Category Archives: Philanthropy General

Should foundations be “all in” on their charitable missions? – The Denver Post

Should foundations be “all in” on their charitable missions?

What would our world be like if charitable law required foundations to invest all of their assets in ways consistent with their charitable missions? This important question was recently posed by Mark Finser, chairman of RSF Social Finance.

Most likely, our world would be a much better place.

Charitable foundations exist for one overarching purpose: to benefit the public. To encourage this result, they are highly tax-advantaged. Donations are usually tax-deductible, and assets grow tax-free. In spite of this tax advantage, most foundations are required to grant only 5 percent of their assets for a “public benefit.” What about the other 95 percent?

Harnessing financial power for social good

The Foundation Center reports that in 2010, the combined assets of U.S. family, corporate and community foundations approached $650 billion. Today, that number is presumably even larger. There is significant power in these assets.

Typically, they are invested in traditional portfolios with the goal of generating the best financial return to help the assets grow. Often, however, those portfolios are not aligned with the mission of the foundation. In fact, they are sometimes in direct opposition.

Thus, a foundation with the mission of preserving the environment might be investing in companies that harm the environment. A foundation supporting organic foods and local sustainable agriculture might be investing in agribusiness and fast food. And so on.

Investing your money where your mission is

For decades, many foundations have been engaged in socially responsible investing, where negative screens prevent certain types of investments. For example, SRI could prevent inadvertent investments in tobacco, environmental polluters or weapons by foundations with missions to the contrary.

Recently, many foundations have taken this approach a step further, exploring proactive program-related investments and mission-related investments. PRIs and MRIs employ positive investment tools to intentionally advance their missions.

PRIs are below-market-rate investments that are made with a targeted program objective and can count against the 5 percent grant-payout requirement. They fall into the grant-making category because their primary objective is to accomplish program goals.

MRIs, by comparison, are market-rate investments that support the mission of the foundation by generating a positive social or environmental impact. Although they do not count against the 5 percent grant-payout objective, MRIs produce financial and social returns. These definitions come from Mission Investors Exchange, an excellent resource on mission investing.

via Should foundations be “all in” on their charitable missions? – The Denver Post.

The Benefits of Involving Your Children in Philanthropy and Volunteering

Many problems parents struggle with can be improved, if not solved, by involving them in charitable and volunteer activities, according to Richard Morris and Jayne Pearl, co-authors of Kids, Wealth, and Consequences: Ensuring a Responsible Financial Future for the Next Generation (Bloomberg, a Wiley imprint, 2010).

aMany parents worry that their children are spoiled and entitled; others worry their children feel guilty about living a comfortable lifestyle when so many other people are suffering,a say Morris and Pearl. aSome families have a hard time giving as much to charitable causes than they have in the past. Another common problem is that lots of parents feel they donat know enough to teach their kids all they need to know about money, or they are uncomfortable talking about it at all.a

The authors point out that each of these concerns can be addressed by involving children in giving decisions and helping out at community and other charitable causes. For instance, they explain, aParents can inspire their kids to become philanthropic by inviting them to participate in identifying and researching causes the family can support

via The Benefits of Involving Your Children in Philanthropy and Volunteering.

How Foundations Can Prevent Populist Backlash – Give and Take – The Chronicle of Philanthropy- Connecting the nonprofit world with news, jobs, and ideas

How Foundations Can Prevent Populist Backlash

By Ian Wilhelm

Can foundations prevent the growing populist sentiment in America from turning on them?

Several philanthropy experts have predicted that Tea Party activists and others who are staunchly antigovernment—and in some sense antiinstitution—will eventually take aim at big grant makers that are perceived as elitist.

William A. Schambra, director of the Bradley Center for Philanthropy and Civic Renewal, and Joel Orosz, a professor of philanthropy at Grand Valley State University, have said the current political environment reminds them of the 1950s and 1960s when lawmakers grew suspicious of foundations and imposed new regulations on them.

“Whenever the populist gale is blowing in America, sooner or later it blows ill for the world of philanthropy,” Mr. Schambra wrote in a Chronicle of Philanthropy opinion article.

Now in a Huffington Post article, Jane Wales, a vice president at the Aspen Institute, a think tank in Washington, says foundations need to heed these concerns and take steps to soften the possible backlash.

She says grant makers should do more to tell the public about what they are doing to benefit the country.

“No institution is being given a pass, particularly one that is seen as opaque while claiming to advance the public good,” she writes. “‘Trust us’ has never been an adequate response to doubters.”

She notes that other philanthropy leaders have urged foundations to show how they are responding to the downturn in the economy.�

via How Foundations Can Prevent Populist Backlash – Give and Take – The Chronicle of Philanthropy- Connecting the nonprofit world with news, jobs, and ideas.

via How Foundations Can Prevent Populist Backlash – Give and Take – The Chronicle of Philanthropy- Connecting the nonprofit world with news, jobs, and ideas.