Doing the Gifting My Way

We in America give a lot to charity — more than $358 billion last year, nearly three-quarters of it from individuals. This, of course, includes very large donations from very wealthy people, mostly to large nonprofits that will put their names on what they fund.

They presumably don’t wait till December. But a lot of us apparently do — or at least, make our final donations then. If past is prologue, charities will receive nearly a third of our donation dollars this month.

Over the last month or so, I’ve noticed a spate of articles on how to give — most quite similar. But the recent stream also includes one New York Times column that challenges the advice of the rest and another that seems to point toward a third way.

The main theme of most advice is to give where you’ll get the biggest bang for the buck. We’re enjoined to practice effective altruism — to “think scientifically rather than sentimentally.”

An oft-cited nonprofit — GiveWell — does the number-crunching. So we learn, for example, that less than $3,350 will save the life of a child in some poor part of Africa by supplying the family with an insecticide-treated mosquito netting for his/her bed.

No donation any of us could conceivably make — let alone one so small — will literally save the life of a poor child in America. So do we all just click the Donate button on GiveWell?

A recent column in Parade magazine says not necessarily. What we need to do first is decide what two or three causes we’re most passionate about, then choose our geographic scope.

Then we somehow identify specific organizations that seem to suit. We can consult Charity Navigator, though the column doesn’t mention it. Then comes research — the nonprofits’ revenues and expenses, operations, ratings, etc.

Here too, we’ve got online sources — the financials on GuideStar, for example, and the annual reports some larger nonprofits post, as well as ratings on several sites. But we shouldn’t rely on what we can find on the Web, the Parade columnist says.

We should also talk with a board member and actually visit the services site or volunteer there. Alternatively, we should see what causes a business leader or foundation we admire supports and do the same.

Note that we’re still in the effective altruism mode — merely relying in part on the “homework” of other practitioners.

Professor Jamil Saki, author of one of the New York Times columns I mentioned, argues that “dismissing sentiment” from our giving choices is wrong-headed. “Emotion — especially empathy — adds a powerful, positive spark to philanthropy” because the good feelings we get when we donate can prompt us to give again.

And we’ll even feel less stress and anxiety in our daily lives. Studies cited for both prongs of what he calls the “feel-good school of philanthropy.”

We do, however, he adds, have to “turn our sympathy to those most in need,” rather than rely on our feelings for those who “look like us or whose sufferings are well-publicized.”

Something in both approaches troubles me. On the one hand, we surely want to know how much of our money would go to salaries for top-level officers and for further fundraising. And we want to give to nonprofits that have an impact.

Yet measuring results, if feasible, is costly — far costlier than recording activities, e.g., number of grocery bags distributed, number of poor youth trained for jobs. So the bang-for-the-buck focus will tend to favor large, amply-funded organizations.

Similarly, we do want to avoid basing our donations on heart-tugging ads (also costly) or how readily we identify with the prospective beneficiaries. (There but for the grace, etc.) But deciding who’s most in need seems to assume that suffering is somehow measurable.

And not only that. It seems to assume that we should aim only to relieve the immediate causes of suffering — hunger, for example, or homelessness. Yet these causes have causes rooted in the operations of our private markets and public policies.

And public policies can uproot them — or at the very least, offset their impacts. The President of the Ford Foundation seems ready to move his very large source of funding for human needs in this direction.

“‘Giving back,'” he says, “is necessary, but not sufficient. We should seek to bring about lasting, systemic change.” He’s clearly speaking here to very wealthy people and their foundations.

What he has in mind for them isn’t altogether clear, beyond “listening to those most affected by injustice,” seeing “through a diversity of viewpoints” and learning from past successes and failures — much of this apparently through high-power data analyses and other uses of technology.

We thus seem to have a new phase of effective altruism in the making — one that would seek to “disrupt the drivers of inequality” so as to help birth “a world that makes philanthropy unnecessary.”

This is all well beyond such extra income as I have to “leverage” social change — not to mention the resources need to figure out how, according to the envisioned model.

Yet I welcomed his column because it opens a space in the advice-giving realm for donations to charitable organizations that focus on policy-relevant research, analysis and advocacy.

Or at least, that’s how I choose to view it because the alternatives effectively ignore the role such organizations can play in alleviating suffering. A handful dominate my end-of-year giving list.

I don’t need an online tool or business leader to choose them. And they’d be hard put to document results, i.e., to show that their activities alone achieved policy changes.

I know them because I rely on their analyses and information they share with the like-minded for my blog posts — and the self-education that lies behind and beyond them. So I feel I’m “giving back.”

And I feel good about my philanthropy, if we can call it that, because I witness how they help bend the arc toward justice by working strategically, persistently and collaboratively for policies that will alleviate the hardships of poor people in the U.S. and, in the fullness of time, make them unnecessary.

 

 

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Free Legal Services a Powerful Tool for Preventing Homelessness

This is National Hunger and Homeless Awareness Week. I don’t suppose anyone who lives in a major metro area needs a special week to become aware of homeless people.

Here in the District of Columbia, we see them on the streets every day. And we know (or should) that we see only a relative few of the thousands who don’t have a home of their own.

The District has taken a leaf out of the strategic plan produced by the U.S. Interagency Council on Homelessness — the goal of ending homelessness by 2020.

Or rather, it’s adopted and expanded the goal, since the nationwide plan merely “set[s] a path” for ending homelessness among adults who don’t have children in their care. The District instead aims to have homelessness be “rare, brief, and non-recurring” for all residents.

Though the goal is broader, the meaning of ending homelessness is the same. The plans recognize that some people will, at some point, have no place to live except a shelter. But optimally, they’ll be re-housed swiftly. And a relative few will need re-housing again.

Making homelessness rare and nonrecurring implies prevention. Significantly increasing the stock of housing that’s affordable for low-income residents — especially the very lowest-income — is a big part of that.

But the District has other preventive resources too. Its plan refers to emergency rental assistance, for example — one-time cash equivalent aid for certain types of people who’ve fallen behind on their rent or will if they can’t move to a cheaper place.

Beyond that, its plan focuses on several other groups at especially high risk of immediate homelessness. It envisions “prioritizing housing resources” to individuals whose mental health and/or substance abuse problems put them at greatest risk.

And it refers to plans that will help people who haven’t had to cope with housing before or for quite awhile, i.e., youth who are reaching the maximum age for foster care and people who’ll soon be released from jail, prison or the youth equivalent thereof.

Another form of assistance can prevent homelessness — free legal aid for individuals and families facing eviction or impermissible rent increases that could pave the way.

It also prevents them from having to leave their homes, with no place to go because landlords have so egregiously neglected repairs. And let’s not forget help in securing public benefits that can help pay rent.

The District has an impressive number of nonprofits that low-income residents at risk of homelessness for such reasons can turn to. And private law firms provide substantial pro bono services, both directly to individuals and as partners with nonprofits.

It’s still the case that many low-income residents stand before a judge alone and unprepared. Judges are not only aware of this, but deeply concerned.

Last year, the Chief Judge of the District Court of Appeals testified that he and his colleagues view “the growing number of litigants who are forced to seek justice without benefit of counsel” as “the principal barrier to ensuring equal access to justice.”

This is an old story. And it’s hardly unique to the District. The Legal Services Corporation, which awards grants to nonprofits that provide free legal aid, has lost federal funding — at least in real dollars — since 1981.

And restrictions Congress has imposed on what grantees can do has limited their effectiveness, prompting some nonprofits, including the D.C. Legal Aid Society to forgo the funds.

The recession has shrunk funding for nonprofit legal services too. States cut their share of funding to balance their budgets with shrunken tax revenues.

At the same time, Interest On Lawyer Trust Accounts — another source of funding for free legal services — plummeted as banks cut their interest rates in response to the Federal Reserve’s near-zero lending rate. Doubtful the recovery has spread to IOLTA, since the Fed hasn’t yet changed its policy.

We don’t, so far as I know, have current data on what LCS has termed “the justice gap.” A study it conducted about 10 years ago indicated that fewer than one in five low-income people with legal problems of a non-criminal sort had any assistance from a lawyer.

LCS-funded programs themselves turned away an estimated two-thirds of people who sought help with housing problems — the second most common type of help requested.

A District-specific report issued in 2009 warned of increasing recession-related needs for legal aid, including a rash of foreclosures. At the same time, legal services programs here had lost, on average, 25% of their funding, not counting a recent cut the District had made.

LCS funding is up in the air. The Senate Appropriations Committee has approved a $10 million increase — hardly enough to restore prior cuts. The full House has voted to slash the Corporation’s funding by $75 million.

The outcome will have an impact on the Neighborhood Legal Services Program — one of the District’s major sources of free legal assistance in housing cases. Local funding for District programs has inched up over the last five years. But it’s still only about $5 million — not all of it, for good and proper reasons, for services that can prevent homelessness.

One understands why strategic plans to end homelessness don’t mention free professional legal services — and thus why they’re not included in related budget proposals.

The collaborating agencies — and in the District’s case, community organizations that have a role in housing placements — don’t want to alienate landlords, since progress toward ending homelessness hinges in part on what they choose to do (and not).

Nor, one supposes, do the agencies cotton to the notion of acknowledging that the nonprofits and pro bono partners that challenge them are preventing — or foreshortening — homelessness.

But we who aren’t so constrained can do so — and advocate for them, as we should even if homelessness were ended.

Nonprofit Housing and Service Providers Face Funding Crisis

I’ve often remarked that nonprofits can’t fill safety-net gaps created by cuts in public funding — or even gaps due to current funding levels. Leaders of some of these organizations have publicly — and more persuasively, of course — said the same.

On the other hand, nonprofits do fill gaps that would exist without funding from private, as well as public sources. We individual donors are one of the former. But helpful as our donations are, many nonprofits, large and small, receive significant financial support from foundations.

So you can imagine the shock waves that reverberated through nonprofit communities when they learned that the Fannie Mae and Freddie Mac foundations would cease to exist.

They didn’t abruptly cut off funding. But it’s about to end. Fannie’s already has. Freddie’s schedule calls for last payments some time this year.

Combined funding, though shrunk, was about $50 million in 2011. That’s a lot to make up for from other sources. But if it isn’t, we’ll surely see cutbacks in programs that provide housing and services to low-income residents here in the District, nearby communities and probably elsewhere.

Charitable Giving Phase-Out

How Fannie and Freddie came to withdraw from their roles as major donors is a tad complicated. But I’ll try to briefly tell the story, mainly because it strongly indicates that the funding spigot won’t open again.

Fannie closed out its foundation in an apparent effort to counter accusations that it had used its grants to build support — and lobbying partners — for its business interests.

The CEO said that Fannie itself would pick up the foundation’s charitable function — and spend at least as much. That was in early 2007 — just as the housing bubble began to burst.

Shortly thereafter, both Fannie and Freddie were holding a bunch of bad mortgages and responsible for delivering on promises to investors in securities backed up mortgages — also now bad.

They were, in a manner of speaking, bailed out and control of their affairs turned over to the newly-created Federal Housing Finance Agency. It told them to phase out their charitable giving and set the terms.

Fannie and Freddie in the Washington Metro Area

Up until recently, Fannie and Freddie, through its foundation, were the largest corporate donors to nonprofits in the Washington metro area, according to a report by George Mason University’s Center for Regional Analysis.

They provided support for more than 500 nonprofits during 2007-10 — a total of nearly $100 million. The money supported a wide range of programs and services.

But well over 70% received by the 200 largest nonprofits supported three types of programs and services — homelessness, housing and “human services.”

The first two (obviously related) are hardly surprising. Fannie and Freddie are, after all, in the housing business. And the FHFA directed them to focus their donations accordingly.

However, the corporations donated more to human services than the other two combined. The explanation here perhaps lies in how the analysts decided to classify donations.

What we know is that Fannie and Freddie have provided crucial support for services that can prevent homelessness and, in various ways, help families who’ve become homeless achieve enough economic security to become stably housed.

What’s at Stake

The funding figures I’ve cited understate the impacts of lost Fannie and Freddie funding because the corporations donated much larger amounts before the bailout. Even the recent figures, however, suggest a potential crisis in the making.

Nonprofits in the Washington metro area have reportedly lost — or will soon lose — nearly half their private sector-funding.

The loss will be greater — about 60% — for their programs and services to prevent homelessness and to provide both shelter and housing with supportive services for people who were homeless.

The crisis isn’t ultimately for nonprofits, however, but for the people they serve. It’s also, for this reason, a crisis for state and local governments because nonprofits are deeply woven into our safety net.

They also operate programs that can reduce needs for safety-net benefits by helping individuals and families overcome barriers to self-sufficiency, e.g., domestic violence trauma, substance abuse, lack of marketable skills.

These improve future prospects for low-income children. Other services do as well — for example, by helping parents learn how to keep them healthy and support their development, manage resources and so, in the best of cases, provide a safe, stable home.

These crucial programs and services won’t all vanish, of course. But loss of so much funding will surely mean fewer people served and/or fewer services — unless other funding sources fill the gap.

Well, we can’t look to this Congress. That’s for sure. Doubtful we can look to state and local governments either, though some may increase funding, as the District already has in several areas.

What Next

The GMU analysts recommend that nonprofits develop plans to reduce expenses and/or combine programs. Whether nonprofits can do either or both without curtailing services remains to be seen.

Even coming up with a plan — especially one that would merge nonprofits — seems a challenge at least some will need expert help with. Help perhaps with profound internal culture changes too.

The analysts also note the need for other corporations to “step up and fill the gap.” Interestingly, no mention of individuals who’ve got lots of money to give away. Nor those of us with the wherewithal to do our bit — or bigger bit — once we understand the need.

We don’t have comparable reports to tell us where and how large the gaps will be outside the Washington metro area, but we can be fairly sure there’ll be some, since total Fannie and Freddie donations have exceeded those to metro-area nonprofits in the past.

In short, we seem to have some handle on funding losses here — and some as-yet unpublished indications of impacts. Doubtful other affected communities have even this much. We’re nowhere near solutions, assuming they can be found.

Yet the needs Fannie and Freddie’s donations helped meet can’t be put on hold. A lot of folks have a lot to do PDQ.

 

 

 

Looking to Low-Income Families for Solutions

I first got to know David Henderson when we both wrote from Change.org, which then had lively blogs on poverty and homelessness. Before and since, he’s used his formidable technical and analytic skills to help nonprofits collect and use data to measure outcomes.

That, of course, is what donors want. But David’s main concern has been to help his clients maximize their impact on the causes of poverty and its personal harms.

He recently steered his career in a different direction — for reasons that are, at the very least, thought-provoking.

Basically, he’s rejected our predominant social services system because, he says, it is “based on a misguided paradigm … of providing solutions to distressed ‘clients’ in ‘need’ of answers.” This, he adds, “doesn’t only oversimplify the poor, it plainly gets them wrong.”

The organization he’s joined — the Family Independence Initiative — seeks to learn what families do when they, rather than case managers or other social workers have “control over their paths forward.” And it seeks to learn from them “what works — and what doesn’t.”

Quite a role reversal here. Families set their own goals and decide what actions to take. The FII liaisons, as they’re called, just listen and sometimes ask questions to gather stories and deeper understanding.

Deeper understanding — for the families themselves, as well as FII — comes from online journals they add to monthly. They input information on things like income and savings, education and skills, health, housing and, very importantly, leadership and connections.

“Very importantly” because FII seeks to strengthen relationships participants have with friends and relatives. To this end, participants are responsible for forming groups, which in one way or another, provide mutual support, accountability, advice, resources and the like.

Families get paid a modest amount for sharing information via their online journals — some capital they can invest in their further progress, FII’s founder and CEO explains. The organization in turn develops resources to help families achieve what they themselves have chosen as priorities and to meet needs they have identified.

These resources include an online community that enables participants who’ve initiated actions of various sorts to share successes and how they achieved them — and for other participants to seek advice.

FII will also link participants who’ve started — or want to start — small businesses to lenders it’s partnered with. And it provides support for lending circles, i.e., self-formed groups of people who contribute to and can then take interest-free money out of the pot they’ve all created.

The FII approach isn’t altogether novel. As I’ve mentioned before, pilot projects in developing countries have given cash to some very poor people, who, for the most part, used it to improve their lives — sometimes by starting businesses, developing their skills, building savings and the like, sometimes by paying for basic needs like food, clothing and housing.

But, as we can see from the project evaluations — and in at least some cases, the project designs — the cash-givers had preconceived notions of what the poor people should do (and not) with the money. Reported successes clearly reflect their value judgments.

What FII says it’s doing seems quite different. It’s what’s known, David told me, as demand-driven philanthropy, i.e., investments in what families are already doing to improve their lives and communities.

What will come of FII’s approach remains to be seen. What it will learn also, though one thing it clearly has learned is to refrain from helping families avoid seeming mistakes.

What it learns isn’t an end in itself, however. The organization aspires to “transform stereotypes, beliefs, practices, and policies that undermine families’ efforts to get ahead.” Learning, in other words, has to reach deep into the social services system and the minds of decision-makers that shape it.

A tall order for one relatively small nonprofit. And it’s encountered pushback from professionals, as well as cold shoulders from prospective funders.

But the challenge it poses to the prevalent model, the stories it shares and the data David crunches could provide a needed antidote to programs that in principle and/or practice treat low-income people as lesser beings who don’t know what’s best for them — and won’t do it unless their benefits are at stake.