10 • Philanthropy Journal of North Carolina
January 1996
Opinion
Shared goals
Collaboration becoming a capital idea
While our government is engaged in a revo
lution that is rewriting the social contract, two
of the other major parties to that contract - non
profits and business - are looking for ways to do
a better job. In the process, many organizations
in both sectors are finding they can be more
effective by learning from and working with one
another.
The growing collaboration between nonprof
its and business brings together two sectors
that have different missions and constituencies.
Nonprofits traditionally have been
America’s social entrepreneurs. They identify
community problems and find ways to solve
them.
Businesspeople traditionally have been
America’s commercial entrepreneurs. Their
goal is to create wealth and jobs by identifying
needs and creating products
and services to meet them.
Today, with government
cutting spending for social programs, nonprof
its and business find their paths converging.
Nonprofits are becoming even more enterpris
ing in their search for solutions to our deepest
problems - and for the resources to make those
solutions work.
And businesses, faced with the information
revolution and intense global competition, are
finding that good corporate citizenship can
improve the bottom line.
Many nonprofits are becoming more busi
nesslike in running their operations. They are
trying to become more innovative and aggres
sive about securing resources they need to get
the job done. And they are becoming less resis-
EDITORIAL
SPSswiwSBSSS
tant to the idea of marketing
themselves through sophisti
cated public relations and
sales techniques.
At the same time, many businesses are
becoming more organized and focused in their
philanthropy Companies, for example, are tar
geting their support to particular causes, such
as the public schools. Businesses are encourag
ing more employee voluntarism and finding
ways to contribute their products, services and
expertise to nonprofits.
And many companies are asking grant
recipients to predict the impact that they expect
corporate support to have and to work together
in order to be better stewards of the support
they receive.
Indeed, some companies are integrating
their philanthropy more directly into their mar
keting, tying their giving directly to their corpo
rate mission.
The nonprofit and for-profit sectors have
much to gain from working together even more
closely. Nonprofits can benefit from the
resources and techniques of business. And busi
nesses can benefit from better serving the com
munities from which they draw their workers
and look for their customers.
Business will never be philanthropy,
althou^ it certainly creates philanthropists.
And philanthropy ^ never be business. But
the two sectors can learn from one another and
work together for the common good of the com
munities they both serve.
A debate over giving
Charitable gift
annuities attacked
Editor’s note: When the Philanthropy
Journal went to press, the U.S. House had
unanimously passed the Charitable Gift
Annuity Antitrust Relief Act and the
Philanthropy Protection Act - both designed
to protect charities from lawsuits arising
from investment practices. The lawsuit men
tioned in this column was filed by the heirs
of a Texas widow who had contributed
$800,000 in a gift annuity to the Lutheran
Foundation of Texas. The heirs contend that
the charity violated antitrust laws by con
spiring to provide a lower rate of return on
the gift annuity.
If it looks like a gift - money or property pass
ing to the control of a recognized charity - and it
acts like a gift - the Internal Revenue Service
recognizes it as legitimate and has tables and
formulas for calculating the proper tax deduc
tion - then what it is?
It’s an Investment. Or so say some disgrun
tled individuals in Texas regarding one of the
Wayne Clawson is director of gift plan
ning at Appalachian State University in
Boone, president of the North Carolina
Planned Giving Council and a member of
the development committee of the National
Committee for Planned Giving.
Philanthropy Journal
Of North Carolina
The Philanthropy Journal of North Carolina
is afcnlh^pfMleatfci of
pnvatb:fctadatlii» Slip,
“SriglitilrlseiSl'
EOrrOR ANDPtlBUSHER
TODD COHEN - (919) 899-3744
MARKETING AND DEVELOPMENT DIRECTOR
MARGUERI'm LEBLANC - (919) 899-3741
ASSISTANT EDITOR
BARBARA SCMLOW — (919) 899-3745
SE.AN BAILEY- (919) .S99-:i747
MERRELL WOLF - (919) 899-3746
KATE FOSTER-(919) 899-3742
PAGEDESIQNER
MCHABL STANLEY - (919) 899-3748
oldest and most
widely-accepted
forms of charitable
giving in the U.S.
The charitable gift annuity has existed m
this country for over a century It is a simple
contract wherein a charity agrees to return
investment income to a donor in return for a
charitable gift.
The income is payable during the donor’s
lifetime and is based upon a negotiated percent
age of the value of the origiaal gift. The income
stream is secured by the assets of the charity
The value of the future interest to the charity -
determined by a simple calculation - is a tax-
deductible item on the donor’s federal income
tax return.
Annuity agreements have served both chari
ties and donors well over the years. Donors
secure tax deductions and the satisfaction of
supporting the work of their favorite charities
while reserving income for their lifetime needs.
Charities gain irrevocable commitments for the
support of their missions and - unlike the case of
charitable bequests - are privileged to be able to
appropriately express their appreciation to liv
ing donors.
Although it is beUeved that charitable annu-
Look for CLAWSON, page 11
A potential partner
State should tap
black colleges
When poet, lyricist and novelist James
Weldon Johnson wrote “Lift Every Voice and
Sing,” he composed a song of hope for all people
who rise up from struggle or disadvantage.
Still, every voice does not rise up and sing in
our state today We know that blaclB earn much
less than whites, that women earn less than
men and that occupational segregation by gen
der is extremely high in North Carolina.
The Imperative to achieve the full economic
participation of all the state’s residents is com
pelling. By the year 2010, the majority of youth
under the age of 18 in this state will be black
and Latino.
At the same time. North Carolina faces a
looming shortage of teachers and skilled labor.
Blacks and Latinos constitute a growing per
centage of the labor force from which those
technical speciahsts must come. By 2000, two-
thirds of new entrants to the labor force will be
female and over 42 percent will be minority or
Oliver Johnson is executive vice presi
dent of the North Carolina Child
Advocacy Institute. This article is
exeerpted from a recent presentation to a
conference in Raleigh on funding
resources for children sponsored by the
state Youth Advocacy and Involvement
Office.
immigrant.
It is no exagger
ation to say that
our futures are
bound together,
white and black, male and female, native-born
and immigrant.
North Carolina has a unique set of assets. It
is home to 11 historically black colleges and uni
versities. These institutions are an invaluable
resource that can make a huge contribution to
the preparation of a healthy and educated work
force. Wth limited financial resources and fac
ing challenging odds, historically black schools
have made great strides in building competitive
academic programs in education, engineermg,
business, mathematics and computer sciences.
North Carolina’s future economic health is
dependent on more historically black schools
being counted among the state’s major research
institutions and producers of talented gradu
ates. This state has a responsibhity to maintain
a strong network among its varied institutions
of hi^er education and to ensure that these
institutions have “real world” connections to the
state economy
Given the crucial role of historically black
schools in educating blacks - as well as their
Look for JOHNSON, page 11
Hard-working courtship
Donors, charities find common ground
When I was a Md, I liked to watch a televi
sion series about a fictional millionaire who
helped people in need. Each week, the show told
the tale of a different person’s pli^t. At the
close of each show, the millionaire’s hand was
seen signing a check that, I imagined, would
ease the recipient’s suffering.
I was reminded of the almost magical powers
I had attributed to the TV mMonaire when I
learned last month that Massachusetts busi
nessman Peter Nicholas was giving $20 million
to Duke University
Philanthropy does indeed seem to involve a
mystical transaction in which resources with
the power to heal and repair move from the
donor to the needy With the mere stroke of a
pen, a wealthy industrialist can inject millions of
dollars into charity and, with proper aim, can
have a huge impact. The gift to Duke, for exam
ple, wiQ support interdisciplinary environmen
tal education and research that will bear fruit
for generations.
It is natural to daydream about the impact
that a major gift might have were it to be divvied
up among the myriad small nonprofit organiza-
ABOUT CHANGE
tions for which simply surviving can be a con
stant struggle.
The biggest gifts from the wealthiest philan
thropists and foundations tend to be directed to
large and already healthy institutions, particu
larly colleges, universities and hospitals. That
tendency is understandable; Clearly, large insti
tutions share with small organizations the need
for a steady stream of support to pay the bills
and expand the good that they do. Unlike small
organizations, thou^, the big institutions are
engaged in the work of teaching, research and
pubUc service whose reach and impact can be
enormous.
The reality, though, is that any gift is impor
tant to the recipient and to the people the gift is
intended to serve. Philanthropy tW proceeds
slowly and with tiny steps can have significant
impact. A small gift can go a longway for a small
organization. A volunteer performing a simple
act of kindness and caring can make a world of
difference to a person in pain.
What’s more, the small gift can take as much
work for the smaO organization to secure as can
the large gift for the large organization. The $20
million gift is not likely to go to the food pantry
or hospice, but they like Duke, work hard for the
support they do receive.
Fundraising is slow and painstaking.
Cultivating a donor can take years tor any orga
nization. The goal is to engage the donor in the
mission and activities of the organization, and
fashion a gift that will do the most good for the
recipient and meet the interests of the donor.
And the impact of any gift always is relative to
the size of the gift and the organization involved.
It’s rare in real life that the assistant to a
mMonaire shows up on your doorstep with a fat
check just when you need it most, although such
philanthropy does happen. More common is the
courtship of nonprofit and donor in which each
partner invests the hard work and compassion
most likely to produce a marriage that will
endure and make a difference.
Todd Cohen