This post first appeared on the Foundation Center’s GrantCraft blog. GrantCraft, a service of the Foundation Center, taps the practical wisdom of funders to develop free resources for the philanthropy sector.
Several years ago, ACBP set out to research issues facing spend down foundations. To our surprise, there was little information available. Since then, there has been an increasing amount of publications and forums around spending down assets as compared to perpetuity. In absorbing this information, we have a few considerations to highlight.
Investment and impact are two major concerns facing every foundation. Investments are managed to produce a return. Returns are spent to have impact – with a portion held for reinvestment. The target spending rate for many foundations in the United States is five percent. This has roots in the federal government’s minimum distribution requirements. In the private foundation world, those favoring a spending plan in excess of the traditional five percent consider a third and fleeting element – time.
The issue of time is particularly relevant now. We are entering the greatest transition of wealth in human history. Foundations as prominent and diverse as the Bill and Melinda Gates Foundation, The Atlantic Philanthropies, ours, and others are in the midst of distributing all assets over a finite period. A few are also making a public record of their experiences and lessons.
There are a number of significant factors and realities that any foundation debating time should consider. Here are five that we’ve observed as important to the thought process:1) The Living Donor Effect
Employees, consultants, and paid advisors that consider perpetuity could be serving their self-interest of job security, reducing their fiduciary risk, and increasing their influence as assets appreciate. The chronological life span of a foundation is a fundamental and critical strategic decision that needs to be driven by donor intent. It is the living donor that has the capacity and independence to decide, or at least set the stage, if a foundation is to have a limited or perpetual life.2) Compound Social Impact or Investment Returns
Often, consultants of perpetual foundations conclude that foundations could do more good over the long term than in the shorter term if investments are allowed to grow. The assumption is that compounding investment returns with a distribution rate that is below the historic returns will lead to greater cumulative financial distributions. Let’s consider the cumulative social impact that would be achieved had those funds been put to use for social impact. For example, let’s look at polio and the Bill and Melinda Gates Foundation. The Gateses, who are living donors, plan to spend all of their foundation assets. They have used impact to measure the rate at which projects are funded.
In just 25 years, the number of new polio cases has decreased from 350,000 annually to less than 400 in 2013. That equates to more than 7 million people who have avoided contracting polio. We’ll never know who these people are, but nonetheless, they will not be burdens on society and they have an opportunity to be productive contributors to the GDP of their countries.
“Doing good” is a measure of impact. Impact is measured over time. The foundation didn’t limit itself to spending within the standard five percent rule. They looked at what needed to be done and worked to address the challenge with a focus on time.3) Distribution Rates Can Vary by Giving Vehicle
The fastest growing charitable vehicle used today is Donor Advised Funds (DAFs). Although these funds have no minimum distribution rate, they historically have had average distributions far in excess of the five percent minimum required for private foundations. For example, in its most recent annual report the Jewish Communal Fund, one of the nation’s largest DAF sponsors, had an average spending rate of 25.3 percent while The Fidelity Charitable, the nation’s largest DAF sponsor, had an average spending rate of 20.6 percent.
For endowments, the Uniform Prudent Management of Institutional Funds Act (UPMIFA) is used to provide guidance on investment decisions and distribution rates. Several are considered, but the result is that spending policies can be limited to a range of four percent to seven percent.
As one of the most common forms of giving, private foundations based in the United States have a minimum distribution rate of five percent. Amounts in excess of this limit can vary depending on the philanthropic plans. I’ve heard foundation professionals sometimes say, “spending down provides a quick fix.” In reality, foundations have flexibility – they can vary their spending rates based upon their plans and circumstances.
Each type of giving vehicle has proven highly effective in philanthropy. There may be legal requirements that allow or prevent flexible spending rates. With each type of fund, account, trust, or foundation, careful planning is required in both the short term and the long term.4) It’s Okay to Change Course
As circumstances change, so do spending plans. During the mid-1940’s, The Rockefeller Foundation adopted a spending plan that resulted in nearly 15 percent of assets being distributed annually. The purpose was to help countries recover from the ravages of WWII. As the quickening pace of funding lead to “substantial appropriations,” their Board undertook a change in strategy and decided to preserve assets for future needs.
Increased spending well above the investment returns over an extended period of time may lead a Board to conclude that they are approaching a period of “reckless” spending. However, reckless spending will happen regardless of time. Thoughtful spending is a function of research, debate, and planning.
Good governance is flexible in order to react and adapt as circumstances change. Clear communication with objective research will provide the necessary ingredients for a Board to respond.5) Philanthropic Assets Are Not Finite
As Jeff Solomon, ACBP President, has said a number of times, when you’ve seen one foundation, you’ve seen one foundation. According to Giving USA, Foundation Center, and the IRS, philanthropic giving is again on the rise. Giving USA recently reported that in 2012, contributions to private foundations increased an estimated 25.4 percent from 2011. And since 1980, the number of active private foundations has increased an average of 4 percent per year or more than 2.7 times – for each foundation that closes, there is at least another that is formed.
Our global GDP is rising; the middle classes in the poorest countries are growing. The world is in the midst of the greatest transition of intergenerational wealth in the history of mankind. Overall, new philanthropists and assets will continue to enter the philanthropic stream and take up worthy causes. There are people that we don’t see yet and whose assets have not been counted on a tax return that will take the mantle and continue to help those in need.
In 2013, ACBP analyzed 135 private foundations that closed between 2007 and 2012. Of these, 23 percent exhibited a gradual spending pattern, 42 percent made lump sum grants to various charities, and 35 percent made lump sum grants to other grantmakers.
The three main spend down strategies listed were defined as follows:
Examining the last ten years of each of the 135 private foundations, those that appeared to have a planned, gradual spend down did so over a period of several years, while those focused on lump sum grants did so primarily during the last three years.
What did that mean for us? We chose a path that would give the foundation flexibility and a runway long enough to 1) conduct research, 2) publish the results, 3) create trial programs, 4) partner with stakeholders, and 5) grow the program from impendence to sustainability or implement an exit strategy.
This is the ninth post in the “Making Change by Spending Down” series, produced in partnership by The Andrea and Charles Bronfman Philanthropies and GrantCraft. Please contribute your comments on each post and discuss the series on twitter using #spenddown. See related content below for more posts in this series.
John Hoover, senior vice president & chief financial officer at Andrea & Charles Bronfman Philanthropies.
Since the pro-democracy uprisings in the Middle East & North Africa (MENA) region several years ago, many donors have expressed interest in funding in this region. Deciding what, who and how to fund in this dynamic context is challenging. At the Mediterranean Women’s Fund we fund in the 21 countries around the Mediterranean shores, and specifically work in ten countries of the MENA region: Morocco, Algeria, Tunisia, Libya, Egypt, Palestine, Israel, Lebanon, Syria, Turkey. We support women’s rights groups, networks and individuals in contexts where it is difficult to organize.
Supporting women’s activism works
The decision we made to focus on strengthening women’s movements in the MENA region is supported by global evidence that this has significant impact. For example, analysis of policies on violence against women in 70 countries from 1975 to 2005 (reveals that the most important factor driving policy change is women’s activism.
The study found that the effects of autonomous women’s organizing are more important for influencing progressive policy change than the presence of women legislators, the impact of political parties or national wealth. Countries with the strongest women’s movements tend to have the most more comprehensive policies on violence against women.
Having funded in the MENA region during and after the pro-democracy uprisings, we are already seeing results.
In Egypt, we’ve supported several women’s organizations over the past four years for their work against sexual harassment. One of our grantees launched an internet campaign and conducted a study to show the magnitude of the phenomenon: they found that 97% of Egyptian women have been harassed. Another grantee led by women lawyers have provided legal assistance to victims of sexual harassment. A third grantee led by young women denounced sexual violence by taking to the streets and organizing with young men to establish open safe areas in the cities. All of these groups are part of local networks. Thanks to their work and continuous efforts, sexual harassment is now considered to be an societal issue and the Egyptian government has finally issued the country’s first law that explicitly uses the term “sexual harassment,” in June 2014. While this is a success, women’s organizations say it does not go far enough and they have to continue putting pressure on the government to ensure that it will implement good policies aimed at curbing sexual harassment in their country.
In Tunisia, there were very few autonomous human rights groups before the revolution. In 2012, we brought together fourteen women’s organizations for a two day strategic reflection meeting. Here, they decided on a campaign for an equalitarian constitution. The result of their work -with their allies – is tangible: the new Tunisian constitution is the most advanced regarding women’s status in the region. It stipulates clearly equality between women and men, parity in the election process, and that the state should protect women from violence.
In Morocco, our grantees are monitoring the implementation of the Mudawana (personal status law) with caravans going from village to village to reach women living in poor rural areas, to share with them what their rights are and to gather information about their situation. These women’s rights organizations have gone to the media to report on the very difficult conditions in which people, and especially women, are living in remote areas. This forced the government to pay attention to the “other Morocco”. As a result of their work, thousands of children have been registered and gained legal status, and hundreds of young girls could escape from early marriages that are now forbidden by law.
The power of movements
The women’s organizations described above— and the majority of women’s organizations in the region— operate on very small budgets: they exist thanks to the incredible energy and commitment of women that juggle their families, jobs and volunteer work for women’s rights. Yet their commitment is essential for the implementation and monitoring of progressive social policies. They ensure that the voices of those that are often excluded from conversations about policy are heard. They are also working tirelessly to transform social practices and public opinions about women and their rights.
Achievements like these are possible only when feminist organizations are numerous and able to form a strong movement so they can collectively strategize and organize for their rights. Our support, as funders, should thus seek to strengthen them without restrictions that could hold them back from implementing their vision for a just MENA region where women’s rights are recognized and upheld by society at large.
The Mediterranean Women’s Fund was founded in 2008 and is based in France. Its mission is to provide, or help to find the financial or technical means which are needed to fund actions decided by those groups, associations, organizations or individuals who are working towards equality between women and men in the Mediterranean region.
This article is part of a series posted by Mama Cash sharing the perspectives of the local and regional funds that are its grantee-partners.
Caroline Sakina Brac de la Perrière, Executive Director of the Mediterranean Women’s Fund
Some donors try to steer Israel studies to political ends, but gifts must fund impartial enquiry, says Charles Keidan
The growing prominence of philanthropy in higher education can be a force for good or bad. It can compensate for public sector cuts and inject innovation into the academy, but it can also distort the direction and content of scholarship. This dichotomy is particularly evident in the field of Israel studies.
A wave of philanthropic donations resulted in the number of posts in the subject at US universities rising by 69 per cent between 2005 and 2009, according to a survey conducted by Brandeis University’s Cohen Center for Modern Jewish Studies. Many of the academics recruited are deeply committed to rigorous scholarship and do not shy away from criticising the historical role or contemporary behaviour of Israel.
Some of the philanthropic foundations investing in Israel studies are also genuinely committed to promoting objective academic enquiry. When I was the director of the Pears Foundation from 2004 to 2012, we advocated for scholarship about Israel, not for Israel. I believe that our investments in numerous posts provide a model for how philanthropic foundations and higher education institutions can work together in a spirit of trust and openness to advance understanding about controversial issues.
Source: Elly Walton
Sadly, however, not everyone shares these goals. At the 2013 annual conference of the Association for Israel Studies at the University of California, Los Angeles, Mitchell Bard, the executive director of pro-Israel body the American-Israeli Cooperative Enterprise, emphasised the centrality of Israel studies – and the classroom more generally – to efforts to bolster support for Israel. He also trumpeted the programmes he runs, on behalf of the major American-Jewish philanthropy organisation the Charles and Lynn Schusterman Family Foundation, that support visiting Israeli professors and doctoral students in Israel studies; these, he said, were “grooming a new generation of scholars” who can “speak up” for Israel at universities around the world.
Charles Keidan is a philanthropy practice research fellow at City University London and a visiting scholar at Stanford University’s Center on Philanthropy and Civil Society.
It is hard to look at events of the past few years without concluding that democracy in America is in trouble. Surveys routinely find that most Americans think poorly of the federal government and, in particular, of Congress. Such frustration and mistrust do not bode well for our system of government.
Against this backdrop, The William and Flora Hewlett Foundation announced today [8 July] that it is launching a new initiative to help alleviate the problem of polarization, with a special focus on the problem in Congress. The foundation will invest $50 million over the next three years in what it is calling the Madison Initiative. It will use this initial phase of grantmaking to assess whether and how it can help strengthen the nation’s representative institutions so that they are better able to address the major issues facing the country—and do so in ways that work for the American people.
The new initative has met with some criticism. ‘Critics, like Niki Jagpal, director of research and policy at the National Committee for Responsive Philanthropy, called the effort “problematic”,’ reports Alex Daniels, writing for the Chronicle of Philanthropy on 15 July. ‘Instead of supporting groups across the political spectrum, Ms. Jagpal said it would make more sense to dedicate more resources to current Hewlett grantees that work to alleviate poverty, attain social justice, and secure women’s reproductive health.’
While David Callahan, writing for Inside Philanthropy on 14 July, asks:
Try this exercise. When you think ‘women’ and ‘investing’ what do you think about? This piece is going to ask you to think about the ‘women effect’ as a factor across multiple dimensions where ‘women and girls’ and ‘impact investing’ come together. Across all asset classes, and a variety of stakeholders.
Let’s put it right out there … women belong as investors (whether it’s their own capital or on behalf of others), as entrepreneurs, in management, and as board members. They belong in the picture of social impact as leaders in women-led enterprises, as participants in enterprises where women can create or increase wealth, as beneficiaries of investment, philanthropy or development aid. In fact they are key actors in almost any aspect of investment you might consider.
The case has been made about why women – and gender-diverse teams – make better investors, why you’d want women on boards, on a management team, on an investment committee, or running a hedge fund. The case has also been made that getting access to capital for women and girls lifts up their families, their communities, and indeed their nations, in a way that investment in men cannot. I’m not going to use my space here to debate these facts.
Investing with a gender lens
A gender lens in impact investing means considering how you can use your investment capital to have a positive impact on women and girls, and correspondingly to help solve the challenges that are the focus of our social investments and philanthropy. Whether we’re speaking about what are often called ‘women’s issues’ such as slavery and trafficking, domestic violence or maternal health (which aren’t ‘women’s issues’ as much as core ‘societal issues’) or about food security, healthcare, education, access to finance, energy, clean water, sanitation, you name it: women are the reality in the picture – though ironically often not in the picture when it comes to considering our investments.
And we must be as committed about getting women into the picture as impact investors, and therefore also as owners, board members and fund managers, as about investing with a gender lens. And this is not just about women. It’s about diversity, and the evidence that diversity, whether it be on teams or inside portfolios, enables investors to outperform their peers.
Some of the pioneers in the ‘women effect’ conversation are Joy Anderson (Criterion Institute), Jackie Vanderbrug (US Trust, previously at Criterion) and the team at Calvert Foundation (there are too many women who have been inspirational to mention all of them here). Today, we could list dozens of women and men who have influenced this conversation, from the pioneers in impact fund management to those who started out in the early days of microfinance, SRI, community investing, and more.
When I first started out in social impact investing, it was hard to find anyone writing or talking about it (apart from my boss at Venturesome, John Kingston). But the tables have turned, and in the recent Alliance special feature, ‘Markets for good: removing the barriers’, we had not just one article but several from around the globe! It’s a joy to think that the field is now at a point that such an esteemed and diverse group of contributors can come together and debate the issues raised by Monitor Inclusive Markets’ report Beyond the Pioneer: Getting inclusive industries to scale. For me one big issue the report raises is the role of government vis-à-vis impact investing in addressing social problems.
Beyond the Pioneer is framed as an exploration of the barriers faced by social/impact enterprise (‘social ventures’ as we label them at Nesta) when attempting to scale up their operations. Many of the responses to the paper looked through the lens of social/impact investing and its role in overcoming those barriers.
In my opinion, the barriers to scale faced by social ventures as identified in the paper (at the level of the firm, value chain, public goods and government) are a helpful framework to consider what is needed to tackle any complex problem, ie it is a means of exploring a whole system of innovation around a need (as Vineet Rai points out in his contribution). It shouldn’t surprise us that solving persistent social problems effectively, at meaningful scale and with longevity, requires interventions beyond the level of a single firm. I agreed with Guillaume Taylor that the lessons from Monitor Inclusive Markets’ developing world experience have plenty of resonance with our experience making impact investments within the UK’s developed economy and government structures.
So I want to respond to the special feature on five particular points that speak to my experience investing in UK social ventures operating at the boundaries of private, social and public sectors in education, social care and local communities.
Why are so few market-based solutions to poverty getting to scale? What can be done so that they can deliver meaningful benefits to the poor?
Hosted by the Shell Foundation, the June 2014 Alliance Breakfast Club discussed these and other issues arising from the June 2014 special feature of Alliance magazine.
The discussion was facilitated by Alliance’s editor, Caroline Hartnell
‘During her interviews for the CEO job, Desmond-Hellmann brought up criticisms of the foundation and other thorny topics, to see how philanthropy’s power couple would respond.
‘“I felt like I tested what it would be like to have a conversation about a difficult issue,” Desmond-Hellmann said. And she liked what she heard.’
It seems like asking questions is something she feels she brings to her new job. As the first physician and research scientist to hold the top job at the world’s richest philanthropy, ‘That outside perspective is already proving valuable,’ she told the Seattle Times. … ‘What I hope I bring to the foundation … is coming at things from a fresh angle. I find myself asking a lot of questions, and I think that’s an asset.’
But she isn’t planning any major course changes. ‘The strategies we have are awesome,’ she said. ‘We’re working on some of the most important problems in the world.’
But so far, much of that work is still in the research phase, limited to pilot projects or facing logistical and political hurdles to implementation. Eradicating polio, for example, has proved much tougher than expected due to conflict and chaos in countries like Pakistan, Afghanistan and Nigeria. Desmond-Hellmann said her top priority is to ensure that the foundation’s investments have a broad impact.
‘If you make a medicine and no one gets it, it’s not really worth celebrating,’” she said.
Click here to read the full interview>
This post first appeared on the Foundation Center’s GrantCraft blog. GrantCraft, a service of the Foundation Center, taps the practical wisdom of funders to develop free resources for the philanthropy sector.
From 15th to 17th of May in Sarajevo, Mozaik Foundation hosted European Foundation Center’s Annual General Assembly (AGA) and Conference. Over 500 participants talked about solidarity, civil society and political governance. In the same time, 70 kilometers from the conference venue, River Bosna, Drina, Sana, Sava, Vrbas, and others burst their banks and made terrible damage to human lives, homes, livestock, and even to entire villages. Floods left behind mud with unimaginable quantities of waste and dust, but also terrified and hungry people. Around 2,100 landslides were activated throughout Bosnia and Herzegovina, and some of them washed away homes and infrastructure. Official data estimates that 1,363,000 citizens have been affected – a fourth of the population. Over 100,000 homes were destroyed or damaged and 230 schools and hospitals devastated, while landslides continued threatening homes and infrastructure. The total damage has been estimated at 2 billion Euros.
We at Mozaik Foundation knew it was time to react. Even though grantseeking is normally not allowed at AGA and Conference, we set up a Solidarity Fund and asked foundations in attendance to donate for the relief of the flooded areas. It was an immediate chance for the foundations to show the solidarity we talked about during the conference and to leverage our collective power to help out in a devastating disaster situation.
Meanwhile, we were aware that our existing community programs and actions in rural areas would be affected as well. The Mozaik team decided to approach its partners with a request to adapt our programs to the current situation. Although disaster relief and community rebuilding are not stated focus areas of the Foundation, we recognized our ability to help in an emergency situation because our deep roots in the affected communities. However, it was hard to decide how to help, how to organize ourselves, and what we could do best.
Mozaik Foundation has a long history in doing community action led by youth volunteers, supporting hundreds of youth projects all around the country. So we decided to do what we know best. We focused on three areas: (1) provision of drinking water in flooded areas; (2) youth work activities led by hundreds of young people, who will address the specific infrastructural problems in communities that are damaged due to floods and landslides; and (3) provision of free seedlings, professional support, and secured market link for vulnerable families who see a way out of the crisis through agriculture.
So far, we have succeeded to collect 190,000 EUR thanks to EFC members and individuals from all around the world. By nature of a foundation’s structure, we – the global community of funders – recognize that sometimes the best way to help is not to roll up our sleeves but instead to focus on collective impact of our funds by supporting actual work happening on the ground. Through this experience – Mozaik’s first in an emergency context – we have learned what a vital role our relationships within these affected communities play in providing help. While we have always recognized the value of financial support, our role in coordinating funding efforts and making sure that contributions are effectively distributed has highlighted to us why funders also need to be engaged in the communities they serve.
Please visit www.mozaik.ba to track flood-related donations and distributions.
Haris Buljubašić, Social Media Coordinator at Mozaik Foundation.
As an attendee of the third annual Stavros Niarchos Foundation International Conference, a watershed event in Greek philanthropy, I had the opportunity to meet, as well as listen to, an array of internationally known panellists within the philanthropic community.
After a long day, one of those speakers – Jennifer McCrea, senior research fellow at Harvard’s Kennedy School – asked the audience to reflect on what ‘SIMed’ (Surprised, Inspired and Moved) us that day. Here are my SIM moments.
I was surprised – but not in a good way –by the new research on youth unemployment conducted by Endeavor Greece and funded by the Stavros Niarchos Foundation. Over the last six years, 1 million jobs (21 per cent) were lost in Greece, and two-thirds of those jobs will not return. This means that the majority of the unemployed under age 35 will need either to change professions or to relocate.
The fact that Greek youth are ill prepared for the job market and lack basic skills did not come as a surprise to me. Our failing educational system does not prepare young graduates for the labour market. As Shawn Bohen of YearUp said of Greece, ‘There is a vast disconnect between what employers think is relevant and what universities think is relevant.’ An audience survey revealed that he’s not alone in his thinking. When asked about the most effective way to address youth unemployment, about four in ten (41 per cent) of those in attendance responded with ‘reform the education system in order to connect to the needs of the work place’, and a similar number (39 per cent) chose ‘train youth in order to acquire skills that fit the private sector’.
What inspired me the most was the emphasis on cultural investments in Greece and the socioeconomic impact of such philanthropic initiatives. Among the noteworthy projects:
Like most countries, Greece aims to use cultural investments for gains in socioeconomic development. At the conference, we discussed several successful examples of such work, including Newcastle in the 1960s, Baltimore in the 1970s and New York City’s more recent High Line project. Cultural tourism, or ‘edutainment’, could also be a source of social and economic prosperity for years to come.
Lastly, I was moved by a performance called ‘A Brave New World’ by members of Cerebral Palsy Greece, which reminded me why I do this job and that the true meaning of philanthropy is ‘the love of humanity’.
Those of us in the philanthropic world often forget this, but the co-president of the Stavros Niarchos Foundation, Andreas C Dracopoulos, summed it up in one eloquent sentence: ‘Those of us in giving and receiving must be concerned about what is good.’
Epaminondas Farmakis is president and CEO of elpis philanthropy advisors.
elpis is a consulting company focused on helping philanthropists, donors and foundations develop and implement sustainable, efficient programmes. It is primarily focused on issues in Greece, Southern Europe, the Balkans and the Middle East.
A recent busy visit to Beijing disclosed that much is happening on the ‘charity’ law front, with many other ancillary developments regarding the three regulations (san tiaoli). Beginning first with those, I will analyze where they stand and why.
It is expected that the first ones to appear will be the association (shetuan) regulations in late December 2014 or January 2015. The State Council and the Ministry of Civil Affairs (MCA) seem to be in agreement on most items in them.
There are hang-ups with the other two. With regard to the foundation (jijinhui) regulations, there has been a lot of discussion about the State Administration of Taxation’s (SAT) inability to enforce the 70% of prior year’s earning rule for payout. Indeed, in the previous blog, I mentioned that One Foundation has been having problems with that itself.
MCA and SAT appear to be fairly far apart in their negotiations, but one aspect of the proposed ‘charity’ law may help to resolve this. The draft developed by China Philanthropy Research Institute (CPRI) includes a 5% of assets payout requirement, which is easier to administer. It is also a better measure of a foundation’s capacity to do direct charitable work through its own actions or through those of its grantees. If this were to be incorporated in the foundation regulations, which may clear up the logjam.
With respect to the min fei (social enterprises), the big standoff concerns private schools. On the other side of the argument from MCA is SCOPSR (State Commission on Private Sector Reform), which is in charge of major state restructuring efforts, including reforms of the public institution sector (shiye danwei). This is a very powerful agency, which reports to the Party along with the State Council. It thus has a great deal of political clout, unlike MCA, which has virtually nil.
Although SCOPSR’s plan for state downsizing will mean that many shiye danwei in such fields as health, scientific research, etc., will be transformed into non-state-owned min fei, there is a problem for them with the private schools. They would like to bring those back into the state sector.
While this may appear to be somewhat regressive, my suspicions are that it will succeed. It appears to relate in part to the current drive for greater intellectual purity in China, which began with the issuance of the famous Document No. 9 in spring 2013. That document decried the influence of certain ‘western ideals’ such as democracy, human rights, and civil society in China.
Since then we have seen attempts to censor some public intellectuals (and many have self-censored as well); spurious charges brought against many human rights lawyers (including Xu Zhiyong and others associated with the New Citizens’ Movement (NCM)); media censorship; etc.
There seems to be a relationship between these developments and the assertion of greater control over private schools by forcing them to become state institutions once again. How this will all play out remains to be seen, and it may involve a high level intellectual/legal struggle leading to the repeal of the ‘Private School Law.’ I would say that the issuance of the min fei regulations will take the longest time of the san tiaoli before coming to fruition.
The relationship between these regulations and the ‘charity’ law is clear. That law must stand on the shoulders of the regulations in the absence of a clear law on associations and foundations, such as in Germany. Alternatively there could be a law on those two types of entities along with private institutions (as in Czech Republic). But these do not currently exist (nor are they expected even be proposed any time soon). Thus, putting the ‘charity’ law ahead of the issuance of at least the social association and foundation regulations seems misguided. Many Chinese professionals agree with this judgment.
A first question in regard to the law being proposed by both MCA and CPRI, is why it is called a ‘charity’ law at all. Consistent with civil law practice in Germany, France, and Japan, the proper term is ‘public benefit’ or gongyi in Chinese. This would also be consistent with Chinese legal terminology going back to the 19th and early 20th centuries when the term gongyi was used in China. Most recently, of course, there is the Public Welfare Donations Law from 2001.
This nomenclature was under discussion at two seminars on the CPRI proposal, which I attended as an honored Meiguoren (American) guest. These were actually some of the best seminars I have ever attended in China, as there was lots of give and take and not mere spouting by talking heads. There were several questions addressed including the following.
These were good and productive gatherings. ICCSL has presented both written and oral comments (Prof. Simon participated rather vigorously in the discussion). ICCSL is awaiting the third draft before continuing with its comments.
Karla W Simon (西 门 雅) is chairperson of ICCSL
First published on the Global Fund for Community Foundations blog.
It is appropriate (and no doubt deliberate) that the launch of the ‘What’s Next for Community Philanthropy?’ toolkit has come in 2014, a year that sees the Cleveland Foundation – America’s first community foundation – mark its centenary. This extensive toolkit, which has been produced by Gabriel Kasper and his colleagues Justin Marcoux and Jess Ausinheiler at Monitor Institute, has not really been designed for someone like me. US (and Canadian) community foundations are really the main target audience for this suite of tools and essays. So my comments on the toolkit are framed by my vantage point at the Global Fund for Community Foundations (GFCF), a global grassroots grantmaking organization working to support the development of community philanthropy worldwide.
Evolving concepts, changing terminology
Let’s start with ‘community philanthropy’. Unlike in the US and Canada (where community foundations alone can be counted in their hundreds), there are far fewer of these types of organizations (whatever they are called) in most of the rest of the world, and so by focusing on one particular institutional form, you end up with very small numbers. So although community foundations form a large part of our constituency (and we even prioritize them in the name of our own organization – a fact that is not lost on me), we have always embraced other forms of ‘community philanthropy institutions’, including women’s funds, local grantmakers, environmental funds, etc. So I was pleasantly surprised (and also curious) to see that the more inclusive ‘community philanthropy’ is used throughout the toolkit (defined as ‘community foundations and other community philanthropy organizations’).
A global world – fact not choice
One of the perils of working locally (community philanthropy organizations are mostly place-based) is that it is easy to become inward-looking and insular. The excellent essay, ‘Shift Happens: Understanding how the world is changing’ does a great job in providing a succinct overview of six different types of global trends that are having a profound effect on the nature of communities. If you are a community foundation leader or board member trying to convince your colleagues that the community that your foundation was set up to serve is no longer the same, and to find examples of how other community foundations are responding, then this document will save you many hours of internet searches. Although much of the specific data is geared towards a US audience, the essay demonstrates to any reader how global trends (both good and bad) are driving huge changes in our communities the world over.
Community foundations as specialist generalists
Community foundations tend to make grants across a range of different portfolios. This is well understood within the community foundation field, but it can sometimes seem to outsiders like a lack of focus or being overstretched. (In fact, I once got involved in a very long, rather heated conversation with a US immigration official in New York, who expressed great scepticism about the community foundation idea, insisting that all philanthropic organizations and NGOs should have a focus – he suggested water, healthcare or education – and that it was poor form to try to do everything in a community).
What the toolkit also highlights in its examples is how specialized and sophisticated specific programmes clusters and approaches have become within the community foundation field. In our grantmaking at the GFCF, we have also been looking at how to deepen community philanthropy practice around particular issues (such as youth engagement or the environment) so that community philanthropy organizations can deliver excellent programmes within the context of a broader, holistic and networked approach.
A launching point for a more linked-up global field?
Certainly there are some valuable tools in the kit that a community philanthropy organization anywhere in the world could use to test assumptions, stimulate reflection and inspire creative thinking (although for those operating in contexts where local giving is still very nascent, the level of sophistication around different kinds of donor services might seem like wishful thinking). It is also good to see strategies that have been adopted by many of our community foundation partners, often driven more by innovation and instinct than blueprint, are listed and named in the toolkit. So when in the ‘Bright Spots’ tool, which looks at ‘Promising approaches in community philanthropy’, there is a question, ‘What if you solicited small gifts from less affluent individuals?’, I think immediately of Odorheiu Secuiesc Community Foundation in Romania which created a ‘Community Card’ programme through which over 13,000 donors give small amounts each month. Another ‘bright spot’ on ‘Sharing Community Information’, asks ‘What if you conducted routine check-ups of your community?’ This takes me to a recent blog by one of our partners in Ukraine. Moloda Gromada (‘Young Community’) is based in Odessa, which has seen its own fair share of violence, resulteding in the deaths of 42 people on 2 May 2014. The foundation’s director Inna Starchikova describes how, following the violence, the foundation conducted a survey to ‘check the state of health’ (her words) of the community by asking people how they saw their own personal role in allowing the violence to happen and their thoughts on how future violence might be prevented.
What’s next for ‘What’s next’?
A separate essay, which focuses specifically on examples of community philanthropy innovation from the global field, is in the pipeline and I look forward to that. Finally, I wonder whether this kind of reflective, big picture exercise might provide new opportunities for those community foundations that are interested, wherever they are in the world , to create spaces for engagement, solidarity and collaboration. Although there may be huge differences in the financial asset bases of community foundations in different parts of the world, it seems to me that energy, innovation and commitment to community-driven development are plentiful the world over.
Jenny Hodgson is executive director of the Global Fund for Community Foundations.