Message from the President

Steve Gunderson, President & CEO, Council on Foundations

A month ago we gathered in Atlanta and learned together that philanthropy’s moment is now.

We are at a place in time unlike any in our recent memory.

We are at a place in history with lessons that define both our vision and our strategy.

We are at a place of opportunity that could literally transform philanthropy’s role in society.

The economic crisis will continue challenging all of us and the communities we serve. But philanthropy’s greatest challenge may not be in how we’ve managed the past 18 months. Rather our greatest challenge may rest in how we prepare for and engage the future. This is philanthropy’s moment to come together to embrace the future and realize new potential in our work and passion.

As the plenary speakers at our conference made clear, government officials from every level are looking to philanthropy for help and expertise. Our ability to innovate and foster new ideas is unparalleled. We operate with a freedom government cannot and so they have reached out to us. They are looking to us as partners in a new public-private-philanthropic partnership that will change the way all of us serve our communities.

With the passage of legislation such as the American Recovery and Reinvestment Act (ARRA) and the Kennedy Serve America Act, the government has opened new avenues for partnership. In the coming months, legislation affecting health care, the green economy, and broadband will present more opportunities for partnership. The question for each of us, including the Council, is how can we best respond?

In this issue of TAI, you will hear from voices both within and outside of the sector reflecting on ways in which philanthropy can engage with the public and private sectors to best serve the common good. We hope these reflections will prompt you to offer your own thoughts of where we go from here—and who we must engage along the way. Your input is vital as we together enter a new era of philanthropy and define our role in new ways. We encourage you to comment on the articles you read and look forward to hearing your thoughts and ideas.

Public Domain

Ed DeSeve, Senior Advisor to the President

He’s probably the most important man you’ve never heard of. Ed DeSeve is President Obama’s senior advisor, responsible for implementing the American Recovery and Reinvestment Act (ARRA). What does this mean? DeSeve is managing and disbursing $800-plus billion in economic stimulus funds.

A lecturer and writer, he has extensive experience in the public and private sectors. Grantmakers heard from DeSeve at the Council’s Annual Conference. And the editors at TAI asked him a few questions after this speech.

TAI: How can philanthropy help you meet ARRA’s objectives and priorities?

Ed DeSeve: Collaboration is key. It provides an opportunity to break through existing stovepipes and bring people and information together in new ways. I find that today’s most effective leaders are focused not only on how they can solve a problem, but on whom to pull into the problem-solving process.
We—the Recovery Implementation Office—are embracing some core principles as we look to disburse the stimulus money and create jobs. These principles are:

• government is a connector first and a problem solver second
• government pulls together the right people around a problem
• government enables action through knowledge, resources, and visibility

With this lens, foundations play a critical role. From what I can see, foundations are natural connectors in their communities and/or focus areas. Through the knowledge you have on specific focus areas, connections you have with numerous affected communities, and the resources to spark action, there are huge opportunities for you to get engaged.

You should know that we are in the early stages of working with a select few federal agencies to identify specific problem areas within the ARRA’s focus areas. These include weatherization, health IT, high-speed rail, and broadband. We’re also working with these agencies to develop effective programs that will pull stakeholders and affected communities together through technology and face-to-face functions that will address those problems.

Once we figure out our exact goals and objectives, foundations should and will play a role in implementation.

TAI: Foundations around the country have knowledge on all kinds of issues. Is there a mechanism/point person for foundations to share this information with government?

DeSeve: As we wrestle with how to manage the disbursement of federal stimulus dollars, it is imperative that we not overly rely on our current structures. As we look to meet ARRA’s objectives, we must not fall into a trap that this is a top-down exercise that fits into matrixes that get red, yellow, or green stoplights. We clearly understand that foundations can play a critical role in achieving ARRA’s objectives.

Our focus in the Recovery Implementation Office is for government to be a platform that enables problem solving. We are moving to more collaborative models that empower people across the country to increase awareness, action, and results. With ARRA we want to tap into the latent potential of all Americans and the government workforce to become as agile as the threats and opportunities we face.

TAI: Foundations are ready to help.  How can they partner with you and the other agencies?

DeSeve: We have met with your [the Council’s] board chair and president and are working on some concrete next steps. Through these discussions, we know that you stand ready to help us in this cause and appreciate your willingness to help. As we get traction, we will come back for you for your knowledge, connections, and resources to help power up this collaborative approach.
Let’s make sure we remain focused on identifying the problems and finding new solutions. Old models and approaches will not get us to where we need to be. I believe we have, before us, an opportunity to attempt new and unique methods. While our challenges are great, so is our ability to meet them.

Click on the image to watch Ed DeSeve address Council conference attendees. He suggests five ways his office and foundations can work together.

Overheard

Blogger Kristin Ivie, a program associate at The Case Foundation, summed it up perfectly: “A new face this year at Council on Foundations is Uncle Sam. In plenaries, on panels, in the audience, members of the federal government are ready to engage in addressing social problems alongside foundations in a new way.” (Read the rest of Ivie’s entry “A New Side of Uncle Sam” from the conference.)

Ivie, along with 18 other invited guest bloggers, shared her ideas, thoughts, and observations on public-philanthropic partnerships (among other topics) at the Council’s Annual Conference in Atlanta.

We encourage you to visit the Council’s blog, Re: Philanthropy, for a comprehensive look at the conference. But here are several video clips, as well as entries from our guest bloggers. These entries illuminate the funny, serious, and poignant conference moments.

Click on picture for video

“When you partner with philanthropy, how do you see this sector changing?” asks Council Board Member, Michael Balaoing to Melody Barnes, director of the White House Domestic Policy Council. Click the picture above to see the Balaoing-Barnes exchange. Also watch a Director Melody Barnes discussing the social innovation and civic participation policy agenda.

In “Change We Can Count On,” Kaberi Banerjee-Murthy blogs about Melody Barnes’ substantive speech, saying, “she had me walking out of the room with a renewed sense of hope and potential for change.” One of Banerjee-Murthy’s favorite moments during President Bill Clinton’s speech was when he offered his take on when the economic crisis will end. “November 9th at 3:30 in the afternoon,” he predicted, illustrating the impossibly-false precision on any answer.” (Read “What? How Much? How?”)

For blogger Vicki Rosenberg, vice president of Education, Communications and External Relations at the Council of Michigan Foundations, New York City Mayor Michael Bloomberg’s speech on the importance of metrics, resonated with her. “I’m a great believer in one of the lessons that I learned in my first Wall Street job: In God we trust; everyone else – bring data,” Bloomberg said. Read Rosenberg’s entry, “Waterfalls in New York?” and watch a clip of Michael Bloomberg addressing conference attendees on the importance of measuring impact.

In Sarita Venkat’s entry, “Obama’s Call to Service,” she reports on Sonal Shah, head of the new Office of Social Innovation and Civic Participation at the White House. Shah offered foundations details on the office and its objectives, as well as the newly passed Edward M. Kennedy Serve America Act. Venkat concludes: “It’s ironic that government is often criticized for its slow-moving ways. Philanthropy will now have to keep up.”

Click on image for video

During his speech, Representative John Lewis (D-GA) urged foundations to “get into trouble.” Blogger Roger Doughty, executive director of the Horizons Foundation, found Lewis’ speech inspirational and cautioned foundations against “the luxury of slow-motion decision-making.” Click the picture above to watch a clip of Representative Lewis and read Doughty’s entry “Not In A Hurry (Still?).”

Click on image for video

Dr. Richard Besser, acting director of the Centers for Disease Control and Prevention, shared examples of ways the CDC and philanthropy have partnered on preparedness issues. Click the picture above to watch a video clip of Dr. Besser addressing conference attendees. Read what Emmett Carson, president of the Silicon Valley Community Foundation, had to say in his entry “Roles in Reform and Emergency.” Read, too, the blog entry “Looking for Partners in Health Care System Reform,” of Ali Webb, program director for Food Systems and Rural Development at the W.K. Kellogg Foundation.  Both Carson and Webb comment on Dr. Besser’s and Health and Human Services Secretary Kathleen Sebelius’ speeches.

Time of change or time of crisis? Or so asks blogger Trista Harris, executive director of the Headwaters Foundation for Justice. (Harris also has her own blog.) Harris believes that in this time of crisis, there’s an opportunity and need for change: Now’s “the time to rise up to the potential of what we can become.”

The View From Here

High Stakes, High Hopes for Philanthropy

By: Shirley Sagawa

Shirley Sagawa, visiting fellow, Center for American Progress

It’s unusual for federal legislation to contemplate an important role for philanthropy. The Edward M. Kennedy Serve America Act signed in April 2009 is a rare exception.

Of particular note, the bill’s Social Innovation Fund underscores the new administration’s commitment to trying new approaches to solving urgent problems. It uses a unique allocation mechanism so federal dollars match the funding choices of grantmakers, including foundations, rather than the other way around. In this way, funding decisions are made not by the federal government, but by grantmakers with experience making data-driven decisions for investing in communities.

The fund will work like this: The Corporation for National and Community Service will award grants in the amount of one to 10 million dollars on a competitive basis to grantmakers, or partnerships of grantmakers, taking into consideration the quality of their proposed grantmaking processes, their capacity to manage a fund, and their potential to sustain the fund after the grant period.

Then, funded grantmakers will make multi-year, substantial subgrants to innovative organizations to expand or replicate proven programs or support promising new initiatives in low-income communities. Subgrants may be focused on a specific local geographic area (for example, a neighborhood, group of rural counties, city, state, or an identifiable region), or address an issue such as education, child and youth development, poverty reduction, health, resource conservation, civic engagement, or crime.

Grantees will match funds dollar for dollar, as will subgrantees. In FY2010, $50 million is authorized. While the President has included funds in his budget, in order for this money to be available, Congress must still approve this request through the appropriations process this year. The annual authorized funding, subject to appropriations, increases to $100 million by FY2014.

Other features of the new legislation underscore the importance of service as a strategy to solve America’s education, energy, health, and economic crises by growing AmeriCorps from 75,000 members to 250,000 over the next decade and tying new issue-focused funds to specific outcomes. Philanthropy can play an important role by supporting recipient organizations with matching funds, as well as helping those organizations build their data collection and evaluation capacity so they can take full advantage of this opportunity.

The legislation also recognizes the value of service as a way to change the lives of those who serve. It targets veterans and older adults, for whom service has been proven to improve both physical and mental health. It also focuses on youth, whose motivation to achieve and pursue a life purpose can be developed through service. A new demonstration program that would make a summer of service a “rite of passage” holds particular promise for youth transitioning from middle school to high school—a time of both peril and opportunity.

Foundations would do well to help the nonprofits they support to get ready to engage AmeriCorps members, older adults, youth, and other community volunteers productively. All evidence suggests the supply of those ready to serve will be high.  Whether that is due to the “Obama effect,” unemployed workers looking for something to do, or a growing desire to make a difference in the face of increased suffering, the volunteer management funds in the bill could not come at a better time.

The success of these programs may well depend on foundations’ willingness to ensure that strong organizations can grow with these new human or financial resources. Even organizations that receive substantial government funds need private-sector dollars to enable them to support functions such as evaluation, development, innovation, and advocacy. Foundations could leverage their resources by supporting these efforts.

The Serve America Act, if fully funded by Congress, can make service and social innovation a central part of our national recovery and new way forward as a nation.  Foundations are critical partners in unlocking that promise.

Shirley Sagawa is a visiting fellow at the Center for American Progress.

Partnerships Are Our Lifeblood

By: Terry Mazany

Terry Mazany, President & CEO, Chicago Community Trust

The following is taken from “A Framework for Community Foundation Leadership in the Economic Recovery.”

Community foundations are uniquely positioned to serve our communities through our deep knowledge of the most pressing needs of our community residents and of the nonprofit organizations providing direct services to the most vulnerable. We are also well connected to the networks of philanthropic partnerships organized for research, planning, and development of innovative solutions to the major challenges of our times.

Community foundations support a host of promising and proven pilots that can be taken to scale in areas such as workforce development, early childhood education, green energy, social entrepreneurship, health care access, and many more. We often serve as catalysts to forge new priorities and plans for communities across stakeholder groups. These include investment in metropolitan development and small business, developing mixed income communities, and new approaches to poverty alleviation, among other areas.

The Blueprint for American Prosperity—the policy framework developed by the Brookings Institute to promote an economic agenda that will revitalize our national economy—can serve to structure important work for community foundations. The blueprint recognizes the role of partnerships in this revitalization. As stated by the Brookings Institute:

There is an opportunity to forge a new partnership between metropolitan areas and the federal government. This partnership will empower families, workers, businesses, and leaders in metropolitan areas to achieve productive, inclusive, and sustainable prosperity, and we recognize that this rich and durable prosperity requires commitments from all levels of government.

Community foundations have the capacity to span metropolitan areas and larger regions to help forge a common agenda to address challenges that are larger than a single community. For example, a group of 12 community foundations across the Midwest have already convened to focus on common priorities such as global competitiveness, high-speed rail, immigrant integration, and higher education. Each region has unique opportunities that would benefit from collaboration. We have already helped to stimulate these regional dialogues, as has the work of the Funders Network and various regional associations.

Terry Mazany is the president and CEO of the Chicago Community Trust.

10 Minutes with…

“The fundamentals haven’t changed: The role of the nongovernmental sector is essential. We do need to do more work blending the private sector and government policy where possible…But we need to relentlessly remain in the ‘how’ business. We’ve got quite enough ink spilt and quite enough air spent on ‘what’ and ‘how much’ but when it’s all said and done, when you and I’ve finished our work, when we look back on it, our success will be determined more than anything else on how well we answered the ‘how’ question.”

-    The Honorable William Jefferson Clinton, 42nd President of the United States
Addressing attendees at the Council on Foundations’ Annual Conference in May 2009

Dr. Sherece West, President, Winthrop Rockefeller Foundation

Dr. Sherece West was struck by these words as President Bill Clinton calmly and decisively faced 1,200 grantmakers one May afternoon in Atlanta. Outside, a thunderstorm raged. But inside the packed room, no one stirred as all eyes and ears where on the former president.

West, the president of the Little Rock-based Winthrop Rockefeller Foundation, is facing a “how” situation: How can more Americans—the government, grantmakers, the media—pay attention to and invest in the issues plaguing rural America? It’s not to say that urban America is problem-free but, according to West and many other rural-based grantmakers, rural parts of the country do not receive the necessary funding and resources to make it compete with other—namely—urban areas.

“There are real needs in rural America,” West said. “Let’s take the issues of education and workforce development. We have a swath of Americans who lag behind in education outcomes and who aren’t employable. In Arkansas, we have a high unemployment rate. I often hear there is a mismatch of skills for jobs. Jobs are available but job seekers do not have the skills for the jobs.

“We have school systems that are not teaching our kids to compete successfully in the 21st century workplace. We have illiteracy rates that are beyond belief. If people can’t read, they won’t be able to get a job. And even for those who have a degree or a certification, they have nowhere to go as companies close and industries leave our state,” West states.

West says she and others have tried to get STEM (Science, Technology, Engineering, and Mathematics) education enacted in Arkansas. “We’ve significantly invested in STEM education and we’ve made incremental strides. We know that’s the way to go—it’s the way of the future—but we simply cannot attract and retain top-quality educators to teach our kids.”

To use President Clinton’s analogy, West has a clear understanding of the “what”—the challenges, as well as the hard facts and figures facing rural America. West now wants to focus on the “how”—finding strategies and solutions to address these challenges.

Click on the image to watch President Clinton. He asks foundations to "relentlessly remain in the 'how' business."

She has some ideas on how rural-based grantmakers can get on the political agenda, such as being proactive with lawmakers at all levels and demonstrating that you have investment opportunities in your state.

“Arkansas has a big agricultural sector and we play a major role in our nation’s food supply. There’s an investment opportunity: using science and innovation, as it relates to agriculture, sustainable food, and land development,” West said.

While West doesn’t have all the answers, she believes that rural America will need to reinvent itself.

“What I hear is that rural America doesn’t have a voice because we don’t have an organized presence,” West said. She believes that grantmakers don’t necessarily have to present a unified front, but that they do need a voice.

In July, West, along with other grantmakers and the Council, will host a “Philanthropy and Rural America” conference in Little Rock. The conference will focus philanthropy’s eye on the country’s rural sector and examine the challenges and opportunities it faces. At the same time, conference participants will examine ways to increase philanthropy’s role in serving these communities and amplify its voice with lawmakers and regulators.

West hopes to have these tough conversations at the conference but warns that there will be a “moratorium on bellyaching” because funders need to be solutions-focused.

“We need to talk about strategy that demonstrates our opportunities and impact in rural investment rather than the historic approach that focuses on need,” West said.

West also wants to see funders launch an “Invest in Rural America” campaign at the conference. She believes that a branding campaign will increase awareness of the challenges and, even more importantly, encourage investment. Another of West’s goals is to form an action alliance among rural funders. By banding together, funders can break the silos and work together toward a common set of goals and opportunities.

“The truth is rural America has the opportunity and must re-create itself—whether it is in the area of biofuels or research and development, energy efficiency, or building broadband infrastructure in rural areas (part of the new administration’s reinvestment and recovery act), rural business development, or forestry,” West said. “Rural America is a rich minefield of opportunity for partnerships and change.”

“How” West faces and answers these challenges will be a lesson to all of us.

Note: The “Philanthropy and Rural America” conference will take place in Little Rock, Arkansas, July 13–15, 2009. Learn more about the conference by visiting the Council’s website.

This article was written by Sarita Venkat. Venkat is the manager of external communications at the Council on Foundations.

Ethical Quandary

By: Andrew Schulz

Andrew Schulz, Deputy Counsel, Council on Foundations

It is no secret that many in the charitable sector rely heavily on the government. Some depend on government grants for ongoing support. Others count on the vast pool of state and federal funds to take their innovative solutions to a scale necessary to make them truly effective. With billions of dollars in stimulus funding flowing from the government, there’s talk about the unprecedented opportunity it presents to forge powerful partnerships between the charitable and public sectors. Indeed, Rick Cohen’s recent article in the Philanthropy Journal challenges nonprofits to fight for federal funds.

But the relationship is not a one-way street. The government needs you too. You can provide much needed expertise to strengthen government programs.  You can also help the government distribute its resources more efficiently by using existing networks and helping target them to the greatest need or the best use.

Yet the decision about whether or not to pursue government funding and government partnerships is not devoid of practical and ethical considerations. Assuming your governing documents allow you to participate (most do), the accounting and audit requirements alone can be daunting. Beyond the practical issues, there are ethical considerations as well.

Mission Creep

Don’t let the allure of government money inadvertently pull you from your mission and focus.  While flexibility, creativity, and innovation in response to changing times are hallmarks of the philanthropic sector, so too is commitment to your charitable purpose. Government funds are usually targeted. Resist the temptation to go after grants or partnerships where the government’s objectives are not truly aligned with your own. Discipline here will avoid problems with your partners in the government, your donors, your grantees, and your board.

Dependency

Government funding, whether stimulus or otherwise, won’t last forever. Overreliance on federal or state funds without an exit or transition strategy could leave grantees vulnerable once the funding stream evaporates. Funders, too, are vulnerable. Once government funding ends, grantees may look to you to pick up the slack. Or, you may need to abandon the work all together. You can help avoid having to make those tough choices by taking time now to consider what other sources might replace government funds and how you might tap into them.

Letting Government off the Hook

Active participation of private philanthropy in areas that are inherently the government’s responsibility can actually undermine government support. Cash-strapped governments looking to shave budgets may abandon areas where they feel philanthropy can fill the void. By balancing your role, you can make sure that your participation strengthens and complements the government’s role rather than replace it. Without such balance, the charitable sector could be left holding the bag, funding a shadow of the myriad programs and services  government used to pay for.

Influence

Close relationships with government officials may evolve as a result of partnerships between foundations and government. Strict prohibitions on foundation participation in partisan political activity demand attentiveness to expectations and assumptions that may arise from these interactions. While government officials certainly have a multitude of rules they must abide by, it’s unlikely that they are well versed in the rules that apply to foundations. So, it’s up to you to look out for the interests of your organization. An eagerness to please a valued (and deep-pocketed) partner has led more than one foundation astray in the past and is sure to do so again. Avoid these risks by setting expectations early, making clear where you can work together and where you cannot, and keeping well clear of the line in between.

Andrew Schulz is deputy general counsel at the Council on Foundations.