SOROS' GIFT TO HUMAN RIGHTS WATCH

This morning George Soros's $100 million gift to Human Rights Watch was reported. When you look at where these mega-gifts go they are usually to large, well established and well funded higher education or health care organizations, worthy benefactions without doubt. But iconoclast as he is, Soros probably realizes that funding human rights, in which he has long been interested and has long supported, may carry more import than a gift to an already well endowed university or medical center with a development office larger than most state legislatures and a pool of upgradable prospects. It's "setting-out-the-buckets" fund raising.

But funding human rights is a hard slog. There are grim stories of outrages against individuals, families, clans and tragedy aplenty from Afghanistan to Zaire. However systemic efforts to counter egregious abuse are not well understood or effectively communicated. Moreover there are scores of organizations engaged in human rights initiatives. Some tend toward immediate relief or advocacy and all compete for essentially the same donor type.

In Soros's case it seems he wants to give away most of his money in his lifetime and it reminds me of a story. Some years ago I was meeting with a certified billionaire (though not in Soros's class) and he told me he had a problem. Of course I asked what the problem was. "Well." he said, "I want to give away all my money before I die. My problem is I don't know how long I'm going to live."

He's still with us. I occasionally see him on the Times Square-Grand Central shuttle.

Corporate "Philanthropy": Oxymoron?

In Monday's Wall Street Journal there appeared a provocative essay by Arneel Karnani (whose first name WSJ managed to misspell), a business professor at University of Michigan. Titled "The Case Against Corporate Social Responsibility," the core argument is "the idea that companies have a duty to address social ills is not just flawed ... but it also makes it more likely that we'll ignore the real solutions to these problems."

In my opinion Prof. Karnani is right. But I have a slightly different take born of boots-on-the-ground. My experience is that no company in its right mind ever takes on "corporate social responsibility" for its own sake. Nor should it. Profit is always foremost, or should be; what gets marked down as social responsibility is almost always little more than a marketing ploy or a p.r. gambit. Years ago I worked with George Weissman, then head of Phillip Morris, and one of the few p.r. guys who ever actually rose to the top of a major public company. Weissman was one of the first to come up with the social responsibility tag. I once asked him if it wasn't still "just about hawking cigarettes." His answer was one word "yes." And we both laughed.

As a native New Yorker, and therefore an innate cynic, I am much more comfortable with that "yes" than I am with the posturing that goes along with "social responsibility." In recent years I have become quite involved in helping clients into "cause related marketing," a practical application of the social responsibility thrust. Ultimately, when it works, CRM is the devil and the angel finding common ground.

If there is an act of apparently pure corporate beneficence it simply does not follow that "image," brand" or whatever the current locution is can be extended without any consideration of the good it will do the company. Fine with me. That way we each know where the other stands. Indeed in recent years what I have observed is an ever increasing transactional rationale to corporate giving.

Most probably every charitable gift - regardless of whether it is from a corporation or an individual is a mix of altruism and self-interest. I think of an A/B axis, pure altruism at one end, unmitigated self-interest on the other. Any donor's gift falls somewhere along that axis - and it does not necessarily fall in the same place with each gift. Depending on the cause there may be a greater or lesser degree of altruism v. self interest.

I give money each year to the volunteer fire department in the small town I live in: If my house is on fire I want to know I'm on the donor list. By small town standards I am also a "major" giver to the local humane society. This giving (almost every month) is 100% altruism. I am up to here in (needy) cats and don't want to add to the three who are in charge here. But I cannot resist the monthly newsletter - or the BRE that falls out! All my other giving falls somewhere else along the axis.

A cause marketing firm I work with has published data suggesting that socially aware companies do better at the cash register. Does that prove doing well by doing good really counts? Or is it just clever marketing?

Give It Up!

As everyone by now knows 40 US billionaires have pledged to give away more than half their fortunes to charity, the so called "Giving Pledge." This may be a p.r. stunt or it may be heartfelt philanthropic impulse - and at least among a few, it may be a bit of both. Most of the names on the list are familiar to the trade. There may be a few dark horses.

I am struck by some of the missing names; I can't go further because some of them are among my clients. That aside the first thing that comes to mind is why stop there? Why not encourage everyone who can to do the same? For as long as stats have been kept the total philanthropic handle in the US hovers just above (or in a few years just below) 2% of GDP.

Many of us feel the real challenge to philanthropy is how to move the needle up. Given that in 2009 donations in the US came to some $306 billion a 1% bump would be a major accomplishment: another $3 billion would/could significantly restore much that has been lost the last few years. Of course that wouldn't come in one year but the direction is what counts.

These generous donors aside, the richest people in America, there is a vast middle of near billionaires and "poor" billionaires to say nothing of those struggling with fortunes of $50 million or more. ... I am generally skeptical of pledges of this kind. They are not easily measured. Who is to keep score? Giving USA would pick up some of them. It is also well known that Forbes, the base list for billionaire metrics overstates some and understates others. It is admittedly hard information to acquire as the subjects for the most part are not completely cooperative. Duh.

Well. As I tell my friends I have already given half my net worth away. It's called the recession.

"A Maverick in the Field ... "

Prof. Marybeth Gasman of the University of Pennsylvania Graduate School of Education and her colleague Noah D. Drezner have just published an award-nominated scholarly study of The Oram Group's historic role in helping historically black colleges and universities raise funds. A Maverick in the Field: The Oram Group and Fundraising in the Black College Community During the 1970s is based on our company's files that are archived at the Center on Philanthropy at Indiana University, on some of my published speeches and writings - and on interviews with me some years ago. For the the full paper please cut and paste: http://embedit.in/HEhi5gGRFI.

Reading it for the first time was exceptionally moving and emotion-inducing. I lived it, participated in the work, and with other colleagues like Eve Bates and Liz Hicks, Paul Frillmann and many others carried forward Harold Oram's idealism hard pragmatism and great tradecraft. No other consulting firms in this field - of which I'm aware - have been the subject of such a study.

Comments appreciated. ...

The 2nd Quarter?Trends for the Year

Friend and colleague Marilyn Hoyt summarizes the second quarter...

An excellent roundup and informed speculation.

The 2010 second quarter is behind us. The Financial Times notes that "The US housing market is the biggest debt market...with more mortgage debt outstanding than US government debt" and, in another article, that the federal deficit now and for some time to come is about 1/2 ov what it was at the end of WWII as a % of GDP. Encouraging news and dismal news still swirling around. So where are we now? (Please let me know if you want the citation of any of these notes. Also if you'd like to add a colleague or if you prefer not to receive these notes:)

The staff volatility trend is emerging quickly:
**Nonprofits are starting to re-hire against the positions that were laid off (An April business survey conducted by the NJ Star Ledger found that for the first time in 2 years, more CEO's are planning to hire than lay off)
**Recruiters with large nonprofit practices are seeing strong upticks in demand beginning about last May
**CEO's and development staff are leading in searches conducted by recruiters
**The Chronicle of Philanthropy notes in separate articles that nonprofits are starting to increase salaries again, but foundations are not
**Nonprofit professionals who have lost confidence in the potential for moving ahead where they now work are not only looking to move to another position, but more readily to another city. Assertive Boards and supervising staff are well positioned to recruit a strong candidate if they can demonstrate that their nonprofit is ready to roll again
**If you are searching, check carefully as you interview. Many job descriptions now roll-up the effort of 2 or even more former positions. It may be hard to meet expectations, let alone win success, if this is the situation. Know before you go:)

Corporate philanthropy is redefining itself
**The trend toward bringing marketing priorities into corporate foundation giving has been growing for over a decade
**Now, with corporate foundations still depressed (many had a policy not to diversify their investments), we are seeing what a colleague in the Bay Area refers to as "blurring" across giving methods. The value we are expected to add to the CSR (corporate social responsibility) equation is beginning to show up as part of the giving discussion whether we are working with corporate foundations, corporate contributions, gala ticket purchases from departments supporting their clients/prospects, corporate volunteer programs, employee matching, charity partnerships/awards, or in-kind giving.
**I think most of us are used to thinking of the U.S. as the bellwether in corporate voluntarism. Is this the next big thing coming over the horizon from Europe and Asia? GRI (Global Resource Investment) is fast-growing as the definer of sustainable standards. In Europe, there is a trend toward requiring GRI compliance in order to win contracts, so our international companies are now playing in this field. Where does philanthropy stand in this paradigm? Well, the good news is that the most recent survey on community impact has lots of references to philanthropy: http://www.globalreporting.org/NR/rdonlyres/6D00BC14-2035-42AB-AB6A-5102F1FF8961/0/CIReportfinalnew.pdf. The less good news is that in GRI's own rubric, philanthropy
appears to be positioned in opposition to "sustainable" community inputs. Current thinking does not seem to be moving toward encouraging/requiring philanthropic activity. So....here's a free newsletter to help us watch what's happening http://www.globalreporting.org/griportal/GRI/NewsPressEvents/frmNewsSubscribe.aspx

Foundations seem to be putting out more RFP's
**It seems that the pressure to make scarce resources meaningful is leading to more directive behavior from foundations -- defining the project and issuing an RFP, providing technical assistance/consulting rather than funding, taking on their own projects and producing them soup to nuts (often with nonprofit contractors), setting rigid expectations (such as a merger) prior to releasing more funds or accepting another proposal. Will these patterns spread across the sector and come to dominate activity? Probably not...but since this is growing trendlet, it's one we want to follow attentively
**Keep in touch with your foundation funders and prospects! They notice when we disappear because funding is greatly reduced or on hiatus. Now is the time to call -- to thank, to noodle what's going on in the sector we serve, to act like a real colleague

Government is getting hungrier
**In 2010, we are experiencing tough times in state, county and city budget as cuts in funding
**As stimulus monies end and the tax base is not yet recovered, government is getting hungrier
**Operating cash reserves are more important than ever. We are seeing more frequent stories of school districts, county and state government holding contracted funds "in reserve" or just plain waiting months and months and months to pay. In some instances, grants have not yet been received even as new proposals for the coming year are in review.
**Populations are voting to increase taxes for selected needs (Arizona Prop 16, Georgia education)
**However this won't do the whole job.
1) Governing Magazine notes excise taxes (tobacco, liquor) are on a steep climb.
2) Limiting tax exemptions for charitable gifts is under discussion in New York and elsewhere.
3) Taxes on admissions income has been tested in Illinois. When over 100 supporters turned out for an open meeting, the tax idea disappeared and now discussions of much higher fees for water, sanitation services, and/or other city services are underway.
** Now is the time to check in with colleagues in your field. If precedents exist where these taxes or user fees are in place, it is a problem for all of us. We need to be informed and ready to act.
** Just as in every other part of our work, we need to keep telling the story internally and externally. It is a strong bulwark against the ignorance that yields bad legislation and -- believe it or not -- there's still service and capital funding out there. Our elected officials and their staffs as well as department staff know where it is. Keep talking!

Worth Reading:

www.GivingUSA2010.org -- just as comprehensive as ever, and now free on-line. This is the go-to reference for 2008-09 trends, where private funds are coming from and flowing now.

Turns out that employing about 10% of the U.S. working population pays off. Business journals have been really helpful through this period. Subscribe if you haven't yet. Travelling around the country, I see them most consistently providing us with useful articles on the state of a local nonprofit sector (health & hospitals, the arts). And they are great compilers of lists. This week the San Francisco Business Times built its list of top corporate funders and unveiled them at their annual Corporate Philanthropy Awards http://www.examiner.com/x-10861-SF-Nonprofit-Business-Examiner~y2010m7d22-San-Francisco-corporate-philanthropy-awards-spirited-once-again while Crain's New York Business together with the nonprofit Arts Alliance inked thoughtful articles on the arts sector as well as a useful rundown on the top 100 http://www.crainsnewyork.com/article/20100718/FREE/307189995

The Pew Foundation continues to publish such helpful and thoroughly prepared reports. Here's the latest from July 14th -- a look at the effect of all these furloughs and layoffs on the nonprofit sector. There is some nice categorical work here so you can look at your particular field. http://ccss.jhu.edu/pdfs/LP_Communiques/LP_Communique19_jobs.pdf

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Thanks to all the colleagues, grantmaking staff, and trustees who keep finding time to give me the observations see here. Let me know what you are thinking! (Thanks to Joni Podolsky, community engagement specialist, Bay Area, CA)

NEW GIVING USA BLOG

We want to alert you to a new resource. Beginning in June, Giving USA Foundation’s Melissa Brown began an excellent blog about information, ideas, and recommendations for fundraising coming out of GUSA’s ongoing research. About once a week, Melissa is posting updates to giving information or new ways of looking at the data GUSA collects. We encourage you to bookmark: http://www.givingusa2010.org/blog .

We have just returned from the Giving Institute’s Summer Symposium, our consultant association’s annual conference on best practices, trends, and forward thinking. As always, there was a session about GUSA, of which Giving Institute is the producer. Patrick Rooney, E.D. of IU’s Center on Philanthropy, who oversees the Center’s ongoing role as the research partner for Giving USA, noted that year after year, the forecast—which draws from available IRS data and uses well-tested and vetted econometric models—has had a variance of only 1-1.5%, which is astounding.

Knowing we can rely on the data, we had, as always, a deep discussion about the ways the data can be most useful to our clients, given that our resources are not unlimited. Questions to GUSA staff from Giving Institute firms, including Oram, included what the overall giving picture looks like when certain large inputs or outputs are removed. We know from the data, for example, that overall, direct individual giving (itemized gifts only), which makes up 75% of all reported giving, declined just. 0.4% last year. (Bequests are a separate story, of course.) But in a world where a handful of donors can shift the entire picture by giving large sums into investments or a few select places, we were curious what all the superb bar charts and graphs would look like if GUSA took out what we call the “super-absorbers” — the mega-gifts to mega-institutions. True to form, GUSA is ready to take up the challenge and see what they can do. Your questions can help continue to refine how this marvelous resource to all of us can continue to expand its relevance.

Stay tuned, and keep an eye on the blog. Melissa’s July 20 post concerns “Giving to Religion.”

THE BLESSED USE OF TAINTED MONEY

Does the blessed use of tainted money purify it?


Early on in this business I learned not to question the provenance of money. Not much "old" money was generated in a saintly manner. For "new" money much the same can be said much of the time. I don't know of charities turning away donations aside from those who turn away gifts from tobacco or liquor companies. Whatever your take on the evils of rum or tobacco the makers are acting legally if not morally.


But what about "Illegal" money? The Spence School and Asia Society, two of New York's most elite institutions are fighting the government's demand that they repay funds donated to them by a man later convicted and about to be sent away for running a Ponzi scheme. This claw-back strategy became a thing when the Madoff empire collapsed.


The institutions' argument is that they accepted the funds in good faith, they had no way to know the gentleman was a crook he was not so labeled at the time. Ergo they have no obligation to return the money.


The legal issue I will leave to the lawyers. The ethical question intrigues me because if every charity had to repay every cent of ill-gotten gains that they indirectly received through a good-faith (if not purely motivated) donation I would fear for the worst.This does not appear to be a clear and imminent peril but does lend light to the illusion that the government's on it. Would I advise the Asia Society or the Spence School to give back the money? I would not. Would you?


There's the old story about the wizened preacher who was offered $1000 of tainted money to repair the church roof. "Tain't enough," he replied.