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10 • Philanthropy Journal of North Carolina Opinion December 1994 Nonprofit challenge Philanthropy must overcome petty pohtics The nonprofit sector is becoming a powerful force in America. At a time when many Americans have become cynical about govern ment and business, volunteers and profession als working in the nonprofit sector are doing the hard and unsung work of building our com munities. In the process, these nonprofit workers also are buOding a commnnity of their own -,a phil anthropic community whose mission is neither to amass political power nor to enrich share holders. But even as its numbers and dollars make the nonprofit sector increasingly powerful, it faces big challenges. Those range from the EDITORIAL need for individuals working in the sector to acquire basic management skills to the need for the sector itself to develop the support sys tems that wUl strengthen the individuals and organizations that make up its ranks. North Carolina is well on its way to meeting those challenges. Numerous support systems have been developed in the state to strengthen individual organizations, as well as the sector overall. And nonprofits are learning to work in partnership with one another and vrith govern ment and business. But an even bigger challenge remains, and it’s not one that people like to talk about. The nonprofit sector is not immune to the same type of petty pohtics that characterize endeav ors in the public and commercial sectors. Despite the best of intentions, an organization quickly can find that rather than fulfilUng its mission, it has succumbed to an appetite for turf and control. People who preach “diversity” and “empow erment” sometimes seek to torpedo efforts by groups they see as competitors. People who set themselves up as advocates for “openness” and “inclusion” sometimes avoid public scrutiny and exclude rather than embrace potential partners. It would be naive to suggest that politics - the interplay of people and organizations - does not have an important role in the nonprof it sector. The genius of democracy, after ah, is the ability of people to sort out their differences for the common good. Nonprofit leaders must in fact be wihing to speak out - and to disagree with one another, if necessary - on important social issues. But they also must be brave enough to sac rifice the dominance of their own organizations tor the improvement of their communities and the stren^hening of the larger community of philanthropy. A powerful link Self-help credit union boosts home ownership Thomas Avant was understandably excited when he shook President Clinton’s hand at the signing of the Community Development Financial Institutions Act this past September. He told me that it was almost as wonderful as the day he and his wife got a home loan from the Self-Help Credit Union. For 18 months, the Avants and their five children commuted 120 miles round-trip to their jobs and schools. Unable to get a loan from conventional finan cial institutions, Mr. Avant said the stress was beginning to fray the family’s strength. Now that the family has a new home close to his workplace, the pressure of those hours on the road are gone. He also owns an asset that will continue to support his family over time - a new home. When Self-Help started in 1980, our work focused on building wealth and ownership in poor com munities primarily through busi ness development, especially employee-owned businesses. We soon realized that people who did not have assets, such as savings or home equity, usually did not have the capital to invest in business enterprises. This led us to under stand the powerful link between home ownership and wealth. Martin Bakes is executive flirector and chief executive officer of the Center for Community Self-Help in Durham. n jmportanf feature of deveiop- ment banks and community develop-; ment credit unions like Self-Help is to: demonstrate to tradi tional financial insti tutions than low- wealth individuals^ ore credit-worthy borrowers. As Thomas Avant’s home equi ty grows, he wUl be able to finance his children’s educa tion or a business venture, or simply to weather hard times. Such wealth creation is especially impor tant in the minority community. Even though African-American famihes earn about 70 cents for every dollar a white family does, on average their net wealth is only 10 percent of that of a white family. Self-Help is the nation’s first statewide development “bank” with branches in Asheville, Charlotte, Durham, Greensboro and Greenville. It is one of a few national institutions used by Congress as models for the new Community Development Financial Institutions Act, which President Clinton recently signed into law. Self-Help ‘s members have had great success. Our assets have grown from only $77 to almost $77 million. We’ve made over 630 home loans to first-time home buy ers totaling over $29 million - the majority to African-American households. To further our goal of increas ing ownership for women, minority and rural residents, we also lend Look for EAKES, page 11 A trillion-dollar certainty Transfer of wealth will change charity There is at least one certainty beyond taxes and death. The years immediately ahead will see a change in the control of an enormous amount of American wealth. Unquestionably, large dollars are at stake - Americans are among the richest people in recorded history. TMid, not incidentally, among the most gener ous. In fact, the certainty of taxes and death assures the certainty of this transfer. While it is quite difficult to know precisely the size of the transfer, two Cornell University economists, Robert Avery and Michael Rend^, estimate that over the next 25 years, $10.4 trillion of net worth will flow from one generation to the next. Ten trillion. That’s an amount nearly twice the gross national product and more than fifty times the total of U.S. private savings. It may be less. But it will be enormous. And that is just the more visible tip of the iceberg, because the transfer is absoiutely bound to involve a lot more than the movement of dollars. It will also encompass an accumulated wealth of values and learned behavior of WILLIAM L. BONDURANT William L. Bondurant is retired executive director of the Mary Reynolds Babcock Foundation, a consultant to foundations and is chief operat ing officer of Bioxy Inc. in Raleigh. w generation brought up with TV as their parent, nightly vio lence on the screen as their texts and crowded classrooms as their sitters, have the role models, desire or experience to make wise philan thropic allocations of the dollars descend ing upon them? understanding, tolerance and compassion. And perhaps, hidden in the fine print, meanness, big- otry and anger. How much of the transfer will be invested phUanthropicaLly? That is yet to be seen, but there are indicators that suggest favorable pat terns. First, there is the tradition of sharing; Americans are second only to Canadians in per capita giving to charity. Next, the Reagan years widened a trend of the accumula tion of larger wealth into relatively fewer hands, and those with high net worths are likely to continue to be the most generous philanthropic givers. It also is true that lower- income Americans generally will donate a higher percentage of any increase in their incomes. Third, the options for giving - a broad spectrum of needs and caus es - are growing in number, sophis tication and public consciousness, inversely paralleling decreased public confidence in governmental interventions. Where else can sur plus wealth be better invested to achieve the social goals which are the very missions of nonprofit ill a new Look for BONDURANT page 11 Philanthropy Journal Of North Carolina Urn Philanthropy Journal- of North Carolina is a monthly publication of The News wid Observer Foundation, a 501(c) (8) private founda tion funded by The News and Observer Publishingeo.j Ralei^N.C.: ; © The News and Observer Fomdation. . AU rights reserved. EDITOR MDPmLmmR TODD COHEN(919) 829-898» MaMKETINQ AND DBVMLOPMENT DIRECTOR MARGUERITE LBBMNC - (919) 829-8991 REPORTERS BARBARA SOLOW — (919) 8298921 SUSAN GRAY— (919) 8298917 EALENA CALLENDER — (919) 836-2882 SUBSCRIPTIONS ■' ' ' SIDNEY CRUZE — (919) 836-2876 ® INTERN KATE FOSTER —(919)836-2877 p. . , DESIGN AND PAGINATION BOB NOWELL - (919) 829-8988 Hunt administration can be better partner Gov. Jim Hunt took office last year and promptly convened a nonprofit summit at which he promised to work in partnership with the nonprofit sector. While he’s followed through with some big initiatives. Hunt has a long way to go before he truly practices the partnership he preaches. Three major Hunt initiatives - Smart Start, Save Our Schools and Family Resource Centers - each provides significant state dol lars for programs that hinge in varying degrees on partnerships with nonprofits. But beyond those initiatives. Hunt’s part nership is more lip service than action. Liaisons appointed by the Hunt administration to work with nonprofits can be tough to reach - and too preoccupied with government business to keep abreast of nonprofit issues. That may be the result of the administration’s well-inten tioned decision to pick high-level officials as liaisons: WhOe they have clout, they also have Uttle time to spare. And a recent legislative briefing for non profits, billed by Hunt as a follow-up to last year’s summit, included representatives of only ABOUT CHANGE 50 or so advocacy and poUcy groups based in Raleigh that are members of the North CaroHna Center for Nonprofits. Rich and well-organized as it is, our non profit sector faces major challenges in finding the most efficient and effective ways to use its resources to improve life in our state. If Hunt truly wants to help, he can do more. He might, for example, convene forums to help identify the needs and interests of all our nonprofits - not just those Raleigh-based advo cacy groups with which he seems to be most familiar and comfortable. He also could see that state government’s liaisons to the nonprof it sector be true liaisons - reaching out to non profits and being available when nonprofits reach out to them. Hunt also could look for state funds to invest in helping to build the capacity of non profits as they strug^e to become more busi ness-like in their operations and fundraising. The state invests money from employee pen sion funds in venture capital firms. Why not invest in nonprofits, our social entrepreneurs? The School of Social Work at UNC-Chapel Hill plans to create a program to support the state’s nonprofit sector. Financial support for that public effort to strengthen the sector would be in keeping with Hunt’s promises to be a partner to nonprofits. A possible source of funds would be the budgets of those state commissions that over see matters such as aging and women and in effect duplicate the work of existing nonprofit policy and advocacy groups. Nonprofits play a central role in the life of our communities. Critical to their survival is the work of thousands of volunteers and pro fessionals, as weU as the hundreds of milhons of dollars that Tar Heel foundations and corpo rations invest in nonprofits each year. Hunt is on the right track in realizing the sector is important. Now he just needs to put some resources where the rhetoric is. Todd Cohen
Philanthropy Journal of North Carolina (Raleigh, N.C.)
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Dec. 1, 1994, edition 1
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