Washington-area philanthropy is becoming unabashedly business-minded. Practices such as impact investing and public-private partnerships that were experiments after the recession are now expected to be regular giving habits for many do-gooders. And that’s just for starters. Capital Business caught up with a few local philanthropy thought leaders to see what’s next for local giving in the region:
President of the Calvert Foundation
The Calvert Foundation does not operate like a traditional foundation, shelling out grants to nonprofits. Instead, it invites individuals to invest in notes backing a portfolio of organizations with social missions, such as education, affordable housing and fighting poverty. This is not a new idea. Calvert has been doing it for 20 years, raising $1 billion over that time. But Pryce said we can expect to see much more of it in Washington this year, as more foundations look to invest their endowments in socially minded concerns. “If their mission is creating jobs, they are looking for investments that are supporting job growth,” Pryce said. “How do you invest the endowment in a way that preserves the capital but you have it invested in good? This is huge in the foundation world and a lot are asking themselves that question.”
Another trend Pryce expects is more partnerships between government, businesses and philanthropists to fund social causes — public-private partnerships. Last fall, then-D.C. mayor Vincent C. Gray explored the idea of offering bonds to fund a project that would reduce teen pregnancy. “Much much more often I’m working in partnership with foundations and the government. It’s really a group hug,” Pryce said.
Chief executive of the
Case Foundation and the wife of
AOL co-founder Steve Case
In June, Steve and Jean Case committed $50 million to the Case Foundation for impact investing. Jean Case said she believes the momentum for impact investing will increase particularly for what is known as pay-for-success bonds, or social impact bonds. If a public project achieves its goal, the government pays back donors with a small profit. There is currently a bill before Congress, the Social Impact Bond Act, that would provide incentives for communities across the nation to introduce these bonds. She said this trend will heighten the standards of performance for the nonprofit sector, even more than it has in the past few years. “It’ll put a heavy focus on measurement and outcomes, which will have a spillover effect to make all of our programs more effective,” Case said.
Head of the Washington Regional
Association of Grantmakers, which comprises area foundations, corporations and agencies
Copeland said the region is still recovering from the pullback in federal spending and cutbacks by major funders, such as Freddie Mac, Fannie Mae and others, that have resulted in an estimated loss of about $25 million for local philanthropy. “We’re going to feel that impact for a little while,” Copeland said. Last November, her group published a report on local giving that showed 72 percent of grantmakers planned to continue funding at their current level in 2015, 21 percent plan to increase funding and 7 percent plan to decrease giving.
Copeland said she expects charitable foundations to be more entrepreneurial, perhaps pooling funds across sectors to create or help businesses that support economic development, a strategy some have called “community wealth building.” One coalition created a storm water management business in Prince George’s County that is looking to hire economically disadvantaged people and give them a stake in the company. “This is something I hear more and more funders talking about,” Copeland said.
She also predicted there will be a push to get all of the giant national foundations in Washington to give more to the local community. “When you look at the revenue coming into this region for nonprofits, it appears high, but those monies are going to national entities and sometimes international,” Copeland said. “There’s a growing recognition that they have an important role to play in investing in this region.”
Known for being a philanthropy
advocate for the smaller charities
in the Washington region
Harman is president and editor of the Catalogue for Philanthropy — Greater Washington. The organization publishes a book each year featuring local nonprofits that bring in less than $3 million in revenue. More than 330 nonprofits belong to the organization.
Harman said that social media is continuing to shape philanthropy in this region. Social media campaigns make certain causes go viral, such as #bringbackourgirls, advocating for the return of the kidnapped group of female students in Nigeria, and the Ice Bucket Challenge, which raised awareness about Lou Gehrig’s disease. The only question, Harman said, is how effective can it really be? “[The] #bringbackourgirls [campaign] didn’t bring back our girls,” Harman said. “So smaller nonprofits are going to continue to see what the impact of social media can be.”
Chief executive at the Center for
Nonprofit Advancement, a nonprofit membership organization for groups in the Washington region
O’Gilvie is watching to see how several prominent nonprofits in the region handle changes in executive directors. These include the Community Foundation for the National Capital Region, Meyer Foundation, Human Services Coalition, Nonprofit Roundtable, Maryland Nonprofits and the senior programs officer seat at the Morris and Gwendolyn Cafritz Foundation.
O’Gilvie said many nonprofits are looking to invest more in professional development and what is known as capacity building — sending leaders back to school for certificates and degrees so they can better compete in a business-minded environment.
Director of the local chapter
of the Foundation Center,
which is a resource center for
Pasqual said she believes that the Washington area will see a continued rise in corporate in-kind gifts more than its charitable dollars. “Corporate engagement is the hot thing,” she said.
Chief executive of the
Council on Foundations
The Council on Foundations is an Arlington-based membership organization made up of foundations all over the country. Spruill said she believes crowdfunding will be on the rise and “usher in even more young givers that will flex their collective muscle to support causes and fewer institutions.”
President and chief executive
of the United Way for
the National Capital Area
Allen-Herring said one of the biggest events shaping philanthropy this year in Washington is the arrival of a new D.C. mayor and governor of Maryland. “We will soon find out how much of a priority philanthropy and safety net issues are in the administrations,” Allen-Herring said. “The verdict is still out.”
This story has been updated.