Philanthropy This Week

Glenn Beil-USA TODAY NETWORK

Good morning.

This week we have two stories about big gifts gone bad.

In the first, the exhilaration of getting a $240 million gift of stock to Florida A&M University quickly evaporated when questions were raised about the value of the stock, what exactly was being transferred, and the nature of the gift negotiations, reports Maria Di Mento. The contribution to the HBCU came from a hemp entrepreneur who years earlier had made a pledge to Coastal Carolina University that eventually fell apart.

Historically Black colleges and universities are chronically underfunded, and FAMU’s president told the board that he wanted the gift “to be real and ignored the warning signs along the way.”

How can nonprofits avoid such disasters? Research the donor’s giving history and resources using public data, keep the board and senior leaders informed, and conduct due diligence.

As Tyrone Freeman of Indiana University’s Lilly Family School of Philanthropy told Stephanie: “Be skeptical before you’re celebratory.”

‘Power Drunk’

A different scenario unfolded at Flatbush Cats when a donor sent an email that was “inappropriate, unprofessional” and “severely out of line with our values,” according to executive director Will Zweigart. A week later, Zweigart wrote in a LinkedIn post: “Today I wrote my first big check to a donor. (Usually it’s the other way around).” He had returned the contribution of nearly $30,000, reports Rasheeda Childress.

The donor had already been a headache, trying to micromanage the group’s work and making unreasonable demands. An inappropriate comment to a staff member was the last straw.

“I think he was kind of power drunk,” Zweigart told Rasheeda.

From here on out, he says, Zweigart and the staff will make a point of talking to donors about the organization’s values. “You have to be really clear upfront with donors so that, ideally, you can prevent yourself from being in a position like that.”

Here’s what else you need to know:

Rebecca Blackwell, AP

A federal appeals court dealt a blow to the Fearless Fund’s grant program for Black women business owners, ruling that it must suspend its operations because a conservative organization will likely prevail in its lawsuit claiming the program is discriminatory, reports our partner, the Associated Press.

The program provided $20,000 grants to businesses that are majority owned by Black women, which the American Alliance for Equal Rights claims violates the 1866 Civil Rights Act, prohibiting discrimination on the basis of race when enforcing contracts. That law, from the Reconstruction era, was originally intended to protect formerly enslaved people from economic exclusion.

Alphonso David, Fearless Fund’s legal counsel, said the fund will continue to fight the lawsuit, calling the appeals court’s ruling “the first court decision in the 150+ year history of the post-Civil War civil rights law that has halted private charitable support for any racial or ethnic group.”

Plus: DEI Isn’t a Dirty Word. How Funders Can Fight Back (Opinion)

In a piece for the Chronicle, three nonprofit executives say that despite an onslaught of attacks, including this week’s ruling against the Fearless Fund, the need for DEI programs is growing. Philanthropy can help fortify the field against future assaults.

Getty Images

Bring everyday donors back into the fold with giving incentives, a focus on donor relationships, and pooled micro-donations, suggests Victoria Vrana, CEO of GlobalGiving, in an opinion piece. With nonprofits concentrating ever more intently on big donors, the decline in giving from “regular folks who give via credit cards, checks, donate buttons, and collection-jar coins” should worry charities. It not only hurts to have fewer people supporting important causes; it’s a threat to democracy.

Poor voter turnout and growing polarization suggest people are less willing to become engaged in their communities, to advocate, and to “dream of a better America,” she writes.

“Donations are a civic expression, a tangible investment in an individual’s hopes and vision for the country.”

Courtesy of DignityMoves

Tiny home villages are springing up across the country as some big foundations support efforts to confront the housing crisis and rising homelessness. The homes are typically 100 to 400 square feet, some with indoor plumbing, some without, reports Stephanie Beasley. Some villages provide medical and mental health services.

Critics say tiny homes are not a solution to the widespread problem of affordable housing, but others say they are a temporary measure that gets people off the streets, out of abandoned buildings, and safe from fines or jail time for sleeping on park benches.

“I am personally conflicted around tiny homes,” Jesse Rabinowitz of the National Homelessness Law Center told Stephanie, because they aren’t getting people into permanent housing and they’re often in inconvenient locations, far from public transit.

Counters Elizabeth Funk of Dignity Moves, which manages the development of villages and provides social services: “It is true that this is not a long-term solution. It’s a waiting room. It is a dignified waiting room.”

WHAT WE’RE READING ELSEWHERE

Threats against charities that help newly arrived migrants are increasing as far-right personalities spread baseless allegations that they are trafficking women and children. Some groups have posted security guards at their doors, held active-shooter drills, and advised employees to wear face masks in case they are filmed. Among those making the accusations are James O’Keefe, formerly of Project Veritas, and some members of Congress. (New York Times)

The Tunnel to Towers Foundation has been a main source of income for one of Rudy Giuliani’s companies, according to a disclosure made five months after the former New York mayor filed for bankruptcy in the face of a $148 million defamation judgment. The charity, founded in memory of a firefighter who died on September 11, 2001, has paid Giuliani Communications to sponsor his now-canceled radio show and a livestream. The nonprofit would not say how much it has spent, but the disclosure said it was the “main source” of the company’s $16,300 monthly income. Giuliani said he receives no salary from the company, but creditors’ lawyers suspect he is using the company, for which he does not have to file bankruptcy-related operating reports, as “a personal piggy bank.” (New York Times)

Leonard Leo, the legal activist best known for his role in engineering a conservative majority on the Supreme Court, has been quietly making major contributions to establish centers of conservative scholarship at law schools around the country. After a donation of up to $25 million to Cornell fell through in 2022, Leo directed $15 million to Texas A&M University. Though the gifts are typically made anonymously, evidence also points to Leo as a major backer of an $8.25 million package for a center and professorship at Catholic University and smaller gifts to lesser-known schools in California, Florida, and Texas. (Intercept)

Several nonprofits whose work conflicts with conservative politics are among more than a dozen organizations Texas Attorney General Ken Paxton has targeted for probes. Particular targets are organizations that Paxton believed were providing gender-affirming treatment or counseling to minors, even before a Texas law against such care went into effect, and groups that help migrants. Paxton’s office did not respond to questions about the investigations. (ProPublica and Texas Tribune)

A member of a jury on a massive, charity-related fraud case in Minnesota reported receiving $120,000 in an attempt to bribe her to vote for an acquittal. The case involves seven people accused of stealing $41 million from federal programs to feed needy children, but prosecutors say it is part of a larger theft of $250 million by dozens of people who lied about how many meals their organizations had served. The juror has been dismissed, and prosecutors are investigating the defendants’ possible involvement in the bribery attempt. (New York Times)

An alumnus of Columbia University has given $260 million to Israel’s Bar-Ilan University for scientific and technological research. Bar-Ilan said the donor didn’t want to be named but described the philanthropist as a “North American Jew and graduate of Columbia University who served in World War II,” who “saw Israel as a safe haven for the Jewish people.” The statement did not include an explicit rebuke of Columbia, but divestment from Israel was among the demands of pro-Palestinian student demonstrators who took over parts of that campus this spring. (NBC News)

A yearslong attendance slump at most museums has their directors rethinking the institutions’ relationships with the public. Their approaches include crowd-pleasing exhibitions, technological enhancements, reconfigured physical spaces, and more context for less-accessible contemporary works. Some institutions, such as the High Museum of Art in Atlanta, are focusing on people of color and others who typically didn’t attend museums in large numbers, but who now make up a majority of the local population. (New York Times)

Rob Rosen, the Bill & Melinda Gates Foundation executive who ran the Giving Pledge, will step down at the end of this month. Rosen worked with Bill and Hilary Clinton before his 17-year stint at the Gates philanthropy, where he oversees the organization’s partnerships with other major donors. He announced his departure at the annual gathering of Giving Pledge signers. (New York Times)

NEW GRANT OPPORTUNITIES

Your Chronicle subscription includes free access to GrantStation’s database of grant opportunities.

Pet Adoption: Petco Love’s application cycle for animal welfare organizations performing sheltering and adoptions is currently open. Support is provided to the following types of organizations in the United States: 1) animal control agencies and nonprofit organizations responsible for animal control sheltering; 2) SPCA and humane societies and other nonprofits that perform sheltering and adoptions of companion animals and operate primarily out of an animal sheltering facility; and 3) nonprofit organizations that are primarily foster-based rescues. Application deadline July 31.

Sports: The Kids Run the Nation Grant Fund, an initiative of the Road Runners Club of America (RRCA), provides financial assistance to running clubs, schools, and community-based nonprofit organizations throughout the U.S. for youth running programs. Programs should have kids running regularly, more than once each week for multiple weeks (as opposed to participating in a one-time event), and should be structured running programs incorporating educational topics and running activities. Grants range from $500 to $1,000; application deadline August 1.