blog by arwen

Early this week, the Wall St. Journal’s Personal Finance section had an interesting article written about how to fix some of the most common problems that plague the philanthropic and non-profit sectors with regard to charitable giving.

For anyone who has worked in the sector for a substantial length of time, these suggestions are kind of a no-brainer, but it is good to see them in print in the WSJ nonetheless. The article also includes an interview with the author (in which he digs into the issue of how wealthy individual donors direct their support) and some great charts.

It is a quick read and it makes some fine points. Some suggestions (see #7) are already being implemented in certain sub-sectors (namely ours!), for example, the Cultural Data Project – a streamlined online application and data collection system developed and launched in Pennsylvania and now used in California, Ohio, New York, Illinois, Massachusetts and Maryland.

Here is a quick list of the suggestions made the author, Pablo Eisenberg, who is is senior fellow in the Center for Public and Nonprofit Leadership at Georgetown Public Policy Institute in Washington, D.C.:

1. Increase the Distribution Percentage (Referring to how much of their assets Foundations are required to grant out per year – this is my favorite suggestion)

2. Increase General Operating Support (A topic those of us in the arts have been talking about for years)

3. Increase Multiyear Funding (Yes, yes, yes – foundations offering financial stability year over year – what a concept!)

4. Adopt Rolling Grant Making (Especially given the range of fiscal years that exist, it would be helpful with planning & cash flow)

5. Allocate More Funds to the Truly Needy (I can get behind this given our current economic contraction and high unemployment – but take it from somewhere else besides the arts orgs!)

6. Reach Out to Local Groups And Underserved Regions (We are all in this together people – think Purple, not Red vs. Blue)

7. Simplify Application and Reporting Procedures (Amen, hallelujah!)

8. Improve Public Accountability (I don’t think the non-profit sector are the ones who need more accountability right now – how about going after the banking and finance sector first?)

9. Fund the Watchdogs (Having working for an arts service organization for the last 4+ years, I wholeheartedly agree)

To me, the elephant in the pie-chart is the unavoidable fact that the largest percentage of charitable giving goes to religious organizations who often operate a lot of programs for the poor & needy. I can’t figure out why Pablo doesn’t address this and instead lumps together “higher education, health, the arts and culture” (in the interview) as the largest recipients of individual and institutional support and suggests that support should be redirected for more “charitable purposes”.

His statement about the largest recipients doesn’t agree with the charts included in the article that are sourced from Giving USA -  if you add the percentages listed (education 13%, health 9% and the arts 4%) you only get 24% of total giving going to these areas which is hardly a whopping majority. Maybe he is including the religious organizations in his definition of “culture” and if so, then he is absolutely correct, but this should be clarified if that is indeed the case.

What suggestions would you add to the list?

This entry was posted on Friday, November 13th, 2009 at 7:30 pm and is filed under Arts and Culture, Business and Entrepreneurship. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.