2 Foundations Choose Higher Payouts, Inviting Others to Do the Same

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February 16, 2016; Philadelphia Inquirer

NPQ has often advocated for foundations to consider higher payout rates, taking up the issue in some detail in Buzz Schmidt’s classic, “‘Deliberate Deployment’ or Perpetuity: Questions to Inform Timing Strategies for Philanthropy.” Since then, we have seen a number of foundations moving to deploy more of their assets in the here and now—if not by “spending down” more quickly, then by investing more of their full assets in mission-related activity. But Schmidt also suggests that foundations consider a set of questions in a more “deliberate deployment” strategy, and that is what we see in this story.

Two influential leaders in the Philadelphia area philanthropic community passed away this past January: Patricia Kind and Harold Taussig. The foundations they created, the Patricia Kind Family Foundation and the Untours Foundation, are memorializing their legacy through increased grantmaking. Together, foundation leaders are asking other foundations to join them in giving away more than the five percent required by law.

Throughout Patricia van Ameringen Kind’s long life, she supported some of the most vulnerable. She was trained as a nurse, and this training influenced her philanthropic support of those living in poverty in her community. She and her husband founded the Patricia Kind Family Foundation in 1996 to support the needs of Philadelphia’s poor. The foundation recognizes the essential work of smaller nonprofits by focusing its giving on organizations with budgets under one million dollars.

A day after Mrs. Kind’s death, another of Philadelphia’s most generous leaders, Harold E. Taussig, passed away at the age of 91. Mr. Taussig never forgot his roots as a small-business owner and entrepreneur. He was one of the first to see the value of offering vacationers the opportunity to stay in apartments instead of hotels. Through his Untours Foundation, he provided low-interest loans to startup businesses and other enterprises to create economic opportunity to alleviate poverty throughout the world. Since its inception, the foundation has made more than $7 million in low interest loans.

Although their methods differed, Mr. Taussig and Mrs. Kind shared a dedication to those living in poverty. To memorialize their generosity, the foundations they created are reaching out throughout the philanthropic community, asking other foundations to dedicate more of their resources toward alleviating poverty and underwriting second chances.

Foundations are only required to give away five percent of their assets to maintain their tax-exempt status. Administrative expenses, including staff salaries, are eligible to be included in that five percent, so even less than five percent of their assets may be given in grants each year. Leaders of the Patricia Kind Family and Untours Foundations are advocating for a different use of resources.

“The standard foundation structure of using only 5 percent of foundation assets to address a foundation’s mission is a waste of 95 percent of its assets,” said Elizabeth Killough, director of the Untours Foundation. “On top of not addressing mission, that 95 percent is often invested at cross purposes to the foundation’s mission.”

As the divide between rich and poor continues to expand, will these foundations’ efforts toward building a movement to spend more of their assets on the work of social change catch on?—Gayle Nelson

 

2 Foundations Choose Higher Payouts, Inviting Others to Do the Same

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Sesame Street Explores New Frontiers in Education

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Sesame-Street

February 1, 2016; Fast Company

In the 1960s, creating educational programming for children on television was innovative. Today there are more channels than ever before, and more children first meet Big Bird and other Sesame Street friends on phones and tablets. At the same time, children’s educational needs continue to grow, from obesity to autism, and parent deployment to bullying. Leaders at Sesame Workshop, the parent of Sesame Street, are exploring creative methods of reaching out, educating, and helping children thrive.

Although its programming began on television, Sesame Workshop quickly realized the medium was just the beginning. Sesame Workshop developed websites, cable shows and networks, and 16 million “outreach kits” and events that reach hundreds of thousands of children and their parents through partnerships with over 3000 organizations. With a budget of $104 million, though, more work is needed to fulfill its mission of helping kids grow smarter, stronger, and kinder.

Sesame Workshop recently announced the creation of Sesame Ventures, a partnership with a venture capital firm called Collaborative Ventures, and the subsequent creation of a new fund, Collab + Sesame. The $10 million fund will invest in startups developed by corporations and other for-profit organizations in six broad areas: entertainment and media, food, health and wellness, family development, education tools, and social and emotional development.

We are in the midst of an extraordinary time in the history of how digital technology can change the education, health and welfare of kids around the world,” Jeffrey D. Dunn, Sesame Workshop’s CEO, said in a statement. “History suggests that much of that change will spring from new companies. By partnering with some of these startups, Sesame Workshop can help grow the next wave of kid-focused innovation and improve the lives of children everywhere.”

The Workshop’s funds for its half of this new venture stem from the sale of its stakes in Noggin and Sprout. Both projects were innovative activities of their times: Noggin, the first all-educational cable channel for children, was launched in 1999 in partnership with Nickelodeon, while Sprout, a cable network targeting preschoolers, was developed in 2005 in partnership with PBS, HIT Television Ventures, and NBC Universal.

Projects funded through Collab + Sesame will be offered technical assistance and the opportunity to make use of Sesame Street characters and branding, as well as $1 million each. Although few would give up these perks, Sesame Workshop CEO Dunn places no preconditions that might make one suspect that the group is simply trying to extend their brand on the use of the funds.

Original site: https://nonprofitquarterly.org/2016/02/04/sesame-street-explores-new-frontiers-in-education/