Hello, as we watch where everybody's joining
from which is fascinating and exciting, it's my pleasure to welcome you to this
webinar, Will There be Nonprofits in 30 years? I'm Leslie Slavitt. I'm privileged
to be the executive director of the Johnson Center and I encourage everybody to continue to
drop notes in the chat. It's fascinating to see as everybody continues to join us. We're going to have a few notes on housekeeping
before we get into the webinar. And so this session is being recorde
d and it will be shared out with everybody within a week. There will be a Q&A session at the end and I encourage everybody
to start putting notes in the Q&A. If you have a question, you have an idea and a thought, don't
lose it put it into the Q&A box now. In addition if you have any issues or any technical problems
throughout the webinar please put the note in the chat. We have people who are personing that and
will respond and take care of that. In addition after the webinar we will send ou
t a survey
and really hope everybody will respond to it. That helps us make sure our programs meet
your needs and our engaging content topics. And a little bit of background here before we
begin. And so three decades ago philanthropy saw the need to build a direct route from the
creation of knowledge to its application in communities. And what that really is the story of
the people who turn ideas into reality. We stand on the shoulders of many at the Johnson Center but particularly I would l
ike to acknowledge our visionary founders, Dr. Russ Mawby, CEO
of the Kellogg Foundation, and Don Lubbers, president of Grand Valley State University from 1969 to 2001, and a remarkable civic leader. I'd also like to note and thank
personally and professionally comparable path breaker Dottie Johnson, the
founding president and CEO of Michigan's Council on Foundations, for whom this
global center was renamed in 1999. And this series actually started on July 12th,
and concludes today with this t
opic, Will There be Nonprofits in 30 years? And this series is
actually the culmination of our work reflecting on philanthropy over the past 30 years since the
center's founding. Time does go very quickly, and it's critical that we take stock, learn lessons,
and ask the questions that keep the sector vital and focused on mission and purpose. And I'm
pleased that this series was able to contribute to that imperative. We've done a sort of a broad
look across the sector the last 30 years, we went
deep to look at sort of some present issues in an
international context, and now we're projecting towards the future what will things look like in
30 years. Each program featured experts from the field examining the big picture of our collective
work. I want to thank in particular two very dedicated and talented colleagues, Tory Martin
and Pat Robinson, without whom we would not be here today and we would not be in the presence of
such really interesting and fabulous panelists. These panelists
reflect the wonderful sector
leading ideas and thoughts of the panelists across this series who have engaged in conversation with
the nearly 900 registrants from 39 countries and we can see some of that happening in the chat.
I invite everybody to see parts one and two on our YouTube channel and I think that's going to
shortly be dropped into the chat. You can also go to johnsoncenter.org/events to look at our full
fall calendar of professional development events for nonprofits and foundations.
Also I encourage
everybody to go to johnsoncenter.org the home page and sign up for email so you never miss an
event, a report, or a resource from the center. And now it's my great pleasure to
introduce our three panelists today. We have Dr. Dana Brakman Reiser, centennial
professor of law from Brooklyn Law School, Heidi Hernandez Gatty, vice president of client
services from Rockefeller Philanthropy Advisors, and Emily Rasmussen, founder and CEO of
Grapevine. Thank you all for joining us
today and for your thought-provoking words you'll share
shortly. And the question as we all know it is, Will there be nonprofits in 30 years? And
so I'm going to ask you actually to take a slight twist on that provocation and for each
of you to respond to that question from where you sit in the sector and so to interpret it
in terms of what it means for you. And with that I'm privileged to turn the conversation
over to Dana to begin the discussion today. Thank you. So first of all, just than
k you so much for
including me. It's such an exciting series of events and I'm really thrilled to get to speak
with people from all over the country and all over the world about this important question.
So my take on this question of, Will there be non-profits in 30 years? is a pretty definitive
yes, I think there will still be nonprofits, but I think they will be joined by so many other
kinds of entities that are engaged in social missions. And as a law professor it's important
to me that
the law keeps up with that growing field in both regulating to make sure that the
organizations that are ostensibly serving a social mission are doing so in ways that are comfortable
in our democracy and fit well with the legitimacy needs that we have for social agenda setting
organizations, and I also think it's important for the law to keep up in terms of making it possible
to innovate and create new ways of doing good, and so I'll say just a little bit about both
of those from my positio
n as a law professor. So, a book I published just earlier this
year talks about how players and practices and norms that are native to the for-profit
sector have been migrating into philanthropy, and we rely on the three case studies mentioned
on the slide: philanthropy limited liability companies, commercially-affiliated donor-advised
fund sponsors, and strategic corporate giving. And each of these is an example of how we see this
migration from where money is being earned in the for-profi
t sector, and the tools, techniques, and
networks that are allowing that to happen being then deployed over in the philanthropic
sector with a goal of social good. And that's you know a great thing to bring more
assets and more energy to the table. However, these innovations from a legal perspective
really circumvent the guard rails that are imposed by using the traditional vehicle for
our philanthropic activity in the U.S. the private foundation. We really assert the public's
interest in
targeting philanthropic activity, the public's interest in getting assets that are
ostensibly dedicated to charitable purposes out into operating charities, and our interest
in transparency of these elite institutions, we really assert all of those goals through
the private foundation vehicle. And so as each of these techniques avoids using a private
foundation, it avoids those regulatory goals. And my co-author Steven Dean and I think it's really
important to think about ways to reassert t
hose. I'll say just a little bit more about
two of the examples on the next slide. So a philanthropy LLC, many of you may be most
familiar with the Chan Zuckerberg Initiative because you know when you have a giant social
media platform it's easy to tell the world what you're doing, if you'd like to, and these are
organizations that pursue a philanthropic agenda but do so with a lot more tools available to them
than a traditional private foundation. Of course they can engage in grantmaking li
ke a private
foundation would. They have a total flexibility to engage in impact investing, they also can engage
in co-creation with founder, or donor, or leader organizations that their for-profit entities
that they've developed and often are huge and offer great synergies and they also can engage in
political advocacy. Of course much of this is not available to a foundation which mostly needs to
target its distributions to public charities. In addition, they're not subject to the 5% payout
rule and they're not transparent. We don't know how many of these there are although we certainly
know a lot about CCI there are many many more examples that have you know thrust themselves
into the public sphere that we know about but there's no required disclosures for LLCs so we
don't know about them, about their extent in our society. Donors obviously like this flexibility,
they like the privacy, they like the control, and a lot of good planning can mitigate tax
advantages from this strate
gy, but we don't have those regulatory imperatives being worked through
when you avoid the foundation vehicle. Similarly in the corporate side, strategic corporate giving
happens when a large corporation typically is using philanthropy as part of its business. It's
embedding philanthropy at teams within broader corporate social responsibility teams and even
line departments like HR, marketing, research and development, and that is the most extreme it can
include dismantling corporate founda
tions even in large corporations that had previously had them.
Some examples are on the slide. This enjoys the same tax benefits as foundation giving but avoids
again that regulation in the foundation context. So those are some of the concerns I have with
these for-profit philanthropy vehicles that as the diversity of organizations pursuing social
mission increases we need to think about ways to inject those public goals into them. And then
on the final slide I talk about the other piece where
I also see a great blossoming is in
for-profit businesses that are blending their vision of success. They're pursuing profit
both for their owners and social good, lots of different models here and that are discussed in a
prior book that I also wrote with Professor Dean, here what I've noticed in some new work that
is about to come out later this year is that when we see public incentives for these
kinds of businesses they tend to be linked to distribution constraints, to prohibitions,
or
limitations on how much owners can benefit from enterprises like this. I think that's all
about trust, convincing public authorities that these organizations are really trustworthy and
really engaged in the social mission if we want to allow these organizations to really scale
to achieve the social missions that they have for public incentives and I would also argue
sufficient private capital, we need to be able to ensure that trust at scale and the law
can be part of that. So I'll leave it th
ere. Dana, thank you very very much, a couple of quick
questions before we move to our next presenter. I'm interested normally when people talk
innovations it it feels good, you've innovated to solve something or address something in a new
way. But I wonder from your perspective is this truly an innovation or is it something that's
more sort of retroactive. Where's the push and the pull do you think? I think there is a lot of
innovation in for-profit philanthropy I think that you know most pe
ople don't go into
philanthropy because they want to do harm, right, they want to do good, they want to see
the change that they believe the world needs, but I think a lot of the folks who are deploying
these techniques see the private foundation regime as unnecessarily constraining, right, that it
they don't believe they can make the change in the world that they want to see without engaging
with political systems. And private foundations are very much constrained from engaging in
that kind
of activity. They want to leverage the businesses that they've built and think that
they can actually use those tools and networks effectively, but the self-dealing rules that apply
to foundations are going to make it very difficult to do that in a foundation context. So I think
there is innovation here in terms of there are new levers we can pull to you you know activate that
kind of change that is desirable, but the problem is that it leaves aside the regulatory tool
that we have in our lo
t currently because these institutions, as much as I believe they are well
intended, they are not democratically accountable, and the attempts at accountability that foundation
law provides are lost when those tools are avoided. Well that's terrific. I have a number
of other questions but I'm going to save them as we come together for the panel together, so thank
you very much, incredibly thought provoking. It's now my pleasure to turn things over to Heidi
Hernandez Gatty, thank you so much He
idi, and now over to you. Hello, good morning, good
afternoon, and good evening to you, wherever you all may be in the world. I'm Heidi Hernandez
Gatty. I'm currently the vice president of client services for Rockefeller Philanthropy Advisors and
I've spent about the last 20 years of my career in infrastructure provision to the non-profit
sector. Primarily my career has been around deploying infrastructure in service of grassroots
groups to build power for vulnerable communities and most recen
tly at RPA what we do is really
look and take that work into a global context. I wanted to start a little bit by defining terms
depending on where in the world you are fiscal sponsorship may not be a common a common tool,
and in the 20 years of my career I've certainly seen this work blossom, and the understanding of
what it means to be a fiscal sponsor has really grown and evolved. So at its heart fiscal sponsors
extend their charitable status to like missioned organizations that's incredib
ly important
the primary criteria is mission alignment. Fiscal sponsors focus on different
geographies, issues, communities, we see very small fiscal sponsors, we see
community foundations who act as fiscal sponsors as benefits to their own communities,
so they can be very local, and they can also be very global. And as I mentioned this field
has grown in recognition quite extensively. It's important to note that we're really focused
on a U.S.-based charitable structure and that this chari
table structure has been increasingly
scrutinized and increasingly regulated over time, meaning that it's become more and more expensive
to be able to run a really well-managed, really compliant nonprofit organization. And
it's really this lens that I want to talk a little bit more about which is that when we ask
our visionary leaders when we ask people who are creative and who want to innovate and who want
to solve problems to cram themselves into these structures they're often very frustr
ated. And as
Dana mentioned earlier we see the pace of social innovation, the rate of technological innovation,
the rate of corporate innovation increasing, and our fiscal sponsor our charitable structures
simply don't keep up with that rate of change. The last thing I think we want to do is to
have our passionate visionary leaders be bogged down and be defeated and deflated by
those by being hampered by these structures in a way that sucks their creativity away
from the focus on mission a
nd social change. On the next slide you'll see a couple of the
reasons why people choose these partnerships, that burnout is very real, and the thing that I
really want to spend a little time on with you is the fact that as a U.S.-based charitable structure
more and more we see that our ideas around creating social change are really part and parcel
to our notion of ourselves as a part of a global community. And the U.S charitable structure is
important in the U.S and for Western philanthrop
y but becomes really challenging to
execute when we know that the problems, the intractable problems we are trying
to solve really require a global lens. And so what we'll often see is philanthropy
particularly coming together to try to share infrastructure in order to execute more innovative
philanthropic goals. If you're trying to solve issues around climate crisis then you're going
to want to solve issues that are global in nature even while you're hopefully listening to those
hyper loc
al communities and addressing local community need in a very global context.
The other thing that I'd like to say about these particular structures that I think is
very interesting is that we are also I think trying to move towards more distributed
leadership structures and our corporate structures are often very hierarchical so by
definition we're trying to co-lead, co-create, we're trying to diffuse the opportunities that
we have to make community based decisions even when that community
is global to have a lot more
consensus-based decision making, to be able to sede power and push power into communities in a
way that the hierarchical corporate and nonprofit structures don't always easily support. And
it's in this way that global intermediaries and fiscal sponsors can really be supportive
tools for this next generation of leaders by taking over the burdens of those infrastructure
challenges, by working with communities and understanding the communities that we are a part
o
f, then we're better able to either explain, create creative solutions, understand how to use
regulations, or how to interpret regulations maybe a little differently than they seem in black and
white, and being able to utilize these structures in a way that serves communities and doesn't
actually slow them down. So I'll pause there. Thank you, Heidi, very much. I have again
so many questions, but I'm interested just particularly in the context of what Dana
shared. Do you, you talked about t
he growth and some of the opportunities for maybe continued
growth I sort of heard at the end, you know, if they could extend and expand and apply in a
global context, do you think that the solutions or the resolutions necessary to use these structures
in that way will be something that happens, will be those innovations that allow the structure
to be applied in in those ways, or what's your prediction? Yeah, that's a great question. I think
it's important to remember that intermediaries ar
e nonprofits themselves. It's why the system
works, and so until and unless philanthropy prizes infrastructure in and of itself, it's
hard to see the continued growth in scale that would meet the actual need on the ground. So
there's groups, a couple come to mind that are particularly focused on communities and community
building, groups like Southern Vision Alliance, groups like Movement Strategy Center that are
explicitly working with grassroots organizers for example that are explicitly
on the ground
with communities. Funders have to see those institutions as valuable in order for them to
be able to grow and meet the needs of their communities. And that's true on a local scale
and that's true on a global scale. I think the evolution of philanthropic practice in the U.S. is
very specific to the fact that the United in the United States our government doesn't provide a lot
of the social services and a lot of the and a lot of the basic infrastructure that other countries
are
providing so we're also often talking apples to oranges when we're talking about a global
philanthropy and so the understanding of the fiscal sponsorship in the U.S. context has become
quite evolved and we're just starting to have that conversation with other Western philanthropies
and other philanthropies around the world. That's terrific, that's a terrific insight. Thank you
very much, Heidi. And now we're going to move to our final panelist. It's my pleasure to introduce
Emily, and to t
urn the conversation over to her. Thank you so much, Leslie, thank you for having
me here. It's such a nice opportunity to be in this conversation and participating with Heidi
and Dana and you, Leslie. So when I was first when this question was first posed to me I
guess I approached it from my perspective as a social enterprise founder. So like Dana
was talking about before social enterprise, that is what my organization grapevine.org is. We
then went on to set up a fiscal sponsorship like
Heidi was just talking about, and then just
start our own nonprofit. So my own personal journey has really kind of cut across all
of these different structures in some way, so it's quite personal for me. But the work that
we do at grapevine.org is we're a platform for giving circles so we help people come together to
connect, pool their donations, and collaborate to decide what to support as a collective. And often
these groups are supporting smaller more diverse organizations fiscally spon
sored projects and
looking to find alternative ways to fund smaller more diverse types of impact focused work. And
so this comes up often in our work at Grapevine, questions about the nonprofit sector
and alternative models to nonprofit. So anyway so that's the kind of context for you
all that to know that I came at this question with, and what it really surfaced for me initially
is this broader question that I think a lot of us have been discussing within the nonprofit sector
around wheth
er or not there's even going to be funding and support for nonprofits in the future
assuming that there are people who will be wanting to start nonprofits and run nonprofits in 30
years. And so I'm sure many of you are very aware of these studies and this research, here
is some of the research from Giving Tuesday where they've done a look at broader generosity, and in
this last study that they did, the 2022 Trends in Global Generosity, they revealed some pretty
startling statistics here abo
ut the decline in donations to nonprofits. And as you can see
here that's both a reduction in new donors to nonprofits but also a decline in donor retention.
And so this is really shaken I think the nonprofit sector and raised this question as to whether or
not we will have donors to support nonprofits in 30 years. In fact, there are some people who say
that these numbers show that in potentially less than 50 years we will have no donors to support
the nonprofit sector if we continue at thi
s rate, right? And of course that's a very very big if,
and so my belief, if we go to the next slide, is that actually we will have nonprofits in the
next 30 years, but there will be fewer of them, and I think fewer specifically of the smaller
nonprofits. I do think that there is a lot of infrastructure built for those larger nonprofits
that will be looking at these numbers, are looking at these numbers, already have great strategies
in place to identify new donors, cultivate new donors. I
think we have lots of technology
solutions coming out especially with AI helping to drive some of those solutions for nonprofits to
be able to effectively fundraise and support their work but I do think that the smaller nonprofits
will continue to struggle, and many of them will find ways to continue but I think many people who
would start small nonprofits or would be running them in the future will opt for other models. And
I think this is where I wanted to shine a light on this bright spo
t around generosity because
the other thing that we've seen in the studies from Giving Tuesday is that while donations
to nonprofits as a sort of registered entity are down, generosity continues to be thriving,
right, and what we're seeing is that people are giving into a much broader range of entities and
projects, an initiative some that were brought up earlier by Dana and Heidi, and so it's not just a
matter of you know a generosity crisis but really it's just a matter of expanding how w
e think about
generosity and what we find valuable to support. And so there are some you know examples of
that here. But the one that I want to well, maybe what we'll do is just go to the next slide
because I've outlined a few broader categories here where we look at just the expanding funding
models and some of these again Dana brought up earlier philanthropy LLC, strategic corporate
giving social enterprises, and more giving DAOs on the blockchain that's something that actually
a Johnson
Center for Philanthropy published a post about that a couple of years ago that I was
part of and some other models here like the for-profit nonprofit hybrids we're seeing with
donor advised funds and more. So I think we are seeing this expanding type of funding models and
at the same time we're seeing an expanding type of impact models right so beyond that traditional
nonprofit 501(c)(3). We're seeing crowdfunding giving circles like those we support at Grapevine,
lots of community and col
laborative funds. This is a really big trend I think that a lot of us have
been aware of but haven't had as much clarity around and actually I think it was just last
week the Gates Foundation announced their new collaborative fund website where they're really
trying to shine a light more on this new model where people are coming together to collaborate
and give to a broader diversity of entities. And so there are others here as well we can get
into a variety of these, but I just wanted to g
ive you the high level here where I really do
believe that generosity is thriving, I think that changing behaviors and preferences mean that
generosity is going to a broader range of places, and I don't think that's a bad thing. I do
recognize what Heidi and Dana were talking about around the slower pace of regulation, and of
some of our charitable models being able to keep up with some of these changing behaviors and
preferences, so I think there's always a bit of a challenge in that trans
ition period. But I
do think generally speaking this is an exciting evolution of how we think about impact, how we
think about being change makers in our community, and the models that are available to us. And
like I said I've had my own personal journey using a variety of models to try to fulfill the
mission we have at Grapevine so I'm happy to speak to that a little bit more specifically but
I think I'll pause there and turn it back to you, Leslie. Thank you, Emily, and you really walked
right into the question I've been think I've been wanting to ask you as you've been speaking, which
is one you're sort of going a little bit against the trend you're predicting right? And it's an,
you've gone from a fiscal sponsor, something we just heard a little bit more about, to what is
arguably the most traditional structure we have, especially if you look back on that last slide
you have, into a traditional nonprofit. So if you could very briefly talk to us a little bit
about why tha
t change and the pluses and minuses in your experience of why you went from one to the
other I think that'd be great. Yeah, absolutely. I think if we had a fiscal sponsor that was able
to grow with us and support the model that we had in the way that we knew we needed, we would
have been very happy to stay with that model, but we just outgrew our fiscal sponsor
very quickly. And I think Heidi talked, you know very eloquently about this, how the the
alignment with mission with your fiscal sp
onsor is very important, and we certainly had that
with ours. But there was just a scale issue, and the ability to kind of keep up with the work
that we were doing and the innovative work that we were doing in this space that wasn't quite there
and really strained their operations. And so we're very collaborative, they're actually a funder of
ours now, and very much a collaborator with us in this next phase, but we just we did outgrow that
model. And I think this does kind of speak to the o
ther point I made which is that I do think larger
nonprofits will continue to exist, and kind of in this fiscal sponsorship role or intermediary
role, like Heidi pointed out right, that these are nonprofit entities as well, and I think what
that means is that you're going to have lots of these smaller projects and initiatives under the
broader umbrella of these larger nonprofits which is kind of what we do at Grapevine. We have over
900 giving circles on our platform. Historically before we
were around, a lot of these giving
circles would have to go and get a fiscal sponsor, right and so or start their own nonprofit but
now they don't have to do that because they're under our broader 501(c)(3) umbrella. So in some
ways I'm against that the grain of what I was suggesting where we were headed but at the same
time I think we're also you know directly aligned and that it's a larger nonprofit umbrella to
support many smaller initiatives under that one entity. Thank you very much,
Emily. Now,
I'd like to invite Dana and Heidi to to join us and to facilitate a little bit of a conversation
between us. And to start I think it's very interesting that we heard from Dana a little bit
about being at the nexus of change, from Heidi about sort of the rate of change, and then I think
you were really amazing Emily, to talk about sort of an example of change, though it's interesting
that what might have been your ideal maybe doesn't exist ,which I think circles very nicely back
to some of what Dana led us off with. And so, the first question I want to ask and I
appreciate everybody's, you know raise your hand, you know dive in, ask one another questions,
but do you think we're at some kind of a tipping point? You know we talk about Giving
Tuesday and Giving USA, there's a lot of data that looks at trend analysis, Johnson Center
puts out a lot of trend analysis work as well. Do you think we're at the point where we're
going to start to see some meaningful moves in
this sort of evolution of this moment where
we're at, you know, is there enough activity happening that it's really going to start to have
an effect on the number of private foundations, for instance? And maybe Dana, you wanna start
there, but anybody's welcome to chime in. So, your last point about the numbers, I'm not
sure how much immediate change we'll see in the numbers, I think it's really about, particularly
and I'm talking about elite donors in that part of my work, it's about bein
g selective, right, it's
about using the vehicle that fits the way you want to make an impact. And when you know elite donors,
you know whether they're corporations or you know high net worth individuals or families when they
have a variety of impacts that they want to make, they are going to look for the tool that enables
them to make that tool, to make that impact the most efficiently that they can, and that often
means with the least regulation. And so from that perspective I'm not sure
if we'll see a change
in the numbers it may not be worth it to shut down your foundation because it might be very
useful to have it you know for certain kinds of goals and achieving certain kinds of impacts, but
you're going to broaden out and use other tools as well. I think that's what we'll see. And in turn I
thought your question was going to be for me kind of is this a tipping point for the regulatory side
and I don't have a lot of confidence in that. I think this is going to be a plac
e where the people
in the sector you know doing the innovation really need to think about these public spirited goals,
about you know concerns about the potentially anti-democratic functions of a philanthropic
sector to really be aware of that and try to build transparency and other features that are going
to kind of reassure the public of our ability to trust these kind of elite players. I think that's
going to have to happen mostly on the private side just because of our kind of broader i
mpasse in
the you know Congressional and regulatory areas. Absolutely and as we think about what I'll
call you know sort of broadening the tent or making the tent bigger so we can have
more people included in it, you know we often talk about you know philanthropy you know
adopting you know for-profit models for instance. Does that is there a way that we can incorporate
them in that authentically reflect the sort of values and activities and ways of operating that
philanthropy and nonprofit
s have particularly engaged in, or are we gonna sort of is this a
sense of wholesale sort of making us something we're not or more like the other person, do
you know what I mean? Is this for me again? I don't know, who's ever smiling most, whoever
left to take it, I thought I saw something I saw glimmer and Emily I saw something from
you, Dana, Emily do you have some thoughts? You know, I don't have a great response to that,
Leslie, but I think my first thought in response to that was just
like the desire to question
whether or not that is something we want to bring over, you know and I think that's the first thing.
I mean the reason we have new innovative models and new approaches to things is because what we
had before isn't necessarily working and filling all of our needs, and I think the philanthropic
space has had a lot of its own issues. And so I don't have an answer to that question but
that's just where my first thought was, you know questioning, like what are the thi
ngs that are
working well that we do want to bring over and what are the things that maybe we don't, and it's
an opportunity to reset. Yeah, I think there's a couple of you know a couple threads to pick out
there, one I think, Dana, you started to say it at the end, but really I think the questions around
regulation right now are more way more political than they are about actual regulation or actual
oversight, or communities actually being able to self-determine, they're much more politica
l
conversations right now, who is using a C3 or a C4 structure to make change, to hide something,
to not share, to share, and so I think the level of scrutiny has that political tarnish on it, and
and then I think to what you were saying, Emily, like purpose matters, and you can purposefully
create a for-profit, and I think we're seeing more and more communities saying we're going to
create a purposeful social enterprise that's going to give back to ourselves differently than
the nonprofit
structure than we might have, and I think there's also some some notion of
there can be for many communities an idea that the nonprofit structures are somewhat colonial.
You know this idea that philanthropy is doing two, or four, instead of with, and in service of.
And we need to see that see change happen also. Yeah, and I completely agree with
that Heidi, and I would just say from the work that we've done at Grapevine this has
been one of the things that we've been pushed on the most, is
why do we only move money to C3s,
because there are all of these, and fiscally sponsored projects we do those as well, but still
of C3s and there's been a lot of pushback on that and people are really upset with us about that and
us trying to figure out how do we navigate around that and get more money to purposeful important
programs, you know within the existing structure that were constrained by. It's harder than
people want it to be to just give money away. Yeah. Oh, Leslie, I think yo
u're on mute. Is the both
and here, right, and so we're sort of working on sort of multiple streams at once. How do
we look at the problems we have and try to come up with solutions in this case as tools or
vehicles that can best allow us to do this work, and how do we absorb and adapt existing models
from other perspectives, that's a lot of sort of change taking place, you know to navigate at once.
And what's your advice about how the field and stakeholders can best try to navigate that ve
ry
sort of crowded but important space right now. Oh, just the small questions today, huh, Leslie? I think donors need to interrogate
some of those questions around empowering versus giving what you think is
needed versus asking if the thing you're trying to fund is actually providing
the solution for the people who need it. I think as nonprofit professionals, we also have
to continue to interrogate that notion of purpose, and whether or not the things that we're working
on are actually fu
rthering our missions in the way that we want to, and I think we all
just have to do a lot better listening, which is probably a whole lesson
for our country right now. And it provokes something else for me
which is, limited life foundations. And so foundations that take the approach of
sort of retooling the way they operate with the notion of a termination. Maybe it's
a sunrise in a different context as somebody I know and respect says, but that's, how
do you think about that kind of solu
tion, that sort of feels very binary in a certain
sense, but talk to me a little bit about your experience or reflections on that as
a way of addressing this context we're in. Have experience you know working with donors in
the way that Emily and Heidi do, but this question of you know perpetuity as a model versus a more
limited life is a question that you know at least from a legal perspective we've been grappling
with forever. I teach about some of these issues based on something from the
1500 and hundreds in
England you know so this is a really long-standing question and it came up when foundation the
foundation tool was created in 1969, up until the floor debates on that on that legislation
it was intended to include a lifetime limit. So I think this is you know always going to be a
question and I don't think there's a one-size-fits all but I think donors you know who have the you
know capacity to potentially engage in perpetual giving versus time limited giving, really n
eed to
think about the power dynamics inherent in that question and think about ways that as their assets
are continued to be spent after their lifetimes, how are the decision makers going to be selected,
and you know that goes back to that power sharing question that Heidi is talking about we're
seeing really interesting developments kind of on both sides of that question with some of
these innovations though, so an LLC model sort of is like a lifetime limited model because if
you you kno
w don't pour those assets over at your death into a tax-exempt entity, they'll be treated
as part of your estate, and and that's typically not what you know very wealthy individuals want.
But on the other side the Patagonia exit strategy that Emily referenced is actually creating more
perpetuity where otherwise you wouldn't have it. So I think donors are kind of experimenting
with this question and I think it's okay for them to reach different conclusions as long
as they're being really tho
ughtful about the kinds of impacts that that decision has you
know kind of for generations that the donor you know certainly can't anticipate what their
needs will be or what their preferences will be. And Emily, a question to you in that and then
we're shortly going to turn to the mounting Q&A really exciting questions we're getting
from folks across the globe. I'm interested from a giving circle perspective, is there
a sense of of immediacy that sort of what you don't want to do is sort o
f turn into
an intermediary in a traditional sense, do you feel like the money moves more quickly in
that context to address issues that people are individually passionate about? Yeah, absolutely. I
think for us with giving circles we tend to see it be pretty high velocity. Most giving circles have
some kind of recurring cadence at which they grant money out. And most of them that that we work with
anyway tend to grant the entirety of the money that they've raised out at every cycle. So whe
ther
it's a quarterly cycle which is the most popular, or an annual, or a monthly they tend to be pooling
for that three-month period for example and then granting all of that money away. Now, not all of
them operate in that way there are some especially those that are larger and operate maybe on an
annual cadence where they'll hold some funds back, much like you might do with a donor advised
fund, and then keep that funding for maybe a follow-on grant the next year or something along
thos
e lines, but you know I think it's one of the things that's exciting about this model is it's
it's essentially kind of leveraging this donor advised fund infrastructure I often talk about
the infrastructure piece of this giving circle model as being like a community or a social DAF,
but making it really active and engaged in getting those funds out into the community, which you
know I think there's been this really wonderful trend toward giving while living as they say, and
but it's so inte
resting what Dana just brought up how the Patagonian example is actually kind
of the reverse of that, I hadn't I hadn't put that together before, but it's fascinating to see
yeah donors playing with these different models. Thank you so much. We're going to turn to
the mounting Q&A now, and so I'm going to try to moderate that and see if I can't move us
through as many questions as quickly as we can. Particularly want to go back, there's
a question about a small nonprofit, so given these cha
nges and given some of
the discussion we've been having here, what advice would you give first for
small nonprofits and how they think about their longevity and their
ability to further their mission? That's a great question. I think it's a
particular challenge for, I think a lot of the donation types of questions, it's the
financial sustainability ends up being the critical key challenge. The thing that I would
say is that I think if you're running a small nonprofit it makes it especially
important
to be really aligned to your constituency, to really understand what the needs are, and to
lift up those stories. You know we we've also lost some of our storytelling in the data collection
that we're being asked to provide to philanthropy. Like there so you're a little stuck in the middle
which is I think what really feels frustrating, but really bringing those stories to life, really
doubling down on those relationships, I think that's the those are the places where I think
wh
at particularly when you're smaller, and it's probably worth defining small, because I think
nowadays given the needs given the requirements around the legal and regulatory frameworks, small
today looks very different, I would say you're probably small at a million a year versus what
small looked like when I started my career which maybe was like you could make some real things
happen with a hundred thousand dollars annually. Most, you know, more than half of nonprofits
are still but under
$50,000 you know a year, and that's been very stable you know
for many years and so we micro small, not just small. And one of the, looking
back at some of these questions here, somebody actually provoked a question about
you know how do we think about innovation and moving to new while still recognizing and not
turning our backs on the sort of importance of the infrastructure and the nonprofit environment
that really does reflect the lion's share of most of the sector? And I think obviousl
y Emily and
the decision you made to stand up a nonprofit, it maybe reflects that, but so talk to us
about how the relevance of that model still needs to be asserted and what can be shared with
folks to, as we look at the new shiny objects, you know innovation is very enticing, how do we
not reflect the things we're built on and that really we value in our important to the success
of the sector? Wow, that's a big one. You know I one of the pieces that I was fortunate to write
for the Johns
on Center last year, gosh maybe it was earlier this year, it was last year, lost
track of time was, don't start a nonprofit, start a giving circle, so I don't know if
I'm the best person to talk about this. You know I do think that there are lots of
existing tools to Dana's point earlier, I don't necessarily see people shutting down or stopping
you know use of these other tools, but I just think that people will expand the use of different
tools for funding and for their impact like us, we'
ve ended up with three different organizational
structures essentially to make our work happen, and we also went through a transition
right like, for our earlier stage it was different than our middle stage, and our later stage, and
maybe it will change again I don't know. But so I think you know I'm not sure exactly if
going at this question with the intention of, you know maintaining existing infrastructures,
how I would approach it so much is just looking at the existing infrastructure a
s well as the new
ones, seeing what resonates with you, what would be the most effective tool for the mission and
purpose that you have, and and going with that, so that would be my recommendation. I
agree. I think both this question and the last question I think we also shouldn't
lose the importance of collaboration. So I think one of the reasons why the you know
more traditional vehicles are going to remain relevant is because we're just going to see a much
more networked effort to engag
e in social good whether that be kind of very horizontal networks
of you know like many small nonprofits can really you know be advantaged by working together,
and or more of a vertical network, right, where you've got different types of vehicles
that all care about the same mission, figuring out ways to work together and collaborate, so I
think that trend which actually is a trend that you also see in the business world is something
that is really positive and I'm starting to see develop i
n a very intentional way in the nonprofit
sector that I think bodes well for the future. Thank you. Now we have a question about regulation
and so Dana this might come to you though you know I think it's terrific to get different
perspectives you know sort of surround sound on an issue because the question is very interesting,
it's about regulation, but I think what it's really asking is about the through line. So if we
think about different things that we value or that are relevant for the
se different approaches and
ways of working, is there a through line is there sort of the first sort of 40 feet of cable which
is true about most of them or if we were going to prioritize what matters across the line, you know
what would those items be, and so I think actually it's a regulatory question, but
it's a broader question as well. If I had to pick kind of two regulatory
imperatives in the U.S. context and I think it's important to distinguish you know our sector
which does do so
much of what governments do in many other nations, I think it you know, you might
have different values but for me I think I would choose accountability, you know this there's this
great concern sometimes an overblown concern about greenwashing, you know is this really doing
good, but then not at all overblown with the disconnect from beneficiaries and communities.
So that question of accountability you know, are the efforts of the nonprofit sector really
being directed toward the needs tha
t it purports to support. And then the other that I would
choose and again this is a very American approach is pluralism. I think it's really important that
there are a lot of different visions of the good and of the social change that's desirable. And
I think it's important for regulation to take that as a first principle, that the goal is
not to mold the sector into something that a majority of constituents would get behind, but
instead to have a much more pluralistic vision. Thank you. H
eidi, I'd love your reflection
on that as well. Yeah I mean I think the the regulatory questions are really interesting. I
think that Dana pulled out the the primary ones, and I think you know for me it's really
about transparency and my cat clearly, it's really about transparency underneath that
nests really neatly within accountability. I think when we talk when we look at intermediaries
and regulations, one of the things that we hope we provide is the ability for smaller untested
ideas
is the ability to promote innovation, because you have a larger more seasoned parent
organization that is providing the appropriate checks and balances for new ideas. I also want
to pick up on that international thread though, which is that increasingly I think those of us who
are working in a global context are also seeing governments not wanting the influence of Western
philanthropy particularly around those kinds of large intractable questions, climate, human
rights, where you have autho
ritarian governments there is a real desire to keep the influence
of foreign money, ideas, innovation, out of those political contexts and conversations and
that is a reality that we are all dealing with. We won't solve some of these problems
absent countries that have you know some of the largest populations in the
world. We can't say that we want to make real social change for people globally if
we're going to abandon people globally. So I think our, again for me is so much of
it has com
e to the political unfortunately, that we want to be able to to show what Dana,
I think really eloquently articulated which is, is the money going to the beneficiaries, is the
purpose being met, and are we enacting those kinds of pluralistic visions of good that
people actually want to see on the ground. And so the importance of accountability and
transparency which I think we've talked about you know since the top of the hour, and I'm interested
because to sort of assess, and understand, o
r even you know look at how the needle is
potentially moving, and assess the impact of that, you need to be able to access knowledge right? And
this might be slightly more on the researcherly you know end of a question but if we can't look at
the traditional sources of data and information to understand what's happening to see what people
are doing, we're going to have a more difficult time uncovering it, talking about it, reflecting
on it, making change, moderating, and tweaking as we go a
long, and knowing what best to advocate
for, so any thoughts or advice to researchers, people who engage in the field, of how our
practices can catch up to sort of emerging trends? Oh oh gosh sorry, I have to go turn on my
light switch because it's motion activated. Yeah no, I think there's a couple of
things in there that are particularly about you know for us as intermediaries as fiscal
sponsors, it is a challenge. It's a challenge to drill down. You know the value part of the value
of w
hat we provide is this is this consolidated reporting part of the challenge and part of the
argument if you happen to be working on the other side of the political spectrum from someone, is
well that's a lack of transparency but the fact is this tool is used in a very pluralistic way.
Organizations across the spectrum absolutely utilize intermediaries to engage and create
thoughtful work. So some of its technology, some of its regulation, and that frankly at some level
you don't always want
that regulatory eye on you because legislation is a blunt instrument and in
trying to solve for one thing you're often going to create a lot of downstream effects. I remember
when Sarbanes-Oxley was passed. You know the the downstream effects of that for nonprofit
corporations that are still corporations, it was about corporate oversight, it was about
bad behavior in for-profit corporations, but the downstream effects and how that created additional
burdens for nonprofit organizations were
huge. And in the absence of regulation as we sort of
have to wind down, there is also there's nothing there's no barrier to somebody's self-reporting,
and so there certainly is though it would not to say it's an easy climb but it could certainly
be something that's worth the effort, is in the absence of regulation or the effect
that regulation would have, to do a move towards, you know self-reporting and sort of living and
expressing those values as a sector by choice, and not by mandate.
Absolutely, and I think it's also
important to say that you know researchers tend to heavily rely on you know the easy data, right
you know. And there's a lot that you can glean from you know mining Forms 990, but there's a lot
you're gonna miss. And you know I think that being forced to engage in more qualitative research and
you know going to the source rather than using you know data sets that are available from the
government, can add a lot of richness to our work. We're happy to share.
That's lovely. That's
wonderful to know and I think that goes back also to having the infrastructure and the resources
to be able to take those extra steps to have the time and space and support to be able to do
that kind of investigation and analysis but it's a much more expensive climb. You know not to say
it's not more worthwhile but that implicates some other things about the sector wanting to examine
itself I think. There's also just a move toward trust-based philanthropy and you know
giving in
this way that is going to be pushing us in that direction probably has already, right beyond the
regulatory considerations. Absolutely, absolutely. Well, what a brilliant and thought-provoking
conversation. I'm just delighted to have the privilege to engage and ask questions and continue
to learn more through the incredible conversation we've had here today. I can't thank you enough
for your time, for your commitment to the sector, and for your willingness to be here today. So
t
hank you three so much for everything. I want to remind everybody to sign up for emails and
events on the johnsoncenter.org at the home page. I wish everybody a wonderful rest of the day. Look
for the survey, please do fill it out, and look within the next week or so for the slides from
this presentation. I wish everybody in the words of Heidi, a wonderful morning, afternoon, and
evening. Thank you so much. Thank you. Thank you. foreign
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