Category Archives: Foundations

Sean Parker Writes about the New Group of Billionaire Hacker Philanthropists and Forms The Parker Foundation with $600M

Sean Parker of Napster and Facebook fame is a very smart guy, and he recently wrote “Philanthropy for Hackers;” the essay posits that newly minted tech billionaires are “hackers,” like himself, Mark Zuckerberg, and the Google guys, who collectively represent a new wave in philanthropy:

The barons of this new connected age are interchangeably referred to as technologists, engineers and even geeks, but they all have one thing in common: They are hackers. Almost without exception, the major companies that now dominate our online social lives (Facebook, Twitter, Apple, etc.) were founded by people who had an early association with hacker culture . . . Hackers share certain values: an antiestablishment bias, a belief in radical transparency, a nose for sniffing out vulnerabilities in systems, a desire to “hack” complex problems using elegant technological and social solutions, and an almost religious belief in the power of data to aid in solving those problems . . . At the same time, they are intensely idealistic, so as they begin to confront the world’s most pressing humanitarian problems, they are still young, naive and perhaps arrogant enough to believe that they can solve them.

The above paragraph, as well as most of Parker’s other points, are true and well considered (and they complement our review of Ken Stern’s With Charity for All). Perhaps more importantly, Parker is walking the walk by funding the newly minted Parker Foundation with $600 million. It’s great that billionaire hackers are learning to give away their money (and there are only so many 1,000 foot yachts and $50M penthouses one can buy—even billionaires reach diminishing marginal utility for luxury goods).

Parker does not, however discuss how average nonprofits funded by these new foundations would actually deliver human services to address humanitarian problems. While this might have not made the editorial cut, I suspect that he’s probably not too familiar with most nonprofits and how they work. Maybe he is only looking for nonprofits.

A quick look at The Parker Foundation website reveals that this is a foundation that does not accept unsolicited proposals. While there are some interesting thoughts and a clever PERT diagram on the site, there are no submission guidelines. Although not explicitly stated, The Parker Foundation has to find your nonprofit and contact you, instead of your agency submitting a proposal. This reverse access to funding logic is used by a fair number of foundations, whether they are old school or nouveau riche. But I’ve never understood why anyone thinks this approach is a good idea.

This approach to giving away foundation grants reminds me of the hokey ’50s TV series, The Millionaire. Every week the eccentric millionaire gave $1 million to some sad case person he’d never met to help them solve their life crisis. This was more or less a scripted version of another odd ’50s reality style series Queen for a Day.* It seems that Sean and/or the probably also idealistic foundation staff believe they can somehow not only identify important humanitarian problems, but also which nonprofits are likely to have good solutions. I have no idea how they do this, since, as Jake wrote, evaluating human services programs is hard to do.

I’m often asked by clients how to cozy up to funders like The Parker Foundation (or the much larger Bill and Melinda Gates Foundation, which in most cases also does not accept unsolicited proposals). I tell them they should hang out at private airport terminals, since Sean, Bill or Melinda are unlikely to be found in a middle coach commercial airline seat waiting to be chatted up—think private jets and other places rich folk hang. The sad truth is that, unless you happen upon a foundation founder at Trader Joe’s**, you’ll just have to hope that one of their foundation program officers stumbles across your nonprofit. This, of course, is particularly unlikely to happen to a newly formed nonprofit, which is actually more likely to have an innovative idea than an established nonprofit with a social media consultant to get them noticed.

Seliger + Associates could have helped The Parker Foundation design their grant application process and submission guidelines to reflect the way human services are actually delivered. Only one foundation in 22 years has contacted us about helping them with their grant submission process, however, and they didn’t hire us. Whether or not the source of a foundation’s assets is a successful hacker billionaire like Parker or a more pedestrian scion of the Walton clan, the foundations themselves invariably have founders, board members and staff, who don’t have a frame of reference for nonprofit culture and are idealists, or as we call them true believers. True believers, however, don’t run most nonprofits and, unlike most foundation funders, experienced nonprofit managers know the difference between the real world and the proposal world. Nonprofits often game, deliberately or not, the good intentions of idealistic funders.

* My mom was a huge fan of both shows and I actually went to a taping of Queen for a Day in Minneapolis when I was about 5—she was astounded that her sad tale of woe, submitted on an index card before the taping, didn’t result in her being selected to receive a dime store tiara, dozen long stemmed roses and whatever else the Queen got that day.

** When Jake was a teen, we lived in Bellevue, WA, close to the headquarters of Microsoft. Neighbors and friends told stories of running into Bill at the Dairy Queen or the lunch buffet at an Indian restaurant near the Microsoft campus. Although Jake loved that buffet and DQ, and we often went to both, we never ran into Bill. I did, however, sometimes run into Steve Balmer, but I’ll save that story for another post.

The Department of Labor’s “American Apprenticeship Initiative” (AAI) shows some forward thinking by the Feds

We’re interested in the Department of Labor’s “American Apprenticeship Initiative” (AAI) because it uses a word that rarely appears in the education media, federal grants, or foundation priorities: “apprenticeship.”

Apprenticeship has the ring of an out-of-circulation word, like “aesthete” or “monocle.”* Apprenticeships were common until the 20th Century, when either formal education or industrial blue-collar manufacturing jobs largely replaced them in the United States. But the number of manufacturing jobs has been declining for decades—and those that remain tend to require advanced skills—which has left formal education as the primary way we, as a society, take people aged 13 and up and try to turn them into productive—in the economic sense—adults.

The problem, however, is that a lot of people are poorly suited to sitting still and quietly for long periods of time while conducting abstract symbol manipulation. I’ve written about this issue before, in “Taking Apprenticeships Seriously: The need for alternate paths,” and a rare media account that discusses apprenticeship appeared in The Atlantic: “Why Germany Is So Much Better at Training Its Workers.” Apprenticeships haven’t gotten the attention they deserves. College dropout rates remain stubbornly high, and the solution favored by the feds is better college preparation and more wraparound supportive services in college (we discussed this in “Department of Education Grants Are All About Going to College and Completing A Four-Year Degree“). So far that hasn’t worked out well.

I’ve got an unusual perspective on formal education and college because in grad school I taught freshmen at the University of Arizona. The experience was educational for me for many reasons, one being that many if not most students seemed to have no idea about why they were in college or what precisely they were supposed to do there. Many didn’t particularly like being in classrooms, and it showed. Not surprisingly, only something like half of U of A freshmen complete a degree with six years. Students who don’t complete degrees get saddled with enormous debts and no degrees to show for it.

Not everyone is well-suited to the college environment, and that isn’t me being an elitist jerk. It’s an observation that should be obvious to everyone who has taught at a non-elite college. We—again, as a society—should have a viable system for training people who don’t like abstract symbol manipulation. They can learn and do useful things. I’m well-suited to abstract symbol manipulation—that’s my entire job—but I can acknowledge that many people aren’t.

The apprenticeship model and the university model should have porous borders—people who realize they don’t want to be apprentices should be able to pursue university education, and those in universities who realize they’d rather become electricians should be able to do that. Right now, however, public policy is oriented almost entirely towards the university model, to the detriment of many of those who don’t fit the model. We’re pleased to see the AAI as being an exception to the general principle.

* Though graduate school is still conducted largely in the apprenticeship model, which is sometimes acknowledged, since in a way no one really knows how to teach research or writing—they’re both taste-based skills, which makes them inherently difficult to teach.

We’re Not Taking Sides: We’re Describing How Grant Programs, Like Those Related to Domestic Violence, Get Funded

In Isaac’s post about the NFL spurring new interest in domestic violence, he points out the likely public response to the issue: more grant money. He’s showing what is likely to happen, and he is tracing the formation of a new grant wave—as we have done before.

We want to clarify one point: we aren’t trying to minimize domestic violence as an issue. Our purpose in writing this blog is never to minimize or maximize issues. In one of our oldest posts, “What to do When Research Indicates Your Approach is Unlikely to Succeed: Part I of a Case Study on the Community-Based Abstinence Education Program RFP,” our goal was not to minimize or maximize teen sex education either: it was to describe real-world issues grant writers face. The job of the grant writer is first and foremost to tell the funder what they want to hear. A secondary job, however, is figuring out what project concepts and services are likely to be funded.

Depending on your perspective, the “right” issue may be highly fundable at a given moment, or the “wrong” issue might be. By definition, not every issue can be prominent at any given time—the word “prominent” does itself imply that an issue is necessarily and in some objective sense more important than another issue. It just means that some impetus or news or ideas have lifted it. If you’re a nonprofit, there is a limited amount that you can do to go against a particular funding tide.

One Foundation Grant Can Lead to Another: A Bill and Melinda Gates Foundation Funding Story

A few years ago we conducted foundation grant source research and wrote ten foundation proposals for a national membership nonprofit that wanted to do a complex education study. One of the national foundations we identified, and wrote a proposal to, awarded the client $200,000. The award is terrific but not the end of the story—if it were, we wouldn’t be writing this post. The funder then referred our client to the Bill and Melinda Gates Foundation, the largest foundation in the world, who awarded our client a still larger grant. The study was completed and the American education system presumably improved.

Everyone who works in the grant world knows that the Gates Foundation usually doesn’t accept unsolicited proposals.* The Gates Foundation has to come to the organization.

This specific example illustrates a general principle: with any kind of grant writing, but especially with foundation funding, it’s impossible to know what might happen when the proposal is submitted. Every big foundation knows every other big foundation. Local foundations know other local foundations. Foundations are often fond of funding organizations that have been funded by other foundations. Life many human endeavors, the first grant is the hardest and funding typically get easier after that. If you get into the foundation club, you’ll find that being a member is much more pleasant and fun than watching from the outside.** (Venture capital works the same way.)

But there’s no easy way in, unless you happen to have a friend or relative who happens to sit on a foundation’s board. We, like most people, don’t have any friends or relatives like that. The only practical approach in seeking foundation grants is to carefully research foundations, prepare a compelling boilerplate foundation letter proposal***, customize this generalized proposal to create technically correct submissions to several plausible foundations, submit the proposals, and retire for a cocktail or three.

(Warning: The next paragraph is a shameless plug. Skip it if you’re likely to be offended.)

Incidentally, we’re having a Sizzling Summer Sale right now, and our foundation proposal package fees are discounted by 25%. Call us at 800.540.8906 for details, but don’t delay, as the sale ends July 31.

(Advertising section over.)

Our client’s story also illustrates the challenge in responding to common questions that potential clients frequently ask. They want to know how many clients we’ve gotten “funded.” But this case demonstrates how hard it can be to answer. When our client was initially funded, he didn’t tell us. If we were trying to keep a client batting average—which we don’t, because a batting average is a waste of time, given the wide range of our clients in terms of size, track record, location, type and so on—we wouldn’t have known that he should be included.

In addition, it can be hard to answer the question, “What is ‘funded?'” We wrote and submitted the first proposal, so we’ll take credit for it. But the first funder, which is very large, led directly funding for the save project by the second. Does the Gates Foundation grant count for our tally? Did we get the client funded only for the original $200,000 grant, or for the millions that followed? One could reasonably argue both sides, since the second funder wouldn’t have appeared without the first one.

* The Gates Foundation may run specific RFP processes from time to time, but those are narrow and rarer. Almost anyone who says they want to submit to the Gates Foundation but who doesn’t have connection is actually saying they don’t know what they’re talking about.

** If you want a hot date to the Prom, it helps if you’ve had dates to fall and winter formal dances first.

*** We use the term “foundation letter proposal” to characterize the initial foundation submission. We initially format these as a five-page, single-spaced letters, since many foundations request a short LOI. The final submissions may be customized to create the appropriate letters with proposals, on-line inserts, or some combination—depending on the requirements of the particular foundations.

Sometimes Technology Makes Things Harder: Foundation Proposal Submission Edition

In ye olden days when dragons flew the sky and grain was still milled with water wheels, most foundations only accepted paper submissions. Most also had relatively straightforward instructions that were reasonably simple; since the submissions were done through paper, applicants could create an attractive, well-formatted submission document.

Today things are different. Amazon delivery drones fly the sky and human-like creatures wear Google glasses on the streets, which make them look like Borg extras from Star Trek. Foundations, meanwhile, have created far more work and hassle for applicants by deploying online proposal submission systems that are harder to use and more time-consuming than paper-based submission.

Technology is supposed to make our lives easier. Sometimes it does: Facebook now makes it simple to stalk former lovers and discover that, yes, they have indeed gotten fat. But technology doesn’t automatically make our lives easier. Foundations have used technology to take what used to be a reasonably coherent exercise—like “write a three- to five-page proposal”—but they’ve chopped it up and made it incoherent. Now most foundation submissions mandate tiny input boxes with lots of arbitrary character or word limitations.

There are numerous problems with the new systems. Their space limitations are frequently absurd. They might say, “two thousand characters for the needs assessment.” But is that two thousand characters with or without spaces? Different systems use different counting conventions and sometimes don’t say whether they count spaces. The length itself is absurd: two thousand characters is a third of a page. If there are five detailed questions from the foundation about the applicant and project concept, the funder is going to get disjointed, unsatisfying answers that attempt to hit all the questions.

Since none of this can be formatted, it looks like a ransom note when printed—the sort of thing that you’d receive from a Nigerian Prince who has a bank account he can’t access. A lot of systems also won’t let applicants move forward without a value in the input box. So you have to put a placeholder there to move forward and see the whole application (we like “Jack Bauer,” “Tony Almeida,” and “Chloe O’Brien” from 24 as placeholders. But then applicants must make sure that there are no placeholders left in by accident in the upload. Question: “Who is the CEO?” Answer: “Jack Bauer,” could be a problem.

In addition, each foundation has a different system with different questions and restrictions. It’s always been true that foundation submission requirements vary; since they have the gold they make the rules. But while there used to be length variations and some oddball questions (“Do any employees of the corporation sponsoring the foundation volunteer with the applicant nonprofit?”), applications were more similar than different. The Himmelfarb Family Foundation wanted three pages and the Worcester Community Foundation wanted five, but the overall structure was similar.

Now foundations are more different than similar and their online systems present all kinds of roadblocks. With almost all these online systems, applicants start by answering a bunch of questions (“Are you a 501(c)3?”). Fair enough, we guess. Then when an applicant logs out and returns, they have to answer the same questions again! Once isn’t enough! Applicants have to answer five different times.

We’ve been doing foundation proposals for over twenty years. The current trend is making things worse, not better. Technology does not automatically make things better. The best foundation submission is about five single-spaced pages with reasonable headers that explain clearly and concisely the “Who, What, Where, When, Why and How” of a project. A project that can’t be explained in five pages is probably too complicated. We call the initial foundation submission document we recommend a “foundation letter proposal.”

We get it: foundations want to be hip and say they have an online system. But the systems they implement are usually terrible and counterproductive. Virtually every person submitting a foundation proposal is getting paid from somewhere. Every minute they spend fiddling with the foundation’s online system is a minute they’re not spending on service provision. Do foundations care? Probably not, but they should.

Foundations Give Away Five Percent Of Their Assets a Year: Typhoon Haiyan Shows Why You Should Act Now, Not Later

As you’ve probably noticed if you’re reading any news, typhoon Haiyan likely killed at least 10,000 people in the Philippines. That’s obviously a human tragedy, but there’s one small implication for nonprofit: it pays to apply for foundation funding sooner, rather than later.

The reason is simple. Foundations react to the news cycle. They also give out a limited amount of money every year. When the biggest typhoon in history hits the Philippines, funders are going to redirect a lot of their giving to victims of the typhoon. Since they’re only required to give away five percent a year, and almost no foundations give more, there is usually a finite amount of money that any individual foundation will spend in a given year. By definition, any dollar that goes to one purpose can’t go to another.

(We should clarify that we’re not criticizing foundations for donating to typhoon victims. We are, however, pointing out that in any given quarter, foundation priorities might change.)

Nonprofits that applied for foundation funding three months ago probably had their proposals evaluated on their merits without the typhoon impetus hanging over them. Incidentally, it takes us about three to four months to complete a foundation appeal, which means anyone who hires us tomorrow shouldn’t be strongly affected. But any nonprofit that spent the last year “planning” or “developing” or whatever has just seen the likelihood of its foundation appeal working decline if they submit next week.

The same thing happened, on a larger scale, after 9/11: that tragedy sucked up a huge amount of donations and foundation funding for the rest of the year. The many local, national, and international problems that nonprofit and public agencies had been addressing on 9/10 didn’t go away on 9/12. But many foundations focused on the event that dominated the news, rather than quieter needs that might make the back pages of newspapers and the bottom of websites—if they’re covered at all.

Again, we’re not trying to diminish what happened on 9/11. But we are trying to provide some context from a grant seeker’s perspective. It’s also worth noting that, as Ken Stern describes in “With Charity For All,” donations to 9/11-based causes hit diminishing returns quickly. In other words, there were too many dollars chasing too few effective charitable opportunities. Organizations like the Red Cross, which realized as much, redirected some donations to other causes and then got blasted in the media.

I mentioned above that important problems don’t go away even when major tragedies like typhoon Haiyan or 9/11 occur. My favorite example of underappreciated statistics involves cars. Pop quiz: do you know how many people died in car-related events last year? Around 30,000, which is actually down from the 40,000 people who used to routinely die in car-related events, but it’s still about ten times greater than the number of people who died on 9/11. Despite these facts, auto deaths get nowhere near the press that 9/11 did.

Almost no one is deeply engaged in rethinking our urban and transportation infrastructure to reduce reliance on cars and, as Matt Yglesias says in The Rent Is Too Damn High: What To Do About It, And Why It Matters More Than You Think, increase real incomes by lowering housing costs in major cities. (The book, by the way, is brilliant, short, and worth reading, since its main subject touches on so many economic and political issues in contemporary life.)

The contrast between the reaction to a major event like 9/11 and typhoon Haiyan and to everyday events like the deaths of innumerable people in cars demonstrates the power of unusual stories to shape funder priorities. As a society we’re willing to tolerate 30,000 people dying in and around cars every year because those deaths happen across dispersed geographic areas and 365 days a year. That doesn’t get the reaction of a single, horrifying incident. Most nonprofits are working on relatively everyday struggles around poverty, crime, research, and so on. They don’t have the advantage of every news outlet in the world shining an intense light on their cause. Both their timing in applying for funding and the content of their proposals should reflect that.

General or Specific—The Challenge of Defining a Project Concept for Foundation Support

When scoping a foundation appeal with a client, the first task is to define the project concept. This may seem simple, but few aspects of grant seeking and grant writing are simple.

Let’s assume our client is the Waconia* Family Resource Center and the agency provides a range of family and child support services, including, but not limited to—free proposal phrase here—case management, parenting training, demonstration homemaking, child care, after school enrichment, foster care, childhood obesity prevention and saving the walleye. I tossed the last one in to see if you’re paying attention, as well as to titillate our Minnesota readers.

The executive director could pick a project ranging from the very general—helping disadvantaged Waconians—to the very specific—outreach to the growing population of Latinos to involve their obese kids in fitness activities—and everything in between. So: what to do?

There is no right answer. Like marriage, you’ll only know you’ve made the right choice after it’s too late. In grant writing, you’ll know the correct choice was made when you get funded. With marriage, you’ll know sometime between your honeymoon and the rest of your life. When contemplating this non-Hobson’s choice with a client, we always remind them of this essential axiom: the more general the request, the greater the number of possible foundation funders, but the less interest any particular funder will have in the project.

If the project concept is to help downtrodden Waconians, there will be many potential funders. But, leaving aside the Waconia Community Foundation and the Walleyes Forever Founation, none will likely be particularly focused on the need, because the stated need is so general. Conversely, if the project concept targets chubby kids of the hundreds of Latino families who just moved into the community to work at the new industrial hog farm,** there will be relatively few potential funders, but the ones that exist will be very interested in the idea.

Given this news, most of our client choose a more general approach, unless they are really committed to a highly specific purpose. We recently had a large client, for example, that more or less refused to apply for any grants because they’re waiting for the perfect grant salmon to swim by. Their ideal projects were so narrowly defined that potential funders didn’t exist.

As your organization gears up to go after foundation funds, keep the above conundrum in mind. But whatever you do, don’t dither. As Wayne Gretzky said, “You miss 100% of the shots you don’t take.”

* I spent a lot of my wasted youth fishing for walleyes on Lake Waconia with my dad. Since the sport is called fishing, not catching, I had a lot of time in the boat to contemplate the complex issues that face a 10-year-old boy.

** About 15 years ago we actually wrote a large funded proposal for more or less this project concept on behalf of a tiny school district in rural Oklahoma. I remain convinced that the proposal was funded largely because of the then-unusual juxtaposition of Latinos, hogs and rural Oklahoma. Industrial sized hog farms and the immigrants who primarily work in them are now commonplace across much of rural American. Not much of a problem, unless you happen be be downwind or downstream.

Is It Worth Your Time to Cozy Up to Program Officers and Bat Your Eyelashes? Maybe, But Only If It’s Nighttime, They’re Drunk, and You’re Beautiful

Many nonprofits think they should try hard to develop “relationships” with funders, particularly with foundations and, to a lesser extent, government agencies. In my experience, this practice is mostly a waste of time. Like an aging hooker at a honky-tonk bar, it could work, but it helps if it’s late at night, the lights are low, the guys are drunk and she’s the only more-or-less female in the bar.

Funders, and especially foundation program officers, may not be hip to too much, but they do recognize the cozy-up strategy. Let’s take the bar analogy above and flip it. Instead of a honky-tonk, we’re in a trendy cocktail lounge in downtown Santa Monica like Copa d’ Oro, the foundation program officer is a beautiful aspiring actress and your nonprofit is an average lounge lizard. Like the babe, the foundation program officer knows that wherever she goes, she’s going to attract lots of nonprofit suitors, all of whom think their pick-up lines are original and figure they’ll get to the promised land by being fawning and obsequious. Unfortunately, as the Bare Naked Ladies sang, it’s all been done before.

Foundation program officers have heard every pitch you can imagine and are probably immune to your many charms. This is not to say that an executive director or development director shouldn’t drop in to see the program officers at the larger foundations in your region, as well as show the flag at conferences and the like (free proposal phrase here—we like “and the like” better than etc.). Let them know you exist. They want you to kiss their ring, or more likely their probably ample rear end, and that’s fine too. If you were passing out bags of gold coins to supplicants, you’d want obeisance too, and you’d get it.

Program officers are special and, with rare exceptions, your nonprofit is not special. Get used to this dynamic. As we’re fond of saying, “he who has the gold makes the rules.”

Like the actress in the cocktail lounge, the foundation has something lots of folk want. It’s just a question of application and negotiation, so to speak, in both cases. Rather than chatting up the program officer, we think it’s more important to try your best to understand the foundation’s funding priorities, follow their guidelines scrupulously and submit a technically correct and compelling proposal. This will get the program officer hot—not trying to ply them with metaphorical $15 cocktails.

But remember that the larger foundations will have so-called “program officers” who are actually just flacks—they don’t make decisions, but they do interact with the public. If you call foundation flacks, they’ll just say, “We can’t say anymore than what our guidelines say on the website. You have an interesting idea, and we look forward to evaluating your proposal.”

Government program officers are a different story and are often more susceptible to sweet nothings being whispered in their ears. At the federal level, most program officers at HUD, DOL and the rest of the agencies toil in crummy conditions in DC. Anyone who has ever visited such offices will remember the ancient computers, mismatched steel furniture and, most importantly, stacks of old proposals, reports and other detritus that has washed into their cubicles. Nothing seems to get tossed.

Federal program officers are more or less like your crazy Uncle Joe, living in the basement that no one ever visits. Uncle Joe is only allowed upstairs at Christmas and on his birthday. It’s a big deal when a live would-be applicant shows up to discuss YouthBuild, Mentoring Children of Prisoners, or whatever. If your agency targets specific federal programs, it’s not a bad idea to visit DC and make the rounds. Bringing a dozen donuts or offering lunch might not hurt. Just don’t visit in August. Anybody who can—including Congress—leaves DC in August, when the malarial mists gather in the heat and humidity. Remember the District was originally a swamp and many would say, remains so, at least from policy and political perspectives.

It’s also a good idea to touch base with state and city/county program officers of favored programs from time to time. As one moves down the food chain in government programs, program officers are more susceptible to politics and politicians, so one should be careful about influence peddling. If you really want to use your political muscle—assuming your agency has any, which most don’t—this is best done by lobbyists or perhaps an influential board member, who understands the political situation. Such influence is rarely peddled in a face-to-face with a program officer. Instead, it takes place on golf courses, dimly lit restaurants and the office of the governor/state representative/councilperson/Commissioner of the Metropolitan Mosquito Control District.

Gun Violence and Grants: Echos of Sandy Hook in Philadelphia and Chicago

I recently wrote about the likely impact of the tragic Sandy Hook shooting on grant making and seeking, which is why this CNN piece about ongoing gun violence in inner-city Philadelphia and Chicago in the context of Sandy Hook resonated with me.

Unlike the sudden impact of Sandy Hook, which captured the nation’s attention and created a focused debate on gun violence, the thousands of poor black and brown youth and young adults who are shot every year in cities like Philadelphia and Chicago barely perturb our collective consciousness. One can speculate on complex issues of class, race and media incompetence that may be the cause of this curious and enervating dichotomy, but my task as a blogger is simpler: what does this mean for the world of grants?

It means that there is wealth of grant opportunities in communities affected by gun violence, whether it be the random act of an apparent madman in an affluent exurb or the everyday grind of a generation coming up lying bleeding on the streets of disadvantaged neighborhoods. The CNN article discusses one such effort, the Cradle to Grave program of Temple University Hospital.

Cradle to Grave uses a scared straight in which mostly African American and low-income youth are invited into the hospital to hear trauma staff talk about what happens to a shooting victim and see the trauma teams in action. The visit culminates with a visit to the hospital morgue.

This is a great example of applying an existing project concept, “scared straight,” to a persistent problem and shows how program development should work. The Cradle to Grave program seems to have significant funding from such funders as the Robert Wood Johnson Foundation and the Richard King Mellon Foundation, as well as sufficiently good PR to get on CNN.

This project concept, or ones like it, could be replicated in your community in part by tying them into larger trends and media narratives. Alert nonprofits will be able to write more compelling proposals when they find a way to connect local issues to national debates.

Nonprofit “Whales” May Face Extinction with Potential Tax Law Changes

I’ve about had it with the endless blathering about the so called fiscal cliff.* There is one nugget in the story, however, that should strike fear and loathing into the hearts of nonprofit executive directors: Whether or not President Obama and Speaker Boehner hold hands as they jump off the cliff, America faces an enormous fiscal challenge that will have to be addressed in the coming years, because we spend more than we take in and have for about the last ten years. As Herb Stein’s Law states, “If something cannot go on forever, it will stop.” The inevitable tax reform that will result is likely to include significant limits on the charitable tax deduction.

While nobody knows what form changes to the charitable tax deduction “loophole” might take, it’s a good bet that the annual total for all deductions, including the charitable tax deduction, will be capped at some number—say $25,000. “So what?” you say. “I’ve got lots of donors and there’ll probably be a minimum gross income, like the currently popular $250,000 per year, that is somehow supposed to equate to ‘millionaires and billionaires.’ And it’s time we stick it to the one percenters.”

But many donation-supported nonprofits have lots of supporters who make small, albeit regular, donations to the cause. As any executive director knows, however, these donors take lots of care and feeding to extract money. As a result, the return on the time investment in getting these donations is fairly small. Instead, for many if not most donor-supported nonprofits, a relatively few large donors actually keep the doors open and the lights on.

Like Las Vegas casinos who depend on high rollers, these donor “whales” are critical to many nonprofits. Just like their casino counterparts, who are charmed by private jets and fancy suites, nonprofit whales also demand perks like a seat on the board, constant phone calls and ego stroking. It’s worth it, though, because the return can be enormous. Thus, executive directors spend a lot of time whale watching, while their underlings curry favor with the everyday donors and volunteers.

Restrictions on the charitable tax deduction will probably make whale herding much more challenging. A typical donor whale might support four or five charities generously. When the tax benefit is capped, as it likely will be, that might drop to two or three. Your nonprofit could be left on the whale watching cruise with nary a fluke in sight.

The good news in all of this is that increased tax revenues from tax reform will mean there will be more government grant dollars up for grabs, or at least fewer extensive cuts.

EDIT: The WSJ ran “Should We End the Tax Deduction for Charitable Donations?“, which engages the same questions as the post above. If the WSJ and other major media outlets are debating this issue, you can bet there’s a real chance of actual changes.

* Or to quote the inimitable Samuel L. Jackson in Snakes on a Plane, “Enough is enough! I have had it with these motherfucking snakes on this motherfucking plane!”.