Innovations in Philanthropy / Private Social Investment Grupo de Fundaciones Oficina Bs. As 13 e 14 de marzo, 2006

Agenda Foundations and their environment Markets and Competition Competitive Advantages Model Cases / Best Practice Emerging Philanthropy Models Community Foundations Charitable Gift Funds Venture Philanthropy Funds Websites

Foundations and their environment Financial Markets Corporations  Growth of private wealth  Capital market driven investment grows against institutional investment  Growth of stock market financing  Transfer of wealth to the next generation  Succession in corporate ownership/ governance  Corporate giving  Corporate social responsibility Quantitative growth: increased assets

Foundations and their environment StateThird Sector  New balance: state/ civil society  Changed expectations towards the state: - from the service providing state to the empowering, enabling state  Competitive pressure of the corporate, private sector  Growth  Competitive pressure of the corporate sector  Financial resources: - public funding reduced - fees, revenue growing - donations, philanthropy growing Qualitative Growth: new division of labor between sectors

New Donor Values Self- Expression Entrepreneurs hip Participation Competencies

Traditional funds administered by churches or local administrations Community foundations Charitable Gift funds Venture Philanthropy Funds e-philanthropy (“virtual foundations“) Emerging Philanthropy Models

Independent Charity Multiple Donors Variety of charitable purposes Geographic Focus Endowment-based Transparency of organization and activities Community Foundations I

Professional Management Community Services Donor Services Donor Intent Community Foundations II

Community Foundations III  - an unrestricted donation to the endowment  - a restricted donation to the endowment  - a donation to establish a separate fund administered by the community foundation  - a donation to support ongoing projects  - a pledge to donate on an annual basis  - a donation in “kind” Donor involvement in community foundations can be arranged in the forms of: Capital account Operating budget

A Charitable Gift Fund is a registered charity by IRS standards - organizing professional asset management - providing professional program and grant management - a service provider to donors - an instrument to combine the philanthropic engagement of the many

- analogous to private foundations - as public charities (US tax law) - on the advice of the donor on grantmaking - at a great variety of asset volumina - as rating-agencies to evaluate projects and non-profits worth “investing in” - for all charitable purposes Charitable Gift Funds work.....

- philanthropy starting at assets of $ 10,000 ($25,000) - a choice between grantmaking during one`s lifetime and after one`s death - high returns on investment - tax-effective giving without a separate organization Charitable Gift Funds offer.....

Donor Survey Results I (Fidelity Charitable Gift Funds) 75 % of donors have increased their charitable giving 39 % contribute to a greater number of organizations 95% are highly satisfied with the Charitable Gift Fund 83 % have recommended the Charitable Gift Fund to friends and family

Donor Survey Results II (Fidelity Charitable Gift Funds) 33 % have used professional advisors (mostly financial advisors) 76 % have visited the organizations they are recommending 29% are interested in research on philanthropy 32 % are interested in education materials delivered by the Internet, newsletters, and/or seminars

Venture Philanthropy Funds Long term Several donors Business Plan for support grantees Large grants Investment few projects =Grant support to social Capacity building entrepreneursin non-profits Creation of strong partners

Venture Philanthropy Funds - the Concept  Donor Contributions - On an ongoing annual basis - No endowment building - Possibility of opting out - Flexibility of amount - Minimum Requirement  Donor Education - Training effect of venture phil. fund - Shared information gathering on grantees - Know How transfer from for-profits to non-profits - Investment in the fund´s infrastructure

Venture Philanthropy - Criteria of support  „Venture Capital“ Metaphor - „Close“ investor relationship - Long term capacity building - Evaluation of progress made - Financial as well as management support - Donor activitiy against entrepreneurial background  Donor Community and Exchange - Learning processes - Streamlining of resources - Possibility of comparison

Goals of Venture Philanthropists - Institutional support - Experienced investment teams - Partnership with grantees - Investment focus - Grantmaking driven by SRIs - Creating competence and leadership in grantee organizations - Financial support

Websites Morino Institute on Venture Philanthropy: e-philanthropy report of the Kellogg Foundation: ments.html Fidelity Charitable Gift Fund: www100.charitablegift.org Community Foundations in Europe: