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Aug 10

COVID-19 leads to unprecedented response in support of Indiana’s most vulnerable

By Feature

by Shari Finnell, Editor, Charitable Advisors

Nonprofit organizations on the frontlines of supporting immigrants, refugees and other foreign-born residents have been regularly encountering challenges to ensure critical, sometimes life-saving, information is adequately relayed during the COVID-19 pandemic.

In addition to language barriers, these individuals are more likely to be employed in jobs that put them at higher risk for infection, are denied unemployment benefits, lack health insurance, and have fears about accessing medical care and resources — all factors that jeopardize their ability to navigate the pandemic, according to several local nonprofit organizations.

“Those of us who are fluent in English are struggling everyday to understand COVID-19,” said Dana Harrison, interim executive director of the Immigrant Welcome Center. “‘What did the governor say? What is going on with schools?’ It’s changing daily.” For foreign-born newcomers, those COVID-19 directives — from stay-at-home orders to how to protect themselves from the virus — can be extremely difficult to understand, Harrison said.

Rethinking the ceiling for grantmaking in a time of crisis

During the past 18 years, board members of The Clowes Fund have been invested in understanding the challenges facing immigrants and refugees as they shifted their focus to supporting those populations and workforce development initiatives.

When the pandemic hit the U.S., a subcommittee of Fund board members and staff immediately gathered to determine how it could best meet needs in the community. Realizing they didn’t have the resources of larger foundations, The Fund was intent on making a significant impact through a more concentrated effort.

“We used to be one of the largest foundations in Indianapolis,” said Elizabeth A. Casselman, executive director of The Clowes Fund, Inc. “That’s no longer the case. We work hard to find our lane. We were looking to find the gaps and then identifying the organizations that were working to fill those gaps.” The result was a plan to distribute unsolicited funds to current grantees, allow for more flexibility with an unrestricted grant format, and focus on program areas with the highest needs, including immigrant services and workforce development.

Just a few weeks later, the Fund awarded 21 small emergency grants totaling $220,000 to numerous organizations, including Gleaners Food Bank of Indiana, the Undocumented Hoosiers Fund of the Indiana Undocumented Youth Alliance, administered by Broadway United Methodist Church, and other organizations that serve populations who may not be eligible for other types of relief funding.

The unexpected grants came as a welcome surprise for many of the organizations that received them — giving them the support to continue their mission in the midst of an uncertain and turbulent period.

However, the extent of the damage caused by the pandemic weighed heavily on the board members, who started questioning if they had done enough, Casselman said. “There was a strong sentiment among Clowes family members and non-family members that it does no good to sit on these assets when there’s such a great need. We were worried we would look back and say we took too safe of a position.”

They were already familiar with the math that guided decisions throughout the foundation’s 68-year history — across four generations of the Clowes family. “With a foundation, the only legal requirement is that we must distribute at least 5 percent each year,” said Casselman, referring to the value of net investment assets. “Yet, all too often it begins to be interpreted as the ceiling rather than the floor.”

From a strictly financial standpoint, a conservative approach — the 5 percent floor/ceiling — also would have been the most responsible decision for ensuring that the foundation exists into perpetuity, continuing to support the intent of the founders’ mission, Casselman said.

“If you have several years of 6 to 7 percent, you can pretty quickly erode your funds,” Casselman added. “We realized those policies served us well in the long run. But these are exceptional times. And exceptional times demand an exception response.”

As a result of that strong sentiment among the board, including family and non-family members, the Fund doubled its grantmaking commitment by spending an additional 5 percent more than its typical grantmaking through a $3.2 million draw from the corpus of its endowment in 2020. Through The Clowes Fund COVID-19 Plan, the board approved spending an additional $2 million in grantmaking for 2020 and reserved $1.2 million to supplement grantmaking in 2021.

“Failure to respond in an exceptional manner would likely cause the Fund board and staff to look back with regret,” said Edith Bowles, Clowes Fund vice president. Bowles said they believed it is possible to make an unprecedented decision without damaging the long-term fiscal health of the foundation.

Meeting needs in challenging times

As with its previous response, the Fund quickly distributed unsolicited and unrestricted grants in July — in amounts ranging from $50,000 to Exodus Refugee Immigration, Inc., to $150,000 to Local Initiatives Support Corporation (LISC) for a comprehensive set of loans for minority-owned businesses. Median grant size was $40,000, significantly higher than Clowes Fund grants awarded in previous years.

Harrison of the Immigrant Welcome Center, as well as those of other organizations supporting the immigrant, foreign-born and refugee population of Indiana, were immediately met with challenges in the midst of the pandemic. “The challenges were always there … language barriers, higher risks of infection, an inability to qualify for government resources, lack of health insurance,” Harrison said. “They intensified with the pandemic.”

Every day, the Center intervenes on behalf of immigrants, ensuring that they’re getting access to food pantries, and unemployment benefits, rental assistance and healthcare they’re entitled to but are afraid to access.

Language barriers are especially problematic in a state with inadequate language translation options.

“When the government first issued stay at home orders, some families would not open their front doors or leave their homes, endangering their lives because they were critically low on food,” Harrison said. “In their world, when the government says stay at home, they stay at home.”

Immigration status concerns also instill fear among individuals who are undocumented, Harrison said. With the public charge rule, there is also widespread concern that applying for social benefits could jeopardize any chance of being granted legal permanent resident status, Harrison pointed out. “It’s been very successful in putting absolute terror in our immigrant population,” she said.

The Clowes Fund grant, along with other grants from other foundations, came at a critical time, Harrison said.

“The size of the grant we received from the Clowes Fund gave us some critical breathing room — the freedom to keep on some temporary staff members on a more permanent basis. We did not have to operate in financial fear,” Harrison said. “We were absolutely stunned. It helped transform our year.

“If we had not received that money there would have been the prospect of very hard decisions on the horizon, including reducing positions to part time,” she added.

Cole Varga, executive director of Exodus Refugee Immigration, Inc., said the organization has been focused on meeting the needs of refugees who have been displaced from nations like Syria, Burma, and Yemen under troubling circumstances made even more challenging because of the pandemic. In addition to helping refugees get settled in apartments, schools and jobs, the organization regularly helps them understand basic living skills, such as writing a check, purchasing groceries and accessing health care and social services.

As the impact of COVID-19 intensified, the Exodus team ramped up their efforts to assist refugees in applying for unemployment, and rental and utility assistance. Those efforts were complicated because of language barriers, said Varga, noting that Exodus provided interpretation. “Different government agencies are a bit behind with equality in terms of language access,” he said.

“Unemployment in Indiana has a massive backlog, making it even more difficult to navigate if you don’t speak English,” Varga added. “Some of them didn’t even have WiFi. It would have been impossible if we had not helped them out.”

Because of the added complications of applying for benefits as a non-English speaking resident, unemployment benefits sometimes didn’t arrive for more than two months. As a result, some families were unable to buy food or pay rent and utilities during that time, Varga said.

Grants have helped refugees face difficult circumstances, especially during the period in which Congress has debated on how to move forward with unemployment benefits, Varga said. “The Clowes Fund helped remove those barriers.” he said. “When a single mom lost her job at a restaurant, we were able to stand in and help fill in the gap.”

As part of its mission, La Plaza, Inc., another Clowes Fund grant recipient, provides one-on-one counseling to Hispanic high students to improve their chances of graduating from high school and college. The team also provides support to the families of the students, ensuring that they receive healthcare, utility and rent assistance, and other resources.

The pandemic complicated the ability to deliver those services because most of the engagement had been in person, said Miriam Acevedo Davis, president and CEO of La Plaza, Inc.. Also, La Plaza was sensitive to the increased need for mental health counseling as well as helping families understand the signs of anxiety and depression.

“It was an enormously scary time,” Acevedo Davis recalled of the first several months of the pandemic. “We were serving an area that had been identified as a hotspot, based on a lot of the information we had.”

La Plaza team members initially worked from home, ensuring that the families they served were adequately protected with PPE, medical services, food, childcare and other resources. Additionally, they were sorting out the complications of working with some students who were trying to study from home without WiFi or had the responsibility of caring for younger siblings.

Acevedo Davis described the Clowes Fund grant as extraordinary for several reasons. Not only was the grant unsolicited, it was issued quickly and without restrictions.

Acevedo Davis said those factors were critical. “We did not have to worry about writing a report about what we’re going to do and anticipated outcomes, or spending a lot of time tracking it,” she said. While La Plaza has processes in place for reporting and tracking, additional restrictions would have been difficult to complete at a time when employees were working from home and working hard to meet the needs of the community they served, Acevedo Davis said. 

“They (Clowes Fund) told us, ‘We want to get the money to you quickly. We know you’ll do a good job supporting the most vulnerable,’” Acevedo Davis said. “With those restrictions gone, we could move quickly so that students and their families could get the critical help they needed during a difficult time.”

Acevedo Davis said The Clowes Fund, along with other local funding sources, have provided critical support during an incredibly challenging time for nonprofits and the communities they serve.

“We are in awe of how quickly our funding community moved to provide funds to organizations,” she said.

The Clowes Fund COVID-19 Relief Grants recipients included: Broadway United Methodist Church (Undocumented Hoosier Support Fund); Exodus Refugee Immigration, Inc.; Gleaners Food Bank of Indiana, Inc.; La Plaza, Inc.; Local Initiatives Support Corporation; Mary Rigg Neighborhood Center, Inc.; Second Helpings, Inc.; Shepherd Community Center, Inc.; The Immigrant Welcome Center, Inc; and RecycleForce. Other awards were granted to organizations in New England states, including Massachusetts, Maine and New Hampshire and New York, and other regions.

May 12

Putting overhead under scrutiny

By Feature, Fundraising, Indianapolis, Sustainability

By Lynn Sygiel, editor, Charitable Advisors |

So you donate money to your favorite charity, and you find out later that the money went to buy a new roof. Or new computers. Or to replace the muffler on the company van that shuttles needy clients around the city. Was this a good use of your money?

For many people, any conversation about money is difficult.

But when the conversation is about overhead or unrestricted dollars, and it’s between a nonprofit and a donor, it can be even more difficult.

Six years ago, in the Stanford Social Innovation Review, Ann Goggins Gregory and Don Howard wrote about what they called the nonprofit starvation cycle and challenged foundations to start an open conversation about overhead and analyze the true cost of running a nonprofit. They cited statistics from a five-year study by IU’s Lilly Family School of Philanthropy and the Urban Institute’s National Center for Charitable Statistics, which reviewed more than 220,000 IRS Form 990s and surveyed more than 1,500 organizations with revenues over $100,000.

At the time, the nonprofit sector equated low overhead with high performance and best allocation of dollars. Donors depend on online rating sites such as Charity Navigator or GuideStar to help them give wisely. If there’s a perception that a nonprofit spends too much on overhead, it can have a negative effect on donations.

Indiana grantmakers have started a conversation to address the issue.

Last year, the Indiana Philanthropy Alliance included the topic at its annual statewide conference for grantmakers. There were two sessions that took on the topic, said Marie Beason, director of professional development and special initiatives for IPA.

“It included both sides — not only the direct costs of overhead but true costs of programming. It was a very rich conversation,” said Beason.

Besides a keynote address by Bob Lupton, author of Toxic Charity, five Indiana foundations shared experiences about what it truly costs a foundation to run all the programs it funds and operates.

Based on the responses to these sessions, IPA felt there was an opportunity for additional conversations on the topic. So in early June, they are hosting five IPA/GIFT regional forums facilitated by Lupton. Besides outlining the elements of toxic charity, the sessions will provide foundations and nonprofit partners an opportunity for frank communication about achieving results, using these practices.

While Beason has seen some change, she said conversations have been more casual. She also cautions that no two nonprofits are created equal when it comes to overhead.

“It comes up, I’m sure in every internal grant application review committee. We have not found a format or template that has been strong enough to lead us to a formal initiative, but what we have learned is that folks want to learn more.”

At McCoy, President John Brandon said it is a regular internal staff conversation, and annually with his finance and budget committees.

In the last five years, he has broached the topic with donors, too.

“We have had conversation fairly regularly with donors and givers because I think we have to help them understand the true cost of doing business,” he said.

Sometimes, though, the toughest conversations he has about overhead are in his own head.

“I’m justifying allocating money in my budget to buy that or pay for that and even though it’s not direct programming expense and it improves the quality and effectiveness of our organization. We’re trained to say, ‘Let’s do more with less.’ If we spend hours and hours trying to figure out how to do more with less, we’re wasting time and effort, that we could really be putting into more effective things,” he said.

Without accurate data, and open communication with funders, both argue it is difficult for donors to know what actual costs are.

“So instead of making excuses for overhead,” said Beason, “I do see a movement afoot to really articulate the importance of the work, the importance of the investment and the outcomes, rather than, “Oh, we’re sorry but we could really do this for much cheaper.’

“It all leads back to communicating the value of the work. Oftentimes the nonprofits come begging, which is not the appropriate mindset to raise funds. Now I’m seeing a shift both in donors as well as foundations to recognize it more as an investment,” she said.

The Nonprofit Finance Fund (http://nonprofitfinancefund.org/), according to Beason, has done a great job articulating overhead costs associated with a cup of Starbucks coffee and how that might equate to the nonprofit sector.

Beason suggested that nonprofits start by asking:

  • What is the true cost of programming?
  • What are the real outcomes and not just outputs of what the organization does?
  • What are the things that work and how does the organization build support for that?
  • What are the donor’s expectations?
  • Why is this an appropriate funding source?
  • What will the nonprofit gain from this funding source that will that allow it to effectively reach the outcome that it is hoping to achieve?

Both Brandon and Beason agree this has to be a two-way conversation, and it is critical to have open conversations about how each partner – donor and nonprofit — can benefit from the work.

“It’s not just the foundations understanding that personnel and insurance, and utilities and fully funding a program is important, it’s also getting the nonprofits to understand how best to plan for, manage and raise funds for those line items effectively,” she said.

May 12

The human factor

By Feature, Fundraising, Sustainability

What’s the best way to solicit donations for a charity? New research suggests that telling donors that none of their money will go toward overhead may be very effective at raising money. But it also comes with a few potential pitfalls.

In a study published in Science on Thursday (10/30/2014), a team of researchers showed that giving people the opportunity to donate directly to a charity program — with a promise that the money wouldn’t go to overhead — was far more effective than either matching donations or letting donors know about existing seed money.

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May 05

Cooper Union inquiry puts nonprofits on notice

By Feature, Fundraising, Governance

By James B. Stewart, New York Times |

In what should be a ringing alarm for nonprofit boards across the country long accustomed to minimal scrutiny or accountability, Attorney General Eric T. Schneiderman of New York has signaled that the laissez-faire approach to nonprofit governance is over.

Mr. Schneiderman’s office has sent letters to the board members of Cooper Union for the Advancement of Science and Art, the prestigious college founded in Manhattan in 1859 by the philanthropist Peter Cooper on the premise that it be “open and free to all.” Last year, after the school said it faced financial ruin otherwise, it began charging tuition.

The investigation, reported earlier by The Wall Street Journal, is focusing on the board’s management of its endowment; its handling of its major asset, the Chrysler Building; its dealings with Tishman Speyer Properties, which manages the skyscraper; and how it obtained a $175 million loan from MetLife using the building as collateral, according to people involved.

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May 05

From projects to people

By Feature, Fundraising, Governance

By Ken Banks, Ashoka fellow, Stanford Social Innovation Review |

Bill Siemering was about to jump in his cab to make an airport pickup when his home phone rang. It was the vice president of the MacArthur Foundation. “I was shocked,” said Bill, “when he told me I was being awarded a MacArthur Fellowship.” That phone call proved to be the turning point of his life.

He never did make that airport pickup.

Years before, Bill had been the director of programming of National Public Radio (NPR), where he had created the first signature program in public radio, All Things Considered. He had also crafted NPR’s first mission statement, and while vice president at WHYY-FM in Philadelphia, he was instrumental in bringing Terry Gross and Fresh Air from a local to a national audience. Not bad, you might think.

Despite blazing a trail, though, Bill had eventually found himself out of work; at that time, there just weren’t many opportunities in his sector. As he put it: “I’d spent over 30 years practicing the art and craft of my profession and had no way to use it. I felt like a pianist who lost the use of his hands.” Out of frustration and the need for a job—any job—he started training to be a driver for a car service at Philadelphia airport. He was about to go on his first driving assignment when he got the MacArthur call.

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May 05

Eight common innovation traps

By Feature, Fundraising, Governance

By Gabriel Kasper & Justin Marcoux, Stanford Social Innovation Review |

Innovation, it seems, is easier said than done.

Despite growing interest in applying innovation methodologies to social sector challenges over the past decade, more often than not, philanthropic efforts to support innovation fall short.

That’s because the processes, strategies, and structures that funders need to deliberately seek out and support innovation are often quite different from the ones they use for traditional grantmaking—a lesson many funders learn the hard way.

In our SSIR article “The Re-Emerging Art of Funding Innovation” last year, we highlighted many specific approaches that innovation funders are now using. But we find that many grantmakers still end up falling into one or more “innovation traps”—common mistakes that can prevent them from succeeding as they try to find and fund breakthrough social change.

Some of these traps are challenges related to execution and implementation; others are more conceptual, rooted in the way organizations think about what innovation is and what it can achieve. As you read through the eight common innovation traps below, ask yourself whether your organization has faced one or more of these problems, and consider sharing your experience in the comments.

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