Brights Spots Amidst the Gloom

Our governor presented his budget earlier this week (no, that’s not him in the photo). The word “gloomy” doesn’t even begin to describe the overwhelming feeling of dread that lies ahead as our elected officials start searching for a solution to fix a $6.2 billion deficit.

We all know the status quo is not acceptable and things need to change. Yet, how can we create the change we need (or “be the change we want to see” – to borrow from Gandhi) when change is so hard?

At the closing plenary of MCF’s 2010 Annual Convening last fall, Chip Heath (yes, that’s him in the photo), co-author of Switch: How to Change Things When Change Is Hard, engaged grantmakers in a lively illustration of the dynamics of change – featuring a logical, rational rider atop a massive elephant, which symbolized the power of our emotions. If we humans can balance logic and emotion, then the chance for change is good.

In directing the rider, Heath says, seek out the bright spots: Look for what’s working and do more of that. Even if the bright spots seem small, they represent positive, incremental change. Bright spots are different than best practices, which often mean “be more like them.” Strategy is about fit, he emphasizes, and highlighting bright spots is a call to “be more like me when I’m at my best.” His challenge to Minnesota: Can you scale your bright spots?

So, amidst the gloom of the current budget crisis, take a look at the bright spots we’ve highlighted in the Winter 2011 issue of Giving Forum:

• Blue Cross and Blue Shield Foundation: Reaches Beyond Health Care to Reduce Health Inequities
• Blandin Foundation: Leaders Expand Opportunities, Enhance Community
• Frey Foundation: Collaborating to End Homelessness
• Miller-Dwan: Spearheads Campaign for Mental Health Center
• Stevens Square: Seeds Innovation in Elder Issues
• Northwest Minnesota Foundation: Bands with Executives on Economic Drivers
• Grand Rapids Area Community Foundation: Eyes Workforce Needs
• Wells Fargo: Employees Coach and Mentor to Combat Disparities
• Sauer Children’s Renew Foundation: Strives to Break Cycle of Child Abuse

– Chris Murakami Noonan, MCF communications associate

Obama’s Budget and Its Potential Effect on Philanthropy

This week, President Obama released his 2012 fiscal year budget and again called for a Cap on Itemized Deductions as well as a simplified excise tax for private foundations.

The President again wants to limit the rate at which high-income taxpayers may claim itemized deductions to a maximum of 28%, regardless of their marginal tax rate. The language in the budget is similar to his 2011 budget proposal that was poorly received by the 111th Congress and the nonprofit community. While there is a general agreement that this proposal has a slim chance of becoming law, given the nation’s continued economic challenges and search for new revenues, nothing is certain.

The budget also includes a provision calling for a single 1.35% excise tax rate on investment income of private foundations. Under the current law, private foundations are subject to a two-tiered rate structure that generally imposes a 2% rate but allows a foundation to pay only 1% if certain requirements are met. The President’s budget acknowledges that a single flat rate will simplify the tax rate and encourage increased charitable activity.

Legislation is moving at a break-neck speed on issues related to balancing budgets, attacking deficits and reducing spending. MCF is carefully monitoring legislation on both a state and federal level that could negatively impact organized philanthropy and individual charitable giving. MCF staff and members will be participating in Foundations on the Hill in March to provide our members of Congress with the latest information on philanthropic giving in our state.

In addition to MCF, other nonprofit organizations are monitoring and actively educating our members of Congress on both a state and local level of the importance of the nonprofit and philanthropic sectors. This will be a challenging year for the sector, and our hope is that together we can identify solutions to address our country’s challenges and opportunities.

– Chuck Peterson, MCF vice president of member relations

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Minnesota Grantmaking to Hold Steady in 2011, Survey Report Says

The Minnesota Council on Foundations (MCF) today reported that foundation giving is expected to stabilize in 2011 following two years in which grantmakers anticipated declines. According to MCF’s 2011 Outlook Report survey, indicators also signal that Minnesota grantmakers are more optimistic about their giving in 2011 than they were at this time last year.

• Half of Minnesota grantmakers surveyed expect their giving to stay about the same as 2010 levels. Most who expect to either increase or decrease their giving in 2011 anticipate only modest changes of 4 percent or less.
• For 2011, 35 percent of grantmakers expect to give more than in 2010, while 10 percent expect to give less. This is an improvement over expectations captured last year when just 25 percent expected increases and 30 percent expected decreases during 2010.
• Grantmakers’ optimism about the stock market recovery and potential to earn stronger returns on investments is reflected in their 2011 asset outlook. Of those foundations with assets, 58 percent expect them to increase, 31 percent expect them to stay the same, and just 3 percent anticipate a decrease – percentages nearly identical to 2010 outlook numbers. The majority of grantmakers who expect assets to increase estimate modest growth of 4 percent or less.

“When the economic crisis took hold in 2008, no one was sure how long and how bad the downturn would be and what kind of toll it would take on nonprofits,” notes Bill King, MCF president. “Because much of foundation giving is asset-based, we expect the effects on grantmaking to linger. It now appears that, while the ‘new normal’ is challenging, we are moving to more stability in the next year.”

Other key findings in the report:

• Minnesota’s largest grantmakers (those giving more than $10 million in grants annually) are most likely to expect their grantmaking levels to hold steady. Small grantmakers (less than $1 million annually) and mid-sized grantmakers ($1 million to $10 million annually) are more likely to expect grantmaking increases in the coming year.
• Among all grantmaker types, corporate foundations and giving programs are most likely to expect their grantmaking levels to hold steady, while community/public foundations are more likely to anticipate grantmaking increases.

“This 2011 report also reveals how grantmakers are striving to increase their impact and achieve their missions in an era of tight resources and mounting community issues,” King adds. “Philanthropic organizations are exploring a wide range of strategies that illustrate their commitment to shaping solutions that ensure the future wellbeing of all Minnesotans.

Among the philanthropic strategies, nonmonetary support to nonprofits – such as technical and capacity-building assistance, volunteers and in-kind products and services – was cited by 68 percent of survey respondents; program-related investments and mission-related investments were noted by 36 percent and 16 percent, respectively; and public policy and advocacy activities were listed by 32 percent.

Read more and download the complete 2011 Outlook Report.

MCF’s 2011 Outlook Report research is based on an October/November 2010 survey of 118 Minnesota grantmakers, representing about 65 percent of all foundation and corporate giving in Minnesota. (Foundation and corporate giving totaled $1.42 billion in 2008, the most recent time period for which complete data are available. A comprehensive look at charitable giving in Minnesota can be found in MCF’s Giving in Minnesota, 2010 Edition report.)

To explore what these findings mean for the philanthropic and nonprofit sectors, MCF will host “2011 Minnesota Grantmaking Outlook” on Thursday, Jan. 27, 9 to 11 a.m., at the Amherst H. Wilder Foundation, St. Paul.

Bill King, MCF president, will present findings from MCF’s 2011 Outlook Report. Kevin Walker, president and CEO, Northwest Area Foundation, will moderate a panel of funders as they reflect on how the grantmaking field has changed since the recession, what adjustments their organizations have made to come to terms with the new normal, and what all this means for the nonprofit sector moving forward.

Panelists include: Cindy Gehrig, president, Jerome Foundation; Karen Kelley-Ariwoola, vice president, Community Philanthropy, The Minneapolis Foundation; Mark Lindberg, director, Relief, Recovery, and Development, Margaret A. Cargill Foundation; Jeff Peterson, director, Innovation and Strategy, General Mills Foundation.

For program details and to register, visit the MCF website.

– Chris Murakami Noonan, MCF communications associate

In 2020, Will Philanthropy Look Anything Like It Does Today?

Over last weekend, as one year passed and another began, I embarked on my annual tradition of drinking hot chocolate and spending some time thumbing (and scrolling) through a variety of “best (and worst) of” and “year in review” compilations. While most lists had absolutely nothing to do with work, at least one did:

Lucy Bernholz, author of the highly regarded, very insightful Philanthropy 2173 blog and founder and president of Blueprint Research and Design, looked back at how her predictions for the previous decade in philanthropy fared (1999-2009) and outlined what she thinks the next 10 years will bring.

Titled “Ten for the Next 10: 2010 – 2020,” her Philanthropy 2173 blog post has also been cross posted on the Stanford Social Innovation Review blog.

Here’s a summary of what Bernholz describes as her “premonitions on what will become familiar in philanthropy in the decade to come”:

1. By 2020, philanthropy in the U.S. and trans-nationally is going to be operating under fundamentally different rules (laws and regulations).
2. There will be more spend-down foundations.
3. Foundations, philanthropists and change-making organizations will be using gaming and game pedagogy to address all types of issues.
4. Disaster relief giving will be more structured and planned.
5. Impact investing will surpass philanthropy.
6. Institutional philanthropy will be more collaborative.
7. Program people who can use data, make sense of it, and help foundation’s communicate their own data through analysis and visualization will be key going forward.
8. Most of the foundations that exist today will exist in 2020, as will an amazing percentage of today’s nonprofits.
9. Mobile phones will replace credit card donations.
10. By 2020, we’ll have given up our misconception that “scale = big” and instead be focused on “scale = networked.” We will have recognized that problems get solved through “small pieces loosely coupled.”

Join the conversation on this blog or Bernholz’s: What do you think will happen by 2020? What will philanthropy look like? What can we barely imagine today that will be commonplace by then?

– Chris Murakami Noonan, MCF communications associate

It’s the Season of Giving, and We’re the 6th Best at It!

The Daily Beast just came out with its ranking of the 25 most charitable cities, and the Twin Cities are #6.

According to the Beast, here’s proof that Minneapolis-St. Paulites have big hearts:

• Percentage of earnings donated: 2.9 percent
• Average household income: $98,578
• Giving per foundation: $703,354
• Annual volunteers: 905,400
• Population that volunteers: 27.7 percent

By comparison, here’s the lowdown on the #1 most charitable city – Seattle:

• Percentage of earnings donated: 3.2 percent
• Average household income: $109,401
• Giving per foundation: $2,633,739
• Annual volunteers: 943,600
• Population that volunteers: 27.7 percent

To dive deeper into giving in Minnesota, take a look at MCF’s just-published research report, Giving in Minnesota, 2010 Edition, which presents the most comprehensive look at charitable giving in our state during 2008, the most recent period for which complete data are available.

A bright spot in the data: Grantmakers contributed 26 percent of total charitable giving in Minnesota. Foundation and corporate giving in Minnesota totaled $1.42 billion, an increase of 3.6 percent, from $1.37 billion in 2007.

This increase occurred despite a decline in foundation assets to $17.3 billion in 2008 from $19.55 billion in 2007, an 11.5-percent decrease. This is the largest single-year decline since 1994. Without the first-time addition of the Margaret A. Cargill Foundation’s $2.12 billion in assets, the decline would have been much steeper – 22.4 percent – in 2008.

A summary and the full Giving in Minnesota report are available on the MCF website.

– Chris Murakami Noonan, MCF communications associate

Photo CC mmlolek

The Next Generation: Critical Stakeholders in Strengthening a Family’s Giving Legacy

“What is perhaps most impressive about family philanthropy,” according to David Malone, author of Institute for Philanthropy’s Tomorrow’s Donors project, “is its ability to create new generations of informed, engaged stakeholders, many of whom will become future catalysts for changes in the world.”

On the other hand, Malone writes, “Put simply, a family foundation cannot develop without new advocates, ready to carry the family mission into the future.”

But creating a sense of collective ownership and enthusiasm for the family foundation is not an easy, one-size-fits-all endeavor. Nurturing, sharing and engaging across generations are pivotal.

In the fall issue of Giving Forum, MCF’s quarterly publication, we interviewed several next-generation family members engaged in their family’s philanthropy. Here are some excerpts:

Noa Staryk, board member, The McKnight Foundation, a fourth-generation family member, shares the advice she would give first-generation founders of family philanthropies:

“I would ask that you write down or clearly communicate why you want your foundation to be a family philanthropy and why you want it (or don’t want it) to go on in perpetuity.

William McKnight did not dictate anything about The McKnight Foundation. In most ways, this is a huge gift. We have the opportunity to honor him and his legacy through our work, for example, in neuroscience, but we are not bound to do so. We can stay flexible and nimble around issues that are pressing in our time.

But, it would have been helpful if the family had some nuggets of advice from him about the foundation continuing in the family and existing in perpetuity. Maybe he intended for us to figure this out, but his insights could provide helpful guideposts.”

Julie Zelle, Marbrook Foundation chair, explains how her family’s foundation is supporting the philanthropic education of its younger family members:

“The Marbrook Foundation sets aside 15 percent of its giving each year for family-directed grants that can be given by each family member over age 21; currently there are 23 eligible family members across the country. With this money, we’re trying to keep non-Minnesotan family members engaged, as well as teach our younger adults how a foundation operates. We have deadlines, and if family members miss them, then they need to wait until the next grant cycle. They need to obtain a 501(c)(3) number from the nonprofit and write a brief letter describing why they’d like to support the organization. There is a certain level of professionalism and follow through that we expect, even if it is their aunt or cousin they’re working with to arrange a grant.”

Stewart Crosby, board member and past chair of The Carolyn Foundation, discusses how the foundation recently completed a six-year transition to a board that is now completely comprised of fourth-generation family members:

“Two factors were key: First, the younger generation, which is substantially larger than the previous generation, was willing and eager to work in the foundation. Equally important, the older generation was confident the younger generation could run the foundation and agreed to establish board term limits. Setting staggered term limits enabled the foundation to keep the experience of one generation on the board during the transition from senior to junior members.”

To read more perspectives by these and other next-generation family philanthropists, view the fall 2010 Giving Forum focusing on how families are deepening connections, building legacies and strengthening shared values through their giving.

– Chris Murakami Noonan, MCF communications associate

Catalyst and Collaborator: Philanthropy’s Role in Public Policy

An Interview with Minnesota State Rep. Nora Slawik

Throughout her six terms in the Minnesota House of Representatives, Rep. Slawik has collaborated with foundations working to advance several early childhood and education initiatives. We chatted following her participation on a public policy panel hosted by the Minnesota Council on Foundations.

Here is an excerpt of her interview. Read more of her Commentary in our just-published Summer issue of Giving Forum.

Q: What is philanthropy’s role in public policy?

State government and foundations are looking to solve the same issues facing our citizens, so it only makes sense that we work together.

Part of what we lack in the public policy arena is the ability to do strategic planning, because we need short-term wins. This is amplified by election cycles. Foundations can give us long-term perspectives on issues and solutions and help us make more strategic decisions. It’s particularly valuable when foundations provide funding to jump-start strategic planning for longer-term solutions, especially when government is facing a large deficit.

A recent example is the work of the School Readiness Funders Coalition. As part of its larger advocacy agenda, this group of foundations will fund the implementation of two pieces of the Early Childhood Policy Bill approved this session. Both focus on strategic planning by the Governor’s Early Childhood Advisory Council: $100,000 will fund exploration of the creation of an Office of Early Learning; an additional $58,000 will fund strategic planning for a statewide school readiness report card.

Philanthropy brings a non-partisan lens to issues by advocating for what it believes is best for the community. That more collaborative, strategic perspective is important to have at the table.

Evaluation also is lacking in state government. We haven’t funded or conducted it in areas such as early childhood, so when we try to compare the impact of programs such as Head Start and those focusing on child care, school readiness and preschool – all of which serve the same populations – we do not have good data. How do we decide what are good investments? Foundations can help us begin to evaluate, so we can look at reform.

Foundations can be a catalyst for change by funding pilot projects, and state government can look at making the most of the best ideas. This type of collaborative relationship truly can benefit the public, especially those most in need of assistance. If government gives a subsidy to a parent for child care, foundations can help make that quality child care.

Q: How do philanthropy and government address the great challenges of making progress in public policy?

Develop a common vision and determine benchmarks that demonstrate progress toward that goal. In early childhood, our goal is to have all children school ready by 2020. For the environment, we want most of the state’s energy companies to provide 25 percent of their power through renewable sources by 2025. What are benchmarks we can measure along the way to these goals?

Obviously there will be setbacks. Elections and turnover at foundations change the players, and there are economic cutbacks and societal shifts. We need to adjust, but we can remain true to a consistent goal.

In the political world, people take sides and we encounter opposition. We can’t count on trying to change minds, as legislators are often entrenched in their positions. It’s important to be respectful, acknowledge alternative voices, invite everyone to be part of the process, and not shut out anyone.

In the case of this session’s early childhood bills, some view the creation of an Office of Early Childhood as expansion of government, while I see it as government reform or redefinition. Regardless, we will encourage opposing legislators to be involved in the task forces created by the legislation. During the session, our basic message was, “We have a collaborative partnership with the foundations. Let’s get this passed, then let’s all be active in moving the state forward through early childhood.”

Passing a bill is not the end of the public policy process. It feels like an end, because we’ve accomplished something, but it’s really the beginning of the work to create change.

Timing is everything!

Just as we published Giving Forum, GrantCraft released its latest guide – Working With Government: Guidance for Grantmakers.

Filled with case studies of cross-sector collaborations, the guide sheds light on unfamiliar terrain for foundations and government and offers fresh insight into the benefits and risks of partnering. Developing relationships, navigating roles and power dynamics, and managing risks aren’t easy, but the resulting collaborations — as the funders highlighted in this guide attest — are important and highly effective.

 – Chris Murakami Noonan, MCF communications associate

Capacity, Culture, Commitment and Comfort: Finding Public Policy Strategies That Fit Your Foundation

How much change can a foundation catalyze by simply – albeit generously – writing checks? Not as much as it could if it also engaged in public policy activities. In fact, public policy work should be viewed as an essential part of a foundation’s efforts, say several members of the Minnesota Council on Foundations.

In our Summer issue of Giving Forum, “Public Policy and Philanthropy: Many Roads Lead to the Same Destination – Change,” John Larsen, trustee and administrator of the John Larsen Foundation, says, “Ultimately, the work of our foundation is about creating real, systemic change, and that can only happen when we start talking to government. Whether you’re a small family foundation like us, or a very large foundation, we all need shifts in public policy in order to achieve really significant lasting social change.”

The challenge is that working to achieve shifts in public policy is often equated with lobbying. And the thought of walking up the steps of the Capitol or testifying before a legislative committee is more than many funders can fathom.

Lobbying, however, is not the sole avenue to influencing public decision making and advocating for causes. Although it is the most recognized public policy engagement tactic, it is only one of 18 distinct policy strategies that Julia Coffman outlines in “A User’s Guide to Advocacy Evaluation Planning,” published by the Harvard Family Research Project.

A “Framework of Public Policy Activities,” which we include in Giving Forum, also includes using electronic outreach and social media, coalition and network building, grassroots organizing, briefings and presentations, polling, pilot projects, research investigating issues and identifying solutions and policymaker education, among others – all of which can impact public decision making, which ultimately shapes policy development, approval and implementation.

A foundation can engage anywhere along the continuum, pursuing those activities that fit its capacity, culture, commitment and comfort levels. A public policy activity that feels right for one foundation may not fit another.

Many foundations choose a combination of strategies, leveraging their resources to: raise awareness of where the public stands on particular issues; bring together divergent points of view to first converse then collaborate; empower community members to advocate on their own behalf by providing technical assistance; increase the capacity of nonprofits to mobilize others; identify messages that resonate with policymakers and the public; determine what would happen if the status quo was allowed to prevail; aggregate what is known already about an issue and put that to work to further discussion; or identify possible solutions and best practices.

These MCF members have each chosen distinct strategies to impact public decision making that fit their capacity, culture, commitment and comfort level. Read more about their work in our just-published Giving Forum:

Lead article:

Southern Minnesota Initiative Foundation: An outgrowth of its grantmaking and programmatic activities, community dialogues and business loan work, SMIF’s public policy activities, including building coalition and networks and partnering with the media to draw attention to the issues and how public policy could impact the success the foundation seeks.

The Minneapolis Foundation: As part of the School Readiness Funders Coalition, a group of funders with diverse strengths and abilities in advocacy work, The Minneapolis Foundation brings to the group its ability to lobby and testify at legislative hearings to advocate for the coalitions “Agenda to Achieve Learning Readiness by 2020.”

John Larsen Foundation: When awarding grants supporting work toward LGBT equality, the foundation  considers if educating policymakers is an end goal of the nonprofit’s work and if the organization has a research plan and a track record of communicating those findings to policymakers.

Indian Land Tenure Foundation: Striving to ensure that lands within the original boundaries of reservations is acquired, owned and managed by Indians, the foundation views education about land issues a priority, as well as identification then pursuit of strategies for achieving legal reform.

Women’s Foundation of Minnesota: The explosion of social media has created a new landscape for the foundation to leverage its expertise to educate, engage and broaden its reach to shift attitudes, behaviors and institutions that limit equality for women and girls.

Voices of Philanthropy articles:

Bill and Melinda Gates Foundation: Identifying partners best qualified to successfully implement strategies and measuring what’s important to guide future initiatives drive the foundation’s advocacy work.

Initiative Foundation: Based on the belief that local people are the key to strengthening communities, the foundation increases civic engagement by providing training, technical assistance, resource referral and grants to help citizen-based teams develop and carry out strategic plans.

While these efforts are diverse, the common thread amongst them is the recognition by these foundations that strategically developing goals to influence public decision making and intentionally engaging in public policy activities and advocacy work can move systems change forward.

– Chris Murakami Noonan, MCF communications associate