Grantmaking for Community Impact

May 7, 2014

promise1Last month, MCF hosted Christine Reeves from the National Committee for Responsive Philanthropy (NCRP). Reeves gave an overview of philanthropic giving in the U.S. and shared her thoughts on where the sector should go from here.

Go Beyond “Grantmaker”

Reeves advocated for the term “philanthropic practitioner” rather than grantmaker. While the latter can be limiting, the former includes funder, partner, supporter, evaluator, advocate and champion — embodying more of what philanthropy can do to be effective. And she thinks it would be great if philanthropic organizations were so effective that “we put ourselves out of business.”

Reeves also discussed power dynamics between philanthropic organizations and grantees. For example, she said philanthropic practitioners should act as though their endowments are contingent on a positive review by their grantees, in much the same way that a grant is contingent on the positive review of a grantmaker. Grantees are evaluated by philanthropists, and sometimes philanthropy is evaluated by grantees. But even when it is, the outcome is never tied to dollars.

Use Targeted Universalism

Reeves then explained the concept of targeted universalism as an effective grantmaking strategy. Targeted universalism says if you target money to address needs and reduce disparities for the most marginalized, overall well-being (by many metrics) improves for everyone. Conversely, if a philanthropic organization tries to help everyone equally, they may unintentionally exacerbate existing disparities.

Fund Social Justice and General Operating Support

Reeves said, “In Minnesota, only 13% of philanthropic dollars go to social justice initiatives, yet this is an effective approach to solving long-term problems.” She asked: Would Mahatma Gandhi, Cesar Chavez or Martin Luther King, Jr. receive a grant today? Are philanthropic practitioners championing incrementalism or funding true movement? How do we create fertile ground for the next Gandhi, Chavez or King? Today 2% of U.S. foundations fund social justice.

Reeves also stands firmly behind general operating support, which she said means “letting go and trusting grantees.” Seven percent of U.S. foundations provide general operating grants today.

In Minnesota, the largest share of grant dollars goes to programs, but general operating support represented 30% of grant dollars in 2011, the latest year for which data are available. See Giving in Minnesota, 2013 Summary Report, page 7, for specifics.

Philanthropy’s Promise Explained

NCRP started Philanthropy’s Promise to change U.S. funding priorities, and more than 177 grantmakers have signed on to date. Philanthropy’s Promise celebrates foundations that intentionally target the bulk of their grant dollars to benefit underserved communities and invest substantially in advocacy, community organizing and civic engagement to address the root causes of social problems and promote equity, opportunity and justice.

What does Philanthropy’s Promise look like in practice? Grantmaking organizations that sign on commit to give 50% of their dollars to underserved communities and 25% to social justice organizations or movements. Because by applying targeted universalism, we all do better.

– Jennifer Pennington, MCF member services fellow

Nominate Grantmakers Making an Impact

February 13, 2014

NCRP-logo-color-with-tagline-2014The National Committee for Responsive Philanthropy is on the lookout for grantmakers to honor with its 2014 NCRP Impact Awards, and wants to hear from you.

Which foundations do you think had the greatest impact and made positive, lasting change in 2013? NCRP is looking for grantmakers maximizing their philanthropy by:

  • Attacking the root causes of social problems
  • Empowering underserved communities
  • Helping improve the sector as a whole through public leadership

There will be one awardee in each of these four categories:

  • Large, Private Foundation (annual giving of $25 million or more)
  • Small/Mid-Sized Private Foundation (annual giving less than $25 million)
  • Corporate Foundation (any size)
  • Grantmaking Public Charity (any size)

Last year’s awardees included grantmakers from California, New York and Illinois. It’s time to get Minnesota on the map!

Nominations are due March 1. The awards reception will take place June 9 in Washington, D.C.

Nominate a worthy grantmaker today, and spread the word on Facebook and Twitter!

A Look at National Grantmaking Trends

June 7, 2013

criteriaThe National Committee for Responsive Philanthropy recently released new reports on 2011 philanthropic giving to key areas in Criteria for Philanthropy at Its Best: Benchmarks to Assess and Enhance Grantmaker Impact. NCRP uses data from Foundation Center, which analyzed the grants of $10,000 or more from 1,121 of the largest grantmakers in the country.

Here are the four reports that make up NCRP’s Philanthropic Landscape 2011 analysis:

  • The State of General Operating Support 2011 saw a shift to increased general operating support, from the 2008-10 average of 16 percent to 24 percent in 2011. One Minnesota grantmaker made the list of largest funders by percentage: U.S. Bank Foundation, which committed all its grant dollars to general operating support.
  • The State of Giving to Underserved Communities 2011 saw a slight increase from 40 percent in the previous 3-year period to 42 percent of foundation grant dollars benefiting underserved communities, defined as economically disadvantaged persons, racial and ethnic minorities, women and girls, disabled persons, and other groups. One Minnesota grantmaker, Northwest Area Foundation, was on the list of largest funders by share of giving to underserved communities, at 96% of its total giving.
  • In The State of Multi-Year Funding 2011, while nearly 90 percent of funders reported making no multi-year grants, two Minnesota grantmakers were noted. Blandin Foundation and The McKnight Foundation both made the list for largest funders for multi-year grants as a percentage of their totally giving, at 86% and 81% respectively. The McKnight Foundation also made the list of largest foundations ranked by total multi-year giving.
  • In The State of Social Justice Philanthropy 2011, while the share of giving to social justice decreased 3 percentage points from an average of 15 percent in the previous 3-year period to 12 percent of grant dollars in 2011, there was an increase in the number of grantmakers, from 76 to 94, providing NCRP’s proposed level of 25 percent of grant dollars for social justice work. Northwest Area Foundation also made this list of largest funders by share, with 92% of grant dollars going to social justice efforts.

In nearly all of the reporting, the Bill & Melinda Gates Foundation was a significant funder, and analysis was prepared with and without their contributions. Without the Bill & Melinda Gates Foundation in the mix, the Midwest region was well represented across most of these reporting areas, usually reporting within a couple percentage points of the highest ranked region.

– Anne Graham, MCF research associate

Your Chance to Recognize Excellence in Philanthropy

January 10, 2013

ncrp_logo_fDo you work with grantmaking organizations that lead by example every day and represent the best things about the field of philanthropy? Here’s your chance to recognize them for their efforts!

The National Committee for Responsive Philanthropy (NCRP) is currently seeking nominations for its Excellence in Philanthropy Awards. These awards will honor grantmaking organizations that have made special contributions to:

  • Attack the root causes of social problems
  • Empower underserved communities
  • Improve the sector as a whole through public leadership

One award will be given out to each of four different types of grantmakers: large private foundations. small/mid-size private foundations, corporate foundations, and grantmaking public charities (such as community and public foundations). Individuals can nominate up to three grantmakers for each award.

Make your nominations through NCRP’s online form, and encourage others to do the same! Let’s spread the word about all the good work being done by grantmakers in Minnesota. The deadline to submit is February 1, 2013, so put your thinking caps on now.

The State of General Operating Support in Minnesota and Beyond

November 13, 2012

Grantmakers can invest in the health, growth and effectiveness of their nonprofit partners by providing them with general operating support, in addition to or instead of more restricted program or capital support. Recently, the National Committee for Responsive Philanthropy (NCRP) took a close look at national trends in general support in their research brief The State of General Operating Support (PDF). NCRP compared the latest available data on a sample of 906 large grantmakers’ average giving from 2008-2010 to a previous 2004-2006 sample. It found that foundation giving to support the general operations of nonprofits increased through the recent recession, but the share of foundation dollars classified as providing this vital type of funding remains the same, at about 16 percent.

Here in Minnesota, grant dollars dedicated to general support tend to be higher than the national average. In 2010, general support received 20 percent of Minnesota grant dollars. Program support garnered 62 percent and capital support 9 percent. (Student Aid and Other Support received the remaining 7 percent of grant dollars.)

Click on this figure for a full-size view

But general support has not grown as quickly as program support in recent years. Program and general support both remained steady during the height of the recession in 2008 and 2009, but program support increased sharply while general support dipped slightly in 2010 (see Figure A). Capital support, which decreased in 2008 and 2009, increased in 2010, primarily because of the Minnesota Orchestral Association’s capital campaign.

Why General Operating Support?

NCRP articulates five benefits to providing general support to nonprofits:

  • It provides flexibility to meet pressing community needs and achieve impact.
  • It eases administrative burdens for grantmaker and grantee alike.
  • It contributes to nonprofit sustainability and capacity building.
  • It signals trust between the funder and grantee without sacrificing accountability.
  • It shifts attention from limited program outcomes to broader organizational and social impact.

Learn More: A detailed overview of support type giving in Minnesota – and information on many other trends in giving – is available in Giving in Minnesota, 2012 Edition.

-Anne Bauers, MCF research manager