Investing in understanding you

I had a chance recently to sit in on Philanthropy Australia’s Rural and Regional Affinity Group Meeting.  It’s a group ably led by Jeanice Henderson of the Foundation for Rural and Regional Renewal (FRRR) and links together funders from across Australia with an interest in supporting communities in regional, rural and remote Australia. I was there in my capacity as Co-Convenor of the Philanthropy Australia’s Education Affinity Group but I have subsequently signed up to participate more regularly as a member of the group.

I began wondering why it was that the Foundation I work for hadn’t been involved with the Rural and Regional Affinity Group up until that point.  It is a relatively new group and, like all in the philanthropic sector, I find myself ‘time poor’ a good deal of the time but the truth be told I think I may have actually dismissed the fact that I work for a foundation does make investments in those communities. Sometime when you are not explicit about what you fund (in this case regional and rural Australia) you can dismiss the role you should be playing in thinking about how to make better investments in that area.

Interestingly, I have noted the issue with ‘education funding’ too. I speak to a lot of philanthrocrats who aren’t involved in the Education Affinity Group and when we get talking about their funding priorities it’s clear that there is a genuine education cross over. Education is perhaps the broadest of all funding areas – what are we actually talking about when we say ‘education funding’? Is it simply schools support, numeracy and literacy and basic learning support for students? Or, as funders do we need to think about the wider diversity of education support we direct to young people via our arts, environment and health programs?

Last year’s Leading Learning in Education and Philanthropy survey picked up on the diversity of areas that philanthropy was making its investments to in education. A group of 25 funders actually agreed to identify themselves in the survey to outline the diversity of their education funding remit. The breath of funding priorities was impressive with areas as wides as support for the creative arts to vocational education for young people all supported. You can check out the full results via the Leading Learning in Education and Philanthropy (LLEAP) dialogue series.

In 2012 everyone involved in the LLEAP research is hopeful that the full diversity of philanthropic funders involved in education will complete the Philanthropy Survey to try to paint an even clearer picture of what funds are being directed to education by private and corporate funders. So I would urge all those funders who think they fit within the broad education remit to complete the survey and twist the arms of others they know to get involved too.  As a philanthropic sector it is important we invest our time and energy into knowing how we currently engage with our partners, so that we might in the longer term improve our practices, share our learnings and ultimately do better by those communities we are aiming to support.

The LLEAP Philanthropy Survey closes on Tuesday 21 August. If you have any questions about the survey or you involvement contact Emma or Michelle via tenderbridge@acer.edu.au.

You can follow the musings of Caitriona Fay on Twitter via @cat_fay or the blog via @3eggphil

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The never changing world of philanthropy

New approaches to solving old problems is the innovation mantra of more than one philanthropic foundation in Australia. Recently this got me thinking about the different approaches operating within the grantmaking space in Australia. With a few notable exceptions aside I think it is fair to say that most trusts and foundations operate in a pretty similar procedural manner.  So while funders ask grantseekers to innovate in their practices there is little experimentation around grantmaking practices. Can we assume this lack of innovation from funders in their grantmaking approaches is due to the fact that funders have got their processes perfected?  I wonder what grantseekers would say to that?

So what do grantseekers think of Australian funders? Officially we don’t really know but I doubt that is because applicants and grantees don’t have opinions.  The unfortunate reality is that there is little opportunity provided for grantseeker or grantee feedback about a funders approach to their grantmaking. In the United States the Centre for Effective Philanthropy has developed the The Grantee Perception Report® (GPR) which provides grantmakers with comparative and frank feedback on how grantees think they are performing.  Some funders even choose to make their reports publicly available. The GPR allows philanthropic boards to assess their performance as funders, this in turn helps them to work more effectively with grantees in the pursuit of their mission.

If it walks like a duck and talks like a duck…

So is the answer to better practices and diversity in grantmaking approach as simple as the provision of a feedback loop? While comparatively speaking there are greater levels of diversity in philanthropic practices across the United States it could be argued that ‘sameness’ is still the dominant feature of their foundation sector.

In a 2009 post on her philanthropy blog, Stanford University’s Centre on Philanthropy and Civil Society Visiting Fellow, Lucy Bernholz, questioned why, when there is so much that people outside of the foundation field would change about how philanthropy functions, has so little changed in past 100 years. She contends:

It doesn’t seem possible that these practices survive because they work well, please the customers, or even please the board and staff who choose them and re-create them. Institutional isomorphism is one of those graduate school concepts that is… true to life – organizations mimic like organizations, even when it doesn’t necessarily serve their purposes” (2009).

Isomorphism is basically the much flashier way of saying ‘sameness’.  It should also be said that not all about isomorphism is bad. If you look like a duck and talk like a duck chances are other ducks are going to accept you. These behaviors are really evident in the corporate world where organisations that look like each other (in terms of board structure, staffing structure, business philosophies) will more easily attract investors, customers and secure loans.  In short isomorphic behavior gives many organisations legitimacy.

There have been studies that suggest that isomorphism within the nonprofit sector is not as evident as it might be in the corporate world.  I’d contend however that traditional philanthropy is the exception to that nonprofit rule and there are a couple of reasons for that.  Think of the really big Australian philanthropic foundations, even most of the small ones too – they seem to operate and look pretty similar to one another in their grantmaking (e.g. application process, closing dates, reviews, board meeting, results etc). Objectives and priorities might be different, but processes and board structures are fairly similar. Part of this is driven by fiduciary responsibilities.  Trustees of foundations need to concerns themselves first and foremost with management of the assets – the upside is that if they do this well they can give away more money. So with grantmaking merely a by-product, it’s not hard to understand why diversity in grantmaking approach is not as evident as it might be.

Competition in the corporate world drives innovation and new behaviours.  In the nonprofit world, there is competition too for funds as well as the mission driven approach that dictates how NFPs work and the skills sets that they have on their boards and among their staff.  In philanthropy that competition doesn’t exist and compliance is focused almost solely on tax and law. So how do we drive diversity?  How to do celebrate those foundations that invest more in understanding that sometimes what is really important is the way you give? Perhaps a good starting point is to accept some feedback from those we work with most closely, our grantees. We also need to start listening and learning from those funders who are working a little bit outside the box. What have been their experiences, successes and failures? How did they bring their boards on that journey?

So what do people think really good models of philanthropy look like? Can we start to compile some of the features that not only lead to better practices in philanthropy but greater impact on the ground?

You can follow the musings of Caitriona Fay on Twitter via @cat_fay or the blog via @3eggphil


Increasing professionalism: the role of trustee companies in philanthropy

It has been expressed to me on more than one occasion that philanthropy is becoming too professional. I work in the sector, so I try not to take it personally but I think it is time to pick apart the debate a little. We’ve previously tackled on this blog the delicate balance that good philanthropic grantmaking must attempt to strike: a warm heart and a cold eye. There have been a number of good posts and speeches about the nature of philanthropy and the belief that altruism is unique and embedded within human nature. There are also the economists of this world and other theorists who believe altruism, like all other human behaviours, is incentivised and can be moulded into form.

It appears the nonprofit sector, with the exception of a couple of amateur sporting codes (Gaelic football comes to mind), is the final domain of debate around whether increased professionalism diminishes rather than increases the value of a sector. Does increased professionalism, and the development and employment costs it carries, remove much needed funding from the service coal face, or ultimately help to deliver more while building efficiencies?

With relation to professionalism within philanthropy I hear two main complaints:

  1. There are a lot of people making a lot of money out of spruiking the value of professional organised philanthropy and/or;
  2. Philanthropy has lost its benevolent heart and is no longer organic or enjoyable.  In short, it’s become work rather than play.

The question of philanthropy profiteering is more often than not pointed in one direction – trustee companies. With the enormous growth in private ancillary funds and the governance arrangements they carry there is suddenly money to be made in giving away money. Of the 5,000 or so estimated trusts and foundations in Australia more than half are thought to be held within trustee companies.  These pots of funding are held outside of the public view and are managed and coupled with investment and other financial services. To the cynical, trustee company philanthropy is perceived as tax-break grantmaking and the philanthropic services they offer is viewed as being muddled up with, and merely ancillary to, the bigger bucks of the financial services game.

Equally, those who lament the loss of the benevolent heart of philanthropy are genuinely fearful that philanthropy is the latest victim of fads and bureaucracies that add little value and ultimately deter people from giving. In the world of strategic grantmaking, venture philanthropy, philanhrocapitalism and engaged philanthropy, the concern is that the joy of giving has been lost and with it, potential philanthropists.

It would surprise some detractors perhaps to learn that despite concerns around profiteering and the loss of the joy of philanthropy, it appears that financial advisers and trustee companies might actually be playing an important role in both attracting people to and educating people about philanthropy.  A report from the Queensland University of Technology, Foundations for Giving: why and how Australians structure their philanthropy, documents responses from 40 people involved in structured, formalised philanthropy.  Virtually all respondents indicated that advisers and other intermediaries played some role in their philanthropy and the views expressed were generally positive.  In fact, the negative views expressed by respondents around advisers seems to suggest a greater level of expertise in philanthropy and skills in grantmaking would be preferable.

Philanthropy is and always will be a ‘people’s’ game.  Its about people being inspired by other people.  Its about people trusting and believing in other people.  Most of all it is about people wanting to create better lives and communities for others. It is hard to imagine that the heart of philanthropy will be lost simply through increased professionalism. In fact there is mounting evidence to suggest that the opposite may actually be true. Some of Australia’s trustee companies are driving not only increased professionalism within philanthropy, but also a greater diversity in practices and approaches to grantmaking. Some of our most vocal proponents for greater levels of giving among Australia’s wealthy, increased investment in organizational capacity support and improved engagement and evaluation of grantmaking approaches, are coming from within the trustee company sector. The gags many individual philanthropists are compelled to wear when talking about their philanthropy are less evident within adviser circles.

Good trustee companies will be passionate about their philanthropy and the approaches available to their clients.  Poor trustee companies will see philanthropic services as ancillary, and more than likely will charge a hefty price for the pleasure. As is the case with all services, donors should shop around, the cream of the crop will quickly become evident.

The professionalism that trustee companies bring to client services is beginning to have an impact on philanthropy as it is delivered in Australia.  It’s a diversity that the sector absolutely needs.  More choice for donors and potential philanthropists is important as is greater debate on grantmaking approaches and philosophies.

You can follow the musings of Caitriona Fay via @cat_fay on twitter and the eggs via @3eggphil


Gonski calls to philanthropy

In the 24 hours since its release the public response has been mostly positive to David Gonski’s comprehensive report on the funding of Australia’s schools. The independent and catholic school systems, state education proponents and unions are all urging the Gillard Government to act on the recommendations of the report. With 5 billion extra dollars being earmarked by Gonski to fund his reforms it’s not all together surprising.

One of the big surprises falling from the report was the focus on the need for greater partnerships between schools and philanthropy. The recommendations equally acknowledge the role philanthropy plays in our communities and the need to better equip schools to access that funding. We’ve raised some of the issues facing philanthropists wishing to support schools in a previous post and it was great to see some of the important voices on the issue, Ros Black, Michelle Anderson, Philanthropy Australia, Brian Caldwell, Myles McGregor-Lowndes et al, referenced in the Report.

So let’s take a quick look at the recommendations the Report makes on philanthropy and school partnerships.

1. A fund to encourage philanthropic giving to schools in low socioeconomic areas

The report outlines this fund as a DGR entity focused on assisting schools to develop philanthropic partnerships. As a staffed organisation, the fund would be responsible for facilitation of school-philanthropy partnerships while also building the capacity of individual schools to better partner with philanthropy. We have seen a number of organisations working actively in this space. For example, The Australian Council for Education Research (ACER) has established the Tender Bridge with the specific intent of assisting schools to develop the skills and knowledge required to better access and work with philanthropic and corporate partners. ACER and Tend Bridge have also been the key drivers behind the Leading Learning in Education and Philanthropy (LLEAP) initiative that is investigating the impact of philanthropy in education with the aim of building knowledge and improving outcomes for schools and their philanthropic partners.

2. Capacity building

Access is a critical issue for many schools when attempting to interact with philanthropy and other potential donors.

  • Access to philanthropy – understanding who is out there, how to approach donors and what a suitable partnership looks like
  • Access to individuals – building and growing alumni with a view to keeping former students connected to their school communities for longer
  • Access to DGR status– limitations around DGR funds, particularly for state schools means community partnerships must be developed with the non-profit sector
  • Access to knowledge – understanding different types of grantmaking and sponsorship partnership and what reciprocal obligations, if any, they create

Building the capacity of schools to improve their access to all of the above is imperative in allowing school-philanthropy-business partnerships continue to grow.

3. Increase taxation incentives for donations to government schools

Seen by some as a soulless altruism, tax incentives have been highlighted as a potential means to increase donations to government schools. Debate is still hot on whether these incentives actually work but as highlighted in the Report they could at the very least be an important conversation starter between some donors and schools.

There is a good deal to do before the vision and potential of  a more active philanthropy-schools collaboration is realised. Senator Jacinta Collins has been tasked by the Government with examining the Report’s philanthropy recommendations further and to continue a consultation process with the key stakeholders. The great thing however is that philanthropy has been slowly moving towards more sustained engagement with the school sector for some time. Organisations like the former Education Foundation and the Foundation for Young Australians have a wonderful history in this space. The development of the Business Working with Education Foundation is a further example of this movement as is the wonderfully engaged interaction of so many philanthropic funders with the Leading Learning in Education and Philanthropy (LLEAP) research project over the past 12 months. All of this serves as a reminder of the commitment many funders already have to finding better ways of working with schools. Let’s hope Senator Collins engages with them all.

You can follow the musings of Caitriona Fay on Twitter via @cat_fay or the blog via @3eggphil.


Blueprint 2012 – Looking at the new social economy

Religious readers of this blog (my parents) know that more than once I’ve spruiked the value of Lucy Bernholz’s Philanthropy 2173 blog. It’s a great read for those interested in emerging trends in philanthropy and social investment. Lucy, a self confessed philanthropy-wonk and  visiting scholar at the Stanford University Center on Philanthropy and Civil Society, also publishes a much anticipated annual industry forecast.  I got my hands on a copy of the Philanthropy and Social Investing 2012 Blueprint just before Christmas and it was a great way to both end 2011 and prepare for 2012.

The 2012 Blueprint is ultimately aimed at assisting “donors, investors and enterprise leaders address three big shifts in 2012”.

  1. Finding your way in the new social economy in which philanthropy and impact investing now operate
  2. Considering the implications of the Citizens United decision on philanthropy and social investing
  3. Making sense of data as a public good

On initial reading you’d be forgiven for thinking points 1 and 3 are the only ones that could possibly relate to an Australian context, but interestingly the potential implications of the Citizens United Supreme Court decision in the Unites States provides a couple of ‘ah-ha’ moments around the potential future of Australian philanthropic investments in light of our own High Court’s Aid/WATCH ruling (more on that later). I’m going to explore all three big shifts on this blog a little further over the next week. Today I’ll be taking a peek at the first of the identified big shifts; Finding your way in the new social economy.

One of the big statements of the 2012 Blueprint concerns the need to shift our traditional perspectives on non-profit/donor interactions to a much broader frame that encompasses the multiplicity of ways private resources are today being used for public good. This is a shift to the social economy frame and acknowledges a greater diversity of players, stakeholders and influencers in the resourcing of the ‘public good’. Lucy lists three main ‘galaxies’ as being at play within the social economy: impact investing, political giving, and charitable giving. Here in Australia are we too focused on exploring charitable giving without consideration to the role of those two other galaxies?

It’s fair to say impact investing in Australia is lagging well behind the United States and UK, but 2011 was a big year for the sector (think SEDIF, Hepburn Wind & the NSW Government Social Impact Bonds* announcement). While political giving may not be natural space of play within our system, the Australian High Court’s Aid/WATCH ruling has the potential to change traditional interactions between political parties, donors and non-profits (if donors and non-profits can cope with the cultural change required in this sphere of influence).

In short the interactions between these galaxies within the Australian context are happening at a growing rate and the influence each is expelling on the other needs greater examination.  The 2012 Blueprint helps to explore this beautifully:

Donors today are choosing between and among philanthropy, impact investing and political giving to pursue their goals…the line between the galaxies are clear, other times they are blurry.

As an example, a donor today may choose to pursue their interests in protecting the environment by funding direct landscape restoration & maintenance.  Alternatively they may decide to invest in a community wind farm project or support direct political advocacy with the aim of removing cattle grazing from a national park.

Lucy’s exploration of the social economy and the different galaxy of players has me thinking more and more about who is in the room when conversations about funding and tackling social and environmental problems are actually being had. Are we (donors & doers) actively excluding each other and if so, why? Lucy once again sums it up best:

It is not enough to focus only on philanthropy and nonprofits; rather we need to understand the changing dynamics of the whole economy over time…..The key to our future is accepting that our old assumptions about “which sector does what” may no longer hold.

It’s fair to say that despite opening with a statement on American political giving in the 2012 presidential campaign year, the Blueprint is packed with an enormous amount of content that will be of interest to Australian social investors. For those interested in where the shifts are happening, what the buzzwords of 2012 are likely to be, as well as a prediction on where the social economy is heading, then a copy of the 2012 Blueprint is a must.

You can get your hands on the 2012 Blueprint the following ways:

  • Hard copies from Lulu
  • PDFs at Scribd
  • Kindle version from Amazon
  • eBook from Smashwords. Also available for Amazon Kindle, B & N Nook and others.

*Interestingly Social Impact Bond is on the 2012 Blueprint Buzzword Watch List

 

You can follow the musings of Caitriona on Twitter via @cat_fay or the blog @3eggphil


Verbal reporting… the next step in effective philanthropy?

Louise Kuramoto is a Grant Researcher at the Myer Family Company. She works with families, foundation and corporates providing philanthropic research, administration and strategic advice with regard to their philanthropy.

Engaging effectively with grantees is something that many philanthropists and philanthrocrats alike strive to achieve but are we really getting it right? And when I talk of ‘engaging effectively’ I am not talking of post application feedback but rather the day-to-day relationships you hold with your grantees.

So, where do you sit on the spectrum? Think of a program you have funded and ask yourself three questions;

1. Do I have the direct contact details of the person managing or responsible for the program and have I had a conversation with them?

2. Can I explain the program’s three main challenges to achieving its objectives?

3. Am I aware of the program’s progression (or otherwise!) in the last six to twelve months?

For those of you who could not confidently answer ‘yes’ to each of the above questions you may want to give verbal reporting further consideration.

Otherwise known as face-to-face reporting, verbal reporting is a tool that some foundations have been using to varying degrees as a way to truly understand the organisations they fund and the complexities and challenges of the areas in which they work. Foundation staff cite that the reduction of paperwork for both the funded organisation and the philanthropic body is a bonus, but the real benefits of verbal reporting lie in the face-to-face interactions they have with their grantees. It is these face-to-face meetings they state, that have proved to facilitate a more open and honest dialogue between the two parties, consequently enabling the foundation to form a true partnership with its grantees and in turn, yield better results.

The Myer Family Company, in collaboration with The Portland House Foundation, held a forum late last year to explore this topic further, specifically focusing on The Portland House Foundation’s reporting model which encompasses:

  • A high trust, low documentation process;
  • The CEO or leader of the funded organisation committing to attend at least one face-to-face reporting meeting per year (this meeting would also include a number of other funded organisations who verbally report on their projects); and
  • Supplementary documentation (such as financials etc.) is requested as needed.

The organisations represented at the forum also described the verbal reporting process as highly beneficial to their work because it provides a ‘safe’ environment whereby their organisational and project challenges can be offered for discussion and brainstorming with the donor and other attendees. This point is especially pertinent for us philanthropists/crats, who have a tendency to focus on financial giving and at times underestimate the value of the non-financial support we are able to offer. Whether it’s as a sounding board to discuss program design or harnessing the skills, knowledge or networks of board members, the value these links and expertise can leverage is often much more than any monetary figure the donor could provide.

So next time you seek an update on a particular project or receive an application in the mail, think about picking up the phone and organising a meeting with your grantee, it might change your outlook entirely.

You can follow Louise on Twitter @LouKuramoto or the Myer Family Company via @MF_Philanthropy


The LLEAP Survey Report: A conversation starter for education funders

It was exciting yesterday to see the release of the 2011 Survey Report for the Leading Learning in Education and Philanthropy (LLEAP) research study. The Report documents the responses to the inaugural LLEAP survey provided by 300 schools, non-profits and philanthropic bodies working in the education space.

The release of the Report marks the first real milestone for the LLEAP team and everyone involved in shaping the research program. Those organisations and individuals who have given their time generously to be involved in the interview phase, focus groups and in the completion of the survey have done so out of a commitment to finding better ways to work towards improving educational outcomes.

The LLEAP research is the first of its kind in Australia to bring together schools, non-profits and trusts & foundations to examine the role and impact of philanthropy in education.

For me, one of the more eye-opening aspects of the Report relates to the number of disconnects in priorities and target audiences among respondent schools, non-profits and philanthropic organisations. This is perhaps best demonstrated by schools clearly ranking teachers and teacher quality highly in terms of need for support and yet this need is not reflected in the highest priorities of philanthropic and non-profit respondents.

There are three main themes to come out of the Report with respect to the barriers faced by schools, non-profits and philanthropy.  For schools, it’s that their capacity to find and access philanthropic dollars is poor. For non-profits, the issue of short term funding and program sustainability is hindering their capacity to be as effective as they could be. For philanthropy the barriers are what the report refers to as “knowledge issues” (specifically the who, how and why of collaboration and best practice).

The great thing about the Survey Report is that it is a conversation starter.  The survey results are simply that; survey results. How we use and interpret the results however can potentially influence our practices and decision making. We’ll be exploring some of the issues the Report has thrown up on this blog in the coming weeks and would love you to join in the on the conversation.

Caitriona Fay is a member of the LLEAP Project Team. You can follow her musings on Twitter via @cat_fay and get the latest from the Eggs via @3eggphil