Spring 2007
MCF Revises Groundbreaking
Principles for Grantmakers to
Reinforce Their Value and
Reflect Changing World
by Wendy Amundson
A lot has changed in the decade since the Minnesota Council on Foundations introduced its Principles for Grantmakers in 1996, becoming the first regional association of grantmakers to do so. In the years since, reductions in public funding have given foundations an increased community presence, and with it, increased expectations.
|
|
Daniel Johnson |
Corporate governance scandals, primarily in for-profit organizations, have resulted in regulators and the public demanding much greater transparency and regulatory oversight in all sectors. With the new regulations has come a greater need for tools to help foundations ensure they are aware of, and follow, the growing array of legal requirements. Minnesota also has become much more diverse, and foundations have looked for guidance on how to serve and interact with an increasingly diverse population. And the practice of philanthropy has continued to improve and change as more staff enter the field.
10-Year Mark
All these changes, and more, made the 10-year mark a good time to review and revise MCF's Principles for Grantmakers, which the organization requires as a condition of membership. At approximately the same time, the Minnesota Council of Nonprofits was also revising its Principles for Nonprofits, and the Charities Review Council was creating a new "Accountability Wizard" to make it easier for nonprofit organizations to gauge their compliance with regulations and standards and for individual donors and foundations to see how they comply.
|
|
Jim Toscano |
"I think there's an openness in Minnesota to the idea of public benefit and holding to certain standards," said Jim Toscano of the simultaneous efforts. Toscano, who is president of the Minneapolis Heart Institute Foundation, was co-chair of MCN's original Principles and Practices Task Force and chair of the second edition of the task force, and is also chair of the Charities Review Council's board of directors. "The members of our three organizations are engaged in complementary functions, and we want to reinforce our commitment to establishing and upholding certain values and standards."
"I think this is a natural progression," agreed Daniel S. Johnson, chair of MCF's Public Trust and Accountability Task Force and president and executive vice president of United Health Foundation. "It's clear that as a field we have principles that we hold firm, and while I don't believe our core principles have changed significantly, times have changed enough that it made sense to review them and explore whether changes and adjustments were needed. There was wide support for the existing principles, but at the same time, we had 10 years of feedback from a broad range of members who told us there were areas that could be strengthened and clarified. I see it as a form of continuous quality improvement."
The Hard Work Begins
Johnson, then chair of MCF's board, became chair of the Public Trust Task Force, which was charged with reviewing and revising the Principles and practices. In mid-2005, he began assembling the task force with his co-chair, Holly C. Sampson, president of the Duluth Superior Area Community Foundation and current MCF board chair. The 15-member task force they recruited included five past chairs of MCF's board of directors, as well as members who had served on the task force that created the original principles, newer members, and representatives from family, private, community and corporate foundations.
|
|
Holly Sampson |
During the early months of the task force, significant time was spent on education and research. The effort was launched in fall 2005 at the Council's annual meeting by a dialogue with Mike Hatch, Minnesota's then-attorney general, and Emmett Carson, then president of the Minneapolis Foundation and chair of the national Council on Foundations.
The task force also reviewed the Forum of Regional Associations of Grantmakers' scan of other organizations' principles and practices, similar work by the national Council on Foundations and the efforts of the Minnesota Council of Nonprofits. Hours also were spent pouring over MCF's existing Principles and Practices and member feedback, discussing what should be added or revised.
Certain Issues Rise to Top
Although "every single word was debated and scrutinized," according to Sampson, there were certain things that nearly everyone agreed on. They included a greater emphasis on the role of boards in the effective governance of foundations, and the greater need for transparency and clarity in relationships and communications with the public, applicants, donors and grantees.
|
|
James Frey |
At the top of the list, however, was revising the principles' existing language on diversity, which in part said that grantmakers had an obligation to reflect the diversity of the community in the membership of their boards, staff and/or advisors, "within the limits of their individual charters."
"I think the diversity principle was something that everyone agreed was important, yet it was also the principle that stood out as the most difficult one for small family foundations to adhere to," said Jim Frey, president/CEO and director for the Frey Foundation of Minnesota and MCF board member. "Our charters often define who is on the board, and there is often no staff or just one staff member, so it was difficult for small foundations to feel they were adhering to this principle. Even though the language recognized the limitations presented by foundation charters, some small foundations might have felt as if they couldn't sign the principles because they couldn't credibly meet the diversity principle."
MCF's new Race and Diversity Committee was asked to assist the task force in shaping new language on diversity. "I think there was widespread agreement that this was a commitment our members shared, but that we hadn't made as much progress as we wanted," said José González, chair of the Race and Diversity Committee. "In crafting the language, the question that kept coming up was, 'Are we here to serve or to lead?' We recognize that this isn't always a principle that is easy to achieve, and there was some fear that stronger language would discourage some small foundations from signing the principles."
González, who is also a Bush Foundation program officer and MCF board member, added, "But in the end, we decided we needed to be leaders, and the principle needed to be aspirational. In the practice options, we tried to emphasize the many ways in which foundations could engage diverse communities."
Frey, also a member of the task force, believes the new language achieved the goal. "The new diversity principle is positive and proactive — asking foundations to not only 'reflect' but 'engage' the diversity of the communities we serve," said Frey. "It also takes a broad view of the way foundations can achieve this through 'our varying roles as grantmakers, boards and employers, economic entities and civic participants.' "
Overarching Changes
|
Claire
Harkrider Topp |
Committee members say the biggest difference between the old and new principles may be in tone. "The old principles were very transaction- and role-focused, which reflected the needs of that time," said Claire Harkrider Topp, a task force member, chair of the Nonprofit and Tax Exempt Organizations Practice Group of the Dorsey & Whitney law firm, and Charities Review Council board member. "The new principles are much more aspirational, reflecting what we believe and want to achieve."
MCN had taken a similar approach when it revised its principles, said Toscano. "One of the questions we asked was, 'Will one size fit all?' Like MCF, our membership is diverse, so it made more sense to write principles that focused on what we want to achieve, rather than how something should be achieved."
MCF's preamble also reflects the new aspirational tone. "In a sense, the preamble became our mission statement," said Johnson. "We spent a great deal of time on it, because we wanted to explain the context for these principles," said Sampson. "We wanted to put forth and embrace our role as philanthropists in contributing to and advocating for the health and well-being of our communities."
But the day-to-day issues and challenges of running a foundation weren't forgotten. The revised Practice Options for Philanthropic Organizations, along with a new self-assessment tool developed in partnership with the Forum of Regional Associations of Grantmakers, were designed to be practical and user-friendly, to assist foundations in determining whether they are meeting all legal requirements. The practice options were revised to match up with the online self-assessment tool, which is available in versions for both staffed and unstaffed private foundations.
"There's a very complicated regulatory framework that foundations need to follow, and the more benchmarks and tools we can provide, the easier it will be to make sure that regulations are being followed," said Topp. "And that will leave staff and trustees with more time to devote to the charitable purposes."
"I think this is a great service," agreed Johnson. "In the field of philanthropy, people often learn on the job, but more importantly, from more experienced people who have established best practices. MCF has gleaned best practices from around the country, making it easier for both new and experienced practitioners to learn from the best."
Acting on Principles
The new Principles for Grantmakers and the Practice Options for Philanthropic Organizations were adopted by MCF's board in December 2006. But that official sign-off didn't mark an end to the process, rather the beginning of putting these principles into practice.
|
|
Josá González |
First on the agenda is sharing the principles with members and nonmember audiences through such vehicles as this issue of Giving Forum and a series of Philanthropy & Public Trust publications. Beginning this fall, renewing members will be required to subscribe to the new principles as a condition of membership. To reflect the importance of foundation boards in the governance of foundations, the MCF board of directors requires member boards to review and approve the principles initially and the chief staff or trustee to approve them in subsequent years.
Sampson does not anticipate any strong member concerns about signing on to the new principles. "In addition to having a very broad-based committee, we had several member feedback mechanisms built into the process, and we've had very positive feedback," she said.
Going forward, MCF will continue to provide education and advice to members to assist them in adhering to the principles. "We are a resource," said González. "We encourage foundations to come to us and say, 'We tried this and it didn't work – what else can we try?' We want to share what works."
MCF will reach beyond its membership to have the broadest possible impact with the new principles, practices and self-assessment tools. "Although MCF's 170 members represent 70 percent of Minnesota's grantmaking dollars, there are nearly 1,300 active foundations in the state, many of them unstaffed," said Sampson. "Part of our mission is to make all foundations in the state are aware of these principles, practices and tools, and how they can be used to help them do their good work more
effectively."
|
Thank you to the sponsors of this issue of Giving Forum:
|
| $5,000 Sponsor |
 |
| $5,000 Sponsor |
 |
| $1,000 Supporter |
Duluth Superior Area
Community Foundation |
© Copyright 2007 Minnesota Council on Foundations
Reproduction in any form without the written permission of the publisher
is prohibited.
|
|
New Principles for Grantmakers
|
Principles and Practices
for Minnesota Grantmakers
Originally adopted by the MCF Board of Directors in 1996; revised and
adopted December 2006
Preamble to Principles
for Grantmakers:
The desire to give is a defining human char-acteristic. As members of the
Minnesota Council on Foundations, we honor diverse charitable ex-pressions
across the wide economic, racial, ethnic and social spectrum. We cel-ebrate
new and traditional forms of giving that respond to human needs, build com-munity,
increase knowledge and promote creative expression. We acknowl-edge the
fundamental roles and responsibilities of engaged individuals and the
public, private and nonprofit sectors in a just and equi-table society.
As a community of grant-makers, we embrace philanthropy's role in a civil
society. We are leading advocates for public policy to sustain robust
philan-thropy. We work strategically through grantmaking and other means to
improve the vitality and health of our communities, to educate our members
and the field, and to achieve our collective mission of strengthening and
expanding philan-thropy. We express a shared commitment to excellence by
formally sub-scribing to the Principles for Grantmakers.
|
|
