June 25, 2008
The Moral of the Caine Mutiny: California Diversity Bill Withdrawn
According to an article in yesterday's Sacramento Bee, a California legislator has withdrawn a bill (A.B. 624) that would have imposed diversity requirements on private foundation governance and grant-making procedures in California.
Faced with legislation that would require them to disclose their ethnic [gender and sexual preference] composition and detail grants awarded to minority organizations, 10 of California's largest foundations agreed Monday to a multimillion-dollar, multiyear investment in minority communities. In return, Assemblyman Joe Coto, D-San Jose, dropped a bill that opponents said was an effort to impose racial diversity on charities and threatened to drive donors out of California.
It looked as though the bill had the votes despite being universally opposed by respectable foundations and prominent nonprofit stakeholders. For previous coverage see here and here and here. In the meantime, the Cleveland Plain Dealer reports that many nonprofits continue to practice tokenism (whether by benign neglect or otherwise) when it comes to minority representation on nonprofit boards:
Randell McShepard, vice president of public affairs at RPM International, found himself in high demand last year as 22 nonprofit organizations asked him to serve on their board of directors. McShepard has a high-profile position at his company and much experi ence serving on nonprofit boards, includ ing the United Way of Greater Cleveland and Business Vol unteers Unlim ited, an organization that links businesses and nonprofits and trains nonprofit boards. But McShepard, who is black, said the 22 invitations really underscore how nonprofits are not digging deep enough to tap into the wealth of talented minority professionals in the community. In the end, when the nonprofits repeatedly go to McShepard and a select group of other minority candidates for their boards, some of them come up empty-handed. "I am the poster child for that," McShepard said of being repeatedly asked to join nonprofit boards. "There is no honor in that for me. It saddened me to see so many organizations so limited to me that they can't see the many talented people who are out there."
The Cleveland Plain Dealer story is familiar to those of us who are relatively small, average or even slightly above average potatoes; once majority groups or organizations percieve a willingness to serve by one or two minority individuals perceived as "exceptional" (i.e., clean, articulate and "talks like us" -- safe, in other words), they continue to ask that same person over and over again to serve in multiple capacities. "Exceptional" by the way is often just normal or slightly above average with darker pigment. On the other hand, if the position to be filled is perceived as really significant, even truely exceptional people with a darker pigment are often perceived, for one reason or another, as insufficient for the particular role. But I digress. The few who are designated as "exceptional" (i.e., the average, or even slightly above average educated minority) can't be everywhere at once and that fact becomes an excuse for boards (law schools, and law firms, too, for that matter) who claim, "we can't find qualified minority applicants." Only the rarely exceptional, the designated "super-minority" will do, though the average and sometimes below average non-minority will do nicely as well, thank you.
In the midst of all this, nonprofit boards still tend to be insular and exclusionary by race in 2008:
Last year the Urban Institute, a nonpartisan research group, released a survey that found the nation's nonprofit boards are overwhelmingly white and that just over half are entirely white. The survey of more than 5,000 public charities across the country found that 86 percent of nonprofit board members are white, 7 percent are black and 3.5 percent are Hispanic. Nonprofit boards wield enormous power in the communities they serve, dealing with issues ranging from education and health to homelessness, hunger and the arts. And the boards need to be diverse to guide them effectively because in many cases the stakeholders that the organizations serve represent diverse races, ethnicities, cultures and socioeconomic backgrounds, said Elizabeth Hosler Voudouris, executive vice president of Business Volunteers Unlimited.
"So they stabbed it with their steely knives." The death of the admittedly flawed diversity bill in California is cause for relief, but somehow it reminds me of that last scene in The Caine Mutiny, the movie version. The scene where the anglo-saxon defendant and his buddies raise their champagne glasses to celebrate the flawed skipper's downfall. The Jewish defense attorney who brilliantly saved their skins is having no part of it though. He reminds them, even as they celebrate the downfall of someone whose psychosis made him a flawed weapon in the fight against violent Nazi anti-semitism, that the flawed antagonist was nevertheless fighting against an undeniable injustice while everyone else was content to congratulate themselves for their uncontroversial going along to get along. We might also celebrate the death of a flawed weapon -- the California bill -- in the fight against racism; we ought to recognize at the same time that the statistics suggest racism (exclusion, benign neglect, whatever you want to call it) exists and persists even in the world of do-gooders. Let's not celebrate too loudly.
June 24, 2008
Bill Gates Retires from Full-Time Duties at Microsoft to Pursue His Philanthropic Dreams
Yesterday, June 23, InformationWeek, a technology newspaper, reported on the impending retirement of Bill Gates from Microsoft, Inc. Mr. Gates will retire as of this Friday, June 27, from the helm of Microsoft, Inc., the multi-billion, highly successful technology company in founded. The article captures some of Mr. Gates' own sentiments about his retirement, and his next steps. He states that he will direct his attention to his philanthropic work through the Bill and Melissa Gates Foundation so he expects to have little idle time on his hands. The Foundation is committed to eradicating disease across the world. The article contains links to the Microsoft website wherein a video interview with Mr. Gates is posted. In the interview, he discusses his plans for the future. Please see the article for the full story, click here. Also, here is a direct link to Bill Gates' Interview on the Microsoft website.
The Robert Wood Johnson Foundation Makes an Unusual Grant
The Wall Street Journal reports today that the Robert Wood Johnson Foundation made its largest grant to a single entity when it provided $15 million to Dr. Bill Thomas to build "Green Houses" for senior citizens. The name is misleading on one level -- the "green" refers mostly to Dr. Thomas's idea for revoluntionizing retirement homes, and not so much to environmental concerns. As reported, Dr. Thomas met with Ms. Jane Lowe, president of the Robert Wood Johnson Foundation and others in 2001 to pitch his idea for "Green" senior citizen homes. These homes would be 10 to 12 person, smaller homes, that created more of a home-like environment for those seniors needed assisted living. Dr. Thomas, wearing traditional law professor gear -- birkenstocks and not overly dressy, met with the admittedly stuffy Foundation to pitch his idea for a smaller, more home-like atmosphere and feel of the nursing home. Below is an excerpt from the story:
In the spring of 2001, Bill Thomas, dressed in his usual sweat shirt and Birkenstock sandals, entered the buttoned-down halls of the Robert Wood Johnson Foundation. His message: Nursing homes need to be taken out of business. "It's time to turn out the lights," he declared.
Cautious but intrigued, foundation executives handed Dr. Thomas a modest $300,000 grant several months later. Now the country's fourth-largest philanthropy is throwing its considerable weight behind the 48-year-old physician's vision of "Green Houses," an eight-year-old movement to replace large nursing homes with small, homelike facilities for 10 to 12 residents. The foundation is hoping that through its support, Green Houses will soon be erected in all 50 states, up from the 41 Green Houses now in 10 states.
We want to transform a broken system of care," says Jane Isaacs Lowe, who oversees the foundation's "Vulnerable Populations portfolio." "I don't want to be in a wheelchair in a hallway when I am 85."
The foundation's undertaking represents the most ambitious effort to date to turn a nice idea into a serious challenger to the nation's system of 16,000 nursing homes. To its proponents, Green Houses are nothing less than a revolution that could overthrow what they see as the rigid, impersonal, at times degrading life the elderly can experience at large institutions.
Susan Feeney, a spokesperson for the American Health Care Association, which represents thousands of for-profit and not-for-profit nursing homes, says the criticisms levied against the industry by Dr. Thomas and his supporters are "overly harsh." She says many nursing homes are embracing cultural changes to create a more homelike feel. "While it may not be scrapping a large building...we are changing," she says.
Green Houses face a host of hurdles. Many Green House builders say they've encountered a thicket of elder-care regulations. It takes enormous capital to build new homes from scratch. Plus, experts say the concept faces stiff resistance from many parts of the existing nursing-home system. Traditional nursing homes, many of which care for 100 to 200 patients, are predicated on economies of scale -- the larger the home, the cheaper it is to care for each individual resident.
Foundation officials acknowledge they don't know whether Green Houses are a viable economic model. But they've decided not to wait for an answer. Hewing to its recent strategy of making "big bets" on ideas to change social norms, Robert Wood Johnson is investing $15 million over five years -- one of the bigger grants the institution has handed out to a single entity.
For the complete story, click here.
June 23, 2008
British Newspaper Reports on the "New Philanthropists of Britain"
The British newspaper, The Guardian, reported yesterday that two of Britain's wealthier individuals announced that they would leave sizable donations (in the billions) to charities instead of their children. Below is an excerpt of the story:
The 'new philanthropists' are different from you and me. Hugely ambitious, they get stuck into big issues, often on an international scale. They import their strict business discipline to the charitable sector and demand tangible results, sometimes as a condition of further funding. And instead of signing a cheque and walking away, they take a hands-on approach, sometimes exerting direct influence over charities.
Hohn, 41, who runs the Children's Investment Fund, has donated £466m to the foundation run by his wife, Jamie Cooper-Hohn, to support projects across Africa and the developing world. The Hohns have given almost £800m in four years, making them Britain's most generous philanthropists. American-born Cooper-Hohn, 43, meticulously researches each cause to find those that will produce 'transformational change' on a large scale. She once said: 'I was very eager that, if we did this, we would do it very much in the way Chris invests, making long-term, well-researched investments, bringing business rigour into development.'
Hohn is also increasingly typical because he did not inherit vast wealth. The son of a mechanic who came to Britain in the Sixties from Jamaica, he studied at Southampton University and Harvard Business School, going on to a lucrative career in the City. He now lives in St John's Wood, north London, with his wife and four children - it is not known whether Buffet's philosophy will be applied to them.
Duncan Bannatyne is also a self-made millionaire, having begun his entrepreneurial career with a second-hand ice cream van, then going on to build a business empire of health clubs, hotels and a bar. He said yesterday that he aims to help charities around the world through his Bannatyne Foundation and is looking for causes to help.
Bannatyne, 59, said he had experienced being both poor and rich and that inspired him to give money. 'I first went to Romania in 1992, found children who were abandoned and built a hospice,' he told The Observer. 'I just want to continue doing it. I have got £300m now and over the next few years that will be half a billion. I have nothing else to do with it.'
He explained why he will not pass on the fortune to his six children. 'I don't think it is in their best interests. Look at the examples of children whose lives have been ruined. There are children who don't have a purpose in life, don't know how to live properly, are on drugs.'
The rise of the super-rich has spawned a class of super-givers on a scale never before seen. It is estimated that the top 30 philanthropists among Britain's richest 1,000 people either gave away or pledged to give away £2.38bn over the year to May 2008 - almost double the total of the previous year.
For the complete story, please click here.
The Chronicle of Philanthropy Reports on Annual Philanthropy Study
Below is an excerpt of the recent story written by Holly Hall for the Chronicle of Philanthropy, previewing the findings of the soon to be released annual study on giving trends in the United States. (click here for full story). Reporter Holly Hall reports that:
The sluggish economy is showing its effects on charitable donations, which
rose just one percent after inflation, according to Giving USA, the annual tally of American philanthropy [prepared by Indiana University’s Center on Philanthropy] to be released this week.
Americans donated $306.4-billion in 2007, but fund raising is facing more challenges this year, especially as the housing and financial-services industries continue to crumble, fuel and food costs rise, and the stock market's volatility strains individuals and organizations across the country. Charities report that donors of all types have recently delayed or reduced gifts — or stopped giving altogether.
. . .
At first glance, it might not be apparent from the Giving USA numbers how much tougher the fund-raising climate has become: In both 2006 and 2007, the report said, giving rose by 1 percent.
But the report, produced by Indiana University's Center on Philanthropy, notes that the 2006 figure was in part the result of a steep increase in 2005 to help victims of Hurricane Katrina and the Asian tsunamis. When those donations are excluded, giving in 2006 rose 3.2 percent after inflation.
The slower results come at a time when many charities, especially those that serve needy or middle-class people, say they face increased demands for aid because of the economy's woes and cuts in government benefits and other support.
Fund raising varied greatly according to a nonprofit group's mission. Organizations that focus on international affairs received the biggest percentage increase — nearly 13 percent — while giving to the environment grew by the next highest percentage — 7.7 percent. Giving to religious groups grew by the smallest amount, just under 2 percent.
Among other key findings from the Giving USA report:
Individuals donated an estimated $229-million, a drop of 0.1 percent from 2006. Individuals who died donated $23.2-billion through their wills, or 4 percent more than in 2006.
All told, donations by individuals, including contributions to family foundations, made up 88 percent of donations last year.
Corporate gifts declined by 0.9 percent, to $15.7-billion. Those contributions accounted for 5.1 percent of all donations.
Giving by foundations increased by 7.3 percent to $38.5-billion, accounting for 12.6 percent of all donations. The growth was fueled in part by a nearly 12-percent rise in the value of foundation assets last year, according to the Foundation Center. But new money is not flowing into foundations at those kinds of rates: Gifts to family and other foundations declined by 11.9 percent to $27.7-billion. That could be the effect of the stock market's ups and downs, researchers say, since many people donate stock to their foundations and are deterred from giving by market volatility.
Donations last year equaled 2.2 percent of the nation's gross domestic product, a figure that has changed very little in the past decade.
The full Giving USA Report will be available to the public in July 2008, and is available for pre-order on the Giving Institute's website. The Giving USA Foundation was established by its Parent organization, Giving Institute: Leading Consultants to Nonprofits. The annual report, Giving USA, known as the annual yearbook of American philanthropy, is researched and written for Giving USA Foundation by the Center on Philanthropy at Indiana University. (click here to access the organization's website)
ACLU Files Motion in U.S. District Court Seeking to Have the Names of Two Islamic Charities Removed from Case Against a Third Islamic Charity
The Chronicle of Philanthropy reported (click here) on June 19 that the American Civil Liberties Union had filed a motion (click here for motion) in the United States District Court for the Northern District of Texas in the case of the Holy Land Foundation for Relief and Development (hereinafter, Holy Land Foundation), which is accused of (but the organization denies) providing about $12 million to Hamas, a Palestinian Organization. The motion seeks to have the names of two Illinois Islamic Charities -- the Islamic Society of North America, in Plainfield, Ill., and the North American Islamic Trust, in Burr Ridge, Ill., removed from all documents in the case against the Holy Land Foundation and five of its backers. The Holy Land Foundation trial ended in a mistrial in the fall of 2007.
The two Islamic Charities are identified in the litigation against the Holy Land Foundation as "unindicted co-conspirators." To no one's surprise, linking the organizations to an indicted organization accused of financially supporting terrorism and terrorist organizations has caused fund raising problems for both charities. Below is a fuller excerpt of the story:
The motion filed in U.S. District Court states that the Islamic Society of North America and the North American Islamic Trust, which both disavow any connection to terrorism, have been "publicly branded" as criminals in their connection to the Holy Land Case, a violation of the Fifth Amendment. The legal action seeks to expunge the names of the charities from all documents related to the case.
The Islamic Society of North America is described in the legal brief as "the nation’s largest mainstream Muslim community-based organization." The group promotes civil engagement among American Muslims and works to educate the broader public about Islam. The North American Islamic Trust holds in trust the titles to several mosques and Muslim schools across the country.
"For many people, when they hear the designation ‘unindicted co-conspirator’ what they really hear is just ‘conspirator,’" says Ingrid Mattson, president of the Islamic Society of North America. "This makes it very difficult for us to continue to have relationships that are built on trust."
Additionally, Ms Mattson says the government action has put a strain on fund-raising efforts.
"We’ve had some of our supporters ask if they would have any problems if they donated to us," she says. "And certainly we’ve had to divert some funds that would have gone to our programs to legal defense."
For the full story, click here.
In October 2007, the New York Times extensively reported the mistrial in the United States' prosecution of the Holy Land Foundation and five of its backers. The New York Times reported that the case was understood by many to be the most important and legally complex case in the United States fight to stop American dollars from being funneled to terrorist organizations. The mistrial was seen as a tremendous blow to Bush's War on Terrorism from the homefront. Prosecutors are currently weighing a decision to re-file the charges in this case in September. In the original prosecution, 197 charges were filed and the jury could not render a guilty verdict on even one of them. The New York Times reported that, "[t]he case involved 197 counts, including providing material support to a foreign terrorist organization. It also involved years of investigation and preparation, almost two months of testimony and more than 1,000 exhibits, including documents, wiretaps, transcripts and videotapes dug up in a backyard in Virginia," and at the end of 19 days of deliberation, the jury could not find any of the defendants guilty on any of the 197 counts and became hopelessly deadlocked.
The men charged in the case alleged through their lawyers that their indictments stemmed from the fact that they all have family ties to Hamas leaders but that the charity raised and gave money to Palestinian poor, and not terrorist as alleged. The men basically defend on the premise that one cannot pick one's family. You are born into it, or sometimes, marry into it but that's it. For the New York Times story, click here.
Lily Foundation Gives $50 Million for Flood Disaster Relief in the State of Indiana
The Chronicle of Philanthropy reported today that the Lily Foundation made grants totaling $50 million to three organizations, The American Red Cross ($2.5 million), the Salvation Army ($2.5 million) and the Indiana Association of the United Ways ($45 million). According to the Lily Foundation, these three organizations were selected because of each organization's history in providing disaster relief in affected areas. Below is an excerpt from the press release issued by the Lily Foundation:
In light of the massive recovery facing communities from floods and storms that wreaked havoc in 2008 across major portions of Indiana, Lilly Endowment Inc. announced today (June 23, 2008) grants totaling $50 million for disaster relief and recovery. The grants have been approved for three organizations that have significant experience serving in disaster situations.
The American Red Cross and The Salvation Army each will receive $2.5 million to help with their efforts to alleviate the more immediate needs of citizens and communities that have suffered from disasters in 2008 and to help replenish their disaster relief funds.
The Indiana Association of United Ways (IAUW) has been awarded $45 million for a disaster-response fund from which IAUW will make grants for relief and recovery efforts at the county level in counties damaged by 2008 disasters. Eligibility criteria likely will include whether a county has been declared a disaster area by the state or federal government.
For the full press release, click here.
Also see earlier blog posting about the financial stress the Midwest floods have placed on regional and national nonprofits.
WSJ Editorial Writer Applauds For-Profit/Nonprofit Collaboration
In today's Wall Street Journal, Ed Rensi, former President and CEO of McDonalds USA lauds the 25th anniversay of the Orphan Drug Act. His most salient point is that the Act made collaboration between for-profit and nonprofit organizations easier and thus resulted in the more efficient development of drugs for rare diseases:
The Orphan Drug Act fosters collaboration between for-profit corporations and nonprofit organizations – something I have not only encouraged, but also practiced. As regional vice president of McDonald's USA in Philadelphia, I was approached about the need families of children with cancer had for affordable housing so that parents could be close while their child was undergoing treatment. I decided in 1974 that the Philadelphia market of McDonald's would join in the building of the first Ronald McDonald House, by making it possible for many committed people to take the risk and raise money through our restaurants. Using nothing but philanthropic funds, we helped to build Ronald McDonald House Charities into what it is today, with 276 Ronald McDonald Houses scattered around the globe. I strongly believe that it is important for a corporation to stand for something and contribute to society in a way in which its employees can be proud. This isn't always easy for companies to do. The Orphan Drug Act has made it easier for many nonprofit organizations to partner with companies to find treatments for rare diseases.
No doubt the for profit companies that partnered with nonprofits in the development of new, badly needed drugs greatly enhanced their own bottom lines. As readers familiar with charitable health care know all too painfully, the Service has made it very nearly impossible for such joint ventures to exist, much less thrive. Mr. Rensi' views, though anecdotal, provide a very clear example of the benefits that are being foregone because the Service is so afraid of "private benefit." Mr. Rensi' op-ed piece calls on Congress to pass laws making it easier, not harder, for non-profits to collaborate with profit-seekers in an effort to harness self-interest for public benefit. The Service should heed that call, first by revoking the rulings that make "whole hospital" joint ventures so difficult to achieve.