Monday, November 12 , 2018, 8:02 pm | Fair 59º


Cynder Sinclair: Nonprofit Foundations, and Battling the Class Divide in Philanthropy

Nearly 200 private foundations contribute to Santa Barbara County’s vital nonprofit community. Some are small family foundations; others routinely donate millions of dollars to local nonprofits. With the second highest number of nonprofits per capita, Santa Barbara County is considered “rich” in philanthropic foundations.

As one of the shining examples of local philanthropy, The Fund for Santa Barbara supports grassroots organizations working for social, economic, environmental and political change in Santa Barbara County. For more than 30 years, The Fund has been at the forefront of responsive and progressive philanthropy in our community, distributing more than $5 million to more than 900 grassroots projects.

Recently, we had the privilege of interviewing Geoff Green, The Fund’s executive director, to discuss his thoughts on opportunities and challenges facing the philanthropic and nonprofit communities in Santa Barbara. Anyone who knows Geoff knows he is not shy about sharing his opinions about matters related to nonprofits and philanthropy. In this interview, we have the benefit of Geoff’s wise, yet candid, take on approaches nonprofits can use when working with foundations as well as his frank advice to his fellow foundations about their philanthropic work.

Nonprofit Kinect often conducts interviews with our community thought leaders. We invite you to click here to view more of these interviews.

Sources of philanthropy need to be seen in proper perspective.

In working with individual nonprofits, it doesn’t take long to see how much time we all spend concerned with what foundations will or won’t fund; but revenue from funders is a relatively small part of the overall funding picture. The vast majority of private philanthropic dollars (approximately 75 percent in a typical year according to the annual Giving USA report) come from individual donors. And in most cases, individuals represent the greatest potential source of funds. So I advise nonprofits to focus on individual donors more than they do on foundations.

Geoff Green
Geoff Green

Foundations are typically an unreliable source of long-term support. But it is easy to understand why we spend so much time concerned with them: They can also produce a large influx of cash — often larger than an individual donor gives at any one time, and there can be some caché that comes with receiving a grant. There is no “one size fits all” formula, so a nonprofit should be clear about where its support comes from and spend its time and energies accordingly.

There is no substitute for a diverse income stream. A combination of diversity of income streams and conservative budgeting is the optimum mix for nonprofit sustainability. An organization that cultivates a diverse funding base has more options when things get difficult. Organizations frequently have no back-up plan (e.g. a cash reserve), and the combination of lack of diversity and absence of a contingency plan can be deadly.

Too few sources of funding and no cash reserve virtually guarantees a future financial crisis for an organization. I’m comfortable with about six months operating as a cash reserve but there’s no “right” answer to the appropriate reserve size. There are several white papers out there on policies about cash reserves but the consensus is that there is no consensus — but there is some good thinking out there on this important topic. So, I recommend that nonprofits research this to determine the best fit for them.

Transparency at all levels is a key to success.

Transparency is not just about public image and the “smell test” in the media. True transparency includes proactively letting others know what you’re doing, why you’re doing it, and who’s making the decisions. This level of transparency can help a nonprofit figure its own best management tactics: what it takes to make the organization work. Again, one size does not fit all. There isn’t just one way. Rather its about having good, clear policies; living by those policies; and making sure everyone is well acquainted with those policies. Transparency needs to be practiced internally as well as externally.

Being reflective is very important.

It’s hard to be reflective in the midst of the scramble to get the work done, but it’s really important to make the time. It’s harder to find this sort of time for small- to midsized groups. But make it a priority to carve out the time. Reflect on how thing are working and identify any practices that need to change. Document the practices that are working so you can build on them. We get so used to scrambling; but we need to take time to examine whether we are walking our talk. At The Fund for Santa Barbara, we advocate for nonprofits to follow certain practices and I work hard to make sure we’re following those practices before we suggest that others follow them. For example, we advocate for fair compensation practices — living wages, benefits when possible, etc. Advising others to make sure they pay their employees fairly helps make me conscious of whether we are exemplifying those practices.

What’s the best role for a foundation?

Foundations — at their best — are a tremendous resource in solving critical problems, advancing important ideas and bringing people together.

I do have serious questions about some common practices in philanthropy. For example, I think most funder-led initiatives are problematic. Funders aren’t usually the best ones to lead community initiatives. Funders should be part of them, but rarely should they be in the driver’s seat. Don’t get me wrong, I’m sure we can all think of an example of a productive funder-led initiative, but I believe they are relatively rare and the overall track record is not good. A recent report from the Weingart Foundation points out that more often than not, the best role for a foundation is to do its due diligence to determine which organizations provide unrestricted (or at least minimally restricted) support and have faith in the leadership of the nonprofit sector.

Frankly, a general support strategy would also be the best way for most foundations to serve their own missions. But many funders still are primarily attracted to newer programs. They place too many restrictions on their grants and are looking for next sexy program instead of funding important core work.

Achieving transparency in foundations.

Foundations want transparency from nonprofits; but too often they don’t practice it themselves. The idea that most foundations are dispassionate, analytical entities is debatable. The truth is that foundations are made up of people, and people have their biases. In most foundations, funding decisions often come down to the opinions of a few people. Of course, they have the right to their opinions and to use the decision-making structure of their choice, but let’s not pretend that they are all using a highly democratic, analytical process. I’d like to see more foundations engage community members in their decision-making about funding.

If I have one pet peeve about the larger world of philanthropy, it’s the trendiness. It seems that someone can write a book and speak at a conference and all of a sudden the nonprofit sector rushes — lemming-like — to this new revelation ... until the next thing comes along. There are terrific ideas that are put forth all the time, but there is rarely anything “new” under the sun. Communities, frankly, need to have more faith in their own abilities to analyze their challenges and propose solutions. It is good to get shaken up periodically by a voice from outside, but there is no single model or program or assessment tool that is going to make it all come together. Community work is difficult. It’s messy and it’s complicated. We all need to make peace with that reality and keep moving forward.

Outsourcing of public responsibility to nonprofits.

Let’s call a spade a spade. Many things that were historically a government responsibility for the greater good, and funded by the taxes we all pay have been outsourced to nonprofits. This necessarily isn’t good or bad, but it is a significant change and we need to recognize it for what it is. It is reasonable to argue that the best people to perform a wide range service functions are, in fact, nonprofit employees. But without a broader conversation and recognition of this shift, the competition for government grants creates a race to the bottom with low pay and few benefits. This is often cloaked in the language of “efficiency,”  but there is a significant cost to nonprofit staff and to our larger communities that is not recognized. Issuing RFPs and outsourcing public responsibilities to nonprofits via grants is not a new phenomenon but it has increased radically in recent years. This is strongly correlated with the slashing of government funding. Frequently, the most cost effective way to outsource a key function from the perspective of the public sector is to outsource to a nonprofit. This dynamic is often destructive.

Battling the race and class divide in philanthropy.

There is a larger systemic challenge in philanthropy that we need to consider. The race and class divide in philanthropy is a huge problem. There is no question that the power to control the vast majority of resources in the United States is disproportionately in the hands of wealthy white individuals. The mere threat of requiring foundations to document and report the demographics of their own leadership (California’s AB 624 in 2008) resulted in a near-revolt by many funders. If we truly want to be relevant, we simply must do a better job of reflecting the communities we purport to serve in the philanthropic sector. People tend to surround ourselves with those who are like themselves (often without realizing it) and it can be a real challenge for organizations to find people with very different life experiences to invite to serve on boards and committees. But again, if we intend to be relevant, we have to figure this out.

Addressing the political engagement issue.

The one thing I wish nonprofits would do more of is political engagement. Many people — including nonprofit leaders — are hesitant to engage in political discussions because they believe (incorrectly) that nonprofits “can’t be political.” I believe that this is largely because people confuse “political” with “partisan." Basically, there are two absolute prohibitions for 501(c)(3) nonprofit organizations:

» A nonprofit cannot get involved in supporting individual candidates

» A nonprofit cannot get involved in political parties.

Partisanship is clearly prohibited, but nonprofits can and should be involved in helping set public policy. The current media environment doesn’t help promote this idea. The fact is that governments at all levels need good information in order to make good decisions. And in many, many areas of public policy, nonprofits are the best source of information to help our elected officials understand what’s happening on the ground.

If you look at the actual congressional debate on this topic over the years, it is clear that nonprofits are not only allowed, but expected to engage in helping to form public policy. Many nonprofits have been trained to be disengaged from “politics,” which is tragic because nonprofits frequently have incredibly detailed, real-time knowledge about what’s happening in our communities throughout the country.

Politics is simply the process by which we make public policy; how we determine the rules of the game. This is part of what it means to be a citizen and a participant in a community. Public policy should be firmly in the realm of nonprofit leadership. Policy engagement should be thought of not as an extra, but as a core part of any nonprofit business strategy. Nonprofits need to be at the table. I realize this is a big cultural shift for many nonprofit organizations; but just imagine what our public policy would look like if it was driven by the community leaders who frequently know our challenges best — our nonprofit leaders.

About Geoff Green

Geoff Green is the executive director of The Fund for Santa Barbara, where he has served in various staff roles since 1997.

A native of the San Francisco Bay Area, Geoff came to Santa Barbara in 1990 when he began work in community organizing on issues of racial equity, access to education, environmental health and LGBTQ equality. Geoff's professional work included positions with the UC Santa Barbara Office of Residential Life, Office of the Vice Chancellor of Student Affairs and the Associated Students, which he served as president in 1993-1994.

In 1994, Geoff was elected to a four-year term on the Isla Vista Recreation & Park District Board of Directors and served until pursuing a career as a park ranger/naturalist in Yosemite National Park. Upon returning to Santa Barbara in 1997, Geoff began work with The Fund for Santa Barbara.

Geoff's other community work includes more than 10 years of public affairs radio programming on KCSB and as a campaign field organizer — including co-chairing Santa Barbara County’s “No on Prop 22” campaign in 2000. Geoff was honored as a Paul Harris Fellow by the Rotary Club of Santa Barbara North in 2006, served on the Leadership Council that drafted Santa Barbara County's 10-Year Plan to End Chronic Homelessness in 2006-2007, was appointed as a commissioner of the Housing Authority of the City of Santa Barbara in September 2008, and served on the policy committee of the California Association of Nonprofits in 2010-2011.

Geoff has served on numerous boards and has advised hundreds of nonprofit organizations, foundations, public agencies and labor organizations in the areas of organizational development, coalition building, board development, strategic planning, lobbying and advocacy, effective use of media, fundraising, public speaking, executive searches, conference planning (local, regional and national), and meeting facilitation.

For 2013, Geoff is serving as the board treasurer of the California Association of Nonprofits, as immediate past president of the Association of Fundraising Professionals Santa Barbara Ventura Counties Chapter, as vice president of the Foundation Roundtable of Santa Barbara County, and as a commissioner of the Housing Authority of the City of Santa Barbara.

— Cynder Sinclair, Ph.D., is a local consultant to nonprofits and founder and CEO of Nonprofit Kinect. She can be contacted at 805.689.2137, or .(JavaScript must be enabled to view this email address). The opinions expressed are her own.

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