Re-construct philanthropy for greater impact

headshot of claudiaPaul Shoemaker, executive connector at Social Venture Partners (SVP) in Seattle, recently published an essay exhorting funders to “fundamentally change the underlying practices we use to construct our philanthropy.” He has five philanthropic practices that – when used together – can help funders “make quantum leaps in achieving greater impact” in their communities. These practices are:

  1. Provide 100% unrestricted grants
  2. Fund long-term, at least over 10 years
  3. Connect to peers as the rule, not the exception
  4. Build strong boards
  5. Listen to customers much more closely
Paul Shoemaker, executive connector at Social Venture Partners Seattle

Paul Shoemaker, executive connector at Social Venture Partners Seattle

Paul has worked for more than 17 years as a funder and at SVP, so his insights are gleaned from on-the-ground experience as well as thoughtful analysis of results from those years. He is the founding president of Social Venture Partners International, has served on numerous nonprofit boards since leaving Microsoft in 1998 for SVP Seattle. I interviewed Paul to find out more about his essay and the practices. Read the full essay.

Q: What prompted you to write the essay?

A: Having spent 17 years in the sector and SVP’s work and the way that we do it with nonprofits, I was able to see the ramifications of funding first-hand, so that accumulation of experiences led me to write the essay. And, I think the other part of that is I feel so strongly about the practices, particularly the first thing I mentioned in regards to funding, my call for unrestricted grants. So, it’s a combination of both long-time experience and perspectives on funding and I decided to shove it all together into one document.

Q: How long did it take you to write this essay?

A: I should say probably 3 – 4 months. I got input from lots of people. No one agrees with everything but everybody agrees with some part of it. I got people to send input of what I wrote and then I thought about their reactions. I was certainly trying to write a personal point of view and have a voice, and be willing to put an opinion out there but I also wanted it to be well- rounded and have some other ideas in it.

image of essayQ: You said that funding was sort of the flashpoint for you, but how did you come to identify these five critical practices?

A: Like I said, the first practice was sort of always the flag I waved while the rest were from accumulated experiences and from talking to all those other folks. I had a lot longer list, but you can’t just throw the kitchen sink at it. I had hunch about a lot of things and used the conversations that I had with people who were helping me to prioritize and focus on what really mattered the most. So I sort of had a menu, and those folks helped me pick the things that mattered the most from the menu.

Q: Providing unrestricted funding is not the same thing as building capacity, which you didn’t include; why not?

A: Capacity building has been a part of our DNA for a long time. I guess what I would say is, I feel like capacity building is not really in the same category as these five things. The thing about building strong boards is sort of like the pear and the rest are the oranges. Capacity is like a different level of concept. And honestly, if you did those five things, that would go a long, long way to building a strong organization. So, capacity building is sort of inherent within those five things.

I tried to be clear that I didn’t mean that “unrestricted” (funding) meant “unaccountable.” I didn’t mean you throw money over the wall and burn it. They have to be accountable. There are some things nonprofits need to get better at if they want that kind of funding. But, that being said, I was trying to write a letter early on to funders, so for the purpose of this one essay, I wasn’t really writing for nonprofits. If they get it, great! But I was really writing for funders. I wasn’t trying to suggest practices for nonprofits. That would be a different paper—someday.


Let’s talk, philanthropy.

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Claudia Y.W. Herrold

June 30, 2015 at 1:46 pm Leave a comment

Charitable giving reaches pre-recession peak

headshot of suzanne allenThe headline from the Indiana University Lilly Family School of Philanthropy newsletter, “Giving USA: Americans Donated an Estimated $358.38 Billion to Charity in 2014; Highest Total in Report’s 60-year History,” is great news for our sector. Similar headlines in the Huffington Post, the New York Times and CNN reinforce the fact that Americans are very generous.

A report released this week by the Giving USA Foundation reports that Americans gave $358.38 billion to charity in 2014. That total just exceeds the last peak in 2007, when Americans donated $355.17 billion to nonprofits and is an all-time high since the Giving USA Foundation began its research 60 years ago.

giving usa coverHere’s a breakdown of the 2014 charitable giving from the report:

  • Individual giving, $258.51 billion, increased 5.7 percent over 2013 and represented 72 percent of the total giving;
  • Foundation giving, $53.97 billion, was 8.2 percent higher than 2013 and represents 15 percent of total giving;
  • Corporations contributed 5 percent of the total, giving $17.77 billion, an increase of 13.7 percent; and
  • Bequests, which represent 8 percent of all gifts, increased 15.5 percent.

The question many of us ask is why? Why did the growth happen?

Laura MacDonald, chair of the Giving USA editorial review board and founder of Columbus-based nonprofit consulting firm Benefactor Group, identified some of the factors behind this growth, including the rise of tech donors and “mega-gifts” that accounted for one-third of the growth in individual giving. And, while corporate donations continue to languish at less than 1 percent of pretax profit, individual giving rose to 2.1 percent of GDP, a height not seen since prior to the 2008 recession.

Benefactor Group Giving USA infograhic

Giving USA 2105: The Annual Report on Philanthropy. Researched and written by Indiana University Lilly Family School of Philanthropy. Sponsored by Giving USA Foundation, a public service initiative of The Giving Institute.

She observed, “Almost every sector benefitted from the growth in giving, from religion to arts, from education to human service. While American donors’ interests may be diverse, it appears that our generosity is a shared value.”

But there might be another reason. Perhaps not only are donors able to be more generous, I think the charities are working harder and smarter, making sure their cases for support are sound and relevant. Grantmakers and nonprofits are finding a way to have meaningful conversations and are using new communication and evaluation tools.

give stampLucy Bernholz, one of my favorite writers in the philanthropy field, catches “Buzz Words” in action. A few she predicted in 2013 have certainly had an effect on how and why Americans give and may offer more insight into our “why” question. Could it be that we are using these Buzz Words concepts to make our field stronger?

Here’s the list – you decide:

  • Social Impact Bond
  • Collective Impact
  • Storytelling
  • Charitable Tax Reform
  • Infographics
  • Evidence-based
  • Shapeshifting
  • Disruption
  • Amplify
  • #

I’d love to know what you think! And watch for our own report on the state of charitable giving in Ohio, due out this fall.

suzanne signed in blue ink

Suzanne T. Allen, Ph.D.

June 22, 2015 at 3:36 pm Leave a comment

Who will you nominate?

headshot of claudiaWe’re accepting nominations for our annual awards recognizing phenomenal Ohio philanthropists, including a new one created this year to recognize a board member who passed away in March.

mike shinn headshot

Mr. Michael G. Shinn

We are very excited about this new award, The Michael G. Shinn Award for Diversity, Equity and Inclusion in Philanthropy, which honors Mr. Shinn’s dedication to this important work in modern-day America. The award will recognize an individual who has demonstrated a significant commitment to diversity, equity and inclusion in his/her philanthropic practice in Ohio.

Mr. Shinn was the founder of the Shinn Family Foundation and served as secretary of Philanthropy Ohio’s Board of Trustees until his death in March 2015. He chaired our Diversity, Equity and Inclusion Committee, taking on primary responsibility for guiding Philanthropy Ohio’s efforts in that arena. The Philanthropy Ohio Board of Trustees created the award to honor his memory and will present it for the first time this year.

Denise San Antonio Zeman won the Ohio Philanthropy Award in 2014. She is the retired president/CEO of Saint  Luke's Foundation.

Denise San Antonio Zeman won the Ohio Philanthropy Award in 2014. She is the retired president/CEO of Saint Luke’s Foundation.

We are also accepting nominations for three other awards. First is the Ohio Philanthropy Award, which honors an organization or individual who has made outstanding contributions to philanthropy by demonstrating long-standing leadership in advancing philanthropy, creativity in responding to societal problems or a significant positive impact on philanthropy.

Shiloh Turner won the Innovation Award in 2014. She is The Greater Cincinnati Foundation vice president of community investment.

Shiloh Turner won the Innovation Award in 2014. She is The Greater Cincinnati Foundation vice president of community investment.

The Philanthropy Innovation Award recognizes someone who has moved Ohio philanthropy forward through an innovation or implemented an idea that led to positive change in how the philanthropic sector operates, thinks or impacts communities. The Emerging Philanthropist Award celebrates someone who – regardless of age – has engaged in philanthropy for the first time during the last few years, either in a career path or as a private individual, and shows amazing potential.

Andrea Timan won the Emerging Philanthropist  Award in 2014. She serves on United Way of Greater Cleveland’s Young Leaders Cabinet.

Andrea Timan won the Emerging Philanthropist
Award in 2014. She serves on United Way of Greater Cleveland’s Young Leaders Cabinet.

Nominations close August 3 so that the Board of Trustees can make selections in time for the award ceremonies scheduled for September 16 – 18 in Cincinnati during our Philanthropy Forward ’15 conference.

Check out the criteria and submission rules and decide who you’ll nominate.

Call us at 614.224.1344 if you have questions and stay tuned for announcements about the winners!

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Claudia Y.W. Herrold

June 2, 2015 at 4:28 pm Leave a comment

What does Kathy stand for?

headshot of claudiaAnswering that question was the theme of Kathy Merchant’s retirement toast last week, held in the beautiful Cincinnati Music Hall and attended by hundreds of friends, colleagues and even the mayor. He proclaimed it Kathryn Merchant Day and presented her with a key to the city.

Click here to see all the photos.

greater cincinnati foundation logo It was a terrific tribute to Kathy’s 18 years leading the Greater Cincinnati Foundation; under her leadership, the foundation grew not only the assets, staff and giving of the foundation but became a recognized convener and partner in search of a better, stronger, healthier community. As person after person got up to share reflections on their interpretation of what Kathy stands for, I began to think of my own answer to that question.

Kathy Merchant retirement

The Greater Cincinnati Foundation hosted a retirement event for CEO Kathy Merchant on May 13, 2015.

Kathy was one of the first people I met when I started work at Philanthropy Ohio back in 1998. Coming from jobs in textbook writing and human services coordination, I didn’t know much about foundations and what they did, other than a general idea that they award grants. Over the years, I was able to watch and learn from Kathy as she became a widely-recognized innovator in the community foundation field, both in Ohio and across the country, and as she took on tough issues in southwest Ohio. And, yes, along the way I also learned a little bit about wine – a recurring theme from the reflections shared during last week’s toast.

kathy merchant retirement party

Mary Beth Martin, Claudia Y.W. Herrold and Susan Ingmire pose at Kathy’s retirement party.

In 2006, we presented Kathy with our Ohio Philanthropy Award, which we give each year to someone recognizing their “outstanding contributions to organized philanthropy in our state.” When I re-read the many letters submitted to support and celebrate her nomination for the award, I got my answer to the question of what she stands for: she stands for philanthropy. Her commitment to the field of philanthropy has taken many forms, from participating in the CEO Leadership Circle to encouraging diversity, equity and inclusion in philanthropy, leading an effort to create the Endow Ohio tax credit and sharing her expertise and knowledge with other community foundation leaders in formal and informal ways.

Thanks, Kathy, for all you’ve done to make the philanthropic landscape in Ohio a more effective, strong and visible force for good.

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Claudia Y.W. Herrold

May 18, 2015 at 12:21 pm Leave a comment

Nepal earthquake sparks Ohio philanthropy

headshot of claudiaWith the death toll at 5,000 and climbing, the April 24 earthquake has impacted more than 6.5 million people in one of the world’s poorest countries. The stories and images of the devastation continue to spread, as do the crumbling, injuries and death caused by strong aftershocks. It didn’t take long for the world – and Ohio philanthropy – to respond to the disaster. I queried our members this week and found immediate plans to help that include these examples:

The Columbus Foundation’s website funnels donations to humanitarian relief organizations;

KeyBank will match employee donations to the American Red Cross Nepal Disaster Relief fund, providing a dollar to dollar match;

Photo: Niranjan Shrestha/AP

Photo: Niranjan Shrestha/AP

The Dayton Foundation emailed donors about how they can help, listing a number of possible charities to support; and

Eaton provided $100,000 to the American Red Cross International Disaster Response Fund for relief in Nepal and is matching employee gifts around the globe for donations to a Red Cross Society or Salvation Army disaster relief fund.

map of where Nepal earthquake occured

There are many resources for Ohioans who want to help Nepal and assure their donations are effective. The Center for Disaster Relief Philanthropy provides this advice:

  1. Watch. The disaster occurred on April 24. Before considering a funding option, wait two weeks. Maybe even four. Use that time for the magnitude of the disaster to truly unfold. It won’t be long before a fuller picture emerges of lives lost, infrastructure damaged, individuals affected and unmet immediate response needs.
  2. Learn. Take that time to understand how the needs associated with this disaster are unfolding by reading media accounts of the disaster, responding agency reports, UN and USAID updates about the devastation, and the CDP website.
  3. Act. After two weeks, the media’s attention will sadly have turned away from one of the poorest nations in Asia.
    Simultaneously, the local and international nongovernmental organization (NGO) community efforts will be in full swing to support the needs of affected Nepalese. Now is the time for a funder to wisely choose to support medium- and long-term recovery efforts. Either by working with CDP or closely with an NGO, look to support activities that will rebuild Kathmandu and put its residents back in their homes, jobs, schools and communities.

        People search for family members trapped inside collapsed houses. Navesh Chitrakar / Reuters

    People search for family members trapped inside collapsed houses. Navesh Chitrakar / Reuters

Making sure your dollars go to legitimate organizations is a particular concern to Ohio’s Attorney General, who issued a reminder about avoiding charity scams.

Let us know how you are helping with the relief and recovery,

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Claudia Y.W. Herrold

April 29, 2015 at 12:10 pm Leave a comment

Philanthropy Ohio testifies

headshot of claudiaLast Friday, Philanthropy Ohio President & CEO Suzanne T. Allen, Ph.D., testified in support of HB 128, a bill that would create a tax credit for Ohio taxpayers who donate to endowments at eligible community foundations. The bill was introduced by Representatives Barbara Sears and Ron Amstutz, along with nine of their House colleagues. Both Reps. Sears and Amstutz supported the bill last year, when it passed the Ohio House with broad bi-partisan support evidenced by its 84 – 9 vote.

You can watch the recorded hearing online: it begins with five witnesses from Hudson schools, including two sixth-grade girls. We were glad Suzanne didn’t have to speak directly after these young citizens: they were incredible witnesses who with great knowledge and poise explained why the House should not make any cuts to their district’s funding and went on to answer questions from committee members. By the end of their testimony, members from both sides were recruiting them to run in 2030 House elections.

members pose before finance committee hearing

Philanthropy Ohio members joined President & CEO Suzanne T. Allen who testified at the HB 128 hearing Friday, April 17.

Several Philanthropy Ohio members attended the hearing, leaving their homes early in the morning to arrive in time for the hearing’s 9 a.m. start and we appreciate their support: Brian Frederick (The Community Foundation of Lorain County); Keith Burwell (The Toledo Community Foundation); Marlene Cassini (The Delaware County Foundation); Michele Carey (The Greater Cincinnati Foundation); Erin Clemons (The Community Foundation of West Chester/Liberty) and Megan Wancyzk (The Foundation for Appalachian Ohio).

Ohio has a strong network of community foundations, starting with the world’s first one established in Cleveland over 100 years ago. These foundations support local nonprofits that address a wide array of critical needs; in 2012, they gave more than $340 million to fund initiatives in areas including education, health, human services, the arts and community development.

front steps of ohio statehouseCommunity foundations across the state are able to make these significant investments because of generous Ohioans who create endowments at community foundations.

An endowment is a fund that invests donated dollars and uses only the interest generated from that investment to make grants. Because it uses only the interest and doesn’t touch the principal, these funds are sustainable sources of revenue in perpetuity. Endowment funds can be created to fund a specific nonprofit organization, a particular cause that is dear to the donor’s heart or any number of programmatic areas.

HB 128 would help grow these permanent funds through these provisions:

  • donors who give $1,000 or less would receive a 50% credit on personal income tax, while those giving more than $1,000 would receive a 20% credit;
  • the credit is non-refundable, so individuals wouldn’t get money credited beyond his/her tax liability in a given year;
  • the credit is capped at $10,000 for an individual filer and $20,000 for joint filers;
  • only community foundations in compliance with National Standards for U.S. Community Foundations (a rigorous accreditation process) are eligible for the credit; and
  • the total pool of state dollars allocated for the credit is $20 million per year.

This last point is where the true power of the concept lies: if donors in Ohio use the entire $20 million available, that could provide $100 million in permanent funds – a 5-to-1 return. And, that $100 million would annually spin off $5 million in grants to nonprofits. With research that shows an $8 economic impact for each $1 of grant money, that means that Ohio communities could receive $40 million in benefits each year.

You can read more about the tax credit’s details as well as Suzanne’s testimony online and stay tuned for updates on the progress of the bill through the House.

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Claudia Y.W. Herrold

April 20, 2015 at 11:50 am Leave a comment

5 practices to change philanthropy from the outside-in

headshot of claudiaPaul Shoemaker, executive connector at Social Venture Partners (SVP) Seattle, shared insights gleaned from 17 years of working in philanthropy in a recent essay titled Re-Constructing Philanthropy from the Outside-In.

In line with SVP’s “philanthropic architecture,” Paul approaches his re-construction argument from the broad context of using human, social and financial capital to help nonprofits build capacity and achieve significant change.

empire state buildingThe basic re-construction that philanthropy needs is akin to the fundamental changes contractors made when building the Empire State Building, one of the seven modern wonders of the world.

For about 40 years, it was the world’s tallest building, and, standing 102 floors above Manhattan streets, the first to have more than 100 floors. Completed in 1931 (adapting the design that had been used to build the Carew Tower in Cincinnati), the building was an incredible breakthrough in many ways, including in the practices invented to construct sections of it offsite and then place them on Fifth Avenue.

block quote A similar breakthrough is needed in philanthropy and comes, Paul suggests, through implementing a set of five practices. These practices, he admits, are both familiar and already used by some funders. Alone, they are incrementally helpful: it’s putting them all into practice together that will bring about change from the outside-in.

The five practices are:

  1. Give unrestricted grants: calling funds that are limited as to purpose or time Quite Damaging Dollars (QDDs), Paul says that funders should instead provide 100 percent unrestricted funding to grantees.
  2. Fund long-term: and he doesn’t mean fund for two or three years; the timeframe for investment should be at least 10 years.
  3. Connect with peers: instead of acting collectively as the exceptional practice, make it the norm; philanthropy needs sustained relationships among funders to be a core practice.
  4. Build great boards: foundation boards, he says, must “impose excellence” upon themselves, acting more as stewards and less as overseers.staff meeting with papers and coffee mugs
  5. Listen to beneficiaries: funders can’t “fix communities” without having the recipients of services be participants, so they need to re-frame how they engage in communities to co-create programs and services.

What do you think? How do these ideas resonate with you? Use the comment box to continue the discussion.


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Claudia Y. W. Herrold

April 13, 2015 at 3:47 pm 1 comment

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