Tuesday, May 21st, 2013

Giving is what women do, of course.

We nurture kids and relatives. We drop everything for friends in need. We form neighborhood associations, join walkathons, sit on school boards and give to clothing drives. Often as not, we also write charitable checks.

So what’s this all about?

Something of a revolution, really. Increasingly, women are contributing time, talent, treasure and technology at levels that move well beyond family and community. More and more women are taking center stage and asking, “What can we do?”
In the process, women are changing the face of philanthropy.They’re infusing new excitement, accountability and serious money into charitable goals and plans

They’re also learning how to collaborate and leverage their efforts in order to have greater impact. Women now require a higher level of stimulation and satisfaction than they once got from volunteering or organizing a charity event. They’re reading P&L sheets. They’re working to make the world a better place.

If you think of society as a three-legged stool supported by the business, government and nonprofit sectors, then women have gone a long way in redefining their roles in the first two. It’s now the turn of the so-called third sector.

How did we get here?

First, across the country, the extraordinary growth in women’s wealth, professional skills, confidence and financial decision-making has been rewriting rules about money and power. Women control a staggering 48% of estates worth more than $5 million and will soon direct 60% of the nation’s wealth. In addition, women have become comfortable with their rights of ownership, in business, in power, in leadership. This tilt toward women-directed wealth is propelling women’s involvement in philanthropy.

With deepening experience and resources, women are increasingly choosing a larger, more strategic stage. Women want their money to be working for change. They’re exploring different philanthropic structures, such as impact investing. They’re defining focus and figuring out what they can give that won’t deplete their longer-term growth or potential assets.

Paralleling women’s focus on philanthropy is the unprecedented rise of women-owned businesses, which are growing twice as fast as all other privately held companies in the country. A whopping 68% of women owners volunteer at least once a month, often in leadership roles. Nine out of ten women business owners (92%) contribute money to charities, compared to 88% of male owners and roughly 70% of U.S. households. Such changes have also led foundations and nonprofit institutions to launch woman-oriented fundraising efforts and to recruit women for their boards and staff.

From Maine to Miami to Malibu, women of all ages, colors and stations are developing giving plans and, typically, also contributing hands-on help. Their charitable work has come a long way from baking cakes and organizing church picnics. It’s all about funding social change.

Unlike the spontaneous impulse toward charity, the work of philanthropy does require some homework, but it is also consistently joyful and empowering. Go ahead. Take the leap. Give a little. There’s no doubt that, in return, you will get a lot.

MAKING YOUR MONEY WORK: Focus on Results, Not Financial Ratios

Wednesday, September 5th, 2012

The frontier for nonprofits these days is impact. How do you measure the social good you do? For that matter, how do you measure which cultural arts are worthwhile or what kind of educational efforts will be effective a decade down the road? What does success mean in the charitable arena?

Forward-looking practitioners are walking away from trying to define or measure impact, mostly because such a goal is so big and amorphous that it’s impossible to realize. Donors and charities can’t really measure it. How do you prove impact?

Instead, as donors continue to demand greater roles and results, nonprofits are increasingly focusing on outcomes as signs of success. That is, do grantees and groups achieve the stated goals of the funding? While that’s still not easy to calculate, at least it’s visible and tangible. Such measurement allows for progress.

But then a corollary challenge arises that’s equally thorny. Let’s say you do quantify the outcome—which now is becoming a proxy for impact. Then how do you best demonstrate those results to donors and the larger community in order to build awareness, boost contributions, and ensure continuing progress?

For people who have made money in business, philanthropy can be a difficult transition. Performance in service of a cause cannot be measured on a quarterly or daily basis. So you need to be realistic. Even the biggest donor must become knowledgeable of what you can achieve given the resources you have. To see the result of giving, you need to stay totally focused. It isn’t easy.

The conventional rule of thumb for measuring a nonprofit organization’s effectiveness is to compare its operating and administrative costs to its spending on programs. When operating costs top 40% of the annual budget—which puts spending on programs at 60%—it may be an inefficient organization, or something may be wrong. Yet such ratios can be exceedingly misleading when making decisions about what to fund or whether a gift has fueled results.

Charities raise money and carry out programs in widely different ways, depending on the type of the cause, the organization’s location, age and other factors. There is no ideal fund-raising percentage or standard for administrative costs that can be applied across the board. In addition, accounting rules allow nonprofits several different methods of calculating fund-raising percentages, which means you may not be comparing apples to apples when you look at such figures.

Then, too, there’s plain common sense. Basing your giving decisions entirely on such formulas begs the reality of trying to get the job done. Every organization will perform more efficiently with well-trained staff and the lights on.

When you are thinking about a donation or a contribution of any kind, the best measure of an organization’s impact is how well it is achieving results and how efficiently and effectively it is fulfilling its mission.


Thursday, November 17th, 2011

There’s a triple whammy of sex, money and power coming together, just waiting for women to harness in order to achieve worldwide change and leadership.

First, women are sitting on Fort Knox. High-net worth individuals in this country are increasingly female.

Next, more women are shunning the Prince Charming syndrome to manage their own finances and steward their own investments and wealth. Reading a balance sheet is hardly a male preserve anymore.

Third, and most notably, as the global population ages and women take control of the purse, they are gaining philanthropic profile and forcefully making a difference on their own terms. Women now influence nonprofit endowments and make decisions on the boards. Fundraisers from organizations large and small now are eyeing the growing cohort of wealthy women. Many nonprofits are rejiggering marketing campaigns to become more women-friendly while training staff to redefine “the ask,” because women donors typically rebuff the direct approach.

Women’s deepening engagement in philanthropy is having an impact on social policy, the choice of grant awards, program development, nonprofit management, fundraising and even grantor-grantee relationships.
next steps:
- leveraging resources and skills in smart collaborations so as to avoid wasting efforts and momentum

- learning how to be strategic so as to define impact that can be met and measured

- making noise in the meeting rooms, so as to influence decisions that shift the levers of power


Friday, June 10th, 2011

There are lots of options for giving besides writing a check or giving time. Here’s a roundup of suggestions. Before taking action, of course, check with your tax and financial advisers.

Give your house. Gifts of real estate cover a house, apartment building, farm, vacation home, commercial buildings and land. If you cede a fully paid mortgage to, say, your local community foundation, you can continue to live in the home for the rest of your life. Upon your death, the house passes to any charity you select. The nonprofit can then sell it and use the proceeds. Such gifts raise complex tax and legal issues, but planned giving experts at public foundations or charities would be delighted to help you work through the process.

Give by the dozen.
The vast majority of people who give to charity wait until December to make donations, partly because of the holiday spirit and to qualify for that year’s tax deduction. But you rate the same tax break by giving in January or June. And with monthly donations, you create a habit and ease the cash flow.

Give the rewards of intellectual property. If you’ve written a book or screenplay, own a patent, license a service or the like, set up a plan to donate a percentage of incoming royalties or fees.

Give collaboratively. Set up a giving circle with friends, family or colleagues to learn about philanthropy and leverage your dollars and impact. These easygoing groups forge their own rules and grant choices, often with back-office help from a community or public foundation. To learn more, check out advice from the Forum of Regional Associations of Grantmakers. If your pals live across town or around the world, consider a virtual circle using electronic tools (like Skype) to electronically collaborate in real-time.

Give art, antiques or collectibles. Like bequeathing a home, these gifts can be donated to a qualified charity and still remain in your possession during your lifetime. The gift goes to the nonprofit after you die. Check with financial pros beforehand. Congress changed the rules on such gifts in 2006 and now it’s less of tax break than it used to be.

Give with a legacy. By setting up a charitable remainder trust, with cash assets or, better yet, stock that keeps appreciating, you live on the trust’s income during your lifetime while the principal passes to a qualified charity after you die. CRTs are irrevocable, so you can’t change one after it’s established.

Give technology. More and more groups, online and off, are offering recycling outlets to donate used mobile phones, computers, peripherals, software (when you upgrade) and more. Check with your company’s human resources department, local community foundation, public schools, small-business training centers for opportunities. Or check out Secure the Call Foundation . These can be converted into 911 emergency-use mobiles and given free to, say, battered women and kids at risk.

Give mutual fund shares or appreciated securities. Besides netting a tax savings and an immediate charitable deduction for the market value of the donated assets, giving mutual fund shares that transfer to a qualified charity after you die will exempt you from any capital gains tax on the appreciation. Once again, check with advisers before proceeding.

Give part of your business. If you own limited partnership interests (rather than stock in a private family business), you can contribute them to a qualifying charity.

Give to a social venture investment fund. Dozens of nonprofit investment companies around the country work for change by lending money at very low interest rates. When you invest money, you get a return, which will vary by project and firm. For example, Boston Community Capital , a social venture capital fund, has built charter schools, health clinics, affordable housing, childcare facilities and more.

Give your life insurance policy. When you no longer need the life insurance you purchased years ago, consider assigning the policy to a charity (while still covering the annual premiums) and make the charity the beneficiary. If the policy is paid up, you receive an immediate tax deduction equal to the policy’s cash value at the time.

Everyone has something to give.


Friday, March 18th, 2011

The changing status of women is fueling and informing philanthropy.

With growing earning power, expanding professional skills, profitable businesses of their own, and deepening control over family trusts and inheritances, women now have the means and the will to invest in philanthropic change.

In fact, over the past few decades, women have been making more decisions about greater wealth every year.

Consider: The latest IRS figures, from August 2008, report that 43% of the nation’s top 2.7 million wealth holders are women (top wealth is defined as $1.5 million in assets).

Assets of those nearly 1.2 million women were valued at $4.6 trillion, or about 42% of the total $11 trillion of top wealth holders.

In addition, women control nearly half — or 48% — of estates worth more than $5 million.

They account for more than an astonishing 80% of consumer spending, to the tune of $3.7 trillion.

And over 10 million firms are owned 75% or more by women, employing nearly 23 million people and generating $3 trillion in revenue, as of 2009.

Then there’s women’s longevity compared to men. On average, women live about five years longer than men. Since women tend to marry men older than themselves and they also remarry less frequently after a spouse dies, women aged 65 and older are now three times more likely to be widowed than their male counterparts.

All of this puts women in line to control inherited money from husbands and families and, of course, with more education and leadership positions in the society, increasingly likely to earn significant income themselves.
As a result, over the past several years, significant numbers of women donors and advisors have joined philanthropy’s ranks. Women have moved into the mainstream of philanthropic endeavor.

Across the board, women’s deepening engagement in philanthropy is having an impact on social policy, the choice of grant awards, program development, nonprofit management, fundraising, and even grantor-grantee relationships.

That adds up to unparalleled potential as more and more women eye their legacies.

Has your organization talked to a woman donor in the last month?


Friday, February 4th, 2011

Women don’t need special handbooks to learn how to make a difference in lives around us because giving is what women always do. We nurture kids and relatives. We drop everything for friends in need. We form neighborhood associations, join walkathons, sit on school boards and give to clothing drives. Often as not, we also write charitable checks. So what’s this about?

A significant shift in power and money –- that is, something of a revolution. Increasingly, women are contributing time, skills and assets at levels that far beyond family and community.

If you think of society as a three-legged stool supported by business, government and nonprofit sectors, then women have already gone that long way in redefining their roles in the first two. It’s now the turn of the so-called “third sector.” Many more women are coming into the arena to ask, “What can I do?”

In the process, women are changing the face of philanthropy. They’re infusing new excitement, accountability and serious money into charitable goals and plans. They’re learning how to collaborate and leverage efforts in order to have greater impact. Women now demand greater impact and participation than they used to expect from volunteer work or social opportunities. Plus, women now read budget and P&L sheets while working to make the world a better place.

How did we get here? First, across the country, the extraordinary growth in women’s wealth, professional skills, confidence and financial decision-making has been rewriting rules about money and power. In the U.S., women now represent half of all investors in the stock market. Since we tend to outlive men, women control nearly half (48%) of estates worth more than $5 million. In addition, women are ever more comfortable in leadership roles, whether in business or in philanthropy, and in their rights of ownership.

With deepening experience and resources, women today want a larger, more-strategic stage. We want our money to be working for change. We’re defining focus and figuring how to give in ways that won’t deplete longer-term growth or potential assets. This is the death knell of the bag lady syndrome


Friday, December 24th, 2010

Charitable gifts have seen “historic declines” in 2009, for the second year in a row – that’s the academic version of “OMG, it’s scary out there.” Giving USA rates the decline at 3.2% (down to $303 billion in total gifts for 2009). “Chronicle of Philanthropy” reported an 11% drop for the biggest 400 charities in the US. The Foundation Center listed a 8.4% drop among the country’s grant-making foundations.

And yet. And yet: A new study, the 2010 Donor Advised Fund Report, released by the National Philanthropic Trust, finds that Donor Advised Funds (DAFs) just keep on keeping on.

Like other charitable vehicles, DAF assets, contributions & grants were down.

HOWEVER: the number of DAFs jumped by 3%, and total DAF accounts now are over 150,000.

PLUS: Grant dollars from DAFs to charities hit $6 billion, actually more than the $5.9 billion contributed to DAFs last year.

It would seem that not only are grassroots, individual and middle-class philanthropists overtaking established foundations and multigenerational and multifamily office wealth, but increasingly, people who give are choosing greater transparency and immediate impact for their gifts.

DAFs can avoid lots of the folderol, RFPs, paperwork and tax headaches cause the administering organization, like a community foundation or the NPT itself, does the back-office work for you.

All you need to do is decide where your money will do the most good.

That is the power of one.


Sunday, September 12th, 2010

I’ve been thinking about the future and present of Millennials all week — all year, actually – but lately spurred by news of a just-published business book.

This book seeks to advise employers of all stripes about the seven trends “essential for understanding and managing the Millennials” in the workplace. The trends are: “the role of the parents; entitlement; the search for meaning; great expectations; the need for speed; social networking; and collaboration.”

Seems to me, if you shift that jargon just a tad, you’re talking about the way society saw Boomers back when that generation was coming of age in the 1960s. As in: “search for meaning” turns into “idealism;” “collaboration” translates into “communal;” and “entitlement” equals “anti-establishment.”

Every generation in power looks back (down?) at the young’uns and appears to quickly lose sight of his or her younger self. Human nature, I guess. But this dishing up of the Millennials is getting a bit much for me.

Don’t get me wrong. Every generation is uniquely forged by its own zeitgeist. Gen Y is no exception. We now have a cohort coming of age that’s been shaped by, of course, the 24/7 wireless bytes, not to mention the Columbine massacre, the O.J. Simpson circus, the presidential election that couldn’t (and which then ossified the DC divide that’s deepened to a chasm), the first, second and surge of Mideast wars, and, oh yeah, let’s not forget 9/11. So, yes, absolutely: Nothing in American history has ever spawned a group like Gen Y. But isn’t that the case for every generation. Let’s think about the assassinations of JFK and MLK and RFK. Every young cohort feels special and raw and fresh and know-it-all. It’s not smart or helpful to conflate socio-politico-economic influences with the extravagant utterances of youth. Let us define which is which as we embrace Millennials into the world of work and tradeoffs. Young people always are gonna be young people. And in this horrific climate, the group born between 1980 – 2000 clearly only wants to work hard, do well in addition to doing good and get on with having fun and falling in love and looking for purpose. Not such a crazy, unheralded sociological experiment, after all, is it?

I continue to watch the first, second & third sectors turning somersaults trying to figure out how to harness Gen Y’s “special” attributes. Instead, I’d like to advise everyone to just relax and dive in. Stop analyzing and researching and start having, you know, conversations. Talk about how Gen Y folks can help your efforts, whether for-profit or nonprofit goals. In the third sector, that includes donor outreach, fundraising, communications and mission-oriented programs and grant-making finetuned to younger aspirations and vocabulary.

It means telling and harnessing stories that are not all about you but all about them. Talking to a target always is so much more revealing than talking about one, don’t you think?


Monday, August 9th, 2010

As we all know, growing profits at a company boils down to a simple equation. Boost sales while holding prices and cutting costs and the profit margin widens.

For multinational companies, a preferred route to doing just that is to rely on volumes of scale. If you make and sell more products more cheaply and distribute with greater cost efficiencies, you gain bigger bucks.

With that in mind, a just-released report, “Shaping the Future: Solving Social Problems through Business Strategy,” from the Committee Encouraging Corporate Philanthropy (based on research by gold-plated McKinsey & Co.) finds that global companies nowadays are being called to account not only for their own ethical and social behavior, but also for the actions of all third-party suppliers and vendors that work with them around the world.

Or in corporate speak, across the value chain.

More than nine out of 10 (94%) of the CEOs polled at the CECP’s February 2010 Board of Boards conference felt they were “increasingly being held responsible for their entire supply chain on social issues.” So, says the report, “large multinational companies will need to enforce their high companywide standards not just within their companies, but among all vendors and suppliers system-wide.”

Now, if just one market for a multinational’s goods or services sets a high-level standard for environmental or ethical operations, the company is bound to implement that topmost standard as a model across all markets and supply chains worldwide. Why? Volumes of scale.

It’s way more cost-effective to standardize policies than to adjust on a market-by-market basis every time you ink a deal or finalize a transaction. If you must meet the standards of one demanding market, you might as well use that as your benchmark everywhere — even in places that don’t require such top level operations. Because – and here’s the key — it doesn’t pay if you don’t.

For starters, just consider the dollars it would take for the additional employees and their training and the herds of compliance lawyers and oversight and IT security costs and on and on. Easier to set the benchmark as a turnkey op and walk away to do more deals.

Right now, it’s fear driving such decisions. Multinationals are afraid of a PR disaster, claims the report. What used to be a local story can today go viral and turn into a nightmare. Missteps or misstatements that once blew over now blow CEOs (Hewlett-Packard’s Mark Hurd), government officials (Agriculture chief Tom Vilsak vis-a-vis Shirley Sherrod) and international companies (BP) totally out of the water. Companies that do not comply may, says CECP, “incur the public-relations risks that occur when a supplier fails to enforce standards, triggering product recalls.”

Marilyn Carlson Nelson, Chairman of Carlson is quoted, saying: “Business’s role has always been to identify needs and to fulfill those needs in a competitive, efficient way. That role has been expanded to include the expectation that business will work in an environmentally and socially friendly manner, and to hold our suppliers to the same standards. It has become a competitive differentiator.”

The likely result will be that over the next several years, multinational companies and all their suppliers and vendors will VOLUNTARILY decide to operate in greener ways, forging partnerships to set better standards for using natural resources. They might even lobby governments and international regulators to set clearer and universal standards for carbon use, water conservation and greenhouse gas emissions so there’s no question of compliance.

All because of the profit motive. Pretty cool.

To get there, all we, the world’s voters and consumers and citizens, must do is set the bar high enough.


Sunday, August 1st, 2010

Several years ago, Socially Responsible Investing maven Peter D. Kinder, then president at KLD Research & Analytics (KLD) in Boston, and currently Strategic Advisor to ESG Analytics, wrote a white paper called “Values and Money.”

His stated goal was to trace the history of SRI and to provide some real definitions, context and metrics about investing with a socially or environmentally conscious agenda. He wrote:

SRI emerged in the 1960s from two intertwined, but distinct motivations.

First, it sprang from a desire to change the way corporations interacted with and affected society. This impulse found expression largely through shareholder activism in support of political efforts. The first shareholder action (1967) focused on Eastman Kodak’s minority hiring practices.

Second, it arose from a desire among investors to have their investments be consistent with their ethics. The Pax World Fund (1969) allowed investors to avoid military stocks at the time of Viet Nam.

I think we’re now seeing a third factor surfaciing: Consumers, investors, shareholders are more and more willing to vote with their dollars and to hold corporate boards accountable, just as donors are holding nonprofits accountable. Google and Bill Gates and all the social venture capital partners out there now are backing for-profit companies that seek to do good by doing well because they believe it’s a smarter model for social transformation. And while there are pros and cons to such widespread adoption of for-profit social giving, it certainly does do away with the constant need to fundraise and therefore keeps the focus on the mission. (I’ll look at some of the cons in another blog.)

As a result, boards and CEOs at big, global and established corporations will find themselves hard-pressed to ignore the profile, the purpose and, best of all, the sustainable profits that flow from such socially conscious enterprises. In order to continue to build their companies and attract shareholders and preserve both the planet and their future, they will ultimately be bound to follow the SRI model. They will need to match their operations to socially conscious values. And we, the shareholders and consumers, will win.

Or, as Ivan Seidenberg, chairman and CEO of Verizon, puts it in a just-released report about the coming society challenges from the Committee Encouraging Effective Philanthropy (which boasts Paul Newman as a founder): “Our belief is that corporate philanthropy expands the business. If you do the right thing over time, you expand the capabilities of your customer base, business, and society.”