The View from Here

Redefining Exemplary Philanthropy

By Aaron Dorfman

Aaron Dorfman, Executive Director, National Committee for Responsive Philanthropy

When I took over as executive director of the National Committee for Responsive Philanthropy in 2007, the board and I listened intently to dozens of people—fans and critics alike—about NCRP’s past work. And one message came through loud and clear: people wanted to know what NCRP’s vision for exemplary philanthropy looked like. So we started the process of developing what ultimately became “Criteria for Philanthropy at Its Best: Benchmarks to Assess and Enhance Grantmaker Impact.”

The criteria establish aspirational goals that, if practiced by more of our nation’s grantmakers, would lead to a more inclusive society and a stronger civic sector.

In our chapter about values, we call on grantmakers to find ways to ensure that marginalized communities are benefiting from their grants. We also discuss why funding advocacy, community organizing, and civic engagement is important for the health of our democracy. We believe it is a strategic way to have impact on issues that really matter.

In our chapter about effectiveness, we call on our nation’s grantmakers to provide general operating support and multi-year grants—practices that nonprofits say they need most in order to be more effective.

We also take up issues related to ethics, suggesting that diverse boards contribute to ethical operation. And, we reassert NCRP’s longstanding commitment to transparency.

In our chapter about commitment, we challenge foundations to give out more in grants, and to engage in mission investing.

The benchmarks we set throughout Criteria are all achievable. Many foundations we list in the report already meet or exceed the thresholds.

Our goal is not to set standards that will be uniformly imposed on the sector without regard for the rich diversity found among foundations. Nor are we advocating that these issues be codified into law. Instead, our goal is to have the leaders of every grantmaking institution in the nation seriously consider the important issues we raise. That’s why we have included discussion questions at the end of each chapter and why we distributed the criteria to 25,000 grantmakers. We are confident that if executives and trustees engage in serious discussions about these issues, some will decide to change their practices. If this happens, it will be good for our nation and the world.

I was very surprised by the venom with which the criteria have been met by some. Contrary to what a few vocal critics have been saying, we’re not establishing mandates. We’re not suggesting quotas. And, we’re not telling grantmakers to ignore donor intent.

Part of the problem is that people are basing their opinions on a pre-publication summary that doesn’t fully reflect the richness of the final publication. Further, whenever you challenge the status quo, some people are going to get upset

I urge grantmakers to keep an open mind until they have read the document for themselves. And I welcome debate and discussion about the substance of our recommendations, which tackle the critical and difficult issues we face as a sector.

Aaron Dorfman is the executive director of the National Committee for Responsive Philanthropy.

Enlightened Leadership

By Antonia Hernández

Antonia Hernandez, President and CEO, California Community Foundation

Critics have balked at diversity mandates advocated in the recent report by the National Committee for Responsive Philanthropy. Without offering a workable, alternative solution, however, the criticism falls flat. How do we ensure that our institutions and, by extension, our grantmaking, are inclusive of donors and grantees and benefit all charitable groups, including those with the greatest need? Through enlightened leadership.

Philanthropy is at a crossroads—congressional oversight and greater public scrutiny are demanding change. We need to take the lead. It’s time for the boards and staff leadership of the more than 72,000 foundations in the U.S., as well as the nonprofits they support, to think about what’s good for business and how to be transparent and accountable to a commitment to diversity. The face of wealth and philanthropy is changing in the U.S. and globally. Neglecting this would mean a missed opportunity.

Our boards and staff should reflect the demographics of the communities of donors and nonprofits we serve. Small, incremental changes won’t do. We are not there yet. The 2006 average among U.S. foundations is 23.2 percent staff diversity and 13 percent board diversity, according to Rockefeller Philanthropy Advisors.

What’s the tangible benefit of diversity? If those who govern and staff foundations are from diverse communities and have experience working with those communities, their fresh perspectives, knowledge, and skills will lead to a more robust and creative strategy that will better serve community needs. They’ll also attract a new crop of philanthropists and partners.

Diversity goes beyond a special initiative overseen by human resources. It’s part of an organization’s DNA that runs through everything it is and does. And it must start at the top.

At the California Community Foundation (CCF), the staff is 67 percent minority and 78 percent female. Reveta Bowers is our first African-American woman chair, leading a board that is 40 percent minority and half women.

Our tangible benefits from this feat are significant. We have more than doubled our assets since 2000. And over the last two years, we have doubled our competitive grantmaking to about $23 million. As of end of February 2009, we are 50 percent ahead of last fiscal year’s contributions and new funds. While diversity alone can’t be credited for these achievements, diversity was a critical component to making it happen. That’s because the composition of the staff changes an organization’s strategy and trajectory.

Look no further than what’s happening in California. Three other community foundations in this state are headed by innovative and strong leaders this sector needs ― in Silicon Valley, San Francisco, and East Bay. These foundation presidents are role models and yes, minorities.

Let’s not wait for another report or more congressional hearings to try to regulate how we do our business. We must take the initiative.

Foundations are experts at collecting and compiling data. If foundations do not like the data cited in the NCRP report or take issue with its criteria for good grantmaking, they are hard pressed to produce their own set of data and recommendations. Enter the Council on Foundations, which can exert its leadership by focusing on collecting objective and accurate data. It must convene the leadership and develop a plan with clear objectives to hold its members accountable.

The NCRP report has rattled some in the philanthropy sector. While its harsh tone may be problematic, the recommendations are hardly unreasonable. Many of us are already meeting many of the NCRP benchmarks. The report gives us an opportunity to lead. We must now take action. It is our best bet against the forces of regulation.

Antonia Hernández is president and CEO of the California Community Foundation.

NCRP at its Most Presumptuous

By Paul Brest

This article was originally published on March 5th on Brest’s Huffington Post Blog. Paul Brest is president of The William and Flora Hewlett Foundation.

Paul Brest, President, William and Flora Hewlett Foundation

Earlier this week, The National Committee for Responsive Philanthropy (NCRP) published a paper entitled Criteria for Philanthropy at its Best®: Benchmarks to Assess and Enhance Grantmaking Impact. NCRP starts from the premises, which I share, that philanthropy is seriously underperforming in achieving “social benefit or impact” and in helping “solve the most urgent problems facing our nation and the world,” and that disparities of opportunity, wealth, and power, especially when systematically coupled with race and other personal characteristics, are high among these problems.

From these premises NCRP derives prescriptions for both the proper ends and the proper means of philanthropy. With respect to ends, NCRP asserts that no foundation can have as important a goal–whether it be curing cancer or mitigating climate change–than addressing the plight of marginalized communities. Therefore, at least 50 percent of any foundation’s grants must be devoted to this cause.

As for means: “it is almost impossible … to examine each of the nation’s more than 70,000 grantmaking institutions and determine the extent to which that foundation is enhancing the public good, creating positive social benefits or advancing the public interest.” In an effort to impose a common metric, NCRP would require that 50 percent of a foundation’s grants be spent on general operating support and 25 percent be devoted to advocacy. It also sets some requirements for foundation governance and accountability.

Even for someone who shares NCRP’s concerns about marginalized communities, its hierarchy of ends is breathtakingly arrogant. Its prescriptions of means are more of a mixed bag. Many of the 70,000 foundations in the United States might actually contribute more to society if they followed some of the Criteria. But the tremendous social good done by others would be severely compromised. In aiming for the lowest common denominator, NCRP pushes the entire sector toward mediocrity.

NCRP has issued the Criteria at a time when philanthropy is highly concerned about social impact, good practices, and evaluation. Many of the issues NCRP discusses–such as forms of funding, payout, and mission investments–are the subjects of vibrant ongoing discussions in the sector. Surprisingly, the Criteria don’t recognize that foundations’ approaches to these matters ultimately depend on their particular missions and strategies.

If NCRP’s main purpose were to present its strong opinions for the benefit of foundations and other practitioners, the Criteria would be a valuable contribution to the debate. NCRP makes the most comprehensive case I’ve seen for what might be called “progressive” or “social justice” philanthropy. Although it presents a tendentious one-sided brief for one position rather than a balanced set of arguments, that’s the nature of debates.

Rather than participate in the debate, however, NCRP seeks to control it. By trademarking the unremarkable phrase “Philanthropy at its Best,” the organization apparently aspires to create a philanthropic version of the Good Housekeeping Seal of Approval. But while NCRP disclaims any “call for regulatory action,” the introduction to its Criteria states that policymakers “will find the benchmarks … informative when considering issues related to philanthropy.” The version that NCRP sent around for prepublication endorsements was more direct: “Policymakers may find the criteria valuable when considering regulations or legislation that affect institutional grantmakers.” For anyone who has experienced the Greenlining Institute’s efforts to legislate social justice philanthropy in California and watched its efforts in other states, this lets the cat out of the bag. NCRP has just concealed Greenlining’s fist in a velveteen glove.

Although I would oppose legislative enactment of the Criteria, NCRP’s earnest contribution to the discussion of these issues deserves an item-by-item response, and that’s what I shall try to do in the posts that follow.

Before signing off, though, I should note that though we often disagree with its positions, the William and Flora Hewlett Foundation has provided NCRP with general operating support as part of our grantmaking for the infrastructure of the philanthropic sector. Ironically, this grant would not count as Philanthropy at its Best®, since NCRP is not a disadvantaged community. It is just a minor sign of NCRP’s tunnel vision that, while issuing rules for the proper practice of philanthropy, it ignores the value of grants whose purpose is to help the field become more effective.

Moreover, the Hewlett Foundation actually follows many of the precepts articulated in the Criteria for Philanthropy at its Best. Much of our grantmaking focuses on disadvantaged communities, not just in the US but also in developing countries–whose billions of impoverished citizens NCRP largely ignores, notwithstanding its throwaway statement that philanthropy should help solve urgent problems worldwide. And the Foundation pursues its goals through advocacy with ample amounts of general operating support.

But that’s not the point. Rather, the point is that many foundations whose goals and methods differ from Hewlett’s provide no less value to society. Indeed, it is differences among the missions and practices of foundations and the diverse nonprofit organizations they support, that give the US the most vibrant civil society of any country in the world.