Be Spectacularly Wrong. I Was!

Today's New York Times (February 5th)  reports that KAREN BROOKS HOPKINS president of Brooklyn Academy of Music  (BAM) will step down next year. Thereby - as they say - hangs a tale. BAM is over 150 years old. But its modern incarnation dates to the arrival of  impresario HARVEY LICHTENSTEIN  in 1967.

Harvey was a ballet dancer, he had an arts award from Ford Foundation and at one point was briefly employed at the Oram firm where we became acquainted. He told my colleague the late Sid Green and me of a bold plan he had to bring all the performing arts to Brooklyn, to revivify BAM and to create an entirely new performing arts presence in New York, in of all places, Brooklyn. Brooklyn-born Sidney thought that was a super idea.

As a lifelong Manhattan-centric snob from 67th Street  not from somewhere west of Newark, east of the river, or  north of the Spuyten Duyvil, I assured Harvey that this was a quixotic notion and a dead certain money dump. He bore no grudge and a few years after that I met Karen when we were retained by BAM. She was then BAM's development officer and all I remember from that time was a couple of all-nighters to pull together an NEA grant.

Today BAM is a  multiplex of arts and edgy vision; real estate; and for sure one of the most exciting venues in the city. Karen's energy, creativity and chutzpah  is an example of  CEO-ship anyone could learn from. To paraphrase what Jefferson said of Adams, or maybe it was the reverse, she can be succeeded  but  not replaced.

We have been on and off members of BAM for years now. If they served crow in the cafe I'd eat it!

The Year Ahead

 
I am always delighted when friend and colleague MARILYN HOYT sends along her take on what's ahead. This is the third or fourth such report I've shared. Comment here or write Marilyn directly at hoytmarilyn@gmail.com.
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Resilience is more important than brilliance

Luke Johnson, The Entrepreneur

Financial Times, 11/6/13

Informal Personnel Study looking at Job Volatility:  Thanks to the 85 of us who reported on their current position and the past 2.  High points were:

1)      Most of us did not change jobs during the recession…and yet, we often saw ourselves as outliers if we stayed put.  Not so! 

2)      We often saw our job descriptions expanded as others were laid off or left. Now, new hires are getting new jobs and we still have these expanded jobs. (True of business too)

3)      When left jobs, we often began grantwriting/consulting. Now, many of us are going back to jobs.  Those at/near retirement are most consistent in staying freelance. 

4)      Those who stay a long time in one institution (10 years +), often have a bad experience after a move. We need to pace ourselves nimbly if we want to career-build with moves.

5)      For-profit colleagues often cross into fundraising from marketing and communications or their own small businesses.  We fundraisers transfer among non-profits serving similar constituencies or into government.

Trends:

Foundations generally very much on the uptrend.  No sign that they’ll go back to pre-recession priorities.

Corporations not particularly.  They are distracted by the larger story of global CSR where there is no pressure for philanthropy, are still giving nearly ½ of their recorded philanthropy in-kind, continue interest in having their employees volunteering as part of their internal motivational and leadership development programs, and are under a lot of pressure to make sure their giving brings value back to their brand, leadership and/or bottom line.

Individuals.  Annual Funds are holding if not growing. Major gifts are tracking the return of stock profits and our ability to invest in building relationships. Social media delivers much more measurably as a brand raiser than a fundraiser.  Cause Related Marketing may make more sense as it doesn’t tend to require so much time on our side:  222.conecomm.com/2013-social impact. Don’t get lost in fads!  Keep watching the studies.

Government:  Still so volatile.  Network, network, network in your region and field.

Fads:  The fad of the moment is “technology.”  Since we’ve so traditionally worked without much technology or data, investigating these tools is a good idea. But technology does not replace relationships in our business or anyone else’s…and it’s hard to find efficiencies too.

Watch business…they got us into this, and are beginning to illuminate what data does and does not do.  A full year ago, the New York Times put a shot over the technology bow by placing two articles top-of-fold on page 1 of the Business Section:  (http://www.nytimes.com/2013/01/11/business/in-new-year-errors-mount-at-high-speed-exchanges.html and http://www.nytimes.com/2013/01/11/business/electronic-records-systems-have-not-reduced-health-costs-report-says.html)

To get my grey cells perking on how to harvest and use data, I was impressed with an article in the December 2013 Harvard Business Review: You Might Not Need Big Data After All – Learn how lots of little data can inform every day decision making.  http://hbr.org/2013/12/you-may-not-need-big-data-after-all/ar/1

On the other side of “hard” is where special things happen.

Kasim Reed, Mayor of Atlanta

 National Public Housing Museum conference hosted by the Ford Foundation

10/17/13

FAMILY FOUNDATION MANAGEMENT/COUNSEL LLC

FAMILY FOUNDATION MANAGEMENT/COUNSEL LLC is new entity I established, separate from The Oram Group. Please visit FFM/C at www.ffmcounsel.com.

I set it up because over the years I've been informally advising high net worth people, families, trustees of Oram clients, etc. on their  philanthropy. I gradually came to see that though these folks had  investment advisors, wealth managers, lawyers and accountants what they didn't always have was any real guidance on how to pick grantees that would optimize their giving. Some of these people already had donor advised funds at community foundations but in a few cases their wealth had increased so much they effectively outgrew that model.Others felt distant from their philanthropy or were not deriving a whole lot of pleasure (or recognition) out of their giving. As reported in The Chronicle of Philanthropy last October:

Affluent Americans say their financial advisors too often talk about charitable giving in ways that are technical, focusing on tax breaks rather than their clients' philanthropic goals or missions, according to a study by US Trust and the Philanthropic Initiative.
The Chronicle of Philanthropy, October 24, 2013

FFM/C's focus is new and emerging family foundations. We're not trying to compete with community foundations or fully established foundations (unless they seek us out) but  most important we are  not money managers, wealth gurus or investment managers.We are intensely and solely focused on a client's needs and philanthropic aspirations. FFM/C ...

Helps new and emerging family foundations develop a strategic focus for their philanthropy.

Provides a sensitive understanding of the intergenerational issues that may affect family philanthropy and arm's length counsel in resolving those conflicts

Brings guidance in inviting and evaluating grant proposals submitted on paper or through a foundation's website; selection of grantees; grants management; qualitative and quantitative assessments of grantees' performance; schedules accompanied or unaccompanied site visits

Closely cooperates with the family's legal and financial team.

VOLUNTEERS COUNT. COUNT VOLUNTEERS

In the current political climate the greatest uncertainty before philanthropy is whether the charitable deduction will be preserved with no, or very limited, change. Overlooked  in the discussion is that total US philanthropic through-put has hovered at just above or just below 2% of GDP, year in, year  out since for as long as Giving USA has been charting  philanthropic trends.

Increased giving at the top – the $100 million plus cohort, profiled in last week’s Chronicle of Philanthropy, impressive as it is, doesn’t move the needle and a large number of small gifts at the middle and bottom of the pyramid can’t nudge it either. In my view this has a lot less to do with the status of the tax deduction and much more to do with what we actually count.

Even if we allow that a lot of giving is undetected and unreported – e.g. corporate cause related gifts, small cash gifts, internet and  mobile giving, estates too small to file returns, gifts to religion outside the mainstream churches and synagogues …  etc. – what’s not counted at all is the value of voluntarism to the whole process. I have seen a few attempts over the years to quantify volunteer time (not the deductible cost of being a volunteer such as travel and other expenses) but it’s not what one could or would describe as hard science.

Voluntarism is an (uncounted) economic activity; GDP is an expression of economic activity.  I can think of three other ideas that might move the needle: first increase taxes  on the 1% for sure – but raise (not cap) the charitable tax deduction; second limit the  life of private foundations to 50 years and distribute the assets directly or to community foundations for distribution not perpetual storage. Third – as  my friend Ram Capoor  notes philanthropy is highly fractionated. There is no central, searchable go-to web-based source of  information for all stakeholders: donors, organizations, governments, the public – a Trip Advisor for philanthropy. This is a simple,  brilliant idea. Information is currency.

But most important count voluntarism.

Pay More. Give more. Get more.

The December 7th  New York Times detailed the increased marginal  income tax rates for the wealthiest Americans. I have a modest suggestion. There is  no question in  my  mind that these"folks" (Obama's preferred term) should and can pay more. Instead of threatening to cut the charitable deduction rate, or cap it, how about the Republicans and Democrats agree to increase it as the marginal tax rate goes up for the wealthiest? It helps charities. It's a sop to the rich and though I am  no economist I sense that it would have little bad effect.

Big Government and the Charitable Tax Deduction

The fatalistic conjunction of Super Sandy, President Obama's re-election (whew!) and the fiscal cliff has  put big government and the charitable tax deduction on the board in a way we couldn't have imagined a month ago. Sandy showed both the vibrancy of generous Americans and charitable impulse - as well as the simple fact that private charity, no matter how well intentioned, cannot really function very well in a disaster setting without a supervening mammoth federal. state and local government presence. Government assures adequacy of broad scale effort; charity is at best  interstitial, filling  in the cracks - essential yes, but really quite limited, highly selective, not easily quantified, and pretty much  unaccountable.

A lame duck congress has gathered and must forge a compromise that ideally will address the need to  increase revenues and decrease expenses. As we know mandatory across-the-board cuts, deep cuts, in federal spending  - including the Republican untouchable, Defense - kick in at the end of the year. Everyone  knows the super-rich and the just-rich ($250,000 and up) are favored  in the tax code. Simply put my view is the rich can and should pay more in taxes. There are various ways to accomplish this end. One way is  by capping the charitable tax deduction - a kick in the rubber parts that reportedly will have a profound impact on giving by the very rich.

The usual suspects have already begun a furious lobbying effort to assure that the deduction isn't touched. I'm of course part of the "industry;" I'm on the receiving end of this agitprop and as a matter of self interest I should huff and puff with everyone else. But I'm not so sure. I keep asking myself what is best for the country? What is best for the greatest  number of taxpayers in all brackets? Yes some mega-donations might be  lost or reduced. Would that cost bring a greater social benefit? I don't  like singling  out the charitable tax deduction when the entire tax code is such a dog's breakfast of forgiven revenue - everything from mortgage interest to offshore tax  loopholes, etc. But the prospect of a split congress actually reforming the tax code? That chute won't open. The best we'll get, in my view, is a spatchcocked compromise with most of the inherently bad stuff unaddressed.

If  other giveaways  by the federal tax code are seriously addressed I really can't honestly argue that the charitable tax deduction is untouchable. And I  itemize.
 

Health Care and the 1%

Some years ago I went to work for PROSTATE CANCER FOUNDATION then run by Leslie D. Michelson, a tough but fair marketing-oriented guy. Leslie left  in 2007 and founded a company called Private Health to help his clients " ... obtain the best possible health care.  We knew just how dysfunctional the health care 'system' was and have worked hard to develop the expertise, resources, systems and discipline needed to navigate it."

The article below, written by Joe Rago of the Wall Street Journal will be of interest to anyone concerned with the equities and inequities of health care specifically and of American economic life generally. This piece is very troubling to me yet it is on head-on. Like charter schools, Ivy League colleges or anything else that attracts an elite sub-set the argument reduces to one ethical conundrum: if you can't help everyone should you help anyone? A corollary is if you do so does or can society as a whole  ultimately benefit?

Friends - this is a dose of the salts.

http://webreprints.djreprints.com/46034.html