The Foundation Center has just released the second edition of its annual compendium highlighting the news, issues, people, organizations, and giving trends shaping the field of philanthropy.
The publication provides a full overview of the year in philanthropy, with articles summarizing major events, interviews and profiles of key individuals, reviews of new books and other media, and statistics outlining the current state of philanthropy. Contents are drawn in part from Philanthropy News Digest, the Center's daily online news service, as well as from the annual Foundations Today Series and other Foundation Center resources. To see more specific information on what's covered in this year's edition, download the table of contents (PDF).
Philanthropy Annual: 2008 Review is available for free download (PDF) at the Foundation Center web site, and print copies can be purchased through the Center's online Marketplace ($19.95).
A recent article (3/21/09) in the New York Times points to shifts in foundation giving in Detroit in the midst of a shrinking and increasingly fractured economy. Here are a few quotes, providing some good food for thought. Thanks NYT.
Faced with sharply declining resources and exploding need, [foundations] are being forced to pick winners and losers, engaging in what Larry M. Gant, a professor of social work at the University of Michigan calls triage." Insolvent organizations need to be dissolved, weak ones need to be merged and acquired, and only the strongest should receive the stimulus they need to become more financially sound," Dr. Gant said. "It’s simple in theory but hard in practice.”
The disappearance of donations from car makers, their suppliers and dealers have dealt a particularly hard hit to Detroit’s arts organizations, which Douglas Bitonti Stewart, the executive director of the Max M. and Marjorie S. Fisher Foundation, called "the venerable and the vulnerable." The opera canceled one show, and question marks hang over performances and exhibits at other organizations. "People won’t come back to Detroit without these organizations, so we have to support them," Mr. Stewart added. "But they also have to make some hard choices to make our support worthwhile."
Recently, more than a dozen local foundations gathered to discuss whether to pool their money into an emergency fund for struggling charities and to share ideas about how to use resources limited by the stock market’s plunge. A year ago, 10 of them pledged a total of $100 million over eight years to help restructure Detroit’s economy to attract skilled workers and fill its empty houses and storefronts. Detroit’s foundations are also prodding the nonprofit groups they support to share resources. “Strategic pooling of resources by foundations and nonprofits is what is going to get us through this crisis,” said Edsel B. Ford II, a Skillman board member. “Living in silos is a thing of the past.”
YouthVille Detroit, a youth development organization, recently struck an agreement with the Detroit Science Center to create a science program, “Think Squad,” for local public television. "The collaboration doesn’t benefit us financially,” said Judith D. Jackson, the chief executive of YouthVille. “But it does benefit our kids, and it brought us a lot of publicity, too.”
The Detroit Hispanic Development Corporation has joined with Southwest Detroit Weed and Seed, a crime prevention program that involves the Detroit Police Department and local businesses and residents. By participating in the program, the Hispanic development organization got federal money to train police officers and school staff members in gang awareness and to run gang-prevention sessions in middle schools. Angela G. Reyes, the group’s founder and executive director, said her organization would not have received any money for those efforts without the collaboration.
How is the "collaboration imperative" affecting your organization? If you have experience or expertise in this area, we want to hear from you. Leave a comment or contact us. We want to share your story.
Foundation president Susanna H. Krey says,"The impact on our endowment is a deferred problem, a problem waiting to happen. Our 2009 budget is just as strong as our 2008 budget. We are staying the course for 2009, but putting a plan in place the changing environment around us." Listen and learn more about how the Sisters of Charity Foundation of Cleveland is responding to the economic downturn.
A slew of surveys and studies have been conducted recently by a number of different organizations and agencies throughout the U.S. I offer selected information from a few of them to provide some insight into how nonprofits are doing.
Reversing the nonprofit plunge is a matter of jobs, not just charity. With 9.4 million employees and 4.7 million full-time volunteers nationwide, nonprofits constitute 11 percent of the American workforce -- greater than the auto and financial industries combined. If the nonprofit sector were a country, it would have the seventh largest economy in the world. We cannot afford for it to go the way of Iceland, whose financial system collapsed.
Mergers and acquisitions (M&A) are much more common in the nonprofit world than most would think, as our study of 3,300 deals across four states over 11 years shows. But nonprofit mergers often come about through default—due to financial distress or leadership vacuums. At the same time, relatively few nonprofits are using M&A strategically, as a way to strengthen organizations' effectiveness, spread best practices, expand reach, and to do all of this more cost-effectively. Yet the potential for M&A to create real value in the nonprofit sector exists, particularly if more philanthropists take on the mantle of matchmaker and help nonprofits explore and evaluate M&A opportunities. This article discusses research conducted by the Bridgespan Group on nonprofit M&A; explores the Child and Family Services (CFS) field, where "market" conditions are especially favorable to combinations; and profiles two nonprofits making the most of acquisitions. It also issues a call to action to philanthropists to further strategic, social sector M&A.
While organizations of all budget sizes anticipate the economic downturn impacting their organization, organizations with smaller budgets indicate that the impact will be greater compared to organizations with larger budgets.
More than half the respondents reported that their organizations will see a decrease in revenue during the current fiscal year. About one-third of the respondents feel that the revenues would decrease more than 10% during the current fiscal year at their organizations. About one-third of the respondents also feel their organizations will experience a decline in revenues during the next fiscal year.
There were no significant trends related to decrease in revenue across organizations with different operating budgets or across program areas, suggesting that organizations across all program areas and operating budgets are seeing similar changes.
While the respondents felt that the revenues were decreasing, many (40.5%) felt that the demand for the services of their organization had increased in the past 3 months.
While there were no significant trends related to changes in demand over the past 3 months across organizations with different operating budgets, significantly greater percentage ofrespondents from organizations providing human services reported more than 10% increase in demand during the past 3 months.
Do you know of other reports, studies, findings? Share!!
A: Simply put, earned income is revenue generated from the sale of goods, services rendered, or work performed. One nonprofit example that most people have some familiarity with is Girl Scout cookie sales. If you have ever purchased a box, you have contributed to the earned income of the Girls Scouts organization. Why is earned income gaining popularity with nonprofit organizations? As factors like increasing competition and a flagging economy have caused gift income, like foundation grants or donations from individuals, to level off for some organizations, nonprofits are looking to diversify or expand their bases of support to meet growing needs and to better sustain their operations over the long term. New players entering the field with new ideas about how nonprofit organizations should address society's ills are also spurring increased interest in earned income and other forms of social enterprise.
Earned income can be viewed as one part of a diversified financial or fundraising plan for nonprofits. A good primer providing background information on earned income is Social Enterprise: Hype or Reality? from the Social Enterprise Alliance, which says:
Earned income ventures by nonprofits generally do not free a nonprofit from other types of revenue…
Earned income ventures have never generated limitless profit…
Launching and running a social enterprise is as risky as launching and running a business in the for-profit sector…
Social enterprise demands skill sets that may be lacking in a typical nonprofit...
Social enterprise has the added challenge of managing to the 'double bottom line' of both mission and margin…
Here are some additional resources to help you access services and get up to speed:
"We're invested in a process of community change in the Mahoning Valley," says Joel Ratner, president of the Raymond John Wean Foundation, "and we are trying to do things as much the same as possible." Listen and find out how the foundation is responding to the economic downturn.