Whether it’s Winter Storm Jonas that just finished dumping feet of snow across the east coast, an earthquake in Alaska or flooding in the Midwest, philanthropy is fast on the scene to help with relief and recovery.
At the start of the new year, Philanthropy Ohio welcomed four new philanthropy leaders to the Board of Trustees, but not one of them is new to philanthropy, as you’ll see in their brief bios below.
Recently, Philanthropy Ohio’s President & CEO Suzanne T. Allen, Ph.D., wrote a guest blog that was featured on The City Club of Cleveland’s website about the Chan Zuckerberg Initiative. Please see below for a re-post of that blog.
The Chan Zuckerberg Initiative introduced by Facebook CEO Mark Zuckerberg and his wife, Dr. Priscilla Chan, has the philanthropic and business communities talking. But they aren’t talking about the fact that two people are giving 99 percent of their Facebook shares worth $45 million to support efforts over the coming decades to advance human potential and promote equality. No, the conversation is because of the three letters that appear after the Chan Zuckerberg Initiative’s name: L.L.C.
“What could they be thinking?” asked some leaders in the philanthropy world, because traditionally the wealthy have set up nonprofits, donor-advised funds or foundations to make their charitable donations. The use of an L.L.C. is a radical, new idea for high-net-worth donors seeking flexibility, autonomy and privacy in their investments. It’s structured partly like a corporation and somewhat like a business partnership and it gives the owners more control over their assets and grants (expenditures) than a private foundation would.
They can have much more flexibility when investing in for-profit social enterprises and supporting political causes. They won’t have the private foundation’s 5 percent payout requirement and they won’t have to disclose their tax documents publicly. They also will not have to disclose any contracts they might have with for-profit businesses or nonprofits.
While Chan and Zuckerberg won’t receive an immediate charitable tax deduction for any shares they give to the initiative now, as they would with a foundation or public charity, they will see the deduction when the initiative makes grants to nonprofits.
After the initial announcement, Zuckerberg wrote a follow-up post on Facebook. “By using an LLC instead of a traditional foundation, we receive no tax benefit from transferring our shares to the Chan Zuckerberg Initiative, but we gain flexibility to execute our mission more effectively,” Zuckerberg wrote. “In fact, if we transferred our shares to a traditional foundation, then we would have received an immediate tax benefit, but by using an LLC we do not.”
In a New York Times article, GuideStar CEO Jacob Harold said, “It’s buying optionality, so that down the road they could still decide to direct money to nonprofits or they could choose to invest in really cool solar energy companies that are doing a lot of good… and it will enable the creative and flexible use of capital over time.”
It makes me wonder what people in Cleveland were talking about 100 years ago when a man named Frederick Goff said that his vision was to pool the charitable resources of Cleveland’s philanthropists, living and dead, into a single, great, and permanent endowment for the betterment of the city. According to the Cleveland Foundation’s history, “Community leaders would then forever distribute the interest that the trust’s resources would accrue to fund such charitable purposes as will best make for the mental, moral, and physical improvement of the inhabitants of Cleveland.” This had to be just as radical as the Chan Zuckerberg Initiative is today. And look where Goff’s vision is today…
Suzanne T. Allen
December was a celebrated month for charitable giving. In the last week in session before the December break, Congress made the IRA Charitable Rollover a permanent incentive for charitable giving in the federal tax code. On behalf of our members, we are very thankful for the U.S. Congress’ action that will impact community foundations, nonprofits and donors for years to come.
“We are so excited at this major accomplishment for the nonprofit sector,” said Dr. Suzanne T. Allen, president and CEO of Philanthropy Ohio. “And, we are equally pleased that Ohio’s congressional delegation voted overwhelmingly for its passage.”
The House passed the PATH Act 318 – 109; all of Ohio’s representatives except Rep. Marcia Fudge (voting no) and Rep. David Joyce (not voting as he was attending his daughter’s graduation) supported the bill. In the Senate, the vote was similarly positive, 65 – 33, with Senator Brown voting yes and Senator Portman voting no.
The IRA Charitable Rollover, which allows tax-free donations to qualified charities from IRA accounts, has been an important source of donations for Ohio’s community foundations, which have used the funds to support critical local needs.
Making this provision permanent is something we at Philanthropy Ohio have been working on since its creation as a two-year provision in the Pension Protection Act of 2006. Having to reauthorize it every year or two has created great uncertainty for donors and nonprofits. Making it permanent strengthens its role in encouraging charitable giving here in Ohio and across the country.
Special thanks to all, including our members, who urged their representatives to vote yes on the legislation!
Our annual Ohio Gives report is now out, highlighting a slight reduction in overall Ohio giving. In 2013, the most recent year IRS data is available, Ohio giving fell 5 percent. Individual giving, which was down 8 percent, helped fuel the overall decline, while foundation giving was up 5 percent.
Individual giving makes up 75 percent of Ohio giving, with foundations making up 18 percent, United Ways making up 2 percent and other giving at 5 percent.
Individuals gave less to their favorite charities in 2013, due to decreases in both the number and dollar amount of bequests as well as a decrease in charitable contributions listed on federal tax returns. Over the past six years, 2012 was the peak of individual giving.
Of the 22 percent of taxpayers who claimed deductions for charitable gifts on their federal tax returns, middle income earners – individuals/joint tax filers earning $50,000 to $200,000 – make up 68 percent of individual giving. Religion is still the top category individuals give to, with those gifts making up 32 percent.
Foundations make up 18 percent of Ohio giving, and strong asset growth pushed foundation giving up 5 percent, just below the 2008 peak of giving. Foundation assets grew 11 percent, despite the number of private and corporate foundations decreasing.
COMMUNITY FOUNDATION GIVING
Community foundations in the three Cs top the list of foundation giving for 2014 with The Columbus Foundation giving $142.9 million, followed by the Cleveland Foundation at $98.2 million and the Greater Cincinnati Foundation giving $72.2 million.
Though community foundations make up only 2 percent of all Ohio foundations, their giving makes up 27 percent of all foundation giving.
PRIVATE FOUNDATION GIVING
Nine out of 10 foundations in Ohio are private foundations and have been the fastest growing segment of the philanthropic landscape. Most of these foundations are small foundations managed by family boards.
Ohio’s 3,638 private foundations held 65 percent of the state’s charitable assets and awarded 59 percent of all grant dollars in 2013. Private foundation assets grew by $1.5 billion, or 11 percent, and giving was up a modest 4 percent.
Ohio’s private foundations have recovered from the 2008 Great Recession, with asset and grant totals surpassing the previous high marks of 2007 when assets were $12 billion and grants were $762 million.
CORPORATE FOUNDATION GIVING
While the number of corporate foundations in the state has decreased by 19 percent since 2008, both the assets and grants of corporate foundations grew in 2013.
Corporate foundations comprised only 3 percent of the state’s foundations, yet provided 13 percent of the state’s grant dollars.
Though assets are now at pre-recession rates, giving has yet to reach the 2008 peak of $212 million.
The key component of corporate philanthropy not captured from these numbers is in-kind product contributions, volunteer engagement or similar charitable contributions.
UNITED WAY GIVING
Ohio’s 75 United Ways are a diverse group of funders spread across the state. Together, they provided $181 million to nonprofit organizations in their communities and are a vital part of the state’s philanthropic network.
Ohio Gives portrays philanthropy’s value and impact, drawing on 2013 and 2014 data from a variety of sources. Our analysis presents data from the most recent available year, which is 2013 for IRS data. Other sources used for the report include Foundation Center, Foundation Directory Online, Guidestar and Giving USA as well as our own research.
We offer custom research to Philanthropy Ohio members, among other resources. Please contact us if you’re looking for a specific piece of information or data. Learn more about Ohio Gives at www.philanthropyohio.org/ohiogives.
Dave’s appointment is not the big news here. The important news is that the nation’s largest philanthropic network has chosen a leader who will guide the Forum and its members into a more collaborative, connected and smart next phase.
Have you ever used an expression or an idiom and been asked to explain it? You know, expressions like: “push the envelope,” “stay ahead of the pack,” “corner a market,” “raises the bar” or “the elephant in the room?”
To a person whose first language isn’t English, these can be truly baffling, but so is the Spanish expression, “ser pan comido,” which means “to be bread eaten” or what I would translate idiomatically to be “a piece of cake.”
In English, I might say, “as good as gold” but the Italians would say “buono come il pane,” which means “as good as bread.”
How, you ask, did I get on this path of idioms? It started with a 12-year-old, a Blu-Ray remote and a joke. Yes, the 12-year-old was showing me how the Blu-Ray was supposed to work and he told me a joke, which was, “You know even if you ‘push the envelope,’ you are still ‘stationery.’” Take a minute…
Idioms are interesting in every language, but the one that’s always been the hardest for me to grasp (and explain) is this one: “think outside the box.” And I hear it a lot, at least once a day. And frankly, idiomatically speaking, it’s “rubbing me the wrong way.”
Wikipedia says it means to “Think creatively, unimpeded by orthodox or conventional constraints.” But at the “end of the day,” one must get back into the proverbial box to try and act on the thinking that was done in an unorthodox or unconventional way.
So where did this idiom really come from and why is it such a hackneyed phrase?
Somewhere back in the late 1960s and early 1970s, folks in the U.S. aviation industry used the term “outside the box” in this context: “We must step back and see if the solutions to our problems lie outside the box.” (Aviation Week & Space Technology, July 1975)
The box seemed to signify rigidity, constraints and linear thinking. Yet an even earlier example from the 1940s in an Iowan newspaper uses the phrase, “pushing out in the blue.” Perhaps this is where another idiom, “blue sky thinking,” arose.
I digress. Back to the story. English psychologist and inventor Edward DeBono is generally given credit for coining the phrase “outside the box thinking” in 1967. He sometimes used the term “lateral thinking” and “outside the box thinking” interchangeably, yet he encouraged people to look for solutions from outside their usual thinking patterns and he used a 1914 puzzle as his metaphor. Does this look familiar?
“Draw a continuous line through the center of all the eggs so as to mark them off in the fewest number of strokes.”
This puzzle has become the hallmark of “outside the box” thinking and was popularized in the 1970s and 1980s by a management consultant named Mike Vance, who helped create the corporate culture of the Walt Disney Company, where the puzzle and the “outside the box” thinking were de rigeur.
During the same time, another psychologist named J. P. Guilford was one of the first academic researchers to conduct a study of creativity. He, too, used the nine-dot puzzle and he challenged his subjects to connect all nine dots with four straight lines without lifting their pencils from the page.
From the business and the academic worlds, I wonder how many times, and in how many workshops, have you been asked the same question that Sam Loyd asked in 1914?
But before we throw the idiom and the theory behind it away, let’s not forget Charles H. Duell, who was the director of the United States Patent and Trademark Office, who in 1899 said, “Everything that can be invented has been invented.”
Was he wrong? Should he have thought “outside his box?”
However you want to view this box, it really is a perspective, a set of limits that may or may not be self-imposed. But it is a box about context and opinions and creativity. And that’s something we all must attend to, no matter what our business or purpose is.
But lucky for us, we get to choose our boxes, we can change our boxes and we can look at boxes from other perspectives and ask others to look at ours. We can ask people from another department or company or from Spain or Italy to jump in our box and see what they think or say.
But I do wish we could find another idiom to use, I’m so tired of “out of the box thinking” – to which the Italians might say—idiomatically—“In bocca al lupo!” translated as “into the mouth of the wolf!” and meaning “Good Luck!”
Suzanne T. Allen, Ph.D.