Bill Somerville’s Presentation at the Pro Net Conference
The following is a presentation that Bill Somerville, PVF Founder and President, gave at the Pro Net Conference in Cleveland, Ohio on October 19, 2014.
Let me tell you what I am going to talk about. I am going to talk about immediate response grants and paperless giving, about foundation staff approving grants and involving special groups to help decide some grants, about venturing, taking risks, giving discretionary grants, and finding outstanding people.
It’s interesting to talk to you all because many of you have a smart phone and you can fact check me, create your own PowerPoint, and look up references I cite.
Well, tomorrow I will put this talk on venturesfoundation.wordpress.com with a listing of the addresses of all the citations. I invite you to sit back, relax, and just listen.
Let me tell you a story. This is about Larry Purcell, in Redwood City, California, he is an ex-priest who does great work in the poverty field. He and I were having lunch awhile back and he said, “You know, that truck you funded years ago is worn out – the one we use to pick up food in San Francisco and bring it down for distribution to the poor.” I asked how much a truck costs. He said he would find out and he called me that afternoon and says, “$44,000.” That same afternoon a check for $44,000 was sent to him with this cover letter: “Enclosed is our check for $44,000 to purchase a truck and continue your work of getting food in San Francisco and distributing it to programs serving the poor. Please sign a copy of this letter in agreement with the above and send it back to me.”
I now have everything I need for an audit – a signature agreeing to what the money is for and indicating acceptance of the money. My friends, this is paperless giving. Why would I have Larry submit a proposal when it isn’t needed? I have worked with Larry for years. I have made many site visits to see his work. I know him and I trust him. Why would I require a proposal? With paperless giving, I wrote what the money is for and that’s all that’s needed to justify the grant. Recently, I noted an article in the Chronicle of Philanthropy which asked “whether it matters if the community foundation model succeeds.” You bet it does, but that model needs to innovate and be more responsive. And that model is you.
Let me tell you a bit of history. In 1969, the Tax Reform Act delineated between private foundations and public charities for the first time, and public charity at the time implied community foundation. The Act also created the Donor Advised Fund. Today, most assets at community foundations are donor advised funds. The era of donors giving unrestricted large money seems to be diminishing.
So, let’s talk about donor advised funds and the challenges they represent. We need to be adept at enticing donors to focus on local giving as opposed to you being a warehouse for their funds as is so often the case. By the way, this has the makings of a scandal, over $60 billion in donor advised funds with no expectations on their use. I contact donor advisors all the time and suggest things for funding. With one donor I ask for $400,000 at a time and then give it out as discretionary money, which means we decide how it will be used.
Activate your donor advisers. The Napa Community Foundation in California does a good job of creating donor interest in where to give their money. They send out emails with options donors can choose from.
I have another donor who keeps $1 million with us at a time because we are creative and have impact with her money. She trusts us and she allocates $250,000 for funding the “poorest of the poor.” We give out that money, which has now amounted to a few million dollars. This is discretionary giving with donor advised money.
Find out what the donors’ interests are by taking them on a field trip. Let me give you an example. Here is a couple; retired, wealthy, highly educated, and wanting to help in the community. I took them on a field trip to understand how to invest, not give away, but invest their philanthropic dollar. We must get away from the concept of giving away money. We invest philanthropic money in people worthy of that investment. Let me describe the field trip. We meet at 9:00 a.m. at Starbucks with some residents of the low-income community we are visiting and we discuss common concerns such as good schools. Then we drop in on programs we have funded and I introduce them to managers and school principals and they can ask all the questions they want.
I can’t begin to tell you how much enthusiasm this field trip creates by meeting people, talking with them, and learning about the community. After the field trip, this couple got all revved up and now they do significant funding and keep $400,000 with us.
I once asked a program executive if he thought I was spying on him by coming over to see his work every so often; sometimes without an appointment. He said, “Not at all, you are the only foundation person who takes the time to come and see us and thank you for it.”
By the way, when you are conducting a field trip and visiting programs you are becoming more aware of these programs. In a sense, you are doing an evaluation of your foundation’s grantees by seeing them in operation.
Do more field trips. These are not tours. Get out of the office. You can’t do philanthropy just sitting at a computer.
These field trips are a way to interact with outstanding people.
What are ways of finding such people? Expose yourself to new situations, new people, and new programs. Our job is to find and fund outstanding leaders; the people who get things done. You can only do this by being in the community. First, if you know someone you admire for their work, ask them for references. People doing good work know others in their field and can call them to your attention. Second, try to attend some meetings where people are discussing issues of importance and watch for persons who have ideas and energy and encourage them to follow through.
Take the initiative with these people and invite them to develop and share their ideas. This doesn’t mean you are committing to fund. It means you are interested. This can lead to you bringing forth new ideas to fund and that is a quality factor in philanthropic work.
I urge you to offer to give presentations in college classes. Attend classes where students are reporting on ideas that they have developed. An example is Sirum at Stanford University where the students created a program that collects unused medicines and makes them available to people who can use them. Sounds crazy, but this has turned out to be a significant effort. They needed start-up money and we helped them. Encourage young people to come up with ideas that benefit the community.
Another avenue to finding people who have outstanding qualities is to create opportunities so you can meet them. Sponsor sessions focused on an issue such as employment, or housing, or teen pregnancy and stimulate the groups to be creative and come up with ideas that relate to these issues. For example, I held a session on young women and invited a juvenile judge, a poverty worker, two program executives, a member of our board, and a city planner to participate. They got along perfectly and built on each other’s ideas.
Eight participants is a magic number for a meaningful discussion. Sixteen is the maximum. These are people from all walks who you think might have something to say. Everyone participates. If necessary, you draw them out. Your job is to make the meeting productive. This is a way to create funding possibilities. Convening is a skill that program officers need to develop.
Challenge yourself to come up with ways for finding outstanding people because we need such people for significant funding.
Here’s an example of creative thinking. In Alameda County, California there is a new program taking youth out of the juvenile halls and giving them six weeks of training and making them Emergency Medical Technicians, the people who respond in ambulances. And the program is working well.
Now, the people we need to reach are millennials, people like some of you in their 30s and 40s. These are people who tend to give nationally and internationally and who we need to convince with regard to local giving. An article I have cited for you is “Inspiring the Next Generation Workforce: The 2014 Millennial Impact Report.” Millennials have lots of potential for you. You need to interact with them.
For example, “Are you phone-centric?” Meaning is your foundation’s website designed to be viewed on a smart phone? Millennials tend to not use offices. Their phone is their office. Are you ready for this? There are templates for you to use in creating such websites and I have listed them for you.
The interesting thing about the millennial cohort is that they are socially conscious and they want to work in companies that care about social causes. They want to make the world a better place. If they are concerned about a company’s work culture, wouldn’t it follow that they would be concerned about the community? We have an opportunity here to reach out to millennials and bring the community more into focus.
For example, millennials like to volunteer, especially as a group. Think up things they can build as a group.
Let me tell you a story. Kaboom is a national program that puts play structures on school playgrounds throughout the country. They did this in East Palo Alto, California and it took over three days to build the structure at the school. The most impressive thing to me was the millennial corporate volunteers, about 100 of them working on the structure. They were very enthusiastic.
Moving on, you have the capacity to create giving programs. Let me give an example. A donor gave me $100,000 and said spend it on education. This was an opportunity to create a program and customize the donor’s grant. I sent a notice to 44,000 public school teachers saying if they would like a grant of up to $500 for art supplies, science equipment, a field trip, an artist in the classroom, an afterschool program, resources for disabled children, just fax a request to us on school stationary co-signed by the principal. A one-page request. Don’t paralyze yourself by worrying about being flooded with requests. My son is a T.V. anchorman in the San Francisco Bay Area and he interviewed me one morning on air about teacher grants. I think every mother listening got their child’s teacher to call us and we received 400 calls. And we processed them. You want to encourage proposals and don’t be worried by a temporary surge.
I mentioned resources for disabled children and I remember a letter from a teacher that said, “I have been teaching disabled students for 15 years and this is the first time anyone has given me anything. Thank you.”
When the first request came in by fax, I asked “what are we waiting for” and we funded it with a check going out the next day. We have given out over $8 million and teachers love us and so do the donors, which is important because it is their money we have to raise each year to keep this program going. Teachers call this the fax grant program. I think teachers are the youth workers of America. They are my heroes. And what is more, many of them give $600 a year of their own money for their classes.
We also do a one-page request with social workers who serve foster care youth, $250 at a time for whatever the social worker feels the youth needs – tutoring, summer camp, a computer, interview clothing for a job – you name it. The requests from the social workers are very touching because these are children who are abused, neglected, or removed from their homes. This is a new option for the social worker. It allows them to advocate for the most critical needs. One social worker wrote about a girl who received glasses saying, “For a youth who has experienced so many difficulties and so little good the knowledge that your organization cares is priceless.”
We do this with juvenile judges when a youth in the court system needs dental work, clothing, glasses. You can’t give money to a judge so we set aside $10,000 renewable for nine juvenile judges in the area. The judge recommends, we decide, the kid receives. One judge wrote, “The support you provide to abused and neglected children in my court makes the lives of these children much more livable.”
What I haven’t mentioned is that all the grants I have described are given in 48 hours. Why not? Why load yourself down with paperwork when you don’t have to? Just give the grant. The one page request is enough justification.
You have a challenge here knowing that money given quickly when it is needed can have more impact. And impact is the name of the game in philanthropy. It means something positive happening for a better community.
Regarding our grants to teachers, social workers, juvenile judges – I call this public sector funding and few foundations do it. Some of our colleagues and donors say this is the tax payer’s responsibility and not for philanthropy. With us it has led to a trust relationship with public entities. For example, the county health services agency now keeps $2 million at a time in a designated fund at our foundation. This public money is now taken out of the bureaucracy and has more flexibility in how it can be used. We give it out as directed, we make suggestions some times, and we get administrative fees.
Did you know that the average time to apply to a foundation is 27 hours? In addition, reporting on that grant can take up to another 20 hours. This data comes from the report “Drowning in Paperwork: Distracted from Purpose,” which I have cited for you.
My friends, this is absurd. What is more is that it is getting worse. This is not acceptable and it is up to you to change the system.
We are using paper as due diligence. The more paper and questions, the more careful we think we are being. Not so!
A word we don’t hear often in philanthropy is trust. Trust yourself and trust others. It allows you to move more rapidly with less paper and it is not reckless. Trust means to rely on your intuition – your life experience, to be confident in your work. We are now using paper in place of trust and it is a mistake. If you are dealing with outstanding people, trust them. Find ‘em, trust ‘em, and fund ‘em!
Too often we end up funding paper, not people. If it sounds compelling, convincing, persuasive, we are attracted. Be careful because it is the person behind the idea that is all important. The job is to find and to fund good leadership.
I’ve made 400 visits to community foundations. I found that everyone is flooding themselves in paper. Why?
Let me move on by saying I recommend doing away with applications. They get the answers to your questions, but let the applicant say what they need in their own words. Use guidelines that allow for this rather than applications. Give it a try. I have put sample guidelines on the website for you to use.
I also recommend giving discretionary grants where the grantee can decide how to use it. This is a little bit different than general support. The applicant does not need to list exactly what the money is for. They have done good work. You trust them. Let them decide and it also makes their request to you much simpler.
It’s interesting. I don’t look at people as applicants or recipients, but as colleagues. We need people with ideas and they need money. We need each other. It’s a symbiotic relationship.
Now let’s talk about bringing younger people into philanthropy. Do you have summer internships? At Stanford University, five students are placed full-time in the summer at foundations and each receives a $6,000 stipend. We also place three graduates full-time for a year at any foundation they choose and they get a $30,000 stipend each. Over the past 12 years, over 100 students have been placed and 8 of them now work full-time for foundations. This intern program is unique in the country and I advocate it for all of you. I have listed the Haas Center for Public Service at Stanford for you to use if you want to give it a try.
Be willing to try these new approaches to your work because they can make your job exciting, challenging, and rewarding.
Are you aware that you can give to anything that is charitable regardless of whether it has a 501 (c)(3) status? The ex-priest I have funded has no 501 (c)(3) status. Says he’s not going to ask permission from the government to do his work with the poor. Be clear, he is not on Guidestar or any roster for giving. He isn’t even on their radar. You have to find people like him who are significant players in the community but who are not in the forefront. How do you do it?
Again, people lead to people. If you are working with someone in the poverty field, ask them for names. Use the media and watch for people and programs that are highlighted. Get stories in the newspaper about your foundation and your interest in finding people. This always brings a response.
Poverty funding is perhaps the most challenging funding in philanthropy. There is no silver bullet. One needs to understand that poverty is a collective term. It means not enough housing, employment, food, education, etc. It covers all of these things and if you want to begin to focus on poverty it is best to pick one of these topics.
Poverty funding is where you hack away and try all sorts of things. Forget strategic planning. Forget theories of change. Just commit yourself to becoming aware and be willing to try just about anything. I mean willingness to venture, to know your community, to fund grassroots people.
This involves initiative philanthropy where you can cause something to happen by taking the initiative. Let me give an example. Children do better in school if parents are involved, but if the parent doesn’t speak English there is a problem. We recognized this. We took the initiative in a low-income school and went to an English as Second Language program. We hired three women graduates and placed them in that school as Parent Involvement Workers. A term we made up. Their job is to get parents involved in the school and this has been going on for several years. The principal says she couldn’t run the school without them because now the parents are involved and the kids are doing better. Are you taking the initiative and causing things to happen? We have two new terms: initiative philanthropy, where you take the initiative, and as a result cause something to happen.
Homelessness is a national problem. How involved are you? As community foundations you know the community better than most. What are intervention possibilities through the city, the county? What safety net resources are available? Do you have a safety net funding program to respond to poverty issues, such as meal programs, clothing distribution, food bags, and car repairs?
What agencies are doing work in responding to poverty? Do you know? Would it be worthwhile to convene funders, county and agency directors to address this issue? In Contra Costa County, California, there is a coalition working on homelessness and affordable housing and having a significant impact.
Is this a role for program officers – being a convener? You bet it is. It’s called leadership.
Now, let’s look at another dimension of our work.
I’m not worried about commercial firms offering to set up donor advised funds. They are not grant makers. You are experts on knowing the community and giving money where it counts. You are not some commercial finance house. You can advise. You can create. You can take the initiative. They can’t and they don’t.
I have a flyer I am thinking of using.
Switch Your Money to Us!
Vanguard, Fidelity, Schwab pay 10% – 15% – 20% return –
So what – we guarantee 100% return in satisfaction.
After all, it is philanthropic money and we guarantee impact – something positive happening for a better community.
Don’t let your money just sit – do something exciting with it.
Philanthropic Ventures Foundation
What about risk taking? Do you have a venture fund at your foundation where you are ready to tolerate an occasional failure? Venture means in your professional opinion it is worth taking a risk. We are constantly asking agencies to change in how they do something. This is risk taking for them. At Hewlett-Packard, Bill Hewlett would tell his engineers that “unless you have a failure you aren’t doing your job.” If you venture, you will have an occasional failure. If you have no failures, you have not ventured. I believe it is venturing that will move community foundations forward. Consider setting up a venture fund where you will take risks with the good possibility of an occasional failure.
But philanthropy does not like a failure and thus we are not pushing the envelope. I am advocating that the philanthropic dollar should be the entrepreneurial dollar of society – the risk dollar that tries new ways of doing things. This is why we need the community foundation model I’ve been talking about.
Let’s talk about some other dimensions in community foundation work. Are you concerned about sharing decision making in giving? How about an arts fund with its own granting committee made up of artists, or a millennial fund with its own grant committee made up of young adults, or a teachers fund that shares the prerogative of giving.
We created the ambassador program wherein we come across very committed people in the community. We give them $10,000 each to give out as they wish. Fascinating what they come up with; people and programs we never knew existed. We have given ambassador grants to a public health nurse for her work in the poverty field, I remember when I first met her she had sponsored a haircut service for homeless people and was cleaning up afterwards; another is an activist in the Mexican-American community, she involved me in a class she conducted to teach people how to be waiters; a school board member who is very active in the schools and she finds and funds school counselors working with disturbed kids; the Director of the County Health Care Agency who has a big budget but no discretionary money. This is the fellow who came up with the idea of emergency medical technicians in ambulances.
This brings us to a point where we need to understand that the coin of the realm in philanthropy is ideas. What is it you want to happen and how do you bring it about? Your job is to encourage new thinking, positive thinking, to come up with new ideas. And yet we tend to be problem-oriented, which slows us down.
We pride ourselves as problem-solvers, but too often we don’t act until there is a problem. Wouldn’t it make more sense to encourage ideas? Let me give an example.
The founder of a dance company came to me for funding. Dance companies tend to serve wealthy women and their daughters so I suggested they also work with low-income girls. That was our idea. And they did and it was thrilling to see the success. This company is now preeminent in serving low-income youth as well as developmentally disabled youth, autistic youth, and youth in juvenile detention. This is an example of venture funding. What is more is that we have almost no pregnancies with these girls. Girls with a positive self-image know how to say “no.”
This is an example where we helped to focus the work of the dance company and then negotiated a grant. Coming up with ideas is something you could try because it is a promising role for community foundations to play. Think about it.
I want to say a word about deadlines. Most of you have them for grant applications and I would ask “Why?” Let me propose to you the concept of no deadlines wherein you take applications until you have enough; say your cutoff is two times the amount of money available at your next meeting. Why process requests that add up to twenty times that amount? It makes no sense and it wears you out.
So, when you hit the two times limit, that is the deadline and requests that come in after that are scheduled for the next meeting. This does not become a myth of Sisyphus where the load gets bigger and bigger. It becomes a system that is more realistic than offloading zillions of requests on your grants committee.
Sure, you might have a back log, but there is the concept of “not favored by staff” and you, the program officer, can weed out the weaker proposals. This allows you to eliminate a large number of proposals and do it quickly rather than have an applicant wait for a negative response, which could have been given weeks earlier. This is done in the name of the foundation and is not something personal. This assumes that you are willing and able to take on this responsibility and professionally handle people who are disappointed.
Thus, there is no deadline. Your literature says “Get your proposal in when it is ready and we will schedule it as circumstances permit.” You are not committing yourself to a date.
A lot of you handle scholarships which are the most labor-intensive grants in philanthropy and also tend to become overgrown in the correspondence required. Are you trying new dimensions in your scholarships? For example, loan cancellation scholarships given when the student graduates to pay off the loan, or scholarships based on promise to cover the student who had some poor grades in the past but has improved, or a reentry scholarship for the woman going back to school after she had a baby. This is where you can advise, encourage, entice the donor advised funder to try something new in scholarships as opposed to just giving to the “A” student.
What is more with scholarships is that you can use volunteers to run the program. They bring maturity, patience, and willingness to handle the details. And this saves you enormous time in administering scholarships.
I have found in working with volunteers, that they become very enthusiastic about their work and about the foundation and consequently they become donors to the foundation’s discretionary fund.
What about Boards and committees at community foundations. They take staff time and the more committees the more staff time in scheduling, preparing, attending and reporting. Some of you have up to 15 committees. This takes an inordinate amount of staff time and focuses the foundation’s work on itself versus serving the public. Try to pare down the number of committees you have.
Now let’s have look at the staff–grant committee relationship. When a request comes in, the staff reviews and researches it and writes a report with a recommendation. Most always the grants committee agrees and the grant is either given or denied. Question: why not let the staff make the grants and disburse the money quickly? To a degree, this is already the case where some CEOs of foundations can give grants up to a certain amount, but I am advocating letting the staff make all the grants. If necessary, there can be limitations on the amount. Of course, they make these grants in the name of the foundation and its board and all grants are reported to the board for confirmation.
You say board members feel it is their prerogative to decide grants, but if all they are doing is rubber stamping staff recommendations, is this really a prerogative? Your boards are made up of business people who come from companies where their boards of directors do not make operational decisions. Those Boards decide policy, focus, and direction. Your Board should stand in judgment of foundation staff performance and foundation outcomes and determine the future focus of the foundation and not decide every grant.
If community foundations are to succeed, you will need to modernize your systems.
Predicting is perhaps one of the most challenging aspects of philanthropy. I predict that a lot of what we have talked about will happen – that grants will be given faster, much faster; that foundation staff will decide grants, maybe all grants, that we will bring more people into the giving process, that we will involve special groups to help decide some grants, that our fear of failure will diminish and we will be willing to have venture funds for risk-taking in grantmaking, that we will give discretionary grants and let the recipient determine how the money will be used, that we will fulfill our obligation to have a safety net responsiveness to face off poverty.
They say change only moves at the speed of trust. So trust yourselves and full speed ahead.
- Contra Costa County – Homelessness and Affordable Housing
- Tim O’Keefe, Executive Director, Shelter, Inc., firstname.lastname@example.org, shelterincofccc.org
- Lavonna Martin, Acting Director, Contra Costa County Health Services,email@example.com
- Donald Gilmore, Executive Director, Community Housing Development Corporation, firstname.lastname@example.org, chdcnr.org
- “To Stay Relevant, Community Funds Must Adapt to a Radically Changed World.” Kasper, Ausinheiler, and Marcoux. The Chronicle of Philanthropy 19 June 2014, page 41.
- Zohar Dance Company,Palo Alto, CA, Ehud Krauss, Founder and Artistic Director,email@example.com, zohardancecompany.org
- Napa Valley Community Foundation – Creating Donor Advised Donor Interest, napavalleycf.org
- “Drowning in Paper, Distracted from Purpose: Challenges and Opportunities in Grant Application and Reporting”, projectstreamline.org
- Helping Community Foundations Adapt for the Future, The Center for Effective Philanthropy, effectivephilanthropy.org
- Leslie Garvin, Assistant Director, Post Graduate Public Service,firstname.lastname@example.org
- WordPress – wordpress.com, free as a blog, small cost to turn into a website
- Weebly – weebly.com, free as a blog, can pay to turn to a website
- Square Space – squarespace.com, not free (between $8 and $24/month)
- Philanthropy Fellowship, Haas Center for Public Service, Stanford University, https://haas.stanford.edu/students/cardinal-quarter/fellowships/philanthropy-fellowship
- Paperless giving
- Active donor advised funds
- Discretionary giving – donor advised funds
- Field trips
- Finding outstanding people
- Initiative philanthropy
- College student ideas
- First funder
- Out of the office
- Sponsor sessions
- Millennials giving
- Create programs
- Social Worker
- Juvenile Judge
- 48-hour turn around
- Public sector funding
- No applications
- Young people into philanthropy
- Giving to non 501 (c)(3)
- Poverty funding
- Safety net funding
- Risk taking – venture fund
- Sharing decision making
- Using volunteers
- No deadlines
- Staff grant committee relationship
- Staff grant making
- Board committees
- Convening – skill
- Getting interns – young people into philanthropy