Category Archives: learning

Connecting Family Philanthropy With Social Giving

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A couple months ago, PhilanthroGeek founder Nathaniel James, ioby co-founder Erin Barnes, and I set out on a small adventure to answer two questions:

  • How do we describe the new trends in social giving to the family philanthropy world?
  • What do family foundations make of the opportunities and challenges in these trends?

I’m describing some results of our adventure in this post. Nathaniel and Erin will be adding their thoughts in future posts at PhilanthroGeek and elsewhere. For ease of writing, I’ll use the term “family foundations” to be inclusive of foundations, donor-advised funds, trusts and other forms of family philanthropy.

Framing “Social Giving” (vsn 1)

We started our adventure with the rapid rise of crowdfunding sites and grassroots giving circles. Both tools help donors of any means directly connect with and support ideas, projects, and organizations. Both tools allow donors and requesters to bypass traditional intermediaries ranging from record companies to community foundations. Not all raise money for traditional charitable purposes and very few crowdfunding sites are sponsored by charitable organizations.

The term “social giving” is sometimes narrowly used to discuss online fundraising. We purposely used a broader definition that emphasized the “social” aspect, as not all giving circles are online and both tools truly succeed when people reach out to their offline and online social networks to make great things happen.

Our overview of the field of social giving showed that the tools share three common traits and have at least four trends driving their growth.

social giving graphic

Erin created a matrix of a larger variety of tools for giving, showing how they compare in the proximity of donors to recipients and how driven the tools are by technology.

matrix of social giving tools

Family Philanthropy’s Reaction (vsn 1)

Session picForty or more people attended our session at the 2013 Family Philanthropy Conference. They represented different generations and roles in family philanthropy. Few had direct experience with crowdfunding sites or giving circles.

After our overview of social giving and some quick case studies, we asked small groups of attendees to discuss how social giving trends and tools might complement or distract from their family philanthropy work. Discussion topics came from the National Center for Family Philanthropy’s Pursuit of Excellence framework for assessing family foundations:  legacy, vision, and mission; governance; family roles; program development and grantmaking; and finance, administration, and responsibility. You can download notes from their responses at the end of this post, but I wanted to comment on four reactions from the small groups.

“[We would] need assurance about proper due diligence and legal issues. This adds a layer of complexity to grants.”

Grantmaking – Every small group brought up challenges with supporting crowdfunded projects and giving circle award recipients that aren’t IRS-approved charitable organizations. Many projects provide community benefit, but create the burden of exercising expenditure responsibility. Crowdfunded support for small businesses, even socially-minded ones, likely don’t qualify as Mission-Related Investments, but this could change over time.  In the meantime, organizations such as ioby, Donors Choose, Global Giving, and Social Venture Partners’ chapters are public charities, providing easy testing grounds for grantmaking.

“[Social giving] can be a glue that brings family together – a family foundation exists for more than just grantmaking.”

Family giving culture – Most founders of family foundations want them to be tools that bind family together over time. Family foundations already use storytelling, family legacy documents, and other tools beyond grantmaking to build cultures of giving. Family offices and some family foundations will assist family members with giving beyond grants made by the foundation. Social giving tools can be a terrific means of family members discovering and acting on their philanthropic passions, either individually or in groups. And, because many social giving projects are short-term in nature, families can learn quickly from the experience and decide what did and didn’t work for their culture.

“[Social giving tools] meet Next Generation members ‘where they are’…They add new dimensions of giving from younger trustees.”

Trustee preparation – Attendees easily linked social giving tools to the interests and behaviors of young philanthropists described in the recent #Nextgendonors report. Family foundations often struggle with finding meaningful ways to involve teens and Millennials in foundation grantmaking processes. Involvement in a giving circle or crowdfunding campaign can be a valuable experiential learning opportunity. In a giving circle, a family member can learn about evaluating ideas, projects, and organizations without the pressure of conforming to foundation processes or parental expectations. Often, participants in giving circles lend expertise to grant or award recipients – another chance a for family member to practice volunteering or learn leadership skills. Foundations could encourage trustees to pitch their favorite giving circle or crowdfunding projects to other family members in an environment that would likely have lower stakes than pitching an official grant proposal.

“[Social giving is] a great way to bring family foundation work to the people, to make it understandable.”

Community relations – Welcome to the magic of crowdsourcing ideas. Nathaniel, Erin, and I hadn’t thought of this in our session preparation. A few years ago, the Philanthropy Awareness Initiative reported that 60% of people in community leadership roles felt they didn’t understand how and why foundations work. Only 15% could describe a foundation’s impact in their community. Everyday people presumably knew even less. In this era of government budget cuts and tax reform conversations, I think this lack of understanding can only hurt traditional foundations. (See my previous post on the topic). Family foundations could use social giving tools to learn about community opportunities, solve community problems, and provide financial support alongside everyday members of their communities. Family foundations have already been providing matching grants to encourage support of projects through ioby and DonorsChoose. And, the Geraldine R. Dodge Foundation seems to be the first foundation to have a curated page on the crowdfunding site Kickstarter.

Your Thoughts?

You can download our session handout (including the graphics above) here and a summary of the small group notes here. Erin, Nathaniel, and I would welcome your feedback:

  • What do you think of our first stabs at condensing the key concepts into a couple graphics?
  • How do you see social giving trends and tools complementing or distracting from your family’s philanthropy?
  • Who do you think will be the first foundations savvy enough to include social giving tools as part of their family engagement and grantmaking work?

Feel free to reply to this post, email me, or reach us on Twitter at @tonymacklin1, @erinargyle, and @Pg33k.

 

Is Family Philanthropy Ready for “New Giving” Tools?

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(updated from my post on the Council on Foundation’s re: Philanthropy blog)

“Crowdfunding. Social giving. Unsectored solutions. Hacker and maker cultures. Citizen-led social innovation. These ideas and others are shaping new pathways for giving. Will they complement your family’s philanthropy or distract from it? Join us for a fun, honest discussion of new frontiers in giving.”

That’s the blurb for a 2013 Family Philanthropy Conference session that I’m co-hosting with Nathan James (consultant and founder of PhilanthroGeek) and Erin Barnes (co-founder and Executive Director of ioby).

In her new Philanthropy and the Social Economy: Blueprint 2013 report, philanthropy scholar Lucy Bernholz continues her assessment of the “social economy,” defined as  ”private capital used for public good.” She writes about the growing influence of mobile giving, networked action, crowdfunding, and other ways people choose to accomplish social goals outside of the traditional donor/funder-nonprofit relationship.

Nathaniel, Erin, and I have also been thinking about this social economy issue. Erin and Nathan are working daily to grow and connect new pathways for generosity and I guess I’m bringing the “seasoned philanthropy geezer” perspective. At our session, we’ll discuss potential intersections between traditional family philanthropy and the new wave of giving tools enabled by technology and fueled by problem-solving approaches of Millennials, entrepreneurs, and everyday citizens. Some of these tools include:

Here’s where you come in!

These tools are rapidly evolving and rapidly expanding their reach. So, we’d love to tap your curiosity, wisdom, and concerns to bring the freshest thinking to the session:

  • What questions would you want answered by this session?
  • Have family members brought any of these tools up as ways for the family to give? What experiments have you tried?
  • Do you know a foundation that has helped grantees use these tools for friend-raising and fundraising?
  • Do you think these tools would aid your family’s philanthropy or distract from it?

How you can respond

Erin, Nathan, and I encourage you to join the conversation in any of these ways:

We’ll promise to summarize the results of the responses and session discussion on the Council on Foundation’s blog, our blogs, and other places. Thanks in advance for your responses!

Transparency in Grantmaking

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If you’ve written a grant proposal, you know the drill. You send it off to the funder. If you’re lucky, the funder asks you some questions after reading the proposal. If you’re really lucky, the funder comes on-site to see your great work in action. They’ll also likely drill you for details of your financial health, evaluation methods, and/or governance practices. It might not be painful.

And then…silence.

The walls go up around the funder’s decision-making process. They’re reinforced by soundproof curtains, unstated locations, and maybe an armed guard or two. You’re hoping the decision-makers are kind to you and that maybe they’re having good snacks so they don’t get too surly. You sweat and wait for a call or email from your contact on the inside. When the news comes, it’s a crap shoot as to whether or not you understand why the funder made its decision.

It doesn’t have to be this way, and a government agency is the inspiration.

I had the recent pleasure of serving on a grants panel for Cuyahoga Arts & Culture (CAC), a county agency charged with distributing a one-and-a-half-cent-per-cigarette tax. State and local arts agencies have a rich history of transparency in their grantmaking. I’ve experienced this first-hand in Indianapolis and Pittsburgh as a staff member running the process, a volunteer panelist, and a board member of a nonprofit applying for money.

At minimum, arts agencies’ grant review meetings are typically open to the public. But I think the CAC did a great job of going beyond the “letter of the law” in transparency and accountability to its constituents:CAC Twitter Feed

  • CAC’s panels met at the Idea Center at Playhouse Square, a cool downtown space with easy transit access and streetfront window views into the panel. Anyone could walk in and listen. (I’ll admit that it was the last warm day of the fall so we likely didn’t attract an audience beyond grant applicants).
  • The Idea Center’s staff streamed the panel conversations live on CAC’s web site and the recording will be available to anyone for later listening.
  • CAC’s staff used Twitter and Facebook to keep the public posted on the panel’s progress.
  • Applicant organizations and members of the general public were invited to provide feedback on the process at the panel conversation and via email or social media. They could also submit factual corrections in case the panelists said something incorrect about the organization or proposal.
  • The panel’s scoring criteria were clear, transparent, and provided to applicants up-front. Forty-five percent of the score was weighted to public benefit, with an eye to how the applicant actively engaged the community in planning the arts programs and host the applicant thought about community accountability.

I’m sure not all applicants were excited about the process. They couldn’t sell the panelists or staff members on their proposals’ merits. They had to listen to sometimes tough assessments of how their projects didn’t meet the scoring criteria. The panelists weren’t from Cleveland and only knew what we read about the organizations and the communities they proposed to serve. The application process probably took too much effort for grant awards under a thousand or two thousand dollars. But, it was likely tough to beat the fair shot the applicants received at obtaining money and obtaining feedback on their proposals.

What if…

What if philanthropic foundations did grantmaking the way Cuyahoga Arts & Culture does?  I’ll concede that foundations have the legal right to say little more than what’s published in their IRS 990 forms. I’ll likely even defend the right, in many circumstances, to that privacy and the freedom it can provide.

There are some great efforts in foundation transparency. The Foundation Center’s Glass Pockets project and the Center for Effective Philanthropy are leading the way, and philanthropies ranging from the Knight Foundation to the Omidyar Network are experimenting with sharing more information more quickly. But the efforts are mostly concentrated on answering “Where did our money go?” and “What did it accomplish?” rather than “Why and how did we make our funding decisions?”

 

The Nonprofit Quarterly’s Rick Cohen wrote this summer about the potential benefits of increased disclosure in the foundation community, including better civic engagement in and understanding of philanthropy.  That’s the same benefit the CAC gains from its transparency – everyday citizens understanding how their tax dollars benefit the community and feeling they have a voice in the process.

Foundations aren’t immune from the public’s increasing mistrust of traditional institutions (see here and here for stories on this). And, in the upcoming debates about federal tax reform, it will be an easy populist win for Congress to throw endowed institutions under the bus in favor of direct help to everyday Americans and small hometown charities.

Foundations shouldn’t be legally forced to be as transparent as the CAC. But we’d do ourselves a big favor if we chose to act as transparently.

A new jargon for philanthropy? Or even a new culture?

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Hacked solution. Maker culture. Artisan. DIY. Dorkbot. Citizen-powered. Decentralized. Open brand. Flamethrowers vs. Orphans Paradox*.

Are these terms in the vocabulary of your giving or of the foundations you know?

They weren’t for me until I attended the first Awesome Summit in Boston this month. The three-day event was the first gathering of the rapidly-expanding Awesome Foundation movement. There are more than 40 chapters, each giving $1,000 at a time as “MacArthur grants for microflashes of brilliance.” By the summer of 2013, the movement will have given away $1 million.

In one sense, the Awesome Foundation chapters across the world are a 21st-century take on giving circles. They’re groups of donors who band together to share in the joy, and perhaps risk, of giving and learning together. In another sense, the chapters embrace practices of organized philanthropy. There are application forms, deliberation processes, and award announcements. Many chapters “do more than give” through publicizing good ideas, actively attracting other resources to them, and forging networks of grantees.

But there’s something more. One of the movement’s founders, Christina Xu, opens her Tedx profile, with the phrase “How a playful subversion of traditional foundations is spreading awesomeness and tackling serious problems.” In the talk, she describes the movement as an experiment in guerilla funding and a celebration of citizen problem-solvers. (Now you’re talking my language!)

The trustees are mostly younger and more connected to the creative and tech sectors than your typical philanthropy group. They’re more likely to run in circles that connect with hackers (the benign kind), hobbyists, makers, and others who love grassroots innovation. Some come from government and nonprofit backgrounds, attracted to the Awesome Foundation’s simple, no-strings-attached work. They often draw on the values of the open-source movement – sharing, openness, collaboration, clever repurposing of existing work, and a skepticism for hierarchy and lists of rules.

Most importantly, they’re the type of donors and volunteers traditional philanthropies and nonprofits need and deserve. The trustees are connected, active, and already dedicating $100 per trustee per month to improving their communities. They’re biased to finding cheaper, quicker, citizen- and customer-centered approaches to community opportunities and problems. And they’re developing a smart sense of when flexible money at the right time makes all the difference to developing and spreading an idea.

Imagine if…

  • A United Way teamed with its local Awesome Foundation trustees to support new ways of helping people in need, led by those people?
  • An arts council used its Awesome Foundation as a talent scout, allowing the Awesome Foundation to take risks it can’t but adding its marketing and training support?
  • A community foundation asked its Awesome Foundation trustees, their grantees, and their friends to join its grantmaking committees or paid for their participation in community leadership programs?
  • An economic development agency and Awesome Foundation worked together to find and support nontraditional entrepreneurs, connecting them with other forums for innovation, promoting them on Kickstarter or other platforms, and more?
  • A family foundation or donor-advised fund involved its younger family members in an Awesome Foundation chapter to learn philanthropy from new perspectives?

There are bound to be challenges as differing cultures and risk tolerances collide. And some Awesome Foundation trustees might even resist the idea of being co-opted by traditional organizations. But I think the intersection of the Awesome Foundation model and traditional philanthropy is worth exploring.

What do you think? Can traditional philanthropies and nonprofits learn from the Awesome movement?

 

*P.S. The Boston chapter of the Awesome Foundation coined the “flamethrowers vs. orphans paradox” phrase to describe the tension between funding ideas that produce crazy fun (flamethrowers) and those that produce social good (orphans). Feel free to use it at your next meeting with a grantmaker and let me know their answer.

Foundation Executive as Community Builder

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“…outside resources will be much more effectively used if the local community is itself fully mobilized and invested, and if it can define the agendas for which additional resources must be obtained.” - Building Communities from the Inside Out, John P. Kretzmann and John L. McKnight, 1993.

I’ve been reflecting on how much my early training in community economic development continues to influence my current work in philanthropy.  I fell into both professions by accident, and the book quoted above and subsequent training on the Asset-Based Community Development (ABCD) approach continue to be integral to my worldview.

I was lucky that mentors ranging from neighborhood leaders to national foundation staff continued to introduce me to leaders and tools that worked in the same spirit:  Jim Diers, Bill Traynor, Everyday Democracy, Grassroots Grantmakers, Project for Public Spaces, and Cambridge Leadership Associates, just to name a few.

Because of these influences, I tend to take as a given that:

  • All people and communities are full of assets and capabilities
  • Smart community leaders help people identify those assets, make use of them, and grow additional skills and talents
  • Enduring community improvement starts with everyday people connecting with each other, cultivating their civic leadership and civic entrepreneurship skills, and planning and acting on the future of their community
  • Community building and trust building work has value by itself and not just as a means to another end

In looking back on my first year as executive director of a family foundation, I realize that I’ve continued to adapt these influences to the family and its philanthropy.  I see my work as an internal community builder.  My job is to help each family member identify her or his philanthropic skills and interests, and create an environment in which those skills and interests are recognized and flourish.  And, my job is to help them stay connected to each other and become more invested in and mobilized around their foundation’s future.

The tougher task is to continue the ABCD spirit in the foundation’s grantmaking – to see the nonprofits and communities we serve as full of capabilities, and to ensure our grants help them build on their assets effectively. Years of work in grantmaking unfortunately often translate into a lazy “been there, funded that, didn’t like the grant report” cynicism and distrust in community improvement powered by everyday people.  I hope my role can be to guard against that cynicism and distrust, including in myself.

As I write this, I’m attending the 2012 Family Philanthropy Conference.  NCFP’s CEO Retreat has started the conference with a discussion of the family foundation CEO’s role using GrantCraft’s Roles@Work materials.  “Community builder” didn’t appear as a role, though many of the roles described feel familiar, including bridge builder, connector, organizer, talent scout, and validator.

If the asset-based community building approach makes sense to you in family philanthropy work, drop me a line. I’d love to find more foundation staffers who are working from the framework!

(Also posted at http://www.cofinteract.org/rephilanthropy/?p=3919)

The Growing Power of Diverse Philanthropy

Aside

A quick plug for the W.K. Kellogg Foundation’s new report, Cultures of Giving: Energizing and Expanding Philanthropy by and for Communities of Color. The report dives into the world of identity-based philanthropy—“a growing movement to democratize philanthropy from the grassroots up by activating and organizing its practice in marginalized communities, particularly communities of color.”

The report is a great primer on the core characteristics of identity-based funds, the scope of the field and its grantmaking, and its key organizations and leaders.  Even most seasoned philanthropoids and philanthropists will be surprised by the breadth of the field:  the funds award $400 million in grants annually, and that’s just the giving through these formalized groups.  The report also describes the Foundation’s activities and lessons learned in supporting the funds and their leaders.

Three quick quotes from the report to whet your whistle:

  • “We hope this report will inspire everyday givers—of all backgrounds, genders, races, and ethnicities—to embrace their power as philanthropists.”
  • “Communities of color teem with generosity. Much of that generosity is informal and casual, expressed through acts of benevolence and support so prevalent that they simply seem part of the fabric of a community taking care of itself.”
  • “It is not enough, then, to say that the field—and the face—of philanthropy is changing. Philanthropy has already changed. The only question is how fast and how well our traditional structures will catch up with it.”

If you’ve read my previous blog posts, you’ll know that I’m a big fan and advocate for making philanthropy and community leadership accessible to anyone.  A big thanks to the Kellogg folks for sharing their knowledge and inspiring the rest of us to learn and do more to diversify and democratize philanthropy.

Whom do you trust to lead community improvement?

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Whom do you trust to lead community improvement?

This question keeps rolling through my head as I’m participating in the Growing Social Impact for a Networked World conference.

It’s not an easy question. It gets to the heart of a person’s values, upbringing, work history, own sense of self-control, and more. And, it’s a tough conversation for a group, whether that group is a philanthropic family or a foundation board.

But I’m convinced it’s an essential question for self-reflection by foundations and philanthropists, especially now as people, communities, and nations struggle to find the best paths out of the recession.

I think when you boil everything down, a foundation or donor ends up with three choices as answers:

  • Citizens – philanthropy that strengthens citizen engagement and leadership and even helps them exercise their voice in and lead community progress. It’s philanthropy that puts its trust in everyday people, consumers, start-up social entrepreneurs, and unincorporated networks.
  • Frontline delivery mechanisms – philanthropy that strengthens nonprofits, schools, and congregations. It’s philanthropy that puts its trust in the professionals who have studied the issues and had experience in delivering effective solutions.
  • Strengthening institutions – philanthropy that strengthens the ability of government agencies or the corporate community to move our communities and nation forward.  I know that most people will hate that I’ve lumped these together.  But I see them both as expressions of supporting the existing aggregations of power (market and elected).  And the philanthropy that puts its trust in them looks similar – support of public policy, public will-building, multi-sector partnerships, etc.

The easy answer is to support all three, and it can be sometimes be smart to do. But “all 3″ is also the weak way out.  It disconnects giving from fundamental core values and beliefs – of the real answer to where you see power* and authority should be placed.

As one example, the community foundation field especially struggles with this question because they try to serve all three audiences simultaneously. Their answers show through how they design their strategic philanthropy and community leadership initiatives. Some answer “We’re about empowering donors and/or neighborhood residents to lead change” (trust the people).  Others answer “We’re about building strong nonprofits and social entrepreneurs through grants and capacity building services” (trust the delivery system).  And others answer “We’re about building community assets for the long run and hiring smart staff to run initiatives” (trust us as the institution to lead change).

As another example, funders in my adopted hometown of Pittsburgh are paying for an assessment of the community development system. Though the essential question above hasn’t been explicitly asked in discussions so far, funders, intermediaries, and government officials are revealing their biases. Some see the community development system at its roots as being about supporting citizen-led change; others as about robust delivery of units, jobs, and saved lives; and others about catalyzing and increasing the investments of government and financial institutions.

So, what’s your answer – where do you place your philanthropic bets?  And, do you have other answers?

 

Caveat:  I’m a white Midwestern guy, child of two generations of entrepreneurs, with an employment history in state government and endowed foundations. Many will say I have no standing or legitimacy to discuss power dynamics. I’m ok with that.