Connected Giving | February 2019 edition

Your role as adviser, social enterprise's three big problems and a customer centred NGO tool.

Welcome to Connected Giving, Australian Executor Trustees monthly update on current trends and news in philanthropy. This month’s industry news summary looks at the important role for advisers to play in philanthropy, how nonprofits are a requirement for social enterprise’s success, the illusion of control in giving. The NSW Government has developed a free customer-centred tool set for NGOs which we discuss. A new OECD report has outlined the need for more universal measuring standards for impact investment to be useful. A unique collective philanthropic venture to protect the Murray Darling Wetland has also been developed. In the US, a $4 million grant has been received to diversify boards of museums, and we also look at some of the problematic criticisms in the nonprofit sector.

Jump to any one of the edition’s articles by clicking the links below:

Philanthropy and your role as adviser

Approximately 5,000 philanthropic foundations are operating in Australia with combined gifts of around $1.86 billion per year. There has been a steady increase in giving over the last few decades, with a 36% growth since 2010. The profile of the ‘major donor’ today is a professional who is over 55 with investable assets of over $1 million, no beneficiaries, and actively involved with a not-for-profit organisation as a director, trustee or volunteer. For many of these individuals, investing in structured giving is new. This places importance on networks, connections, and tailored expert advice. The role of the adviser here is crucial, as an influencer of their clients’ philanthropic activities, and for creating formal structures for giving. Rather than building expertise on everything, advisers can form relationships to augment their offering and add value to the overall client relationship. Read the full article (3 mins).

How nonprofits solve social enterprise’s three big problems: money, trust, and information

Social enterprise business ventures provide an interesting solution to social problems, seen as a ‘promise of salvation’ from the organisational baggage that weighs down other approaches to social problems. While that story is familiar, it is problematic. Scratching below the surface of social enterprise businesses reveals that they depend significantly on the not-for-profit sector for effectiveness. For-profit social enterprise ventures rely on elements of civil society (nonprofits and governmental organisations) for providing credit and other financial support, broadcasting their trustworthiness, and generating difficult to access information. It is inaccurate to see these businesses as replacing the work of nonprofit organisations. Read the full article (10 mins).

General operating support and relinquishing the illusion of control

As the Center for Effective Philanthropy’s recent report finds, foundations do not understand nonprofits’ needs as well as they think, or as well as nonprofits would like them to either. The perception gap is stark when it comes to the provision of general operating support. The majority of nonprofit CEOs ask foundations to support what they — the CEOs — think foundations want to fund. Most funders consider what a grantee specifically requests when considering whether to provide support to strengthen the organization. Both nonprofits and foundations play a role in closing the gap between what support is needed and provided. If nonprofits think — or know — that a foundation does not make general operating support grants, then they are unlikely to ask for them. Counterintuitively, a trusted and unrestricted supporter may actually have more influence on grantees. Read the full article (5 mins).

New customer-centred tool set to improve NGO capabilities​

The NSW government has released a tool designed to improve NGO capabilities around customer-centred approaches. The tool is designed to develop resources and training, commissioned by The Department of Finance, Services and Innovation, and developed by the Social Innovation Council. The organisational capability building tool is voluntary and fully confidential, bringing together free government resources and NGOs to improve training and policies. Read the full article (1 min).

OECD says impact investment needs universal standards

OECD report finds that social impact investing could be more effective if universal measurement standards were implemented and impact goals were better defined. The main challenge facing the impact investment market is the differing definitions of impact as defined by public and private organisations. There is an urgent imperative for a shared understanding of how we measure investments in sustainable development. This is important, as the number of social impact investment funds has quadrupled in two decades, with $319 billion invested. Read the full article (5 mins). 

Record philanthropic purchase to protect Murray Darling Wetland

The Great Cumbung Swamp is home to over 131 species of birds, and more than 200 plant species has been bought by The Nature Conservancy, who raised $55 million to buy two cattle stations, protecting the swamp from irrigated farming. The cattle stations were bought in partnership with agricultural investment company Tiverton, and managed alongside a government owned property, as well as in partnership with the Nari Nari Tribal Council. Tiverton is expected to play a role in the economic return of the project, ensuring that properties retain sustainable farming and land management practices. Behind this project is the combined efforts of big philanthropic donors such as John Fairfax, The Ian Potter Foundation, and investment capital such as the ANZ Agribusiness. Read the full article (2 mins).

$4 million grant will promote board diversity at museums

The American Alliance of Museums will receive US $4 million to bolster board diversity in an effort to make museums more accessible and inclusive. Currently about 46 percent of American museums have all-white boards of directors, and this statistic has barely moved in 20 years. Museums are not the only nonprofit organisations with a diversity problem, as 24 percent of charities have all-white boards, and four out of ten foundation boards were all-white. Museums selected to take part will be announced in coming months. Read the full article (4 mins).

Less generalisations, more nuance please

Charities are often the subject of criticisms, more often than not because of misguided generalisations. Nuance is lacking when it comes to charities and philanthropy. These generalisations miss important points, and make invisible the real questions we need to be asking. Questions such as ‘are these charities effective? Are they responding to community need?’. While criticisms bring up important points that we should challenge ourselves on, these criticisms must account for nuance in a large and diverse sector. Read the full article (5 mins).

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