Polishing the Tarnished Brand of Private Philanthropy

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Last week Claire Gaudiani wrote in the San Francisco Examiner about organizations such as the Greenlining Institute and the National Committee for Responsive Philanthropy, who charge that today’s private foundations do not sufficiently meet the needs of society’s poorest and most marginalized populations. In other words, they think private foundations have a poor brand–often for good reason–and it needs fixing. Greenlining and NCRP have been advocating both for set percentages of funding (as much as 50%) for such groups, and also that foundations report the ethnic and racial composition of their boards and staffs.  In many ways, these actions could serve to increase the responsiveness of the foundation sector to people in need. In other ways, these goals could be counterproductive.

First, let’s take the diversity goal. When I work with nonprofit boards, particularly in the area of governance, I am always pushing for diversity. But what I often find is not so much a lack of racial and ethnic diversity as a lack of economic and age diversity.  Age, what’s that got to do with it, you say? Well, a lot.  When I poll boards before working with them, I typically find the bulk of members are within a ten-year age range.  While some boards skew older and some younger, in most cases they are missing members in their 20’s and 30’s and those in their 70’s and 80’s.  From the younger group they could gain a better understanding of the power of social media–with tools like social networks, web video, podcasts, and mobile technologies–to reach donors and service-users alike. (For example, mobile phone use is very high in so-called under-served populations.)  In the older group, they would find experience running organizations, managing investments, and excellent community connections.

In terms of the charge that private foundations should provide more grants to marginalized populations, one of the key stumbling blocks to this funding may be ensuring the readiness of grantees to actually manage the grant, with its reporting, communications, and financial responsibilities. The US Agency for International Development (USAID) provides a good model in the way it provides capacity-building grants to nonprofit re-granting organizations that act as bridges, helping communities and very small nonprofits learn to manage the funding process, build community-based solutions and improve their capacity, so that in the future AID can make them direct grants.  This is a model followed by many private foundations as well, and so the target measurements should take this into account.

There’s no question private foundations can improve their work, and their image. The question is how to do it in a way that benefits society, and builds more capacity within the donor organizations, too.

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