In This Issue
- Strategic Philanthropy
- Rethinking the Do's and Don'ts of Non-Profit Organizations
- Introducing new members of the family
- 2009-10 Conference Calendar
- The 5% Payout
- Philanthropy Camp
Did You Know?
The Farese Family Foundation is starting a photophilanthropy project! Check out the website and encourange friends and family to submit photos. PhotoPhilanthropy.org
Learn More About Our Newest Foundations
Welcome to the summer 2009 edition of the PFS newsletter. We have included a number of articles that we hope will be of interest as you consider your own philanthropic goals. The links on the left will help you navigate this newsletter.
Essentially, it involves (1) setting clear, measurable goals, (2) developing sound, evidence-based strategies for achieving them, (3) measuring progress along the way to achieving them, and (4) determining whether you were actually successful in reaching the goals.
Paul Brest, President, Hewlett Foundation
That sounds easy, but each step has its challenges and the first, setting clear and measurable goals, has defeated many otherwise good philanthropists.
So, how do you go about getting "strategic"? Quite a bit has been said, and written, about strategic philanthropy. Here are a couple of the better sources of information:
- Paul Brest and Hal Harvey, president of Climateworks Foundation, wrote the key book in this debate (http://www.smartphilanthropy.org/)
- Sean Stannard-Stockard, who works in wealth management, produces a very accessible blog (http://tacticalphilanthropy.com/)
- Blueprint R&D, a well-respected local consulting firm, also has a good, though somewhat abstract, blog: (http://philanthropy.blogspot.com/)
- For a good critique of strategic philanthropy, see this paper (www.hudson.org/files/publications/2008_11_07_Schambra_on_Strategic_Philanthropy.pdf)
Would you prefer to pass on the strategic planning and get right to work? There are things you can do right now to make your foundation's philanthropy more effective. Kris Putnam, a very good philanthropy consultant, put this list together:
- Invest in a great leader. Find out what they need to be more effective, and provide them with that support. This could include executive coaching, participation in a leadership development program, management training, etc.
- Invest in a great organization. This could include general support, organizational capacity building, strategic planning, improved fiscal management systems, etc.
- Provide multi-year funding. When you provide multi-year funding, you enable an organization to focus its efforts on reaching its goals, rather than on raising funds.
- Generate new ideas through convening. Donors can play a critical role in simply bringing people together to learn from each other, seeding new ideas, and fostering collaborations among non-profits.
- Fund policy change. Local, state, and national polices can have far-reaching impact on people and communities. This work can include funding research and dissemination of findings, media advocacy, and policy advocacy.
By far the most important things any
donor should do, no matter how much money or time they have to give, is to
practice self-reflection. Wherever your foundation is on the spectrum of
strategic philanthropy, we look forward to working on strategic issues with you
and your fellow directors.
Eric Sloan
Rethinking the Do's and Don'ts of Non-Profit Organizations
In his book, Uncharitable, Dan Pallotta goes back to the colonists' Puritan roots to explain why, for so long, prevailing opinion about non-profit organizations has prohibited spending money on salaries, advertising, and research and development, and has frowned on saving money for expansion. He notes that this attitude harms non-profit organizations in a number of ways, not least of which is that the field is not able to attract and keep the talented workers who could really help solve social problems. The last section of the book is a case study of Pallotta TeamWorks, the company he started that sponsored the earliest AIDS rides and raised millions of dollars but that was roundly criticized for generating a profit. Although the book is somewhat repetitive, Pallotta raises important questions which take the debate about venture philanthropy and social benefit enterprise to a new level.
In a June 15 article in Business Week, author John Tozzi describes the current trend toward forming a Low-profit Limited Liability Company (or L3C) in situations where the best way for a social enterprise to expand is not through grants but through investment of private capital, whether from individuals, corporate investments, or program-related investment by foundations.
To read the whole article, go to: http://www.businessweek.com/smallbiz/content/jun2009/sb20090615_940089.htm?chan=smallbiz_smallbiz+index+page_top+small+business+stories
Mary Gregory
PFS Updates: New clients and new members of the PFS team
We are pleased to introduce you to two new employees at PFS, Fiona Barrett and Jessi Misslin. In addition to the two new team members, we are excited to welcome the following foundations that have hired PFS in the past eight months: Avery-Fuller-Welch Children's Foundation, the William G. Gilmore Foundation, and the Winifred Johnson Clive Foundation. Learn more about them by following the links on the upper left of this newsletter.
Fiona joined our team in January
after spending five years with Kidpower Teenpower Fullpower International in
Santa Cruz, a non-profit that teaches people of all ages personal safety
skills. She holds a B.A. in Community Studies from UC Santa Cruz and enjoys
living in Oakland with her two cats, Syd and Murphy. Fiona is the Program
Coordinator for the Bella Vista, Morris Stulsaft, William K. Bowes, GGS,
Gamble, and Winifred J. Clive Foundations.
Jessi
joined PFS in March of this year. Prior to PFS, Jessi worked with Summer
Search, a non-profit leadership development organization that works with
low-income youth. Originally from Minnesota, Jessi earned a B.S. in
Communication Arts from Minneapolis College of Art and Design. She lives in San
Francisco with her partner, Matt, and their charming baby boy, Ian. Jessi is
the Program Coordinator for the Bothin, Kimball, Michelson, WLS Spencer, and
Farese Family Foundations.
Shorey Myers, who joined PFS in 2008 as the Office Manager and Receptionist has proven to be a fast and eager learner and has recently taken on Program Coordinator responsibility for the AFW Children's Foundation, the William G. Gilmore Foundation and the Cleo Foundation.
In other personnel news, Hector Melendez was promoted to Senior Program Officer and is now the lead staff member for the Michelson and AFW Children's foundations. In addition to bringing his substantial experience in the fields of mental health and family resource centers to PFS and our clients, Hector has learned quickly about working with boards, families and non-profits. He has done a terrific job for several PFS client foundations, and those of you who have worked with him will undoubtedly applaud his promotion.
Please welcome our newest staff members when you are next in the office and congratulate Hector on his new role.
Charlie Casey
2009-10 Foundation Conferences
You may be interested in attending any or all of the following conferences. If you will be attending, please let us know!
- Grantmakers for Children, Youth
and Families
- September 21-24 2009: Minneapolis-St Paul, MN
- www.gcyf.org/annualconference/
- Grantmakers
for Education
- October 5-7 2009: Chicago, IL
- http://www.edfunders.org/programs/conference/index.asp
- Council
on Foundations: Family Philanthropy
- January 31-Feb 2 2010: San Diego, CA
- http://www.cof.org
- Grant
Managers Network
- March 15-17 2010, Baltimore, MD
- http://www.gmnetwork.org/about-us/annual-conference
- Council
on Foundations: Annual Conference
- April 25-27 2010: Denver, CO
- http://www.cof.org
- Association
of Small Foundations Annual Conference
- October 10-12 2010: Austin, TX
- http://www.smallfoundations.org/site/pp.asp?c=fvKRI7MPJqF&b=5203787
There is much talk in the world of foundations about the "five percent rule." As a very general rule, 5% of a foundation's corpus (endowment) should be spent each year on grants and certain expenses related to charitable activity in order to remain compliant with federal and state tax codes as they relate to foundations and charitable trusts.
The 5% payout rule is designed to allow foundations to grow their assets at the rate of inflation so they can maintain their purchasing power (giving ability) in perpetuity. With historic market returns of approximately 8% in a balanced portfolio and 3% historic inflation, a foundation should be able to spend 5% of its corpus each year and maintain relevance.
But what does that 5% number really mean, and how is it applied? How is the 5% properly calculated? And, what are the consequences of missing the payout requirement? The answers are fairly complex, but the important lesson is that foundation directors and administrators should try their best to budget well and then not worry too much about "hitting" the payout number on an annual basis.
To learn more about the 5% payout, click here.
Pacific Foundation Services (PFS) and Youth Leadership Institute are collaborating to create a new opportunity for young people ages 14-21 who would like to learn more about philanthropy. With resources and staff expertise from PFS, Youth Leadership Institute will implement a week-long program for 8 -12 youth from diverse cultural, neighborhood and socio-economic backgrounds. Young people who participate in the program will gain leadership skills through the following experiences: new and authentic partnerships with adults and other youth; increased understanding of their communities and community needs; a greater sense of their role in promoting community development and influencing policy; increased understanding of the philanthropic process and the role of philanthropy at a community level.
Philanthropy Camp will take place at the offices of PFS. There will also be site visits to non-profit organizations led by the course faculty.
We hope that through understanding and implementing a "mini-foundation," the young participants will be empowered to propose, research, review, and fund projects that make a difference, not only during Philanthropy Camp but also in the future. They will participate in actual funding decisions, learning concepts and terms of philanthropy and community that they can then apply to community service work through their schools, their volunteering, and their donating.
In early spring 2010, we will announce the dates of Philanthropy Camp. In the meantime, if you have questions, feel free to call Mary Gregory (415 561-6540 x 204).
Pacific Foundation Services, LLC | 415-561-6540 | www.pfs-llc.net