Asian American Giving

Philanthropy News Digest 01/30/2012

An Executive Director's Guide to Financial Leadership. There is a difference between financial management and financial leadership but do most executive directors understand this? Financial management is the collecting of financial data, production of financial reports, and solution of near-term financial issues. Financial leadership is guiding a nonprofit organization to sustainability. The ED is responsible for developing and maintaining a business model that produces exceptional mission impact and sustained financial health. This should be required reading for all EDs.

Executive liability rising for private, nonprofit firms. Before joining a board, prospects should ask the nonprofit if they have directors and officers insurance for their executive employees and board members. Surprisingly, one out of every four private or nonprofit firms do not have D & O insurance and when asked why not, 80% of nonprofits said they do not believe they need it. 

Fidelity Charitable Reports Record-Breaking Year in Grants and Contributions.  Fidelity Charitable donors made more than 380,000 grants, totaling more than $1.3 billion, to nonprofits nationwide during 2011. Donors also made record-breaking contributions to their Giving Accounts in 2011, with nearly $2.9 billion being recorded in new charitable dollars, up from more than $1.6 billion in 2010. 

Melinda Gates and Social Media

Within 21 hours of joining Twitter, Melinda Gates (@melindagates) has 17,876 followers. Why is she twittering? Melinda says on her blog post:

There is not a moment to waste when millions of people's lives and futures are at stake.

Twitter is an example of this—it is the type of vehicle that allows you to share stories of impact in an instant. I’ll be using Twitter to pass along stories that inspire me.

So far, Melinda has sent out four tweets. Will her presence in social media help shape the philanthropic conversation? How relevant do you think her tweets will be?

About the video: At the recent Social Good Summit, Melinda Gates addresses the crowd on why social media is important and how the Foundation will use it to connect with people.

Philanthropy News Digest 09/21/2011

* Taking Minutes of Nonprofit Board Meetings. Carter Law Group posted a very useful guide on taking nonprofit board minutes. Also, the site where the guide is found, JDSupra, is an awesome site for those needing general legal advice.

* Introducing the Map of Nonprofit Startup Resources by State. I am not advocating that we need more non-profits but if you are interested in starting a non-profit, but the map is a useful site to start with.

The Nexus Youth Summit

- by Andy Ho

Last week I was in New York City to attend the inaugural Nexus Youth Summit, a gathering of over 300 young wealth holders, philanthropists, and social entrepreneurs from around the world to discuss ideas and connect with peers in a safe space.  Part of the time was spent at the United Nations as part of the Year of Youth high-level meetings.  Here’s an excerpt from the inspirational speeches there:

Let us all find the common thread woven into the fabric of our diverse lives; the part of us that cringes when we hear these statistics read aloud; our inner conscience that wants us to become more than we can be, not for selfish gain, but so we can systematically and gradually reverse the direction of these statistics and eventually, once-and-for-all, eradicate them altogether.

Our community is in the best position to make a difference on each and every one of these issues. We are the next generation of leaders, investors and philanthropists. 

As you can see, conceptually we can solve the world, but the question is: politically, financially, and actually will we?

It is with the utmost gratitude that I thank you all for making a deliberate choice to become a long-lasting part of history. And we are all familiar with the phrase, “actions speak louder than words.” And you have shown it by coming on your own dime, sacrificing your own time, not only in word, but in action.

We have all been tremendously blessed and now it is time for us to become the blessings ourselves; it is time for those who have the vision to give sight to those whose eyes are clouded with fear and pessimism, it is time for those who have the resources to provide for those who are starved of opportunity, it is time for those who have the experience to collaborate and come up with the best available processes to realize the vision within the resources we have.

I personally left very inspired.  At first I wasn’t sure what to expect – would this just be another conference full of talk, or would there be real inspiration and energy coming out of the conference? Here is a group of influential young people, aiming to do more than just talk about making a difference but to utilize the tremendous amounts of financial and relational capital to truly seek to change the world.  There was such diversity in the group – participants from around the world with success in many areas (technology, arts, politics, community organizing, etc), from varying sectors and backgrounds, but all with a common mindset of discovering how to be action-minded on ideas to make a difference.  I look forward to seeing how this group will continue its momentum and to build a broader movement in philanthropy and society. 

Photo courtesy of Ashitakka. Creative Commons, Flickr

Enabling Indian Diaspora Philanthropy

Give2Asia released a new report that looks at the challenges and trends of diaspora donors giving to India. Here are some of the highlights from the report, Enabling Indian Diaspora Philanthropy:

* Nearly 2.7 million people of Indian origin reside in the US, making it the third largest Asian American population. 

* Over $2.3 billion was received by some 12,400 non- governmental organizations in India from overseas sources in 2008-09, an increase of nearly 12% over the previous year. Of this, nearly $740 million came from the United States alone, making it the single largest contributor. Diaspora remittances to India are the highest in the world at an estimated $49.3 billion in 2009.

* The Indian government has also recognized the financial and intellectual power of its diaspora, and has been actively seeking to encourage its business and philanthropic investments.

* There are challenges to giving to India though. They include: (1) lack of information about good organizations; (2) lack of trust in intermediaries and grantees; (3) India has a complicated legal process for non-profits wishing to accept foreign funds; and (4) and many of the funds to India are concentrated in certain parts of the country.

* Give2Asia has seen some recent trends in private giving: (1) public-private partnerships in India are increasing, an example is the creation of the Public Health Foundation of India; (2) donors are focusing on localized high-impact philanthropy; (3) donors are not only giving annually but they are making endowment gifts; and (4) social investments are on the rise.

To read the full report, you can download it here. 

 

It Takes More Than Just Great Funders

- by Andy Ho

Often times I get inspiration about philanthropy from reading about other fields I am interested in - technology, economics, finance, marketing, culture, politics, and music.  Which kind of makes sense, since philanthropy is multidisciplinary in nature (and why I enjoy being in this field so much.)  

One consistent source of inspiration is a blog written by Fred Wilson, a venture capitalist who has backed many well-known tech companies including Twitter and Zynga.  Earlier this week he talked about 'modern community building' in terms of building communities online - it takes more than just great software, but someone to do it.  He quotes Joel Spolsky: "Online communities require both software and people. Sometimes the software part is the easier part. Curating communities is hard work and requires people to do it. It is an inherently social behavior."  

This is valuable insight when it comes to philanthropy and solving social problems as well.  It takes more than just great funders, but someone to do it.  Someone has to be able to create a community around a cause to make a difference.  Getting the funding, as hard as that step alone is, is just one piece of the work.  Many 'community organizers' work in politics or grassroots organizations, but doing it well in connecting funders is still a challenge.  I had a conversation with someone in Europe asking me about what is the best way to go about collaborations among NGOs globally in the early childhood education space, and how to get groups of philanthropists and foundations to buy in to a vision of how social impact can be achieved.  It takes a community builder of philanthropists to do this - at a global level.  Technology now can help -- but ultimately you still need the people to manage and organize the community. 

Photo courtesy of Stuck in Customs, Flickr, Creative Commons

A Play on Logic Models

Several months ago, the Nonprofit Quarterly featured this map as a spoof to showcase how logic models work. In today's conversation about the need to include some version of model for creating change in grant proposals, I thought our readers would be amused with this map. You can click on the map for a larger version. Enjoy!

Ripple Effects of the Mortenson Issue

Greg Mortenson, author of the best-selling book, "Three Cups of Tea: One Man's Mission to Fight Terrorism and Build Nations...One School at a Time" has been accused by Jon Krakauer on the CBS 60 Minutes show that the story, "while beautiful, is a lie." Greg is co-founder of Central Asia Insittute, a U.S. 501(c)(3), nonprofit organization with a mission to build schools and to support girls' education in Afghanistan and Pakistan.

The issue for me is not so much that Greg lied or not about his journeys - they could be fiction and could still encourage people to give and understand the importance of education for girls. The issue is his character and the work of CAI now being called into question. Many donors gave to the organization assuming that the funds were being used to build schools and classrooms. The 60 Minutes show interviewed and visited the grantees of CAI. Many of the classrooms were abandoned or not used at all. Some of the alleged schools never existed.

CAI raised more than $14 million in 2009. In the CNN article, Three Cups of Tea: Served with a Grain of Salt?, the author says that "less than half of that money actually went to building schools in Afghanistan and Pakistan..... $1.7 million went to promote Mortenson's books, according to the institute's board of directors."

The alleged mis-use of donor funds will deeply affect the philanthropic community.  Donors give because they believe in the leadership and work of the organization. Reports, project monitoring, site visits, and knowledge of the work on the ground are all important pieces used to assure donors that the organization is doing its due diligence and fulfilling the trust given to them. Pictures, videos, and even stories of the constituents - children, teachers, families, reinforce the impact of the work done.

Transparency, accountability and trust are very important when working with overseas groups. Working in Afghanistan and Pakistan is difficult enough with the various rules and regulations of countries where the funds are sent and where it is received (i.e., U.S. Patriot Act). In addition, funding and receiving groups have to abide by strict guidelines, whether imposed by law or self-regulated by the board or organization itself. Day-to-day working conditions, language, and expectations of funder and grantee all add to the difficulty of working overseas. However, donors have various ways to "check" on the organization, including the use of several watchdog organizations. But watchdog organizations, and their paper reviews, are only the beginning research work that donors have access to. Donors can also look at past reports, annual reports, audited statements, etc., and talk to other donors and staff of the organization to learn more.

The philanthropic community does not need bad press like this. There are many groups working in difficult places that are providing positive influences in communities around the world. Bad examples create tension for many stakeholders including government, donors, and charitable organizations. I hope donors will continue to work with the organizations they wish to support or are supporting so they can increase their understanding of how the organization is structured and how it runs its programs.

In turn, organizations must take steps to be as transparent and accountable as possible to further the public trust. While staff should be loyal to the organization, they must also respect certain ethics when working with donors - and do the right thing - such as being honest about how effective their own due diligence and grantmaking process is, the fees they charge and the outcomes or impact of their programs. Fundraisers follow certain Code of Conduct guidelines but these should also apply to everyone inside the organization - especially to the CEO.

For more information:

'60 Minutes' investigates "Three ups of Tea" author Greg Mortenson. USA Today quotes from CAI's website: "Through his work empowering communities in some of the most remote areas in the world, and through his successful books that share the stories of his experiences, Greg has accomplished the real and extraordinary work of bringing education to girls and boys in Pakistan and Afghanistan who otherwise would have no educational opportunity to enable them to help themselves and their communities," the board wrote. "It would be truly tragic if the sensationalized allegations against him were to harm the future of this crucial work."

American Institute of Philanthropy issues a "?" rating for CAI. It found questionable audited statements, concerns over conflict of interests between CAI and Greg Mortenson, and noted that "a donation to Central Asia Institute, at least in 2009, was more likely to be spent on costs related to educating people in the U.S. about problems in Pakistan and Afghanistan than on helping children in central Asia with their education. 

Charity Navigator - 4 star rating. Charity Navigator reviewed CAI's FYE 09 information and gave it a 4 star rating (out of 5). A quick visit to the review section (powered by Great Nonprofits) has comments asking Charity Navigator to explain their rating.

 

Philanthropic Goals and the Search for Unicorns

The following is a re-post from Asian Philanthropy Forum.

As philanthropic advisors, our goal is to help our clients or donors answer difficult questions, listen to their ideas and dreams and eventually define a strategy and implementation plan to fulfill their philanthropic goals. Along the way, we make adjustments, complete evaluations and re-define our path based on new information we gather.  To be a good philanthropic advisor, I think we must act like attorneys (and not as wealth managers or bankers - fields where many philanthropic advisors are coming from). That is, seeing the situation from various sides, researching and completing a form of comparative analysis in the philanthropic interest, and then providing the client or donor with the best recommendation. Like attorneys, we "zealously advocate" for our client's or donor's interest even when no one believes in their philanthropic dreams. But how far should we proceed in advocating for our donor's philanthropic interests?

Russ Alan Prince, president of Prince & Associates, a market research firm specializing in global wealth, has written extensively on the subject of philanthropy, including the very well known book, Seven Faces of Philanthropy. In the March/April 2011 issue of Private Wealth magazine, Prince wrote about his lunch experience with a cryptozoologist who had recently inherited $30 million. His lunch date had a doctorate degree in anthropology and taught college for a few years. He stumbled upon a collection of ancient documents one day that described the amazing power of the alicorn- the horn of the unicorn. According to his lunch date, the alicorn can eradicate disease and potentially help people live for centuries. After spending $10 million of his inheritance researching unicorns, he clains to have found their secret sanctuary. According to his projections and business plan, he needs another $50 million for the expedition to retrieve the alicorns - this also included the training of an elite corp of female virgins who are required to capture the unicorns. He attempted to raise funds from private equity firms but they lacked vision so he found a few individuals who were interested in backing his unicorn expedition.

As I was reading the article, I wondered how I would have responded if the cryptozoologist came to me and shared with me his plans. Crazy? A bit off the beaten path? A dreamer? But what if it was true? What if alicorns can eradicate disease and cure all those that are currently in pain? Afterall, who are we to tell Bill Gates that he can't eradicte polio or malaria if he wanted to?

As philanthropic advisors, we sometimes have to take a leap of faith with our clients or donors. Philanthropy can be practiced everyday in simple ways. However, there are some folks out there, maybe calling them visionaries is not completely appropriate, but folks that have dreams of how they wish to see the world. How far would you, as a philanthropy advisor, leap with your clients or donors?

Photo courtesy of scorpiorules58, Creative Commons, Flickr

Philanthropy News Digest 04/15/2011

* A modified version of the Giving Pledge. Zaw Thet, an entrepreneur and CEO of 4INFO, announced the launch of the Palindrome Pledge in which a group of leaders in technology, media, advertising, entertainment, education, hospitality and finance will commit themselves to making a difference by serving on the board of a nonprofit for a minimum of one year and participating in the Palindrome community. The Palindrome Pledge is managed by Palindrome Advisors. "We're challenging the current model of just giving money by creating deeper engagement,"says Zaw Thet in a Fast Company interview.  Is a one year commitment to a nonprofit board actually helpful and creates "deeper engagement?"

* Massive identity theft with help from the IRS. The nonprofit database was hacked and 2,300 small or defunct nonprofit identities were stolen. IRS outsources the electronic annual reporting requirement of small nonprofits - (less than $25,000 in revenue) to Urban Institute. The purpose was to make the filing easy but perhaps too easy? Guidestar and other databases that use the IRS data has also been affected. This brings into question the reliability of information on Guidestar - a site that many donors use before making a charitable gift.

* Giving for Japan disaster tops $246.9 Million. As of April 12, the Chronicle of Philanthropy reports that donors in the U.S. have contributed more than $246.9 million to relief and recovery efforts. The American Red Cross (even with their 9% administrative fee) accounts for 69 percent of the dollars. It is interesting to note that the Chronicle and other news outlets compare the funds raised to those of Haiti earthquake. A bit odd since it is two very different countries with very different economic and political situations.