Category: Grantmaking

What if every aid worker was given a micro investment fund?

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What if every aid worker – local and international – at every level was given a micro investment fund, over which they have total personal discretion? How would aid delivery change?

The rise of and access to technology in the developing world is already significantly changing the way aid agencies work. It has also made alternative support mechanisms to seemingly “invisible” local leaders and initiatives more possible than ever before. In fact, there is a growing number of small NGOs and foundation that specialize in offering direct funding to grassroots leadership and small, often “informal” movements.

Why not expand that idea to give every aid worker ‘in the field’ a social change investment fund of $1,000 (£655), over which they have total personal discretion? Each person could be tasked to find an under-the-radar grassroots organization, local leader, or community initiative worthy of support. The only stipulation would be that the group has been in existence for at least three years and has never received international assistance. Allow only one-page proposals and reports to cut down on transaction costs.

People must find a person, an organization, or an idea that inspires them. The primary mandate will be to tap into the enthusiasm that drew them into aid work in the first place and see for themselves how a diversity of approaches and actors are all a part of unleashing social change.

At the end of the experiment, the fund managers could get together and share what they’ve learned through well-facilitated and documented reflection exercises to distil good practices and actionable insights.

The estimated 595,000 aid workers around the world are rarely called to examine the bureaucratic rigidities that govern their day-to-day work. With just $5,950,000, one in 10 of these aid workers could try the investment fund and find ways to change a corporate culture that no longer meets the demands of a rapidly-changing world.

[The Guardian]

Utilizing intermediaries to simplify international giving

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Few income tax treaties allow U.S. individuals to make deductible donations to foreign charities.

U.S. charitable organizations engaging in international philanthropy are subject to a number of restrictions on making grants to foreign organizations, some of these restrictions aimed at combating terrorism and increased enforcement of sanctions. Other challenges arise from the fact that the rules governing recognition of charities and the circumstances under which donors to charitable organizations may claim tax deductions or other benefits for their contributions is governed almost exclusively by the law of each separate jurisdiction.

A private foundation is subject to punitive excise taxes on grants to foreign organizations unless it either (i) obtains an equivalency determination that the recipient is the equivalent of a U.S. charity or (ii) exercises expenditure responsibility with respect to the grant. Obtaining an equivalency determination or exercising expenditure responsibility can be both costly and time consuming.

Hence, many U.S. private foundations, as well as individuals, choose to make grants to intermediaries that qualify as public charities rather than to foreign organizations directly.  A public charity is qualified as such because it raises its money from the general public and in turn donates funds and support to other organizations.

Bill Gates on the Colbert Report

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Bill Gates appeared on the Colbert Report this past Wednesday night to talk about The Bill and Melinda Gates Foundation’s recent successes in global health. Not least of all, due to the critical role of the Bill and Melinda Gates Foundation, since 1990 the number of childhood deaths has been reduced by 5 million.

“It’s good news that you wouldn’t hear,” the founder of Microsoft said of the information he shared in his annual missive. “I share what I’ve been able to see in my travels to Africa and Asia.”

But after Gates shared his good news, Colbert in typical fashion commented that Gates is just not as “cool” as Steve Jobs was.

“People say ‘what a cool guy’ … Steve Jobs was. You’re out there saving the world, yet you don’t have the ‘cool factor,’” Colbert jabbed. “Did you ever want to be the cool guy?”

Gates didn’t seemed phased, responding, “He was brilliant. He had his own style. He had his own approach. Mine is, I guess…a little geekier than his was.”

International giving on the rise

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One of the most notable trends in philanthropy, according to the 2012 Giving USA Study of charitable giving, is that international giving has steadily grown despite a tumultuous economy.  For the past two years, 2009-2011, international giving has experienced a 15.2 percent growth, the largest increase across all of the subsectors the Study tracks and reports.

The growth in international giving can be attributed to many things: increasing digital access to global information, a growing number of international giving networks, and a heightened awareness of the interrelationships of global communities.

The Hudson Institute’s 2012 Index of Global  Philanthropy and Remittances shows that despite the recession, U.S. giving to developing countries actually increased to $37.5 billion in 2009, outpacing official U.S. government aid by almost $9 million.

[Excerpted from WealthManagement article, by Betsy Brill and Michael Donovan]

The IShack betters conditions in slum settlements

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As you approach the simple dwelling, a rooftop solar panel, an outdoor security light and a roof overhang make Nosango Plaatjie’s shack stand out amid the sprawling cluster of makeshift wooden structures and rusty corrugated iron dwellings where her neighbors live.

Welcome to the iShack, or improved shack, an innovative approach to housing that’s being tested in the windswept slum of Enkanini, just outside Stellenbosch, South Africa. The dwelling, developed by researchers at the University of Stellenbosch, is intended to raise the living standards of slum residents while improving their access to electricity and protecting them from extreme temperatures in an environmentally friendly way.

The iShack prototype is occupied by Plaatje and her three young children. It is fully equipped with a photovoltaic panel capable of producing enough electricity to power three lights, a mobile phone charger and an outdoor motion detector spotlight. Its windows are strategically placed to achieve better air circulation and sunlight heating, while the roof is sloped so that rainwater can be harvested during the winter months.

Plaatjie, a domestic worker employed once a week, says her family’s life has improved a great deal after relocating to the ecologically designed iShack. Their previous home was a cold, damp shack hastily put together from disused pallets and corroded zinc sheets.

62% of the urban population in Sub-Saharan Africa lives in slums, typically characterized by deplorable living conditions, a feeling of insecurity and inadequate infrastructure for basic energy, sanitation and water services.

Excluding the solar power system, the iShack costs about 5,600 rand ($660). And thanks to a grant by the Bill and Melinda Gates Foundation, the iShack project will be trialled over the next year.

 

The economic impact of American grantmaking

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It’s hard to imagine life without the fruits of charitable giving in America, including hospice care, insulin, vaccines, civil rights, Sesame Street, the 911 system, and even white lines on roadways. These and other advances are among the products of philanthropy that support thousands of organizations serving millions of people every day.

Unfortunately, the broad importance of the sector and the size of its impact are not well known, including among public and elected officials … a particular concern as Congress and the White House debate the role of the sector.

Using established economic models, a new study from The Philanthropic Collaborative (TPC) examines how domestic foundation grants in 2010 ($37.85 billion) are contributing to job creation, wages, GDP, and tax revenues. According to the study, foundation grantmaking in 2010 helped create about 500,000 direct jobs for those hired to implement the grant. Within one year, the number expands to nearly 1 million jobs when the “ripple effects” are included.

The study also presents longer-term projections of economic benefits such as better health care, educational opportunities, and quality of life. In addition, the study connects foundation grantmaking to nearly 4.5 million new jobs through long-term benefits or 8.8 million jobs when including ripple effects.

To help specifically demonstrate benefits to communities, the report includes case studies that document long-term economic benefits from reduced costs of juvenile crime, health care and social services, greater employment opportunities for the disabled and homeless, revitalized urban areas, and advanced longevity and quality of life from medical cures and treatments derived from scientific research.

Other outcomes include improved worker education and productivity, as well as a thriving business environment given the importance of schools, hospitals, cultural organizations, and other charitable enterprises to a community’s ability to attract and retain businesses. Of course, philanthropic support for entrepreneurship and the ecosystem that supports it can be even more far reaching.

–John Tyler, chair of The Philanthropic Collaborative

Helping Americans better understand the impact of philanthropy

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A message from Vikki N. Spruill, president and CEO of the Council on Foundations:

According to recent studies by the Philanthropic Awareness Initiative, only 1 in 10 engaged Americans can give an example of a foundation’s impact on an issue they care about. Yet 8 in 10 engaged Americans think it would be a loss for their community if foundations no longer existed.

This past year presented philanthropic leaders with the grave reality of how delicately the charitable sector hangs in the balance of broader national issues. For nearly 100 years our government has provided an incentive for American generosity, but as our country’s leaders grapple with finding fiscally responsible solutions, their decisions may result in limits on philanthropic giving. If we aspire to foster a more philanthropic society, more Americans must understand our sector’s role and the impact of our work in communities around the globe.

Americans recognize the importance of philanthropy but they cannot readily identify it. It’s time for philanthropy to take a more proactive role in promoting our collective impact. We should come together on behalf of the broader causes we champion to build more awareness among Americans about the impact and opportunity our daily work fuels in communities across the globe. We must replace organizational and transactional communications with a collaborative strategy about our impact and encourage each other to apply our individual strengths and expertise collectively in the search for solutions to social problems.

If we can increase the visibility of our respective issues and build awareness of how we collectively advance them, more Americans will understand the role we play and will reaffirm the strong tradition and future importance of the charitable sector. We will have a clear sense that we are putting issue priorities ahead of organizational ones and are creating a better world.

Non-profit trends for 2013 and beyond

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Nell Edgington predicts these non-profit trends:

1. More Demand for Outcomes – A growing demand for nonprofits to 1) articulate what results they hope their work with achieve and 2) track whether those results are actually happening. This increasing focus on nonprofit outcomes is leading to the 4 other trends:

2. Decreasing Emphasis on Nonprofit “Overhead” – The good news is that more and more people are coming to realize that you can’t just invest in programs without the staff, infrastructure and fundraising to make those programs happen.

3. More Advocacy for the Sector as a Whole – Instead of  a fractured grouping of organizations of various sizes, business models, and issue areas, … we will start to see the sector organize, mobilize and build confidence.

4. Savvier Donors – Because nonprofits are getting more savvy, donors are as well. They are starting to recognize that nonprofits cannot exist on revenue alone, but must have infusions of capital every once and awhile to strengthen and grow their staff, technology, systems, and fundraising.

5. Increased Efforts to Rate and Compare Nonprofits – We will increasingly evaluate nonprofits based on the results they achieve, not on how they spend their money, which requires a whole infrastructure for evaluating and rating nonprofits emerges.

Mark Zuckerberg of Facebook donates half a billion dollars

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Almost two years to the day since Mark Zuckerberg promised to give half of his wealth away to charitable causes, the Facebook founder has announced (on his Facebook page, natch) a donation that amounts to around half a billion dollars.

The recipient is a Silicon Valley-based charity, the Silicon Valley Community Foundation, which will receive 18 million shares in his social network, which floated earlier this year. Its value? A shade under $500 million.

Vital needs don’t always attract vital support

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Excerpts of an opinion on the question “Are charities more effective than Government?”, by John Briscoe, professor of environmental engineering at Harvard University, and a former World Bank official:

The priorities of charities are appropriately set by those who finance and manage those charities. But it seldom stops there. [Apart from non-governmental organizations that focus on health and education,] governments typically and necessarily see things like jobs as overwhelming priorities and sectors like infrastructure as critical for creating jobs and reducing poverty. I know of not a single nongovernmental organization that focuses on job creation, the provision of electricity at scale, or transport.

As a senior official in the World Bank I saw this dynamic at work every day. NGOs would lobby their governments for more attention to health, education and the environment. Rich country governments would then use their position on the board of the World Bank to push for these priorities.

Over the last 20 years this has led to a profound distortion in the priorities of the bank, with the social sectors becoming dominant and, for a long time, infrastructure lending – the original mandate of the Bank – falling to less than 10 percent of total lending.

An interesting evolution over the last decade has been the rise of countries like China, India and Brazil that give high priority to things like infrastructure, and as their weight in the global system has increased, this has led to somewhat of a rebalancing of priorities at an institution like the World Bank, but, more important a rebalancing in options for developing countries.

These countries, having recently emerged from poverty, know that it is not by putting the social cart before the economic horse that development and poverty reduction happen. They have little patience for the pleas of philanthropists rich and poor to deny poor countries the option of following the only known road to poverty reduction.