Spurred on by the recent LA Times article on the Gates Foundation, drop by and see what a bunch of experts in philanthropy (who kindly allowed me-- the neophyte-- to participate) have to say about the investment practices of large foundations.
Thanks Sean, for starting and hosting this new carnival.
I know it has been a while since I highlighted a good cause. Honestly, life is very busy for me and I've run out of easy nonprofits I know about and am having to research a little more. Today, the good cause comes recommended by my sister-in-law who lives in Florida.
Barnabas Center, Inc.
Founded in 1986 by a group of parishioners at St. Michael’s Catholic Church in Fernandina Beach, Barnabas Center is truly a grass-roots community effort that helps needy families by providing food, clothing, household goods, medical and dental care, and subsidies to cover rent and utilities to help those in crisis stabilize their
In 2005, the Barnabas Center started the Samaritan Clinic that uses volunteer hours of local medical professionals to provide free primary care services to uninsured individuals who would otherwise not be able to access care. Through the generocity of local dentists, the Barnabas House is also able to coordinate low or no cost dental services to those who need them.
The Barnabas House focuses on being a safety net organization that simply give folks a hand up to get over financial crisis that may jeopardize their housing status. I really love the stories they tell about people they help. In true DP fashion, they also emphasize that donors at any level are welcome.
Send Your Dollar Today By Mail Payable to:
Barnabas Center, Inc.
11 South Eleventh St
Fernandina Beach, FL 32034
Late this week, Sean Stannard-Stockton sent me an invitation to participate in a new blog carnival that will be hosted by Tactical Philanthropy next week. The inaugural topic is to chime in on the recent criticism of the investment policies of the Gates Foundation.
First a few knowledge points for perspective:
The business of foundations is to create a seed of money that will allow for continuous giving for years and hopefully generations to come.
Foundations usually invest the 'seed' money so that the profits of such investments can be used for doing good.
Foundations must give out a certain percentage of their profits each year to be able to avoid paying taxes.
Summary of the LA Times Articles: The Gates Foundation is heavily invested in a number of companies who have business practices that are honestly pretty icky.
Most recently I wrote about letting go and abandoning cynicism. I have really set that as a goal for myself this year. In today's "bad news is king" environment, it is so easy just to sit here and automatically assume the worst. However, if I listen to my instincts, I don't think the intention of the Gates Foundation was to make money off of bad business practices or by hurting other people. My instincts also tell me that the Gates family and Mr. Buffet had 'doing good' as their primary goal when they endowed the foundation. I do not subscribe the cynical notion that the foundation was established to invest in the business of friends and avoid taxes.
Having had a childhood and adolescence where I accumulated a large number of friends whose parents were involved in pastoral/ordained occupations, I am well versed in the presumption that primary intention is important but it is not everything. Afterall, a minister is expected to walk the walk and talk the talk... and so are their kids. Afterall, it consistent application of guiding principles differentiates the Genuine from the Hypocrite.
It is important to recognize that never in history has there been a bigger philanthropic organization than the Gates Foundation. Just like my friends whose parents were in ordained religious occupations, like it or not--- this makes the Gates Foundation a leaderand a target. As a leader, their practices will always be under scrutiny. Just like the minister that says an expliative when he hits his thumb with a hammer, the Gates Foundation's intention may never be to 'do wrong' but they will always be called out for any behavior contrary to their guiding belief "that every life has equal value." Its not always fair to be called out, but the universal call is to always do your best. When you don't, then you need to make changes to make sure you are trying to do your best.
The power and influence of the Gates Foundation is evolving. It is definitely a fallacy to assume that their power, influence, and ability to 'do good' will be the same tomorrow as it is today. In my view, the Gates Foundation needs to make sure they focus on doing their best and subsequently should take this revelation and subsequent criticism as an opportunity to become better and make an even bigger impact.
Despite the Gates Foundation's view of their influence and their "passive investor" mentality, their investing power is uniquely positioned and perceived to have significant power to change and influence business practices. Unfortunately the mantle of perception can be quite heavy. Couple that with the mantle of doing your best, the Gates Foundation will always be under scrutiny-- at least until their action or inaction firmly places them in the category of hypocrite versus genuine.
Yes.... being a leader can suck at times. Keeping in mind that profound and lasting social change often occurs at an extraordinarily slow pace, the Gates Foundation is positioned to become a serious agent of global cultural innovation. I know they don't want the job, but for now they seem to have it. So...if for no other reason that people will be looking to them as a leader, the Gates Foundation has the unique opportunity to really make sure that every life on this planet knows they have value. If they systematically begin to take positions on how they with consciously invest their money, then businesses will see that their unethical, predatory, uncaring business practices cost them important investment money.
My spending strategies are certainly not what they should be. With that said, we all have more room to be better at spending and investing more consciously when we can. I know I certainly do. I have no doubt that every time I find that "I can't pass it up" bargain, that I there is the chance that I am giving my money to a sweatshop operator. While sweatshops are bad, I am also tormented with the idea/rationalization that at least that person has some means of making some money and the subsequent guilt that comes from the inability to determine which is worse--- extreme poverty or being treated like scum. While on a small scale, I know that this is the exact choice that the Gates Foundation will be face with in the future.
I suppose this torment is why I personally try to focus on my little corner of the world and small, but nimble, nonprofits. This is where my donated resources (time or money) directly impact individuals and the community around me. I can see the changes slowly unfolding. However, the GatesGate news item gently reminds me that thoughtlessly spending/investing can also be seen as turning a blind eye to unjustice too.
As I've been reading more and more about non-profits and philanthropy, I've become more and more interested in developing a giving plan for our family that reflects our values and interests. I've discovered a number of different and creative ways to give, but the difficulty has come in determining if we have to have a lot of disposable income to begin.
I suppose it is this effort to understand my options has led me to call in some help -- in the form of a guest blogger. Thus I am excited to announce my first guest blogger -- Sean Stannard-Stockton. Sean helps people plan their philanthropic giving and has a real gift for explaining things well.
So without any further adieu... welcome Sean!
Philanthropic Planning on $10 a week
My name is Sean Stannard-Stockton and I write the blog Tactical Philanthropy. Carol has asked me to write a guest post about philanthropic planning tactics for people who aren’t millionaires. Over on my blog, most of the tactics I discuss are appropriate for people who give over $25,000 a year. I would say that one of the most frequent complaints I get is from people who wish I would talk about tactics for people with lower giving levels. I’m excited to collaborate with Carol to bring some of these tactics to you.
The reason that most philanthropic planning is targeted to high net worth philanthropists is two-fold. The first reason has to do with the tax code. Most philanthropic tactics revolve around leveraging the charitable tax deductions to increase your giving without increasing your cost of giving, or increasing your net worth without decreasing your giving. However, you must itemize on your tax return (although during 2007 you may be able to use your IRA to take deductions for charitable gifts even if you don’t itemize. I’ll discuss this in a future post). The simple requirement of itemizing on your tax return raises the bar for people to engage in philanthropic tactics. The second reason has to do with the cost of implementing philanthropic tactics. Many tactics require the creation of some sort of philanthropic account or legal entity, or require the assistance of professional advisors. There are fees involved in this process and your level of giving must be high enough to justify the fees.
For today’s discussion, I am going to assume that you do itemize on your tax return. If you don’t, take comfort in knowing that the standard deduction you take instead of itemizing assumes that you make some degree of charitable gifts each year.
Donor Advised Funds:
A donor advised fund (DAF) is like a charitable checking/savings account. The account lets you take a charitable income tax deduction when you put money into the account. At a later date, you can make charitable gifts out of the account (and in the meantime the assets are invested and will hopefully grow over time). In the future, I expect that you will be able to link a DAF to your checking account at your bank and divert a portion of your paycheck into the DAF if you wish. Today, however, you have to open a DAF at a community foundation or a national donor advised fund. The lowest minimum account size that I am aware of is $5,000 at the Fidelity Charitable Gift Fund. If you give $10 a week to charity, then you give about $500 a year. Over the next 10 years, you’ll give $5,000. If you “front load” your giving by shifting $5,000 into the account (preferable using appreciated assets from a brokerage account), you will end up being able to give more to charity at less after-tax cost to you.
However, what if you don’t have $5,000 you are able to dedicate to a charitable account? Another way to utilize a donor advised fund is to set up a giving circle with friends or family. Giving circles are small groups of people who pool their resources and meet to decide what nonprofits to give to and learn more about philanthropy. I think we are on the verge of a massive boom in giving circles. While you don’t need any kind of formal giving vehicle to start a giving circle, using a donor advised fund certainly makes the administration easier. Each member would then be able to record the gift to the giving circle as a charitable gift for tax purposes, rather than needing to track their pro rata share of the gifts make to charity.
The Washington Post published a first person article on Sunday written by a giving circle member. The giving circle in the story is sponsored by the Washington Area Women’s Foundation, which is one of the leading champions of giving circles. You can learn more about the giving circle services here and you can read their excellent blog here.