowment-question-is-it-always-good-philanthropy", "content_html": "*Please note: a draft version of this was mistakenly published previously. This is a corrected version. Apologies. *
\nThanks to our colleagues at CEP, the question of endowments is now in the public philanthropy space. Since the question is on the table, it seems a good time to share some thoughts on what ends up being a not so simple question. [The CEP study focused only on Private Foundation giving for endowments. These thought are not restricted to that.]
\nIt is far from a new question. If one looks at the way in which Andrew Carnegie and Julius Rosenwald did their philanthropy, one sees a very different approach to the question. Both great philanthropists with lasting impact, one endowed many projects, including a foundation that bears his name; the other chose a different approach.
\nThe classic dichotomy is the impact of one’s money. In addition to mandating that his foundation close within a certain number of years after his death, Rosenwald believed strongly that money should be spent now, when it can accomplish the greatest good. One might be able to change the present; the future is by definition uncertain. The incredible Rosenwald schools were, from the beginning, mandated to match his funds. Carnegie, on the other hand, built 2500 libraries around the country and gave most if not all of them an endowment. So his funding approach matched his commitment to endowing foundations that bear his name.
\nThese two basic approaches pretty much captured the long-term prevailing arguments for or against endowments and perpetuity: money spent now is more efficient and more likely to make a difference; money preserved for the future guarantees support for an organization or project regardless of its popularity or other exigencies. For the most part, the issues of endowment and perpetuity have been extensions of these two approaches.
\nThe plot thickens.
\nOver the last cou0ple of decades, though, the arguments have become far more judgmental and even ideological on both sides. To wit:
\nThere are those who argue that the very concept of an endowment for an organization is counterproductive. To put the argument in its simplest terms: if a for-profit company cannot sell its services or products, it closes or merges. Once its cash reserves or credit line have been exhausted, that is the end. It means that others are more attuned to the market or may have better products. Why, the argument goes, should a non-profit be protected from the changing demands in its field of service? If no one wants to support it any longer, it really has no claim for continuity, to say nothing of perpetuity. In other words, if a non-profit is neither adaptive nor responsive, it should get out of the way and let others serve their population. So the argument goes.
\nAt the same time, there are those who argue the opposite. Equity and fairness make endowments an invaluable tool to avoid fads in philanthropy and to guarantee that the most at-risk, vulnerable, or historically overlooked populations have guaranteed support. They rebut the prior argument this way: If a fashion trend causes a boutique to close, it may be sad and disappointing, but it isn’t unfair. But if the latest philanthropy fashion is to support a specific subset of the wide range of societal needs, endowments serve as a buffer against those fads. And especially since the historically underserved get a small percentage of grant money, any sensitivity to equity would mandate that an endowment request should be considered a high priority. Indeed, this argument goes further, that it is paternalistic to assume that a funder knows best all the time, or that any given organization will make the funder’s cut during economic downturns, succession changes, and other pressures on funders.
\nIn both of these, the arguments shift to a disagreement not about what the funder’s concept of the best use of their money but to a judgment about the state of the field.
\nHaving stated the competing arguments, where do I land on the issues?
\nI do want to add an important note: a recipient organization should be quite insistent on clarifying these expenses before accepting a capital gift no matter how generous it may seem. Scaffolding on schools, universities, libraries, churches, synagogues, and other non-profit buildings all over the USA over the last two decades are stark reminders of the short sightedness of so many during an earlier building boom. As we have written elsewhere, one of the most reliable indicators of a healthy relationship between a funder and grantee is the ability of the grantee to say “no.”
\nThis is especially true when the endowment is for a project or initiative. An endowment protects that project from internal competition for funds and guarantees that it will last well into the future. But there are too many times when we have seen projects become out of date or organizational orphans or the demographics no longer apply. What was once protection can become a burden. The process of unwinding these commitments can offend the donor, require legal interventions, and become a source of embarrassment. Perhaps a better plan is to have a mandated review after, say 10 or 20 years, to determine if the endowment requirements still make sense. If not, there can be options to free the restriction, return the corpus, or some other variation.
\nFrom a funder’s perspective, this also encourages long-term thinking about successor recipients, naming, and long-term expectations and appropriate restrictions.
\nAfter the 2008 crash, for example, many organizations wanted to raid their endowments to cover program and staff expenses. In one case on which I was asked to be an advisor, the organization board had already voted to spend all of its historically board-directed endowments and was arguing about where [not IF!] to spend some of the non-restricted endowments.
.
This particular organization was in a state that had surprisingly few rules regarding endowments so it might have been legally possible for them to spend that money. Note the word “might.” However, it would be hard to imagine anyone ever giving that organization an endowment gift for the foreseeable future.
\nWhile the immediate dilemma of this organization was brought about by an external financial situation, it also revealed a long history of board misunderstanding of the difference between cash reserves and endowment. Better financial oversight over time would have prevented the potentially legal challenges, but better financial understanding and planning would have allowed them to more properly use or not use their various pools of funds. For example, the decision to turn every bequest into a board-directed endowment looked suspect when I learned that the organization had a record of approving deficit budgets.
\nLest you think this was a rare case, I can attest to numerous other cases where similar confusion or misunderstanding took place.
\nAs much as many organizations may aspire to endowments, many would be far better served with healthy cash reserves, especially in their early stages. There is an agility to the use of cash reserves that endowments don’t, and shouldn’t, have. Funders would do well to make sure that we fully understand the stage of the organization, the number of months of cash reserves, and whether the non-profit would benefit more from unrestricted operating funds or an endowment, only a portion of which may be used in any given year.
\nAs noted above, these comments were inspired by CEP’s report on foundation funding, but not limited to that. The issues of longevity, purpose, and function should inform decisions by all funders and NFP/NGO’s. Endowments can be a critically important asset, but they also have their limitations. An awareness of both is crucial for them to provide the greatest impact.
\n", "url": "https://wisephilanthropy.institute/insights/476-the-endowment-question-is-it-always-good-philanthropy", "title": "#476 The Endowment Question: Is It Always Good Philanthropy?", "date_modified": "2024-04-01T14:30:00.000Z", "author": { "name": "Richard Marker", "url": "https://wisephilanthropy.institute" } }, { "id": "https://wisephilanthropy.institute/insights/475-philanthropy-affinity-groups-common-interest-or-essential-difference", "content_html": "The philanthropy eco-system evolves amoeba-like. That is certainly what I have seen over the past 3 decades in the field. While some organizations seem to be mainstays, it is fair to say that even the legacy ones have morphed, adapted, and adopted over time. And that doesn’t even begin to note the many comings and goings.
\nThe constantly evolving organizational makeup in the field becomes evident every time I teach philanthropists or am asked to speak to one audience or another about “trends.” A recent international conference and a forthcoming invitational presentation have brought me back to some core questions about our field: do the emerging [and ofttimes disappearing] affinity groups reflect a shared common funding interest or do those group reflect essentially different ways of doing philanthropy?
\nPermit a bit of context: over 2 decades ago, NYU invited me to develop a professional certificate program for funders [principals, trustees, foundation professionals.] Not believing in top down, I approached the major players in the field at the time: The Council on Foundations, the then called Association of Small Foundations – now Exponent Philanthropy, the newly formed National Center for Family Philanthropy, the then called Forum of Regional Associations of Grantmakers – now called United Philanthropy Forum and, since I was in New York and an active member, the then called New York Regional Association of Grantmakers – now Philanthropy New York.
\nThere was a clear consistency in what they all said a funder should know, and in fact a couple of the organizations chose to co-sponsor some of the early courses. But for many reasons, not the least of which was the loss of institutional memory, those partnerships dissipated even as the NYU program attracted many hundreds of funders from throughout the USA and around the world. [A few years ago, NYU discontinued the department in which that certificate program was offered but I now have the pleasure of continuing that educational role at the UPenn High Impact Philanthropy Academy.]
\nThe core competencies articulated by those organizations at the time continue to inform the structure of the UPenn program, but the issues and organizations that require attention change all the time. Affinity groups can be geographically defined, content defined such as climate change or reproductive rights, ideological differences such as NCRP or Philanthropy Roundtable or demographically defined [race, ethnicity, religion, gender.] And, of course, numerous others. Moreover, I have taught funders from many countries and have spoken or taught in 41,
\nThe underlying issue is the challenge to determine and then to formulate what in our field is generic across all of these vs what is culturally, historically or legally distinctive, and when do those distinctions lead to an essential change in what grantmaking, funding and philanthropy is all about.
\nThese aren’t new issues, of course, but they emerged in importance when asked to address international trends at a forthcoming international venue. And herein lies an interesting tale: Only a very few short years ago, funders in various parts of Asia were adamant that there could be no such thing as “Asian philanthropy” since places are so different: Their economies, their governance, their histories, and their cultures simply didn’t easily align. Yet only a couple of years ago, lo and behold there are a number of philanthropy association defining themselves as “Asian” and positing that there indeed is something that can be called Asian Philanthropy.
\nA similar story can be told in Africa, and in Europe with the creation of Philea.
\nFor me, these developments go beyond simply updating my presentations. Rather, they mandate revisiting an underlying question. Is Asian philanthropy essentially different from European philanthropy or is it simply a geographically distinctive affinity group? Is Women’s philanthropy an alternative way of doing philanthropy or simply a definition of who is in the room? When Muslims or Jews or Christians or Sikhs do philanthropy through their affinity associations are they doing so with substantively different values, goals, affect, and behaviors than those of other faiths or are they doing the same generic giving under different names?
\nI am not here speaking of the beneficiaries. It is to be assumed that Women’s philanthropy associations will more likely support women-purposed organizations. The same is true for faith based and values based and place-based funders. Those are measurable and apparent.
\nWhat is less apparent is the decision process, the nature of expectations, who is in – or not – in the decision-making room, and, most importantly, will the impact be different from those of other funder affinity groups.
\nI daresay that the results are mixed.
\nI recall a workshop I did for a large group of non-USA family funders in Cape Town some years ago. The chair was very dubious that an American based philanthropy expert would present something relevant to him and his family. At the end he expressed surprise that everything we discussed described his family and their multigenerational challenges. Score one for the generic side.
\nHowever, at a several day workshop in Scandinavia, the different role of philanthropy in Scandinavia was not incidental, but essential to what we taught, how we taught, and what the desired takeaways would be. The same is true for other places in the world where even the word “philanthropy” has a connotation of paternalism and classism compared to a more communal based history of social support. In these two cases, there does seem to be an essential difference in how voluntarism and philanthropy work and what it means in these very disparate geographic regions.
\nAnother area that suggests that there can be an essential difference is in the newly acknowledged focus on advocacy funding. If one wants to move beyond the palliative, and move to the preventive, one must pay attention to the systemic. And once one attempts to address the systemic, one cannot avoid the political/government roles. In some cases that may be as simple as advocating increased SNAP funding, but in its most macro version, the goal of advocacy for systemic change is nothing less than re-shaping how a political system deals with its citizens. When does the scope of a philanthropic vision mean that it has gone beyond the more traditional way of doing philanthropy, not just in scale but in essence?
\nAt a time of increased pressure on civil society in too many corners of the world, the question of the role of voluntarism, philanthropy, and citizenship is not trivial. Especially for those of us in the philanthropy part of that, our autonomy and our influence are powerful assets. Let’s make sure to use them – wisely and courageously.
\n", "url": "https://wisephilanthropy.institute/insights/475-philanthropy-affinity-groups-common-interest-or-essential-difference", "title": "#475 Philanthropy Affinity Groups: Common Interest or Essential Difference", "date_modified": "2024-03-27T11:30:00.000Z", "author": { "name": "Richard Marker", "url": "https://wisephilanthropy.institute" } }, { "id": "https://wisephilanthropy.institute/insights/474-it-s-not-the-chickens-it-s-the-people", "content_html": "This is the third of several postings addressing very specific, practical, and hopefully useful suggestions for ways of improving our interlocking sectors. None of this material is new or cutting edge, and in fact, I have written, taught, or spoken of much of this in the past. But on the chance you haven’t see any of it before, or need a reminder, here goes…
\n….
\nAn oft told anecdote in Mirele’s family is about their butcher when they lived in the Boston area. One day, the butcher was in a notably cranky mood and was complaining about his business. When asked what the problem was his response “It’s not the chickens, it’s the people.”
\nPretty succinctly that summarizes the reality for the philanthropy and non-profit world. If one examines the budget of almost any NGO/NFP, the personnel line far exceeds that of any other expense category. Moreover, more than any other subsector, human resources are the indispensable driver for service delivery, success, and impact. Some but very little can be replaced by AI or other automation. People matter. That should be the end of the story, but…
\nIf we recognize that essential reality, why is that so many professionals get burned out? Why is there still endemic under-compensation? Why do some still hold the attitude that those who work in the sector are less competent, or should accept lower pay because they chose the sector, or conversely, too many are getting too much money off of charitable donations or they don’t work hard enough or if they were any good they would be working in the for-profit world.
\nI have heard all of these, some even directed at me. The last half of my career has been in the foundation/philanthropy subsector. But in the days before then, especially when I was a CEO of a complex multi-state non-profit organization, I would be challenged with all of the questions regarding our professional staff and myself. As one who used to fit the definition of a workaholic, there were those who said to me: “why do you work so hard; you work for a non-profit?” [I trust that no one reading this needs a response to that!!!]
\nIt is a bit painful that we still hear these questions and biases. In responding, I will propose some practical ways to address or remediate much of this. Most of that remediation will require a healthy mutual understanding between funders and non-profits we fund, but not all. Some have to do with workplace dynamics that are the responsibility of the organizations themselves. Some have to do with what we as funders take seriously in our considerations, and where we choose to let slide.
\nLet’s start with the compensation issues:
\n•\tThe Overpayment Canard: Recently someone who used to be a long time professional in the non-profit world called me to discuss his own grantmaking. He had inherited a chunk of money and wanted to give it out thoughtfully. Much to my surprise he verbalized that he was concerned that so many people were getting overpaid in the NFP world. Frankly, as one who worked in the sector for most of his career, he should have known better.
\nSure, there are some few who make inordinate amounts of money on the backs of dubious charitable claims. They should be called out and shamed. And even indicted if illegal.
\nThere are some who make high executive level salaries for huge complex organizations, the purpose of which is not in question. I don’t begrudge those salaries at all - with a caveat I will come to shortly.
\nMost, by far, of the executive level leaders of non-profit organizations do not get overpaid by any reasonable metric. Most receive less than they would receive with comparable executive roles in established for profit companies.
\nIt is time to put this canard to rest. Yes, occasional abuse gets lots of media attention, but it would be great for those same articles to clarify that those abuses are the exception. And there is transparently available data to prove that.
\n•\tThe Underpayment Trap: I wish that there were as much public indignation about the underpayment of educators, human service professionals, and the huge number of staff that provide service and support for millions. It is unconscionable that full time workers in this sector need SNAP funding, that they may not be offered health care or retirement funds or reasonable vacation time or parental leave. If the non-profit sector stands for public good, it should not be on the backs of those who are providing public good.
\nLet’s be clear: non-profit is not a synonym for a vow of poverty nor for charity. It is the definition of the ownership structure of a legal entity. There is no inherent or credible argument that says that working for a non-profit should require lower salaries, fewer fringes, and less respect. We will return to the “respect” part later, but first some suggestion on how to address the compensation questions.
\n•\tFunder Roles: When I first started teaching philanthropists and foundation executives a couple of decades ago, among the case studies I presented included the issues above. At the time, the standard response was “we don’t micromanage the organizations we fund.” Today almost none of those who take our seminars, courses, or workshops say that – even when they may not agree on what they should do.
\nOne simple way to address this is to ask questions. Nonprofits will respond to the questions we ask. If we as funders only ask about the bottom line, given what we said above about personnel, it is often the only place there is enough money to balance budgets or programs. On the other hand, if we ask about personnel retention and practice, we will start to get a more robust sense of what is going on, and it won’t take long before the grantees present a different set of information seeing that it is something we care about. This should lead to a discussion about the implications of that information. If we learn that much of the staff is earning too little or is under-fringed, perhaps a funder will choose to increase funding so that there are better compensation practices. In other cases, it may lead to hard discussions about whether an NFP should continue to try to do everything it wishes with the available funds on the backs of its undercompensated staff.
\n•\tManagement Roles: An anecdote. Many of you have heard this, I know, but permit a repeat. In 1982, when I assumed the position of CEO of a recently merged non-profit, I learned that every one of the salaries was at the lowest level compared to the field, my own included. [It was certainly not irrelevant to the embarrassing turnover rate.] The board of that organization was shocked to learn the compensation disparity, and also that the turnover rate was not the national norm. Their first response was to offer me, as CEO, an immediate substantial salary boost. When I asked, what about everyone else, they asserted that they weren’t yet prepared to address that.
\nI turned down the increase. It wasn’t because of my heroism or that I didn’t need the money. It had everything to do with my credibility. In an organization with negative morale, little confidence in the executive leadership, and no assumption of job security, if I had been the only one to benefit from the underpayment awareness, I would have lost any claim to leadership.
\nThe story, I am happy to say, has a good ending. In only one year, all salaries were brought up to a level more in keeping with the national norms. And they stayed that way. Moreover, when I moved on from that position some 13 years later, the average tenure of the professionals was 7 ½ years. Leadership can matter in redressing personnel challenges. A couple more examples:
\n•\tStaff training and conferences: Early on, I learned that staff training and attending conferences was by far the most vulnerable budget line. Yet most of us know that unless professionals keep up with the best thinking and have peer contacts beyond their own workplace, they can become stale and lose their edge. How to resolve these two competing realities? At one point, I proposed, and the Board of Directors endorsed, that the benefits package for every professional include a line for training. It was part of everyone’s compensation package akin to health insurance, vacation, etc., not a separate organizational line.
\nThis was no subterfuge but an acknowledgement that if an organization is serious about having a bought-in quality professional cadre, investing in their continued growth and excellence is a small price to pay.
\nIt’s not only about the money, though.
\n•\tInvestment in Retention: As mentioned above, we invested heavily in respectable level salaries. But most studies show that finances alone are not sufficient to keep a professional engaged and around. There needs to be a culture that honors their abilities, contributions, and ambitions.
Ambitions: one thing I knew for sure was that almost everyone is thinking about what’s next in their career I certainly did so why begrudge it among those who reported to me? Instead, I turned it into a retention tool. Every year, I would invite every single professional to meet with me to update their resume. Now, of course, if I only invited some, it would seem to give a message that it was time to move on. But it was an offer for everyone.
The process was extraordinarily useful. Often I would discover that colleagues were actively considering other positions, but in fact were very happy with 80-90% of their current job. It was that 10-20% that was motivating a change. Since I met with most of the professionals, I could often make minor adjustments to job descriptions to address the desires of several of the colleagues at the same time. It would often lead to them staying longer, and with more satisfaction.
Another benefit was that I was never surprised when someone chose to move on because they didn’t feel that I would consider them disloyal. It meant more orderly succession and transfer of responsibilities. [and not a few returned!]
•\tEmpowerment: My own view of organizational design is that decisions should always be made as close to where they matter. Therefore, for both conceptual and personal preference, I never micro-managed. For this to work, I, as CEO, had to be willing to allow for things to happen in ways other than I might have done it, and to be willing to stand by our professional staff when things might not have succeeded. That didn’t mean that there weren’t organizational standards or expectations, but rarely were they such that they got in the way of appropriate autonomy.
\nThis method worked really well with self-starters, the kind of professionals who thrived under this leadership approach. I highly recommend it.
\nHowever, I learned that not everyone thrived under that system. There were very competent and caring professionals who needed more hands-on supervision than I was inclined to provide. Sometimes, some of those folks chose to move on to a different corporate culture. At other times, I would invite senior colleagues to provide that supervision. They were delighted to have the opportunity to expand their own skills and staff.
\nAs I wrote in a recent article, these issues apply to the foundation/funding world as well – frankly more than I was even aware. Program officers, perceived by grantees and potential grantees as the voice of “power” find themselves with none and caught in the middle. [It’s ironic, isn’t it, that at a time when the philanthropy and development worlds espouse “localism”, many still have top-down centralized decision making in their own shops.]
\n•\tStaff in Board Roles: This one may surprise you. I have always felt that there is a regrettable classism in the NFP/NGO sector. By every stretch it is way out of date, but it still exists as a counter productive affect. One of the ways I tried to address this was to suggest to every professional who worked in our NFP to become a board member of another NFP. It had a remarkable impact. Firstly, they were great board members since they understood the other side. Secondly, it made them better professionals working with their own boards. Thirdly, it reinforced that working in this sector is not in “service” but rather is as professional partner to their volunteer leadership. I wonder if readers can suggest comparable ways to redress that outdated classism.
\n•\tWhat is our role as funders?
\nIf one looks at most of the examples above, none relies on short term grants for the specific purpose of professional development, salaries, or job satisfaction. So, while I applaud the outspoken and forceful work of a number of organizations, it is my view that unless compensation, benefits, job satisfaction and effective organizational culture are integral to an organization’s DNA, soft money correctives are mere palliatives. Soft money rarely is sufficient to address core issues, especially since it is so subject to the whims of funders. The Trust Based Philanthropy initiative is only one of several that are trying to redress this funding practice.
\nNow, I do want to applaud the many non-profit organizations and foundations that have adopted these principles and practices. Many more do so than a decade or two ago. But if recent data tell us anything it is that we have a long way to go to properly retain, train, and sustain professionals in our sector.
\nWhat’s the lesson in all of this? As the butcher said, “It’s not the chickens, it’s the people.” Let’s put them first.
\n….
A postscript: The above was written some time ago pending publication. A recent article in the Chronicle of Philanthropy examined the enormous turnover at the executive level. The reasons are complex and examined more thoroughly than i will do here. But I daresay that the mixed messages that society [read: funders] places on non-profits is an underlying cause that covers a great deal of this. Good CEOs needn’t be told that there are long overdue correctives to compensation and retention structures. Making that case to boards and external funders who may still be in an outdated mindset is a heavy burden. Lots of folks work very hard in every sector, and burnout is not unique to the NFP/NGO sector. But the many stakeholders and competing bottom lines, to say nothing of the mixed message regarding status, make being an executive particularly hard for this sector.
This is the second of several postings addressing very specific, practical, and hopefully useful suggestions for ways of improving our interlocking sectors. None of this material is new or cutting edge, and in fact, I have written, taught, or spoken of much of this in the past. But on the chance you haven’t seen any of it before, or need a reminder, here goes…
…
The most long-lasting takeaway from my management training was organizational cultural coherence and consistency: the lessons of how to read the internal culture, develop and apply an organizational design, how to honor and incorporate human resources effectively [the topic of the following article] how that internal culture reflects the surrounding societal culture, and, finally, understand the assumptions of those “in the room.”
\n[To give credit where it is due, in 1980, after 10 years as a Chaplain and faculty at Brown, I was a beneficiary of a short-lived Sloan Foundation program to provide those who were considered early career leaders of non-profit and educational institutions the management and executive overlay to the more academic education that got us there. I cannot speak to how that program influenced the other 13 participants of my cohort, but for me it gave a conceptual structure to subsequent careers that involved numerous senior executive and leadership roles and continues to inform my work in and teaching about philanthropy.]
\nOne of the most striking examples of organizational cultural disconnect is from my foray into private sector strategy consulting. The situation warrants a full case study, but here it is in brief: the CEO of a middle-sized manufacturing company was very much into organizational fads. He was proud of what he considered to be the empowerment of pods on the factory floor, the sales force, the design team, and even the office staff. The goal was to empower them to make decisions as close as possible to where the implementation would be most efficacious. What he could not understand was why the pods seemed so unwilling to do exactly that.
\nWhen we spoke to the employees at every level of the company, we discovered that their complaint was that they had no authority to make any decisions despite the new structure. They all complained that the CEO would overrule or undermine them.
\nWhen we challenged the CEO, he retorted that as the CEO he had that right, but he did so very rarely. What we found, though, was that his interventions – even if not constant, were fully unpredictable. And it happened sufficiently often that none of the employees up and down the vertical continuum felt that the new decentralized empowerment was anything more than jargon. And they resented being blamed for what was ultimately the boss’ myopia.
\nThe disconnect between the claimed culture and the experienced culture was sufficiently great that it negatively impacted the work environment, the productivity, and ultimately the bottom line. For me it was a lesson that underscored that organizational design, efficiency, and competence alone cannot overcome a dysfunctional workplace culture. It was a real-life case that showed me that mission, vision, and “strategy” that doesn’t start with culture is likely to be flawed. It has informed my work ever since.
\nWhile this case reflects a for profit manufacturing company, my professional and personal life for the last quarter century has been in the philanthropy sector so the remainder of this article will address issues in our field:
\nFunder: grantee experience: the most overt examples of this disconnect have been addressed by the work of organizations such as CEP, NCRP, and others. But some patterns continue, albeit usually well intentioned. Just a few of many possible examples:
\na.\t“Partners” Many funders refer to grantees as “partners.” Implied is the recognition that foundations enable but don’t implement. Fair enough. But if that relationship is strictly top-down, as we know still happens frequently, it conveys a distorted use of the term partner. That isn’t lost on grantee organizations that are well aware that they are not true participants in the decision-making process at all.
\nb.\tInappropriate or disproportional application or reporting requirements: Funders certainly have a legitimate interest in knowing what is happening to the money we give. But there needs to be some relationship to the information we request and what will actually be used for decision making. There is no shortage of information that can be requested of a potential grantee, but if we funders are not going to use that information for our decision making, it is a waste of time and energy on both sides.
\nSimilarly, requesting volumes of supporting documentation for a very small grant, or from a long-time proven grantee is equally a waste of everyone’s time. This is not an issue of project specific vs unrestricted funding but rather one of proportionality. Requesting funds and reporting on them is appropriate in the work of a nonprofit. However, when those requests and reporting are excessive, they don’t serve to expand knowledge; they do serve to reinforce the power imbalance.
\nc.\tSite Visits: On the surface, site visits are a valuable tool. They provide direct experience with an existing or potential grantee. When well done, they can be invaluable in decision making and understanding for a funder and reinforcing for a grantee.
\nHowever, those visits are not without cost, especially for small to medium sized organizations. They are interventions. Offices are to be cleaned up; direct service personnel are asked to drop their client work; conference rooms coopted. Too easily they shift away from being open educational experiences discussing real successes, failures, and challenges to being opportunities to put on a show. I don’t usually blame the non-profits for this distortion. Funders need to make it safe for grantees to tell the full story, and, even, as some do, compensate the organization for the time.
\nAs in b, if there is a not a functional decision-making reason for the site visit, think twice about why. Remember, the very nature of a site visit reinforce that above mentioned power imbalance.
\nd.\tOur Affect: This issue manifest itself in what the experience is when grantees/potential grantees visit us, and how we as funders present ourselves.
Our physical settings tell a story. One extreme example is a foundation headquarters that could easily be mistaken for a repurposed mansion. It wasn’t – it was purpose built for the foundation. The board and senior staff of that foundation were very proud that they made meeting rooms available for non-profits. However, they bemoaned that very few took advantage. It wasn’t hard to see why: This foundation facility was not located in a section of that city where non-profits were likely to have their offices or where their staff or clients were likely to live. Moreover, just imagine the intimidation factor of walking into this marble/gilded facility as a petitioner for funds. The disconnect between a very well-intentioned policy and what that looks like to others was striking to say the least.
[It would be disingenuous for me not to acknowledge my own culpability in this regard. When I was CEO of a foundation a couple of decades ago, my office was on the senior executive floor of one of the most famous office buildings in the world. In retrospect, I have a much better understanding of what it must have been like for many of those seeking funds to come to my office.]
Other examples abound; I am sure you get the point. It is why, in my teaching of philanthropists and foundation executives, I have developed a series of scenarios helping funders hone their “conscious use of self”.
\nConscious use of self is about how we present ourselves in our relationships. In the next section, I will discuss the values piece.
\nFunder Consistency: In the next few examples, I will address our own values in decision making, in our investments, and in our involvements.
\na.\tFocus. Early on in my funder education roles, I realized, to be credible, we needed to impose the same discipline on our personal/family philanthropy as I taught others. I will be the first to acknowledge that it isn’t always easy- especially since, at least in our case, it meant that we had to make difficult choices about whether or not to continue funding some organizations that were outside of our focus areas. They were perfectly fine organizations doing superb work and whose goals we honored. In some cases, these hard choices involved personal connections with staff or board. But the discipline worked for us. Over the years since, we were glad we went through that process, have kept it up to date, and it has even allowed us to acknowledge those few times when we may choose to diverge because of an exigency that we believe warrants it.
\nMost foundation boards and staff know well how mission creep can, over time, disrupt even the most thoughtful strategies, especially in flush times. Without discipline, we too easily can dilute our impact or shortchange the causes we care most about.
\nb.\tInvestments. The next personal adjustment emerged in response to the challenges of aligning our financial resources with our values. The process reflected changes in the environment, our teaching, and our recognition that we had only done half the job. We spent time interviewing advisors, understanding what that would mean for us, and ultimately making a commitment that 100% of our investable assets would be values aligned. Admittedly, the transition for us was somewhat easier than for those whose personal or foundation’s assets may be many times ours, but the principle is clear. Philanthropy is the voluntary utilization of private resources for public good. If we believe in the public good, how can we not align our financial resources with those values? This decision has also been invaluable as we look at where and how to invest in ways that matter to us, and in modest ways to the world at large.
\nIt would be gratifying if we could say that, in the investment and philanthropy worlds, the resistance to values-based investing has disappeared. Alas, we cannot. There are still pockets of the investment community or foundation investment committees that feel that values investment is a synonym for concessionary returns [not!] or, even more problematic, that pure investment strategy is values free [hint: there is no such thing!]
\nThis space is about philanthropy consistency and, to be simplistic about it, money invested in private foundations or DAFs, or any comparable philanthropic vehicle has favored status because it is to be for public good. That public good is not supposed to be for only 5% of those resources, but for all. So even on the most basic conceptual level, all foundations and related entities should have an obligation to show that their investment strategy is as aligned with the public good as their grantmaking policy is.
\nOur own personal experience underscores that the same can be true for individuals.
\nc.\tPersonal Involvement: Money is not the full story. Grantmaking and investments are about the financial part of how we use our resources to reflect values we hold dear. Where we choose to put our voluntary time, what leadership or board roles we accept, and what public statements we are prepared to make are all reflections of our values as well. As funders, our voices matter. Some few of us have the clout, financial or otherwise, to influence policy or organizational behavior by ourselves, but all of us have the ability, perhaps even the responsibility to reflect our values in those choices. Those of us engaged in philanthropy are modeling a financial commitment to civil society, and most of us can do so with unique autonomy. That modeling should extend to where and how we choose to use our discretionary organizational engagements as well.
\n…
At a time when cynicism toward funders, organizations, and government abounds, I believe that we have no choice but to walk the talk, model consistency, demonstrate values on which a healthy society must be based. It is not ours alone to do, but without us, it cannot happen.
This is the first of 3 postings addressing very specific, practical, and hopefully useful suggestions for ways of improving our interlocking sectors. None of this material is new or necessarily cutting edge, and in fact, I have written, taught, or spoken of much of this in the past. But on the chance you haven’t seen any of it before, or need a reminder, here goes…
\n……
\nOver the years, there have been many studies demonstrating that successor generations abandon the professional advisors that were used by the parent generations. It is not a new story and has been well documented.
\nBefore relating this very recent example of that, I do want to acknowledge one dilemma facing certain categories of trusted advisors. The law requires that loyalty be to a defined client. So, while families and successor generations may – or may not! – be on the radar of T & E attorneys and wealth advisors, it is true that the interest of the client takes precedence. In my work as a quondam philanthropy advisor, I have seen many times how that reality has been counterproductive for family philanthropy. In the brief story I am about to relate, it may explain part of the bumbling behavior of an otherwise successful financial advisor. To be clear, the following example is not about the challenge of intergenerational philanthropy but strictly about financial succession.
\nIn this case, following the death of an elderly gentleman, the three direct heirs discovered that there were funds under the management of a financial advisor of whom they had never heard, and pointedly, from whom they had never heard. This elderly person had been ill for a long time, so his passing was no surprise. The deceased had very little interest in financial matters and there were sufficient cash resources during his lifetime that these funds under management were essentially unknown to the three direct heirs.
\nEach of these heirs is an accomplished adult, and each has their own financial advisor. So you can imagine their surprise when the manager of these funds introduced himself as their “family financial advisor” and acted offended when each of the heirs made it clear that they were going to move their inheritance. This advisor expressed hurt and anger that the funds were not going to remain under his management. “Look what a good job I have done for you for all this time” he said.
\nNow, it is possible that this financial advisor is indeed a wizard and produced remarkable returns over the years. Perhaps. But the putative returns clearly weren’t why the heirs made the decisions they did. They each had trusted professional advisors with whom they had an established relationship. It may be that their father at one time had such a relationship with this advisor as well but since no one had heard of him and the advisor who defined himself as the family financial advisor had never once reached out to any member of the family, it should hardly have been a surprise that none of the heirs felt any bit of remorse about moving their inheritance.
\nAs most of you know, I am not a stranger to these questions, especially as they relate to philanthropy, so I ask you readers to trust me that there is no back story here. No hidden or unstated facts that sometimes can emerge after more in-depth review. No “whatabouts…” This is about as clear cut a case as one could have.
\nI cannot say what any of the surviving heirs might have chosen had they had a prior or ongoing connection with this person. I do know that they were all put off by his claim to be their long time “family financial advisor.” He wasn’t, and never even made any attempt to act as one until such time as the assets under his management were 100% going to be relocated.
\nOne would hope that nowadays many trusted advisors have already learned this lesson of how easy it is for successors to abandon their parents’ professional advisors. This all too straightforward tale may prod those who still need to learn the lesson not to assume that successor generations feel any loyalty to them. It needs to be earned anew, and before it is too late.
\n", "url": "https://wisephilanthropy.institute/insights/472-a-true-cautionary-tale-for-financial-advisors", "title": "#472 A [True] Cautionary Tale for Financial Advisors", "date_modified": "2024-02-18T17:00:00.000Z", "author": { "name": "Richard Marker", "url": "https://wisephilanthropy.institute" } }, { "id": "https://wisephilanthropy.institute/insights/471-trends-and-myths-in-philanthropy-2024", "content_html": "The only thing more predictable at the beginning of each year than “trends” is “resolutions.” And we all know how those resolutions turn out.
\nThe last year was in many ways the first full post-pandemic, in person one. It was terrific to stretch my vision beyond a screen and be with real people. It meant attending a diverse variety of meetings and conferences in multiple countries and States. Interestingly, for me, it put many of the reported “trends” in perspective.
\nLet me say at the outset that, going back to the time when I was more visible on the speaker circuit at philanthropy conferences of all sorts I understand why trends are the obvious topic to speak about and to write about. An article or a speaker can formulate what is new, how thinking is evolving, and what to anticipate as we go about our challenging grantmaking endeavors. And since most funders still function within a much more siloed reality than we may imagine, having someone who is considered to have a broader perspective present the emerging trends is welcome and often illuminating. So, as I react to what appear to be conflicting messages from our field, I plead guilty for having been a trend spotter myself.
\nBut just as with philanthropy itself, trends are about the future. Since every grant is a bet on the future, so are trends extrapolations about the future. And since we certainly know that the future is never fully knowable, it should hardly be a surprise that even the best futurists among us are never always correct. To take just a couple of examples from our field: how many of you recall L3Cs? A fleeting attempt to legalize hybrid models that simply didn’t take off. Or a more recent example that was all the rage: social impact bonds. The multi-sector performance based solution to systemic issues had all sorts of promise – that, in too many cases, simply could never correct for the competing accountabilities of the necessary stakeholders. Oh, they still exist here and there but as the promised silver bullet that would reduce recidivism, health care costs, and food insecurity- and all sorts of other things, they proved an easily tarnished silverplate. [I am still amused by the time a major international bank brought me to London to speak to their staff and to meet with a funder who was convinced social impact bonds alone could clean up the Ganges.] All of us, including those of us who try to articulate “trends”, need do so with a very heavy dose of humility.
\nSomething else, even more sobering, emerged from my experiences this year. I was struck by how much we each live in our own echo chambers. The phenomenon is well documented in the sadly divided political world, but I daresay we need to be clear about how it plays out in philanthropy as well.
\nHere is where the in-person became such a corrective. During the strange years when our contacts, conferences, consultations, and convenings were “virtual”, it was inevitable that a self-selected or carefully invited group would gather. Our ideas, and shall I say, biases, were easily reinforced. Rarely did a significant number of those with opposing views appear on those screens. Hey, it made us feel good, or at least correct, but it was an all too limiting reality.
\nThis year, as I found myself in places where the self-selection was based on other criteria, I found that many of the best practices we have taught and articulate as “trends” are neither practiced nor understood. Much of the inherent power dynamics we have tried to redress for many years are still assumed to be the norm all to often. Many of the counterproductive impressions of NPO/NGO sector seem all too resistant to amelioration.
\nWithout trying to be complete, permit a few real-life examples. [If you think they may apply to you, you might be right, but every example I will give is a composite.]
\nWithout unpacking all of the principles and practices, there is a profoundly important underlying truth to this approach. We funders don’t always know better than those delivering services. Sometimes we might have a broader perspective, but it is as likely that those closer to the ground are more agile and attuned to the needs and the population that is to be served. [When I was the CEO of a foundation, I learned that whenever we were heavy handed about a project or program, we were more likely to be wrong than right. Not always wrong, but enough to make me aware of our fallibility.]
\nInternational development has learned this truth as well. Without some local credibility, funding or intervention is not very likely to be effective. Learning how to hear what those in the community are telling us is a pretty crucial attribute of being a good funder.
\nThere are times when project specific funding is preferred by both sides. But here too, if it is for a project which is intended to last for a while, it is not only a waste of time but counterproductive to require that it be applied for annually. Any complex project takes a while to set up and rarely can demonstrate value within the 6 months before having to re-apply. [This doesn’t obviate legitimate monitoring and a mutual relationship so that a funder and grantee can continue to be comfortable with the progress or challenges.] In this case, a multi-year funding commitment should be advantageous to both sides. It allows a grantee to invest appropriately in what will make a project most likely to achieve its potential, and it encourages discipline for a funder as well. After all, neither side ultimately wants it to fail. Failure is sometimes inevitable, but it shouldn’t be because a funder has made support too uncertain.
\nSince, during the pandemic, there were many reports that funders were forgoing their long held procedural requirements, it has been a bit disappointing to observe that many funders have reverted to their old ways of doing things. Let’s hope this is not a trend in reverse.
\nWhat I had never sufficiently fully focused on was the dilemma of non-executive funding professionals. They are often intermediaries – perceived by potential grantees to represent the funders, and therefore part of the “power” system. In many cases, a grantee only interfaces with a program officer who must maintain a relationship and be the bearer of good or bad news. However, the program officer may feel that they themselves have limited or no access and wish that they too could influence priorities.
\nIn retrospect, I remembered a time when we were contracted to provide a multi-day education program for the staff of a well-known foundation. The principles who funded that foundation prided themselves on their risk tolerance and their cutting edge approach to funding. Much to our surprise, we found that, almost without exception, the staff of that foundation were much more risk averse than we typically see. When we asked about that, they said that they saw themselves as the intermediaries to protect the interests of the funders. Since the funders were so open to all sorts of proposals, they saw their role to protect them from unnecessary mistakes, not to present them with their own ideas. You can be sure that those grantees that were funded were more than willing to endorse the courage of the funders; you may also be sure that those who weren’t funded were less persuaded that the funders’ reputation was warranted. You can see how the program staff was in a tough place.
\nAs I wrote then, we ourselves use a DAF and I believe that they can serve a valuable purpose within the range of philanthropic vehicles. What concerns me is that there are many who don’t fully grasp what they are agreeing to. Because of the [short term] tax advantages of a DAF over a private foundation, and because there is much less administrative responsibility or even payout mandate, many who are contemplating what to do with their funds are persuaded to establish a DAF. Only later do they realize that they hadn’t fully understood what that meant about future family involvement and other levels of autonomy that they imagined they would have.
\nI don’t know how widespread this phenomenon is, but I have met enough people in the last couple of years who have shared this experience to think that DAFs are being oversold. They are a wonderful vehicle for many, and not the right vehicle for many others. I would encourage those considering their options to consult with someone who has nothing vested in your decision.
\na.\tRetirements/transitions. The philanthropy field is no different than others. For all sorts of demographic reasons, we are in the midst of a significant number of leadership transitions. The backgrounds and experiences of many of those assuming leadership reflect very different profiles than those they are succeeding. Some of those changes will assuredly lead to changes of style. [to wit, there are fewer old white males heading foundations.] What remains to be seen is if they will also lead to changes in practice and policy. [evidence seems mixed so far, I think.]
\nb.\tCompensation: I wish that I didn’t still hear complaints about bloated salaries in the NGO/NPO sector. While I know that there are some examples of those bloated unearned compensation packages, when I hear those complaints, they are usually a way to couch an unwillingness to give.
\nI wish that I did hear the opposite: it is terrible that so many in the NGO/NPO sector are underpaid. If we are serious about providing quality education, health care, childcare, elder care, etc., we need to make sure that those providing core human services receive a living wage, have health care, vacations, and retirement funds. The number of underpaid far far exceeds the number of overpaid and has a greater impact on the effectiveness of the organizations where they work.
\nFor all the talk about “equity” in the philanthropy sector, we funders still allow organizations we fund to avoid correcting for these long-standing inequities. This issue demonstrates that it is not simply a matter of what we fund, but what expectations we have. We don’t have to micromanage our grantees to fully expect them to have responsible and dignified practices as well as balanced budgets.
\n….
\nDepending on which article or author one reads, there are numerous other identified trends not discussed here. Perhaps in future pieces. What is certain is that each trend needs be examined not by whether it is true but for what we should be thinking about. I look forward to continuing the discussion.
\n", "url": "https://wisephilanthropy.institute/insights/471-trends-and-myths-in-philanthropy-2024", "title": "#471 Trends and Myths in Philanthropy 2024", "date_modified": "2024-01-27T19:00:00.000Z", "author": { "name": "Richard Marker", "url": "https://wisephilanthropy.institute" } }, { "id": "https://wisephilanthropy.institute/insights/470-congressional-interest-in-donor-transparency-in-support-of-craig-kennedy-s-op-ed", "content_html": "In the December issue of the Chronicle of Philanthropy, our long-time colleague Craig Kennedy wrote a forceful and important argument in support of greater transparency in our field, “Congressional Interest in Donor Transparency is Good for Nonprofits.” It is a few weeks since it has been published but deserves support nonetheless.
\nReflecting the all-too-common silo-ization in our field, I have met Mr. Kennedy only a few times over our long overlapping careers. Even though I have spoken and written similar thoughts over the years, I very much doubt that he would have been aware of them. His editorial need not be rehearsed in this space – it is widely available in the journal of record in our field, and his arguments are cogent and well stated. These few thoughts are intended to amplify a few implied arguments in his piece.
\nIt has always bothered me when any industry tries to argue that no one can or should put any limits on them – certainly not government. We know all too well what unfettered capitalism has done and can do to the environment, to access to health care, to workers rights, and to the obscene divide between the very wealthy and the average person, to say nothing of systemically at-risk populations. Self-regulation simply hasn’t been any more effective than trickledown economics. It is ethically and practically irresponsible to assume that the average person has the time, knowledge, or sophistication to do the due diligence to know what is greenwashing, what is pure fakery, what is honest, and what is extractive. Our world and the relevant information are so complex and the way in which information is made available is so elusive that self-regulation, by the industries themselves, has rarely worked, if ever.
\nIt is particularly problematic for our field. Yes, as Mr. Kennedy says, “the role of a trade association is to advance the interests of its members and not to improve the sector or civil society in general.” But philanthropy SHOULD stand for more than the interests of a trade association. As a sector we DO exist to improve civil society in general. If we want to argue that we are deserving of certain tax benefits, certain autonomy, certain discretionary privileges, our legitimacy is ONLY because we stand for something beyond our own self-interest.
\nLet us also remember that our sector exists because of problematic social and legal lacunae. On the “supply side” the accumulation of the wealth that enables the philanthropy sector to function is, inter alia, because of extraordinary tax benefits. It is a distorted tax system and the wealthy benefit from effective lobbying on our behalf, as it were by our trade associations. At the same time, on the “demand side,” philanthropy is necessary since, as a society, we in the US don’t feel a sense of obligation to provide for basic human need as a societal right. [We can have arguments about what that level of support should be, what the minimum wage should be, what medical care should be guaranteed, what level of food should be secure for all, and more – but the US system is largely still dependent on voluntarism to provide too much of that.]
\nIn either case, legitimacy follows transparency. We want to know that our voluntary support is properly used, and we should want to know that those who provide that support are doing so without improper self-dealing or circumvention of the law or best practices. In other words, I would argue that if we claim that our sector is an indispensable and distinct sector, we should not be acting as just another trade association.
\nOne of the oft repeated notions, included in Mr. Kennedy’s piece, is that we should not let a few bad apples lead to unhelpful laws and regulations. However, without transparency, how do we know if there are just a few bad apples? How do we know how many fund holders are stockpiling resources even after getting their tax deductions? As a family with a DAF ourselves, I do believe that it is a philanthropic vehicle that should have a place in the spectrum of philanthropic vehicles. But not an unfettered one.
\nIn 1969, some pretty overt excesses in the private foundation world led to some much-needed legislation. I have no idea what percentage of private foundations had acted in self-dealing ways before then, but the legislation was a long overdue corrective. Oh, there are some peculiarities in that law that probably need some adjustment, but it went a long way to establishing confidence in the legitimacy of that philanthropic vehicle, even while preserving a huge amount of autonomy for the funders.
\nGiven the growing scope of what DAF’s do, what institutions sponsor them, and the massive amount of money now in them, the demand for transparency and a reasonable set of standards and regulations is not an overreach by government. It is in our sector’s interest as well.
\nAt a time when confidence in every sector is at terribly problematic low levels, our sector, the philanthropy sector, should stand above it and model what best practices and good citizenship should mean. Appearing to be against reasonable transparency is hardly to our long-term benefit, or that of society as a whole.
\n", "url": "https://wisephilanthropy.institute/insights/470-congressional-interest-in-donor-transparency-in-support-of-craig-kennedy-s-op-ed", "title": "#470 Congressional Interest in Donor Transparency - In Support of Craig Kennedy's Op-ed", "date_modified": "2024-01-18T13:00:00.000Z", "author": { "name": "Richard Marker", "url": "https://wisephilanthropy.institute" } }, { "id": "https://wisephilanthropy.institute/insights/469-the-canary-in-the-coal-mine-3-antisemitism-the-article-i-never-thought-i-would-write", "content_html": "NB: Since this is not about philanthropy, it is not being circulated beyond those who have subscribed to the website. As with all posts, any reader may choose to disseminate it if you wish.
\nI confess, I really didn’t think it could happen here – at least in my lifetime. And, indeed, it has taken me several weeks to be sure I was prepared to actually publish these thoughts.
The overriding message in this is about the surge of antisemitism in the USA and elsewhere, and some of the moral, ethical, real-politique, and historic implications of what I am seeing.
Sure, antisemitism never really went away, but it went underground for a couple of generations, rarely daring to be overt in polite company. The social strictures that reinforced social antisemitism: real estate restrictions, quotas at the Ivies, law and finance firms that were for Jews or not for Jews, clubs where everyone understood what “exclusivity” meant – all of these had largely dissipated over the last two generations.
No one was so naïve to think that the canards, the distortions of history and religion, the dark and ominous conspiracy theories that emerged so regularly for centuries had simply disappeared. But they had ceased to be part of everyday reality in ways that mattered. The vast majority of North American Jews went about their business, not hiding their identity, lived where they wanted, worked where they wanted, studied where they wanted, married whom they wanted…. If there were any issues ever, they were in the private realm – within families, for example, but they weren’t “statements” or public legal matters.
\nPeriodically we would be reminded of the vulnerable underbelly. Bomb threats, shootings, swastikas… but whenever that happened they would be roundly repudiated and condemned by anyone who mattered. They may have been unsettling for a moment but never deeply threatening to the overwhelming sense of being in a welcoming place.
\nSome of this vulnerability began to be felt around the Charlottesville marchers – especially as a prior occupant of the seat of the POTUS refused to condemn them. But nothing, I daresay, prepared us for the surge of antisemitic mobs and unbridled vitriol we now see. What to make of it and how to respond?
\nBefore making a few comments on the Israel-Hamas war, permit some thoughts on Macro issues that are underscored by that war but not caused by it.
\nThere is only one group in the USA that is loving this – right wing nationalist xenophobes. Watching the progressive alliance splinter, Jews and Muslims on opposite sides, and the mainstreaming of antisemitism and Muslim hatred plays into their hands. To be as blunt as I can be, they hate all of us and nothing makes them happier than to see us at each other’s throats. [I have heard, but I don’t know if it is rumor or fact, that some of the most vitriolic and mob like anti-Israel/anti-Jewish rallies are funded by these groups.] We have a lot of work ahead of us to rebuild the fragile coalitions that have resisted these anti-democratic forces.
\nWe may be seeing that the modern concept of the nation state is an insufficient organizing model for a post-modern world. The challenges come from two directions: the internationalization of the economy means that virtually no national state is self-sufficient. At the same time, the 2 centuries of the “modern” nation-state experiment did not lead to the elimination of ethnic and cultural divides that continue in almost every corner of the world.
\nThere is much more to say about this question – that goes beyond what I will attempt in these few pages. But it is by no means certain what the right model should be for the world in which we live. With catastrophic and existential climate crises, with the political and cultural confrontation with civil society and liberties in far too many places, with nativist politicians being all too prevalent and outspoken, with the anarchy of social media, and more, it is certain that the aspirations of what the modernizers of the 18th and 19th centuries imagined that the nation state would solve have reached their end.
\nAs a historian, it is precisely in times of transition, uncertainly, and upheaval that antisemitism has thrived. The Israel-Hamas war may have made it safe, but if these larger phenomena were not present, there would be less fertile ground in which these seeds would flourish.
\nNow a few thoughts on that war. So much has been said, written, shouted, and argued that I will try to only address a few points.
\n•\tThe Hamas attacks on 7 October unleashed what they hoped would happen: a large-scale Israeli response that incurred the wrath of the many. For any of us, certainly those of us on the progressive side of things, this is painful. It is painful to see our one-time allies willing to justify Hamas’ inhumane behavior but condemn all of Israel’s. From my perspective, criticism of Israel is legitimate [I fully agree with the 80% of Israelis who feel that Netanyahu should resign and the over 50 % who have felt for a long time that he has been terrible for Israel and by extension for the Palestinians.] But it is simply morally corrupt to justify rape and murder by Hamas or to have the narrative begin on 8 October.
\n•\tIs Israel a colonial state? It certainly is not a colonial state in any historic sense of the meaning in many other places. Yes, it was acknowledged as a separate nation state by the United Nations, after WWII. Yes, there is no doubt that world guilt of the Shoa made that recognition inevitable. But…
Jews were living in that area we now call Israel and throughout the entire Mediterranean and Middle Eat uninterrupted from before Christianity, and before Islam. So, while it is accurate that many survivors and other Jews from Europe moved to Israel before and after it became a State, it is not as if another nation state occupied a place as its colony. Moreover, as we will see below, Jews were/are indigenous. Unless, of course, one understands the very presence of Jews as alien!
•\tSome have accused Israel of ethnic cleansing. I certainly concur that some of the behavior in the West Bank in recent years has been deplorable, but I find it telling that the obligatory ousting of hundreds of thousands of Jews from places they lived for over 2 millennia was not considered ethnic cleansing or worthy of protest. If it is okay to oust Jews but not Palestinians, that is selective judgement. Doesn’t that also reek of antisemitism?
\n•\tLet us make no mistake about what words mean: When mobs in the USA and Europe argue that it should be Palestine “from the river to the sea,” that is not a call for a 2-state solution; it is a call for the elimination of Jews or a Jewish state. And the precedent is absolutely clear: when Israel withdrew from Sinai and subsequently from Gaza, it meant that no Jews could remain.
\n•\tAs long as we are addressing words: to accuse Israel of “genocide” is a willful distortion of what the word means. In the 20th Century there have been all too many attempts at genocide – the Nazis, while the worst, did not have a monopoly on the concept or the behavior. However terrible the War has been in Gaza, and in Israel where rockets land daily – it is not genocide by any reasonable understanding of the term. Holocaust deniers are eating this up, but morality requires distinctions.
\n•\t What about… I am not a big fan of “whataboutism”. It usually is used to deflect blame from an obviously bad actor to say that they are just doing what others have done. But when there is a pattern that disproportionately rebukes and blames Israel when there are far worse actors elsewhere, even in the middle east – with nary a peep and certainly no large-scale rallies, one is forced to ask if there is an inherent bias in the imbalance. In the UN and the WCC and elsewhere, self-review demonstrated this imbalance over a long period of time. Is it antisemitism?
\nI end where I began. I never imagined that I would be writing a piece like this since I never imagined that I would be living in as precarious a time – certainly for Jews but, as history has shown, for all vulnerable minorities who can be “othered.”
\nIf we are to change the course, there is no time to lose. History doesn’t give us much cause for optimism.
\n", "url": "https://wisephilanthropy.institute/insights/469-the-canary-in-the-coal-mine-3-antisemitism-the-article-i-never-thought-i-would-write", "title": "#469 The Canary in the Coal Mine 3: Antisemitism - The Article I Never Thought I Would Write", "date_modified": "2024-01-17T13:00:00.000Z", "author": { "name": "Richard Marker", "url": "https://wisephilanthropy.institute" } } ] }