Category Archives: Foundations

The Growing Blog Team

April 24, 2008 – 9:03 am

After the success of last year’s One Post Challenge, I thought that putting together a large blog team for the upcoming Council on Foundations conference might lead to a more dynamic conversation. So far, the list of people signing up has been excellent. You can read some background on what I’m looking for here and here. If you’ll be at the conference and would like to sign up to participate, shoot me an email. The conference this year combines the annual events for corporate philanthropy, community foundations, family foundations and private foundations. I would particularly like to add some representatives from family foundations to the list below.

The confirmed bloggers are:

My hope at last year’s conference was to open a “portal” into the event through which non-attendees could participate. While I think I was at least partially successful in providing a view into the event, the “participation” I was hoping for (for instance, a reader posting a question which I could then ask at a session and then blog about the answer) did not really occur. After the huge success of the One Post Challenge in creating reader debates around certain issues, I’m hoping that this year, we might get more of a back and forth going.

Let me know if you want to join the team and mark May 3-7 on your calendar for an explosion of activity on this blog as I begin posting entries from 10+ bloggers.

By Sean Stannard-Stockton | Also posted in Cross-Disciplinary Conversations, Giving Blogs, Philanthropy, Social Media, Transparency | Comments (0)

Conversations with a New Donor

April 17, 2008 – 8:46 am

I had a fascinating conversation over lunch at the Global Philanthropy Forum with a young philanthropist. He was in his 20’s and along with his uncle had started a pretty large family foundation. He described the difficulty they had just trying to figure out how to get things started and how now after 18 months they were ready to really work on developing programs.

I mentioned in my last post on GBF how the intention of this conference is to bring together family foundations who can learn from each other and influence each others grant making. What I found interesting was this young philanthropist’s comment that many of the sessions seemed to focus on big policy issues. While clearly important, these issues did not help my lunch partner figure out how to create his programs. This gap, the gap in information available to individual philanthropists, is the information gap I’m focused on. A small segment of this gap is what I’ve designed Ensemble Capital to fill (the gap that led to the young philanthropists 18 month journey of simply getting his foundation up and running). But program development, either official foundation programs, or just strategic family giving, is a another huge gap. I suggested the book Inspired Philanthropy to him and told him about a program consultant I could introduce him to. But that’s not enough.

I think that supply begets demand as well as responding to demand. It is interest from donors that has led to the creation of Charity Navigator, the increasing level of philanthropy coverage in the mass media, the new philanthropy TV shows and Ensemble Capital. But on the other hand, I’ve found that most people who come to my firm for assistance don’t know what they don’t know. As they become educated about the possibilities, their interest and engagement in philanthropy grows.

Who is going to tell people the great story that is philanthropy? Who is going to weave the true story of the Second Great Wave of Philanthropy. Who is going to educate donors about the possibilities of philanthropy?

When an intelligent, young philanthropists like the one I had lunch with today has a hard time finding information about how to achieve impact (even after catching a long plane flight to one of the premier philanthropy conferences) how is it possible to make the argument that donors have always been focused on impact? To believe that donors have always wanted something and yet the market simply has not delivered it to them, is to believe in a massive market failure. The supply of impact-oriented philanthropy information does not exist because the demand is very new. The demand is small because the supply does not exist. I believe deeply that we are seeing the very early signs of supply coming to this market. I think the latent demand is massive. As the demand materializes in response to the coming supply, a feedback loop will develop and a Second Great Wave of Philanthropy will begin to crest.

What will these individuals fund? How will they conduct themselves? I met Case Foundation CEO Ben Binswanger at the conference. Have you seen the Case Foundation Make It Your Own program? Ben is one person who is already positioning his foundation to figure out how to leverage this Second Great Wave. Are you ready?

By Sean Stannard-Stockton | Also posted in Grantmaking, New Philanthropy, Philanthropy | Comments (1)

Council on Foundations Conference

April 16, 2008 – 7:47 am

On May 2-7 I’ll be at the Council on Foundations annual conference. Last year was the first year that the Council issued media credentials to bloggers and I covered the conference in Seattle. I enjoyed being a full time blogger for a couple days, but was frustrated that I could not cover more sessions. So to that end I’d like to extend an invitation to Tactical Philanthropy readers who will be at the conference to help me cover some of the sessions. If you’ll be in attendance and are interested in writing a couple of blog posts about particular sessions or about the conference in general, please shoot me an email and we’ll discuss the possibilities.

You can read my coverage of the 2007 conference by clicking here. To get a sense of the type of session posts I’m interested in, read Demonstrating Impact: Philanthropy’s Urgent Call to Action. This post from last year’s conference is one of the most frequently read posts I’ve ever written.

By Sean Stannard-Stockton | Also posted in Media, Philanthropy | Comments (0)

Global Philanthropy Forum

April 10, 2008 – 12:13 pm

I’m at the Global Philanthropy Forum conference today and tomorrow. 500 people talking about international issues. Not the same crowd you get at a lot of these events because the forum targets family foundations. But the kinds of families that draw the Archbishop Desmond Tutu and the Queen of Jordan as opening speakers. Larry Brilliant and Richard Rockefeller are here, but so are Sean Parker (developer of Facebook Causes) and Peter Gabriel (the muscian).

The Forum was started in 2001 with a recession looming as a way to engage donors on international issues that are often abstract. In a recession, donors often pull back from causes that do not offer the immediacy of local issues. What I find interesting about the Forum is that the stated goal is to get the attendees to work together. About half have been giving for 7 years or less, while the other half are mostly multi-generational donors.

To measure the impact of the conference, Forum CEO Jane Wales says that their greatest metric is tracking how influential the attendees become in each others’ future giving. 83% of attendees from last year’s Forum say that an attendee they met was instrumental in a giving decision they made after the conference.

There’s a lot that I believe is brand new in today’s philanthropy, but I agree 100% with Amanda Moniz’s statement from yesterday:

In order to grapple honestly with the strengths and weaknesses of beneficence, it is important to recognise that new and better practices are often old methods that have been revived…

I just happen to think that concept is being applied incorrectly to the debate we’ve been having. A famous phrase of wisdom in financial markets is the often ignored warning to never believe that “Its different this time”. I’m glad to see that at the Forum we have a venue for new philanthropists to learn from multi-generational donors and vice versa.

By Sean Stannard-Stockton | Also posted in Cross-Disciplinary Conversations, Effective Giving, New Philanthropy, Philanthropy, Social Entrepreneurship | Comments (1)

Donors Want Impact?

April 9, 2008 – 9:43 am

In response to my recent Financial Times column about new approaches to funding growing nonprofits, the following letter to the editor appeared in the April 5 edition of the FT.

Sir, Sean Stannard-Stockton (“Non-profits look to invest in themselves”, March 29) errs when he concludes his interesting column by saying that “while yesterday’s donors were content to give to a non-profit based on emotional appeal, today’s donors want to know their money is really going to have an impact”.Since the late Renaissance and the Reformation era when the conceptual and applied shift towards “modern philanthropy” with its pursuit of rationalised solutions to systemic problems occurred, donors have sought to optimise the outcome of their investments. Today’s “venture philanthropists” promise greater results and more accountability by borrowing from the practices of venture capital, just as “scientific philanthropists” of the late 19th century did by adopting the principles of the reigning intellectual framework of science.

In order to grapple honestly with the strengths and weaknesses of beneficence, it is important to recognise that new and better practices are often old methods that have been revived - because the problem of an unequal distribution of resources endures - and that perpetual frustration with the limits of philanthropy is a prime reason for the continual reworking of ideas.

Amanda B. Moniz,
Department of History,
University of Michigan

Michael Edwards of the Ford Foundation responded to the same sentence in my column saying, “[you] assume that impact considerations are new, when in fact they have been around for fifty years or more - just not expressed in the ways you
think are satisfactory.”

I agree that the concept of impact (attempting to give in ways that can do the most good for your dollar) is not new within institutional philanthropy. Because a lot of my readers work at institutional foundations, consult for these foundations, or work at nonprofits that receive grants from these foundations, I often address issues of institutional philanthropy. But I’m not an expert in institutional philanthropy. My firm, Ensemble Capital, serves individual philanthropists. When I talk about The Second Great Wave of Philanthropy, I’m talking about major shifts going on with individual donors. When I write for the mass audience of the Financial Times, I’m writing for individual donors. But given how my writing on this blog veers into issues of institutional philanthropy on a regular basis, I can see how it is my fault if people perceive that I’m declaring “impact” as a new concept to foundations. It is not.

Individual donors have always been aware of the idea that their donations could do more or less good depending on which nonprofits they funded. While they might not often use the word “impact”, the concept makes sense if it is explained to them. But I reject the idea put forth by Moniz and Edwards that “donors” (and that was the word I used, not “foundations”) have embraced impact considerations for half a century.

If in fact donors understood impact, which at its core assumes that some donations do more than others, than you would assume that these donors would strive to achieve higher levels of impact. Yet there are almost no mass market books that discuss this issue, almost no articles in print or online, almost no organizations that help donors achieve impact.

Now before you send me emails pointing to Inspired Philanthropy or Don’t Just Give It Away, before you point out that I’m writing a mass market column on these very issues at the Financial Times, before you tell me about excellent consultants like The Philanthropic Initiative, Arabella Philanthropic Investment Advisors, or my own firm Ensemble Capital, let me just say that all of that adds up to just a bit more than zero.

Individual donors have access to almost nothing compared to individual investors. Every bookstore in the country has a whole section devoted to personal finance (books on which generally ignore charitable giving while lavishing pages of copy on other obscure financial issues). Every daily newspaper devotes space to advising individual investors and we have many mass market publications targeted directly to the individual investor. Investors issue with investment advisors is not so much finding one (believe me, there are thousands of advisors trying to find you right now), but picking from amongst the many qualified professionals.

Most individual donors don’t even know the difference between a nonprofit and a foundation. Institutional philanthropy actual is making a effort to let people know what they do since most Americans cannot even name a single large foundation. Individual donors with a portfolio of appreciated assets still mostly write checks to charity instead of transfering assets or setting up a philanthropic account (this is similar to saving for retirement in a checking account because an investor had never heard of a 401k).

I could go on and on.

I actual have my own criticism of the sentence in my column that Edwards and Moniz call out. When I wrote “while yesterday’s donors were content to give to a non-profit based on
emotional appeal, today’s donors want to know their money is really
going to have an impact,” I actually overstated the case in the opposite direction of the way they saw it. Edwards and Moniz argued that the statement was false because they believe yesterday’s donors were focused on impact. I would say that my statement was flawed because in fact, not even “today’s donor” knows what impact is. “Tomorrow’s donor” will be the ones deeply concerned with impact. But at least today we have real movement in that direction.

By Sean Stannard-Stockton | Also posted in Cross-Disciplinary Conversations, Effective Giving, Grantmaking, Impact Measurement, Media, New Philanthropy, Philanthropy | Comments (12)

For-profits Asking Nonprofits for Money

April 8, 2008 – 9:16 am

In a fully functioning financial market, money flows to where it produces the highest return. My focus is on how to make the philanthropic marketplace more efficient, since the for-profit market is at least adequately efficient. But the two are not really separate. In the future, I expect them to be much more interrelated. Here’s an interesting example that turns things on its head a bit; the for-profit market is turning to nonprofits to supply cash.

From the Boston Globe, “Drug Makers Turning to Nonprofits for Cash”:

In addition to raising venture capital and launching stock offerings, Massachusetts biotech companies are increasingly turning to another source of funding to support early drug research: nonprofit foundations dedicated to fighting serious diseases.

For instance, the Cystic Fibrosis Foundation, said it has awarded more than $300 million to for-profit companies over the past decade to help develop cutting-edge therapies for the debilitating disease, including $192 million in the Boston area. Cystic fibrosis, which ravages the lungs and digestive system, affects roughly 30,000 people in the United States.

Epix Pharmaceuticals Inc. plans to say today that the foundation will give it as much as $37.7 million, in addition to about $12 million it has already received, to help the Lexington company discover new cystic fibrosis drugs. The money is contingent on Epix’s meeting certain goals.

Other foundations are following suit…

Click here to read the rest of the article.

By Sean Stannard-Stockton | Also posted in Effective Giving, Mission Related Investing, Philanthropic Capital Markets, Philanthropy | Comments (0)

Embedded Foundations

February 27, 2008 – 12:57 pm

Lucy Bernholz coined “embedded giving” last year to describe products and services that are sold to a consumer with a promise to donate some of the proceeds to charity. Now we have “embedded foundations”. From the Springfield News-Sun:

The Chapin Hall Center for Children, a semi-independent policy research center at the University of Chicago, is studying foundations similar to Springfield’s Turner Foundation to identify effective philanthropic practices that could benefit national foundations.

What researchers found is a set of foundations with an uncommon but highly successful approach to giving, researcher Mikael Karlstrom said, resulting in significant, sustainable change in communities around the country. The ongoing study, titled “Embedded Funders and Community Change,” explores foundations that concentrate their resources in one limited geographic area and become deeply involved in those communities.

National foundations can swoop into an area and give money for a reform initiative over a certain time frame. When the time’s up, they can leave whether or not the initiative achieved the desired results and move on to the next project, said Prudence Brown, a researcher for the study.

The foundations at the center of Chapin Hall’s study — what researchers dubbed “embedded foundations” — aren’t about to pull up their roots…

…”The embedded funder says, ‘We’re going to keep working at this until we get it right.’ That’s a very profound difference,” Brown said. “Many of these foundations didn’t fit the stereotype of a foundation that holds itself above everybody. There was just a very admirable sense of persistence and deep understanding of community that takes many years to develop.”

You can read the whole thing here.

In financial markets it is understood that small investors have certain advantages over large institutions (the ability to make decisions without worrying about client perceptions, the ability to invest without “moving the market” or influencing the price of the stock, the opportunity to see Main Street trends without being caught up in the Wall Street herd mentality). I think embedded foundations is one way that smaller foundations can achieve high impact.

By Sean Stannard-Stockton | Also posted in Effective Giving, Impact Measurement, Philanthropy | Comments (0)

Investors vs. Donors

February 27, 2008 – 8:30 am

I have some questions and would love your feedback.

  1. Why do investors take credit for picking great investments (”look how smart I am, I bought XYZ stock!”), while philanthropists, especially foundations, claim that the credit goes to the nonprofits they fund (”the grantee did all the work”).
  2. Why is it acceptable for investors to talk about investments they think are bad (”Don’t buy ABC stock, their management is terrible!”), while philanthropists never badmouth nonprofits, even if they think they are ineffective?
  3. Related to #2: Why do public companies generally ignore all the talking heads who say negative things about them, while nonprofits find it intolerable to have a prominent person speak negatively about them in public?

If you’ve read this blog for awhile, you probably think these are leading questions and that I have a firm bias about which approach is better. But I’m truly asking these questions with an open mind. Recently I met with the director of philanthropy-focused grantmaking at a large foundation. I brought up the idea that publicly talking negatively about ineffective nonprofits (especially those that the foundation thought were not “fixable”, say because management was incompetent) would produce a positive social impact by directing other donors’ funds away from the bad nonprofit and towards more effective competitors. She told me that it was a primary value of the foundation to not harm grantees.

I think that is a very compelling counter argument and I’m interested in how readers view my three questions above and the idea that not harming grantees means never saying anything negative about a nonprofit.

By Sean Stannard-Stockton | Also posted in Effective Giving, Evaluation, Grantmaking, Philanthropic Capital Markets, Philanthropy | Comments (9)

How to Start a Nonprofit

February 20, 2008 – 9:52 am

My firm, Ensemble Capital Management, advertises our services for philanthropists on Google. We’ve found that most people googling words like “private foundations” or “donor advised funds” are looking for eduction, not a sales pitch. So we’ve crafted this landing page for people looking for private foundation info and this one for donor advised fund info.

Occasionally we have people contact us who want to start a nonprofit, not a grantmaking organization. While doing some research on which resources I could point one of these people to I ran across a google ad for the keywords “how to start a nonprofit”. The ad was placed by The Wallace Foundation, one of the largest private foundations in the country. The ad leads to this “knowledge center” web page maintained by the Wallace Foundation.

The information is about a variety of topics, but included a report called “More than Grantmaking”, about how private foundations are deploying “direct charitable activities” to further their mission. I shared this report with one of my private foundation clients last year as they contemplated the use of this tactic.

In my push for large foundations to share their knowledge with individual donors, I’ve often been told that it is not foundations’ job to help other donors. So I was struck to see the Wallace Foundation actively advertising their knowledge center. By taking out a google ad, they are actively competing against for-profit companies to educate donors about philanthropy.

Interesting… I love it.

By Sean Stannard-Stockton | Also posted in New Philanthropy, Philanthropic Technology, Philanthropy | Comments (0)

Information Sharing in Philanthropy

January 23, 2008 – 11:45 am

I wrote a post a while ago called Paul Brest Needs a Blog (Paul is the head of the Hewlett Foundation). I’ve been an advocate for more people in philanthropy to start blogging in general. In the above mentioned post I wrote:

So why should foundations blog? It seems to me that the imperative is not for them to embrace technology so much as it is for foundations to join and begin to drive the online philanthropy conversation. [But] it is the two-way flow of information that blogs encourage that is important, not blogs themselves.

Even so I’ve noted recently that some people feel that I’ve pushed blogging rather than information sharing. As the conversation we’re all having unfolds I think it is important to take a step back and make sure we haven’t missed the forest for the trees. I wish I had expressed my thoughts with more clarity.
When Phil Cubeta recently asked why nonprofits should blog, astute reader Michele Moon asked:

I’m not entirely sure why it’s blogging, in particular, that’s the focus of discussion, especially because it’s now considered a little bit old-hat, Web 1.5. What is it about the format that makes it so essential to transparency and its tyrant? Is it actually blogging you want to see - personal, real-time updates and editorials, followed (if you’re lucky) by people who read, comment, and sometimes stick around to converse?… Why should it be blogging that we aim to do, or is that shorthand for more complicated online interactivity?

I’m guilty of using “blogging” as short hand for information sharing. I’ll stop making that mistake.

When economists speak about efficient markets they are talking about a situation where money flows to the organizations that can put it to the best use. Widely available, robust information is a critical factor for a functioning efficient market. Recently, in a conversation with Phil Buchanan and other readers on this issue I wrote the following (you can find the full thread here. The Chronicle of Philanthropy recently highlighted the conversation):

In an efficient market, investing is a zero sum game. Maximum returns are generated globally so the only question is matching an investor’s risk/return preferences. In inefficient markets, higher returns accrue to more “effective/smarter” investors. In a public benefit market, since all returns accrue to everyone, investors should desire an efficient market within which they could align their social investments with their personal values/goals.

The philanthropic capital markets are highly inefficient. Far more inefficient than any for-profit marketplace.

Therefore, it seems to me that making the philanthropic capital markets more efficient should be the number one priority of large funders who desire to be effective…

I’m not arguing that the public will make better decisions than the “experts”. I’m saying that efficient markets will produce better outcomes than inefficient markets. In the for-profit world, inefficient markets are great for “expert” investors because they can exploit superior information to generate outperformance of investment returns. But these inefficient markets reduce the total returns in the market by preventing capital from flowing to the best performing investments.

What I’m saying is that unlike in the for-profit market, “expert” philanthropist enjoy no advantage from superior information. The returns they generate accrue to the public, and so no “outperformance” is possible. Instead, they should be interested in the total market functioning at a higher level, since that is the only way to increase the social return on investment that accrues to everyone.

This is the challenge we face as a field. How can we ensure that the $300 billion that is given to charity each year is flowing to the organizations that can put the money to its best use? The key will be our ability to supply market participants with widely available, robust information. Blogs are one tool in this work. There are many others.

By Sean Stannard-Stockton | Also posted in Cross-Disciplinary Conversations, Effective Giving, Evaluation, Giving Blogs, Grantmaking, Impact Measurement, New Philanthropy, Open Source Philanthropy, Philanthropic Capital Markets, Philanthropic Technology, Philanthropy, Transparency | Comments (18)

The Future of Foundations

January 21, 2008 – 1:12 pm

This post is my entry to the January edition of the Giving Carnival hosted by Trista Harris at New Voices in Philanthropy. The carnival asks, “What will foundations look like in 25 years?”:

For most foundations, the year 2032 doesn’t look a whole lot different than 2008, or 1950 for that matter. Most foundations hold less than $1 million in assets and devote the bulk of their giving to nonprofit organizations in their community. While these nonprofits have responded to competitive pressures and can now clearly discuss their impact objectives and actual results, donors typical provide funding in response to a personal connection from within their community.

But for some foundations, the landscape is radically different. The “social stock exchanges” that became popular between 2011 and 2019 now include all but a few large nonprofits and many small but ambitious startups. These exchanges compete for nonprofit listings, arguing that they provide the most visibility to potential funders. Exchanges include large national networks that include some international organizations, down to small local exchanges that cater to specific metro areas and some large rural areas.

The business of giving money away has changed radically for large private foundations and smaller “impact oriented” foundations. Instead of being solicited for grants, these foundations’ “impact committees” and “program analysts” spend their days looking for and researching potential grantees. Given the significant information disclosure required by the exchanges, much of the information required for grantee research is available online. Third party evaluation firms provide regular reports on listed nonprofits and these reports are a valuable input for the foundations.

While the cost to nonprofits of conforming to the exchanges’ information disclosure requirements is steep, once a nonprofit is listed they find that grant dollars come looking for them rather than the other way around. Exchange listed nonprofits tend to have very small fundraising groups who focus on “donor relations” and marketing the nonprofit during the regular “road shows” they attend where they have the opportunity to make their case in front of large audiences of funders.

In the early days of the social stock exchanges, many funders and nonprofits worried that the passion and joy of giving would be swept away given the exchanges resemblance to financial markets. But the truth was something else entirely. As funders became comfortable with the idea that social impact was generated from the distribution of relevant information rather than through its protection, a sense of community and comradery developed that set the social exchanges apart from the traditional financial markets. Nonprofit presentations at the regular “road shows” were frequently interrupted by spontaneous conversations in the audience as funders debated the potential of the nonprofit with each other. Working together, funders often organized large public funds that they would then direct at specific social problems. The nonprofit competition for these funds were fierce, but at the end of the day, even the ones that were not funded generally felt that the competition had helped them improve.

Now in 2032, more and more individuals of moderate incomes are becoming interested in the social markets. Most Americans now have a donor advised fund since all major banks offer a zero minimum, no fee account that can be linked to your checking. A quick search on Google Finance gives individuals access to multiple third party evaluations of exchange listed nonprofits. International giving is even coming into vogue for the small donor now that so many “donor funds” managed by the largest foundations offer low cost access to a basket of top rated nonprofits within specific causes.

The early 30’s is a good time for both funders and grantees in America. Many funding innovations have come to pass and for-profit firms are constantly working to develop new products and services for the philanthropic capital markets. But recently there has been some consolidation among the exchanges and some local nonprofits fear that funding will dry up for organizations without national scope. The default on a $1 billion bond issued by a nonprofit offering vaccines in Africa has sent shockwaves through the markets and other nonprofits have seen the availability of credit dry up. There are challenges in 2032 just as there are challenges that face every generation. But it is an exciting time to be a philanthropist.

By Sean Stannard-Stockton | Also posted in New Philanthropy, Philanthropic Capital Markets, Philanthropy | Comments (4)

Should Foundations Fund Philanthropic Information?

January 16, 2008 – 1:49 pm

An interesting conversation is beginning to unfold in the comments to Phil Buchanan’s podcast. The point I’m making is not that foundations have some sort of obligation to fund nonprofit information for public use, but that doing so is in their best interest. This conversation ties in directly to the conversation we’ve been having about Google Finance and Google.org.

If a foundation can give $1 that creates $2 of social benefit, or give $1 that spurs the public to give $10, which creates $20 of social benefit, which one should they choose? This ability to give $1 and get $10 of social benefit instead of $2 is the “leverage” that so many philanthropist and foundations say they want to employ.

Here’s the big leverage opportunity of this decade: Provide the individual donors (who every year give seven times more than all the foundations in the country combined) the information they need to make better donation decisions.

Join the conversation with Phil Buchanan and let’s work this problem out!

PS: As background it might be useful for readers to note the essay by Paul Brest, the president of the Hewlett Foundation, in which he discusses “the advantages of good information” in philanthropy. In the essay he mentions Great Nonprofits, whose founder Perla Ni is participating in the conversation with Phil Buchanan. Hewlett is, to my knowledge, the most forward thinking foundation on these issues. Hewlett is also considering funding GiveWell.

By Sean Stannard-Stockton | Also posted in Effective Giving, Evaluation, Grantmaking, Impact Measurement, New Philanthropy, Philanthropic Capital Markets, Philanthropic Technology, Philanthropy, Transparency, nptech | Comments (0)

Edna McConnell Clark Foundation’s Thrilling Move

December 21, 2007 – 12:56 pm

I have a friend who emails me every time I complain that big foundations are not more innovative to say “But Sean, look at the Edna McConnell Clark Foundation!”

He’s right.

I first heard EMCF CEO Nancy Roob speak at a Council on Foundations meeting. She co-presented with Clara Miller of the Nonprofit Finance Fund on why funders need to provide growth capital to nonprofits. I dug the presentation. After I wrote up my thoughts on the session, Nancy stopped by and became the first major foundation CEO to leave a comment on the Tactical Philanthropy blog (probably any blog for that matter).

Now The New York Times’ Stephanie Strom has an excellent article talking about a new fund being launched by EMCF:

A New York foundation that focuses largely on opportunities for low-income youths is creating a fund to help charities become bigger and more efficient.

The institution, the Edna McConnell Clark Foundation, has committed $39 million to the fund and attracted $49 million more from other foundations and individuals, putting it well on its way to achieving its goal of raising $120 million by June…

…The effort by McConnell Clark and its partners “is groundbreaking,” an acknowledgment “by major funders that scale isn’t cheap and that the order of magnitude needed to scale up to make real and lasting changes will take collaboration,” said Kirsten Moy, director of the economic opportunities program at the Aspen Institute…

…[The foundation] has won financing from major foundations like the Robert Wood Johnson Foundation and the Bill and Melinda Gates Foundation, which is highly unusual. Foundations have typically been unwilling to support concepts already developed by others; thus the proliferation of tiny organizations doing similar work.

“So very often there is pressure on foundations to feel like they are the ones discovering something,” said Hilary Pennington, director of special initiatives at the Gates Foundation. “We have said we want to explore ways in which grant makers could work together for greater impact, and we have an obligation to put our money where our mouth is.”

I encourage you to go read the full article here. You can also read a Nancy Roob’s own thoughts on the fund here with more details on the fund here.

EMCF seems to have created a $1 million funding commitment to accept new funders into the pool. I believe that over time, individual donors (who give seven times more than foundations do each year) need to gain access to funds like this. However, even today, nothing should stop community foundations or national donor advised funds from aggregating their donors to make a $1 million commitment. This kind of work is already being done to provide smaller donors access to funds like Good Capital.

By Sean Stannard-Stockton | Also posted in Effective Giving, New Philanthropy, Philanthropic Capital Markets, Philanthropy, Tactics, Venture Philanthropy | Comments (0)

Trent Stamp: Transparency’s New Champion?

December 20, 2007 – 10:03 am

Trent Stamp just emailed me:

Sean, I have every intention of running the most transparent foundation in the world  I hope it’ll be a leader in its field.

My Charity Navigator bashing ends today. I told Trent that he has all of my support in his new job.

By Sean Stannard-Stockton | Also posted in Philanthropy, Transparency | Comments (0)

Trent Stamp Retires

December 20, 2007 – 9:51 am

From Trent Stamp’s, the CEO of Charity Navigator, blog:

Shortly after the New Year, I am leaving Charity Navigator, my happy home for the last 7 years, to become the Executive Director of the Eisner Foundation in Los Angeles. It’s a wonderful opportunity for me and my family and a chance for me to spread my wings and try something new, to see if I know as much about giving money away as I have claimed over the last few years. But I do not depart without great sadness at what I leave behind.

You can read the whole thing here.

I’ve been hammering at what I view as the flawed rating system that Charity Navigator uses. But let me say this about Trent. He knows charities. He will likely make a great executive director. He won’t just use overhead expense ratios to make grant decisions for the Eisner Foundation. Charity Navigator themselves always warned donors that expense ratios alone are not enough.

Here’s a “what if” for you. What if Trent Stamp decides to share with everyone why his foundation funds the nonprofits they choose? What if he releases detailed explanations of the research conducted and the analysis done? What if he uses his extreme media savvy to shine a light on how a foundation can operate transparently and by doing so increase their own impact? The Eisner Foundation is the foundation of Michael Eisner, the former CEO of Disney. So Trent should have public visibility if he chooses to seek it.

I wish Trent the best. I’ll follow his work in his new job closely.

By Sean Stannard-Stockton | Also posted in Effective Giving, Grantmaking, Philanthropy, Transparency | Comments (0)