Asian American Giving

More than directories to engage Asian American donors and volunteers

- Dien S Yuen

Asian American nonprofit groups are spread over the U.S. with the majority of them concentrated in states such as California, New York, Hawaii, and Texas.  While regional directories exist, there is no comprehensive directory of groups in the U.S. that serve the Asian Americans/Pacific Islander community. Organizations such as the Asian Pacific Fund (San Francisco Bay Area), Asian American Federation (NY metro area), Asian Pacific Community Fund (Los Angeles area), and the Institute for Asian American studies at UMass Boston (Boston area) have listings of affiliate organizations. Now, there is a new directory for the DC metro area.

The Metro Washington DC/Baltimore Chapter of AAPIP created CONNECT! a regional guide of nonprofits serving Asian Americans/Pacific Islanders. There are 26 nonprofit organizations listed. The Cherry Blossom Giving Circle of Greater Washington will use Connect! as their official giving guide.  It is hoped that the tool will be used to engage potential volunteers, board members and donors.

While these directories are useful to locate groups and resources for the community, I believe they are not donor-friendly tools and cannot be effectively and easily shared with others. These guides are general listings, with descriptions and contact information.  Some are hard copies while others are online listings - usually in large pdf files. Unfortunately, they do not describe detailed programs of needs or issues, provide budget information, make it easy to give, or generally evaluate the work of the organization. In other words, they do not create an easy way to engage donors, i.e., provide a platform for them to give or learn. The information is also not presented in a format that creates communities.

It seems to me that we need a national, online platform that incorporates social media tools and communicates the work of our organizations. If we want to engage donors and volunteers, then we need to make it easy for them to find us and learn about our work. The platform must also provide an effective mechanism for donors to give and if desired, be able to share it with others. It should also provide a way for donors that have similar interests to engage with each other.  

Directories of nonprofits are like the yellow telephone book for businesses. Now, let's see if we can build a platform that is user-friendly for donors in web 2.5 format.

Photo courtesy of rutty

Perfect proposals: making logical sense and hitting the heart

- Dien S Yuen

In my line of work, I interact with many small, on-the-ground, grassroots groups in Asia.  While reviewing funding requests are not the major focus of my work, I do have to read them and try to understand them before presenting them to potential donors.  Unfortunately, it is a frustrating and time-consuming process.  I am used to the fairly standardized proposals from U.S. nonprofits and when I read the ones we receive from small, grassroots groups in Asia, I find myself sighing.... what are you trying to say?  who are you helping? what is the issue you are trying to solve? how will your project solve that issue? I am glad you will be grateful but please don't overdo it and tell me that in three paragraphs etc, etc.

I blame myself for being trained in the western ways of proposal writing and budgeting - it created a bar that many small groups cannot pass.  I also blame our perhaps, un-necessary need of requiring pages and pages of paperwork - again and again - and then again to all the different funders.  Mostly, I blame our lack of ability to provide these groups training on how to write proposals, draft budgets, conceptualize the project and be able to articulate it, and most important, share with donors the impact of their work.

See Your Impact

- by Andy Ho

Asian American philanthropist Scott Oki, a retired Microsoft executive, was recently featured in an article discussing his new venture that would connect donors to causes, and use mobile phones as a means to capture photos and videos to show how the donation is working.  In a recent blog, Save the world using your cell phone, fellow blogger, Dien had asked: How great would it be for grantees to instantly capture a life changing event of a beneficiary and then send it to the donor? It seems as Scott was one step ahead of her.

Guarantee a loan for entrepreneurs in India!

- by Dien S Yuen

I just made my first loan guarantee on United Prosperity to see how the platform works. I had previously mentioned Bhalchander ("Bala") Vishwanath, CEO, and this project in an earlier post. United Prosperity officially lauched on May 28th and I am excited to see the responses they will receive.  They have guarantors from all over the world now.  Below is a brief description of my experience in using the website.

First, I reviewed the listing of the entrepreneurs on the site.  There are six women entrepreneurs.  One sells gunny bags to merchants and needs a loan to expand her work.  Another woman owns a grocery shop and requires a loan to expand her store.  I narrowed my choices to two women:

* Gita Devi sells vegetables in the market and she would like to start her own vegetable and grocery shop near her home.  She currently earns Rs. 3000 per month selling vegetables alongside her husband at the market. 

* Sunita Devi supports her family by stitching clothes, as her husband is no longer alive. She does the stitching work at her home. She has applied for a microloan to rent space, furnish it with goods and purchase a sewing machine. She hopes to increase her income and meet the growing financial needs of her children.

It was a difficult decision and I could have supported both of them but I thought, if I had to choose one, how would I choose and what would my criteria be?

With the limited data on hand, I liked the fact that Gita currently sells vegetables with her husband and has experience doing this.  I just had to assume that she would know where to source the freshiest vegetables and could properly price the products.  She also has young children and she could use the profits to help them.  Gita had requested a loan for $1,052.63.  A guarantee of $578.95 was needed and the repayment term was 18 months.  61% of the guarantee has been raised so far.

The second entrepreneur, Sunita, is without a husband and supporting the family by herself.  Sunita also has children and could use the proceeds to help them too.  From a need-based point of view, Sunita probably needed the loan more since she is the single bread-winner in the family.  Sunita had requested a loan for $877.19.  A guarantee of $484.46 was needed and the repayment term was 18 months.  51% of the guarantee has been raised so far.

It is too difficult to evaluate the two entrepreneurs and their repayment and business successes based on the little that we know about them, how they work, their background, business model, ethics, etc.  What was interesting is that all these women work in groups and they understand the concept of the Joint Liability Group.  That is, in case any member is unable to repay the microloan, the others will pay on behalf of the member whose loan is delinquent.  This reinforces the need to ensure repayment of the loan.

United Prosperity works with Ajiwika, an MFI working in the state of Jharkhand, where all these women are from.  According to Bala, the founder of United Prosperity: Ajiwika is operating in one of India’s poorest regions where over 80% of potential clients are un-served and where only a few MFIs operate. From my interactions with Ajiwika over the last one year I have been impressed by their commitment to social goals and their willingness to put the needs of the poor entrepreneurs first.  The site also lists the interest rate, delinquency rate, default rate, and the credit risk of the MFI.

I clicked on the 'guarantee loan' icon and was directed to Paypal.  From there, I entered the amount of guarantee and before checking out, I had the option to make a 10% gift of the loan guarantee amount to support United Prosperity's work (of course, I did).  After approving the transaction, I was immediately emailed two receipts.  The first receipt was the loan guarantee amount (not tax deductible) and the second was for the charitable contribution to United Prosperity's operational support.

Now, I wait and hope that the entrepreneur does not default on the loan she receives from Ajiwika and Ajiwika does not default on the loan it received from the bank.  If both of those things happened, then I would lose the funds I had guaranteed.  I can monitor the repayment progress from my account page so I hope the entrepreneur will be successful. 

When the entire loan to the bank is repaid, United Prosperity’s guarantee to the bank is freed up. The amount I had guaranteed also gets freed up and I can use it to support another entrepreneur or have it refunded to my PayPal account.  In all, it was a simple exercise and I am rooting for my entrepreneur to be the first one to receive 100% of the loan guarantee she needs.

You can follow United Prosperity's progress on twitter @unitedprosper

How diverse are foundation boards?

- by Dien S Yuen

Greenlining Institute released a study yesterday on the diversity of 46 foundation board of directors in the U.S.  Hypothetically, if there are more diverse board members on the board of a foundation, then the funding will be driven to reflect their own notions of which causes to support while taking in their personal and professional networks, i.e., meaning that funds will be directed to diverse communities.

Looking at the largest 46 foundations boards in the U.S., Greenlining Institute found that 25% of the positions are held by people of color.  Here is the breakdown of that compared to the population of the U.S.:  8% of the positions are held by Lations (15% of the U.S. population); 12.5% by African Americans (12.8% of the U.S. population); 4.5% by Asian Americans (4.4% of the U.S. population).  Looking at these numbers, two things jump out at me.  Latinos are definitely under-represented and maybe Asian American's are not doing so bad afterall.

However, the report goes on to say that 13 of the 46 of the largest foundations have no people of color on their board of directors at all.  56.5% have no Latinos on their boards, 37.8% have no African Americans and here is the issue - 69.6% have no Asian Americans on their boards.

One explanation for the lack of diversity may be that these are family foundations and family members and close associates are normally chosen to serve on these boards.  While there are no requirements for foundations to select particular individuals or backgrounds to their boards - it may make sense if they are supporting specific areas requiring expertise or they are trying to represent the constituents they serve. 

We have to again ask the questions that we struggle with constantly - if you were Asian American and serve on a foundation board, would your community receive more funds? Are you the voice for your community?  If you were Asian American and worked at a foundation, would your community receive more funds because you were there and you would direct funds to your community?  How realistic are these expectations?

Nandan Nilekani on social businesses

- by Dien S Yuen

My friend, Bhalchanda Vishwanath, CEO and Founder of Bay Area based nonprofit, United Prosperity, recently interviewed Nandan Nilekani, author of Imagining India – Ideas for the new century on their blog.   Nandan is the Co-Chairman and Co-Founder of Infosys Technologies.  He was Forbes "Businessman of the Year" for Asia in 2007.  Most recently, he was nominated to the list of 100 most influential people in the world by Time magazine. Nandan's wife, Rohini, was one of the four Indians names on Forbes 48 Heroes of Philanthropy in Asia.  Below is an excerpt of the interview:

Bhalchander: ..... In his recent book, Creating a World without Poverty - Social Business and the Future of Capitalism, Nobel Laureate Prof. Muhammad Yunus talks of a new form of business – social business. In Prof. Yunus’s own words: “A social business is not a charity. It is a non-loss, non-dividend company with a social objective. It aims to maximize the positive impact on society while earning enough to cover its costs, and, if possible, generate a surplus to help the business grow. The owner never intends to take any profit for himself.” What are your thoughts on social business? Can a wave of social businesses as Prof. Yunus envisions help solve some of the pressing challenges India faces? 

Nandan Nilekani: From what I’ve seen, some NGOs that work in India do function as ’social businesses’. That said, I think too many of us indiscriminately tar the idea of ‘profit’ being bad for the social sector. Its good for all kinds of organizations to create surplus for a rainy day.  Two organizations that made a huge difference to poverty in India were the Rockefeller and Ford Foundations - they financed the research efforts that led to the Green Revolution. Their money came from corporate profit. The Bill and Melinda Gates Foundation is now doing some incredible work in Africa. We can’t diminish such efforts because they were funded by corporate profit. 

And for better or for worse, more people are motivated by profit than by philanthropy. The question is whether such for-profit efforts are effective in the social sector, and from what I’ve seen, I would say yes - paired with sensible regulation, it helps bring excellence to the forefront in the social sector. In India, businesses targeted at the poor have managed to deliver them low-cost services more effectively than some NGOs. Arvind Eye Hospital specializes in  low-cost eye operations for the poor. For-profit micro-finance institutions are doing remarkably well in Tamil Nadu and Karnataka. 

Why do people give?

- by Don Wong

Why? Why do people give? That is the question I've been asking myself recently after receiving an unusually high number of e-mail, snail mail, and personal solicitations over the past few weeks. I was reminded of a New York Times article I had read a year ago entitled: "What Makes People Give?"

The article reports on two economists - John List and Dean Karlan, experts in the field of philanthropy economics - who have conducted a series of field experiments to learn what motivates people to give charitably. For the vast majority of charities, those that do not simply operate on the spending afforded by an endowment's investment income, this question remains the holy grail of fund-raising, operational budgets, and how successful the charity is at achieving its mission statement.

List and Karlan set out to gather "empirical evidence to support the strategies employed by most fund-raisers." In essence, they wanted to understand better what motivates people to give so that charities could focus their fund-raising efforts on those strategies that are most effective. What the two learned from their experiments is that much of what we fund-raisers cling to as gospel is, in fact, inaccurate or simply wrong.

Yes, many of the reasons for giving "to make the world a better place, to see your name printed in the back of an annual report, and the like" are valid and accurate, but they are not very helpful in that they do not address or take into account the often complex reasons that influence a donor giving. The article points out that there is very little research on the subject of philanthropy economics, but that there exists a "growing group of donors, like Bill and Melinda Gates, who are interested in bringing some of the quantitative rigor of big business to philanthropy."

List and Karlan looked at specific, traditional fundraising "methods" and tested their validity. In one experiment, List and Karlan helped a charity develop different solicitation letters to help them determine the efficacy of matching gifts. "In one letter, sent to the control group, there was no match. Another letter said that a donor had agreed to match any gift, dollar for dollar. In a third, the match was increased to two to one, and in a fourth it was three to one." The economic analysis behind matching gifts is straight-forward: matching gifts effectively increase the value of one's gift, or decrease the cost of making a gift. Either way you look at it, the conventional wisdom is that matching gifts are an effective way to motivate giving. What the two found is that although the existence of a matching gift did impact the number of people who responded to the solicitation letter (2.2 percent of people receiving a letter mentioning a match v. 1.8 percent for the control group), the size of the match had no bearing (one-to-one match recipients "gave just as often, and just as much, as those responding to the three-to-one offer").

The article discusses other studies and experiments performed by behavioral economists who explore the motivations for giving; discuss the notion of "warm-glow" theory (people give money for the cause they're supporting, and the feeling - the warm-glow - they get from giving); and talk about "impure altruism" (giving isn't always predictably rational, despite people's general tendency to want to do what's best for themselves). The article reports on research that compares the results of seed money (campaigns that announce money that has already been raised for a goal) with matching gifts, examines the language used with donors during pledge drives, and explores differences in giving between the genders.

But maybe more importantly (especially in light of the global economic crisis that occurred since the article was published), the article sheds light on understanding human behaviors as they apply to things like the effect of employer matches on employee contributions to retirement plans, and the impacts of changes to tax codes on charitable giving. For example:

"Each year, the federal government subsidizes charitable donations to the tune of about $50 billion a year. That is the value of tax deductions that the government gives out in exchange for donations. It's a huge amount of money, more than enough to pay for, say, universal preschool for all 3- and 4-year olds. There are several reasons to question whether a subsidy of this size is such a good idea. Deductions of any kind complicate the tax code. This particular deduction disproportionately benefits the affluent, who have done quite well on their own in recent years. It also adds to the government's long-term budget deficit.  In an ideal world, the government would figure out a way to recoup some of this money without causing charitable giving to plummet.

"So what if it were possible to design a tax policy for charitable giving that wasn't quite as generous as the current one but still led people to give nearly as much as they're giving now? It might be possible and the potential benefits would be enormous."

Interesting questions, to say the least. Has your charity done any research on why your donors contribute? As a donor, have you thought about what it is that motivates you to give?

The decline of private foundations?

  - posted by Don Wong Jr

Another victim of the recession may be private foundations. According to a recent Wall Street Journal article, more and more people are dissolving their private foundations, or choosing to contribute to donor-advised funds rather than create private foundations.

In addition to fewer administrative requirements, lower costs, greater tax deductions, and increased privacy, the recession has given people another reason to choose donor-advised funds over private foundations:

[Donor-advised funds] don't impose annual distribution requirements. Foundation, by contrast, are required to make annual distributions of at least 5% of their assets, even when markets are plunging. Foundation assets declined about 28% on average last year, according to the Washington-based Council on Foundations.

Diversity focused funds: what makes them successful?

- posted by Dien S Yuen

The Diversity in Philanthropy Project recently released a study called, Social Catalysts: A Case Study of Fifteen Successful Diversity Focused Funds.  The purpose was to put forth information about these funds so that more collaboration between these funds and mainstream foundations could take place.  There are only a handful of ethnic based - community funds in the U.S., and these are naturally the places where individuals start from when looking to give in their own ethnic community.  One would also assume that since these funds are closer to their community they can address problems that directly affect them with that much more impact and in a culturally appropriate way.

Of the fifteen funds from the study, three of them are Asian: (1) Asian American Federation (NY); (2) Asian Pacific Fund (San Francisco); and (3) Asian Women's Giving Cirlce (NY).  These three groups are very different in structure, strategy and focus.  For example, the Asian Women's Giving Circle is a donor advised fund of AAPIP and their funding is derived from a group of donors and volunteers that run the circle.  Whereas, the Asian Pacific Fund was started by the United Way and several local foundations and has permanent staff.

The issue with the Asian-related funds are they they are geographically focused.  APF serves the Bay Area community, AAF serves NY and the AWGC serves NY and focuses on arts activism.  Therefore, donors that do not live in these geographic areas must rely on themselves, their advisors, local community groups, and regional community foundations to assist them. 

The study is an interesting read and I hope it helps mainstream foundations understand more of how these funds work.  But these funds also need support to sustain themselves when starting out or during its expansion phases.  With this research now available as a guide on how to invest in successful focused funds like these, the question now is, who will step up and support not just these current groups but future ones as well?  How do we use the information to attract and encourage investments into community philanthropy? 

Perhaps, the next step is to position these funds as attractive investments not just for mainstream foundations but also for individual donors.  If you looked at the Asian funds, the key to success is really derived from their work with individual donors of the Asian community.  So perhaps the investment by mainstream foundations is to grow the capacity of these funds to work more with individual donors of the Asian community.  The investment would then be leveraged to increase not just support to the Asian community but also help individuals become engaged philanthropists in the general community overall.

Here is a brief summary of the primary factors that contributed to the success of the fifteen funds:

1.  Leadership - all the funds involved grassroots leaders committed to increasing philanthropic dollars in their particular communities.  They were founded by a dedicated leader(s) who were willing to invest in starting and sustaining a new venture.  In the case of APF, the executive Gail Kong, has been there since their founding in 1993. Hali Lee, still with AWGC is still leading the circle.  Cao O, of AAF has led the organization since its inception in 1990.

2.  Adaptability - They built capacity by diversifying their funding and investing in staff and infrastructure.  Many were able to secure early endowments and/or multi-year funds from established grantmakers.

3.  Responsible stewardship - They wanted to ensure that their grant-making would directly benefit the community and that grants would be available on the basis of transparent guidelines and processes.  According to the report, AAFmakes about $250,000 in grants each year, and APF makes annual grants totaling $200,000.  AWGC raised $60,000 in its first year and $70,000 in the second year. 

4.  Multiple social change strategies - These funds used multiple social change strategies or a combination of them (they include social service, social partnership, social activism, and social entrepreneurship).  AAF is engaged in all these strategies due to the needs of their affiliated agencies.  They remain flexible to address infrastructure needs of its affiliated agencies while also investing in programs.  As Cao explained:  We're not just responding; we are also proactive.  From where we sit, we see certain gaps that we have filled by incubating start-ups.

Photo courtesy of Northcountry Boy

New website for young philanthropists

Half the Sky, a U.S. based organization founded by Jenny Bowen, a 2008 Skoll social entrepreneur, has just launched a new “children to children” website.

Give Me Wings! (and I will Fly) was inspired by young philanthropists and volunteers who regularly contact Half the Sky, which establishes and runs nurturing care and education programs for orphaned children in China.  The “Give Me Wings!” site is a place for kids to share their stories. Visitors under 15 can send ideas, videos, and photos to the site. “Give Me Wings!” requires parental permission to participate. 

Source: Skoll Foundation blog; Photo courtesy of Half the Sky