Spitzer Slams Small Foundations
New York State Attorney General Eliot Spitzer is “proposing controversial changes in federal law and state regulations that would limit some charitable tax deductions, outlaw the formation of small private foundations, and require many charities to seek multiple bids before signing contracts with professional fundraisers,” the Chronicle of Philanthropy reports. Spitzer defends his wish to ban small private foundations—defined as organizations with less than $20 million in assets—by citing “abuses” among smaller foundations that lack “professional” staff members, among other things. “What [the attorney general’s office] often encounters,” claims Spitzer, “is a failure on the part of the founder to distinguish between the assets that are his or hers and the assets that are the foundation’s.” Douglas K. Mellinger, CEO of Foundation Source, opposes Spitzer’s desire to propose a financial threshold for foundations: “I’m just sick to my stomach at what these guys are thinking.”
‘Godfather’ Leaves Russia
“Russia as a state is reestablished and doesn’t need my subsidy.” With those words, reports the Washington Post, George Soros ended his 15 years of major philanthropic work in the former Soviet Union. “In some parts of the world, Soros is a mistrusted figure,” writes the Post, “but to Russians building a new nation, he has been the godfather of change.” His accomplishments include providing grants to “tens of thousands” of Russian scientists who were without salaries following the state’s collapse, introducing the Internet to Russian universities, and supporting an emerging independent media. Of the transformation in Russia since he started working there in 1988, Soros tells the Post, “It’s a big change. I came here to help in the transition from a closed to an open society when the Soviet Union collapsed. The transition is over.” While more work is needed, he concludes, it’s time for the Russians to do it themselves.
Packard Head Leaves
Richard T. Schlosberg III, head of the David and Lucile Packard Foundation, announced he will step down from his position at the end of the year. Schlosberg told the San Jose Mercury News his decision is unrelated to the foundation’s recent difficulties. When Schlosberg took the helm, the foundation’s endowment stood at $13 billion. In the aftermath of the economic downturn, the foundation’s endowment, heavily invested in Hewlett-Packard stock, fell to $4.8 billion, which led the foundation to lay off about 40 percent of its staff. Observers wonder if Schlosberg’s retirement will mean a change in funding. The Mercury News speculates a change is unlikely, because three of David Packard’s children sit on the board and are active in the foundation.
‘Rey’ of Hope
The Cristo Rey Schools, a network of Catholic high schools in several cities, have received a $19 million grant from the Bill and Melinda Gates Foundation and “another major charity,” reports the New York Times. The schools’ students pursue a college-prep curriculum while job-sharing at local businesses, “which pay the schools roughly $25,000 a school year for their services. The money offsets [most of the school’s] operating costs, and the jobs provide the students with work experience.” Tom Vander Ark (see portions of his talk from our NYC education event) of the Gates Foundation “praised the schools for exposing teenagers to the business world and instilling in them a ‘culture of respect and responsibility.’” He also praised Cristo Rey’s success in reversing the “trend toward shuttering Catholic schools in the inner city.” In Chicago, 62 percent of students in the neighborhoods surrounding the local Cristo Rey school don’t graduate. By contrast, 85 percent of Cristo Rey students finish school, and all of this year’s graduates are going to college.
When Life Gives You Lemons
The Philadelphia Foundation’s philanthropist of the year is seven-year-old Alexandra Scott, who has suffered from neuroblastoma, an often fatal childhood cancer, since she was one. The Philadelphia Inquirer records how she decided at age four to fight the disease by raising money with a lemonade stand. Last year, she generated $67,000 for cancer treatment and research, and recently she inspired students at Clara Barton Elementary School to raise $6,500 and donate hair for young cancer patients. Her family has formally organized Alex’s Lemonade Stand Fund with the Philadelphia Foundation, a local community foundation, to receive the funds raised.
Little Russian Giving
The Hermitage art museum in St. Petersburg is “among many Russian artistic institutions learning the difficult ways of the free market after state support dwindled,” says the Christian Science Monitor. While a number of Western companies have contributed to high-profile projects in Russia such as the Hermitage, “homegrown” Russian philanthropy “has been slow to develop.” One important reason, according to Mikhail Kamensky of Moscow’s Pushkin art museum, is that “every kopeck donated to a museum is taxed to the hilt in this country; there are no deductions.” The economy is the other factor. Russia is still dominated by a few “corporate empires,” while medium-sized businesses have been slow to develop.
Black is Bountiful
A Chronicle of Philanthropy study published May 1 and reported in the Memphis Commercial Appeal shows that blacks give a larger portion (8.6 percent) of their discretionary income to charity than any other racial group in America (the figure for whites is 6.4 percent; Hispanics, 5.7 percent; Asians, 3.9 percent). Emmett Carson has studied black philanthropy and attributes the generosity to necessity. “They had to give because society was not geared to support the development of the African-American community.” Historically, black giving has occurred in “three waves.” The first wave was through the church, “which funneled funds to education, social welfare programs, and black-owned insurance companies and banks.” In the 1960s, the second wave of giving began when black and civil rights groups sought access to payroll deductions, “previously limited to contributions to United Way.” Now, Carson says, the black community has evolved to “actual philanthropy,” as the first generation of “extremely wealthy black philanthropists”—Oprah Winfrey, Michael Jordan, and Camille and Bill Cosby—start thinking about giving “through their estates.”
Small Schools, High Hopes
In Chicago, three large, troubled schools were converted this past fall to five new schools with small enrollments and autonomy in budgets, staff, and curricula. Initial signs are mixed, says the Chicago Tribune, but Tom Vander Ark of the Bill and Melinda Gates Foundation, which has given more than $400 million toward the creation of small schools in the last three years, believes the future is bright. The schools, he says, just need time to work. On Chicago’s notorious West Side, the small school Best Practices High opened in 1996, and though student test scores are still “not ideal, the school has high attendance rates and most of its seniors graduate-both of which are rare for city high schools,” writes the Tribune. The greatest problems the schools face are “insufficient money and support from middle-tier bureaucrats in the school district.”
Mr. Robinson’s Neighborhood
Michael Wilbon, the Washington Post’s irascible sports editorialist, finds little to criticize and much to praise in the San Antonio Spurs’ athlete-philanthropist David Robinson. As he considers his imminent retirement, Robinson says, “It’s not what people say about you; it’s what you’ve left behind.” Sketching Robinson’s impact on San Antonio, Wilbon reports on Carver Academy, a school for disadvantaged children the ballplayer saw through “from inception to completion against staggering odds.” Red McCombs, the man who drafted Robinson, says, “I begged David not to try to build it” because “it’s almost an impossible task.” Teammate Malik Rose adds, “David basically went door to door to raise money to build that school, and also put in $10 to $11 million of his own . . . .He’s a great man.”
Tech-savvy Charity Leaders
The collapsing dot-com market put many talented entrepreneurs out of work. A number of them, it seems, have turned to the nonprofit world. Research by the Christian Science Monitor shows that in high-tech hubs like San Francisco, Boston, and Austin, Texas, the percentage of nonprofits formed since 2000 that have a former technology executive at the helm is in the neighborhood of 20 percent. The skills that made dot-com leaders successful (aggressiveness, intensity, and focus) are useful for nonprofits, according to Paul Light of the Brookings Institution. But the transition isn’t always easy. “Understanding tax laws and fundraising regulations is where many are coming up short,” according to Matt O’Grady of Management Center. This aside, Light believes dot-comers will “bring a new discipline and entrepreneurial approach that the industry can really use.”
King Petty (II)
Kyle Petty-son of “King” Richard Petty, NASCAR’s all-time winningest driver with 200 victories-has done his family proud on the race track and now in his philanthropic efforts. The Palm Springs, California Desert Sun writes about his ninth annual cross-country motorcycle tour to raise money for Victory Junction Gang Camp, which Kyle and his wife established to help disadvantaged children shortly after the death of their own son, Adam, during a practice run at New Hampshire International Speedway. “I’ve heard people say Kyle has the heart of a lion,” says writer Reno Fontana. “I disagree; He has a heart the size of the tractor-trailer that carries his race cars.”
For Givers and Lovers
In the category of “just when you thought you’d seen it all,” comes a personals service that lets activists participate in online advocacy while finding dates. “Activism is sexy, activists are sexy, and it’s high time that all humans are offered a way to ‘take action’ while ‘getting action,’” said John Hlinko, the founder of actforlove.com.