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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Gates Foundation Invests in Corporation to Fight Disease

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The Bill & Melinda Gates Foundation is investing $52 million in CureVac, to fund a new factory in Germany. The factory will make drug products using mRNA. This represents the foundation’s largest ever investment in a corporation. It is also a symbol of what the world learned since the Ebola outbreak, diseases in poor countries affects health across the world.

The Gates Foundation’s majority equity investment will be used to build a $76 million factory developing products using mRNA, a messenger chemical that provides information from the gene into cell parts making proteins. It is believed that mRNA can be used as a platform for rapidly producing low-cost drugs and vaccines. These products are “thermostable,” meaning they do not need cold-chain storage, a major hurdle in supplying vaccines in developing countries.

Additionally, the two organizations are forging a larger partnership as part of the foundation’s focus on vaccines that fight global diseases that disproportionally affect people in the poorest countries. The Gates Foundation’s mission is “guided by the belief that every life has equal value….[The] Foundation works to help all people lead healthy, productive lives. In developing countries, the emphasis on vaccines leads to better health thereby increasing individuals’ ability to lift themselves out of extreme poverty.” This initial project is part of a larger plan to invest billions to develop vaccines for viral, bacterial, and parasitic infectious diseases including rotavirus and HIV.

This investment is part of the trend of foundations turning to corporations rather than nonprofits or other foundations to solve the world’s inequities. These partnerships are part of socially responsible investing, or SRI. SRI includes impact investing, shareholder advocacy, and community investing, and is designed to encourage corporations to act in a socially respectable manner in addition to making a profit.

Because the majority of medical research is driven by the desire to make a profit, corporations and the world’s scientists are focused on drugs and vaccines that will make the largest monetary return on investment. These are rarely realized in medicine that’s focused on outbreaks in the world’s poorest countries. World NGOs have described this as “the 10/90 gap”; ten percent of global health research is focused on ninety percent of the world’s diseases. Ignoring these diseases leads to epidemics like the recent Ebola outbreak.

While there are clearly questions embedded in such tight relationships between nonprofit and for-profit organizations, these types of partnerships are gaining support with conservatives as well as liberals. Prime Minister Stephen Harper of Canada recently met with Bill Gates to discuss their shared goal of improving the lives of women and child around the world. Canada is funding twenty research teams of African and Canadian scientists to expand immunizations in order to eradicate polio and eliminate tetanus.

The CureVac factory is expected to produce additional products funded by the foundation. The corporation will hold the licenses created by the partnership and sell the products at an affordable price in poor countries.

Original cite: https://nonprofitquarterly.org/philanthropy/25738-gates-foundation-invests-in-corporation-to-fight-disease.html

The Powerful Philanthropic Intention behind “Women Moving Millions”

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For too many decades, programs serving women and girls stemmed from programs serving men. In response, women’s funds were created to raise, advocate, and focus funds on programs geared toward the unique needs of women and girls. Although these funds continue to grow, many leaders are advocating for more dynamic growth and others continue to question their need.

Women Moving Millions (WMM) issued a call to action in September to women of means across the country. The organization advocated for an increase in giving and a concentrated focus on organizations serving women and girls.

The call to action was accompanied by a new study entitled All In for Her, documenting the growing amount of wealth wholly or partially controlled by women. According to the study, women in the U.S. have the capacity to give an estimated $230 billion a year. Jacqueline Zehner, the chair of WMM, described the sum as “approximately equal to all charitable giving from individuals and roughly 3.3 times the overall charitable giving by foundations and corporations in the U.S. last year.” Much of this capacity stems from an intergenerational transfer of wealth. According to the Boston College Center on Wealth and Philanthropy, women will inherit 70 percent of $41 trillion, or $28.7 trillion, over the next 35 to 40 years.

This large transfer of wealth has the potential to increase philanthropic activities. According to a July 2009 Barclay’s Wealth study titled Tomorrow’s Philanthropist, women give, at 3.5 percent, an average of 1.7 percent more of their wealth to charity than men.

WMM advocates not only for an increase in giving, but giving that is transformative. Currently, only ten percent of donations are chosen using a “gender lens.” The organization defines giving with a gender lens as donors thoroughly “examin[ing] how culturally entrenched gender norms affect women and men differently, and then tak[ing] these distinctions into account when identifying both the problems and the solutions.” Women can change this deficiency by giving larger general operating gifts, combining money with volunteer engagement, and merging their efforts with other donors who share this passion. In addition to giving using a gender lens, thoughtful donors provide capital directly to women and girls in need.

The first women’s funds were created in the 1980s. Their donors have led the way by building and expanding foundations with missions of supporting organizations serving and creating programs designed for women and girls. Currently, there are over 160 women’s funds and they are growing at a faster rate than the greater philanthropic community. A report developed by the Foundation Center and Women’s Funding Network documented 24 percent growth in giving by women’s funds between 2004-2006 ($101 million in 2006, up from $72 million in 2004) while overall foundation giving increased by 14.8 percent. The leaders of WMM are advocating for transformational social change building on the dynamic growth of the last thirty years.

Article original cite: https://nonprofitquarterly.org/philanthropy/25008-the-powerful-philanthropic-intention-behind-women-moving-millions.html