Advocates keep scoring

Efforts to push companies to adopt more socially-responsible corporate strategies continue to bear fruit.

As The New York Times reports, Burger King this week announced it would start buying eggs and pork from suppliers that do not keep their animals in cages and crates.

Burger King made the changes after talks with the Humane Society of the United States and with People for the Ethical Treatment of Animals, or PETA, the Times says.

An official of Technomic, a food industry research and consulting firm, told the Times the growing importance to consumers of social responsibility and consciousness likely would prompt industry to see “an increasing imperative to get on that bandwagon.”

As the Times also reports, celebrity chef Wolfgang Puck said last week he will use meat and eggs only from animals raised under strict animal codes, while Smithfield Foods, the world’s biggest pork processor, said in January it was phasing out over 10 years the confinement of pigs in metal crates.

These developments follow an environmental deal announced by the Sierra Club and Kansas City Power & Light, and a separate deal between environmental groups and Texas utility TXU.

Yet while foundations preach about change, only a handful have had the courage and vision to use their clout as shareholders to push for corporate change.

And far too few nonprofits have proved willing to get involved in policy work that would advance their mission and benefit their constituents.

Even in China, no stronghold of democracy, 21 environmental groups recently called on the public to boycott products from companies that cause pollution, China’s news service Xinhua reports.

America’s civic sector is rooted in the idea of working for social change that makes our society a better place to live and work.

If foundations and nonprofits truly want to put their money and clout behind their words, they need to speak up more forcefully and work harder for policy change.

The only thing they have to lose is their hypocrisy.

Bush’s faith funding belies his talk

President Bush says he is making progress on getting more federal dollars into the hands of religious social-service charities.

But Bush’s actions have not kept faith with his words.

As Associated Baptist Press reports, Bush this month told a White House conference for leaders of religious groups and community charities that the federal government gave nearly $2.1 billion in grants to religious charities in fiscal 2005, up 7 percent from the previous year.

At the conference, Bush said he wants to ensure a “level playing field” for religious charities.

But some religious leaders Bush initially enlisted to push his faith-based spending plan have criticized him for not putting his money where his mouth is, Associated Baptist Press also reports.

While Bush says publicly he wants to fund social services delivered by religious groups, these leaders say, he actually has reduced overall funding available to charitable groups by cutting discretionary spending for social services.

And a new study by the Roundtable on Religion and Social Welfare Policy finds that, while the share of funds that 99 federal grant programs gave to faith-based providers between 2002 and 2004 was flat compared to the share given to secular providers, the total amount of funding actually fell to $626 million in fiscal 2004 from $670 million in fiscal 2002, Associated Baptist Press reports.

If Bush truly wants to ensure the effective delivery of social services supported by government funds in a even-handed charitable marketplace, he should not be cutting those funds or giving religious charities an uneven advantage.

Bad-behavior show at Smithsonian

The Smithsonian Institution has produced a compelling exhibit on the need for more effective regulation and policing of the charitable marketplace.

Under the gun for lavish perks and excessive spending, Smiithsonian CEO Lawrence Small has quit, The New York Times reports today.

But despite Small’s exit, the mess he created and the failure of the Smithsonian’s board of regents to ride herd on him underscore the broader need for stronger government oversight of nonprofits.

Nonprofits boards certainly need to do a better job keeping their own houses in order.

As Rick Cohen of The Nonprofit Quarterly told the Times, the Smithsonian board, apparently seduced by Small’s fundraising success, “was prepared to turn a blind eye to questionable expenditures.”

But even stronger board oversight is no substitute for tougher rules and cops to hold nonprofits accountable.

A Washington Post review of spending by Smithsonian Secretary Lawrence Small since he took office in 2000 found $90,000 in unauthorized expenses and approval by the institution’s board of regents for $2 million in expenses for his private home and offices.

The Smithsonian’s former inspector general also told the Post last week that Small, whose compensation this year was budgeted at $915,698, had asked her last year to halt an audit of the Smithsonian division that generates revenue for unrestricted use.

In the wake of the Post’s reporting, the Senate last week voted to freeze a $17 million increase in the Smithsonian’s proposed 2008 budget, capping salaries for any Smithsonian executive at $400,000 and keeping the freeze in effect until the Smithsonian fixes how the secretary’s shop does business.

Independent Sector and the big foundations that bankroll it continue to claim the charitable marketplace can police itself, but self-policing clearly has been missing in action as executive greed and board sloppiness continue to infect organizations like the Smithsonian.

And it is the news media, not the self-appointed champions of nonprofit self-regulation, that have helped lift yet another rock to expose still another slimy practitioner of nonprofit excess and arrogance.

Big foundations and the trade groups they fund can fight all they like against the need for better regulation and enforcement.

But without rules and cops that are effective and even-handed, the charitable marketplace will continue to be a breeding ground for bad behavior that only erodes the trust on which all nonprofits depend.

American Idol’s show-biz philanthropy

Aiming to do some good with the fortune it is raking in and focus the attention of its estimated 26 million to 28 million weekly viewers on the impact of extreme poverty on children and young people in Africa and America, TV juggernaut American Idol is turning to philanthropy.

The philanthropic initiative, “Idol Gives Back,” aims to raise funds and awareness peaking in broadcasts April 24 and 25 during which celebrity artists will appear and the top six finalists this season will sing songs about compassion and hope.

So far, reflecting its roots in the breakthrough marketing prowess of the Fox reality-TV phenomenon, Idol Gives Back has been big on show-biz.

But sadly, reflecting the arrogance of much of organized philanthropy, the effort has been short on details or respect for the individual donors it is counting on.

During the show’s March 8 broadcast, host Ryan Seacrest announced plans for Idol Gives Back, and American Idol that day published a news blog on the charitable effort.

The blog said sponsors Coca-Cola and AT&T and other partners would donate money for every vote cast for contestants on the April 24 show, that Ford Motor Company also would contribute, and that viewers during the April 25 show would be able to make donations using toll-free lines and the Internet.

The Philanthropy Journal phoned Scott Grogin, senior vice president for corporate communications at Fox Broadcasting, to find out exactly how much money American Idol and Fox planned to give to the philanthropic effort, how much money its sponsors and partners would give for every vote cast, how much Ford would give, and how much American Idol expected the entire effort to raise.

Grogin said he could not answer the questions but that someone would get back to PJ, and that any communication would have to be by email.

The response came this week – a week-and-a-half later – from Andrea Lewis, who says she works for Richard Curtis, a movie director and writer who Lewis says is one of the driving forces behind Idol Gives Back.

So how much will American Idol and/or Fox contribute? Will those contributions also involve matches? And if so, how will they work?

“We are aiming to maximize the funds raised,” Lewis says. “No specific numbers are available to you at this stage.”

What is the aggregate contribution that American Idol, Fox and corporate sponsors together are likely to make?

“We expect corporate contributions in the double-digit millions,” Lewis says. “We are working together to maximize the contributions for Idol Gives Back and the overall contributions amount will be announced once it has been totaled after the event.”

What is likely to be the total of all contributions from Idol, Fox, sponsors and viewers?

“We are working to maximize the contributions both from sponsors, philanthropists and the general public,” Lewis says. “Every dollar raised has the capacity to change someone’s life so we will be happy with the final outcome, whatever it may be -- clearly the more donated, the more lives we can help change and save so we’d like the total be as big as possible. Raising awareness of the issues is equally important.”

There you have it: Maximizing hype, minimizing substance.

American Idol, which has made an art form of reality TV and product placement, and transformed wannabe amateurs into entertainment superstars, surely will generate huge bucks and a lot of attention for the cause of helping impoverished children.

As multi-media entertainment guru Martha Stewart would say, that’s a good thing.

But American Idol could do much more: Instead of simply touting its philanthropy in advance, and treating its viewers like automated teller machines, American Idol could be engaging them for the long-term in philanthropy and the cause of addressing poverty.

American Idol has a loyal and enormous audience with which it could be sharing the details of how it plans to practice its philanthropy.

Each week until its big two-day philanthropic extravaganza, American Idol could be educating over 25 million viewers about the impact of poverty and the difference that individuals and organization can make by getting involved.

And to accomplish its stated goal of “maximizing” its philanthropy, American Idol should spell out exactly how much it and its sponsors plan to give, including the formula they will use for providing matching funds.

In letting viewers know exactly how much their participation will generate in matching funds, American Idol might generate even more support.

By treating its viewers like donors, cultivating them and engaging them with substantive information instead of shallow hype, American Idol not only could increase the impact of its inaugural philanthropic undertaking, but it also could transform an unprecedented show-biz phenomenon into breakthrough mass philanthropy -- and create a model for other mass media.

That would be something worth idolizing.

Foundations’ aggressiveness misplaced

Charitable foundations are aping the wrong role models and fighting the wrong fight.

Apparently coveting huge returns like those generated by the investment stars who manage the endowments at Harvard and Yale, foundations are allocating a bigger share of their assets to alternative investment strategies like those the Ivy League investors favor, such as hedge funds that offer high returns for taking high risks.

But spectacular as they have been, the returns at Harvard and Yale are not realistic barometers for most foundations.

The investment managers at Harvard and Yale, profiled recently in The New York Times, have the resources and expertise to forecast where the financial markets are going and to stay ahead of the curve.

That requires finely-tuned metrics, savvy financial know-how and the ability to anticipate the uncertain variables of inflation and projected costs and payouts.

Yet while they may lack their resources and expertise, foundations still try to mimic the big players.

In the process, foundations may fall short of the returns they need to meet the requirement that they pay out at least 5 percent of their assets each year in grants and overhead.

Lacking the clout and in-house expertise of Harvard and Yale, foundations pursuing alternative strategies depend on outside investment managers, and it can be tough for them to find hedge funds or other high-risk vehicles in which to invest the assets immediately, delaying the possible payoff and making it tougher to use investment income to meet the payout requirement.

And just as many foundations have tried to invest more aggressively than might be prudent, many also have been overly aggressive in fighting proposals to increase their required payout to 6 percent.

Instead of raising a stink to preserve the current payout rate and hoard their wealth, foundations should be looking for ways to invest their assets more prudently, address critical social needs and their underlying causes more strategically, meet nonprofits’ need for operating support more effectively, and work more actively to keep their investments and the companies they invest in more closely aligned with their philanthropic mission.

If they want to be aggressive, foundations should focus first on themselves by improving the way they invest their assets, make their grants and perform the policy role they can and should play in society and the marketplace.

The wolf at foundations’ door

Foundations claim they are at risk of going out of business, but they actually must be laughing all the way to the bank and the country club.

Screaming and kicking over proposals for a tiny increase – from 5 percent to 6 percent – in the share of their assets they must pay out in grants each year, foundations have misrepresented the proposed payout increase as one that will doom them.

Critics argue, rightly, that current law gives foundations an unfair edge in the charitable marketplace: Their donors get big tax breaks up front; the foundations have to spend only 5 percent of their assets each year, and can count overhead costs as part of their payout; and the assets they hoard give the donors and their successors unbridled power and influence.

What’s more, foundations typically count on an annual return of 5 percent on the investment of their assets to meet their payout requirement, keeping their assets safe and unspoiled.

And the grants that foundations do make do little to address nonprofits’ critical need for operating support.

Yet in fighting modest proposals for an increase in the payout rate, foundations argue that being forced to give away more money each year will put them out of business.

Foundations, in short, are reframing the issue, misrepresenting the modest proposal that they be required to be only slightly less greedy to an apocalyptic ultimatum that will force them to close their doors.

In his new book, The Foundation: A Great American Secret, Joel Fleishman of Duke University argues that "perpetual foundations" are critical to American democracy.

Fleishman says foundations constitute a “polyarchy,” a term he says refers to “the existence of many separate, independent power centers in society.”

In our civic sector, he argues, “it is the foundations that put the power of concentrated money behind individuals and the associations they form, thereby transforming American pluralism into a polyarchy with effective firepower.”

And it is perpetual foundations that “introduce a multigenerational polyarchy,” Fleishman says. “Without such perpetual foundations, America’s civic sector would be greatly impoverished.”

The “accumulated capital held by perpetual foundations plays a critical balancing role in another broader sense,” Fleishman writes. “Thanks to their power and the slow, steady pressure they exert on behalf of the causes they champion over time, the foundations serve as both a prod and a counterweight to the government. Perpetual foundations are much better able to criticize and stand up to politicians and administrations, if they exercise the courage to do so, than are life-limited foundations.”

Not only does Fleishman’s argument by implication discount the role that any individual or group without perpetual wealth can play in a democracy, but it overstates the role that "perpetual" foundations actually do play.

Donors who create foundations get tax breaks, and foundations’ charitable assets are tax-exempt, because our lawmakers concluded it is good public policy to encourage the operation of a charitable marketplace that will address critical social, economic, environmental and cultural issues.

The special tax treatment foundations enjoy is not a license to hoard money, and proposals to increase the payout rate and tighten the regulation of foundations are more than justified and long overdue in the face of foundation excess, wrongdoing, greed and arrogance that undermine the fair and efficient working of the charitable marketplace.

As for perpetual foundations acting as more muscular government watchdogs and gadflies, the reverse seems to be the rule.

Too many foundations are smug, fat and lazy, and their main interest in dealing with government these days seems to be to preserve and protect their assets and power, not to push government to fix flawed public policies that underlie our most urgent problems.

And precious few foundations are willing to use their role as shareholders to push corporations to adopt business strategies to better address those same critical problems.

Foundations also have been pushing nonprofits to be more effective and measure the impact of the grants they receive, but only a handful of foundations have been willing to invest in nonprofit operations.

Warren Buffett, who last year announced he was giving the bulk of his wealth, or $31 billion, to the $30 billion Bill & Melinda Gates Foundation, recently announced he had stipulated in his will that the proceeds from all the shares in Berkshire Hathaway he owns at his death must be used for “philanthropic purposes within 10 years after my estate is closed,” and he estimated his estate would be settled within three years of his death.

That is philanthropy.

Too many foundations, in stark contrast, spend their time crying wolf.

More charitable slime exposed

The New York Times has exposed yet another scandal in the charitable marketplace.

Based on its investigation of the Ancient Arabic Order of the Nobles of the Mystic Shrine, the group that founded and controls the Shriners Hospitals for Children, The Times reports on the Shriners’ “lax accounting procedures and oversight under which money earmarked for the hospitals instead financed temple activities,” including paying for liquor, parties and members’ travel to Shrine events.

In the face of reports of excess and wrongdoing at a small but growing number of charities and foundations, organized philanthropy and nonprofit trade groups have staunchly opposed tougher regulation of the charitable marketplace.

These groups, like Independent Sector and the Council on Foundations, argue that nonprofits and foundations can and will police themselves.

But self-policing cannot curb abuses by groups and individuals that neither recognize or respect accepted and acceptable standards of behavior.

In their fierce fight to ward off challenges to their "independence," big foundations and nonprofit trade groups mainly are defending their turf and their right to do business however they like without interference or oversight by anyone.

It is a sad commentary on the nonprofit world – and a shining affirmation of the critical role the news media can play –- that it is the news media rather than the self-appointed guardians of the nonprofit sector’s independence that continually are the organizations exposing shameless behavior in the charitable marketplace.

Green clout sprouts

Today’s news brings two more shining examples of the role nonprofits can play in helping to shape corporate strategy and public policy.

As The New York Times reports, the Sierra Club has agreed to scrub opposition to a coal plant in return for a promise by Kansas City Power & Light to cut carbon-dioxide output by the amount a new plant will produce.

The Times reports in the same story that a group of 65 big firms and investors, organized by the Coalition for Environmentally Responsible Economies and the Investor Network on Climate Risk, are asking Congress to set a carbon policy to curb climate-change risk and give businesses a better sense of the requirements that are likely to emerge.

If they focus themselves on policies they care about, organize themselves, team up with partners who can be effective, and work the system to negotiate with corporations, lawmakers and other policymakers, nonprofits and charitable foundations can make a difference.

Too many nonprofits and foundations, however, steer clear of policy work, leaving critical policy issues and decisions unexamined and unchallenged -- even as those groups whine about the impact of those policies.

It is time for nonprofits and foundations to get involved, get organized and speak up.

Getting the gears moving

The social and economic problems our communities face are critical, and foundations can and should transform the way they think about and address those problems.

That is a key message contained in an important new report by MDC Inc., a think-tank in Chapel Hill, N.C., that examines the role of philanthropy as society’s “passing gear.”

Speaking recently to a group of foundation and corporate-giving officials, MDC President David Dodson likened the challenge for foundations to the one addressed in the mid-1960s by the North Carolina Fund, a pioneering effort supported by a handful of foundations to address the interconnected problems of race and poverty.

Just as the North Carolina Fund helped fuel social progress in our state, so can a new collaborative push by organized philanthropy throughout the U.S. help take on deep-seated problems facing our schools, our health care, our economy and workforce, and our communities.

We need, in short, a new generation of local, regional and national efforts modeled on the North Carolina Fund, and foundations need to make it happen.

These Next-Generation Funds would focus on engaging our increasingly diverse population and enlisting organizations from the government, business, education, philanthropic and nonprofit sectors in the work of making social progress.

As PJ reported, the MDC report says a healthy economy and society are critical to developing the good jobs and smart workers needed to compete in a marketplace that is global and fiercely competitive.

Creating and sustaining economic and social health requires repairing educational and health-care systems that are badly broken, and eliminating the gap between people who have access to good schools, good jobs and good health care and those who lack that access.

If they can shake themselves out of their comfort zone and see beyond business as usual, foundations can exercise the flexibility and leadership for which government and business lack the will or backbone, and create the partnerships needed to address the root causes of our most urgent social and economic problems.

Who will take the first step to provide that leadership?

Online fundraising needs personal touch

As PJ reports today, a new survey says online donors give more but are less likely to keep giving.

The study, by Target Analysis Group and Donordigital, also says online donors seem to be more valuable over time.

The internet and email clearly have changed the marketplace for giving.

Online giving after Hurricane Katrina, for example, was unprecedented, and some nonprofits and universities have found that donors are more likely to give, give quickly and give more in response to email appeals.

Email and online giving will be particularly important with younger donors who have grown up communicating online.

But as the new study indicates, technology is no substitute for the personal touch.

A growing body of research underscores the critical importance of developing personal relationships with donors.

That means understanding their interests and values, involving them in your organization by building on those interests and values, and keeping them informed about the impact their giving is having on the people you serve.

While technology can help build those relationships, charities first need to develop an organizational culture and strategy rooted in the understanding that donors are critical partners to fulfilling the organization’s mission.

Philanthropy is a two-way street

Whoever “wins” the court fight between Princeton and the children of major donors who claim the school misspent their parents’ endowment gift, the dispute underscores the fact that any gift creates ethical responsibilities on the part of donor and recipient alike.

As The Wall Street Journal reported March 13, while it says the spending was proper, Princeton now has reimbursed $782,375 to the Robertson family because of “inadequate disclosure” of its spending.

The lawsuit by the Robertson children, heirs to the A&P supermarket fortune, claims Princeton spent $207 million outside guidelines the gift established.

The school denies the claim and, as the Journal reported, the reimbursement does not end the fight, which the newspaper says “may be the most important case in higher education over the question of honoring the wishes of the donor.”

Whether large or small, a charitable gift is built on mutual trust between donor and recipient, and creates ethical responsibilities that do not end with the transfer of assets.

The recipient can and should keep the donor informed and involved, reporting back on how the gift is being used and the impact it is having.

And the donor can and should keep in touch with the recipient, asking for information and looking for appropriate opportunities to continue to provide input and support.

While it can be sensitive and tricky to maintain, the continuing relationship between donor and recipient is critical in the charitable marketplace.

Keeping the donor involved can create a lifelong friend and supporter for a charity, while staying involved with a charity can lead to a fulfilling role in helping to shape solutions to a cause the donor cares about.

Call to action on operating support

Like the emperor with no clothes, U.S. foundations have no cover for their failure to address the operating needs of nonprofits.

And yet, while that failure hurts nonprofits, few of them are willing to push foundations to invest more of their assets in helping nonprofits strengthen their internal operations.

But now, as PJ reports today, the National Committee for Responsive Philanthropy is calling on foundations to allocate at least half their grants and half their grant dollars in the form of “flexible core operating support grants.”

And for all remaining grants that are specific to a project or program, the National Committee says in a new report, foundations should include “indirect costs or an overhead rate that is calculated to be appropriate to the nonprofit and the project.”

The report also calls on individuals planning nonprofit conferences and convenings, on national nonprofit and philanthropic bodies, on academics and researchers and, above all, on nonprofits to focus on the lack of operating grants and its impact on nonprofits.

Foundations control a tax-exempt base of over $500 billion, and the combined assets of organized philanthropy total nearly $1 trillion in tax-exempt funds, but relatively little of those assets reach nonprofits, the report says.

Yet because they are tax-exempt, it says, those assets “are basically equivalent to public resources to serve the public interest.”

Nonprofits serve as the “essential delivery system for foundations to realize their missions,” the report says.

So nonprofits need to recognize that they can “propel change” in the foundation sector.
But fearing it could cost them the funding they do receive, many nonprofits are reluctant to speak bluntly to foundations about their need for operating support.

Delivering the message about the need for operating support, the report says, “depends on nonprofits coming together and being willing to stand up and speak truth to philanthropic power.”

This is an important report, and nonprofits and foundations alike need to read it and move quickly to address this critical problem in the charitable marketplace.

Giving circles spur creative tension

Giving circles, or networks of people who pool their funds and use them to support causes they care about, are one of the fastest-growing areas of philanthropy.

And a new study finds that giving circles are producing mixed reactions from nonprofits.

All nonprofits surveyed say they appreciate the value in dollars and expertise that giving circles add to their work.

But other nonprofits say giving circles' full potential still has not been realized and they can create challenges in:

* Recruiting donors

* Adjusting quickly to a range of personalities in the giving circle

* Dealing with donors who want to be actively involved in the nonprofit

* Balancing a possible “mismatch” between the priorities and application process of the giving circle and a foundation or other group that may be hosting the giving circle

* Overcoming the fact that giving circles are not always consistent in their expectations and simply cannot be counted on for sustained and long-term funding.

Angela M. Eikenberry, an assistant professor at Virginia Tech who conducted the study with a grant from the AFP Foundation for Philanthropy, says giving circles are generating tensions between donors and nonprofits that reflect an emerging dynamic that is part of a larger evolution in philanthropy and society itself.

That tension, she says, involves balancing the needs of donors, particularly those who are trying to learn more about philanthropy and get more involved in it, with the needs of nonprofits.

And as other research suggests, Eikenberry says, this move for greater engagement is occurring at the same time that social networks are becoming looser.

“We’re transitioning to a new philanthropic environment,” she says. “Donors want to be more engaged and have more say in where their gifts go.”

But the new philanthropy, dubbed “supply-side" philanthropy by Paul Schervish of the Center on Wealth and Philanthropy at Boston College, “doesn’t necessary equate to meeting needs and demands in a society where government is doing less and expects nonprofits to do more,” Eikenberry says.

Her next undertaking, she says, will be to study the implications of the emerging “fragmented structure” of giving.

And as philanthropy evolves, the challenge for nonprofit, as always, is to better understand donors, help them understand the needs of nonprofits, and get them involved in helping to shape strategies and provide resources to address the needs of nonprofits and the people they serve.

Nonprofits can do better with volunteers

With all the challenges they face meeting social needs and running their shops, nonprofits cannot afford to waste resources.

But many nonprofits are failing to tap the full potential of one of their most precious assets -- volunteers.

Three new reports underscore the need for nonprofits to strengthen their efforts to engage volunteers and match their interests with the needs of the organization.

PJ reports on a new study by the U.S. Department of Labor that finds both the number and percentage of Americans volunteering their time fell last year, with the share of Americans volunteering falling to its lowest level since the department started tracking that metric in 2002.

PJ also reports on a new study by the Corporation for National and Community Service that says Baby Boomers are volunteering at higher rates than the two preceding generations, with more than one in three volunteering, but that one in three Boomers who volunteer one year do not volunteer the next year.

And a survey by Thrivent Financial for Lutherans says that while nearly two in three American adults performed some type of volunteer service last year, 86 percent said they would be willing to volunteer – leaving a volunteer gap of 22 percentage points that nonprofits are failing to tap.

Past research has shown that people who volunteer their time are more likely to donate their money, and that people who start volunteering when they are young tend to keep volunteering.

The study by the Corporation for National and Community Service reinforces other research that shows Boomers have different volunteer interests than past generations and need to be engaged in different ways.

Generation X and Generation Y, and the generation that preceded the Boomers, all represent even different interests, and all are looking for volunteer opportunities.

Volunteers are the lifeblood of nonprofits.

So nonprofits need to invest a lot more time and effort to understand the needs and interests of these different groups of potential volunteers, and to engage them and truly integrate them into the life of their organizations.

The medium is the message

Broadcast and print, and DVDs, are the media that a foundation and a nonprofit will use, respectively, for new advertising and public-awareness campaigns.

The New Jersey-based Robert Wood Johnson Foundation, which focuses exclusively on improving the health and health care of Americans, is launching a $3 million blitz using broadcast and print ads.

The campaign supports congressional reauthorization of the State Children’s Health Insurance Program, or SCHIP, a move the foundation says will help address the needs of 9 million uninsured children in the U.S.

And Leave A Legacy, the public-awareness campaign of the Indianapolis-based National Committee on Planned Giving that encourages people to leave a charitable gift in their wills and estate plans, has teamed up with producers of The Ultimate Gift, a new movie about a young man who inherits a fortune.

The film, which opens March 9, will be followed this fall with release of a DVD that will contain a public-service announcement about the Leave A Legacy campaign.

While they may not have the resources or clout to invest in a national ad blitz or hook up with Hollywood producers, all nonprofits can be more resourceful in using media to help tell their story.

That ranges from developing relationships with news reporters, submitting letters to the editor and guest opinion columns and fielding guests on talk-radio shows to providing speakers for civic groups and religious congregations and submitting news items for their newsletters.

To promote their cause and secure the support they need, nonprofits need to raise awareness about the work they do and the needs they address.

A critical job for any nonprofit is learning how to work more effectively with the media to communicate its message.

Green power ratchets up

On the heels of helping to negotiate environmental concessions from the buyers of Texas energy firm TXU, and drawing sharp criticism from other environmental groups that argue the green negotiators sold out and got too little in return, Environmental Defense now has hired an investment bank to advise it, The New York Times reports.

The move, the Times says, signals that Environmental Defense wants a bigger say with TXU and its suitors, and suggests environmental activists may push for a bigger role in mergers and acquisitions “as they use Wall Street tactics and a better understanding of the financial mechanics of deals to negotiate even more aggressive environmental concessions.”

To make progress on the critical social, economic and environmental problems we face, nonprofits and foundations need to break out of their cocoons and work the marketplace.

Media fight shows power of advocacy

Nonprofits can shape public policy.

Just ask Free Press, a nonprofit that has led a grass-roots drive against a push by the Bush administration to let newspapers and broadcasters own one another in most markets.

As The Wall Street Journal reports today, while progressive grass-roots activitists are better known for opposing the Iraq war, their bigger impact may have been on national media rules and telecommunications policy.

“Free Press has effectively blocked some of the most-wanted issues on corporate wish-lists,” the Journal says.

Not all nonprofits are advocacy groups, but all nonprofits can get involved in efforts to shape policies that affect their constituents or the charitable marketplace overall.

Fear of payback or lack of knowledge about the advocacy role they can play may be keeping nonprofits from getting involved.

By learning the rules of nonprofit advocacy and getting involved, not necessarily in a leading role but by lending their voice to a larger effort, nonprofits can indeed make a difference.

The rest is silence.

Congressional eye on nonprofits

Nonprofits will be the focus of a new caucus in the U.S. House of Representatives, The Examiner reports.

Co-chaired by Republican U.S. Rep. Robin Hayes of North Carolina, the bipartisan Congressional Philanthropy Caucus could be matched by a new caucus in the Senate, The Examiner says.

Accounting for roughly 5 percent of gross domestic product and receiving $260 billion in annual charitable contributions, the nonprofit sector clearly is on lawmakers’ radar.

Yet the charitable marketplace is largely unregulated, and many lawmakers and regulators have voiced serious concerns about scandal and excess in that marketplace.

So the new caucus gives all nonprofits yet another reason to get involved in advocacy and help keep Congress informed about the challenges they face.

For too long, lobbying on issues affecting the nonprofit sector has been dominated by a few big trade groups like Independent Sector and the Council on Foundations.

But those groups do not represent or speak for the entire nonprofit sector, which is huge, fragmented and diverse.

It is time for all nonprofits to make their voices heard.

The green is always greener…

The ink was barely dry on environmentalists’ seal of approval for environmental concessions by investors buying Texas utility TXU when other environmentalists started sniping at their colleagues who had helped negotiate the concessions, The Wall Street Journal reports.

The critics charged that their fellow environmentalists caved in for too little from the TXU buyers, including cutbacks on projects TXU already planned to scrap, the Journal says.

It also reports the critics say their colleagues were cowed by big business interests for a “seat at the table.”

Casting stones is easy, but persuading corporations to change their business policies and strategies is hard work that can be slow and frustrating.

And in the marketplace, while you can’t always get exactly what you want when you want it, you at least can try to chip away at making change happen.

Groups that focus on advocacy know only too well that progress often must be measured in tiny steps.

But far too few nonprofits and foundations are willing to move beyond their comfort zone of daily program work and get involved in advocacy work on complex issues whose resolution requires give-and-take on the part of everyone involved.

The TXU deal is not perfect or even as good as it might have been.

But it shows that advocacy can begin to make a difference.

And it should remind nonprofits and foundations that if they want to have a voice in making change happen, they need to move from their seats in the bleachers to engagement on the field.

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CEO out at Kintera

PJ reports today on the continuing shakeup at financially-troubled tech firm Kintera with the ouster of co-founder Harry Gruber.

Less than a month after being replaced as president and board chair, Gruber has quit as CEO.

Richard LaBarbera, who was promoted to president in February -- a year after being named chief operating officer -- was named CEO and elected to the board of the San Diego-based firm.

Gruber will continue to serve on the board.

The San Diego Union-Tribune reports today that Gruber quit under pressure from several investment firms.

Kintera, which made its initial public offering of stock in late 2003 and employs 265 people, never has reported a profit.

Piercing philanthropy’s gilded veil

The mainstream media have praised Joel Fleishman’s new book on foundations, The Foundation: A Great American Secret: How Private Wealth is Changing the World.

Reviewers for The Wall Street Journal and The Economist, for example, were particularly impressed with the idea that a philanthropy insider like Fleishman – a professor and former fundraiser at Duke University, former president of the Atlantic Philanthropies and former chair of the Markle Foundation -- would criticize organized philanthropy.

Now, Pablo Eisenberg, a senior fellow at the Georgetown Public Policy Institute, author of Challenges to Nonprofits and Foundations: The Courage to Change and a thoughtful and highly-respected critic of philanthropy, has contributed a stinging critique of Fleishman’s book.

Writing in The Nonprofit Quarterly, Eisenberg suggests that, while conceding some minor blemishes and advising the application of a few dabs of makeup, Fleishman’s book fails to acknowledge or even see -- let alone diagnose or prescribe remedies for -- deep structural problems in the world of foundations and the way they operate.

Seen through the eyes of “a consummate insider who is close and indebted to establishment institutions, such as foundations and universities,” Eisenberg says, the world of philanthropy Fleishman’s book examines “is one of elite institutions, governed by the wealthiest and most highly paid professionals in our society.”

Embracing foundations and their track records, Eisenberg says, Fleishman “tends to dismiss some of their shortcomings.”

And the transparency and accountability Fleishman promotes, Eisenberg says, are procedural, not substantive.

“The reason for his approach is that he is satisfied with foundations as they are,” Eisenberg writes. “He sees no need for any transformation. It is fine that they are governed by an elite group of wealthy people and highly paid establishment professionals, regardless of their impact on democracy.”

Eisenberg also says that transparency and public accountability, which he calls “key to the growth, legitimacy and future effectiveness of philanthropy” in Fleishman’s book, “may be a precondition to change” but are not the determining factor.

“The desire and will to alter behavior, public pressure, and political action are the forces that bring about change,” Eisenberg says. “This is the weakness in [Fleishman’s] recipe for change.”

In Fleishman’s view, Eisenberg says, foundations are noble institutions that balance government, corporate power and nonprofits to make our democracy tick.

And Fleishman simply “dismisses those critics who have accused foundations of perpetuating privilege and wealth as simply being Marxist,” Eisenberg says.

Occupying a “rarefied” world, he says, the foundations Fleishman celebrates are “well intended institutions that do a lot of good but don’t get to the heart of many of our societal problems and dysfunctional systems.”

Fleishman’s “celebration of foundations downplays the important role that nonprofits have played in creating almost all the social and institutional changes in our history,” Eisenberg says.

“It ignores the poverty, class tensions, social and economic inequities, political corruption, and corporate excesses that shake the pillars of democracy.”

Eisenberg concludes that Fleishman’s world “is not yours or mine, so far removed from our fundamental concerns and needs, so irrelevant to much of our civil society.”

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Donor inflation stains fundraising

The philanthropy arms race just keeps escalating.

Obsessed with bragging rights, colleges and universities have been tripping over one another for years in an endless sprint to set ever-higher goals for comprehensive campaigns.

To meet those goals, increasingly totaling billions of dollars, many of these bastions of higher learning have developed methods for counting donations that give a new meaning to higher math.

Faced with a nationwide decline in the share of graduates who give, The Wall Street Journal reports today, many schools have been inflating their “alumni-giving rate,” worrying more about that metric than the actual dollars given.

While the average alumni donation has grown, the Journal says, the percentage of alumni who give has declined.

So, under pressure from trustees who set annual targets for alumni-giving rates, and from magazines that count giving rates in their college rankings, development staff have become masters at the new fundraising math.

A 2004 graduate of Albion College who gave $30 her senior year but has not given since is counted by the school as a $6-a-year donor through 2009, the Journal says.

Instead of turning them off by playing numbers games, fundraisers should be working to understand the interests of donors and plug them into the work of improving the organizations and causes they care about.

Far from recognizing that philanthropy is about more than money, too many colleges and universities treat philanthropy as less than money and more as a measure of their prowess in a fiercely competitive marketplace.

That demeans donors and erodes the trust and relationships that institutions need to grow and make a difference in a troubled world.

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Can nonprofits police themselves?

The charitable marketplace in the U.S. is the focus of a critical debate about the extent to which voluntary actions and organizations should be regulated.

The debate is critical because it involves two values that are fundamental to our democracy but can create tension in how they are put into practice -- the rule of law and the freedom of individuals to voluntarily give their own time and resources to address social problems, often through nonprofit organizations and foundations.

Whether intentional or not, nonprofits and individual givers may run afoul of laws and regulations designed to make sure the charitable marketplace operates with an even hand.

Scandal and excess on the part of some nonprofits, foundations and donors have triggered widespread review by regulators and lawmakers of the charitable marketplace and the laws and rules governing how it works.

Powerful trade groups like Independent Sector argue that nonprofits can police themselves by voluntarily embracing and complying with a detailed set of standards on ethics, governance, legal compliance, public disclosure, financial oversight and fundraising.

Just this week, the Panel on the Nonprofit Sector posted on its website a second draft of “Principles for Effective Practice” and invited nonprofits to comment on those principles through March 30.

Also this week, The New York Times reported that a new study by the IRS, the largest ever by its exempt-organizations division, had found flaws in the way 600 charities and foundations reported payments to executives and other employees.

As a result of the study, 600 charities and foundations have had to file amended tax forms, and the IRS also asked 40 individuals to pay a total of $20 million in excise taxes as a penalty because the agency had determined nonprofit executives were paid excessively.

The IRS told the Times it also is looking into loans made to insiders at charities and foundations.

The voluntary sector plays a critical role in a democratic society, and nonprofits need to do a better job keeping their own house in order.

Clearer standards, greater peer pressure and better professional training and education can go a long way to helping the charitable marketplace police itself and maintain the independence that is critical to the role it plays in society.

But that marketplace also needs stronger laws, regulations and policing to help ensure that individuals and organizations transacting charitable business operate in the open and with fairness.

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