Pause to Reflect
A Message from Lynne Ferrell, CMF Board Chair and Program Director, Frey Foundation and Kyle Caldwell, President and CEO of CMF.
Dear CMF Members,
In philanthropy we are all in the “patient capital business” where we take time to consider the impact of our actions and investment. And yet we need to remind ourselves of the importance of slowing down, to give ourselves permission for the critical work of reflection. To reflect, celebrate and learn from our successes, failures and our impact as we continue our collective equity journey.
We began 2021 just days away from the initial release of the COVID-19 vaccines—giving hope for an end to the pandemic. We will close this year with 62% of Michigan residents (ages 5 and up) vaccinated, as we face a surge in the Delta and Omicron variants. Philanthropy has played a critical role in meeting various COVID-19 relief milestones through strategic support and coordination, quality partnerships and a deep engagement with and understanding of our communities. CMF members’ efforts to support not only vaccine outreach but recovery, resilience and reform throughout the pandemic have indeed been exceptional.
Michigan philanthropy has invested in nonprofits providing for essential needs, support for small businesses, helping ensure safe access to schools, providing for mental health programs, helping arts and culture organizations find new ways to engage their audiences, helping new immigrants find new and welcoming communities – and so much more. You are demonstrating the power of a thriving philanthropic sector. We thank you for your innovation and impact in 2021 and certainly in the years ahead.
As we look ahead to 2022, we feel hopeful and thankful– inspired by your examples. While we cannot be certain what life will look like in the coming months, we know that you have led in a time of incredible transformation for our communities, our state and our sector and that momentum only continues to grow. We urge you to pause to reflect on where we as a community of philanthropy have been over the last two years and where we are headed in 2022. As you do so, please know that we are filled with deep appreciation and gratitude for your enduring leadership and your engagement in CMF. We remain focused on leading, strengthening and supporting the people, practices, and policies and your commitment to advancing our collective equity journey.
We wish you and your loved ones a safe and happy new year.
Lynne Ferrell Kyle Caldwell
CMF Board Chair President & CEO
Program Director CMF
Philanthropy and Digital Civil Society: 2022 Blueprint
In her 13th annual industry forecast, philanthropy expert and scholar Lucy Bernholz highlights the current landscape and challenges of the year, and big ideas and predictions for the coming year in Philanthropy and Digital Civil Society: Blueprint 2022.
Bernholz, senior research scholar at Stanford University’s Center on Philanthropy and Civil Society and director of the Digital Civil Society Lab, is a highly valued thought leader in the sector and has a long relationship with CMF, as a key partner and a presenter at CMF hosted learning opportunities.
In the Blueprint, Bernholz digs into challenges our civil society faces on digital dependence, the need for protecting data, access, technology and our digital civil society. Organized in four sections – time, space and motion, plus a new section called “Collective Architecture,” which includes voices beyond her own.
Bernholz defines digital civil society as, “as collective action enabled by digital systems, about digital systems or that takes place exclusively on digital systems.”
Bernholz calls attention to the current landscape of digital civil society, climate change, equity and actions we must take for the future.
Highlights of Bernholz’s predictions for 2022:
• Crypto donations will increase and more organizations than ever will accept donations of cryptocurrencies.
• Restrictions on the right to protest will increase.
• Accountability for foundation pledges on racial equity will continue and some pledges are likely to become ongoing accountability practices.
• NFTs (Non-Fungible Token), a means of making and selling digital artifacts, will continue for another year then “bust.”
• More people from the tech industry will resign and establish their own nonprofit organizations.
Bernholz reflects on what she got right and wrong about the past year. She was correct on 9 out of her 16 predictions for 2021. Here are a few of the notable predictions that came true:
• 2020 will have the highest-ever level of grants from DAFs as percentage of assets.
• Virtual volunteering will increase and maintain.
• Corporate volunteering will decline and take a long time to recover.
• Nonprofit organizations will increase their focus on the physical and digital security of their staff, volunteers and board members.
• Amazon, Apple, Facebook, Google, Microsoft and Twitter will at least double their corporate spending on lobbying and charitable giving/community partnerships.
Here are a few highlights from the Blueprint with recommendations on what we can do to change our current digital structures:
• Civil society and philanthropists can support “data activism” to shift the power of data from corporations to civil society in two ways. “By standing behind policy proposals that incorporate an individual’s right to access, either directly or through proxies, the data that is collected about them; and by supporting efforts led by marginalized communities to set boundaries and imagine practices for giving data,” Bernholz writes.
• Philanthropists can support and ensure that those most likely to be harmed by data sharing lead the development of new frameworks. “For everyone committed to racial equity, this is a chance to invest in an empowered multiracial future, forged from diverse knowledge practices and built for justice,” Bernholz said.
• Civil society can design systems that privilege people and communities, not corporations. “We can align efforts to repair past harms and pursue equitable futures with the challenges of governing data donations. This would include deciding how, when, and when not to enable, allow, incentivize or prevent data donations,” Bernholz said.
Bernholz offers a summary of the 2022 Blueprint. She writes in part, “the door is open for the decade ahead to see very different dynamics between technology companies and regulators. The environmental impacts of the corporations, long secreted away, are being exposed, and the necessity of new social, legal, economic and political action about the fate of Planet Earth will include heightened fights over technology as problem or solution.”
Read the full 2022 Blueprint.
Advancing Community Transformation Through Donor Advised Funds
We’re digging deeper into the roles of donor advised funds (DAFs) at community foundations, sharing examples of DAFs in action around the state to learn more about their role in communities.
As we close out the year and reflect upon the rich stories shared in 2021, we are learning how Midland Area Community Foundation (MACF) is leveraging DAFs to advance community transformation.
“Our DAF holders are people who believe in the power of philanthropy to help address difficult issues. Our DAFs are intended for people who believe in this community and want to continue to help this community move forward in very innovative ways,” Sharon Mortensen, president and CEO of MACF said.
At MACF, they have seen DAF holders invest in large community projects, inspire the next generation for future giving and respond to critical community needs amid the pandemic and beyond.
A snapshot of DAFs hosted by MACF:
• In 2020, DAFs at MACF granted $1,792,691, an increase from $397,183 in 2019.
• 77% are endowed DAFs and 23% are non-endowed.
• 47% of DAFs paid out 5% or more in 2020.
• 38% paid out 9% or more in 2020.
• 58% of MACF-hosted DAFs made a grant in 2020.
As outlined in CMF’s FAQs on DAFs and Payout Rates, an endowed DAF is established with the intent of long-term use. A relatively high minimum level must be maintained in the fund to ensure sufficient investment returns which are then granted to the community.
A non-endowed (spendable) DAF is intended to be used by donors to fill the fund and payout the majority of the fund within a short period of time. The donor can then refill and reuse the account regularly to support their charitable contributions.
MACF shared examples of the ways donors have used endowed and non-endowed DAFs to make an impact and meet their philanthropic goals.
One fundholder, Mortensen shared, built their endowed fund up to “save” for a project which will renovate a river site in the community.
“The fundholder is an avid bike rider and advocate for the environment. He has been holding some of his resources to invest in the renovation of this area that will become a natural area with walking trails. He’s been holding on to that because he knows it’s a big project and something he so strongly believes in,” Mortensen said.
One DAF holder at the community foundation established a DAF to promote future giving within their family and as a result inspired others to give, too.
“The family meets with their kids on a quarterly basis, they have dinner and talk about where they want to give out into the community,” Emily Schafer, director of development at MACF said. “They presented at one of our annual events and motivated a couple other community members to open their own DAF because they were so inspired.”
According to Schafer, in the case of one such DAF that was started in response, the fundholder passed away and designated his three nieces as the successive generation of advisors.
“They are keenly passionate about giving to the things that their uncle was passionate about. It’s their way to honor him and you can tell they’re really connected to their uncle through the fund,” Schafer said.
MACF has also seen DAFs serve as tools to support immediate crisis response efforts.
In 2020, the Midland community faced dual crises with the pandemic and devasting flooding after a dam failure. Mortensen said DAF holders stepped up to support the community during that time.
“They asked what they had as spendable in their funds, and how much could they give in response to the flooding. They reached out in light of the huge need and wanting to do something. It was the immediate ‘what resources do I have, let me look at my DAF and I’ll use what I have there to be able to give’,” Mortensen said.
Mortensen shared that DAFs are another tool to inspire giving and to extend the power that the community foundation has to help with community transformation.
“It’s based on the integrity that we have in the community as leaders in philanthropy that people trust us with their dollars so they can go out and grant to the causes that they’re most passionate about.” Schafer said.
CMF released phase three of our payout rate research series, Analysis of Donor Advised Funds from a Community Foundation Perspective, focusing on the payout rates of donor advised funds (DAFs) within the context of the philanthropic sector, specifically the payout rates of DAFs administered by Michigan community foundations. CMF has also crafted a comprehensive FAQ on DAFs and Payout Rates to help our community of philanthropy and sector partners navigate phase 3 of our payout rate research series.
Throughout this year, CMF members shared their stories on the roles and functions of DAFs in communities both within our sector and more broadly. We invite you to read more impactful DAF stories emerging from our network of Michigan community foundations.