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Will Donor-Advised Funds Revolutionize Philanthropy?

As endowments set aside for charity, donor-advised funds have many similarities to foundations but do not face the same rules and restrictions that can intimidate would-be foundation donors. Donor-advised funds introduce a new ease to the establishment of endowments, calling into question the often burdensome policies associated with foundations. Donor-advised funds allow a wide range of people to establish small endowments—a development with exciting prospects for the future of philanthropy. However, donor-advised funds not only introduce a new way of giving, they also force a reevaluation of past practices. Because donor-advised funds are treated so differently from foundations on questions Read more





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Washington-Area Nonprofit Operating Reserves

This report, funded by the Meyer Foundation, looks at the operating reserves—the cash and other liquid assets—of public charities in the Washington Metropolitan area. Using IRS Form 990 data, the report found that 57 percent had reserves insufficient to cover three months of expenses, a level that many experts consider the minimum necessary for financial stability. This leaves them especially vulnerable to the rapid declines in revenue or increases in expenses that occur in economic downturns like the present. A substantial perecentage of all types and sizes of organizations lacked adequate reserves.





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Tough Times, Creative Measures: What Will it Take to Help the Social Sector Embrace an Outcomes Culture?

Sparked by the publication of Leap of Reason by Mario Morino, this symposium convened a select group of twenty leaders from government, nonprofits, philanthropy, and business to discuss a challenge that has limited the collective impact of the social sector: the lack of encouragement and support in the nonprofit community for disciplined, data-driven management. The symposium explored barriers to and opportunities for making performance management more common in the social sector. Participants discussed possible solutions that would advance performance management, including the Outcome and Effective Practices Portal (now called PerformWell), an online resource for nonprofits seeking assistance with identifying indicators Read more





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The Scope and Activities of 501(c)(3) Supporting Organizations

Supporting organizations provide a broad array of services, including grants and other financial benefits, to the organizations they support. This study found that nearly 92 percent of the large supporting organizations with no apparent grants in our sample did, in fact, provide significant financial services and benefits to their supported organizations. Complex business and legal reasons similar to those found in the for-profit world appear to lie behind the activities of most of these organizations.







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The International Charitable Nonprofit Subsector

Though international nonprofits are just 2 percent of the U.S. charitable nonprofit sector, they have continued to grow in size and scope to meet pressing demands around the world. This policy brief provides a snapshot of the international subsector through an analysis of trends in their size, resources, and scope from FY 2001 to FY 2003 in three major areas of operation: international development and relief assistance, international understanding (e.g., educational exchanges), and international affairs. It gives an overview of the geographic concentrations and the depth of U.S. international nonprofit activities and enumerates the importance of small organizations in international Read more





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The Charitable Property-Tax Exemption and PILOTs

Driven by increasing pressure on local budgets, some municipalities have sought a reexamination of the property-tax exemption for nonprofit organizations provided by state law. The property tax is a major source of revenue for many municipalities, and large nonprofits such as universities and hospitals may own significant portions of land within a given city. Some cities have begun asking nonprofits for voluntary PILOTs, or Payments in Lieu of Taxes—an attempt to collect a portion of the property tax revenue which would be owed if nonprofits were not tax-exempt. However, concerns from nonprofit organizations have arisen regarding PILOTs.





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Philanthropic Foundations: Payout and Related Public Policy Issues

Both proponents and opponents of changes in the laws, regulations, and practices of charitable foundations have the same goal: enhancing public well-being through the best use of charitable resources. In the language of investment, that goal implies maximizing the social return on those assets. Measuring the social return on different types of activities and comparing outcomes or even outputs over time, however, is not so easy. Moreover, the issue of how to treat existing foundation assets and activities cannot be separated from the broader issue of the development of the charitable sector as a whole, including the establishment of new Read more





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PerformWell

PerformWell, a partnership of The Urban Institute, Child Trends, and Social Solutions, provides a free, on-line, interactive resource to help nonprofits better manage program performance. The site was launched on March 6, 2012, and the partners are continuing to build new content. As of July 2012, more than 13,000 unique visitors had been to the site downloading more than 6,000 PDF assessment tools.





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Joel Fleishman on the Role of Foundations

Joel Fleishman, author of The Foundation: A Great American Secret, discusses the crucial role foundations play in fostering social innovation, breaks down the recent trends and misfortunes that shape the nonprofit sector today, and urges foundations to find greater success through greater openness.





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Nonprofit Sector in Brief: Public Charities, Giving and Volunteering, 2011

This brief highlights trends from the eighth edition of The Nonprofit Almanac 2011, prepared by the National Center for Charitable Statistics at the Urban Institute. We highlight the growth in the number and finances of 501(c)(3) public charities, as well as key findings on private charitable contributions and volunteering.





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Nonprofit Almanac 2012

The Nonprofit Almanac 2012 is a detailed analysis of nonprofits’ place in the national economy and trends in wages, employment, private giving, volunteering, and finances. The Almanac features the most recent data on the philanthropic sector, presented in more than 50 charts and 100 tables. Topics include: The nonprofit sector and its place in the national economy Wage and employment trends Trends in private giving and volunteering Financial trends in revenue and outlays The size, scope, and finances of public charities Classification scheme for charitable organizations based on the National Taxonomy of Exempt Entities Glossary of nonprofit scholarship terms  





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Mandatory E-Filing: Toward a More Transparent Nonprofit Sector

The Obama administration’s 2014 budget proposal authorizes the IRS to require electronic filing (e-filing) of returns filed by all tax-exempt organizations. While mandatory e-filing of these forms will yield more robust and timely data for potential donors, nonprofit managers, regulators, and researchers, some observers are concerned about the potential impact on paper filers and tax preparers. In this brief, we will examine this concern in more detail and report findings from a small survey of certified public accountants, thought by some to be opposed to e-filing, that shows instead that they are widely in favor of it.





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Life Spans of Charitable Foundations: Arguments for and Against an Assumption of Perpetuity

As foundations struggle with reduced assets in a still declining economy, what are the considerations regarding the current state of foundations and charitable life span? With a range of strategies to consider, how should foundations approach their asset base? Publications by panelist Francie Ostrower and Arthur Schmidt will frame the discussion.





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High-Impact Philanthropy in a Recession

Individuals and foundations can have an impact disproportionate to their resources during a recession by offering a philanthropic lifeline to organizations providing vital community services. Yes, foundation endowments recently have been hard hit and individuals who traditionally give to charity have suffered financial reversals. But many nonprofits in their communities are in truly desperate straits. Philanthropy can seed and reap significant long-term benefits for our communities by acting now.





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Hearing on Public Charity Organization Issues…Testimony Before the Sub-Committee on Oversight of the Committee on Ways and Means United States House of Representatives

Staff from the Urban Institute, GuideStar and the Foundation Center submitted joint comments to the Subcommittee on Oversight of the Committee on Ways and Means, United States House of Representatives for its hearing on “Public Charity Organization Issues, Unrelated Business Income Tax, and the Revised Form 990” July 25, 2012. The authors make recommendations for achieving greater transparency, accountability and effectiveness in the nonprofit sector by requiring electronic filing of IRS Forms 990 to improve the quality of data on nonprofits and the speed with which those data become available.





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From Awareness to Action: A Case Study of the Dave Thomas Foundation for Adoption’s Philanthropic Strategy

The Dave Thomas Foundation for Adoption was created in 1992 to increase adoptions from foster care in North America. A decade later, the Foundation concluded that it needed to change its philanthropic approach to achieve that goal. In response, the Foundation launched the Wendy’s Wonderful Kids initiative, in partnership with Wendy’s, to implement and evaluate an alternative method to finding families for hard-to-place children. This case study examines the Foundation’s philanthropic strategy to enhancing its effectiveness, identifies lessons that may help other foundations, and draws implications for the respective roles of private and public initiative in addressing major social issues.





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Foundation Expenses and Compensation: How Operating Characteristics Influence Spending

Questions about how much U.S. grantmaking foundations spend on staff, trustees, overhead, and other administrative expenses—and how much is appropriate to spend—are at the forefront of current debates on foundation practices. Over the past several years, stories in the media have spotlighted foundations with questionably high compensation and expenses. In turn, this media scrutiny has prompted action by policymakers to address perceived improprieties. In the foundation field, it has sparked widespread discussion at the national and local levels about what constitutes appropriate practice. Missing from these debates has been adequate information about current practices across a wide spectrum of foundations. Read more





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Forum: Future of the Nonprofit Sector and Philanthropy

The Center on Nonprofits and Philanthropy convened this event to focus on the future—the challenges and opportunities for the nonprofit sector and philanthropy in the face of evolving economic and political realities and changing sector dynamics. Watch as a distinguished panel wrestles with big questions: What are the major forces that will affect the sector going forward? What kinds of impacts can we foresee? How can the nonprofit sector help to shape those forces? Can we envision some optimum outcomes? Can we begin to articulate strategies that could mobilize efforts to achieve desired outcomes?





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Attitudes and Practices Concerning Effective Philanthropy

In 2003, the Urban Institute conducted a survey of 1,192 grantmaking foundations in order to construct a wide-ranging and rigorous portrait of attitudes and practices concerning effective philanthropy in the foundation field. The survey results tell us a great deal about how foundations see themselves, how they function, and whether they are fully functioning in the ways that they feel they should be. The specific attitudes and practices covered in the survey fall under the following general topics: Ideas about foundation effectiveness; Approaches to grantmaking; Grant application and review processes; Monitoring and evaluation; Investments (program-related investing and social investing); Collaboration Read more