Giving like Herb and Dorothy

They weren’t born rich. They didn’t get rich either. Quite the opposite in fact. But they are major American philanthropists. They’re Herbert and Dorothy Vogel.

I hadn’t heard of the Vogels until a couple of weeks ago when I was scanning the shelves of my local video shop for something to watch (why do we still call them video shops?!) and a title caught my eye: “Herb and Dorothy. The incredible true story of a postal worker and a librarian who built a world-class art collection”.

Using Herb’s salary alone (they lived on Dorothy’s) the Vogels managed to amass what is described in the film as “one of the most important contemporary art collections in history”.  They did this using just two selection criteria:

  1. they had to be able to afford the work, and
  2. it had to fit into their rent-controlled one bedroom apartment in Manhattan!

While the artists represented in the collection now reads as a who’s who of major Minimalist, Conceptual and post-1960s artists, the Vogels bought the works when no one else was interested, which meant they were able to buy them for virtually nothing. They bought passionately and compulsively for almost 30 years and by the early 90s their apartment was busting at the seams with works of art estimated to be worth millions of dollars.

In 1992, after being courted by some major art museums and made many lucrative offers for their collection, the Vogels gifted it to the National Gallery of Art in Washington. But what motivated them to do this? Why did they gift it? They may have been asset rich but in real terms they had no money!  They explain it as being because they’d both been government workers and they liked the idea of giving it to the American people.  Gorgeous!

Amazingly, they then went on to continue to collect art…..mainly using the small annuity the National Gallery had given them as a token of thanks for their gift (I love their story!!). Once again, the artworks outgrew the Vogels’ capacity to properly look after them and they decided to make another major gift to the American people. Unfortunately the National Gallery was unable to accept any more works, so instead they brokered an initiative which in the last couple of years has seen the distribution of 50 Vogel collection art works to 50 art museums around the US.  NY Times Vogel 50×50

Clearly it was all about the art and giving others the opportunity to gain as much from it as they had: learning from it and getting a huge amount of pleasure out of experiencing it. It’s such a human story and it’s so inspirational!

In the last week Australia has celebrated two major philanthropic gifts – one from John Kaldor and one from The Felton Bequest. The Kaldor Family Collection of 200 international contemporary art works was unveiled in its new home at the Art Gallery of New South Wales. The collection, which John Kaldor gifted to the Gallery in 2008, is valued at AU$35 million and is the single largest donation of art to an Australian public gallery. John says that his benefaction was driven by the fact that he sees art as an essential part of life and that he felt selfish having the art in his own home where only he and family were able to see it. As he has demonstrated via his commissioning of major public art works in Australia since the 1960s, he has a deep commitment to enabling public to learn from, have access to and enjoy art. It’s a hugely important gift.  ABC Kaldor Gift feature

The Felton Bequest was left to the National Gallery of Victoria by Alfred Felton on his death in 1904. He left £378,000 in trust (about $30 million in today’s money) for the NGV to use for the purchase of works and objects judged ”to have an educational value and to be calculated to raise and improve public taste”. Hmmmm. Since his death over 15,000 works of art valued at over $2 billion have been purchased, accounting for 80% of the NGV’s collection, and growing….the purchase and commissioning of a further 170+ art works was announced yesterday on the Gallery’s 150th birthday! It’s such a shame Felton didn’t give in his lifetime, so he could have seen the very value of his benefaction. In fact with such a categorical goal to improve public taste, I’m surprised he didn’t want to be around to know if he’d achieved it!  NGV at 150/Felton Bequest

It is these gifts and those of the Rockefellers, Guggenheims, Besens, D’Offays and Duffields to name but a few, that give so much to the public in terms of their capacity to create opportunities to learn and give enrichment and pleasure. Long may they continue! The Vogel’s story makes it feel possible that it could be any one of us that can give a gift which makes all the difference. I wonder if I have it in me to “do a Vogel“?!

If you want to see the trailer for Herb and Dorothy directed by Megumi Sasaki, click here: Herb and Doroth 2008 movie


Advocacy – not as naughty as you might think

Advocacy is a pretty divisive issue in philanthropy. For tax, legal or ideological reasons some people believe very strongly that philanthropy should not be in the game of supporting political campaigns. But there are some big name philanthropists who have plenty of skin in the advocacy game.  Gates, Soros, the Rockefellers and Feeney are all backers of major political advocacy in their areas of interest. But the cynics will tell you that individuals with big cheque books have always been good at influencing policy.

Many philanthropists here in Australia, who fund for charitable purposes, will argue that supporting advocacy is political and therefore fails the basic charity means test. But thanks to the brave souls at Aid/Watch that might all be about to change.

Changemakers Australia has recently released the results of their Charity Law Reform project that examines the barriers to advocacy under charity and tax laws. The report, which you can find here, is called Freedom to Speak – Capacity to Act. The low down is this –  while the Aid/Watch decision paves the way for more ‘political’ in our charity, we’ll have to wait for the ATO Tax Ruling for Charities before anything is set in stone.

For me, the really fascinating bits in the Freedom to Speak report come from the series of ‘hypotheticals’ put to the ATO.  The responses they provided to the hypotheticals appear to indicate that if philanthropy does its bit to make sure the organisations they are supporting have the appropriate tax status, then there’s not a lot to fear around the support of advocacy. Could it be that advocacy has been philanthropy’s bogey man, all fear without substance?

There’s a lot for funders to like about the opportunity to support advocacy. The return on investment is estimated in some circles to be over 100:1.  So to celebrate the potential, I thought I would highlight a few resources around funding advocacy. Here’s a list of four of my faves:

  1. Are we allowed to claim Atlantic Philanthropies as one of our own?  Probably not, but Chuck Feeney is a very generous honorary Australian, he’s also a big believer in the power of advocacy.  Here’s Atlantic Philanthropies report Investing in Change: Why Supporting Advocacy Makes Sense for Foundations
  2. The Harvard Graduate School of Education interviews four foundations around evaluating their advocacy funding.  The article called Pioneers in the Field: Four Foundations on Advocacy Evaluation examines why grantmakers choose advocacy and how they go about establishing whether their funding has had impact
  3. Ashley Allen a partner at the Endevor Group (who are definitely worth checking out) gives us a run down on some important philanthropic supported campaigns for change in her article Catalytic Philanthropy: Investing in Policy Advocacy 
  4. And finally (with thanks again to Atlantic Philanthropies for the link) the Chronicle for Philanthropy hosted an online discussion about advocacy campaigns, you can check out a reply of that chat with Tom Novak of the amazing M+R Strategic Services, Antha Williams, the Advocacy Exec at Atlantic Philanthropies and Dan Cramer of Grassroots Solutions

To make this list a nice round number at five, it would be great if you could share any additional resources you might know of via the comments section of the blog (go on, don’t be shy).

You can following Caitriona on Twitter via @cat_fay

How to make friends and influence philanthropy

A colleague has just returned from the Centre for Effective Philanthropy’s (CEP) conference Better Philanthropy: From Data to Impact in Boston.  The CEP provides data to philanthropic funders so they can “improve their effectiveness – and, as a result, their intended impact”.  She’s buzzing with new ideas, and was inspired by the people she met.

One of the areas CEP looks at is the funder-grantee relationship, or, whether we’re “working productively with our grantees”.  My colleague raved about the report Working with Grantees:  Keys to Success and Five Program Officers Who Exemplify Them. The CEP has looked at grantee survey data since 2004, and has tweaked their survey along the way to glean new insights.  Through this process, CEP has looked at over 9,600 suggestions from grantees on how foundations can improve.  That’s a lot of feedback…

In the introduction to the report, Paul Beaudet  from the Wilburforce Foundation says “At the very basic level, solid relationships with grantees are critically important because grantees are a very good source of information for us.  They are the ones doing the on-the-ground work.  They’re likely to have a much more nuanced and deeper understanding of the context for the work that needs to be done in the particular places that we care about.  If we have high-quality, long-term, trust-based relationships with grantees, we believe that we’ll have better knowledge around which we can make smart investments in their organizational and programmatic capacity, helping them to achieve their outcomes more efficiently and effectively.”  Yep, couldn’t have said it better myself.

I’ve been thinking about Caitriona’s recent blog on transparency, and I think a lot of the ‘how’ in transparency comes down to relationships.  And I mean relationships at all levels.  From the high level – for example the philanthropic sector’s relationship with government, and the perceptions of the philanthropic sector from the point of view of the not-for-profit sector – right down the nuts and bolts end – the relationship between the giver (whether that be the philanthropist, Foundation board director or philanthrocrat) and the asker (development manager, Board member of the NFP or fundraiser).  What Paul is talking about is transparency.  And a transparency that has a real benefit for both the Foundation and for those organisations it supports.

The CEP had four key findings of factors that contribute to a good relationship between Foundation staff and grantees.   Firstly, that Foundation staff understand the organisation they’re funding, including its goals and strategies.  Secondly, that the selection process of the Foundation helps strengthen the grantee organisation’s work.  Thirdly, that Foundation staff have expertise in the area they’re funding, and finally, communication between the grantee and the foundation staff, both who initiates it, and how often.

It sort of seems obvious, but I think there are still some take home lessons for us philanthrocrats.   For me it’s about keeping the door open, saying ‘yes’ to opportunities to learn, and doing my best to be engaged in sectors of interest.  In my experience, that’s where I’ve learnt the most.  And watching my peers, I think it’s also where the best projects are born.  So cheers to transparency.  May it make our sector stronger.

Arts funding – Federal budget follow-up

Well despite all of the doom and gloom, the Federal budget wasn’t as dire as we were led to believe it would be. Included in the Government’s key pledges to the Arts were:

  • $10m in new funding to the Aus Co to distribute (over five years) to artists across all artforms
  • continuation of funding to support its Contemporary Music Touring Program to the tune of $400,000/yr (bad pun!!) and;
  • $56m in support of TV and film production.

In terms of the new $10m funding, this will be used to support artists to produce new works, undertake fellowships and give additional presentations of their work to audiences around Australia. Grants of up to $80,000 will be made available for new work and up to $50,000 to support presentations. For a government with stretched resources to find an additional ten million dollars to support this kind of work is testament to the community value of the Arts in this country.

The shift in funding focus away from arts organisations towards individual artists appears to be a response to Aus Co’s 2010 Artist careers research. The research identified that for artists to create inspiring new work they need time, space and financial support. It also responds positively to the  New Models New Money paper, launched in early 2010 by the Queensland Government and the Centre for Social Impact, which highlighted the value of the arts in Australia and the importance of the individual artist to the growth and health of the sector. For funders with an interest in supporting artists the New Models New Money full discussion paper is well worth a read.

This provides a good segue to an interesting recent development in philanthropic funding of the Arts in Australia…. the new Sidney Myer Fund Arts and Humanities funding model. Full details aren’t due to be announced until later in the year, but what the Fund has revealed is that from 1 July 2011 it will give about 15 artists from around the country $80,000 per year for two years, seemingly with very few ties and binds. For a funder that has for so long supported Arts orgs via commonly used grant-making protocols, this is a huge change in direction. It’s great to see a big philanthropic taking risks and changing direction. I’m sure many artists, arts organisations and grantmakers will be watching with great interest.

Going back to Government funding of the arts in general, though, this time looking to the longer term. I mentioned in my last blog ( Arts Funding: England vs Australia ) that in April this year Harold Mitchell was tasked with leading a major review of private sector support for the Arts in Australia. The review will report on current Government arrangements for encouraging private sector support for the arts, consider potential new models for encouraging private sector support and develop policy options in the context of the long awaited National Cultural Policy. It doesn’t sound too dissimilar to the type of stuff happening in the UK that I talked about last time, where government is trying to leverage greater private support to try to take financial pressure off itself.  There’s been a broadly positive reception of their actions, and no doubt the same will be true here too.  The review is scheduled to be reported on in late October 2011.

It looks like there are some interesting times ahead!


Time for Open Philanthropy in Australia?

I hinted in a recent blog that there was growing talk in the philanthropic sector about the need for increased transparency. At the recent Philanthropy Australia AGM, President Bruce Bonyhady AM, ended his yearly review asking philanthropy to look more closely at the role it plays in society.  Two things stood out to me in Bruce’s speech, first was his belief that philanthropy could play a greater role in the advocacy space and second was that the sector needed to find more ways to be transparent. Both issues, that of advocacy and transparency, are important areas for consideration in Australian philanthropy today. We’ll be tackling both in upcoming blogs and today I’ll kick us off we a few thoughts on transparency.

The timing is right for Philanthropy Australia to push the need for greater transparency among trusts and foundations and not simply because so many are working to solve the same problems.  With the announcement of the formation of the The Australian Charities and Not-for-Profit Commission (ACNC) it is likely that we will see increased government interest in way the philanthropic sector is distributing its funds. Already established are minimum distribution requirements for private ancillary funds and a move to see the same placed on all their public ancillary counterparts. But to be honest, if the extending reach of government is the only incentive driving philanthropic transparency in Australia then we as a sector should probably be a little concerned.

The concept of ‘Open Philanthropy’ in the United States has been driving forward some interesting thinking and incentivising transparency in unique ways. The wonderful Lucy Bernholz (you must follow her blog) shared her modest manifesto on open philanthropy early last year and it really struck a chord with me at the time. Transparency improves our ability to address problems through the sharing of data, successes and failures but like all things in philanthropy the ‘how’ can be the really important bit.

The ‘how’ of transparency is something that the Foundation Center in the US has been looking closely at via the Glasspockets Initiative. The principle behind Glasspockets is, in the words of Janet Camarena, the Foundation Center’s  project lead, “all about creating a culture of transparency within foundations”. But in this digital age transparent philanthropy is no longer simply about sharing how much we fund, it’s about how we communicate openly with each other and the broader public. Glasspockets is a true resource for the community and grantmkers alike, providing functions such as a Heat Map showing the frequency with which information is shared by foundations and a tool allowing foundations to submit and post grant data electronically in near real-time (called eGrant Reporting).  Both functionalities are potentially important tools for grantmakers and the broader community, actively informing and mapping where philanthropy is working, who its engaging with and how engaged that conversation is with people at the coalface.

When I see the potential of initiatives such as Glasspockets for grantmaking I get a little excited.  Imagine the possibilities.  Imagine the potential for real collaboration and informed giving! We need to move away from a belief that transparency in philanthropy is simply about better reporting to government and the public via tax returns and annual reports.  I get the feeling that if the incentives are right for increased transparency in Australian philanthropy then the results could be game changing. But an investment needs to be made by philanthropy into itself, and the capacity of the sector, in order to undertake these initiatives and really drive them forward. I hope that this active transparency model is something the ACNC and Philanthropy Australia encourage among funders.

You can follow Caitriona on Twitter via @cat_fay

Budget 2011

So what the heck does the budget really mean for the Not for Profit (NFP) sector? Well, in short it’s all about reform.

The big exciting news is that we’ll finally get a charities commission here in Australia. The Australian Charities and Not-for-Profit Commission (ACNC) will be launched on 1 July 2012 and will receive a $53.6 million injection from the Government over the next four years. Finally there will be a one-stop-shop for charities, responsible for determining the eligibility of organisations seeking charitable status as well as the implementation of the much sought after ‘report-once use-often’ reporting framework for NFPs. The arrival of the Commission will hopefully lead to the implementation of some of the recommendations of the 2010 Productivity Commission Report into the NFP sector.  A Government Taskforce will be established in July 2011 to take responsibility for getting the ACNC ready to launch into operations by July 2012.  While the makeup of the Taskforce is currently unclear, there will be a broader public consultation process with the NFP sector and relevant government agencies.

While the launch of the Commission is positive, there have been some mixed feelings around the announced budget crackdown on tax exemptions for businesses run by Not for Profit organisations. The media has focused on the implications of the closing of this loophole for organisations like Hillsong Church which operates the Gloria Jean’s Coffee Shop franchise or the Seventh Day Adventist Church which operates cereal company, Sanitarium. The basic gist of it is that any revenue generated by NFPs from commercial activities that are not directed back to their altruistic purpose will be subject to income tax.  Seem’s fair enough?  Well, maybe but here’s a great international comparison from Bronwen Dalton arguing that the only winners in this closing of the loophole are the lawyers and accountants.

The final big piece of news from the Budget for the Not for Profit sector is the government announcement that it will introduce a statutory definition of ‘charity’ by July 2013. Basically, someone has decided that a 400 year old definition of charity is simply not good enough.  While the broad nature of the current definition has caused problems the review seems to be a reaction to Aid/Watch decision from the High Court late last year. The Government has committed to providing $2.9 million over four years to the ACNC (tough first up job) to assist with the reassessment of the charitable status of entities on the basis of the new statutory definition.

For more information check out the the media release from The Hon Bill Shorten

Buzzword of 2011: Capacity Building

Ok, so it’s only May but I’m going to put my neck out early and call ‘capacity building’ the buzzword of 2011.  A big call, especially with so much talk of ‘transparency’ lately.  Call me cynical but I do worry that capacity building will be to 2011 what ‘collaboration’ was to 2008-2009.  We in the philanthropic sector can talk the good talk but turning the rhetoric into reality is actually bloody hard work. When I talk to my colleagues about ‘collaboration’ more often than not what we end up discussing is ‘co-funding’. And while there are excellent examples of genuine collaborations between trusts and foundations over the last few years, somewhere the definition of what collaboration is has been lost in the noise.

I don’t want to see capacity building lost from the philanthropic agenda.  It’s important for philanthropy in Australia to examine not just the ‘why’ of supporting non-profit capacity building but also the ‘how’.

But first the basics, what is capacity building? The Human Interaction Research Institute which operates the Philanthropic Capacity Building Resources (PCBR) Database describes capacity building as:

“the term used to describe funding, and services such as staff and board training, technology or other capital purchases, fund-raising strategy development, and other activities that help strengthen nonprofit organizations”.

In some circles you might hear ‘capacity building’ referred to as its evil alter-ego, ‘core-funding’.  In philanthropy speak, when someone says core-funding the response you’ll get from a foundation is likely to be ‘you should be funding this yourself’. So for some in philanthropy capacity building is simply a no go area and that’s ok. For those that are interested in the value of funding in the capacity space there are a number of challenges, the biggest of which is the question of how.

Building the capacity of grassroots environmental organisations was the focus of a number of sessions at the 2010 Environmental Grantmakers Association (EGA) Fall Retreat in the US last October.  At the retreat Amanda Martin, Executive Officer of the Australian Environmental Grantmakers Network, brought together a group of Australian funders to hear from Paul Beaudet of the Seattle based Wilburforce Foundation.  Paul explained that at the Wilburforce Foundation they recognised that in order to build the strength of the communities they were working in, they needed to build the strength of the orgnisations they were working with. Rather than develop a grants program to allow organisations to access capacity funds, the Wilburforce Foundation developed a network of service providers that their programmatic grantees could access for support in their own areas of identified need.  The Foundation’s grantees did not need to tell Wilburforce what providers they were accessing for support.  In fact, the Foundation created an entire new entity to ensure they were completely removed from the process.  This allowed their grantees the freedom to genuinely address their areas of capacity need without fearing what their grantmaking partner might think.

What I like about the Wilburforce Foundation approach is that they recognise the imbalance in the power dynamic between grantmaker and grantseeker. As a grantseeker would you feel confident in telling a funder that your organisation’s capacity needs were in financial management? What about seeking support for conflict mediation? Or support to develop your governance structure? As a grantseeker, these might be genuine capacity needs but it’s understandable that many might find it difficult to share these needs with a funding partner.  So with this in mind, can philanthropy ever be directly involved with capacity funding? The answer of course is yes, but the ‘how’ of funding capacity needs to be carefully considered before a foundation dives in.

Ultimately, investing in capacity building is investing in the strength of the non-profit sector and that benefits everyone. If the philanthropic sector in Australia wants to ensure that recent conversations around ‘capacity building’ don’t become empty rhetoric then we need to invest some time and thought (and maybe even some capacity funds of our own) into the ‘how’s’ and ‘why’s’ of funding in this space.

You can follow Caitriona’s other musings via twitter @cat_fay