Rockefeller Philanthropy Advisors

Getting Personal: Philanthropists, Government Partner for Good

Monday, December 21st, 2009

The Wall Street Journal Online
Shelly Banjo

New York (Dow Jones)–As more philanthropists try to leverage their gifts by teaming up with public agencies, the federal government is opening a new avenue for these public-private partnerships.

Starting this summer, the Corporation for National and Community Service will channel grants of $5 million to $10 million to existing grant-making institutions, such as community foundations and venture-philanthropy funds. These intermediaries will then create their own social innovation funds to make sub-grants to promising nonprofits, the corporation said Friday in its announcement.

To qualify for funding, the intermediary organizations and the charities on the receiving end are required to raise dollar-for-dollar matching funds from foundations, private donors, and state and local governments.

The money comes from a $50 million Social Innovation Fund, authorized by the 2009 Edward M. Kennedy Serve America Act in March to direct federal dollars to innovative programs in the areas of health, economic opportunity, youth development and school support. Funding is expected to increase incrementally to $100 million by 2014.

Read the full article.

Philanthropy UK: Letter from America

Wednesday, December 16th, 2009

from Philanthropy UK’s December newsletter
Melissa Berman

Two powerful forces in the US have combined to forge a renewed awareness of how and why the public sector and private philanthropy can connect.

First, of course, is the steep economic recession and the painfully obvious toll it’s taking on many people. Even with recovering equity markets, unemployment in the US is at historic highs, with low expectation for rapid relief. According to recent figures, nearly 15% of Americans are going hungry or worrying about where their next meal will be. Community feeding programmes face longer and longer lines – while donations of both food and money are dropping. Credit remains tight, even for sound borrowers, and by some estimates a quarter of American homeowners are behind on their mortgage payments. Fifty million Americans now lack health insurance, and medical bills are a rising reason for bankruptcy.

Just as there are no atheists in foxholes, there are no libertarians in recessions.

Read the full letter.

Melissa Berman Discusses Goldman’s Small-Business Aid Program on Bloomberg TV

Monday, November 30th, 2009

Melissa Berman, president and chief executive officer of Rockefeller Philanthropy Advisors, talks with Bloomberg’s Erik Schatzker and Deirdre Bolton about Goldman Sachs Group Inc.’s $500 million charitable effort to help 10,000 U.S. small businesses.

Practical Guide to Impact Investing Published by Rockefeller Philanthropy Advisors

Monday, November 23rd, 2009

Clear picture of concrete solutions to move from theory to practice in achieving social change and investment returns

NEW YORK (November 23, 2009) –A challenging economic climate for investors, donors and nonprofits alike has prompted increased interest in “impact investing,” leveraging a broad range of investments to address major social and environmental problems while also earning a return. For investors exploring this nascent field, Rockefeller Philanthropy Advisors has published Solutions for Impact Investors: From Strategy to Implementation, practical guidance on tightening the link between making investment decisions and impact.

Written by a team of practitioners, advisors and academics, Solutions for Impact Investors is designed for investors who may have made social purpose investments but not yet connected them to an overall investment strategy, and traditional investors struggling with whether – and how – to integrate impact investing into existing asset allocation models. This includes philanthropic foundations and endowments seeking to enhance their knowledge of social, mission- and program-related investments, and individual and institutional investors and their advisors.

“As techniques and options in this kind of investing continue to evolve, there is great potential to deploy much more capital into the social sector, which is especially needed in this difficult economic climate,” said Melissa A. Berman, President and CEO of Rockefeller Philanthropy Advisors (RPA).
Solutions for Impact Investors builds on Rockefeller Philanthropy Advisors’ earlier publication, Philanthropy’s New Passing Gear: Mission-Related Investing, widely recognized as the first practical guide to translate the concepts, ideas and philosophy of mission-related investing into useable policies and practices for foundation trustees.

“The possibilities for social change through impact investing are limitless, but it is not charity; it can be used across all asset classes and requires the same discipline as traditional investing,” said Steven Godeke, a noted independent advisor and a lead author of both RPA publications.
“Our intent is threefold: to attract more capital to impact investing; to assist investors as they move to executing and refining their investment decision-making processes; and to narrow the gap between foundations’ program and investment professionals, which would contribute to a mutual understanding and implementation of a portfolio approach to impact investing,” said co-author Raúl Pomares, a vice president of Guggenheim Partners.

Embracing “The Genius of AND”
The sharp dichotomy between profit-maximizing financial investment and “give it away” charity is gradually eroding. Citing business author Jim Collins’ advice to avoid the “Tyranny of OR” and instead harness the “Genius of AND,” the authors of Solutions for Impact Investors emphasize that investors need not choose between social impact OR financial return. Instead, they can:
• Create new impact-related processes AND operate within strict investment policy discipline;
• Optimize for impact AND apply rigorous investment management tools;
• Invest in new markets and asset classes AND continue traditional investment strategies;
• Embrace new business models AND adhere to recognized financial theory;
• Evaluate impact performance AND subject investments to recognized financial benchmarks; and
• Expand the scope and scale of philanthropic capital AND adhere to fiduciary responsibilities.

The book covers the key role that behavioral finance plays in impact investing, and includes examples of investment processes, case studies and resources that focus on specific themes or investment vehicles. To illustrate many of the concepts throughout the book, the authors highlight RSF Social Finance, the KL Felicitas Foundation and the Calvert Social Investment Foundation. Finally, the authors prepared more than 40 profiles to demonstrate the range of impact investments available in the marketplace today. While not intended to serve as investment guidance or as a comprehensive list of the industry, additional profiles will be added on an ongoing basis and are available at www.rockpa.org/impactinvesting.

“Government and traditional philanthropy do not have sufficient funds to address the world’s most serious problems, so commercial capital and market forces must be part of the solution,” said Berman. “Impact investing will build the kind of partnerships that we need for the current crisis, and will lay the groundwork for real change in the coming years.”

Other contributors to Solutions for Impact Investors include technology entrepreneur and pioneering impact investor Charly Kleissner; Patrick Guerra, founder of Lions Peak LLC; and Albert V. Bruno and Hersh Shefrin, social investment experts and professors at Santa Clara University.

Major support for the publication was provided by the KL Felicitas Foundation and the Rockefeller Foundation. Additional underwriting was provided by the Betsy and Jesse Fink Foundation, Legacy Works, the Flora Family Foundation and the Woodcock Foundation. Solutions for Impact Investors: From Strategy to Implementation is available at no cost by contacting info@rockpa.org or calling 212-812-4369. A PDF can also be downloaded from www.rockpa.org/pdfs/impactinvesting.pdf.

Tax Smart Is Only Part of the Strategy for Giving

Monday, November 16th, 2009

by The Associated Press

Many people are finding the holiday tradition of making charitable donations difficult again this year, particularly if they’re unemployed or worried about the economy.

Charities, many of which normally get the bulk of their donations at the end of the year, don’t expect to see a big resurgence after last year’s 2 percent drop. That means that many people are probably trying to figure out how much they can give, and to which organizations.

If you can’t give as much as you did in the past, you might consider concentrating your donations among a smaller number of charities. You’ll have a bigger impact than if you made many modest gifts.

Read the full article.

Philanthropy Thrives, Even With Reduced Resources

Monday, November 16th, 2009

The New York Times
Paul Sullivan

The expectation in America is that people who do well give back to society. For the wealthy, it is one way to stave off charges of being greedy. And in the boom times, being seen as philanthropic seemed a social and political obligation.

But just as the downturn left the wealthy (and the rest of us) reeling from personal portfolio losses, their foundations also suffered investment losses that have affected their capacity to give.

The Foundation Center in New York said this month that philanthropic giving in 2009 could fall as much as 13 percent. This has left many charities, particularly small ones, scraping for funds.

Yet Charles Bronfman, the former co-chairman of the Seagram Company and founder of the Andrea and Charles Bronfman Philanthropies, was quick to correct me when I asked him how philanthropists felt about the pressure to give back. “I never give back,” he said. “I don’t like that term. I give because I want to give. Other people give because they want to increase their social standing.”

That may help explain why philanthropy has not dipped as much as people’s net worth. “I think some donors are in a state of panic, which leaves them frozen in place,” said Melissa Berman, president of Rockefeller Philanthropy Advisers. “But others have a more philosophical temperament and have continued on a steady course.”

Read the full article.

Gondas Have Less Wealth To Share

Monday, November 9th, 2009

Los Angeles Times
W.J. Hennigan

Hospitals, theaters and museums have long enjoyed their generosity. But as AIG shares fell, the father and son’s fortunes shriveled.

***

Driving around Los Angeles, particularly around the UCLA campus, it’s hard not to notice the hospitals and research centers that bear their name.

The father-and-son team of Leslie and Louis Gonda made a fortune from the sale of their aircraft leasing business, and they weren’t shy about spreading their wealth around, giving to charities and medical research throughout the city.

“For years, they’ve given away a great deal of money,” said Bob Safai of Madison Partners, a Los Angeles commercial real estate firm.

But now the highflying pair may be falling back to Earth, hit hard by the financial crisis that has left them scrambling to sell personal property and tighten their purse strings.

Read the full article.

Goldman Bonus Stigma May Overshadow Charitable Effort

Thursday, October 15th, 2009

Bloomberg
By Christine Harper and Patrick Cole

Goldman Sachs Group Inc., on pace to top 2007’s record $20.12 billion in compensation, may find that acts of largess aren’t enough to mitigate a public backlash sparked by the firm’s bonuses.

After rebounding from the worst financial crisis since the Great Depression, Goldman Sachs is considering a new charitable program and has been working with Bridgespan Group, a Boston- based philanthropy consulting and recruiting firm, people familiar with the matter said. Goldman Sachs said today third- quarter net income more than doubled to $3.19 billion, beating analysts’ estimates. The firm also said it has set aside $16.7 billion for compensation so far this year, up 46 percent from the $11.4 billion figure for the same period in 2008.

Goldman Sachs’s public-relations quandary — the more money the firm generates, the more hostility it provokes — has fueled speculation among Wall Street bankers about a charitable gift of $1 billion or more, to be announced by the end of the year when the company awards bonuses. Only a small group of senior executives at the bank is privy to the details and no decision has been reached, people with knowledge of the matter said.

Read the full article.

Getting Your Name on Building Gets Cheaper as Non-Profits Compete

Friday, October 9th, 2009

Bloomberg
By Alexis Leondis

The price of immortality is cheaper these days in the wake of the financial crisis.

Wealthy individuals for centuries seeking posthumous fame have donated money to construct hospitals, parks and college buildings in return for getting their names on projects. Nonprofits and universities may be more willing now to negotiate over how much donors have to give and how long they have to make the payments in exchange for recognition, according to Melissa Berman, president and chief executive officer of Rockefeller Philanthropy Advisors in New York.

Read the full article.

A Few Charities Buck Layoff Trends by Hiring Workers, Creating Jobs

Monday, October 5th, 2009

Chronicle of Philanthropy
By Caroline Preston

Share Our Strength, the Washington charity that fights hunger, has been particularly cautious about its expenses since the recession started. But this month, the group added two new positions to help with fund raising and marketing, one to build ties with companies and the other to seek big gifts from individuals.

Chuck Scofield, chief development officer, says his charity recognized that spending money to expand its 13-person fund-raising and corporate-marketing staff was the only way to achieve an ambitious goal to end childhood hunger in the United States by 2015. The group has also seen enough interest from donors to justify the new positions.

“Absolutely, economic times are difficult, but this issue is more important to Americans than ever,” Mr. Scofield says.

Share Our Strength is one of a handful of nonprofit groups that are creating new jobs even as the country is still reeling from the worst recession since the 1930s.

Read the full article.