Message from the President

In the midst of the economic crisis this past spring, I started a conversation with the planning committee for the 2009 Rural Philanthropy Conference with one question: Faced with restricted travel budgets, should we simply cancel the event? After a thorough discussion, we agreed to move forward with planning a small-scale gathering of 40 rural philanthropic leaders who would use the time as a working session to offer some thoughts on growing rural philanthropy.

By now you know that over 150 of our rural philanthropic colleagues took part in the Little Rock-based conference. The end result was a gathering defined by its content and outcomes, as well as the enthusiasm and commitment of its attendees.

What made this conference a success? To be honest, I am not 100 percent sure, but I suspect at least four ingredients were at play:

• Our powerful agenda combined four tracks on four priority topics, allowing attendees to dive deep into a specific content area. On the last day of the conference, participants in the four working groups produced a set of strategies and recommendations for each of the tracks. Thus, substance, continuity, and outcomes were unknown before one arrived but displayed at the time everyone left.
• Excellent and relevant plenary and session speakers offered their insights and knowledge, addressing the specific needs of rural philanthropy. Former President Bill Clinton gave an incredible speech on rural philanthropy, then extended his time for a longer conversation with those in attendance.
• Our site visits were a key part of the program providing us with two excellent examples of rural philanthropy’s work in rural Arkansas.
• The William J. Clinton Presidential Center served as both a great location and host. The opportunity to gather at the Clinton Presidential Center and in Arkansas contributed to both the incentive to attend and the quality of our programming.

As a child growing up in rural Wisconsin, I learned something about rural folks many years ago that held true for this conference: We are survivors. It is part of our genetic make-up. Rural folks are accustomed to managing through unanticipated challenges like the weather, commodity prices, and a lack of resources. The economic crisis of the past two years was just another chapter, but it was not one that would define our work or our focus on the future. In Little Rock, I noticed 150 people who had almost no interest in mourning the loss of philanthropic endowments over the past year. Instead, they wanted to learn from the past and move forward.

In this edition of T>A>I, you will see highlights of the recommendations from the four working groups, along with many other insights from those who participated in this conference. This conference was not convened to create another list of “to-do” items for the Council, the National Rural Funders Collaborative (our co-sponsor for this event), or even the government. Rather, we sought to identify the steps that all of us—collectively and as individual foundations or rural regions—could use to advance rural philanthropy.

A final thought: Rural philanthropy doesn’t spend time convening and talking about what others should do for us. Rather, we seek to find common strategies that can increase our collective impact. From transfer-of-wealth studies, we know that time is of the essence if we hope to capture even a small part of this transfer into philanthropy, particularly in rural America. Of course, time is always a concern in rural America. That may really explain why 150 people showed up for a conference designed as a small conversation among 40.

The View from Here

By: Jeff Pryor and Alexandra Mitchell

Is “rural” undervalued? Apparently, yes. Yet, our collective lives depend greatly on rural regions. Our food security, fiber, energy, minerals, water, oxygen, and many other essential materials are embedded in rural environments—as well as many of our world’s most majestic places.

As we are thus rooted, providing support for rural communities merely for the sake of girding rural communities is a miscalculation. Rather, we need to take a more comprehensive approach, one that enhances the interplays between nonprofits, philanthropy, government, economic interests, and education. No single sector alone can create vibrancy in rural communities.

Surely, rural communities should learn to live by the proverb, “You either make your future, or it will be made for you.”And rural people must be much more deliberate in articulating their worth by telling a better story—and having a better story to tell. But is it only for our rural neighbors to carry this burden? No. Grantmakers, too, should consider how they can deepen their understanding of rural issues and realize opportunities. They can do that by working with rural agencies, elected officials, and community leaders to develop a shared strategy—and collaborative advantage. Whatever steps we take to enhance leadership, governance, access to resources, advocacy, media coverage, political responsiveness, and civic engagement will result in positive outcomes—for all.

So how can grantmakers effectively champion rural vibrancy? One way is by offering capacity-building support: building knowledge and skills in areas such as strategic planning, governance, personnel management, resource development, cultural competency, communications, and evaluation. Certainly, one-time workshops and webinars have value. But there is greater advantage in making a longer-term commitment to ongoing coaching and consultation. Grantmakers could contract individuals who work well with various populations and who can provide customized assistance to grantees and/or rural collaboratives.

Grantmakers could also help by developing appropriate resources. For example, adapt existing training materials—many of which reflect a metropolitan focus—and ground them in the realities of rural communities. As one rural colleague noted, generic communications training materials often encouraged nonprofits to develop their “elevator speech.” With tongue-in-cheek, our colleague asked, “How appropriate is this image to a rural community? Grain elevators may not be the best location to make a pitch…”

Southeast Colorado has proven that such an approach can reap big benefits. This region of Colorado received the least amount of grants in the state—less than one percent of all grants made in Colorado. Despite sporadic fundraising and governance trainings, nonprofits in the region experienced little success in producing more grants. All that changed once we took a robust regional approach. Grantmakers and nonprofits worked together to build a regional vision and agenda, assert rural value, and expand relationships and trust. Nonprofits in the region are now skilled at capturing funding opportunities, resulting in a substantial infusion of grants from public, private, regional, and national sources.

At the heart of this achievement is Rural Philanthropy Days. Begun 20 years ago in Colorado, this bi-annual event is a result of a partnership that drew together the state’s 12 largest foundations, state government, the Community Resource Center, and rural nonprofits. It brings together thousands of people for the purpose of educating grantmakers about rural issues and opportunities. It has also established and integrated a mechanism for long-term communication, capacity-building, and collaboration. Rural organizations that did not know that each other existed are now building strategic partnerships. Old rivalries based upon years of competitive history are being replaced with deliberate regional partnerships addressing, housing, transportation, health, workforce development, land use, and other important topics.

You are welcome to join us for the Northwest Rural Philanthropy Days on September 16–18 in Steamboat Springs, Colorado. Please visit www.NorthwestRPD.org or contact jeffpryor@TAC-Denver.com.

Jeff Pryor is the executive director of the Colorado-based Anschutz Family Foundation.

Alexandra Mitchell is the founder and president of Pathfinder Solutions, Inc. The firm provides research, evaluation, organizational development, training, and consulting services to foundations, non-profits, and government agencies.

What is the state of rural philanthropy today?  The answer, of course, depends on whether you’re looking at the issue from a local, regional, or national perspective. I’d like to offer some thoughts from the national perspective, gleaned from my years as a senior program officer at the Ford Foundation.

One of the central truths is that large global and national foundations have recently reduced their role in seeding local, rural institutional philanthropies in the United States. About 15 years ago, Ford began investing heavily in catalyzing community-based organizations in rural areas. We also heightened awareness of public and private investment opportunities in rural development. At the heart of this work is the belief that local leaders must play a central role in determining the future of their communities.

One of the Ford Foundation’s most successful strategies has involved working with community foundations to develop resources aimed at strengthening rural, community-based organizations in the United States. In turn, we used the lessons learned to help improve the lives and livelihoods of the most vulnerable and poor throughout the world.

Our work in rural America has sought to:

• Identify local community-led organizations and strengthen leadership and organizational capacities to ensure their effectiveness;
• Recognize and provide resources to innovative rural leaders who could enhance social and economic outcomes for low-wealth communities;
• Invest in the development of critical research centers with data and knowledge about rural communities in the 21st century;
• Amplify voices from rural communities by facilitating opportunities to share successes and challenges with elected officials at all levels of government, business leaders and with the field of philanthropy;
• Work in collaboration and partnership with other funders to leverage additional private and public resources to share knowledge about systemic barriers to social and economic progress and use knowledge to influence policy for social change;
• Invest in tools and methods to facilitate community-building efforts in rural places as more people of color have moved into rural communities; and
• Provide a voice at the national levels about the important linkage between rural and urban strategies in reducing inequity in the United States.

The result is that rural America is now better positioned to set the agenda for its future and to generate local resources to support these goals.

Over the years, the Ford Foundation has learned that when we work at the community level, we can never simply replicate a good idea. Instead, it is necessary to take great care in adapting that idea to the specifics of place, economy, and culture. Even so, there is the potential to develop a “rural lens.” To effectively apply this lens, we need to:

• Encourage more joint learning and collaborative priority setting among communities, philanthropy (individual and institutional donors), and local and state government. This will shorten the time needed to accomplish outcomes;
• Sustain regional and local institutions in communities by linking them to discretionary wealth in their communities;
• Convince local funders to invest in their own social entrepreneurs;
• Strengthen and add to the information base of regional associations of grant makers and wealth advisors regarding rural needs; and
• Build additional rural liaisons to engage with foundations from all parts of a rural area.

Given today’s realities, how do we approach scale in a local, rather than a national context?

Going to scale locally will require more outreach to communities. We must hear concerns, identify opportunities, ensure ongoing access to decision makers, and most importantly, broaden the leadership base throughout the community or region.

We must create scalable solutions that work across the diversity of rural America. This will require us to develop flexible frameworks for thinking and action that rural communities can adapt locally with the help of rural philanthropy. Once the frameworks are in place, funders—both government and philanthropy—should devolve control to those closest to the issues to apply resources within these frameworks. Already some communities have such frameworks in place. They can serve as a guidepost for making effective, scalable investments in rural places. Again, the important point to remember is that we must allow those at the local level who are closest to the problems to direct resources to the most effective solutions for their communities.

Community philanthropic institutions—including community foundations and other public charities committed to improving lives locally—are uniquely positioned to ensure that investments in rural America have the intended impact. No other single group of institutions has access to such a diverse set of local leaders.

It’s time to spread the word throughout the foundation sector that rural communities offer a rich opportunity to invest in rural America. The successes we encounter there can serve as a guide to finding scalable solutions for the complex challenges facing our world.

For those who fund in the environmental and energy arenas, I would emphasize that virtually all solutions to the planet’s energy and environment problems have a rural component.  Rural areas have the biggest opportunities for wind, solar, biomass, geo-thermal, and extractive energy development. Most large-scale energy development will occur in rural areas because that is where the land is available and the resources (and the stewardship expertise and capacity) lie.

America’s greatness is firmly rooted in its rural beginnings. Public and private investments in rural America will pay enormous dividends—now and long into the future.

Public Domain

It’s no secret that President Obama’s priority list contains the usual suspects: healthcare, the economy, education, and foreign policy. Lesser known is his commitment to an issue that literally connects all of us—broadband. Short for “broad bandwidth” connection, this technology allows a large amount of data to travel through a medium at the same time. Most people know broadband as “high-speed” Internet, in contrast to the antiquated approach of using dial-up service to connect to the Web.

Broadband requires expensive equipment to get connected. That’s one reason why rural communities with low population densities often cannot get access. But it is not the only reason. In fact, the biggest obstacle to getting broadband coverage in rural areas is not money or technology, but the lack of leadership. That’s according to Karen Jackson, deputy secretary of Technology for the Commonwealth of Virginia and senior advisor to Governor Tim Kaine’s administration on matters related to broadband and telework. Jackson believes stepping up the leadership is even more important now that President Obama has committed more than $7 billion in federal stimulus funds to broadband via the American Recovery and Reinvestment Act (ARRA) passed in April 2009.

At the Rural Philanthropy Conference in Little Rock, Jackson encouraged rural funders to apply for broadband funds. Here, in her own words, Jackson offers ideas and inspiration. Her advice is timely and her lessons learned relevant to all grantmakers

T>A>I: Tell us a bit about broadband in Virginia.

Jackson: I’ve been working on broadband issues in Virginia for 10 years making sure that the Commonwealth is not left behind as the world gets deeper into the information economy. The question we addressed is the need for bigger and faster infrastructure because the applications that people want to use—sending photos, x-rays, large files—we can’t do unless we make sure the infrastructure is in place.

Technology is pervasive; it cuts across all lines. However, in Virginia there are population divides, as well as technology and income divides. In 2007, Governor Kaine assembled a broadband roundtable to discuss two things: what we wanted to do with broadband, and how we were going to move it forward in the Commonwealth. We formed a 72-member roundtable, which included academics; regional, state, and local leaders; individual citizens; and telecommunication providers. We wanted to be very inclusive; we didn’t want to leave anybody out of this process. Keep in mind that we had two dynamic people leading this charge: former Governor Mark Warner and Aneesh Chopra (Jackson’s former boss and current chief technology officer for the United States).

T>A>I: What was the result of this exercise and what did you learn from this experience?

Jackson: We determined that the critical element for broadband in any locality or state is leadership. I cannot stress that enough: without leadership, nothing’s going to happen.

During the roundtable’s year-long tenure in Virginia, we traveled the Commonwealth and met with many people—all to answer these questions:

• What were the barriers to broadband deployment?
• What were the opportunities for installing broadband?
• What resources/support did leadership at the local level need in order to make “smart” broadband decisions?

We didn’t enter communities with a top-down “cookie cutter” approach telling people what they needed or how to get things done. Instead, we took a grassroots approach. We looked at what we could do to empower community leaders and their communities to be able to strike a deal with private providers and get the infrastructure they need.

The final outcome was our Online Community Toolkit. It’s a public resource available at www.wired.virginia.gov. The toolkit includes information about community leadership and the process communities should go through in order to form public-private partnerships with broadband service providers

T>A>I: Can you explain the part of the broadband process that you refer to as a “mapping exercise”?

Jackson: One basic question we kept hearing was: Where, within the Commonwealth, was broadband available? In order to know where deployments should occur, we needed to know where it was. So, we embarked on a mapping initiative with the help of CIT, a Virginia-based 501(c)(3) organization. We completed the exercise in the spring of 2009, and now, we are the first state in the nation to have a broadband map developed without spending additional taxpayer dollars. We can pinpoint, down to the county level, where broadband is and isn’t in Virginia.

T>A>I: With the toolkit and the map, how did you engage people in communities?

Jackson: Here’s what we wrestled with: Through our conversations, we learned that people don’t always talk to one another in their community. For example, first responders don’t regularly communicate with the leadership at the hospital. The hospital leaders don’t talk to the school leaders who, in turn, don’t communicate with the community IT staff. To get things done, you need to aggregate the assets you have at your disposal in your community,. and that means the first step is to get the right people around the table and start a dialogue.

What is the key to a successful broadband deployment program? It’s leadership. It’s not a complete lack of money or the inability to find the “right” technology. To assist rural communities, we put together a “buy-down” worksheet and asked local leaders to start a dialogue—to bring together these people they rarely coordinate with and find out what they are doing with broadband. We asked them to find out:

• “who” is doing “what”
• how they are currently connected
• what applications (telehealth, distance learning, etc.) they currently use or plan to use in the future
• if they are eligible to receive grants for any broadband related activities

T>A>I: What’s significant about the name “buy-down” and how did it work at the community level?

Jackson: Communities have access to broadband monies through federal programs and agencies, but too often when they start to negotiate a public private partnership, they look at a big price tag and automatically think they can’t afford it. Instead, they should think, “Let’s try to buy these costs down and find a way to make this work.”

A rural community in Franklin County, Virginia went through this exercise. Franklin County is mountainous and near Roanoke along the North Carolina border. An ISP provider came to this community and estimated that it would cost $500,000 to do a wireless deployment across 70 percent of the county. The community could not afford this, but they went through the toolkit and got ideas on how they could come up with the money. For example, they owned towers that they could let the provider use for free. The community also received an interoperability grant from the Department of Homeland Security. To make a long story short, the county ended up paying $83,000. So it worked! The biggest problem is: nobody takes the time to look.

T>A>I: How can funders secure ARRA funding?

Jackson: There’s a substantial amount of money available in ARRA funds (which may not labeled as broadband, but are still accessible and relevant.) Funders should speak to others in their community to identify needs, find out who’s applying for funds, figure out how to leverage those funds, and coordinate their efforts. Be creative; don’t miss the opportunity to get the infrastructure through one grant and the equipment through another grant.

T>A>I: What final advice would you give grantmakers on funding broadband?

Jackson: Information technology is no longer a “vertical” in a organization matrix—it’s horizontal. It cuts across every single element of every single part of everyday life.

In that same vein, we can’t treat infrastructure as a single entity. Everybody likes to say “We’ve got 100 percent connectivity.” That won’t matter if we don’t have the applications to run across it. The question you need to ask yourself is this: How do you deploy infrastructure to anchor institutions, such as hospitals and schools, as a means of providing sustainable revenue and leveragable assets that can lower the cost of reaching residences? It’s not just about getting connectivity to people; it’s about making sure that people have the means to use it in a way that will empower them. It’s about involvement, engagement, and coming up with a holistic solution. The point of the stimulus program is to create jobs and stimulate the economy. Jobs don’t automatically come from giving somebody a computer or a cut-rate broadband subscription. That is a short-term fix. The long-term goal is provide citizens with the training and connectivity they need to effectively leverage technology to create personal and community wealth.

Overheard

President Bill Clinton focused much of his speech at the Rural Philanthropy Conference on alternative energy initiatives and the future growth of wind and solar energy in rural America. He was adamant about the need for such initiatives, saying, “We need to change the way we produce, conserve, and consume energy—and rural America needs to be part of that.”Alternative energy, he claimed, “…would spark the largest job boom we’ve had since World War II—and we wouldn’t have to shoot anyone to do it!”

T>A>I asked several conference attendees if they agreed/disagreed with President Clinton’s bold statement and challenge to rural America. We also asked them to suggest other areas rural America should focus on in order to survive and thrive.

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“Clinton made two important points about conversion to a green economy and rural America’s opportunity to lead. First, he pointed out the challenges in transmission technology. Right now renewable energy from rural solar and wind can’t be deployed to major urban markets at competitive costs. But that could mean outstanding opportunities to develop renewable energy zones in hard hit rural communities where the energy is produced, modern day TVAs [Tennessee Valley Authority]. But this is where President Clinton’s other point is critical. For rural to take part in a green economy we will need financing that both takes into account the true value of conversion and appreciates the lengthier terms needed for a full return on investment.”

- Dee Davis
Founder and President
Center for Rural Strategies

“As President Clinton made his way out of the room after almost two hours of captivating commentary regarding rural issues of the day, one comment he made kept running through my mind: “Make things better today than yesterday.” The message to me is to be diligent, committed, and passionate about making a difference for rural people and places one step at a time. Challenges do not go away overnight.  Our work is about improving lives and recognizing progress every day.”

- Robert Mahaffey
Director of Communications
Rural School and Community Trust

“President Clinton was right about the opportunities for rural America in renewable energy. Wind energy, for example, has potential to create tens of thousands of good jobs for struggling Great Plains communities.

But renewable energy must be done right. Wind should be structured to maximize ownership opportunities for wind farm employees, as well as farmers and ranchers.  Wind wealth should not be an export.

Renewable energy is no silver bullet. But, combined with broader initiatives to build assets, support microenterprise and develop community leaders, it can bring new prosperity and hope to struggling rural communities.”

- Chuck Hassebrook
Executive Director
Center for Rural Affairs

“Simply, America can’t change the way we produce, conserve, and consume energy WITHOUT the workforce in rural America. A developing community college training network is providing the human energy necessary to participate in this boom. Because energy production, whether from the wind, rays, or bio-mass will be generated from the landscape, it just makes good sense to give opportunities to those who live in rural areas to upgrade and increase their skills. The community colleges are place-based institutions that partner with the businesses and the communities in which they are located in. Linking good paying jobs with a local skilled workforce not only benefits the individual worker economically, but this strengthens the community and the nation.”

- Marcie McLaughlin
Director of Constituent Relations
Rural Policy Research Institute

“During his address at the Rural Philanthropy Conference, President Clinton challenged participants to take full advantage of the opportunities that are currently available. I was particularly struck by the goals President Clinton outlined for the current administration’s Social Innovation Fund and how well those goals align with those of Southern Bancorp. The Social Innovation Fund is tasked with identifying programs that address chronic problems in our communities with innovative solutions. The Fund will then develop ways to bring these innovative solutions to scale and reach an even larger population of people facing these same problems. At Southern Bancorp we strive to bring residents together to develop new solutions for their communities at the county level and then help the local, and frequently isolated, rural communities to connect to resources from all over the country. By scaling up in counties across rural Arkansas and Mississippi, we can make regional change, very similar to what the Social Innovation Fund proposes to do.”

- Ben Steinberg
President
Southern Bancorp

10 Minutes with…

Most people agree that in order for transformative change to occur, a clear understanding of the root causes of the issue is imperative. Such a substantive and intense discussion occurred during the education track at the Rural Philanthropy Conference. Significantly, funders and other representatives from across the education spectrum (those involved from pre-natal care to literacy and adult training issues) agreed on the root causes that stifle education—particularly in rural communities. Equally significant: they agreed on the importance of and need for public-private partnerships as a long term solution to eradicating poverty and sustainable economic development.

Sarita Venkat, editor of T>A>I, spoke to two attendees who participated in the discussion: Tina Markanda, a program officer in Heath Care at the Duke Endowment, and Margaret Doughty, secretary of the Literacy Funders Network—the Council’s newest affinity group.

T>A>I: Tell us a bit about your respective work.

Doughty: The Literacy Funders Network (LFN) launched in June 2009. We were formed because foundations have realized the need to collaborate with each other and other organizations to address the literacy issue in this country. There are 90 million people in the United States who have limited literacy skills. Low literacy is the root cause of people living in poverty, which results in communities not having the skilled workforce they need to prosper.

LFN focuses on two issues: working with grantmakers to raise awareness about low literacy levels by infusing a literacy component in all social service programs (from childhood to adult learning), and bringing the funding community together to craft and support solutions around best practices. More recently, we also help foundations learn how to access stimulus funds around workforce development and literacy for their communities.

Improving literacy levels is the most effective strategy to help a person out of poverty and is also the tool to ensure a skilled workforce. Infusing literacy throughout the lifespan of support services is both the solution to a critical problem and provides an effective return on investment for public and private dollars.

Markanda: As a rural health, child care, and workforce development funder, the Duke Endowment supports the issue of pre-natal care. We work to ensure that new, at-risk parents have the services they need to provide their child with a healthy start to life. It’s documented in science and literature that a child’s first three years of development are extremely critical for optimal brain development. So, a child who has an optimal start can do much better in life—in achieving academic gains, contributing to society, and not needing government services.

T>A>I: What did you learn from the root cause analysis discussion on poverty and education?

Doughty: The discussion we had at the conference was a stimulating one. People were aware that systemic and strategic change has to occur if we are to rebuild the economy. At each of the education-related sessions, two or three experts presented their concerns, issues, and solutions. That gave participants a framework and set the stage for a dialogue. What followed was an intense discussion around the issues, the root causes, and the strategies needed to move the dialogue forward. We specifically:

• dove deeply into understanding the systems (education, social, etc.) in place and whether these systems met community needs
• understood where the systems have prevented the most progressive changes from happening (sometimes the system itself prevents the change)
• examined a broader, coordinated approach to address the educational gaps in the country

I learned two things from this conversation: funders need to partner with other organizations in their states or communities, and such collaborations are needed to devise holistic solutions.

T>A>I: Please elaborate on your observation.

Doughty: From my understanding, foundations have opted to fund individual “pieces” of the education pipeline: childhood, or workforce literacy, or health-related issues. I don’t think foundations always realize that their communities view them as leaders who can bring all these pieces together.

It’s unrealistic to think that a foundation can find the entire solution—from helping a mother in her pre-natal state to funding adult education and training. Instead, funders should work with other public and private organizations in their communities to ensure, for example, that once a new mother has completed her pre-natal program, she stays in the system and receives support and services in the next stage of her development.

I think that our education system is fragmented and our funding system is fragmented. Sometimes it’s easier to look at all the issues in the community and select a piece and focus on that piece. But this approach and mindset reduces the collaboration and coordination aspects of the education and workforce pipeline. I think funders might think in terms of “a continuum of services.”

T>A>I: Is there a specific example of a solution that illustrates the benefits of this approach?

Markanda: The Nurse-Family Partnership program has been very effective for two reasons: one because we’re making the biggest impact even before the child is born—on the child and the parent—and second, it’s an example of a successful public-private partnership.

Before we began our seven-year, $20+ million commitment to the Nurse-Family Partnership program, we embarked on a similar root cause analysis exercise. We concluded that if we made a difference upfront—at the very beginning of a child’s life—in the long-run, the child will be better equipped to compete in the workforce and live a healthy life. The ripple effect of investing in those first few years would reap big gains for the child—and for society.

This is how the program works: A nurse is partnered with an expectant mother. The mother commits to the two-and-a-half year program whereby the nurse makes frequent visits. When researching the program, our staff had the opportunity to accompany nurses on these site visits. I visited a woman who was six/seven months pregnant and watched as the nurse asked the mother about her health: if she made her pre-natal visits to the doctor, if she had appropriate nutrition, etc. If the nurse couldn’t help, she then connected this mother to other services and providers in the community as necessary—this was key.

As a result, by the time the child is born, the mother has the support and services around her to create a healthy environment for her baby. In my opinion, it was a very transformational experience to observe as a third party. The nurse and the mother had clearly formed a special bond.

Doughty: This is an example of a holistic family model: providing the parent with pre-natal support so that once the child arrives, all the support systems are in place and thus ensuring the parent has the skills to support the child once he/she is born. The nurse is able to look at the network of support organizations within the community and bring those pieces together. This program is especially effective because of home visits by the nurse. If the parent has a low literacy level, chances are, they aren’t accessing or don’t even know about the support or services available to them in the community. But having someone actually speak to them in their home—a trusted, caring person—creates that awareness.

What tends to happen is that we miss these steps early on. Only later, when we identify deficits in early childhood, do we discover that it’s often too late. Repairing the damage is costly—to the families involved and to society as a whole.

T>A>I: Explain the importance of partnerships in this program.

Markanda: We work with other foundations and the state government to deliver this program in North and South Carolina. We looked very closely to see if there were opportunities to collaborate—both with funders and with implementation partners. Because it affects so many different agencies and people, this program depends on active and seamless communication and participation among the partners. Before you invest in such a program, it’s important that your funding and implementation partners are committed to the mission.

I believe that, as funders, we have a unique vantage point— we have the opportunity to invest in programs for the long-term and see systemic change.

Ethical Quandary

By: Kelly Shipp Simone

What do you do when a grantee—or potential grantee—asks someone on your board or staff to sit on their board? Does such a request constitute a conflict of interest? Are there times when such a situation can actually benefit one or both of the organizations involved?

Let’s look at some of the pros and cons of sharing board members.

Reasons for Sharing Board Members

At times, sharing board members can benefit both grantees and grantmakers. Each organization gains access to the individual’s unique talents, and expertise—and potentially gains new insights that can broaden their board’s perspective. Grantmaking organizations can especially benefit from:

• Better understanding the work of specific nonprofits.
• Greater insight into the nonprofit culture and experiences in the community (whether defined geographically or by interest area).
• Broader talent pool from which to draw volunteers (especially beneficial for grantmakers in smaller communities).

Reasons for Not Sharing Board Members

To minimize any possible conflicts of interest (or the appearance of such conflicts), you could develop a policy that clearly prohibits sharing board members with other nonprofits. Such a prohibition would help you:

• Reduce the potential for others in the community to accuse you of being unduly influenced in favor of a particular potential grantee.
• Provide a clear policy that your board and staff can follow to avoid conflicts of interest (particularly associated with board membership).
• Enable your board members and/or staff to decline invitations to join boards of potential grantees without alienating the organizations.

Conflicts of Interest Policy

Regardless of which approach your organization takes, you should have a clear conflicts of interest policy in place. Here are two reasons why: such a policy leads to a more informed decisionmaking process; and conflicts of interest—and how grantmakers handle such conflicts—remain a major focus of regulators, the public, and the media. As one example, the revised Form 990 asks more questions about relationships with other organizations and conflicts.

If you choose to prohibit sharing board members, you should incorporate that practice into your conflicts of interest policy. On the other hand, if you do permit sharing board members, your policy should define what constitutes a conflict of interest and require board members and staff to disclose any potential conflicts. You should also establish a procedure for handling the conflicts, ensuring that your policy and procedure conform to state law requirements. For example, the policy would likely require a board member who also serves on a potential grantee’s board to disclose her conflict and abstain from any vote on a grant request from that potential grantee.

Finally, should a conflict arise, document any disclosures made and procedures followed. In so doing, you can reinforce your foundation’s commitment to following its policies and procedures. Remember: using a conflict of interest policy to mitigate a conflict does not resolve the conflict. The conflict is still there; you have merely engaged in a process that reduces the impact of the conflict.

Legal Note

Private foundations need to be particularly cognizant of potential self-dealing concerns when the foundation shares board or staff members with grantees. Self-dealing will present less of an issue if your board and/or staff members are not paid for serving on the boards of other organizations.

Even so, your organization may still confront issues of self-dealing. For example, let’s say your foundation is making a grant to an organization where one of your own board members (or a relative) serves as staff. Because such a person would generally be considered a “disqualified person” under the IRS regulations, you will need to ensure, at minimum, that your grant is not designated—verbally or in writing—by the grantee to pay that person’s salary. Providing such an economic benefit to a disqualified person could be considered an act of self-dealing.

Private foundations should also watch for situations where the grantee is controlled by a disqualified person of the private foundation. In such a case, be aware of special recordkeeping rules and the timing of the grantee’s expenditure of the funds. Read more about these rules in, “Tread Carefully When Sharing Board Members with Grantseekers.”

Working through these issues with your board and your legal counsel will help ensure your policies not only meet the letter and spirit of the law but also meet your specific needs.

Resources

Tread Carefully When Sharing Board Members with Grantseekers
Conflicts of Interest: Safeguarding your Foundation
Conflicts of Interest: IRS Sample Policy Annotated for Grantmakers

Kelly Shipp Simone is the senior staff attorney at the Council on Foundations.