Just as they did after 9/11, Katrina and the Asian tsunamis, individuals, companies and foundations after the Haiti quake have done what Americans do best in times of crisis: They got involved and gave.

What we often seem to forget, however, is that we face a perpetual crisis, one the recession simply has deepened.

At home and abroad, millions are hungry, homeless, in poor health, impoverished, illiterate, and subjected to violence and intolerance.

The giving sector exists in large part to address the problems vulnerable populations face.

But among the nearly one million charities in the U.S., many struggle with limited resources and big operating challenges.

Individuals, foundations and companies in the U.S. give over $300 billion a year to support charities, and often give more after horrific events like the quake in Haiti.

But the charitable marketplace has changed dramatically in recent years in the wake of financial and ethical scandals and the collapse of the economy.

Many foundations and corporations have narrowed the focus of their giving, and are demanding more business-like operations from charities seeking support.

Those funders want nonprofits to be more strategic, set measurable goals, create clear metrics to gauge their impact and effectiveness, and make their staffs and boards more diverse and inclusive.

These all are important goals: To address critical needs, nonprofits must be able to sustain themselves financially and engage the thinking and know-how of the full spectrum of people and institutions with a stake in making our communities better places to live and work.

But in placing greater demands on charities and ratcheting up expectations for how they perform, many funders seem to be in denial about the investment charities need to meet those demands and expectations.

Most charities are small, community-based groups with limited resources.
Their employees are overworked and underpaid and often lack the skills or know-how they need to keep their shops financially afloat.

Their boards often are not willing to raise money or set a vision and direction for the organization, and typically are not even aware those are key responsibilities of their board role.

The recession has increased demand for services from charities and reduced the dollars available to them in what has become a fiercely competitive charitable marketplace.

And foundations and corporations typically will not support charitable operations, preferring to fund special projects and address particular needs in sync with their mission or business goals.

So while they expect charities to be more enterprising, efficient, effective and strategic, funders are not willing to make the significant investment charities need to improve the way they do business.

After the Haiti earthquake, savvy charities used social-media strategies like text-messaging to raise a lot of money quickly.

Aiding that effort was massive coverage by mass media that used the power of images and technology to communicate both the intimacy and the massive scale of devastation in a nation long ground down by poverty.

Yet while they are quick to provide wall-to-wall coverage of horrific disasters in their immediate wake, the media fail to tell the ongoing story of the relentless toll poverty takes throughout America and the world.

And while nonprofits serve on the front lines in the fight against poverty, their limited resources make it tough for them to more effectively tell their story to the mass audience mass media can reach.

Nonprofits need all the help they can get, including greater understanding and flexibility among foundations and corporations that control charitable resources nonprofits can use to do a better job running their organizations, serving people in need, and telling their stories to engage more people in their cause.

Todd Cohen, a veteran news reporter and editor, is editor and publisher of Philanthropy Journal, an online newspaper that is a program of the Institute for Nonprofits at North Carolina State University in Raleigh. Cohen has taught nonprofit reporting and media relations at the University of North Carolina at Chapel Hill and at Duke University, and regularly speaks on the topics of nonprofit media relations and trends in the charitable world..

The Clearinghouse is interesting because of the way it offers some of the attributes of a stock exchange. There has been a lot of talk in philanthropy about social stock exchanges, but I’ve often found the implementation of this concept of little interest. This is because when most people think of a stock exchange, they think of the prices of stocks moving up and down as the primary characteristic. A social stock exchange which attempts to mimic the pricing elements of a stock exchange is interesting, but I’ve yet to see an implementation that is particularly exciting. Instead, stock exchanges are valuable not only because they publicly reveal prices, but because they have certain requirements for organizations to be listed and ongoing requirements to stay listed.

Once an organization is listed on a stock exchange, it must adhere to higher levels of public disclosure than a non-listed company. Being listed on a stock exchange is called “going public” and a listed company is a “public company” as opposed to a non-listed or “privately held” company.

This all matters to philanthropy because the organizations listed on the new Social Impact Exchange are offering public access to documents such as due diligence reports, business plans and the results of independent evaluations (it appears that currently there are not standard documents that all listed organizations must have, but see the documents listed for the nonprofit Ways to Work as examples).

My friend George Overholser, has often pushed back on my urging for nonprofits to share more information about themselves publicly. George’s point is that most nonprofits are the equivalent of privately held companies, who may be damaged if they share too much of their internal issues with the public. While I’ve generally thought that nonprofits should have a higher required level of transparency than privately held companies, George’s point has always resonated with me. With the advent of the Social Impact Exchange, we have the beginning of a mechanism whereby a nonprofit that is ready to “go public” can list their organization and in exchange gain access to a wider range of philanthropic investors.

In addition, the Exchange plans to only list organizations who have demonstrated extremely high levels of impact and scale readiness or have demonstrated a significant level of effectiveness, and are increasing their capacity for scale readiness (groups qualifying under each standard are identified separately). This means that if the Exchange can establish credibility for their vetting process, 1) organizations who get listed will gain a marketing advantage due to their “making the grade” and 2) donors can have an increased level of confidence in Exchange listed organizations.

The Social Impact Exchange is more than just a list of nonprofits. It also hopes to be a hub for related research, publishing, education and training as well as an annual conference, business plan competition and regional meetings.

While this effort is still in its infancy, I think the organizers have gotten some key elements right. With the high profile funding from Robert Wood Johnson Foundation and the involvement of Duke University, the Social Impact Exchange is one to watch.

Sean Stannard-Stockton is CEO of Tactical Philanthropy Advisors, a philanthropy advisory firm that serves individual and family philanthropists. Sean is the author of the Tactical Philanthropy blog and writes a monthly column for the Chronicle of Philanthropy. He is a member of the World Economic Forum’s Council on Philanthropy & Social Investing and has been quoted or referenced in The New York Times, Wall Street Journal, Washington Post, Financial Times and many other media outlets.

In the early 1990s the advent of national donor advised funds showed that a huge market existed for unbundled products—donors would eagerly purchase the financial product by itself. Several billions of dollars in charitable assets were soon being managed through Fidelity, Schwab, Vanguard and others who provide best-in-class financial accountability, responsiveness, and transaction processing, with no promises of strategic advice, support or other types of information products. The market worked—we’ve had two decades of new innovations, new customers, and new financial products for donors.

Nowadays, some of the same technological advances that led to scalable efficiencies in transaction processing are beginning to shape the landscape for information products and service providers. First, the broad and deep adoption of broadband access and a decade plus of online banking, travel booking, emailing and searching have changed our collective expectations about where information lives, how to get it, and whom to trust. Second, the massive storage and searching capacities that underlie systems like GuideStar now make it a commonplace assumption that basic information on nonprofit organizations should be only a “click away.”

From these “expectational starting points” new behaviors begin to sprout, leading to the possibility of new products. If financial information is a click away, why not more nuanced information? This leads to systems like DonorEdge or Blackbaud’s Nonprofit Central. If there is “professional vetted information available,” why not the insights of customers or volunteers, leading to innovations such as GreatNonprofits or Keystone’s constituent response work. And if I can get information on one nonprofit, why can’t I find lots of options for action in one place (SocialActions.org) or compare the work of multiple efforts (New Philanthropy Capital’s reports or Acumen’s Pulse system)?

These are exciting developments. And they are built around data—data that can be found, compared, searched, mashed up, re-purposed, questioned, and applied. The data are the currency of change.

And rest assured, today’s data systems and information products are just the beginning. How we use these products, build off these services, interact with them as individual donors or change makers, or iterate entire new organizational forms on top of them is what the future holds. The information products for better giving are not as good as they will be, we have not yet seen all of the forms they will take, nor are they widely deployed or integrated into other financial management tools. Yet.

But we’re getting there. In which case the landscape for philanthropic giving—the structures and tools that donors use to organize, aggregate, learn, give, and bank (literally) their philanthropic financial resources will change yet again. This might explain why we’ve seen a notable rise in independent philanthropic advisory firms (SeaChange Capital Partners, Rockefeller Philanthropy Advisors) in the last five years, why online giving markets (such as GlobalGiving and Kiva) have taken off, or why the never-ending stream of new social media tools are all quickly unleashed for giving-related purposes (Facebook Causes, Twitter fundraising, and blog/badge challenges). And it might be inciting new forms from familiar ones—new roles for community foundations or new services from donor advised fund vendors.

We should also plan on this changing landscape of information being full of the seeds of new forms. If you imagine that any donor, anywhere, has quick, easy access to meaningful, comparable, useful data on organizations they could support and issues they care about, what kind of philanthropic entity, service provider, financial tool, public/private partnership, broker, deal platform or relationship builder would you build? That is the question we all need to ask, no matter where we work in philanthropy now, because that is the well-seeded field on which all existing philanthropic enterprises are now playing. And that is the question that some innovator, somewhere, is working on, right now, in the proverbial garage.

Lucy Bernholz is the Founder and President of Blueprint Research & Design, Inc, a strategy consulting firm that helps philanthropic individuals and institutions achieve their missions. She is the publisher of Philanthropy2173, an award winning blog about the business of giving and serves as Executive Producer of The Giving Channel on Fora.tv.

Membership—being part of a group of professional investors who agree on a real, if still evolving set of definitions—is important. It’s one of the things that gives an emerging market coherence. That in itself is one of the key branding elements of the GIIN, that it is a group that has agreed on some things and lives within certain definitional boundaries. It’s kind of like a club in that aspect: a voluntary association society. There is a standard, I agree with it, and that is part of what locates me on the inside.

But GIIN wants to have a positive impact on poverty, economic justice and a sustainable environment. That means it needs to counter the exclusive nature of its innate and valuable club and be sure to include the voices and the perspectives of the people in the developing world; to make sure that female venture capitalists from Africa, for example, are included at the table at the highest levels.

Point one: it has to be inclusive.

Point two: it has to make sure its metrics for success are also inclusive.

As it develops, GIIN will be one of the key drivers of evolving metrics efforts. Since it will be turning metrics into a basis for financial and social return to investors, it has to make sure that the metrics for success include what the disenfranchised in the developing world consider developments. I would point to the useful tools created by Sabina Alkire at the Ophi.org.uk project. Central to the Bhutanese Gross Happiness Index, her multidimensional indicators are a key way to make sure the benefits of Impact Investing are distributed transparently, and, potentially, more equitably.

The history of colonization and empire mandate GIIN be aware of funder and fundee power imbalances every step of the way. GIIN cannot look like another version of condescending western philanthropy. This kind of thing proceeds from first principles. The first thing GIIN needs to do as it starts thinking about branding and communications is look around the room.

There are plenty of marketing professionals who can build a great brand strategy. That part will be easy. GIIN is a great thing to brand.

The key design issue is this one: Are all the right people, the right groups of people, all the important voices, represented around the table? Are all the people powerful and rich? Are there men who wore their first names stitched onto their blue collar work shirts? How many people who took the high school equivalency GED, but never made it to college, are in the group? Those are not people who are often listened to by the great and the good. They are called in to fix the air conditioners and heaters at the hotels where the meetings are held, but they are rarely consulted. How many maintenance men are being called in to fix the market, people one rung above the bottom of the institutional hierarchy? How many people are called in from the rung below that—the janitors—who not even the maintenance men listen to? The perception of hierarchy and power imbalance is sharply delineated at the very bottom levels, while those sitting at the tables can balance higher education and other professional credentials against power and wealth to hold their own as new models of philanthropy and the capital market are being devised.

I’m sure the answer will be yes about that sort of inclusion, at least eventually. Nothing is perfect right away in that sort of effort. But the issue of who is at the table in a branding and communications plan is the key question for GIIN, I think. The brand will be built on trust, trust of the impact and intent of the capital being deployed. And that means everybody gets dealt into the game this time.

Kevin Jones is a cofounding principal of Good Capital, an investment firm that accelerates the flow of capital to enterprises that use market forces to create large-scale social change. Jones is a successful serial entrepreneur, angel investor, and cofounder of Social Capital Markets, the groundbreaking conference on social venture investing.

Givers gave those funds to foundations to support charitable causes.

But the law does not require foundations to pay out more than 5 percent of their assets a year.

So rather than use more of their assets to support causes for which givers gave them in the first place, most foundations hoard them, although big foundations have been willing to invest millions of dollars to fight moves to require they pay out more.

Instead of giving more each year and truly honoring their givers’ intent, most foundations sit on their assets, betting the investment of those funds will earn returns big enough to cover their required payout and also build their endowments so they can operate forever.

The sad irony is that while foundations hoard so they can go on forever, their hoarding has resulted in the loss of billions of dollars that now likely will never go to charity.

In 2006, the last year for which data are available from the Foundation Center, the assets of nearly 72,500 U.S. foundations totaled $614.7 billion.

Those foundations, in contrast, made grants totaling only $39 billion.

And in 2008, with the capital markets in flames, the assets at 127 foundations responding to a survey by the Council on Foundations lost 28 percent of their value.

Those assets totaled $16.9 billion at the end of 2008, down from $23.4 billion a year earlier.

To put that decline in perspective, the value the endowments of all foundations lost in just one year represents the total grants they might have made over multiple years at their current payout rate.

Instead of hoarding, foundations should have invested more in the charitable marketplace.

Those dollars could have helped house the homeless, feed the hungry, protect women from domestic violence, keep children safe from neglect, preserve the air we breathe and the water we drink, and enrich our communities by engaging more people in civic and cultural activities.

Now those billions are gone. And those problems just get worse.

Still, rather than acknowledge their greed and poor judgment, foundations remain in denial.

What is more, shaken by the hemorrhaging economy, a growing number of foundations are delaying or reducing their grantmaking.

Foundations just do not get it.

Compounding the missed opportunities their miserly annual payout represents, foundations continue to play only a passive role in overseeing their investments.

What they should do is exercise greater scrutiny of their investment managers, track their investments to see if they are in sync with their missions, and push companies in which they invest to be better corporate citizens.

Sadly, foundations are not alone in blowing the opportunity to expand the pool of resources invested in charitable causes.

Nonprofits also are to blame because they rely too heavily on foundation grants and ignore the main source of charitable dollars.

While foundations account for only 12.6 percent of charitable giving in the U.S., nonprofits invest a disproportionate amount of time and effort in seeking foundation grants.

Living individuals, in contrast, account for 75 percent of all giving, with another 13 percent of giving provided by individuals through bequests and family foundations, according to Giving USA 2008.

Yet many nonprofits are not comfortable asking individuals for money, or simply are not prepared to ask, and instead focus on foundations, feeding those institutions’ inflated sense of power and influence.

It is time for foundations and nonprofits to face reality.

Foundations are the stewards, not the creators of wealth, and their job is to make sure the donated wealth they oversee is invested in the charitable causes it was given to support.

Members of foundation boards have a fiduciary responsibility to exercise discretion in overseeing assets given to their foundations.

And at a time of unprecedented economic crisis, those boards should be using their discretion to spend more of those assets, not save it for a hypothetical rainy day.

That day is now.

So instead of continuing to withhold from charities the assets they oversee, foundations should invest a bigger share of their assets in nonprofits that show they can make effective use of those funds in addressing increasingly urgent complex social and global problems.

And instead of begging for scraps or tailoring their programs simply to pander to what they believe foundations will fund, nonprofits should ask foundations for the resources they truly need to fund their current operations, build their organizational capacity and better serve their clients.

Nonprofits also need to kick their addiction to foundation grants and instead invest the time and effort needed to better engage individual donors.

The economic crisis and the human suffering it is causing should be spurring foundations and nonprofits to remake the charitable marketplace and replace bad habits with market-driven strategies and services.

Todd Cohen, a veteran news reporter and editor, is editor and publisher of Philanthropy Journal, an online newspaper published by the A.J. Fletcher Foundation in Raleigh, N.C. Cohen has taught nonprofit reporting and media relations at the University of North Carolina at Chapel Hill and at Duke University, and regularly speaks on the topics of nonprofit media relations and trends in the charitable world.

Of the 303 non-profit organizations launched in response to 9/11, only 27 were still operating five years later, according to a study by the NonProfit Times. What has kept the Peter C. Alderman Foundation going is his parents’ focus on maximizing the impact of their foundation through rigorous analysis. In the words of Peter’s father, Steve: “We will abandon anything that doesn’t work.”

When the Aldermans received $1.4m from the September 11 Victim Compensation Fund, Liz thought of it as “blood money” and almost turned it down. She told me recently that she used to lie awake at night thinking about the people she wanted to kill to avenge Peter’s death. But, with Steve’s encouragement, they accepted the money and launched a private foundation to help victims of terrorism and mass violence round the world.

“Using the money for a good cause was the best revenge,” Steve told me. “The only way for us to counteract great evil was with great good.”

Today the Peter C. Alderman Foundation, in partnership with Harvard University, builds mental health clinics and provides local doctors with the tools they need to treat the emotional wounds of victims of terrorism and mass violence in places such as Cambodia, Uganda and Rwanda. Its work has attracted partners such as the US Department of Health and Human Services and the pharmaceutical company, Eli Lily.

When I spoke to the Aldermans about their foundation, I was struck by the fact they, unlike most philanthropists who talk about the grants they have made, talk about the effect they have had. With an annual operating budget of $500,000 they have set out to help people across the globe. Liz and Steve found that, to have the impact they were seeking, they had to identify outstanding partners and find ways to leverage their giving.

“Starting a foundation was like starting a small business,” Steve said. “Our daughter, Jane, even got her MBA when she realized that we didn’t know enough about business.” She is now the foundation’s executive director.

The Aldermans represent the vanguard of philanthropy—individuals who have recognized that philanthropy is not defined by the act of giving but by the achievement of impact. It is both an emotional act of love by the giver as well as a strategic investment in our social fabric. The Aldermans have discovered that the most emotionally satisfying philanthropy is a gift that has impact.

Unlike many relatively small foundations, the Peter C. Alderman Foundation has an in-depth strategic plan. Through its mental health clinics, the foundation has reached 65,000 people with traumatic depression. Many grantmakers simply measure themselves by the scope of their activities, but the Alderman foundation goes further and documents that it has seen 80 per cent of the people it has treated return to productive lives.

In Cambodia, where the legacy of the genocidal Pol Pot and the brutal Khmer Rouge still grips the populace, the Aldermans have proved they can treat traumatic depression. Demand has been so large that the foundation created a second clinic to eliminate the 14-month waiting list. Importantly, the Aldermans have shown they can achieve their mission cost effectively; the Cambodia clinic system provides services at a cost of $50 a head.

The Peter C. Alderman Foundation is not the first to have a strategic plan, strong partners and demonstrated impact. But it is part of an emerging group of relatively small family foundations that are demonstrating how to use effectively these tools.

The Aldermans have shown that the most effective way both to help people and soothe their own emotional wounds is through a focused strategy and measurement of impact.

I was struck by how the Aldermans talked like seasoned social action experts with impact data and leverage statistics dominating our conversation. But, in the end, the Aldermans are grieving parents trying their best to make sense of a devastating loss. “I’ve realized that you can’t cry when you’re working on the computer,” Liz said. “You get the keys all wet.”

Sean Stannard-Stockton is a principal and director of Tactical Philanthropy at Ensemble Capital Management. Ensemble Capital provides families both traditional investment management and philanthropic planning. He is the author of the blog Tactical Philanthropy and writes the column On Philanthropy for the Financial Times.

The dog-lovers fear people will be inspired to copy the First Family’s choice of dog and then abandon the animals when they prove to be too much trouble. The Nonprofiteer fears that people will be inspired to support children’s charities in India this week and then abandon them when some equally photogenic opportunity emerges next week or month–abandoning the Indian children, in other words, when they prove to be too much trouble.

On the other hand, when she heard the dog-lovers’ plaint she thought, “Oh, get a life!” Dog adoption on balance is a social good, and shouldn’t be discouraged just because some people who engage in it probably shouldn’t (much like parenthood).

Likewise, donations to children’s charities in India are a social good, and shouldn’t be discouraged just because they won’t continue forever. What we hope is that people who adopt dogs grow into the responsibilities that go with pet ownership, and that at least some of the people who turn their attention to Indian orphans on a whim will grow to understand the causes of their poverty and thus to support the means necessary to alleviate it.  (Prominent among those necessary means: not just consistent individual giving but an increase in the U.S. foreign aid budget.)

And meanwhile, UNICEF (along with the charities cited below) will be glad of any and all contributions, no matter how passing the fancy which produces them.

CAFAMERICA: SUCCESS OF “SLUMDOG MILLIONAIRE” IS AIDING CHARITIES

Oscar-Winning Film Inspires a Boost in Donations to Groups Working With India’s Children; CAFAmerica Offers Simple Means By Which to Target Donations to Best Programs In India.

ALEXANDRIA, VA///March 3, 2008///The Oscar-winning film “Slumdog Millionaire,” depicting the often dire circumstances faced by children in poverty in India, has sparked interest in charities that target the problem, according to CAFAmerica, which promotes borderless charitable giving as part of the CAF International Network that spans six continents and has over $4 billion of charitable funds under management.

CAFAmerica CEO Susan Saxon-Harrold said: “Individuals and organizations that have been touched by ‘Slumdog Millionaire’ should consider donating to aid Indian children. I have seen the excellent work by charities working in the slums in Mumbai. These charities are making a huge impact on the health, welfare and education of children living in poverty with very little by way of resources. The success of the film has thrown a positive spotlight on their efforts. We advise donors on how best to get involved in giving to India as well as how to make donations safely to get the best impact. As well as working with individuals we work with CAF India to help corporations with their corporate community involvement goals in the region.”

According to an estimate by UNICEF, there are currently 11 million children living on the streets of India, many of whom have fled abuse or mistreatment at home.

The film “Slumdog Millionaire” has inspired a boost in donations to the following children’s charities:

• Railway Children reports that has experienced 10 times as many hits on its Web site as normal and is witnessing a new wave of donations. Based in India, Railway Children established its first charity project in India in 1996, working with local third sector organizations to address the problem of homelessness. Chief executive Terina Keene has been quoted as saying: “We just hope that this marvelous film will help put us at the forefront of people’s minds when it comes to helping the charity. The children on the streets of India desperately need our help.”
• SOS Children’s Villages of India is a non-profit, non-government, voluntary organization, committed to the care of children in need. The aim and objective of SOS-India is to provide long term family based care to parentless, homeless and abandoned children and to strengthen disadvantaged families as a preventive measure against abandonment and social neglect of children. Since its inception in 1964, SOS-India has expanded its services for children at a rapid pace.
• Save the Children, India is an independent member of the International Save the Children Alliance. The organization fights for children’s rights and delivers immediate and lasting improvements to children’s lives in India. Save the Children has existed in India since pre-independence days and is currently working in 11 states and union territories of India.

Both SOS Children’s Villages and Save the Children, India have reported an increase in donors and sponsors in the wake of the release of the movie Slumdog Millionaire.

Individuals and organizations that wish to rely upon the knowledge and due-diligence capacity of CAFAmerica to investigate these and other overseas charities listed here, can donate to help Indian children by going to the CAFAmerica Home page and clicking the donate “Now” button.

CAFAmerica helps companies, family and community foundations, and individuals to manage their international philanthropy efforts and strengthen charitable activity around the world. It also advises on fundraising and grantmaking, allows online account management, and provides an online giving mechanism for nonprofits to place on their Web sites.

ABOUT CAFAMERICA
CAFAmerica was founded in 1992 as a member organization of the London-based CAF International Network, which provides charitable financial services to nonprofits, individuals and companies. The CAF International Network spans six continents and has over $4 billion of charitable funds under management.

CAFAmerica is dedicated to expanding borderless charitable giving by providing guidance and international grant making options for donors. CAFAmerica’s range of innovative charitable solutions for US donors and overseas nonprofits include Donor Advised Gifts, Donor Advised Funds, Matching Donor Advised Fund and most recently, the Friends of Charity Fund.

CAF CONTACT: Patrick Mitchell, in the US, (703) 276-3266 or pmitchell@hastingsgroup.com; and Fiona Fountain, in the UK, +44 1892 544035 or fiona@fionafountain.co.uk.

Kelly Kleiman, who blogs as The Nonprofiteer, is a lawyer and freelance journalist whose reportage and essays about the arts, philanthropy and women’s issues have appeared in The Wall Street Journal, Washington Post, Christian Science Monitor and other dailies; in magazines including In These Times and Chicago Philanthropy; and on websites including Aislesay.com and Artscope.net.