A Profusion of Philanthropic Prognostication

The turn of the calendar to a new year inevitably brings a slew of predictions for what the new year will hold. The philanthropy and nonprofit sectors aren’t immune to the pull of the prognosticating pundit. In the past 30 days, I’ve read these pieces (in approximate chronological order):

So, were there any trends to the trends? Yes, a few that weren’t surprising:

  • The rise of alternate forms of doing social good – LLCs, B Corps, impact investments, and more
  • The increasing impact of mega-wealthy philanthropists and their willingness to be activist givers in number of issues
  • Opposite to mega-philanthropy, the broadened use of social media and online tools to engage large crowds of everyday people in giving and activism
  • Increasing attention to “effective altruism” and other philanthropy driven by metrics and impact analyses
  • The potential of increased scrutiny of the philanthropic and nonprofit sector, more likely by state regulators and the public than by the IRS and Congress
  • Public and political debates about tough issues carrying over to the nonprofit sector and philanthropy, including about racial equity, inequality, gun control, climate change, and campaign finance and voting reforms.

Of course, you could choose to ignore the predictions. Phil Buchanan, President of the Center for Effective Philanthropy, tweeted

 

Unfortunately, the sector lost one of most thoughtful (and occasionally aggravating) journalists and trend trackers, Rick Cohen. He was a long-time writer for Nonprofit Quarterly and former executive director of the National Committee for Responsive Philanthropy. His predictions for 2015 are still issues to watch in 2016.

Did I miss any predictions for the nonprofit and philanthropic sectors?

Colorado mountain skyline

Is the Value of Place Declining in Philanthropy?

All of us walk around with default lenses through which we view the world. The lenses are created through our experiences and relationships, the communities and cultures in which we’re raised, and more. When we’re at our best, we’re able to separate when those default lenses provide helpful perspectives and when they limit our thinking.

One of my primary default lenses is the importance of place. Until I went to college, my family and most of my cousins lived in the same county in Indiana. My parents, grandparents, aunts, and uncles were all active volunteers in local civic groups. The first 19 years of my professional career were focused on improving places, first through the State of Indiana’s community economic development department and then through the Central Indiana Community Foundation. The majority of the donors I worked with at the foundation focused on giving back to their hometown(s). And so far, most of my consulting clients have been focused on place.

The philanthropic sector is filled with associations focused on improving place – Grassroots Grantmakers, Neighborhood Funders Group, Aspen Institute Roundtable on Community Change, Project for Public Spaces’ Funders Forum, and many more. And associations focused on issues such as education, arts, and the environment talk about much of their work through the lens of local communities.

This philanthropic focus on place – and on hometown – is likely declining.

One window into this decline comes from the new 2015 Trends Study* by the National Center for Family Philanthropy and Urban Institute. This statistically valid survey showed that 66% of family foundations currently focus their grantmaking on geographic locations. Their mental lenses are more about place than issue. However, younger foundations are less focused on place than older ones. Only 40% of foundations formed since 2010 focus their grantmaking on place, compared to 78% of foundations formed before 1970. This difference is magnified by the fact that almost 70% of family foundations launched in the 1990s and 2000s.

Bar chart of family foundation focus areas

 

The survey didn’t ask the reason for focus on place versus issue. NCFP and the Urban Institute wrote in their report:

Possibly younger family philanthropists are less tied to place than are their older peers because they have grown up in a more interrelated and global economy. At least for now, issues seem to capture their attention and philanthropic support more than does a place-based approach.

And the authors posed two questions for ongoing consideration:

Is the move toward funding issues solely a result of newer foundation motivation and behavior? As families move beyond the first couple of generations, will family dispersion—combined with a need to find common ground—lead to even more issue-based giving among older foundations?

Earlier this year, Emmett Carson, CEO of the Silicon Valley Community Foundation posed a related challenge to the community foundation field in 21st-Century Community Foundations:

The shifting definition of what community means is creating a profound identity crisis for place-based institutions including community foundations.

He credits the shift in the meaning of community to two trends:  the increased mobility of Americans (more of us are living in more locations over our lifetimes), and the increased use of technology to maintain vibrant, non-geographic communities based on nationality, ethnicity, gender, and interests and issues.

The Monitor Institute issued a similar challenge in 2014 in its Shift Happens report for community foundations, a report that is equally useful to family and private foundations. In addition to the trends Carson cited, the Monitor Institute noted the potential impact on philanthropy of:

  • The new majority – by 2043, whites will no longer be the majority in the U.S. The philanthropic practices of immigrants and people of color are seen in the increased number of racial/ethnic identity-based funds and the growth of remittances sent back to home countries.
  • Millennials – the largest generation in U.S. history currently focuses its giving more on causes than organizations, and that giving often channels through crowdfunding platforms, instead of through nonprofit online donation pages, and to recipients that aren’t charitable organizations.

The three reports all provide evidence of decreased philanthropic focus on place over time. But I wonder if that shift is more about a decreased focus on a shared sense of hometown within a family or group.

Opinions ahead…

Even as I attempt to set aside my own default lens, my sense is that place is an important part of most people’s identities. People express a passion for place through efforts to “buy local” or support neighborhood businesses through crowdfunding campaigns. They participate in corporate volunteer days at a local park or community center or volunteer through their congregation at a local shelter or food bank. They advocate to their friends to join them in supporting the local music scene or local food movement. Place can be a compelling cause, even if it isn’t a primary driver of a family’s charitable giving.

And, younger generations might be delaying their philanthropic connection to place. Perhaps they’ll be more likely to give and grant in a community in which they’ve raised their kids, built their own business, or enjoyed an active retirement. When I worked for the Roy A. Hunt Foundation, its fourth generation of trustees were ages 21 through mid-30s. Only two members of that generation lived in the founder’s and foundation’s hometown of Pittsburgh and few had settled down for the long run in any community. Perhaps in another 10 or 20 years, their patterns of giving will combine issues and places.

I’m now living in my third metro area after leaving the county in which I was raised. (The picture at the top is the view from my current place in Colorado). Along the way, a portion of my own philanthropy has shifted to each new geography, driven by the importance of place in my own values. The NCFP and other reports give me the sense that I may be more of an outlier in my giving as time goes on.

How about you? Are you seeing trends in giving and grantmaking that are focusing less on place?

 

* Full disclosure:  I served on the advisory committee for the NCFP 2015 Trends Report.

trust-me-e1371494404131

Trust the People, No Strings Attached

It would be easy to believe that most grantmaking is complex, even to believe it should be complex.

Read the philanthropy news sources. Funders are praised for their wall-sized strategy maps, multi-year evaluation projects, and drive for scientific evidence and stellar nonprofit performance. Attend nonprofit and fundraising conferences. Multi-step application processes, long application reviews, and confounding funder decisions dominate the stories in the halls.

Guess what. Strategy does not have to result in complexity.

This summer, a few stories described funders with a less complex strategy:  trusting individuals and small organizations with small grants, no (or very few) strings attached.

Informal awesomeness

The New York Times and Huffington Post highlighted two of the Awesome Foundation’s chapters. This network of giving circles provides $1,000 grants to “forward the interest of awesome in the universe.” The network and most chapters are unincorporated and unstaffed. Depending on the chapter, the online application is 3-6 simple questions and there’s no formal reporting process for grant winners. Grants go to a mix of individuals, unincorporated groups, social enterprises, nonprofits, and more. Local chapters often connect grantees to other resources and promote their work through social media and events.

I’ll admit to being partial to this network. I was a founding donor-trustee of Awesome Pittsburgh and now am a donor-trustee of Awesome Boulder. I admire the network’s ability to find and support, as a donor-trustee in one article put it, people with a “passionate sense of place and a desire to tackle problems, fix inequities, and highlight beauty.” Another donor-trustee said,

“We’re rogues giving to rogues. It’s misfit money for the weird and wonderful.”

Admittedly, not all funded ideas come to fruition and many are small, quirky projects. But, a few projects each year grow to attract other funders and a few grantees draw national and even international attention to a community. One recent example was Pittsburgh’s Smallest Jazz Club, a bus stop augmented with pictures of the local jazz scene, jazz music playing on speakers, and pop-up performances by local jazz musicians. News outlets, bloggers, and social media stories from as far away as Brazil and Germany praised about the project.

Investing in social change leaders

Ariel Nessel, a Dallas-based real estate developer, put his own mark on “trust the people” philanthropy. He founded the Pollination Project to award a $1,000 startup grant each day to “individual change makers and projects that promote compassion around the world.”

Like the Awesome Foundation chapters, the Pollination Project finds ideas and people below the radar of other funders. It has a bit more formal online application and reporting process than the Awesome Foundation. To manage its international reach, it uses a network of former grantees and volunteers to seek out social change-makers and make grant decisions. Nessel recently told the Chronicle of Philanthropy that executive director Alissa Hauser advocated for:

“..democratizing giving and pushing power to the edges, to people who normally don’t have access to capital, and having them help decide who gets money.”

The Pollination Project is a public charity attracts donations ranging from a few dollars to a $50,000 grant from a family foundation. In addition, Nessel has a regular column in the Huffington Post to showcase the grantees.

The International Development Exchange (IDEX) adds longer-term capacity building to “trust the people, no strings attached” grantmaking. One of the younger trustees of the Roy A. Hunt Foundation, my former employer, introduced me to IDEX and its savvy executive director, Rajasvini Bhansali. IDEX supports projects and small organizations founded by grassroots leaders in Africa, South Asia, and Latin America. Bhansali said in a recent article, IDEX, and the Tyranny of the Experts,

“Most of our partners don’t have the machinery to write fancy grant proposals. It’s our role to go and find them.”

IDEX funds grantees for three to ten years, provides them with training programs, and helps them crate alliances to solve local and national problems. It often sticks with them when things go wrong or when they’re out of favor with international aid organizations.

Bhansali and her team are purposely, to coin a term, philanthropically bilingual. They understand and respect the messy, personal work of IDEX’s grantees. And they can talk in-depth about measurable results and theories of change with funders and donors.

Challenging our assumptions

These organizations’ grantmaking styles aren’t for everyone. The Awesome Foundation’s approach often draws quizzical or bemused looks from the staff of large foundations and even community foundations. Those staff members often underestimate the power of supporting passionate, committed citizens. Or, they believe that added layers of complexity will shield them from risk and failure.

Admittedly, not all grantmaking can be this simple or close to the people. There can be legitimate reasons for more complex applications and review processes. However, those complexities can shut out organizations led by volunteers or by a small number of staff. Those organizations make up most of the nonprofit sector. The complexities can also shut out organizations led by people who are racial and ethnic minorities, disabled, LGBTQ, and/or elderly. Those neighbors are growing percentages of the U.S. population.

Nonprofit blogger and humorist Vu Lee wrote about this problem in his compelling post, Funders, your grant application process may be perpetuating inequity. He lists the consequences of grantmaking practices that seem, on the surface, routine. He ends with examples of grantmakers who use challenging processes to “help” nonprofits gain experience with grantwriting, budgeting, and program evaluation. As if the nonprofits needed that help more than cash…

Mr. Lee and the funders I mentioned force us to confront the hidden biases in our philanthropy. We should be inspired to ask ourselves tough questions such as:

  • Do I actually trust people to use the resources I steward wisely? Only certain types of people?
  • Are my professional experience and reputation getting in the way of a heart and mind truly open to others’ ideas?
  • Is a nonprofit always the best means of accomplishing social good?
  • Is bigger really better?

Each donor and grantmaker will have his or her own answers to such questions. The discernment process isn’t always easy. It is uncomfortable to uncover and voice our hidden biases, to change our routines. But, I’ve found the process is definitely worth the time and discomfort and is worth repeating over time. Here’s hoping other donors and grantmakers feel the same way.