Tag Archives: Faith-based

Family Philanthropy – How to Respond in the Economic Downturn

Imagine yourself a trustee of a charitable foundation. It is your job to collaborate with 11 other trustees to decide how to distribute charitable funds to organizations that have requested your support. In a typical year you would have $1 million to distribute but the requests this year amount to $2.5 million. All the organizations have proven themselves to be effective in contributing to the social and financial well being of some of the poorest citizens.  Your job is to choose how to distribute those dollars.

Your decisions will be informed by written analysis provided by competent program officers who have conducted all the “due diligence” on the organizations making sure the administration is solid, that the board is contributing to the operational expenses and that the financials are in order.

The meeting begins and you are informed that due to the economic collapse, the money you have to give out is reduced from $1 million this quarter, to a mere $350,000. You know that some of these organizations and the great programs they deliver will receive much less funding from you than in prior years. Other organizations will not likely survive because your past grants gave a credibility to them that enabled them to leverage funds from other foundations and some governments.

Included on the list are: The Second Harvest Food Bank (read their intro page)

Also, there  are several requests to support alternatives to failing public schools like those described in my favorite HBO series The Wire.

Given the crisis in education in public schools and knowing that each year thousands of  young people are lost, do you consider the request from  schools like those of the  Cristo-Rey network that are transforming the lives of children and families in inner city neighborhoods.   These schools like other faith-based receive no State support and will not survive without private individuals and  foundation support.  The total requested from four of these schools is $125,000.

In the Health and Social Services areas, there is  a request from  Providence House that provides a shelter for homeless women and their infants. They need a new roof on the building which costs $150,000.

Then there is the Youth Arts Program for schools.  Without the support of the foundation they will have to cut their artist in residency programs in schools.  Children in seven targeted  public schools will NOT get any exposure to art curriculum unless they get at least $50,000.

There is the Free Clinic, serving the needs of the ever-expanding number of medically uninsured and underinsured.   They have asked for $50,000 to assist with a pharmacy respository that will provide desparately needed medicines to those in need, especially the alarming number of uninsured patients with clinical mental illness.

Their counterpart, the Federally Funded Community Health Center lost out on a $700,000 federal grant they hoped to secure and must now ask for $250,000 to help them get through a cash flow challenge.

There are many other worthy organizations on the list.

So, how do you make your decisions?

Direct all money to the Second Harvest Food Bank that will provide another six months of food to hungry families? What about that great faith-based schools which over the past ten years accepted children from failing public schools and in one year provides remediation that gets them to grade-level reading and math. Ninety-eight percent of their children go to college whereas their friends who remain in the public schools drop out or fail to graduate and never get to college.

Do you direct all money to the free clincs to help the unisured.  What happens next year when they ask again but at increased levels?

Trustees at the foundation I work with will be faced with very similar situations when we meet. This will not be the first time difficult decisions are to be made, but the current economic climate has made it even more difficult.

Family foundations function under a  set of rules established by the Federal government and the Internal Revenue Service.  The States Attorney General has the duty to make sure the charitable institutions are registered and that they are complying with the federal regulations.  The State Attorney General has the power to revoke the charitable status of an organization.  If you are interested in the federal rules and regulations on foundations and nonprofits Marion Freemont-Smith’s book, Governing Nonprofit Organizations: Federal and State Law and Regulation,is by far the most comprehensive.

Briefly, the  government allows families of wealth to establish foundations as charitable entities .  Instead of going to the government as taxes, this money is invested in with managers and typically include a mixed portfolio that inclues equities (stocks) and fixed income (bonds).  Whereas taxes would collect the dollars and direct them to general funds for immediate needs, foundation dollars are invested with the hope that they would earn between 10 and 17% interest on the principal.  Rather than congressional representatives appropriating laws that will spend tax dollars, family foundations are overseen by  citizens who serve as stewards of these funds.  They are charged with allocating those funds, just as congressional representatives approve laws that allocate funds for many projects, including bridges to nowhere 🙂

The IRS is very specific about how these foundation funds must be directed.  For the most part only agencies that IRS determines to be charitable entieis are eligible recipients of foundation dollars.  There are exceptions for individuals but in all cases, the funds must be used for charitable purposed or to benefit the community at large.

As stewards the trustees must abide by the government rule that requires of minimum of 5% of the interest earnings on the endowment must be “paid-out” for the benefit of the community.  So, a family foundation with $100 million dollars must pay out an  minimum of $5 million year on a rolling average of three years.   Ninety-nine and 44/100% of family foundations I know take their job VERY seriously.  Distributing $5 million responsibly to worthy institutions is a complicated endeavor.  Doing it well requires time, research analysis.  There are a few stories of foolish and/or ignorant foundation trustees that misappropriated funds for their own enrichment.  The press loved those stories which resulted in an expensive and public witch hunt against foundations and people of wealth headed by a federal bureaucrat named Dean Zerby serving as  Sancho Panza to the quixotic and self-aggrandizing  Sen. Chuck Grassley.  Fortunately most legislators have realized the value philanthropy plays in this country and the punitive legislative responses by Sen. Grassley have subsided for the moment.

One useful way to understand how philanthropic decisions can be made by trustees of family foundations or by individuals for that matter is the Philanthropy Toolbox which I believe was developed out the Center on Philanthropy at University of Indiana.   The toolbox is really a spectrum of philanthropy that categorizes types of philanthropic giving.  I used the following slide show to demonstrate the types of giving.

Philanthropy Toolbox

View SlideShare presentation or Upload your own. (tags: civicfabric philanthropy)

The categories serve as headers and we “plot” all grant requests under each of the categories to get a sense of where the family is directing its giving.   This exercise allows the trustees to see where they have concentrated their giving over periods of time.  Of the organizations I described above, think of where you would place them among the categories within the toolbox.  The try to determine which request and category on the spectrum would give one organization priority over another.  Now you have entered the world of a family foundation trustee.

All the requests that come to the trustees for consideration are organizations that are doing great work and having positive impact on the lives of people they serve.   Decisions as to where to allocate funds and why can be personal and vary from one individual to another.  What makes foundations exciting places to work is that each person shares his or or reason for making the decisions they do.  the others listen to their points . Some agree and some don’t.  Debate is likely to ensue.  At the end of the meetings decisions are arrived not by secret ballot but by consensus.  On other occasions, I have described board meetings to be similar to deliberations by congressional delegations either federal or state.  Trustees are usually people of varying backgrounds and even level of wealth.  They range on the political spectrum and have deeply held passions.  Representatives from one generation often have points of view and interests that differ from their parents; so in many ways their portraits reflect the diversity of opinion, character and even race that one sees among citizens serving in elected office.  The image of foundation trustees as a homogeneous club of bow-ties and boiled wool is simply not true.  It is a miniature version of any civic organization gathered to enhance the common good.

The economic crisis is placing pressure on State, Federal and local governments budgets that have not been seen since the early 20th Century.  Scarce resources may place pressure on family foundations in the cross-hairs of government and question whether they and their endowments should continue to exist.  This is a challenging question that was discussed recently at a conference at the National Center for Family Philanthropy.  One of the sessions addressed the role of family philanthropy in a democratic society.  It is worth listening to the panel moderated by my colleague Lance Lindblom, Director of the Nathan Cummings Foundation.

If you were to be part of the decisionmaking on the board, you would be reminded that the Federal government requires a minimum payout of 5%.  You and board could make a decision to pay well beyond the 5% minimum to meet the needs of the community in times of economic distress.  Of course one would need to balance generosity with prudence.  Anyone who creates a foundation must be an optimist by nature.  Doing so assumes that a carefully managed endowment will grow and will remain as an asset to draw upon to help those in need and, at times, support innovative and creative programs that challenge the status quo.  The two brothers Eric and Evan Nord who established the Nord Family Foundation were men of profound optimism and faith in the community.  They were known to say on many occasions, when the times are difficult the foundation has a responsibility to make sure it does not cut back on grantmaking, but be extra careful about directing funds that will have the greatest impact on the community.  Most importantly, the funding should challenge the larger community to give what they can – personal giving – that will help their neighbors.  With that in mind, I anticipate some of our grantmaking in the future will be challenge grants that will require others to give of themselves in either money or time.

Your decision to choose one group over the other is neither right nor wrong. Just the fact you bothered to read this far into the blog reflects your own interest in philanthropy and giving. Your thoughts of giving to benefit the lives of others honors not only those you consider, but yourself.  I leave you with a quote by Thomas Jefferson

The good opinion of mankind, like the lever of Archimedes, with the given fulcrum, moves the world.

Foundation Support for Independent Schools – new opportunities for public school education

The publicity about the Obama’s choice of the Sidwell Friends School shed light on the apparent contradiction of those who support public schools but elect to send their children to private schools.  I am sure this fact makes the Obama’s and others like them feel a bit defensive when attending parties.  In Oberlin, Ohio where I live, people who send their children to the independent school are literally shunned by those who keep their children in the public system.

One of the great challenges facing Independent schools, and the foundations that support them is how to make the excellent quality of education available to those outside the walls of these relatively small institutions.  The winter 2006 edition of Independent School, published by the National Association of Independent Schools gave voice to a growing number of members who struggle with perception that independent schools are institutions only for the elite. In an environment where the gap between wealthy families and poorer families grows, fewer middle class families are able to afford private school education. The quality of Independent School education, such as the institution I send my children (Lake Ridge Academy) can not be disputed. In fact trustees of  foundations tpically send their children to independent schools places like:   Noble and Greenough School, Heathwood Hall, Buckinham, Browne and Nicols and others of pedigree based on a history of quality education. Read the mission statments of any of them and compare that aspiration to those of public schools.  This reality presents an unease because these same trustees approve grants that try to improve the quality of public school education.  We all know that undertaking can have pockets of success but due to the enormity of the task of reform  rewards are elusive.

Faith-based schools such as Epiphany School, Nativity Prep, Arrupe Prep as well as non-denominational charter  KIPP schools. supported by the foundation I serve, offer the quality education that rivals the atmosphere, academic dicipline and values of  higher priced independent schools.  However these schools are expensive to maintain and require constant funding from private sources.  The State simply will not fund these entities.  In the case of KIPP and Charter Schools, the national discussion is typically met with a vitrol accompanied by public policies that keep State funding to a minimum.  Tacitly, the policy carries a hope  that charters will fail and, like apostates, will someday realize the waywardness of their action and return to the public school system as we know it.    That system of course is failing millions of children in the U.S. daily, but there remains no strategy to address that reality.

How can one make the quality of Independent School education available to families of the middle class and even children of low-income families has remained elusive.  D. Scott Looney, Head of Hawken School in Cleveland  suggested, “The benefits of having the broadest possible exposure to students with other backgrounds, races, ideas, and experience must be part of that education, and must include children from families in the bottom 50 percent of the socioeconomic tier.”

How can an independent schools do that when the availability of scholarship monies is limited? Technology provides answers.

Independent Schools can make better use of web-based technology to break down the walls of their institutions and make their curriculum available to a larger number of students.

The Harvard Crimson reported an innovative adaptation of SecondLife™ at Harvard University in 2006 whereby students at the Harvard Law School will co-learn with students at the Harvard Extension School – linking a divergent student body in a cooperative learning process.  Independent Schools can and should do the same thing with outreach to public schools.  Foundations can support these activites.

SecondLife offers very tremendously exciting  opportunities to explore how the quality of independent school education may be open to others who cannot afford a typical four-year education.  What can that look like? Check out the site that explains how Secondlife works for educators.

Independent schools can and should explore the possiblity of creating their schools in Secondlife and inviting their professors and other educators to work with selected students in a virtual envorinment.  This is particularly true of the children in the lower 50% of the economic tier Mr. Lowney mentions.

Phillips Exeter Academy is known for the Harkness Table.  This seminar-styled approach to high school education was developed in 1931 and invites young people to share thought together in a collaborative learning experience.  Why not re-create a Harnkess Table in Secondlife whereby children from schools across the country could benefit from this educational style and interact with students who typically will not have access to these inistitutions of privilidge.

The Burton D. Morgan Foundation in Hudson, Ohio funded one of the first business/entrepreneurship programs at the high school level to Lakeridge Academy.  The teachers developed a very fine curriculum which serves the 20 or so students in that program.  I can imagine a very interesting project where, for example students from the business/entrepreneurship at Lakeridge Academy participated in SecondLife with students from the E-City program and the related Entrpreneurship Academy or E-Prep in Cleveland. (E-Prep received a start-up grant from The Nord Family Foundation and continues to receive yearly operating support s0 I disclose my interest and passion for this great school). A project of this type would expand the number of people who share in the curriculum and widen the perspectives on what entrepreneurship means in the suburbs and what it means on “corners” in Cleveland.

Foundation should consider funding these types of projects as a means of opening quality education they can (and often do) provide their own children and to talented and able children attending failing public schools.

I have had the priviledge to get to know some of the people at The Center for Institutional Technology and Academic Computing (ITAC) .  This institution is currently supporing several innovative uses of Secondlife in the educational settings including pioneering work in the high school curriculum.

Although SecondLife has been tremendously successful in higher education, the potential for its use in high school settings has been thwarted because SecondLife restricts its users to a minimum age of 18.  Students under that age are pointed The Teen Grid.  It is the hope of many educators that someday soon, SecondLife and its creators at Linden Lab will  allow for less restrictive use by high school teachers.

Another very interesting organization to watch for application for Independent schools is the work of the remarkable Aaron Walsh at MediaGrid at Boston College.  This organizations provides high quality virtual environments that rival those of expensive interactive games.

Foundations that restrict themselves only to supporting projects in public education are selling themselves short by not opening themselves to exploring these new ways to blend independent school and public school education.  It is my experience that most independent school faculty would welcome this innovation to expand their educational mission to those outside their walls.

It is time the philanthropic sector open itself to this important discussion with colleagues from Independent and Public Schools.  For those unsure about all this, may I suggest reading a report published by the MacArthur Foundation’s and the Digial Youth Resesarch at U.Cal. Berkeley.  Great reading!

Philanthropy – Evaluation of Education grantmaking

The foundation has considered the importance of strategic grantmaking and the idea of having high impact. What does it mean to have impact when the average grant in education is around $25,000 to $50,000.

What do we know?

Private/faith-based schools have remarkable success with inner city kids. Remediation takes place within the first year; reading seems to be easier to remediate than math and science. In most cases adherence to one particular faith is not mandatory. Most schools welcome families of all faiths. Students thrive in an atmosphere that is safe, and has rules. This seems to be the case across geographic funding areas.

Public Schools pose a more formidable challenge when looking for impact, but the foundation has made significant inroads in shifting the direction of some of these large ships. The work of CAST in schools in Lorain County has generated enthusiasm, contributed to a change in discussion about delivery of curriculum to divergent learners. It has added to conversation in schools about brain function and development and its impact on curriculum. It is exciting to see small pockets emerging where teachers are eager to shift the focus from assessment of learning to a concept of assessment for learning.

There are promising programs in isolated public schools that will address assessment of student performance such as the assessment for learning programs as well as programs that develop co-teaching. We see in these programs an attempt to bring to large public schools methods that have worked well in smaller, private school environments.

Structure of the school day

For inner city schools, a traditional public school day of 8-2:30 is not in place. In the Denver Street School, students are taught in blocks of 90-100 minutes as opposed to the typical 45 min schedule. This, teachers say, allows more time for challenged students to talk and reflect on the matter at hand rather than the typical – here’s the lesson, take it in, and report back to me on a standardized test and we will see how we do.

An environment that incorporates individual attention

In the National Association of Street Schools (NASS), each student has a faculty advocate who watches out for that youngster throughout the year. At Nativity Prep, Epiphany, Arrupe Prep and even the Urban Community School of Cleveland , the school days provide structured environments for students from early morning until the evening. All schools agreed that the after-school hours are when youngsters are most vulnerable.

Each of the schools incorporate into their behavior the reality that educational needs are not divorced from the social needs. For most of these schools the average teacher student ratio is 10/1. In the Cristo Rey model schools, young people who are teachers in training also serve the students by being available for them after the school day is over, for mentoring, coaching. The students live modestly and have little cost impact on the administration.

Respect for individual learning styles and adaptation

We have learned that whether it be in a small nurturing environment that a small private/faith-based school creates, or in larger public school classrooms, teachers know they teach better and students actually learn when the curriculum is adapted to the individual learning styles CAST has been phenomenal in helping teachers understand the link between brain research, and translating that into excited learning.

What we see on the horizon.

Using web-technologies students will develop electronic portfolios for their work which is open to each other (peers) for critique and discussion as well as with teachers. These educational portfolios contain the work that a learner has collected, reflected, selected and presented to show growth and change over time, representing an individual or organization’s human capital. The portfolios are not so much an instructional strategy to be researched, but more of a means to an end: to support reflection that can help students understand their own learning and to provide a richer picture of student work that documents growth over time.”

The Governor of Ohio, Ted Strickland has called for something like this in his very impressive set of Conversations on Education which include an appeal to “personalized learning.” People have yet to figure out what that means. As of 2008, there were no plans in place for the State of Ohio to implement electroinc-portfolios that could follow students throughout their careers (and also be used as a solid record should students transfer to another district or out of the State).

Islands of excellence

In a conversation with Mr. Geoff Andrews, Superintendent of the Oberlin City Schools, I talked about the wealth of learning the foundation has gained by funding a diversified portfolio of schools. After listening he said, “Wouldn’t it be great if the foundation could figure out a way to bring all this learning and leverage it in one district somewhere and create an “island of excellence” that could serve as a model. I said, yes it would be great.

Two months later, my esteemed colleague Helen Williams, Education Program Director of The Cleveland Foundation informed me of legislation in the State of Colorado that would create just that. The Innovation Schools Act of 2008

The Innovation Schools Act is intended to improve student outcomes by supporting greater school autonomy and flexibility in academic and operational decision-making. The Act provides a means for schools and districts to gain waivers from state laws and collective bargaining agreements.

The suggestion could not have come at a better time. It is my hope that philanthropy can suggest the Ohio legislature examine this act and seek advice from experts to do the same in Ohio.

Philanthropic Support for Faith-Based Schools – A case study

I have often said that when trustees of private foundations gather for their meetings, the exercise is akin to what happens in the halls of the U.S. Congress. Representatives from a variety of communities gather to make decisions about distributing funds to support nonprofits often lead by “community organizers” (a term recently ridiculed at the 2008 Republican convention more than once!). The trustees come to the meetings prepared with a board book, prepared by staff that includes written information on each grantee as well as web-based links to the organizations in question. They come to the meeting from their own perspectives and experiences which created an atmosphere charged with intellectual curiosity and a strong desire to be the best citizens with the funds the government allows them to steward.

Not too long ago, the trustees had a lengthy discussion about funding faith-based schools. It began with a question about the overt christo-centric language of one of the schools applying for a grant. As the discussion ensued, questions were raised as to whether the Foundation or (any other private foundation for that matter) should provide support to faith-based schools. The conversation then led to questions as to whether the foundation should fund any faith-based organization. The primary concern was whether these faith-based institutions force youngsters to adopt the religious faith of the teachers and/or administration. The trustees feared that requiring students to adopt the religion of the institutions takes away the freedom of a young person to question religion and ultimately to takes away their freedom to dissent. The questions are legitimate and clearly mirror conversations that take place nationally on some level. News reports from forced religious compliance in the Muslim world and narratives about the abuse of the Taliban in countries contributed to what all agreed was a legitimate intellectual concern.

This debate was critically import for in that any decision on the matter could not only affect decisions on grant requests from faith-based schools on the docket, but could potentially affect allocations of foundation dollars in other program areas. There was strong diversity of opinion on the matter, based primarily on the personal religious (or agnostic) experiences of the individuals on the board. I have found that issues of religion have the greatest potential of alienating some trustees from others because the positions are so deep. Any misstep had the potential to result in some trustees forfeiting their future involvement with the foundation.

Despite the dangers, one of the great opportunities for a foundation is that it really is a place for members to engage in these intellectual challenges. It is a place where informed discussion can lead to shared learning from each other and, in the end, a more focused sense of mission for the foundation itself. As executive director, I feel it part of my job to provide them with the best sources of information to make sure the conversations is based in solid research and good data on the subject. I wrote the following thought piece in an effort to deepen the discussion and make sure that all members felt an opportunity to express their own thoughts. I share this as a lesson to other foundations and even legislators who may want added insight into the subject. These are my opinions and I therefore welcome public scrutiny, rebuttal or debate on the topic from those who may have different information.

With regard to the first question about whether a foundation can/or should give to any religious organization, I would like to suggest several books on the history of philanthropy in the United States. The first is Charity, Philanthropy and Civility in American History, published by Cambridge University Press in 2003. This is an excellent overview on the subject. The book points out the ambiguous nature of private philanthropy funding religiously based organizations.

It traces American philanthropy to its colonial origins stating that its roots are grounded in the British sense of philanthropy as “charity.” Throughout American history, charities were conducted by organizations of one religious organization or another. Some of the leading U.S. universities were established as religious institutions.

One chapter of the book traces the evolution of Roman Catholic schools in the United States. Late in the 19th century there was a dramatic increase in the number of parochial (parish-based) schools which were established to meet the crushing needs of the poor and working class immigrants. Communities of religious sisters were recruited to teach in these schools which marked a significant shift from what had been their primary focus – The Charity Hospitals. (Many of the leading hospitals in the United States were founded by orders of religious women). Today, an impressive number of foundations were established when the hospitals were sold to private health care companies, e.g. Sisters of Charity Foundation, St. Ann Foundation, St. Luke’s Foundation and many others across the U.S.  The religious women’s vocation in hospitals and schools was grounded in Vatican Encyclicals issued throughout the late 19th and early 20th centuries. The encyclicals were strong denunciations against the abuses of human labor under early industrialized capitalism. These encyclicals called for a “preferential options for the poor” described as:

“Coming from Catholic social teaching, this concept expresses a special concern in distributive justice for poor and vulnerable persons. The “poor” includes but is not limited to those who are economically deprived. The principle is rooted in the biblical notion of justice, where God calls us to be advocates for the voiceless and the powerless among us (e.g., “the widows and the orphans”), and where right relationships are restored. Regardless of the reasons, those who are in any way deprived or who are particularly vulnerable have a special moral claim on the community (including its institutions and organizations, but particularly Catholic health care institutions, see Ethical and Religious Directives, n. 3). As a matter of both justice and charity, structures and systems must be in place to address and meet their special needs, so that they might participate more fully in the common good and thereby flourish more fully as human persons.”

The preferential option for the poor does not discriminate for or against an individual’s religious belief, but instead address the philosophical all embracing concept of “humanity.” These documents were the founding documents for the labor movement in the early to mid 20th Century as well as United Nations Charter.

The authors trace the demographic shift in Catholic populations from the mid and late 20th century. As Catholics became wealthy and moved from the inner cities, more parochial schools were started in suburbs and religious orders of sisters were expected to continue providing their services for free. Starting in the mid-century more and more sisters questioned why they were expected to educate the children of wealthy Catholics in suburban communities and not opt to return to inner-city parishes where the preferential option for the poor could and should be practiced. In the late 20th century vocations to women’s religious communities dropped dramatically and the number of Catholic children in parochial schools diminished,

“Now, with rising costs and declining parish memberships, inner-city schools – in much higher proportions than suburban parish schools – had to close their doors. Ironically, in this period, applications for admission to inner-city schools from minority populations (most of them non-catholic) expanded greatly. Minority enrollments in parochial schools averaged about 20 percent nationally in 1984, but urban schools were reporting far higher proportions for example, 74 percent in Newark, 65 percent in Los Angeles, 58 percent in Detroit and 55 percent in New York.”

Much like formerly catholic charity hospitals, the schools our foundation has funded follow a similar evolution in staffing. Most of the schools we support have a religiously diverse teaching corps as well as a religiously diverse student body. Just as catholic charity hospitals do not admit patients based on religious preference, so too these inner-city faith schools do not admit students based on religious preference. The Roman-Catholic and Episcopal linked institutions state emphatically they are not in the business of converting people but instead, are focused on healing – one with physical, and the other in terms of the more complex issues of societal ills that poverty carries with it.

Undoubtedly, the Cristo Rey and Nativity modeled schools are grounded in Roman Catholic tradition. This tradition is the “preferential option for the poor” which is distinct from its evangelical mission. My research has shown this to be true of the Cristo Rey schools (Arrupe Prep, St. Martin de Porres, Nativity School, and Don Bosco) and the Epiphany School which is rooted in the Episcopal tradition. Each school not only respects the faith of the families that attend the school but invites students to explore the faiths of other religions even among students who attend the schools. (All the schools invite leaders of the Muslim, Jewish, Buddhist and other faiths to the schools as part of the curriculum). My interviews with the school heads and the teachers indicate their philosophy is less an exercise in forming faith than it is to introduce students to diversity of thinking and the cultural reality religion plays in the civic life of this United States. In short, these schools are Catholic in mission only, and that mission is the preferential option for the poor

Other faith-based schools in the foundation’s portfolio include the National Association of Street Schools and these are aligned with a fundamentalist tradition of evangelical Christians. NASS has a mission to work with the most challenged young people in society. Their students include former drug dealers, gang members, prostitutes, and youngsters that have been crushed by all dire poverty has dealt them. Their schools transform lives. The evidence is their in the increasing number of successful alumni. Their work has been validated with recognition from the White House and subsequent support from the likes of The Bill and Melinda Gates Foundation. NASS has a more overtly religious curriculum than do the schools from more other traditions. A grant we made to support their accreditation process revealed a section requiring teaches to sign a pact whereby they agree to espouse the precepts of Jesus as one true savior. Without question these schools have a more focused message of “salvation” through a religious framework. Adopting Jesus as your personal savior is a key component to reforming a young person’s life. In some cases, the requirements for prayer are explicit but not found in the other schools discussed. As trustees discussed the grant request to NASS and one of its affiliated schools – the Denver Street School, they made the grant understanding that these schools provided hope to individuals and families which in turn, gave them incentive to pursue academics and strive for a better life. In the cloying economic and social oppression these people live, hope is a critical element for survival. It provides a horizon to the future that otherwise is not there. .

Staff has recommend support for all the schools I described with the understanding that they met the three core goals of the Nord Family Foundation’s mission – to build community – to support projects that bring opportunity to the disadvantaged – strengthen the bond of families – and improve the qualities of people’s lives. After lengthy debate that covered issues of hope, economic despair, and a genuine attempt at putting themselves in the mindset of those the funds were meant to support, the trustees approved the grants in question.

The discussion lead to the larger issue as to whether this foundation should follow the Constitutional separation of church and state when making grants to nonprofit organizations. Staff was put in the position of arguing that foundations were created to be a conduit of a different form of public monies to ensure that faith-based along with a variety of other organizations would be able to thrive with public support.

Federal and State laws governing foundations have never made that requirement of private foundations or charities. The founding documents of The Nord Family Foundation dated 1997 stated that the foundation dollars would not go to support churches. There was no mention of a prohibition against funding faith-based organizations.

A great book on this issue (and my second recommendation) is called,

Governing Nonprofit Organizations – Federal and State Law Regulation

By Marion R. Friemont-Smith

Belknap Press – Harvard University Press Cambridge, MA 2004

“Philanthropy in the United States has been claimed by one writer to be ‘our freest enterprise,’ and this phrase does emphasize what the dominant policy of the federal government and individual states toward charitable activities has been since colonial times.  With the exception of the restrictive legislation regarding charitable trusts that has been described, the enactment of legislation in a few states designed to protect heirs against complete or unreasoned disinheritance in favor of charity, and minor restrictions on the holdings of charitable corporations, the great body of legislation and court decisions has been directed toward the removal of restrictions on charitable funds and toward the grant of almost complete freedom of action to the managers and directors of these funds.”

In a recent interview in Philanthropy Magazine, Carl Schramm, President of the Ewing Marion Kauffmann Foundation in St. Louis and a respected leader in the field of philanthropy provided his thoughts on the role of foundations in a fee society. The following comment, is of particular relevance to the discussion any board might undertake relative to funding faith-based entities,” Because of its financial structure, and because it is above and apart from politics, it (a foundation) can go to places that aren’t necessarily popular. The record is very clear about what has been achieved historically. Foundations can explore the new frontiers and take risks that government can’t and private industry won’t.

With regard to use of deferred tax dollars, Schramm comments, “It is deceptively easy to think of “wealth reconstitution” and “institutional entrepreneurship” as strictly economic concepts. But democratic capitalism is a social, political, cultural and economic system – we can’t speak of “civil society” as something apart from this system.”

After more than four hours of debate and discussion, the trustees agreed to support the faith-based schools.  They also agreed that it made sense to continue support of faith-based entities but that staff should be mindful of any nonprofit that would coerce children or the vulnerable into belief in order to received assistance from a nonprofit.  So agencies were funded, people were served and the trustees adjourned leaving for their homes a little more enlightened having gone through the exericse.

As lawmakers in state and federal houses continue debate how much influence they feel need to legislate on private charities, it is my hope they make the time to sit in board meetings of any private foundation and watch the incredible exercise on civic debate that takes place. I would argue they have much to learn about the stewardship or public trust. Trustees who are often uncompensated for their service contribute valuable service to this country. That privilege should not be truncated or taken away.