You may have seen a couple of articles run in the Sydney Morning Herald a fortnight ago examining the administration and transparency of some of Australia’s better-known celebrity foundations. In the firing line were the McGrath Foundation, The Shane Warne Foundation, the Cathy Freeman Foundation and others. The journalists rightly point out a number of inconsistencies regarding the required public transparency of the non-profit sector here in Australia. Both articles contend that without adequate transparency the donating public can never know how much of their dollar is actually making it to their cause of concern.
The inconsistencies raised in the articles are nothing new to non-profits. The sector has long struggled under the burden of a fragmented regulatory system and been crippled under the red tape of multiple compliance obligations. It’s hoped that the establishment of the Australian Charities and Non-profit Commission (ACNC) will help to reduce the burden on the non-profit sector while providing a new level of transparency sector wide.
What the two articles also helped to highlight was that there continues to be a lack of wider public understanding around administration costs in the non-profit sector. Held up for high praise were those organisations with the bare minimum of administration costs, while those with professional staff and overheads were the inferred to be less effective and somehow less impressive.
It might well be that those organisations highlighted in the article are ineffective but examining administration and fundraising costs will only paint a partial and sometimes misleading picture.
I’ve worked for a grantmaking organisation that was incredibly strong on applicant organisations submitting ‘real world’ budgets. A budget submitted without a provision for administration costs and contingencies was considered poor, full stop. Administration costs were considered realistic if they were in the 8%-25% field (depending on the project type). Any lower or higher and it deserved some prodding. Equally, it was considered poor project management if an applicant didn’t factor at least 10% of the total project costs for contingency costs.
For that particular grantmaking organisation, low administration costs increased the risk of the project operating at the margins, which in turn increased the risk of the project failing. As a grantmaker they decided to mitigate against that risk. When I called organistions to ask why they had submitted application budgets with low or no administration costs their responses were generally the same – most thought putting the actual administration costs in the budget would reduce their chances of success with the grantmaker.
I’m reluctant to suggest that there is any ‘right’ range for administration fees. What’s really important is that donors examine the administration figures within the context of the organisation’s activities and mission. There is no one rule. As a donor you need to be more savvy and a donating public we need to expect that administration costs are a reality for charities.
I’d also encourage donors to recognise that staff within the non-profit sector deserve to be adequately reimbursed for the work they do. One of the great tragedies of non-profit sector is our high staff turn-over, and inadequate remuneration is partly to blame. Working in the most challenging of areas, doing the toughest of work, it’s imperative that the non-profit sector hold on to good staff. That includes senior managers and CEOs whose leadership is so valuable in ensuring the ship is pointing in the right direction.
You can follow the musings of Caitriona Fay on Twitter via @cat_fay
Happy Follow Friday! Don’t know what Follow Friday is? Well, it’s Twitter speak for these people are worth listening to. Every Friday, tweeps (slang for people who use Twitter) share the list of people they think are worth following by using the hash tag #ff.
If you’re in the philanthropy game and are wondering why you’d even bother getting into Twitter, it’s worth checking out Lucy Bernholz’s (@p2173) blog Why Would A Foundation Tweet. Her advice is pretty simple, Twitter is a great listening tool. When you start to get your Twitter legs you’ll begin to find it’s a great way to network, connect, share and talk with an incredibly diverse (and impressive) group of people.
So here’s a #ff list for those new to Twitter and for those interested in philanthropy
Influential Philanthropy Tweeps
#1 @Philanthropy – The Chronicle of Philanthropy is a must follow and considered one of the most ‘influential’ (there is a way of measuring that) philanthropy tweeps in the twitterverse
#2 @Kanter – Beth Kanter is the doyenne of all things social media and nonprofit
#3 @p2173 – Lucy Bernholz is fab, follow her on Twitter and follow her blog
#4 @phijo – The Philanthropy Journal online is a great source of nonprofit and philanthropy news
#5 @Newphilanthropy – From the best of the US to the best of the UK, I really enjoy the work of New Philanthropy Capital
#6 @Alliancemag – it’s the leading global magazine on philanthropy and social investment and definitely one to follow on Twitter
#7 @philaction – Another great news source for international philanthropy
#8 @tactphil – best way to follow Sean Stannard-Stockton, the man behind Tactical Philanthropy Advisors
#9 @philanthropy411 – Great philanthropy blog and if you follow this link you’ll find a some great resources on who else to follow on Twitter from philanthropy
#10 @fndcentre – The Foundation Centre, I absolutely love the work of this group, supporting trusts and foundations since the 1950′s, they are a great source of information, thinking and strategies for people who give.
There’s a significant international philanthropic presence on Twitter and there has been for a good couple of years now. Nonprofit organisations are embracing social media in Australia and while philanthropy has been a little slower, its fair to say the Aussie philanthropy contingent has been growing rapidly over the past 12 months.
So let’s get started on a list of the Aussie philanthropy tweeps we all should be following, connecting with, talking with and listen to. I’ll kick us off, but I’d love to hear from, and of, those Aussie philanthrocrats who are tweeting their stuff
And of course there’s the contributors of this site @ClaireMRmmer, @3Eggphil, @Debmorgan22 and me, @cat_fay. Share with us the tweeps you know that are talking about philanthropy on Twitter by leaving a comment. It will make the beginnings of a great resource.
Keep in mind that the above list is just those people who do a lot of talking on the why’s and how’s of philanthropy in Australia. Not included in that list are the wonderful nonprofits many philanthropics support across Australia. Twitter is a wonderful tool for staying connected to those organisations.
If you still need to be convinced about social media and it’s value then watch the following 2min video:
So if you’re now convinced that it’s time to set up your Twitter account, check out this great infographic from @Partyaficionado.
A couple of weeks ago I blogged about the funder-grantee relationship. Working in philanthropy, the issues of power imbalance, the burden of responsibility and questions around ‘how much support is too much’ come up daily. And when I talk about support I’m not talking about financial support, but about helping organisations to apply for grants. About encouraging and supporting them to ensure they’ve got the best shot at getting the dollars.
Obviously the question of how I allocate my time is a daily proposition, and so I read with keen interest (and rising frustration) a recent blog from Deep Social Impact. In the blog entitled Three strikes and then what? Joanne Duhl talks about the dilemma of how we know when we’re asking too much of our potential grant recipients. In Joanne’s blog, she tells the story of an organisation that underwent significant changes, including the appointment of a new director. The funder decided it was essential to meet the new director before renewing the organisation’s grant. Fair enough, I reckon. In my view it’s essential to meet the director to ensure commitment to the project, organisational stability and so on – it’s just good due diligence. After a few failed attempts at arranging a meeting, and no demonstration of commitment from the grantee organisation, the funder decided to pull the pin.
In reading the story and the list of excuses of the grantee organisation, I sensed Joanne’s frustration. And I recalled a number of similar experiences I’ve had, again, with frustration. But reflecting on the lessons learned from CEP’s findings on relationships between Foundation staff and grantees, maybe I need to be a little more lenient. I get to choose how to allocate my time in my day, so I have to accept that grant seekers get to make that exact same choice. Returning a call from a funder might not be at the top of their list of priorities.
My question, and Joanne’s question is, how far do you go? At what point does coaxing a potential grantee become harassment? We might think that those who don’t have capacity to return our calls (because they’re putting out fires and are just too stretched to take on the extra work of a grant proposal) need our money the most. But really, if we’re not running the organisation, who are we to decide?
I guess this makes the point again that relationships are so important in the funder/grantee relationship. If we know the organisations and sectors we support well enough, we have a better chance of understanding what sorts of pressures they are under. And then I guess it’s just a case by case basis. And maybe sometimes persistence is worthwhile, and other times it’s better to dedicate your time to another worthy organisation.
A colleague has just returned from the Centre for Effective Philanthropy’s (CEP) conference Better Philanthropy: From Data to Impact in Boston. The CEP provides data to philanthropic funders so they can “improve their effectiveness – and, as a result, their intended impact”. She’s buzzing with new ideas, and was inspired by the people she met.
One of the areas CEP looks at is the funder-grantee relationship, or, whether we’re “working productively with our grantees”. My colleague raved about the report Working with Grantees: Keys to Success and Five Program Officers Who Exemplify Them. The CEP has looked at grantee survey data since 2004, and has tweaked their survey along the way to glean new insights. Through this process, CEP has looked at over 9,600 suggestions from grantees on how foundations can improve. That’s a lot of feedback…
In the introduction to the report, Paul Beaudet from the Wilburforce Foundation says “At the very basic level, solid relationships with grantees are critically important because grantees are a very good source of information for us. They are the ones doing the on-the-ground work. They’re likely to have a much more nuanced and deeper understanding of the context for the work that needs to be done in the particular places that we care about. If we have high-quality, long-term, trust-based relationships with grantees, we believe that we’ll have better knowledge around which we can make smart investments in their organizational and programmatic capacity, helping them to achieve their outcomes more efficiently and effectively.” Yep, couldn’t have said it better myself.
I’ve been thinking about Caitriona’s recent blog on transparency, and I think a lot of the ‘how’ in transparency comes down to relationships. And I mean relationships at all levels. From the high level – for example the philanthropic sector’s relationship with government, and the perceptions of the philanthropic sector from the point of view of the not-for-profit sector – right down the nuts and bolts end – the relationship between the giver (whether that be the philanthropist, Foundation board director or philanthrocrat) and the asker (development manager, Board member of the NFP or fundraiser). What Paul is talking about is transparency. And a transparency that has a real benefit for both the Foundation and for those organisations it supports.
The CEP had four key findings of factors that contribute to a good relationship between Foundation staff and grantees. Firstly, that Foundation staff understand the organisation they’re funding, including its goals and strategies. Secondly, that the selection process of the Foundation helps strengthen the grantee organisation’s work. Thirdly, that Foundation staff have expertise in the area they’re funding, and finally, communication between the grantee and the foundation staff, both who initiates it, and how often.
It sort of seems obvious, but I think there are still some take home lessons for us philanthrocrats. For me it’s about keeping the door open, saying ‘yes’ to opportunities to learn, and doing my best to be engaged in sectors of interest. In my experience, that’s where I’ve learnt the most. And watching my peers, I think it’s also where the best projects are born. So cheers to transparency. May it make our sector stronger.
I hinted in a recent blog that there was growing talk in the philanthropic sector about the need for increased transparency. At the recent Philanthropy Australia AGM, President Bruce Bonyhady AM, ended his yearly review asking philanthropy to look more closely at the role it plays in society. Two things stood out to me in Bruce’s speech, first was his belief that philanthropy could play a greater role in the advocacy space and second was that the sector needed to find more ways to be transparent. Both issues, that of advocacy and transparency, are important areas for consideration in Australian philanthropy today. We’ll be tackling both in upcoming blogs and today I’ll kick us off we a few thoughts on transparency.
The timing is right for Philanthropy Australia to push the need for greater transparency among trusts and foundations and not simply because so many are working to solve the same problems. With the announcement of the formation of the The Australian Charities and Not-for-Profit Commission (ACNC) it is likely that we will see increased government interest in way the philanthropic sector is distributing its funds. Already established are minimum distribution requirements for private ancillary funds and a move to see the same placed on all their public ancillary counterparts. But to be honest, if the extending reach of government is the only incentive driving philanthropic transparency in Australia then we as a sector should probably be a little concerned.
The concept of ‘Open Philanthropy’ in the United States has been driving forward some interesting thinking and incentivising transparency in unique ways. The wonderful Lucy Bernholz (you must follow her blog) shared her modest manifesto on open philanthropy early last year and it really struck a chord with me at the time. Transparency improves our ability to address problems through the sharing of data, successes and failures but like all things in philanthropy the ‘how’ can be the really important bit.
The ‘how’ of transparency is something that the Foundation Center in the US has been looking closely at via the Glasspockets Initiative. The principle behind Glasspockets is, in the words of Janet Camarena, the Foundation Center’s project lead, “all about creating a culture of transparency within foundations”. But in this digital age transparent philanthropy is no longer simply about sharing how much we fund, it’s about how we communicate openly with each other and the broader public. Glasspockets is a true resource for the community and grantmkers alike, providing functions such as a Heat Map showing the frequency with which information is shared by foundations and a tool allowing foundations to submit and post grant data electronically in near real-time (called eGrant Reporting). Both functionalities are potentially important tools for grantmakers and the broader community, actively informing and mapping where philanthropy is working, who its engaging with and how engaged that conversation is with people at the coalface.
When I see the potential of initiatives such as Glasspockets for grantmaking I get a little excited. Imagine the possibilities. Imagine the potential for real collaboration and informed giving! We need to move away from a belief that transparency in philanthropy is simply about better reporting to government and the public via tax returns and annual reports. I get the feeling that if the incentives are right for increased transparency in Australian philanthropy then the results could be game changing. But an investment needs to be made by philanthropy into itself, and the capacity of the sector, in order to undertake these initiatives and really drive them forward. I hope that this active transparency model is something the ACNC and Philanthropy Australia encourage among funders.
You can follow Caitriona on Twitter via @cat_fay