Workforce Development: Why It Matters

August 20, 2010

How do we get more people working?

“Jobs.  Jobs.  Jobs.”  Politicians and employers have uttered this mantra a lot lately.  This should come as no surprise; the unemployment rate for the 50 largest metropolitan areas reached 9.3% in 2009.  Since the beginning of the recession in 2007, the United States lost over 8 million jobs.  Families continue to struggle, and leaders are anxious to find a solution that will get more people working.

At a meeting for public and private funders this week, Fred Dedrick, executive director of the National Fund for Workforce Solutions, told the attendees that we should dispel the notion that people don’t want to work.  People are ready and willing to work, but the way that people find jobs has become increasingly complex.  Rarely do people join the family businesses anymore, which was common practice until a few decades ago.  Today’s job seekers send resumes into the black hole of the internet, unsure of whether they will ever even hear back about their applications.

At the National Fund, they believe in a strategy that involves not only understanding the needs of the labor force (the demand side), but also the needs of employers (the supply side).  The National Fund is a $50 million national effort designed to strengthen and expand high-impact workforce development initiatives dedicated to advancing low wage workers into good careers while addressing skill needs of employers.  They do this through forming regional collaboratives of government agencies, foundations, and other philanthropic organizations to focus financial and intellectual capital on creating jobs.  These collaboratives align funds to help create and expand workforce partnerships.  Their model brings employers and workers together to talk about their issues and solutions, or as Dedrick put it, their pain and opportunity.

The National Fund for Workforce Solution’s model is one innovative way of tackling workforce development.  But there are other issues that complicate workforce development even further.  In a report released by the Economic Policy Institute this spring called Uneven Pain, Algernon Austin, director of the Race, Ethnicity, and the Economy program, found that the Twin Cities metro has the worst racial disparity in its unemployed population than any of the other 50 major metropolitan areas in the United States:

“The Minneapolis metropolitan area has a black-white unemployment ratio of 3.1 to 1. This means that blacks are 3.1 times as likely to be unemployed as whites. Additionally, the black-white difference in unemployment is almost 14 percentage points.”

This disturbing statistic has prompted the Greater Twin Cities United Way, The Jay and Rose Phillips Family Foundation, The McKnight Foundation, and Wells Fargo Foundation Minnesota to sponsor a convening to talk about local solutions to this issue.  Many groups are working on pieces of the issue to diversify and strengthen the metro area’s workforce, but how are they aligned?  How are these groups affecting policy?  What about green jobs?  And how strong is the safety net that supports low-income workers?

On September 1, MCF is pleased to welcome Dr. Austin and a distinguished panel of experts for a morning program open to MCF members to discuss these questions.   In addition, MCF is thrilled to partner with the Alliance for Metropolitan Stability on an afternoon meeting open to both nonprofits and funders.  MCF members, we hope that you are able to attend to discuss this important issue.  For those who are unable to attend, stay tuned for a summary of the program here at the MCF Philanthropy Potluck Blog.

- Stephanie Jacobs, MCF director of member services

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Capacity, Culture, Commitment and Comfort: Finding Public Policy Strategies That Fit Your Foundation

July 20, 2010

How much change can a foundation catalyze by simply – albeit generously – writing checks? Not as much as it could if it also engaged in public policy activities. In fact, public policy work should be viewed as an essential part of a foundation’s efforts, say several members of the Minnesota Council on Foundations.

In our Summer issue of Giving Forum, “Public Policy and Philanthropy: Many Roads Lead to the Same Destination – Change,” John Larsen, trustee and administrator of the John Larsen Foundation, says, “Ultimately, the work of our foundation is about creating real, systemic change, and that can only happen when we start talking to government. Whether you’re a small family foundation like us, or a very large foundation, we all need shifts in public policy in order to achieve really significant lasting social change.”

The challenge is that working to achieve shifts in public policy is often equated with lobbying. And the thought of walking up the steps of the Capitol or testifying before a legislative committee is more than many funders can fathom.

Lobbying, however, is not the sole avenue to influencing public decision making and advocating for causes. Although it is the most recognized public policy engagement tactic, it is only one of 18 distinct policy strategies that Julia Coffman outlines in “A User’s Guide to Advocacy Evaluation Planning,” published by the Harvard Family Research Project.

A “Framework of Public Policy Activities,” which we include in Giving Forum, also includes using electronic outreach and social media, coalition and network building, grassroots organizing, briefings and presentations, polling, pilot projects, research investigating issues and identifying solutions and policymaker education, among others – all of which can impact public decision making, which ultimately shapes policy development, approval and implementation.

A foundation can engage anywhere along the continuum, pursuing those activities that fit its capacity, culture, commitment and comfort levels. A public policy activity that feels right for one foundation may not fit another.

Many foundations choose a combination of strategies, leveraging their resources to: raise awareness of where the public stands on particular issues; bring together divergent points of view to first converse then collaborate; empower community members to advocate on their own behalf by providing technical assistance; increase the capacity of nonprofits to mobilize others; identify messages that resonate with policymakers and the public; determine what would happen if the status quo was allowed to prevail; aggregate what is known already about an issue and put that to work to further discussion; or identify possible solutions and best practices.

These MCF members have each chosen distinct strategies to impact public decision making that fit their capacity, culture, commitment and comfort level. Read more about their work in our just-published Giving Forum:

Lead article:

Southern Minnesota Initiative Foundation: An outgrowth of its grantmaking and programmatic activities, community dialogues and business loan work, SMIF’s public policy activities, including building coalition and networks and partnering with the media to draw attention to the issues and how public policy could impact the success the foundation seeks.

The Minneapolis Foundation: As part of the School Readiness Funders Coalition, a group of funders with diverse strengths and abilities in advocacy work, The Minneapolis Foundation brings to the group its ability to lobby and testify at legislative hearings to advocate for the coalitions “Agenda to Achieve Learning Readiness by 2020.”

John Larsen Foundation: When awarding grants supporting work toward LGBT equality, the foundation  considers if educating policymakers is an end goal of the nonprofit’s work and if the organization has a research plan and a track record of communicating those findings to policymakers.

Indian Land Tenure Foundation: Striving to ensure that lands within the original boundaries of reservations is acquired, owned and managed by Indians, the foundation views education about land issues a priority, as well as identification then pursuit of strategies for achieving legal reform.

Women’s Foundation of Minnesota: The explosion of social media has created a new landscape for the foundation to leverage its expertise to educate, engage and broaden its reach to shift attitudes, behaviors and institutions that limit equality for women and girls.

Voices of Philanthropy articles:

Bill and Melinda Gates Foundation: Identifying partners best qualified to successfully implement strategies and measuring what’s important to guide future initiatives drive the foundation’s advocacy work.

Initiative Foundation: Based on the belief that local people are the key to strengthening communities, the foundation increases civic engagement by providing training, technical assistance, resource referral and grants to help citizen-based teams develop and carry out strategic plans.

While these efforts are diverse, the common thread amongst them is the recognition by these foundations that strategically developing goals to influence public decision making and intentionally engaging in public policy activities and advocacy work can move systems change forward.

- Chris Murakami Noonan, MCF communications associate

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Small Foundations Pay Out Big, Study Finds

July 6, 2010

As Foundation Source processed grants last year and analyzed data collected from Form 990PF filings of nearly 500 of its small and mid-size private foundation clients, it tracked the pay outs and compiled what it found. Its just-released study concludes that, in 2009, 83 percent of these small to mid-sized foundations paid out more than they were required to by the IRS. (The IRS requires that private foundations distribute at least 5 percent of average investment assets annually for charitable purposes.)

In fact, the study says that 58 percent exceeded the minimum distribution requirement by at least 5 percent of their average investment assets.

The larger payouts are continuing into 2010, the Foundation Source also notes, reporting in May that it was seeing a 15 percent increase in grantmaking among its clients.

“Ninety-nine percent of all family foundations are under $100 million,” says Foundation Source President Andrew Bangser. “These generous foundations represent more than half of all foundation giving in the US, nearly $16 billion in 2007. … The data shows that most family foundations have not limited their giving to the minimum amount required by the IRS. And small and midsize family foundations stepped up dramatically in this tough economy to assist a wide variety of people, organizations and causes.”

Foundation Source provides support services for more than 900 private foundations across the U.S. representing $4 billion in foundation assets.

To learn more about the study, view it online on the Foundation Source’s website, or read about it in the Chronicle of Philanthropy.

-Chris Murakami Noonan, MCF communications associate

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Don’t Close the Achievement Gap, Prevent It

June 29, 2010

In recent years, I’ve heard a lot about efforts to close the achievement gap, a national embarrassment that is especially evident in Minnesota.

Last week I attended “Window of Opportunity: Babies Can’t Wait, The 4th Annual Nancy Latimer Convening for Children and Youth” co-sponsored by the Minnesota Early Childhood Funders Network and the Minnesota Council on Foundations. Evidence presented there was clear – poor children (and their families) need services and intervention, long before the children enter school, to ensure an achievement gap doesn’t start.

Dr. Richard Chase of Wilder Research puts it this way, “We have to stop talking about how to close the achievement gap. We have to think about how to prevent the achievement gap.”

Chase talked about the necessity of multiple, coordinated services to achieve this and defined three essentials that very young children need to thrive:

  • A caring and responsive caregiver
  • A language-rich environment
  • Opportunities to safely explore

In our state, 15 to 20 percent of our babies are vulnerable. Their families live in poverty, increasing the risk that they simply won’t get what they need to succeed. In 2008, 60 percent of American Indian babies in Minnesota were born into poverty, 42 percent of African American, 33 percent of Hispanic, 10 percent of Asian, and 8 percent of white babies. Low-income children of color make up a growing portion of Minnesota’s babies today and of Minnesota’s students and workforce tomorrow. Their success matters.

Dr. Megan Gunnar, a professor at the University of Minnesota’s Institute of Child Development also spoke. She introduced the theory of “serve and return,” a continual process of the child “serving something out” and how, in a responsive environment, their “serve is returned.”

This high stakes game doesn’t happen on a tennis court. Instead, imagine a baby smiling and cooing at mom and then waiting for a smile or encouraging word to come back. If she doesn’t get a response, she tries less and less often, and ultimately her brain development slows. An unresponsive environment just doesn’t provide what a child needs.

Why the lack of response? Caregivers in low-income families are depressed or emotionally stressed 15 to 20 percent of the time, rendering them ineffective at the all important “serve and return.” Lack of access to affordable mental health care and other services exacerbates the problem.

For both speakers, the answer is clear. Increase funding for the whole child, the whole family and the whole community and do it now.

Chase summarized, “Close the gap between what science is telling us and what we do. Investing in early childhood gives us the biggest bang for our buck. It’s certainly a better investment than stadiums or airlines.”

Awards Presented
This year’s “Nancy” awards, presented in honor of Nancy Latimer, went to Jane Kretzmann, senior program officer at the Minnesota Community Foundation (an MCF member) for her work promoting the healthy development of young children, including development of the Project for Babies, and Arthur J. Rolnick, economist, senior vice president and director of research at the Federal Reserve Bank of Minneapolis for showing the link between early childhood education and healthy communities and economies.

- Susan Stehling, MCF

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Skating Ahead of the Cracks — Nonprofit Adaptation in the New Economy

June 15, 2010

In the “New Normal” success will require acknowledging trends, assessing your organization’s health accurately, and adapting proactively.

Are there fault lines in your fiscal forecast?

In my first follow-up post to last week’s United Front 2010, I wrote about State Economist Dr. Tom Stinson’s take on what the new normal is, and what it will mean for Minnesota nonprofits. I promised that in future posts I would delve into different recommendations shared at the program to ensure organizational sustainability. With this post I’d like to touch on some thoughts from general session panelists.

“When You’re Doing Poorly, It’s Too Late”

Among the panelists was MayKao Hang, incoming president and CEO of the Amherst H. Wilder Foundation. As you may already be aware, the Wilder Foundation has suffered the effects of the economic downturn, and in response, the leadership at Wilder made the difficult decision to cut both programming and staff.

Hang’s advice is to consider carefully your current financial fitness and try to get ahead of potential problems by making decisions from a position of relative financial health and power. “When you’re doing poorly, it’s too late,” she stated. Sarah Caruso, president and CEO of the Greater Twin Cities United Way, corroborated Hang’s comment, warning audience members “Don’t wait for the cracks to show.”

Caruso went on to tell the story of two nonprofits that came to the United Way considering a merger only to choose against it. Both subsequently suffered further financial hardships and found themselves so weak that a merger was no longer a viable option for either.

Identifying the Cracks, Before They Develop

If you’re a nonprofit leader looking to assess your organization’s financial wellness and map future contingencies to anticipate and plan for change in this new economic landscape, Nonprofits Assistance Fund has a variety of resources and tools. Their Sustenance in Lean Times web page provides an excellent starting point for spotting potential weaknesses and building contingencies “before the cracks show.”

“Skate to Where the Puck will Be”

In his closing statements at United Front Tom Stinson quoted the great Wayne Gretzky, and it seems appropriate to reiterate those words here, “I skate to where the puck is going to be, not where it has been.” In the new economy, this prescience will be crucial to creating  sustainable futures for nonprofit organizations, and in turn, better outcomes for the people and state of Minnesota.

- Cary Lenore Walski, MCF web communications associate

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Making More and Better Key to Economic Recovery

June 11, 2010

This week at United Front 2010, Minnesota Economist Tom Stinson started out on a positive note. “I’ve got some good news,” he said. “The recession is over.”

“But,” (there’s always a “but” isn’t there?) he continued, “…we’re not going back to where we were.”

Where We Will Be, and Why

Stinson went on to explain to me and the 900 other nonprofit, grantmaker and government workers and representatives in the audience that the “New Normal” will most likely mean:

  • Higher interest rates
  • Slower economic growth
  • Increasing numbers of retirees
  • Less consumption; more saving
  • Creative destruction/disruptive innovation will change the way we deliver services
  • A shift in the balance between private and public sectors
  • More uncertainty about the future

The two broad factors shaping these trends are the combination of the recession and our aging population. Research shows that the U.S. economy lost 8.4 million jobs during this recession. It’s estimated that it will take 2.5 years for Minnesota to recover  its lost jobs. Unfortunately, due to the aging of our population, there’s concern that once those jobs become available again, eventually we will not have enough people to fill those positions.

Why is this a problem? Past recessions have taught us that productivity is the key to economic recovery. Traditionally growth happens when “More people make stuff, or people make more stuff per hour.” With out the people-power to drive production, Minnesota faces a shrinking tax base, coupled with a dramatic increase in demands for health services, as aging baby boomers require increased medical assistance.

The Key to Growth — Individuals and Organizations Making Better Choices

Stinson noted that although the future looks gloomy, Minnesota is fortunate in that the new economic reality plays to our strengths. Future economic growth will depend on increasing productivity without corresponding increases in the size of the labor force. The key to increasing productivity without more labor is innovation. The key to innovation? Education — something that we Minnesotans traditionally do well, but must continue to invest in.

Nonprofits, he explained, will be crucial to helping individual Minnesotans make better decisions and produce better outcomes in key areas such as:

  • Creating healthier habits to reduce lower lifetime health care costs
  • Reducing recidivism rates
  • Improving graduation rates

Simultaneously, the very economic straits that demand nonprofits help individuals make better choices, will also demand that nonprofits make better choices too about how they deliver service.

How can nonprofits make better choices about service delivery? There are many paths to providing better service, and the methods of doing so are sometimes very unique to individual organizations. However, there are some key areas common to nonprofits where efficiencies can be found and better practices to foster innovation put into place.

I’ll be exploring some of those paths to better outcomes that I learned about at United Front 2010 in future posts.

- Cary Lenore Walski, web communications associate

Join the Conversation: Did you attend the United Front 2010 conference? What were your take-aways? How is your organization planning on doing more, better in the coming years?

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At United Front 2010, Cross Sector Leadership Will Confront the New Normal

May 14, 2010

The stormy economic climate of the last two years has transformed the shape of the nonprofit sector. As the clouds part, and a new point of homeostasis in the market economy is reached, leaders across sectors are now seeking to chart out the new landscape that we have found ourselves in.

On June 9, the Greater Twin Cities United Way, with the support of General Mills, will convene nonprofit, philanthropic, and government leaders to take stock of the new reality at United Front 2010 at the Minneapolis Convention Center.

At this informative, interactive forum the latest state economic and fiscal data will be presented, along with an overview of the future of funding in health and human services. Attendees will be challenged to find ways to collaborate and lead the strategic and systematic changes converging in the human services arena.

To learn more and register for this program, visit UnitedFrontMN.org.

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Energizing the 95 Percent of Foundation Assets That Aren’t in the Spotlight

May 3, 2010

It’s hard to imagine that something that’s been around for 40-plus years is actually energizing philanthropy. But, that’s exactly what program-related investments (PRIs) are doing.

“While foundations traditionally have given great attention to the 5 percent of their assets they typically pay out each year, PRIs provide us with an opportunity to think about what we do with the other 95 percent and what our role could be in working with our community partners,” suggests Kathleen Fluegel, executive director of HRK Foundation, a member of the Minnesota Council on Foundations (MCF).

The Spring 2010 issue of MCF’s Giving Forum focuses on how Minnesota grantmakers are magnifying impact and creating change through innovative philanthropic initiatives. PRIs – loans, loan guarantees, lines of credit and equity investments that earn a foundation a return on its investment of 1 to 2 percent in most cases – are playing a prevalent role in energizing the field.

Fluegel recalls that when the younger generation of HRK trustees introduced PRIs to the board as a new foundation tool, the idea was “embraced by the older generation, and it energized all of us because of new, creative possibilities,” she says.

For example, HRK offered a PRI to one of its long-time nonprofit partners who was having difficulty timing cash flow to acquire pieces for its museum. “We realized that a line of credit could give the organization more flexibility,” Fluegel explains. “Raising money for the acquisitions wasn’t an issue; it was quick turn-around that presented challenges.” With the line of credit, the museum could purchase an object and then take the time needed to raise the money and repay the loan.

In this issue of Giving Forum, we also spotlight PRI maker Sunrise Community Banks.

With its community development mission, Sunrise provides financing that other institutions might view as risky. “We’re willing to take the extra steps to make some of these projects work, because we know they will positively impact the community,” acknowledges Nikki Foster, Sunrise Community Banks’ vice president of community development.

Through its Sunrise Homeownership Alliance, an innovative, nationally recognized initiative, Sunrise Banks secured deposits from organizations such as The Minneapolis Foundation and the John Larsen Foundation. These deposits fuel lending through the Greater Metropolitan Housing Corporation and Dayton’s Bluff Neighborhood Housing Services. These nonprofits provide financing to individuals to buy homes  on a three-year contract for deed, during which time the individuals participate in credit counseling to learn how to repair their credit and set aside savings, so they’re able to refinance into a conventional mortgage. Also part of the financing mix are federal dollars from the Family Housing Fund.

In this issue’s “Giving Trends” article, MCF research manager Juliana Tillema outlines how PRIs got their start, some recent trends and the opportunities and benefits that PRIs can present for both foundations and nonprofits. She notes that, because PRIs require funders to integrate deep program knowledge with financial and legal expertise, PRIs are most often made to organizations with which a grantmaker has a well-established relationship, when a strategic investing opportunity arises with those partners, and when capital is needed to realize a shared goal.

Who are Minnesota’s PRI Makers? Tillema cites MCF research that lists 11 MCF members, about half of whom made their first PRI recently – in either 2008 or 2009. The list includes: Blandin Foundation, Duluth Superior Area Community Foundation, HRK Foundation, John Larsen Foundation, Lutheran Community Foundation, The McKnight Foundation, The Minneapolis Foundation, Otto Bremer Foundation, Carl and Eloise Pohlad Family Foundation, Thrivent Financial for Lutherans Foundation, and the West Central Initiative.

- Chris Murakami Noonan, MCF communications associate

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