The Path to Effective Philanthropy: Honest Conversations

February 27, 2014

It was a treat this week for MCF and our members to host a conversation with Phil Buchanan, president of the The Center for Effective Philanthropy (CEP).

Our exchange was energetic, provocative, fun and sometimes funny.  I was struck by how often we circled back to core concepts and philanthropic fundamentals.

The discussion aligned serendipitously with MCF’s Principles for Grantmakers.  Here are a few snippets that illustrate the challenges — and opportunities — of putting principles into practice.

Effective Governance
According to MCF’s Effective Governance Principle, grantmakers are expected to be good stewards of assets, to fulfill donor intent, to make sound decisions and to perform all fiduciary responsibilities.

Buchanan called for foundation boards to govern effectively by not rubber stamping staff members’ grant recommendations.  “If the board is approving every grant, they’re not taking time to see what it all adds up to and they’re not asking the hard questions.”

And he challenged foundation CEOs to practice “radical openness” with their boards – i.e., to say everything they’re thinking and to spark “messy conversations.”  Good governance doesn’t emerge from perfectly scripted board meetings at which “the most spontaneous thing that happens is when someone gets up to get a cup of coffee.”  (Yes, it’s okay to laugh at ourselves.)

Engaged Learning
The MCF Engaged Learning Principle calls for continuous learning and reflection by engaging board members, staff, grantees and donors in thoughtful dialogue and education.

Of course, learning and continuous improvement through performance assessment is at the heart of CEP’s mission.  (Buchanan readily acknowledged that he is not the expert in philanthropy . . . and he cautioned us to be wary of those who say they are.)

Because philanthropy is “wicked tough,” funding programs on theory alone is not enough.  It’s vital that grantmakers establish performance indicators and are data driven.

And they sometimes need to follow, not lead.  By replicating proven programs, foundations can learn from others and succeed.  (For more on shared goals, read Buchanan’s opinion piece in this week’s Chronicle of Philanthropy.)

Transparency
Through MCF’s Transparency Principle grantmakers strive to build healthy relationships with the public, applicants, grantees and donors by using clear, consistent and timely communications.

Being transparent includes sharing the so-called “failures.” (Our host Kate Wolford of The McKnight Foundation noted that we might be more apt to learn from our missteps by reframing them in more positive, multi-dimensional terms.)

Buchanan reported that it’s up to foundations to share the results of CEP assessments.  Some don’t share at all, some partially share with grantees (and sometimes add a positive spin!), and some share widely, warts and all.

He noted that foundations that are truly transparent are viewed as trustworthy and credible.  For example, Robert Wood Johnson Foundation is fully committed to evaluation and transparency, making it all the stronger.

Cynics may say that foundations don’t need to be accountable to anybody.  But as Buchanan reminded everyone, if grantmakers aren’t honest and don’t cultivate positive relationships with their grantees, how can they obtain the candid information they need to improve philanthropy . . . and improve lives?

More to Come
Keep watching our Philanthropy Potluck Blog for future postings about philanthropic effectiveness, including video conversations with MCF President Trista Harris, Buchanan and other big thinkers.

Like our grantmaker members, MCF is committed to hosting robust conversations within and across sectors . . . because leadership for the 21st century requires honest, provocative discussion.

– Wendy Wehr, MCF vice president of communications and information services


“Finish Strong” Funders Coalition Supports Older Adults

February 21, 2014

Spending several days with my home-bound elderly mother this week has given me new perspectives on the “graying of America.”

Let’s just say that I’m not looking forward to losing my driver’s license, walking with a cane and having difficulty cutting an apple or reaching up to my kitchen cupboards.

Of course, thousands of baby boomers in Minnesota feel the same way, and many more will face far greater challenges. And that’s one reason the philanthropic community is paying attention to the great “age wave.”

According to the Minnesota Department of Human Services, the number of Minnesotans ages 65 and up will nearly double between now and 2035, while other age groups will grow on average only six percent. (Learn more about our state’s changing demographics at Minnesota Compass.)

Funders for Aging Services
A statewide network of grantmakers affiliated with the Minnesota Council on Foundations (MCF) has just announced a new name for their group:  the Finish Strong Funders Coalition for Aging Services.  (Yes, they’re working at the other end of the age spectrum from the Start Early Funders Coalition.)

The network describes itself as “a wide array of public and private funders dedicated to funding services that support older adults in the community as important contributors, assets, and resources.”

Like several of MCF’s member networks, this group understands the importance of private and community foundations, corporate givers and government entities working together to face society’s challenges. And aging is a big challenge that’s closing in fast on all of us.

Resources on Aging
If you’re a grantmaker, a nonprofit aging services provider, elder or caregiver who wants to learn more about the impact of aging in our communities, here are just a few links to get you started:

And if you’re a grantmaker interested in learning more about Minnesota’s Finish Strong Funders Coalition, contact Tara Kumar, MCF member services manager, at tkumar@mcf.org.

By dedicating resources and coming together in formal and informal networks such as these, I have a growing confidence that we’ll transform our communities in ways in which we can live and age well. Then we’ll all have rides when we can no longer drive, as well as a helping hand in the kitchen.

– Wendy Wehr, MCF vice president of communications and information services



Minnesota Corporate Grantmaking Reaches Its Highest Level Yet

January 31, 2014

GiM_mediumLast October, MCF released its latest Giving in Minnesota, 2013 Edition,  the latest comprehensive analysis of the trends in giving by organized philanthropy in the Minnesota. This month, we’re taking a closer look at the report’s insights on corporate grantmaking.

Corporate community support can occur through several streams: corporate giving programs, endowed foundations, in-kind giving, volunteering, and any combination of these and other programs. For this research, we concentrate on actual cash giving through corporate giving programs and corporate foundations.

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Corporate grantmakers are an important part of the philanthropic scene in Minnesota. In 2011, corporate grantmakers represented just 9 percent of all grantmakers but gave 43 percent of all grant dollars. This trend – relatively few corporate grantmakers contributing a relatively large share of overall giving – has been consistent since MCF began conducting Giving in Minnesota research in 1976.

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2011 marked the highest level of corporate grantmaking yet, and recovery from declines in previous years from the Great Recession. The total 2011 corporate grantmaking of $713 million was a 9 percent increase from 2010. The previous giving peak was in 2008, a total of $695 million.

Minnesota’s top corporate grantmakers in 2011 were:

  • Target Foundation and Corporation
  • General Mills Foundation and Corporation
  • Cargill Foundation and Cargill, Inc.
  • UnitedHealth Group and United Health Foundation
  • Medtronic Foundation and Corporation

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Corporate grantmaking in the sample broken out by subject area varied slightly from the whole sample of 100 of the top grantmakers in the state. Similar to the entire sample, corporate grantmakers gave the largest share of their grant dollars to Education, but the corporate share was larger, 39% compared to 28%.

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In contrast, corporate grantmaking in the sample broken out by geographies served was quite different from the whole sample. Corporations based in Minnesota often divide their grantmaking between headquarters communities and other regions of the country or world where their facilities and customers are located. 30% of corporate grantmaking served Minnesota, compared to 47% from the whole sample. 27% of corporate grantmaking served national areas, compared to only 13% by the whole sample.

Look for future posts digging into more giving trends by subject area, with Arts up next.

- Anne Graham, MCF research associate


Minnesota: A Case Study In Large-Scale Data Collection and Impact

January 29, 2014

GiM_mediumThe blog Markets for Good, an effort by the Bill & Melinda Gates Foundation and others to improve the generating, sharing, and acting on data in the social sector, just interviewed MCF President Trista Harris about our annual Giving in Minnesota report. We are reproducing the entire Q&A here; you can also read it on the Markets for Good website. Thanks to them for the opportunity!

What data collection techniques and technology does MCF use to produce its annual Giving in Minnesota report?

Producing Giving in Minnesota is a year-round process. Production of the 2013 Edition began in 2012, when Research Associate Anne Graham began identifying the top 100 grantmakers in the state and asking them to provide their grant lists for coding.

Our process succeeds because of the human element. Over the past eight years Anne has built strong relationships with Minnesota’s top grantmakers – including corporate grantmakers who are not required to file tax forms that make public specific details about their annual giving.

And we accommodate the grantmakers. They can submit their grants lists in whatever form is easiest for them – whether it’s an electronic file pulled from their grants management system or a hard copy of their annual grants list.

Of course, even with this high-touch, low-tech approach, we do need to rely on some public sources to complete our data collection. But here again, we have a close working relationship with individuals in the office of the Minnesota Attorney General, and they give us direct access to a database that allows us to update grantmakers’ financial data and identify new foundations in the state.

And our technology? Microsoft Access relational databases still serve us well for data management, annual reporting and long-term trend analysis.

What recommendations would MCF have for other organizations seeking to collect critical information directly from many sources?

MCF may be the only U.S. regional association of grantmakers that is collecting grantmaker data on this scale. To maintain our organizational commitment to this research work (since 1976), we have fully integrated it as a core member service.

Producing Giving in Minnesota goes hand in hand with our other research projects. We communicate closely with foundations and corporate grantmakers to publish our Minnesota Annual Grantmaker Rankings. Plus, we connect regularly with these same organizations to keep our Minnesota Grantmakers Online (MGO) database of grantmakers and grants current for nonprofit grantseekers.

And our lead data coder knows her stuff, too. Having worked for MCF for more than 10 years and in the state’s nonprofit sector longer than that, she knows minute details about Minnesota’s grantmaking and grantseeking scene.

While it would be hard to achieve that level of coding consistency and reliability from someone outside Minnesota, we are sticklers for maintaining national-level standards that enable comparisons between our data and others’ around the country. In coding, we use the National Taxonomy of Exempt Entities (NTEE) system and the Foundation Center’s Grants Classification System (GCS).

What are the benefits of this research for grantmakers and others in the community? What are the limitations?

MCF members rank our research as one of the most valuable benefits of membership. Using this source of reliable data, MCF staff can credibly explain the value and scope of philanthropy in our state. We publicize our findings to nonprofit grantseekers, business leaders and representatives of the media. Plus, we overlay US. Congressional district information so we can use our data to reach government officials and support our public policy work.

Having a robust database and staff expertise in-house, MCF can quickly respond to custom requests from grantmakers. For example, Anne goes deep into the data to help members benchmark their giving against peers, understand geographic shifts in funding, and sift through dozens of subject area subcategories to answer cross-subject and cross-population funding questions – such as which pockets of human services and health giving benefit seniors.

Having local data, we were able to report on how grantmakers responded to the Great Recession by shifting dollars from education to human services. We can see what grants are benefitting the metro area around Minneapolis and St. Paul and what are directed toward rural areas.

And we’ve been able to document the full value of corporate giving in Minnesota (which has the second highest number of Fortune 500 companies per capita in the country). Our state’s corporate grantmakers, including multi-nationals such as Target and General Mills, account for less than 10 percent of grantmakers but give 43 percent of the annual grant dollars. But they also direct more giving beyond our state’s borders than do our private or community foundations.

Still, what we know from our research is sometimes dwarfed by what we don’t know. Just as others across the country struggle with collecting beneficiary data, so do we. Receiving incomplete grant descriptions, we significantly under-report support for specific population groups.

And we receive complaints about the lag time in reporting complete information (which is also something that plagues the sector as a whole). Our grantmaker members often ask for real-time information so they can learn about the strategic intent of their peers and identify collaborators. At the end of the day, though, we cannot collect and analyze data that the grantmakers themselves don’t track.

But let’s not lament the gaps in our data. Instead, let’s use our rich data repository to identify trends that enable us to see into the future and succeed as 21st century philanthropic leaders. In my recent Philanthropy Potluck Blog post about predictions for the future, I envision how MCF’s data, our members’ data from grantees, and data from other sources such as Minnesota Compass can be combined to create a positive force for change in our state.


What Are Real Barriers to 21st Century Grantmaking?

January 24, 2014

While listening to some research highlights about Native American philanthropy yesterday, I got to wondering: Why have grantmaking methods changed so little since the 20th century? What are the invisible roadblocks that are preventing us from adopting 21st-century grantmaking practices?

In the Native Voices Rising report are 17 recommendations to increase grantmaking effectiveness and impact. Although written from a Native perspective, these suggested changes could be adapted for nearly any cultural or issue-based group:

  1. Provide increased funding for Native organizing.
  2. Provide more general operating and capacity-building support.
  3. Make long-term multi-year funding commitments.
  4. Fund grassroots Native organizations directly.
  5. Invest in leadership development.
  6. Support Native intermediaries that are solidly grounded in Native movements.
  7. Support income-generating activities such as social enterprises.
  8. Support development of the telecommunications/media infrastructure.
  9. Provide on-going operating support to voter engagement organizations beyond national election cycles in order to sustain progress and momentum.
  10. Incorporate interdisciplinary grant approaches that draw funds from multiple foundation program categories to support organizations and projects conducting work at the intersection of those programs, e.g., culture and environment.
  11. Listen and learn about Native communities, including issues, needs, and aspirations.
  12. Be more responsive than directive; find common interests.
  13. Communicate information about grant programs more broadly in the Native world.
  14. Conduct research on needs in the field in partnership with Native organizations.
  15. Look beyond the small population numbers as compared to other racial/ethnic groups.
  16. Bring Natives into the foundation as staff, board members and resource people, involving them in shaping and implementing foundation programs.
  17. Pool funds from small grant funders to streamline the grants application process and reporting requirements.

If you are a grantmaker, or if you work anywhere in the independent sector, I expect you’ve seen versions of these recommendations many times before. So what is hindering our adoption of these 21st-century grantmaking practices? I confess I don’t have the answers, but I bet you do.

Join the Conversation
Grantmakers, which of these recommendations have you already incorporated in your work? Which new practices would make the greatest difference to your grantees’ success? And which would dramatically improve your grantmaking effectiveness?

Please share your experiences. Together we can identify and break down the barriers to change.

– Wendy Wehr, v.p. of communications and information services


Education Grantmaking Rises with a Boost from Margaret A. Cargill Foundation

December 23, 2013

Screen shot 2013-12-04 at 2.55.04 PMIn October, MCF released Giving in Minnesota, 2013 Edition, the latest comprehensive analysis of the trends in giving by organized philanthropy in the Minnesota. Each month, I will write a blog entry that delves more deeply into the full report. This month is Education grantmaking.

Giving in Minnesota, 2013 Edition, reports on grantmaking data from 2011, the latest year for which complete data are available. The information here is based on the coding of a sample of over 27,000 grants of $2,000 or more made by 100 of the largest grantmakers in the state.

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Education saw strong growth in 2011 compared to 2010, surpassing the previous high set in 2007 prior to the Great Recession. Total Education giving from Minnesota grantmakers totaled $325.7 million, an increase of 23% compared to 2010. The growth in Education grantmaking was larger than the overall grantmaking increase of 15%. Education ranks first of eight subject areas, accounting for 28% of the grant dollars coded.

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Margaret A. Cargill Foundation’s giving greatly affected Education grantmaking in 2011. Sixteen percent of all 2011 education grant dollars came from this foundation. Overall giving by this foundation increased significantly in 2011 due to the foundation paying out multi-year commitments to a large number of nonprofits. Without giving from Margaret A. Cargill Foundation, education giving would have grown by 4 percent.

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As in previous years, Elementary/Secondary Education received the largest share of grant dollars compared to the other Education subcategories. Higher Education & Professional Schools saw increased funding due to the increased giving of the Margaret A. Cargill Foundation. Target Foundation and Corporation school library makeovers contributed to the increase in giving to Libraries/Library Science. Student Services & Organizations of Students includes scholarships and student support groups, such as college readiness organizations and reading/literacy programs.

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Corporate grantmakers continue to provide the largest share of Education grant dollars. Many corporate grantmakers focus on Education, including through programs like Take Charge of Education at Target Foundation and Corporation and Box Tops for Education at General Mills Foundation and Corporation. You can see the impact of Margaret A. Cargill Foundation’s increased giving in the increase in giving to Education by private foundations from 2010 to 2011.

Look for future posts digging into giving trends by grantmaker type, with Corporate Grantmakers up next.

- Anne Graham, MCF research associate


A Deeper Look at Minnesota Grantmaking Trends

December 4, 2013

Screen shot 2013-12-04 at 2.55.04 PMIn October, MCF released Giving in Minnesota, 2013 Edition, the latest comprehensive analysis of the trends in giving by organized philanthropy in the Minnesota. Each month, I’ll be posting here to delve more deeply into the full report. This month is Grantmaking by Subject Area.

Giving in Minnesota, 2013 Edition, reports on grantmaking data from 2011, the latest year for which complete data are available. It is based on the coding of a sample of over 27,000 grants of $2,000 or more made by 100 of the largest grantmakers in the state.

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As in previous years, Education leads, capturing 28% of the grant dollars coded. Except in three years – 2001, 2005, and 2008 – this has been the case since MCF began this research. Human Services followed with 21% of the grant dollars, and Public Affairs/Society Benefit was third with 17%.

Human Services includes grants for housing, youth development, disaster preparedness and relief, food and nutrition, employment, and human services areas. The Public Affairs/Society Benefit subject area covers grants to nonprofits involved in general civic, community and societal improvement projects, as well as philanthropy/volunteerism including community foundations and federated funds like United Ways.

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Over time, the share of grant dollars each subject area receives has remained fairly stable. Human Services led the giving by subject area in those three years that Education came in second. Each of those years was marked by crisis – 9/11, post-tsunami and Hurricane Katrina, and the Great Recession – where grantmakers stepped up to support people in need.

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There are some long-term differences in giving by subject area by Minnesota grantmakers compared to national foundation trends. The most significant one is the relative difference in shares of grant dollars to Health and Human Services. Minnesota grantmakers give a larger share to Human Services (21%) than the national trend (14%), and a smaller share to Health (10% vs. 28%). One of the reasons for this is that the major funders of Health are not located in Minnesota.

Care should be taken when making comparisons between national and Minnesota grantmaking trends. The data are different in several ways, including: different baseline sampling (MCF codes grants of $2,000 or more while the national sample is made of grants of $10,000 or more), inclusion or exclusion of corporate giving programs, and coverage of slightly different time frames.

Look for future posts digging into several of these subject areas, with Education up first.

-Anne Graham, MCF research associate


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