Nonprofit Chronicles

Journalism about nonprofit organizations and their impact

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Texas national guardsmen rescuing a woman from her home. Source: US Dept of Defense

The devastation in Houston was terribly sad.

So, in its own way, was the philanthropic response, particularly from business.

Big brands including Amazon, Apple, Google, Starbucks, Walmart and many more are making donations to the American Red Cross, and encouraging their customers to do the same.

Former President Obama retweeted:

It’s understandable. People see TV images. They want to help. That’s wonderful.

But the American Red Cross? Can’t we do better? The question answers itself. Continue reading

Uganda has about 30 psychiatrists. New York City and its suburbs have about 41,000. So depression in Uganda can’t be treated the way it is in New York.

Turns out, that may be a good thing.

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StrongMinds, a fledgling nonprofit founded in 2013, organizes self-help groups to treat depression among poor women in Uganda. Its approach costs about $48 a person, which buys 20 minutes with a shrink in Manhattan, if that. Yet its self-evaluations find that more than two-thirds of the women report being free of depression, when surveyed 18 to 24 months after their treatment. Those are impressive results–better, in fact, than the outcomes reported for antidepressants or talk therapy in the US.

“We have simple, proven effective solutions for mental illness,” says Sean Mayberry, the founder and executive director of StrongMinds,

Of course, self-evaluations are….self-evaluations. What seems to work in Uganda may not work in the US. That said, StrongMinds appears to be alleviating suffering at a low cost in a place where the needs are great.

“Africa is the last place on earth you want to be a depressed man, woman or child,” Mayberry said in a 2015 TedX talk.

To learn more about StrongMinds, I called Mayberry last week. He told me that, to the best of his knowledge, neither big NGOs, nor major foundations, nor governments are paying much heed to the mental health needs of Africans. “There’s just no money for it,” Mayberry told me.

This, despite the terrible cost of the disease. In a 2014 editorial, the scientific journal Nature wrote: “Measure by the years that people spend disabled, depression is the biggest blight on human society — bar none.”

So how did Mayberry get StrongMinds off the ground? Importantly, which funders took the risk of supporting an unproven startup? Continue reading

Charitable-Giving-Estate-PlanThis is not the time to be holding onto money that will eventually go to charity.

Needs are urgent: Globally, about one in 10 people remain extremely poor. In the US, the environment, immigrants, civil rights, reproductive freedoms and democracy itself face threats from the Trump administration. Meantime, it’s not hard to identify standout nonprofits.

Yet an estimated $78 billion –$78 billion! — sits in donor-advised funds, which are tax-advantaged accounts designated to be used, someday, for charity. The National Philanthropic Trust reports that in 2016 there were 269,180 DAFs in the US and that the average DAF holds $235,727.

Most Americans are likely unaware of donor-advised funds, which are the fastest-growing sector of philanthropy. The biggest “charity” in the US last year, according to the Chronicle of Philanthropy, was not the United Way or the Salvation Army but Fidelity Charitable, the not-for-profit arm of the mutual fund company, where about 150,000 donors have DAFs.

DAFs are also the single biggest reason for the explosive growth of the Silicon Valley Community Foundation, which is holding billions of dollars, mostly for well-to-do techies. I’ve written a long profile of the foundation that was published last week by the Stanford Social Innovation Review.

Here’s how my story begins:

Silicon Valley technology has been unkind to traditional middlemen. Streaming music punished the record industry. Netflix killed video stores. Life has become harder for intermediaries such as travel agents and stockbrokers.

So it is perplexing that when it comes to philanthropy, Silicon Valley has given birth to an intermediary that has rapidly grown into one of the world’s biggest foundations. The Silicon Valley Community Foundation (SVCF), which was formed 10 years ago by the merger of two smaller community foundations, connects the region’s wealthy donors to nonprofit organizations that they want to support, around the corner and around the world.

With assets under management of more than $8.2 billion, the Silicon Valley Community Foundation last year made more than 108,000 grants valued at $1.3 billion, pushing more money out the door than the Ford, Rockefeller, Hewlett, or Packard foundations—more, indeed, than any foundation in the United States, except for the Bill & Melinda Gates Foundation.

The numbers are eye-popping. But if you read the story (and, of course, I hope you will), you will learn that there is less to the Silicon Valley Community Foundation (SVCF) than meets the eye. Of that $1.3bn in grants, only $19.2m came out of the foundation’s own coffers. The rest came from DAFs.

A bit of explanation about donor-advised funds, for the untutored. DAFS function as a rest stop for charity dollars that depend upon a well-understood legal fiction: By law, they are controlled by the foundation, but in practice, donors decide how and when to give the money to charity.  Continue reading

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