Not-for-Profit Financial Literacy Survey


nfp financial literacyGrant Thornton and Probono Australia have launched their Not-for-Profit Financial Literacy Survey Results, in a document entitled: Not for Profits: Are you Ready for the Future?

The survey looked at directors’ and managers’ perceptions of whether not-for-profit boards are financially literate to deal with current situations and future change.

Simon Hancox from Grant Thornton is the author of the survey which was sent out through the Pro Bono mailing list of 45,000 and received 1065 responses.  Most of this post is a summary of Simon’s recent presentation of the results of the survey.

The key question that the survey wanted to address was “how does a board provide financial leadership through times of change and what is the perceived level of financial literacy in not for profit boards”.  The survey included just under 30 questions, and 84% of the respondents were from charitable organisations.

Grant Thornton wanted to analyse whether there were differences between the views of management vs boards, smaller and larger organisations, paid vs unpaid boards and whether the method of director appointments made a difference to perceptions of financial literacy.  Overall they found that there were not significant differences.

What they found was that management and board generally agreed and that 59% of respondents felt that the standard of financial literacy was adequate to meet current needs, but that only 40% felt that their boards had the right level of financial literacy to meet future needs.  The third key finding was that director education could play a role in bridging this gap, and that there is a challenge to improve the financial literacy of boards.

The survey examined eight characteristics or skills of financially literate boards – being:

1) prepared – board reads and understands financial information provided by management

2) informed – board understands nature of key income and expenditure items and factors which may affect them

3) balanced – board has a clear understanding of respective roles of board and management

4) strategic – board has clear understanding of how budget supports strategic plan and risks associated with it

5) critical – board critically evaluates financial performance of the organisation

6) reactive – board promptly reacts to changes in financial performance to mitigate any potential risks to the organisation

7) cost aware – board understands costs of providing services/programs

8) legally aware – board members understand the legal responsibilities and potential liabilities of acting as a director

The survey then compared the importance of these criteria to the perceived performance of the boards (see page 7 of the report).  The survey noted a stronger performance in all areas from larger organisations (which is to be expected) but not a huge amount of difference across the whole sector.  However, it is worth noting that no boards performed better than 4 out of 5, even where the criteria were considered more important.  The survey also found no difference in performance between paid and unpaid boards.

The survey also identified that 22% of director respondents said that they were entirely reliant upon a subgroup (such as a subcommittee) for financial expertise, and 22% of all respondents relied completely upon management.  This clearly leaves much room for improvement.

In looking at the future financial sustainability of not for profit organisations the survey found that all the characteristics were important and examined the ability of boards to understand revenue streams and effective methods of investment.

The survey also found that only 37% of organisations included financial literacy training in board induction.

The survey’s conclusions were that while there is a reasonable perceived level of financial literacy in not for profit boards to deal with current situations, there is a level of concern about the preparedness and ability of these boards to deal with future changes and challenges.  Organisations have a large responsibility to work with their directors to close this knowledge gap.

Following on from Simon’s presentation of the survey findings there was a panel discussion with Karen Mahlab AM, Murray Baird, Assistant Commissioner and General Counsel for the ACNC and Paul Wappett, Chair of Berry Street.

The level of discussion was good so I am going to record some of it here.

Q: “Why do boards fail and how can we protect ourselves from this?”

A: Paul – things come up which might be unexpected – for example Berry Street is dealing with the Royal Commission into Institutional Child Sexual Abuse, there are changes in government funding and policy, boards are volunteers who offer their time after hours and are often working for the not for profit organisation at night – often financial oversight is not the top priority when other strategic matters come up.

A: Simon – organisations need to understand the time constraints placed on their board members and boards need to balance those who are doing the heavy lifting and detailed analysis – eg finance sub-committees with developing the knowledge in all board members to ask the right questions

A: Murray – board failure relates to role – the board must constantly remember what purpose it is there for.  Murray noted that 72% of complaints to the ACNC related to the board being asleep at the wheel (and entertained us with car and driving analogies for the rest of the morning).  However, once the board’s role is clear it needs to have in place processes which enable accounts to be available and for there to be time for them to be examined, addressed and interrogated.

A: Karen – it is concerning that the survey showed that 22% are reliant on others.  The Board Chair needs to understand the balance sheet.

Q: “Do boards need a compulsory level of training?”

A: Karen – that would deter many volunteers from participating on boards – what is needed is better board induction rather than just handing over a huge governance folder.  Boards need to be future focussed and perhaps the finance person needs to step up more within boards, particularly with the introduction of the NDIS and changes in access to revenue such as impact investing.

A: Murray – you need proportionality – some boards have extensive inductions, but some boards might not be operating at a level which needs this.

A: Paul – it is important for the board to self-evaluate its own skills and the Chair needs to take an active role and change the board composition if necessary.

Q: “How important is it that management provides financial information to the board in a way that the board can understand it?”

A: Paul – the reports need to have good commentary, visuals and graphics

A: Karen – numbers don’t speak to the mission of the organisation – what the finances need to show is how do numbers reflect what the organisation does.

A: Murray – boards should be able to ask any questions to allow information to come out and should not be afraid to ask.  While full understanding is not required, you still need to know when to ask a question (back to the car analogy – when you look under the hood you might not understand your car’s computer system – but you need to know whether it is plugged in or not).  Not every board member needs to have the same skill level.

Murray also suggested that external advisers can be useful as while you may have a lawyer on your board, their area of expertise might not necessarily cover what you need to know.  The board needs to be sponsored by the Chair to ask seemingly dumb questions.

A: Paul – cautioning against over-reliance on external advisers and to be sure to ask open ended questions – so if they have not addressed something specifically there is space for them to bring things up eg – Is there anything else we need to be aware of?

Q: “What about risk aversion?”

A: Murray – yes there are changes – for example the NDIS will call on not for profits to raise capital and this will be a huge challenge as traditionally reserves have been held in conservative bank accounts (eg at a low interest rate of 1%) – so how can organisations deal with the need to raise more revenue or invest more seriously.

A: Karen – there is a need for more entrepreneurial skills.  The NDIS is asking organisations to act on a business basis – while there has been a rise in social enterprises, 50% of small businesses fail in the first five years – so what does this mean for new social enterprises?  With impact investing and taking on debt – these are different skills for boards who are used to dealing only with service delivery.

A: Paul – the risk/reward ratio needs to be considered – taking on debt adds to level of complexity

A: Simon – changes in consumer directed funding models and the implications of this.

Q: “Is the not-for-profit business model broken – and if so, how do we fix it?”

A: Murray – NO – the model is just taking off.  No- for-profit boards are no less capable than commercial boards.  Not-for-profit organisations need to make a social impact.

A: Karen – NO – not-for-profit organisations are an expression of need in our community.  The model is not broken but it needs to change – absolutely.  The way government works with not-for-profit organisations is broken and we need to work out how to do things differently.

A: Murray – the ACNC is registering 100 new charitable organisations a week so there are clearly still needs and a will to engage with them.

Q: “What about dashboard reporting and pie charts and should the finances be placed earlier in board meetings” (NB the author particularly liked this question especially knowing how much work goes into changing reporting formats)

A: Paul – yes the placement of items in the agenda is important

A: Simon – dashboards and charts need to be tied to the strategic reasons for doing them

A: Karen – finance is not all about financial reports – it is about investment in the organisation and creativity

A: Murray – don’t leave strategy till 10pm at night.

(In response to a question about the number of new charitable organisations registered by the ACNC, Murray was asked how many charitable organisations are being removed from the register) – the ACNC is currently clearing out 5,500 organisations (many of whom had been inactive for some time) and expects to get to a point of equilibrium where new organisations equal the numbers of those closing down and deregistered.

Q: “Finances are backward looking – how do we keep the board awake?”

A: – coffee, cheese and biscuits – don’t underestimate the importance of the physical environment and always relate finances back to the mission of the organisation to maintain engagement.

What are your thoughts on financial literacy in not-for-profit boards ? Could your board do with training, induction, formal courses?

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A Century of Community Foundations: Evolution and Adaptation – Mark Sidel


Mark Sidel College of Law

The Asia-Pacific Centre for Social Investment and Philanthropy hosted the 2015 Commencement Lecture with guest speaker Professor Mark Sidel, the Doyle-Bascom Professor of Law at the University of Wisconsin-Madison and consultant for China and Vietnam at the International Center for Not-For-Profit Law.

Professor Sidel gave a talk on adaptability and change in institutions, looking at the hundred year history of community foundations in the United States.  (Many of you will be aware that 2014 marked the centenary of community foundations, which evolved from an organisational model developed in Cleveland in 1914).

Professor Sidel’s thesis is that there are two stories of adaptation which have come out of the community foundations movement – that of those who have grown and prospered, and that of those who have not done quite so well.  He also articulated it as contrasting those who have grown, demonstrated social impact and embraced social innovation with those organisations who have struggled to grow, struggled to make an impact, and struggled to handle social innovation.

Professor Sidel reminded us that community foundations were one of the first models to enable philanthropy to reach beyond the very wealthy, to enable more middle-class people to participate in community philanthropy.  While innovative for the time, there were also other models of adaptation in community foundation, such as the United Way and Community Chests.

A quick snapshot of the state of community foundations in the US at the moment:

approximately 765 community foundations in US

$64.9 billion in assets

$14.9 billion in grants every year.

Community Foundations make up 9% of the assets in foundations across the United States and represent 10% of United States giving.  They range in size and scope from the Silicon Valley Community Foundation which has assets of $4.7 billion – to those who have less than $100,000 in their corpus.  Professor Sidel noted frequently that it is difficult to speak about these organisations as one kind of institution given the range and difference within the field, even though they take the same legal form.

Community Foundations have grown significantly in the last 20 – 30 years, fuelled by the development of donor advised funds, however, this has meant that community foundations are now a vehicle for donor control (ie the donors can say where they wish their funds to be spent, and the community foundations have difficulty implementing their own social impact programs or addressing what they might consider to be greatest community need).  This makes it difficult for community foundations to provide innovative impactful solutions.

Other challenges faced by community foundations are how they can grow and interact effectively with their donors.  The distribution rules for community foundations (many of whom only distribute 5% each year makes it difficult for them to be innovative.

Donors have many more choices these days about where to put their money to make a difference, and competition for donors is fierce.  Professor Sidel predicts a continuing rise in community giving, but not necessarily through community foundations.  He quoted from Lester Saloman’s New Frontiers of Philanthropy: A Guide to the New Tools and Actors Reshaping Global Philanthropy and Social Investing and Social Investing and Leverage for Good: An Introduction to the New Frontiers of Philanthropy and Social Investment Oxford University Press (2014) which has a long list of of competitors for donor funds including social impact bonds, crowdsourcing, capital aggregators and secondary markets).

While community foundations were originally a creative adaptation for their times, they are now being threatened by new adaptation and models.  The very value proposition of community foundations (being place-based local vehicles for donors to give in their own community) is being challenged.

Some community foundations have maintained their traditional role – grantmaking in the local community, but there are three ways to move beyond this paradigm.  These include:

a) acting as a conduit for grantmaking for larger institutions (such as corporates)

b) collaborative and collective action

c) community convening and leadership.

Professor Sidel seemed to convey that unless a community foundation was moving towards community convening and leadership it was not necessarily enabling local philanthropy to move forward.  He spoke of the “innovation and impact inflection point” at which an organisation becomes a “leader”.

My understanding of his view was that unless and until community foundations can take on a greater leadership role, they will struggle to gain and maintain donors, given the wide range of innovative options now available to them.  He also mentioned that while community foundations were supposed to be about democratising philanthropy, on the whole, the community foundations remain largely for middle class and upper middle class donors, and do not represent the diversity of the communities they seek to support.  The need for financial survival has necessitated the prioritisation of raising funds against working within a representational context.

Professor Sidel noted a curious development for community foundations in their move towards self regulation through the US National Standards for Community Foundations. These work to bolster the legitimacy and accountability of the sector and are a response to the competitive environment.  He called it a “weapon in the struggle for donations and impact.”

Professor Sidel spoke briefly about community foundations outside the United States, which have developed from the 1950s and 60s with assistance from the Ford and CS Mott Foundations.  He compared the success of community foundations in the UK and Germany (48 and 348 respectively) with the lack of success in India.

Community Foundations have now also arrived in China, but it is too early to predict results, especially as Professor Sidel said, “while they are under intense scrutiny from Western foundations and scholars”.  He did not sound confident that the imposition of a western model on a culture which has thousands of years of history in philanthropy is necessarily going to work.

While Professor Sidel’s talk highlighted the early adaptability and innovation of community foundations, it seems that in some cases community foundations have lost their innovative edge.  The challenge now is to find a new road towards having impact and adapting to new eras and competitors.

What do you think about the history and the future for community foundations?  Will Australian community foundations suffer from the same competitive forces as those in the US?

 

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Changing guard at Buckingham Palace


jobs

A vacancy for an executive officer for a community foundation is not unusual, but two at the same time? There are some changes afoot in a couple of community foundations in Melbourne.  But perhaps the more interesting questions raised by this coincidence are:

How long is an optimum time to stay in a role?

How do you know when you have outgrown your organisation, or your organisation has outgrown you?

Where are the best places to look in considering a change? Are the usual suspects of ProBono and Ethical Jobs the most relevant, or are do you prefer to use not for profit career consultants?

What do you think about career transition? How do you do it, plan it, manage it, communicate it? How strategically do you plan your own career and what do you look for when you are ready to make a move?

Is a “career” in philanthropy something people really plan for, or is it something people fall into and are just swept along with, through a series of roles.

What are your thoughts? I look forward to your comments in 2015 on this and many other topics.

and if you are interested in the two vacancies mentioned at top of post check out the position description for the Executive Officer of the Inner North Community Foundation and contact Australian Communities Foundation for more detail about their vacancy.

 

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Rebecca Riccio – Learning by Giving and MOOCS


Rebecca Riccio  The Asia-Pacific Centre for Social Impact and Philanthropy at Swinburne presented the annual Heloise Waislitz Oration with Rebecca Riccio, the founding Director of the Social Impact Lab at Northeastern University in Boston.

Rebecca has developed the world’s first MOOC – massive open online course on effective charitable giving, which has taught philanthropy to 18,000 students in 100 countries, and enabled them to understand grantmaking through making decisions on giving away $250,000 to not for profit organisations.

Giving with Purpose is a course supported by Doris Buffett’s Learning by Giving Foundation, which provides 35 universities in the United States with $10,000 each for students in particular courses to distribute.

“Experiential philanthropy education” is about the integration of real dollar grant making into a curriculum.  Not only do students learn about not for profit organisations and areas of need in their communities, but they leave the course with a newfound sense of agency and their own power to affect change.  Students participate in the program in courses as diverse as sociology, communications and English literature.

Rebecca teaches two courses at Northeastern University which develop students’ ability to understand what it takes to build and invest in non profit organisations, and their understanding of the mechanisms for funding which often pit charitable organisations in competition with each other.  Students are able to examine the levers of social change, and see that philanthropy is not a neutral act, but has consequences both for the organisations which receive funding – and those which don’t.

They also begin to understand the power and influence that wealth holders (who are not elected officials) can wield in society and how this can affect issues of social justice.  Students develop their own power in philanthropy through developing their own guidelines for funding and creating filters for their decision making.  The students maintain their independence in decision making about where to distribute the funds and understand the competitive nature of the process.  They are given a relatively small amount of money $10,000 so that they can see how this can help, but also how much more may be needed.  The students are encouraged to take a consensus approach to their grantmaking, rather than voting organisations in or out.  While this may be more difficult and time consuming, it helps develop core values such as humility, respect for others’ opinions, a commitment to active listening, perspective and patience.

The students are taken out of the comfort of their classrooms to meet potential grant recipient organisations and come face to face with the unmet needs of their communities.  Despite perhaps having an emotional response to some of the organisations they visit, the students are encouraged to separate this from their decision making.  Rebecca felt that the more painful the site visit experience – the better for the students as they need to understand the real consequences of their grantmaking.

One of the students completing the course said: “our job is to heal the world and this is how we are learning to do it”.

Rebecca has been able to expand delivery of the course through the MOOC referred to earlier which has grown from putting a few lectures online to developing an accessible online course, including guest speakers and then creating a collaborative grantmaking exercise.

Experiential philanthropy provides students with a toolkit to feel that they can make a difference, and every decision along the way becomes a teachable moment.

Watch the video outlining the course here:

This program is very similar to the Youth in Philanthropy which is run by the Lord Mayor’s Charitable Fund and the Schools in Philanthropy program at Geelong Community Foundation which are based on the Canadian Community Foundations’ philanthropy in schools model.

It was great to hear from someone with such a passion for engaging young people in philanthropy, and the benefits and flow on effects of early participation in the community in this way,

What is your experience of grantmaking with young people?

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Philanthropy and art: why Australia’s wealthy don’t invest in culture


Check out this opinion piece from Raven by John McDonald art critic for the Sydney Morning Herald and film critic for the Australian Financial review.

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The Future of Philanthropy – Bradford K Smith – Foundation Center


foundation centerThe Dean’s Lecture in the Faculty of Business and Enterprise at Swinburne University was given by Bradford K Smith, President of the Foundation Center, based in New York.

The Foundation Center is committed to transparency in philanthropy, having been established in 1956 to defend the philanthropy sector from hostile government enquiries such as those led by Senator McCarthy.  (I borrow here from wikipedia: “‘as a strategic gathering place for knowledge about foundations'”‘ positing that transparency would be the best defense against congressional inquiries about private foundation activities and spending.” It has grown from publishing an annual foundation directory to now listing 108,000 foundations and donors and 3 million grants and is an online resource with a searchable library, newsletters and a collector of global data on philanthropy and giving.  The aim of the Center is to “empower through knowledge”.

Brad spoke about several trends in philanthropy evidenced through their data and collection activities.

Trend 1: philanthropy will continue to grow.  In the US it was a field distributing $30 billion in 2003 and $50 billion in 2013.  Foundations can be identified in four categories, independent, operating, corporate and community,  The sector in the US holds $715 billion in assets, and the trend is towards much smaller foundations giving locally with very few or no staff.  Growth can partly be attributed to the growing profile of philanthropy, particularly through the Giving Pledge, the movement initiated by Bill and Melinda Gates and Warren Buffet to encourage wealthy individuals to pledge half their wealth to charitable causes.  The Foundation Center has a page called Eye on the Giving Pledge which examines the 122 billionaires who have so far signed up.

The Foundation Center recently did a survey which found 76% of foundations in the US have four or fewer staff, and in self-reporting only 27% had a website or issued annual reports.  On more detailed and stringent examination they found that only 7% truly had a website presence.

Trend 2: Philanthropy is a global industry, particularly as as Brad says: “the one thing the world economy is really good at is manufacturing billionaires”.  The Foundation Center’s colleagues in China now map 3000 organisations which are considered foundations.  The sense of community for large donors is changing as well.  In the past, philanthropists tended to give back to the communities where their businesses had made their money, but now, with the technological/digital revolution, for some philanthropists, such as the Zennström Foundation (from the people who invented skype), their community is not local and physical but global and virtual.  Their giving reflects this – with their key interests being international human rights and global climate change.

Trend 3: people will demand to know more.  The Foundation Center now provides for real time updates of granting through their Reporting Commitment.  This is a way for grantseekers and grantmakers to be more transparent and to be able to respond to queries from government. (I also recommend readers look at Glasspockets which is a Foundation Center website devoted to transparency in philanthropy).

Trend 4: the philanthropy toolkit is growing from grants only to mission related or impact investing (but there is not yet a great deal of data on this).

Trend 5: new forms of social investment such as online giving platforms and crowdfunding will continue to evolve.

Trend 6: philanthropy will become more data and knowledge driven.  Brad spoke about “big data” and how foundations can become more than just buckets of money.  Through the information foundations collect about grant seekers and through evaluation and acquittals, foundations are now repositories of information, can commission their own research and are now not only managing information, but producing knowledge.

Trend 7: technology will allow us to do tomorrow things we can not even dream of doing today.

While the Foundation Center is committed to information, making decisions in the philanthropic field can never be an exact science.

Brad concluded with a quote from Russell Leffingwell, the Chair of the Carnegie Foundation in 1952.  “I think they [foundations] are entering into the most difficult of all fields. They have gotten their fingers burned, and they are going right straight ahead, knowing that their fingers will be burned again and again, because in these fields you cannot be sure of your results, and you cannot be sure that you will avoid risk;“.  You can read this in full in Brad’s blog post on why foundations need to be more transparent.

This was an invigorating and inspiring session.  You can hear Brad speak at the Philanthropy Australia conference in Melbourne on Tuesday and at the United States Study Centre at the University of Sydney later in the week

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so much to do – so little time


melbwomensfund

It seems to be that time of year when there are so many events, talks, keynotes and briefings to go to that it is all a little overwhelming,

The main items on my agenda at the moment are:

Philanthropy Australia Conference – 2 – 3 September and the Community Foundations Forum 3 – 5 September.

As well as this Philanthropy Australia has a some pre-conference workshops on 1 September and there is the annual Ethics in Philanthropy debate held as part of the Melbourne Writers Festival, presented by Australian Communities Foundation – this year entitled: The Economics of Enough on 30 August – and featuring our oft featured Genevieve Timmons and Australian Communities Foundation’s Jonathan Chapman.

There’s a session on Transparency in Philanthropy with Bradford K Smith, the president of the Foundation Center at Swinburne on 1 September, and breakfast with the Lord Mayor’s Charitable Fund featuring one of the key note speakers from the PA Conference, Ian Bird, from the Community Foundations of Canada (on 3 September).

If you are in Adelaide on August 27, Hub Adelaide is running a session on everything you ever wanted to know about funding.

Charities Aid Foundation is running a series of briefings on their new Good2Give workplace giving platform in Melbourne (9 September), Sydney (26 August) and Brisbane (16 September) and the Melbourne Women’s Fund is holding a Savvy Giving event with Genevieve Timmons on 19 September (email them at info@melbournewomensfund.org to join their mailing list and to ask for an invitation).

I am sure there is more going on, so keep your eyes peeled and if you get to some events we can’t attend, think about dropping in a review.

 

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Savvy Giving – a personal reflection – a guest post by anonymous


savvy giving
Savvy Giving by Genevieve Timmons is what could be described as a ‘primer’ or a ‘nuts and bolts’ book that provides an excellent overview of giving for the beginning philanthropist. Timmons discusses that there are many ways to make a difference through giving, noting that giving is not just for millionaires but for anyone who wants to make a difference by creating a positive social benefit through giving. Savvy Giving she notes, ‘offers a pathway through the philosophical, creative and practical challenges of grant-making’. (P.14)

This was the first book I had read on the topic of giving and what it means to be a philanthropist. Whilst for many years we had donated to ‘good causes’ and contributed through volunteering, we had done so in a haphazard manner. Our goal when my family and I ventured into the world of giving through a family foundation was to be both structured and strategic. Our areas of focus differ but we all agreed that we wanted to achieve maximum impact and lasting structural changes that would result in systemic change, thereby improving the well-being of others who through no fault of their own are disadvantaged in our society. Whilst each of us has a passion for areas we wish to support, Timmons’ book has assisted me to start thinking about a framework for how our funding can potentially generate greater outcomes for the projects we are interested in supporting.

My first question would have to be, ‘how does this book help someone who knows very little about philanthropy’? My initial response is that it gives a clearly developed step-by-step process of thinking and actions in the ‘how to’. Whilst this may be seen as simplistic, I found to be extremely helpful, as one could feel overwhelmed when not knowing where to start.

Timmons suggests you start with ‘knowing yourself and what is the catalyst and motivation for giving’. How sensible! For me before jumping into the ‘doing’ it was extremely helpful to be able to explore my values and the foundation of these. This process led to interesting conversations within our family and in particular with our children. Values such as human rights, fairness and equity don’t just emerge from thin air; there is always a narrative behind these ideals and values. For me, I was able to tell some stories of my childhood to our children, how my parents had little money but always had an open house for those in need. How my mother would stand up and alongside those who were discriminated against. For those who came from different cultures than ours, she persistently and intelligently argued for their rights until she won the case. Like Timmons, my parents also had an ‘enduring spirit of generosity’ and this is the legacy they have shared with me and I in turn hopefully have embedded in our children.

Since starting a course on philanthropy, I have begun to read other articles and literature that explore peoples motivation and the ethics for giving.

Many of these such as Peter Grant’s ‘The Business of Giving, the Theory and Practise of Philanthropy, Grantmaking and Social Investment (2012)* and Peter Singer’s ‘The Life you Can Save: Acting now to end world poverty’ (2009)**, explore a deeper level of argument that it is a clear-cut moral imperative for all of us to give more to charitable causes that help reduce poverty and disadvantage. Whilst Singer makes the distinction between the ‘ethics of giving’ and the ‘practicalities of giving’ and how much should one give and where it should go, he agues that these should not get in the way of the fundamental issue that we should give. Whilst researching this area of exploration I was taken off to thinking about what Eva Cox described in her Boyer Lectures “As a Truly Civil Society (1995). Dianna Gribble – the Deputy Chair of the ABC at the time noted Eva Cox, was ‘a forthright commentator on social policy. Her critique has influenced policy debate in the areas of social security, superannuation, economics, child-care, migration, education, family law and women’s affairs’.

Eva Cox took what Gribble described as ‘a radical look at the collection of somewhat forgotten values -such as trust, co-operation and goodwill -that hold society together. She argued that we are losing that important social glue and that current debates about citizenship are narrowly focussed on citizens as competitive individuals rather than as social beings. Whilst this may be seen as a diversion from the central theme of Savvy Giving, it does for me give depth and expand on what I would argue that Timmons opens the reader up to in her discussion on ‘start where you are, know yourself’. (P.17)

After exploring why one gives, Timmons explores the genesis of philanthropic giving. It was interesting to read of the cross- cultural understandings of ‘giving’ and how they have been embedded in historical and spiritual parts of many societies across the centuries. From working in the not for profit sector, or as I now have decided to call it the ‘not for distribution’ sector, I am acutely aware of the difficultly that many in the sector face around securing the sought after ‘DGR’ status. It was pleasing to read that Timmons expands on this area in Appendix 2, giving the reader a clear definition of the status as well as the variations in the types of DGR status. For Indigenous organisations there is an excellent resource that supports the process of applying for DGR; SNAICC’s Guide to Applying for Deductible Gift Recipient Status (and Surviving!), October 2012

Linking to the first chapter, Timmons goes on to discuss which causes to champion. I particularly like how she describes giving as being ‘a powerful expression of the philosophical and politics of the donor’ (p.33). Once again this ethos fits with my understanding of the ‘personal being the political’ as proposed by Michael White who developed a therapy of working with people in counseling that is respectful and builds on a persons sense of self (Narrative therapy). He, like philosophers such as Derrida and Michel Foucault, the French postmodernists, discusses discourses on power and how power underpins the way in which society functions and how relationships operate. As Foucault noted, power is everywhere. Power is what makes us what we are, operating on a quite different level from other theories. This knowledge helps me as the donor, strategise and plan the most effective ways of making a social impact. My belief is that donors need to listen to communities, build on their strengths, essentially empower them to formulate the answers to the perceived problems, whilst supporting this process to occur – ‘allowing them to lead’ as noted by Mary Jane Rivers from Delta Networks, New Zealand (p.37) and taking a ‘whole of community approach’ as another philanthropist from New Zealand Jennifer Gill noted (p.54).

In Timmons’ language she discusses the point of the expression of the philosophical and politics as ‘a theory of change’ – ‘a planning process which involves deliberately unpacking donor intentions, identifying any underpinning assumptions, clarifying who will benefit, confirming how the intended changes will happen, and describing what is required to bring about that change. (P.37)

As we progress through the book one area that particularly captured my attention was the discussion on governance. As noted earlier, as I work for an Indigenous NGO, good governance is crucial (as it should be with any organization). I have found however that Indigenous organisations receive a lot more scrutiny in this area than other organisations. Timmons deals with this section well citing what the legal financial and operational requirements are. I particularly liked her referencing the work of David Ward’s ‘Trustee Handbook: Roles and Duties of Trustees of Charitable Trusts and Foundations in Australia; 2012 as there are lists of functions and responsibilities giving the reader a clear understanding of what is required in the areas of administration, investment and grantmaking (including responsibilities and risks). (Pp. 63-64). I read with interest in this section the discussion on conflict of interest, raising two issues for me. The first, as being both a donor and one who seeks philanthropic funding for an organization. This can at times require clear thinking and transparency and at times negotiating the boundaries whilst sitting at the table. The second issue around ‘conflict of interest’ is that readers need to look at this issue through a cultural lens. What is a conflict for one culture are family obligations for another. Once again through my role working for an Indigenous organization, we have ensured that the board has clear guidelines and policies for dealing with this scenario. A good resource was developed by Reconciliation Australia and has been helpful to non-Indigenous organisations as well as Indigenous.

Whilst some may view this book as being to general, for me it is a clearly written resource that has been helpful in my beginning journey as both a donor and a seeker of philanthropic giving. As someone who enjoys the ‘narrative’ of story telling, I particularly appreciated that Timmons included a significant number of ‘stories from the field’ (pp. 109-138). It included many quotes from those in the field and for me this is a good starting point that the reader is able to connect with and learn from their wisdom.

Sharon’s note: All proceeds from the sale of Savvy Giving go to the Australian Communities Foundation.

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ozphilanthropy welcomes guest posts – contact me if you have a topic or area of interest you would like to write about in this forum.

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Funding Advocacy – the legal, conceptual and anecdotal


CharlesLane

Dr Charles Lane

Swinburne Philanthropy Alumni presented a lively session last night on “funding advocacy”.  Dr Charles Lane, former CEO of the Myer Foundation and Sydney Myer Fund, spoke first.  Dr Lane’s view is that advocacy is a crucial component of grantmaking and is important in terms of the conceptual overview of making grants because it is the role of philanthropy to promote social wellbeing and environmental care – money is not enough.  He gave the analogy of homelessness – that we all know that when being confronted by a homeless person in the street, while dropping a coin in their hat or coffee cup might provide some immediate form of relief, it changes very little in their lives (this echoes Julia Unwin‘s talk earlier in the day which I will write about later, in which she said philanthropy should not fund soup kitchens, but discover the reason soup kitchens are needed).

Dr Lane said that donations do not always address the causes of circumstances, and that support for charitable organisations is dwarfed by other agendas (such as those of government and business).  So the lesson is that philanthropic bodies must do more than make donations, and must advocate for change even if we feel threatened by this.

It is legal in Australia for charities to advocate (since the Aidwatch decision of 2010).  It is more difficult now in Britain – since a bill to limit the spending of charities in relation to lobbying was passed in January.

What is important is the public benefit test.  Charities and not for profits here can advocate and this can include political agitation as long as their actions meet the “public benefit test“, and are in line with the core objects of the organisation.  In fact Dr Lane argues that it is the obligation of charities to do this – that we expect them to perform in this way because of their tax exempt status.

Advocacy can be used in several ways – to argue a position, enrich a debate and to be part of the education process.  Dr Lane says that it is the moral responsibility of charitable organisations to advance public debate, and that there is a need for new ideas to feed into the practice of law and policy.  Advocacy can thus advance the funding objectives of a philanthropic grantmaker, and amplify the impact of the grant given to a charitable organisation.

He is in no doubt that advocacy will attract attention, and may attract criticism – it may even be contrary to the personal or business interests of the trustees of a funding body. It is difficult to evaluate and elusive, and it is a challenge to get it right.

Dr Lane’s advice to philanthropic organisations who wish to support advocacy is that they need to gather expertise around the issue they want to advocate for, and it is often best to form partnerships with other charities.  Funders should decide if it is consistent with their objectives, be sure that it meets the public benefit test, decide who will lead, be the face of the advocacy program, speak to the press and politicians.  It needs to be someone who can take on the criticism.

He noted that there are several ways to play an advocacy role.  These include: hosting meetings, commissioning research, publishing reports, soliciting support from others, and engaging prominent people to act as patrons.

He also noted that a tactic to fund advocacy used by some funders was to provide “core” non specific, untied grants – which enable the recipient organisation to use the funds in any way that they see fit (and allowing them to engage in advocacy activities).

In summary, Dr Lane advised: be sure of your facts, ensure funding is consistent with objectives, pick the right partners and ensure that the subjects of advocacy are at centre stage – do things with people, not for them.

Genevieve Timmons photographed by Ian McKenzie 2007

Genevieve Timmons photographed by Ian McKenzie 2007

Genevieve Timmons began her segment by reminding us knowledge is power.  She spoke of asking a Gamillaroy elder what we lack in western  culture.  The answer was about the “responsibility of sharing knowledge” and that knowledge can only be shared when it can be passed on to someone who will use it properly.  In a sense, advocacy is about the appropriate and strategic use of knowledge and information.

Genevieve took us back to the days when it was not legal for philanthropic organisations to fund advocacy and the work of the Reichstein Foundation and their support for Broken Rites in the 1980s. The foundation funded research about abuses in the Catholic Church, and then provided support for programs such as counselling and “community voice building”.  This work moved from the establishment of an inquiry in Victoria to the Royal Commission which is taking place now.

Genevieve says the key to supporting advocacy is to have clear principles, to ensure that money is spent well, and to look at the bigger picture.  She also talked about how advocacy is not always about changing things but can also be about holding ground (for example students protesting about changes to the education system).

Genevieve provided a diagram of the “advocacy chain” which is a progression from 1) an experience or situation to 2) information, 3) research and data analysis, 4) services and programs, 5) community voice, 6) public awareness and education, 7) policy to 8) lobbying.  Which leads to “change” or “holding ground”.

Mary Crooks Executive Director of the Victorian Women’s Trust

Mary Crooks AO says that philanthropic organisations should pick the issues where they are well placed to act to undertake advocacy.  She told the story of meeting with a potential donor who wanted to know what the Victorian Womens Trust  was going to do about an issue of concern in relation to state politics in the early 90s (when the auditor-general was being gagged by the Premier).  When told that VWT was not placed to address that issue, but were starting a new kitchen table model of community consultation, the donor was very interested.  Her support led to the Purple Sage project.  Her support then, has led 16 years later to the Voice for Indi campaign.  Moral of the tale: advocacy can have a slow burn, but this philanthropic investment is still yielding a powerful return.

Mary talked extensively and movingly about the “Paradox of Service” unfunded advocacy program the Victorian Womens Trust runs for former nuns who have left their orders.  Eight years on, this started when a woman came into their office asking for help.  While this was not part of the VWT’s core business, their ethos is to leave no left-of-field contact or query unanswered.  So they took it upon themselves to research what was going on.  Their report was published in 2008.  It gained world-wide press coverage (including the Irish Times) and led to a television story on Compass and now significant change in how the Church deals with former nuns and priests.

Their documentation of the distress, poverty, hardships and emotional pain endured by people who had left religious orders enabled them to form their own independent advocacy program, develop a manual on how to be an effective advocate.  Staff from the Victorian Womens Trust have now spoken to several orders on behalf of the women, to ask for apology, statement of service and monetary compensation.  It was satisfying to hear that so far, they have settled every case they have tackled.  This is becoming even broader, in that they are now intending to distill everything they have learned in the last eight years, to share as a guide for all affected.

Mary says that philanthropic organisations have a freedom to go to the leading edge in what they fund, as they are not subject to the same commercial and government restraints as other donors.  It is no good just going along with the same old same old as this is both wasted power and wasted opportunity.  She also feels that advocacy is not just the preserve of the centre left, but noted significant changes in society which have been brought about by conservative womens’ agencies such as the Country Womens Association and the Womens Christian Temperance Movement.  She agrees with Dr Lane that advocacy is a moral imperative, about word and deed if you have the words “justice”, “fairness” or “disadvantage” on your website.  She concedes that funding advocacy and practicing advocacy is tough and there is huge potential for criticism, but that you need to have stickability – one piece of advocacy can take 20 minutes and involve writing a letter, others, like the Paradox of Service, can take eight years or more.

Mary feels that it is imperative for those who fund advocacy to work with others  to give voice to issues of concern, and she says she is heartened by the response to the Federal Budget as being not a hip pocket knee jerk reaction, but criticism based on the idea of what is fair.  She concluded by stating: The robustness of our democratic culture depends on advocacy – we can all work to find channels to give people voice.

What do you think? How does your organisation support or fund advocacy?

In case of queries as to why I have referred to Charles as Dr Lane but to Ms Timmons and Ms Crooks by their first names – this is not sexist deference, but rather a result of my relationship with the two latter mentioned whom I know personally.

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Is Corporate Sponsorship Philanthropy?


ImageReaders, today there is a debate about funding, the arts, ethics and government support.  The discussion around whether an organisation which has a corporate supporter has the “right” to terminate that relationship is becoming politicised, particularly by the Minister for the Arts, Senator Brandis, who has written to the Australia Council asking them to review their policies relating to organisations which “unreasonably refuse corporate support” but continue to seek Government funding.

I find this extremely disturbing.  In a time when ethical investing, impact investing, and the idea of understanding where our dollars are invested in order to further strategic philanthropic goals is growing in importance, it seems a strange disconnect to me that an organisation is being criticised for its decision to take an ethical stance on a particular issue.  See  this from the Sydney Morning Herald and this radio transcript from an interview this morning.

Corporate sponsorship serves a different purpose from philanthropy.  Sponsorship is a commercial transaction whereby both parties gain some form of benefit – usually for the sponsor it is that intangible goodwill, good corporate citizen kudos, as well as the opportunity to get their name in front of an audience, and benefits for staff (free/discounted tickets, opportunities for volunteering, engagement in matched giving etc).

Philanthropy in its truest sense is the giving of a gift for no visible or material return (unencumbered by the desire for publicity, recognition or brownie points – though no doubt all foundations and philanthropists would love this as a side benefit).

For a corporate sponsorship relationship to succeed there needs to be an alignment of values for both organisations – in the end, the relationship is not about the exchange of cash, though that is of course very important – but it should be about providing a resonance between the two organisations.  Most likely in this instance, this was originally the case but circumstances have changed for the sponsoring organisation, and for the issue at the heart of the matter (the treatment, and offshore detention of refugees/asylum seekers).

I do not want to get into the tintacks of the specific case, as it is highly emotive.  But I would hearken back to the days when tobacco companies were gleeful supporters of the Australian Ballet and sporting events.  (I am taking a sentence here from wikipedia, so forgive my laziness:) “In 1992 the Tobacco Advertising Prohibition Act 1992 expressly prohibited almost all forms of tobacco advertising in Australia, including the sponsorship of sporting or other cultural events by cigarette brands”.  If this Act were not in place, would it now be considered “unreasonable” for cultural organisations to refuse funds from the tobacco industry on grounds of political correctness or health awareness or simply not wanting to be associated with products that are known to have harmful effects? Or under the Minister for the Arts’ proposed code – should they just take the money and shut up?

The topic is complex (or not – depending on where you sit – and depending whether you even care about the arts receiving funding – as so many people who comment on the articles about this appear to be) but I think this is an important debate and I would love to hear your views.

 

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