National News

This report by the Lilly Family School of Philanthropy at IUPUI, the same folk who bring us Giving USA, looks at the patterns of million dollar gifts for the 12 year period between 2000 and 2011. Predictably, the years following both recessions make a very poor showing but there are some interesting though perhaps not revelatory facts here…

A recent study by the Fairfield County Community Foundation in Connecticut focuses on collaboration and mergers among local nonprofits.The survey drew a 30 percent response rate, and of the 104 Fairfield County nonprofits surveyed, eight percent have merged and 21 percent have considered a merger.Those organizations that merged reported that the primary benefit was not cost savings, but higher quality and quantity of services available to the community. Those who have considered a merger but did not complete one stated that the primary reasons included cultural differences, personnel considerations, and the questionable financial return on investment. The results of this study are consistent with David La Piana’s argument that mergers don’t always lead to better financial returns.

The study goes on to note that although 57 percent of respondents have program-level partnerships with other nonprofits, only 10 percent of respondents have engaged in back office sharing, a strategy that was reported to offer significant cost savings by most of the participants. Thus, the collaboration story mirrors the merger story: partnerships are less about cost savings and more about increasing the quality and scope of services. –Michelle Shumate

Affluent young donors say they are more focused than their parents and grandparents on producing a measurable impact with their giving, according to a study released today.  What’s more, some of them say they care more about advancing a cause than helping an institution, the reverse of how they see the philanthropy of their elders. “Heartstrings don’t do much for us,” says Jaimie Mayer Phinney, a 29-year-old trustee of the Nathan Cummings Foundation, established by her great-grandfather.

In the Washington Post, Vanessa Small and Sarah Halzack write about William Hanbury’s time at the helm of the United Way of the National Capital Area, during which he righted the ship after some devastatingly embarrassing financial management scandals. Interestingly, they report that a “most critical” component of his strategy for resurrecting the damaged United Way was “a shift away from the workplace-oriented giving campaigns that have long been the lifeblood of the organization.”

Are there some fields that would be better served by removing the profit motive, where, in other words, nonprofits should be the preferable provider? It seems so if we care about the quality of care provided to the sick and elderly and if we care about out of control medical costs.

Many nonprofits are trying to figure out the big picture on social media and many are focusing on how to use it to reel in big fish donors. But the Naperville Area Humane Society may be doing more to engage its friends and followers by thinking really small. The organization has successfully used a sign on a well-traveled road to alert people to its immediate needs, such as a dwindling supply of kitty litter. Now its social media staff is doing the same thing on Facebook and Twitter, posting timely pleas for help.

Here is a good story to tell boards to impress upon them the advisability of strong fiscal stewardship. Educational Housing Services, established in 1987, is a New York City-based nonprofit that rents affordable housing to students. On Monday, New York State Attorney General Eric Schneiderman disclosed that George Scott, the founder and former president of the group’s board of directors, has agreed to a $5.5 million settlement resolving an investigation that Schneiderman said found “stunning” negligence on the part of the board.

On the Markets for Good blog, a consultant named Greg Ulrich asks whether more and better information on, about, or from nonprofits will improve the behavior (presumably, Ulrich means choices) of individual charitable donors. His firm, Hope Consulting, has data on whether donors do research on nonprofits they give to, whether they want better information on nonprofits, and whether they will use data to guide their choices if they do get it…

The Chase Community Giving Program, started in 2009 by JPMorgan Chase & Co., was reportedly one of the first experiments in using social media to engage charities and their supporters in a competition for grants. By many accounts, it has not gone well. As Ad Age’s B.L.

Ochman reports, “the 2012 contest descended into chaos, capped by Chase’s bone-headed announcement of $10,000 prizes to 15 charities that didn’t get enough votes to win—apparently the result of a clerical mistake.” According to a representative of one of the 15 charities, the mistake came with some reputational harm as “people think [the charities] did something wrong that caused us to lose the $10K.” Plus, there were allegations that Chase was secretly blocking winners that the bank didn’t think fit with its image…

The national elections are less than a month away. But regardless of who occupies the White House and Congress come January, the big issues for the nonprofit sector will be looming, requiring nonprofits to speak out, to mobilize, and to make sure that their broad range of diverse voices are not drowned out by a small coterie of large organizations that claim that they speak for the entire sector…

Nonprofit organizations build movements that mobilize people to fight the worst forms of human suffering. But when it comes to dealing with the systemic issues that undermine its true potential, the nonprofit sector has no movement to mobilize itself.

And while nonprofits speak for those who cannot speak for themselves, they have no national voice to defend against investigative reporters, lawmakers, and others who attack them—often maliciously and incorrectly—for spending too much on executives’ salaries and on the overhead and infrastructure expenses it would take to grow…

I am beginning to believe that the notion of so-called “strategic philanthropy,” in all of its beguiling and shape-shifting forms, is a very powerful accomplice in transforming the funding ecology and structure of the nonprofit sector.

Quite simply, it shifts the onus for creativity and decision making to those who have control of the finances and narrows, in many cases, the number of groups with whom philanthropists have to reciprocally communicate as they “focus” ever more acutely not just on the outcomes they hope for but on their preferred strategy for production of those outcomes. And this smaller number of grantees become the anointed—the chosen…

You need to be a subscriber to get full access to articles in the Journal of Marketing, but check out the executive summary of this article on cause-related marketing. The article’s three authors, Stefanie Rosen Robinson from North Carolina State University and Caglar Irmak and Frances Hipp of the University of South Carolina, write about cause marketing (CM) campaigns that allow the consumers to pick the causes…

Philanthropic organizations, nonprofits and public media—organizations that depend on charitable giving by corporations, individuals, and other foundations are facing significant challenges. While most people are aware of the short-term struggles facing these organizations as a result of the economic downturn and cuts in government spending, most don’t realize they face a bigger, long-term, and structural challenge. This challenge relates to the significant demographic changes taking place in the U.S.—population changes that threaten to undermine the viability of many of these organizations…

The future of corporate philanthropy—and corporate social responsibility in general—is likely to look much different than it does today, and the main difference will be a shift away from traditional cash giving and toward addressing social challenges through business. Put another way: Companies will no longer just hand out money and products to the nonprofits they align with. They will be engaged in solving social problems for profit…

According to Steve Case, the hottest topic for discussion at the second annual meeting of The Giving Pledgers was impact investing. This puts some emphasis on an idea that was raised at our recent ReCoding Good charrette on Impact Investing, Philanthropy and the New Social Economy.

That idea, quite simply, is this – do we need a new form of philanthropic enterprise designed to work across the continuum from grants to impact investing?…

The Supreme Court’s decision last week to uphold the nation’s health-care law predictably drew much praise from foundations and charities that help the nation’s most vulnerable citizens.  The verdict is far from conclusive, however, that the law is smart public policy. Conservative and liberal nonprofits have spent the past few days rethinking their public-policy strategies and gearing up for the inevitable battles yet to come over what Congress and the states should do next…

The Giving USA 2012 full report ($45) and a free Executive Summary are available at http://www.givingusareports.org

For the second year in a row, charitable giving barely grew, rising by just 0.9 percent after inflation in 2011, according to today’s release of “Giving USA,” the annual yearbook of American philanthropy. The study estimated that the total donated was $298.4-billion.

The glacial pace of the economic recovery caused “Giving USA” researchers to make a far gloomier forecast about when a full recovery in charitable giving will occur.

“If we continue to grow at this rate, it will take more than a decade to get back to where we were in total giving in 2007,” said Patrick Rooney, executive director of the Indiana University Center on Philanthropy, which compiles “Giving USA.”

Last year Mr. Rooney predicted that a recovery in giving could occur by 2016; now, given current conditions, he says it will more likely be 2022…

No one, least of all I, would argue nonprofits do anything less than important work.  In addition to providing vital art, theater and music experiences, as Senator Bradley once noted, nonprofits have done everything from create the polio vaccine to build the Sesame Workshop to invent the nationwide 911 system we all benefit from. They’ve protected endangered species, played a crucial role in bringing down apartheid, helped rebuild civil society in Eastern Europe, demined war zones, cared for aged patients, fed and sheltered the homeless and continue to provide help for schools nearly every day of the year. About half our nation’s hospitals, colleges and universities are nonprofits. And yes, nonprofits even play music.                                                                                  

For the purpose of this discussion, let’s stipulate nonprofits do some pretty amazing things and we’d all like to do them properly, without compromising our integrity one iota. We can talk about what the good things are and why they matter later, perhaps, in a future article.

But for now, because we identified a structural fissure in the underlying nonprofit business model the last time we spoke, let’s focus on some fundamental steps nonprofits might take if they are to follow their financially more perspicacious siblings in the for-profit sector toward a brighter financial future…

The New York Times has eliminated its philanthropy beat, a move that could make it harder for nonprofits to get their stories told to a national audience…

If we were holding a contest for “most depressing headline,” this one from Reuters might be in contention: “U.S. investors lack interest in companies doing good.” This was apparently the prevailing sentiment at a meeting of the Committee Encouraging Corporate Philanthropy, who met in New York City on Monday, which was International Corporate Philanthropy Day…