Nonprofit Chronicles

Journalism about nonprofit organizations and their impact

4166734True to its name, Unorthodox Philanthropy got started with an out-of-the-ordinary proposition.

In 2010, on a crowdsourcing website called Innocentive, the funder announced that it was seeking “novel, unorthodox opportunities for philanthropic investment with the potential to generate extraordinary returns to society.” It promised a prize of at least $10,000 to the best idea.

Nearly 300 people or organizations submitted proposals. The winner was GiveDirectly, a nonprofit that had just been formed by four graduate students to give direct cash grants to the very poor. It was awarded the $10,000 prize,and a $100,000 grant.

That first grant to GiveDirectly was “a watershed moment,” says Paul Niehaus, one of the founders, because it signalled that thoughtful donors would embrace the idea of giving money, with no strings attached, to the poor. Since then, GiveDirectly has distributed about $65m in unconditional cash transfers to poor people in east Africa. [It’s my favorite charity, as I’ve written here and here.]

Unorthodox Philanthropy is the inspiration of Mark Lampert, who is the founder and president of BVF Partners, a private investment firm in San Francisco that specializes in biotechnology companies. Lampert, who is 57, has been investing since 1993, and he sees some parallels between venture investing and philanthropy.

At BVF, he says, “we look for interesting, undiscovered companies and we give them money and we try to help them. A little bit of money married to a really big idea can have a dramatic impact.” His hope in philanthropy is to likewise unearth new and exciting ideas that deserve funding.

On its website, Unorthodox Philanthropy says:

We tend to be contrarians, believing that the opportunities with the greatest potential exist where others aren’t looking. Otherwise, we are sector- and geography-agnostic.

Unorthodox Philanthropy believes great opportunities should drive our funding decisions, not a predefined funding agenda. We seek to foster a system that enables great ideas to flow upwards toward capital, rather than allocating funding downwards from specific issues or causes.

In this regard, Unorthodox Philanthropy differs radically from most foundations, which typically identify and attack specific problems or serve local geographies. The very biggest staffed foundations like to devise grand strategies to curb climate change, or challenge inequality, or promote resilient cities. Some of those approaches work, many don’t, and one problem with philanthropy is that only occasionally do we learn which did which. (Here’s an exception, a smart look back at a seven-year, $32m initiative to improve Detroit’s schools that failed to deliver.) Family foundations are also sector- or cause-specific, as a rule. What made Unorthodox Philanthropy so, er, unorthodox? Continue reading

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Life is improving for millions of animals in the US. Pigs are being freed from crates, and laying hens are being liberated from their cages. Progress is on the horizon for broiler chickens.

Michael Budkie, a lifelong animal-rights activist, is unimpressed.

Budkie, the co- founder and executive director of Stop Animal Exploitation NOW!, a nonprofit that opposes the use of animals in laboratories, believes that animals have a right to be free of all forms of human exploitation.

“Welfarism is a lie,” he says. “I don’t want the animal exploitation industry using cage-free eggs or humane slaughter to market their products. I want to end all animal consumption.”

Budkie spoke last weekend at the Animal Rights National Conference 2017 (AR17), which calls itself the largest and longest-running meeting of animal rights activists. More than 1,000 people gathered at a suburb Virginia Hilton, where they were provided with vegan food, vegan brochures, vegan buttons, vegan bumper stickers, even vegan riddles. (From Erica Meier of Compassion Over Killing: What is a vegan vampire’s favorite food? A nectarine.) Alex Hershaft, who has organized the event since the early 1980s, began the proceedings on a light note by promising people that “for the next few days, no one will be asking you where you get your protein.”

All kidding aside, the arguments put forth by speakers at AR17 deserve to be taken seriously. The animal rights movement is about “how we choose to relate to the most vulnerable, the most defenseless, the most exploited sentient beings on earth,” Hershaft said. Animals raised for food, or confined in zoos or aquariums, or forced to perform in circuses, or experimented upon in laboratories are, he said, “no less deserving of consideration than your family dog.”

There’s a moral clarity to the animal-rights movement that is absent when the issue is humane treatment of animals. Are hens happier outside of cages? Probably, but there are tradeoffs between freedom and security, as Tamar Haspel explains. Debates over whether to adopt slower growing breeds of chickens, at a higher cost to consumers, are irrelevant to the abolitionists. Just say no, they declare.

Then again, as Erica Meier told me: “The world isn’t going to go vegan overnight. We have to meet people where they are.” Surveys estimate that just two to four percent of Americans are vegetarian, fewer are vegan and the vast majority of those who follow vegetarian or vegan diets eventually abandon them, according to Faunalytics.

So what are those who care about animals to do? That was the question on my mind at #AR17. Drawing from my experience–my meat and fish consumption is close to zero but my days often begin with cage-free, Certified Humane eggs–I wondered whether reforms in animal welfare might backfire, by leading people who care about animal suffering to feel better about consuming animal products. Had I fallen victim to  “humane washing?” Continue reading

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To pressure Darden Restaurants, The Humane League organized a picket line outside a Capital Grille restaurant in Manhattan.  Photo credit: Jacy Rees

Not long ago, the animal welfare movement was at war with Perdue Farms over its treatment of broiler chickens.

The Humane Society of the U.S. and Compassion Over Killing had sued Perdue and Kroger, which sells Perdue chickens, over labels claiming that their chickens were “raised in a humane environment.” Compassion in World Farming, working with North Carolina whistleblower who raised chickens for Perdue, exposed animal abuse on one of its farms. An investigation by Mercy for Animals caught Perdue growers on camera stomping chickens to death.

Then, in a startling turnaround, Perdue last year announced a series of animal-care commitments regarding broiler chickens, promising to add windows and perches to poultry houses, to change the ways chickens are killed and, importantly, to explore the use of breeds of chickens that grow more slowly. Perdue also pledged to reward those farmers who provide better animal care and to be transparent with critics about its progress.

Now, Perdue’s erstwhile critics are cheering.

“Perdue initially put its head in the sand,” says Leah Garces, executive director of Compassion in World Farming USA. Today, she says, “they are leading the market, and they’re not turning back.”

“Perdue has leaped ahead of everybody,” says Josh Balk, vice president for farm animal protection of HSUS.

This month, Perdue went a step further, promising to satisfy the demand from dozens of retailers, restaurants and food service companies — among them Whole Foods Market, Aramark, Compass Group, Starbucks and Chipotle — that have promised to meet higher animal-welfare standards for broiler chickens. Balk and Garces attended an “Animal Care Summit” organized by Perdue, and praised the company as a pioneer among poultry producers.

What accounts for the turnaround at Perdue? And, what does it mean for animal welfare in the rest of the $90-billion a year broiler chicken industry?  Continue reading

2016700activepassivesign-640x410.jpgAmerica’s foundations spend many millions of dollars every year on investment advice. What do they get in return? Bubkes.*

You read that right: Money that could be spent on charitable programs — to alleviate global poverty, help cure disease, improve education, support research or promote the arts —instead flows into the pockets of well-to-do investment advisors and asset managers who, as a group, generate returns that are below average.

This is redistribution in the wrong direction, and why it hasn’t attracted more attention or debate is a mystery.

The latest evidence that foundation executives make dumb investment decisions arrived recently with the news that two energy funds managed by a Houston-based private equity firm called EnerVest are on the verge of going bust. Once worth $2 billion, the funds will leave investors “with, at most, pennies for every dollar they invested,” the Wall Street Journal reports [paywall]. To add insult to injury, the funds in question, which were invested in oil and natural gas, raised money in 2012 and 2013, just as Bill McKibben, 350.org and a handful of their allies were urging institutional investors to divest from fossil fuels.

Foundations that invested in the failing Enervest funds include the J. Paul Getty Trust, the John D. and Catherine T. MacArthur Foundation and the California-based Fletcher Jones Foundation, according to their most recent IRS filings. Enervest operates 33,000 U.S. oil and gas wells, more than any other company, according to a profile of its founder, John Walker, in Shale magazine. Stranded assets, anyone?

Of course, no investment strategy can prevent losses. But the collapse of the Enervest funds points to a broader and deeper problem–the fact that most foundations trust their endowment to investment offices and/or outside portfolio managers who pursue active and expensive investment strategies that, as a group, have underperformed the broader markets. Continue reading

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Chickens. Cows. Cookstoves. Toilets. Solar panels. Job training. Clean water.

Western NGOs dole out lots of stuff to help poor people in the global south become less poor. Do such programs work? It’s hard to know, but when researchers for a series of World Bank studies called Moving Out of Poverty asked 3,991 households in 15 countries how they escaped poverty, just three of those households credited “NGO assistance.” Hmm.

What we do know is that economic growth has lifted hundreds of millions of people out of poverty in such places as Botswana, Brazil, China, India, Indonesia, South Korea and Vietnam. With a few glaring exceptions–notably China and Vietnam–these countries benefited from democratic political institutions, relatively stable governments, the rule of law, property rights and trade. “Countries need inclusive economic and political institutions to break out of the cycle of poverty,” write Daron Acemoglu and James Robinson in Why Nations Fail, a sweeping 2012 book about the origins of prosperity and poverty.

Most development economists agree. Chris Blattman, a scholar of international development at the University of Chicago, puts it bluntly: “The problem in the poorest countries today is first and foremost politics.” (This, despite the fact that Blattman is best known as an advocate of cash transfers to alleviate poverty.) Blattman and Harvard prof Lant Pritchett, who are both associated with the Center for Global Development, lately have been engaged in a lively debate about poverty alleviation in blogposts (here and here) and on podcasts with Russ Roberts of EconTalk (here and here), all of it inspired by Bill Gates’ enthusiasm for raising chickens; while Blattman and Pritchett disagree on chickens and cash, they share the view that economic growth, supported by the right political and economic institutions, is the best way to alleviate poverty. As Pritchett has said: “Treating world poverty as if it can be addressed programmatically [by chickens, cash transfers or women’s self-help groups] biases attention away from the real solution to poverty, which is having higher productivity economies.”

How, then, can philanthropists, NGOs and governments help poor countries reform their institutions and enjoy the benefits of economic growth? Again, that’s hard to know, but today’s blogpost will spotlight Spark MicroGrants, a small NGO that practices what’s called community-driven development, an approach that invites communities to design, execute and manage their own aid projects–farms to feed families, power lines, schools or roads. There’s growing evidence, according to Spark, that community-driven development leads not just to more sustainable projects but to “stronger governments and institutions.”

“We help to create local democracy,” says Sasha Fisher, the co-founder and executive director of Spark MicroGrants. “People have have a platform to work together. Citizens become engaged and start driving local change.”

Spark isn’t designed to spark political reform, but when you give people a taste of democracy, well, don’t be surprised if they want more. Continue reading

static1.squarespaceYou could call Jonathan C. Lewis a late bloomer. Not until he retired from business in his mid-50s did he rediscover his 1960s activist soul and become a full-time “social entrepreneur.” Lewis founded a nonprofit impact investing firm now called MCE Social Capital that makes loans to poor people in the developing work. He created Opportunity Collaboration, a conference for activists and funders unlike any other. And he co-founded Copia Global, an Amazon-like e-commerce catalog for consumers at the bottom of the economic pyramid in Kenya.

All that came after an eclectic career for this 69-year-old Californian. He worked as an aide in the California state legislature, became a lobbyist, opened an art gallery, started a small real estate development company, came up with the idea for a retail chain selling high-end artisan merchandise, served as chief executive of the California association of health maintenance organizations and ran a consultancy helping US health care executives learn from best practices overseas. 

Along the way, Lewis kept his eyes open, made a bunch of mistakes and learned a great deal. He has distilled his knowledge into The Unfinished Social Entrepreneur, a new book about social change that manages to be both entertaining and wise. It is neither an overview of the social sector, nor a conventional memoir, nor a how-to manual, exactly. Instead, it is a collection of personal essays with single word titles — Justice, Starting, Passion, Power, Mentoring, Failure, Confessions — that can be read in any order, and should be read by anyone starting a life’s work devoted to social change.

Lewis told me recently: “The only important question is, how do you lead an honorable life when there is so much dishonorable stuff going on around you.” That’s the question this books seeks to answer.

As a writer, Lewis is smart, insightful and almost entirely free of b.s. I say almost because the term “social entrepreneur” has always struck me as pretentious. But Lewis explains up front that he’s using it as a synonym for political activist, change-maker or community organizer.

He also can be fun to read, to wit: 

Some of my closest friends and colleagues have questioned my sense of humor and, in particular, my cringe-worthy puns and snarky quips. These critics, obviously lacking in comic judgment, are manifestly mistaken.

My kind of guy. Continue reading

9780262036085_0Consider the food bank, a staple on the menu of nonprofits in most communities. Food banks collect unwanted food from donors, including supermarkets, food manufacturers, individuals and the government, and then distribute it to poor people through food pantries and meal programs. Last year alone, food banks affiliated with the Feeding America network distributed more than 3.6 billion meals to people in need.

What’s not to like? A good deal, says Andrew Fisher, a long-time anti-poverty activist and writer.

Fisher’s new book, Big Hunger: The Unholy Alliance Between Corporate America and Anti-Hunger Groups, argues that “anti-hunger work has become big business and big business profits from anti-hunger efforts.” 

He writes:

The charitable food sector has snowballed out of control. It has grown from what was supposed to be a temporary stopgap into a seemingly permanent feature of our country’s landscape, in part because numerous entrenched interests backstop it. Food charity has turned into big business, and an integral part of the business strategy of many corporations.

This is a story of good intentions gone awry, with lessons for any nonprofit that finds itself torn between its donors and those it wants to serve. The results, in this case: Food banks advocate narrowly around hunger but often ignore broader issues of poverty, they offer their customers unhealthy food and, alongside the food industry, they oppose restrictions on what people can buy with SNAP (formerly food stamp) benefits.

Continue reading