No longer the exclusive purview of foundations and nonprofit organizations, philanthropy increasingly comprises a diverse range of forms and innovations that are transforming the so-called social economy, leading philanthropy scholar Lucy Bernholz argues in her annual industry forecast.
Published in conjunction with GrantCraft, a joint project of the New York City-based Foundation Center and the European Foundation Centre in Brussels, the fourth edition of Philanthropy and the Social Economy: Blueprint 2013 (30 pages, PDF) further notes that the big shifts in philanthropy that matter for both donors and "doers" are data-related. They include data-sharing practices embraced by foundations, the rise of mobile payments, and an increased emphasis on transparency and privacy concerns. Moreover, Bernholz argues, data is becoming central to how foundations, nonprofits, businesses, and policy makers shape the social economy; indeed, she asserts, the use, ownership, and access rules of data will be as important for the social economy in the twenty-first century as the charitable tax deduction was for nonprofits in the twentieth.
Looking to the year ahead, Bernholz, a visiting scholar at Stanford University's Center on Philanthropy and Civil Society, predicts that crowdfunding will go mainstream; that technology-enabled civic engagement will deepen; that social impact bonds will gain traction in the United States; and that charitable organizations will fail in greater numbers. The report also calls for a multi-sectoral conversation around how organizations and financing systems within the social economy can complement one another, and for seeing the debate over the charitable deduction as an opportunity for the body politic and civil society to realign regulation as it pertains to social good with actual practice.
"I'm hopeful the Blueprint can contribute to a global discussion about philanthropy, nonprofits, and how we use our private resources for public benefit," said Bernholz. "There are big changes ahead, and the Blueprint gives readers a heads-up on the most meaningful trends."
?Data Are Transforming Philanthropy and the Social Economy.? Foundation Center Press Release 1/07/13.
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In partnership with the Indian Institute of Management Calcutta, the Mumbai-based Tata Group has announced the launch of the Tata Social Enterprise Challenge, an initiative to support promising social enterprises in India.
Launched with the aim of creating an ecosystem in India for social entrepreneurship that drives sustainable, scalable, and measurable social impact, the challenge invites social entrepreneurs and social enterprises with either an early-stage venture or a promising idea to submit a business plan to the competition. In round one, up to twenty teams will be selected to go through a three-week mentorship program at the IIMC campus, where they will pitch their ideas to a panel comprised of social venture capitalists, social entrepreneurs, and IIMC faculty. From that group, up to ten teams will be invited to pitch their ideas for consideration by IIMC's Incubation Centre, with the top two teams receiving a significant amount of seed funding.
Ventures will be judged on three parameters ? business model, social impact, and sustainability. Although applicants need not be Indian nationals, ventures should be aimed at creating social impact in India in one of the following areas: education, health, agriculture, energy, technology, housing, handicrafts, and microfinance. Proposals and nominations will be accepted through January 20.
"IIMC has always encouraged its students to pursue their interest in entrepreneurship in the social sector and take up the role of flag bearers for innovation and entrepreneurship in the country," said Ashok Banerjee, dean of new initiatives and external relations at IIMC. "The institute expects this initiative to serve as an opportunity for young entrepreneurs to engage themselves in socially relevant initiatives and also familiarize themselves with the work that various organizations are doing in the social sector in a sustainable manner."
?Tata Group In Partnership With Indian Institute of Management Calcutta Announces the Launch of Tata Social Enterprise Challenge.? Tata Group Press Release 12/27/12.
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New York state attorney general Eric Schneiderman has announced that nonprofit organizations in the state have raised more than $400 million for Superstorm Sandy relief efforts.
A survey of eighty-eight nonprofits by the office of the state attorney general found that as of mid-December fundraising for victims of the storm was dominated by five charities that, collectively, had raised approximately $330 million. The American Red Cross topped the list with $188 million raised, followed by the Robin Hood Foundation ($67 million), the Mayor's Fund to Advance New York City ($45 million), the Empire State Relief Fund ($15.4 million), and the Salvation Army ($14.3 million).
The remaining eighty-three nonprofits on the AG's list reported raising a total of $77 million, although a small portion of that figure includes grants from other organizations on the list. The Charities Bureau within the AG's office plans to request and post more detailed information on Sandy fundraising and relief and recovery spending within a few months.
"The generosity of the public and the hard work of charities in response to Hurricane Sandy is inspiring," said Schneiderman in a statement. "As we continue to monitor charitable activities related to Sandy relief, it is essential that nonprofit organizations operate in the most transparent way possible."
To view nonprofits' responses to the AG's survey and how they plan to spend the funds raised, visit the Web site of the New York state attorney general's office.
?A.G. Schneiderman Publishes Information on Hurricane Sandy Relief Activities by Charities.? New York Office of the Attorney General Press Release 1/03/13.
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After showing signs of rebounding in 2011, charitable giving by America's billionaires slowed in 2012, the Chronicle of Philanthropy reports.
While the fifteen largest gifts announced by U.S. philanthropists in 2012 ? including five ties for the ten largest ? totaled nearly $5.1 billion, $3 billion of the total was accounted for by Warren Buffett's gifts of Berkshire Hathaway stock to the foundations run by his three children. Without those gifts, the 2012 total would have been $2.1 billion ? far short of the $2.6 billion tallied in 2011.
The second largest gift after Buffett's was Facebook co-founder Mark Zuckerberg's commitment of Facebook stock worth an estimated $500 million to the Silicon Valley Community Foundation. Thirteen of the largest commitments announced in 2012 (including Buffett's) were for at least $100 million, three more than in 2011 and seven more than in 2010. The total for the largest gifts, however, has yet to recover from the effects of the recession, falling from $8 billion in 2008 ? half of that from a $4.5 billion bequest from inventor James LeVoy Sorenson ? to $2.7 billion in 2009 and $1.4 billion in 2010.
At the same time, the Chronicle reported that the total for gifts of at least $1 million increased to $6.1 billion in 2012, up from $5.4 billion in 2011.
For a complete list of the largest gifts made by individuals in 2012, visit the Chronicle of Philanthropy Web site.
Di Mento, Maria. ?America's Wealthiest Donors Slow Their Giving.? Chronicle of Philanthropy 1/01/13.
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While the nation's four largest banks spend billions of dollars on lobbyists and public relations campaigns touting their philanthropic initiatives, the public record reveals a significant amount of unverifiable, lackluster giving, a new report from the National Committee for Responsive Philanthropy finds.
The report, Take and Give: The Crimes and Philanthropy of Bank of America, Wells Fargo, Goldman Sachs and JPMorgan Chase (20 pages, PDF), evaluated the charitable giving of the four banks based on verifiability, quantity, and quality, and found that the giving of all four lacked transparency; that three of the banks fell below the financial industry's median for philanthropic generosity; and that none met NCRP's best practices criteria for impact or the grantmaking process.
Because none of the banks disclosed the recipients of grant funds disbursed from their corporate treasuries, it was impossible, the report notes, to verify their claims of philanthropic generosity. Moreover, the banks often include certain for-profit investments or employee volunteer hours, which are only partially subsidized, in the value of their philanthropy.
When corporate generosity is measured in terms of cash grants to nonprofits as a percentage of corporate revenue, only Bank of America (0.15 percent) came out above the median (0.13 percent) in a survey by the Center Encouraging Corporate Philanthropy, while Wells Fargo (0.12 percent), JPMorgan Chase (0.08 percent), and Goldman Sachs (0.03 percent) all were below median. In addition, none of the banks met NCRP's benchmarks for grantmaking to benefit marginalized communities, promote social justice, or provide general operating support and multiyear grants. And while all four scored well in terms of board governance, all were rated substandard in terms of transparency and philanthropic codes of conduct.
"The four megabanks invite tougher scrutiny than most corporate grantmakers," the report argues, "because of their massive lawbreaking and because their aggressive PR campaigns to repair their public reputations boast generous and effective philanthropy ? boasts they repeat loudly and often as they lobby public officials against reforms to safeguard against fraud, abuse and financial collapse."
"These too-big-to-fail banks already hurt America with their lawbreaking and unscrupulous practices that greatly contributed to the financial crisis," said NCRP executive director Aaron Dorfman. "The question is ? should you trust them when they say their charitable giving is especially generous and effective? I wouldn't."
?New Report: Philanthropy of Megabanks Mediocre, Lacks Transparency.? National Committee for Responsive Philanthropy Press Release 1/03/13.
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While legislation passed by Congress on January 1 to avoid the fiscal cliff does not include a flat cap on itemized deductions, it does limit deductions for the wealthy and does not protect the charitable deduction from being reduced or eliminated in upcoming budget talks, the NonProfit Times reports.
In addition to raising the top marginal rate on income to 39.6 percent for individuals making $400,000 or couples making $450,000, the American Taxpayer Relief Act of 2012 reinstates the personal exemption phaseout and the Pease provision, which will result in limits being placed on itemized deductions for individuals and couples earning more than $250,000 and $300,000 a year, respectively. The provision reduces most itemized deductions by 3 percent of the amount by which an individual or couple's adjusted gross income exceeds those thresholds, up to a maximum of 80 percent of the total. Given that the number and amount of itemized deductions tend to increase with income, disallowed deductions are almost always less than 80 percent of total deductions, according to Independent Sector.
"Since it is based on income (not the amount of deductions), it essentially operates as an income tax surtax, not a cap on itemized deductions," Joseph Rosenberg, a research associate at the Tax Policy Center, a joint venture of the Urban Institute and Brookings Institution, told the NonProfit Times. The only way it "can affect the tax incentive on giving is if a taxpayer's disallowed deductions exceed 80 percent of their itemized deductions," Rosenberg added.
Nevertheless, the Alliance for Charitable Reform called on Congress and the White House to reconsider the provision. "[We are] disappointed that the Pease provision was made permanent in this agreement, which will progressively limit deductions, including the charitable deduction," the organization said in a statement. "We encourage members of Congress and the president to continue to preserve the charitable deduction and revisit Pease as it relates to charitable giving as we move forward into both tax reform and measures to address the federal deficit."
Upcoming budget negotiations to avoid across-the-board budget cuts in a process known as sequestration also remain a major concern for the nonprofit sector. "[W]e recognize the agreement reached this week leaves major fiscal and tax policy issues unresolved, and that as discussions resume in Washington about increasing the federal debt limit and addressing the mandatory spending cuts known as sequestration, Congress and the president will once again be looking for additional sources of revenue," said Independent Sector in a statement.
The National Council of Nonprofits also had concerns about the legislation, which, it said in its own statement, "continues to leave our country under a cloud of uncertainty regarding severe domestic spending cuts that threaten to push Americans over a human cliff. Federal policymakers have failed to recognize that the arbitrary sequestration cuts to domestic programs will reduce funding without reducing the underlying human needs, thereby increasing demands on states, local governments, and nonprofits in local communities while also decreasing resources to provide needed services."
Still, acknowledgment that something terrible had been averted seemed to be the prevailing sentiment as people returned to work after the long holiday break. "This deal allows us a bit more time to work with the new Congress and the administration on best approaches [for] addressing revenues, expenses, policy and social priorities," said Neal Denton, senior vice president and chief government affairs officer for the YMCA of the USA. "Nonprofit advocates need to be on their guard. The next several weeks will be important to our sector."
?Alliance for Charitable Reform Statement on Fiscal Cliff Agreement.? Alliance for Charitable Reform Press Release 1/01/13.
?IS Statement on Fiscal Cliff Agreement.? Independent Sector Press Release 1/02/13.
Clolery, Paul. ?Done Deal - Donors Living and Dead Take Hit.? NonProfit Times 1/02/13.
?Congress Passes Fiscal Cliff Legislation.? Independent Sector Press Release 1/02/13.
?National Council of Nonprofits Statement on Fiscal Cliff Deal.? National Council of Nonprofits Press Release 1/02/13.
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With the IRA charitable rollover provision reinstated as part of the recently passed American Taxpayer Relief Act of 2012, older donors will not be required to count as taxable income transfers of up to $100,000 from their individual retirement account to qualified nonprofits, the Wall Street Journal reports.
Under the law, which had expired in 2011, investors age 70-and-a-half or older can take advantage of the rule through the end of the month and have it count toward their 2012 return, while those who took a mandatory distribution in December 2012 and donate that money to charity will not be subjected to tax on the distribution.
According to the Journal, nonprofit organizations lobbied hard to have the provision reinstated. In a statement on its Web site, Independent Sector commended policy makers for reinstating the provision. "We are...heartened that the [American Taxpayer Relief Act] does not provide any direct limitations on the charitable deduction and that key giving incentives, including the IRA charitable rollover, as well as enhanced deductions for the donation of food and land for conservation purposes have been reinstated and extended through the end of 2013," said IS. "The compromise between parties resulted in modest improvements to the federal estate tax, though not at the 2009 levels IS has supported."
Herman, Tom. ?IRA Charitable Rollover Is Back.? Wall Street Journal 1/06/13.
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Charitable giving by Silicon Valley philanthropists accelerated toward the end of the year amid expectations that Congress and the White House might strike a budget deal that capped or eliminated the deduction for charitable giving in 2013, the Wall Street Journal reports.
According to a study commissioned by the Journal and conducted by compensation firm Equilar, Inc., Facebook co-founder Mark Zuckerberg topped the list of Silicon Valley donors in 2012 with a December gift of eighteen million shares of Facebook stock valued at $498.8 million to the Silicon Valley Community Foundation. The second spot on the list was claimed by EBay and Omidyar Network founder Pierre Omidyar, who donated eBay stock valued at $441.3 million to various organizations and causes over the course of the year. The third and fourth spots were claimed by Google co-founders Sergey Brin ($222.9 million) and Larry Page ($185.6 million), followed by Oracle Corp. CEO Larry Ellison ($45.4 million). Eight of the top ten Silicon Valley donors ? including Zuckerberg, Omidyar, and Brin ? donated more in stock in 2012 than they did in 2011.
A flurry of public stock offerings in 2012, including Facebook's highly publicized IPO in May, helped to boost charitable giving in the valley. For example, Facebook COO Sheryl Sandberg, who gave $9.9 million to charity in 2012, was eighth on the list of Silicon Valley givers, just behind Guidewire Software director and valley veteran Craig Ramsey; Guidewire went public early in the year.
Executives at local charities report that giving by rank-and-file employees whose wealth is increasing also is on the upswing. Daniel Lurie, CEO and founder of Tipping Point Community, a San Francisco-based nonprofit working to reduce poverty in the Bay Area, told the Journal that the nonprofit had increased its donor base to thirteen hundred in 2011, up from a thousand in 2010, and expected the growth to continue in 2012. "You don't have to retire to make a difference," said Lurie.
Lessin, Jessica E. ?The Technology Moguls Who Gave Big in 2012.? Wall Street Journal 1/02/13.
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The Kosciusko County Community Foundation has awarded $50,000 to the Kosciusko Community YMCA to help underwrite schematic designs for a new facility, Stacey Page Online reports. Initial plans for the new Y include a health and wellness center, lap pool, instructional warm water pool, multi-purpose gathering spaces, a youth and teen center, a gymnasium, and outdoor space for a day camp.
MassachusettsAs part of a $5 million matching campaign made possible by an anonymous national donor, five funds of the New Bedford-based Community Foundation of Southeastern Massachusetts have each awarded $5,000 grants in support of Teach for America's work in the region, South Coast Today reports. Grants were made by the Acushnet Foundation, the BankFive Foundation, the Crapo Foundation, the Jacobs Educational Attainment Fund, and the Women's Fund.
MichiganThe Petoskey-Harbor Springs Area Community Foundation has announced the winners of its thirteenth-annual Bob Schulze Poetry Contest, which encourages middle-school students to express their creative thoughts through poetry. Since 2000, the Bob Schulze Fund for Creative Writing has awarded a total of $3,500 to nearly two hundred middle school youth in Emmet County.
New YorkThe Central New York Community Foundation has announced grants totaling $193,127 to eleven local nonprofit organizations to help them improve their ability to function more efficiently and effectively. First awarded in 2011, the foundation's Performance Management grants help organizations better measure their community impact. Grantees of the program are invited to participate in monthly meetings of a "learning community" where they can share their experiences and challenges with peer organizations. In the latest round, three organizations, two of which are previous performance management grantees, will serve as mentors. Grant recipients include Vera House and OnCare, which will serve as mentors, and the Baltimore Woods Nature Center, PEACE, Inc., and the Spanish Action League.
The Rockland Community Foundation in New City has appointed William E. Sherwood to its board of directors.
South DakotaThe Pierre-based South Dakota Community Foundation has named Stephanie Judson as president and CEO.
WashingtonThe Greater Tacoma Community Foundation has announced $295,000 in grants to four local nonprofits. Grants ranging from $15,000 to $155,000 were awarded from the Donald R. and Mary E. Williams Horticulture and Donald R. and Mary E. Williams Arts funds, established by a $15 million bequest from the Williamses, to the Tacoma Garden Club, the University of Washington-Tacoma, Lakewold Gardens, and the WW Seymour Conservatory.
?Bob Schulze Poetry Contest.? Petoskey-Harbor Springs Area Community Foundation Press Release 1/03/13.
?Community Foundation Grants Boost Teach for America.? South Coast Today 1/02/13.
?Community Foundation Awarded YMCA $50,000.? Stacey Page Online 1/02/13.
Mercer, Bob. ?Judson New President for SD Community Foundation.? Capital Journal 1/03/13.
?GTCF Awards $295,000 to Revitalize Local Gardens, Catalyze Public Art Project.? Greater Tacoma Community Foundation Press Release 12/20/12.
?Sherwood Joins Rockland Community Foundation Board.? Rockland County Times 1/03/13.
?Community Foundation Awards $193,127 in Performance Management Grants.? Central New York Community Foundation Press Release 12/27/12.
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The Marion I. and Henry J. Knott Foundation has announced the appointment of KELLY MEDINGER as executive director.
The Virginia G. Piper Charitable Trust has announced the promotion of MARILEE DAL PRA to the position of vice president of programs.
The Boston Foundation has announced the promotion of KATE GUEDJ to the position of vice president for development and donor services.
The James Irvine Foundation has announced the election of TIM RIOS to its board.
In other news, the Council on Foundations has announced further developments in its organizational redesign with the appointments of SUE SANTA AS senior vice president of public policy and legal affairs and JULIANNE SOBRAL as director of human resources, as well as the promotions of WILL HEATON to chief of staff and strategic advisor to the president and RENEE BRANCH to vice president of programs.
?Sue Santa to Lead Council on Foundations Policy Team.? Council on Foundations Press Release 1/03/13.
?The Boston Foundation Promotes Kate Guedj to Vice President for Development and Donor Services.? Boston Foundation Press Release 1/02/13.
?New Irvine Board Member Elected.? James Irvine Foundation Press Release 1/03/13.
?Virginia G. Piper Charitable Trust Appoints Marilee Dal Pra Vice President of Programs.? Virginia G. Piper Charitable Trust Press Release 1/02/13.
?Knott Foundation Announces New Executive Director.? Marion I. and Henry J. Knott Foundation Press Release 1/03/13.
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