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INTERESTING READING

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May, 2022

Rural Philanthropy
Rural Health Information Hub has some good insights in its new report, Challenges Rural Organizations May Face in Seeking Philanthropy Support.
Funder Affinity Groups
Funder affinity groups are ongoing open-facing collaborations of grantmakers interested in a specific area of grantmaking (health, environment, K-12 education, for example). Inside Philanthropy explains Affinity Groups:
A group or network of funders that come together around a shared interest.
Circles where funders can interact, and often collaborate, to maximize impact.
There is a funder affinity group for about every community or issue imaginable.
Most affinity groups are hosted by a larger organization, such as the Minnesota Council of Foundations. We thought we would jump on the wagon and provide a couple links for affinity groups sponsored by the national Council of Foundations and Minnesota Council of Foundations:
Implications for Grantseekers:
  • As a prospecting resource, lists of affinity group foundation members are a good way to find out which funders are interested in K-12 funding or homelessness.
  • Also as a prospecting tool, sometimes affinity groups will list the names of program officers who represent the foundation at the affinity group table. Good to know which program officers are serious about health issues.
  • Often affinity groups will talk about upcoming conferences or webinars. It’s good to know what issues are in the forefront of climate change funders and what kind of language and terms funders are using.

Upcoming webinar: Small Family Foundations Giving in Minnesota

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FUNDING NOTES May ’22

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Target Foundation Funding Opportunity: Racial Equity Grants. This opportunity is up to $200,000 in general operating support, with an opportunity to request support over two years for BIPOC-led organizations. Four priorities:

  • Entrepreneurship and Small Business
  • Workforce Development
  • Housing
  • Asset Building

The Foundation supports organizations that improve the asset building opportunities available to traditionally marginalized communities, especially those that are engaged in work to increase financial inclusion, wealth building and overall financial health.

Mortenson Family Foundation is making three key changes to its grantmaking process:
  • Schedule a 30 minute call with Community Relationship Officer Ambar Hanson (for Expanding Opportunities for Children and Families grants) or Danyelle O’Hara (for Sustaining Environmental Systems grants).
  • Share updates on the outcomes you stated you want to accomplish in your 2021 application. No more budget reports.
  • If you have an annual report that includes last year’s outcomes, the foundation can use that report.[1]
  • We applaud the Mortensons for streamlining grantseeking for nonprofits.

This may confuse some applicants- there is a different process/contact depending on grant.
See: mortensonfamily.org/explore-partnership/

Huntington Bancshares (which merged with TCF) announced it wants to be the largest SBA funder in the Twin Cities market. No small feat, since climbing to #1 in SBA loans means creating A LOT of general banking business – both consumer and corporate lines. In turn, this means a lot more presence in the Twin Cities and lots more community investments, including Community Reinvestment funds. Consequently, more funding for community causes. Watch these folks, especially, Marcio Thompson, Community Development Relationship Manager.
Groundbreak Coalition – You’ll be hearing about these folks and the $2 billion they’re investing in thousands of BIPOC homeowners, businesses, rental units, and commercial developments in the neighborhoods most affected by the George Floyd protests. Th effort is led by representatives of major regional and national foundations, including the McKnight, Minneapolis, and Bush Foundations, our Twin Cities Mayors, several banks (PNC, Sunrise, Wells Fargo, US Bank, JPMorgan, and others), Chambers of Commerce, the Center for Economic Inclusion, Hennepin and Ramsey counties, and several private businesses.

Our Favorite Dysfunctional Financial Corporation – Our friends at Otto Bremer Trust are getting things together with the help of Ramsey County District Judge Robert Awsumb. Two big things:

  • The judge removed trustee Brian Lipschultz from the OBT board of trustees. Read the Star Trib article here.
  • The judge said the trustees could still move forward with the proposed sale of Bremer Bank, one of the things that started the relationship meltdown between the trustees and the bank official.

Lots of questions about the remaining trustees’ ongoing interest in selling the bank. But there’s no question that someone would be willing to pay big bucks for it, its presence in four states and its great relations with local (rural and urban) communities.

One of the top current bidders is Huntington Bank (the new TCF). Would Huntington keep up OBT’s community grants and outreach programs? They don’t have a history in their own banking practices, but maybe.

Meantime, the trust’s grantmaking operation remains remarkable, one of the best, if not the best, in Minnesota. April announcement of $7.3 million to 96 organizations.

James R. Thorpe Foundation, one of our favorite local funders, offers funding twice a year, once for youth and once for seniors. Youth requests are due June 15. Most grants are in the $6,000 to $12,000 range.
Lessard-Sams Outdoor Heritage Council  — This is the voter-approved State of Minnesota Outdoor Heritage Fund, one of four funds created by the Clean Water, Land and Legacy Amendment. Deadline May 27, 2022.
G4GC’s Black Girl Freedom Fund (BGFF) is part of the Grantmakers for Girls of Color network. In only its second round of grants, BGFF awarded $4 million to 68 groups nationwide
Bill and Melinda Gates Foundation issued its first Diversity, Equity, and Inclusion (DEI) Progress Report. Will such reports become a standard annual thing for major foundations? We hope so.

Minneapolis Foundation – has three news items on grants made or grants to come:

Patrick and Aimee Butler Family Foundation – another tried and true Metro area family foundation, the Butler Family Foundation continues to grow in financials and in wisdom. Although we aren’t crazy about the closed Invited Grants program, we understand this is a generations old family fund with its own family traditions. See the latest round of grants.

A Few Other National Opportunities:

US Agency for International Development recently announced plans to invest $50 million in global childcare infrastructure. USAID will invest $50 million in the World Bank’s Childcare Incentive Fund to expand global access to quality childcare and early learning programs.

People on the Move:

We welcome CEDRICK BAKER, the McKnight Foundation’s new Chief of Staff, who recently served as Chief of Staff for Saint Paul Public Schools. NA ENG, previously Communications Director at the McKnight Foundation, has been named new Chief Communications Officer at People for the American Way (PFAW).

Cryptocurrency and Philanthropy

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An AP Philanthropy Landscape Report
May 2022

Stories about cryptocurrency have been showing up in business journals, consumer magazines, daily newspapers, and nonprofit publications. In March, some funders acknowledged one of the only ways to get relief money into Ukraine was via cryptocurrency. We sent AP Researcher Laura Wilson to find out more. She looped in folks from ImpactMarket and Alight (formerly American Refugee Committee) to talk about implications of Bitcoin,  Ethereum, and other crypto donations for nonprofits. You can read her report

New Ways of Giving

Starting as a thought experiment in the 1990s, cryptocurrency has slowly bled into everyday life, developing into a nearly-mainstream market. According to a recent survey by the Pew Research Center, from 2015 to 2021 the percentage of Americans who personally invested in cryptocurrency rose from 1% to 16%; in 2021, 86% of Americans knew something about cryptocurrencies. Official counts vary but the consensus is, more than 10,000 cryptocurrencies exist today, with the most popular being Bitcoin and Ethereum.

Congress is in the process of developing legislation to regulate cryptocurrency within U.S. borders, and has already passed a tax provision to simplify reporting requirements. These changes have implications for the philanthropic space and the willingness of donors and other stakeholders to engage with cryptocurrency.

Blockchains Enter the Philanthropy Space

Charitable giving via cryptocurrency gained steam in 2013 with the establishment of the BitGive Foundation, the self-described “first Bitcoin and Blockchain charity.”  It rose sharply in visibility in 2017 when an anonymous donor established the Pineapple Fund and donated Bitcoin worth over $55 million to 60 charities.  Since then options for donating cryptocurrency have expanded:

Funding Missions with Cryptocurrency

Once the gifts are held by a donation management platform or nonprofit, more possibilities emerge.  The decentralized characteristic of all cryptocurrencies allows them to bypass country borders and traditional currency exchange rates.  To use cryptocurrency, nonprofits can either spend the digital asset  or convert it into fiat (traditional) currency.

Many nonprofits will “cash out,” since volatility makes these currencies a risky choice for long-term investment. Most currency exchanges around the globe work with only fiat currencies.  Some organizations, however, are working to build the capability to lean into the properties of cryptocurrency.

We spoke with representatives from ImpactMarket, and Alight who are collaborating to expand the practice and impact of Universal Basic Income (UBI) using cryptocurrency.

ImpactMarket created and maintains a platform for donors to give cryptocurrency. That currency is funneled directly to recipients in participating communities across Brazil, Nigeria, Ukraine, and India, many assisted by Alight. In communities where Alight doesn’t work directly, ImpactMarket partners with other nonprofits. The recipients of UBI funds choose how to use the currency, based on what is available in their area (“cash out” or use as is).

Their efforts haven’t been without challenges, like technology  and Internet access, as well as building trust with recipient communities.  But initial results are encouraging. Both organizations expressed hope for the future of the program, which seems to be fostering greater financial stability and long-term financial planning.

Without the existence of cryptocurrency, this type of global effort would be next to impossible.  Through ImpactMarket’s platform, donors can see exactly where their currency is headed and which communities they are supporting, creating a strong sense of donor-connectedness (GiveTrack works in a similar manner).  The global transfer of traditional currency is costly and time-consuming, while cryptocurrency has none of those associated fees.

Other ways of utilizing cryptocurrency on the nonprofit end include:

  • Working in philanthropic incentive programs for cryptocurrency miners and donators like RootProject, PinkCoin, and Impact Market.
  • Advancing donor involvement through the use of a reporting and voting system networked directly with donors (GiftCoin in partnership with Network for Good).
  • Using a blockchain to track the source and movement of goods as they move through supply chains (IBMs Blockchain for Social Good).

The Future of Crypto for Charity

One significant drawback to cryptocurrency is its negative impact on the environment. Blockchains require large amounts of energy to store and verify transactions. Bitcoin mining, for example, consumes 22 to 22.9 million metric tons of CO2 in a year. That’s comparable to Kansas City’s annual emissions.

Only 39% of the energy used to mine Bitcoin comes from renewable sources (mostly hydropower), with the rest produced through traditional fossil fuels. While there are proposed solutions, they have not yet been widely implemented.

Art museums, battered by the impact of the pandemic on attendance and income, first turned toward, then away from, selling NFTs, for these environmental reasons.  ImpactMarket uses Celo, the first carbon-neutral blockchain, which offsets its energy use by investing in tree planting and other carbon reduction projects. Alight’s decision to scale up its work with ImpactMarket will take environmental impact into account.

The anonymity of crypto donors is also problematic. Although transactions are recorded and tracked via IP address, the identity of the individual is not recorded.  This creates an obstacle in creating and maintaining personal relationships with donors. It also turns away organizations that avoid opaque funding sources.  In an interview with The Chronicle of Philanthropy, Erich Mische, Executive Director of Minnesota nonprofit Spare Key, said “We don’t want to get caught up in a situation where you get a knock on the door and find out that someone who gave you a significant donation is on some list that makes things problematic.”

AP is keeping a close eye on further developments, as the adoption of cryptocurrency in the philanthropic sector shows no signs of slowing down.

For more information on Access Philanthropy or suggest new ideas for a Philanthropy Landscape report, contact Steve Paprocki at [email protected]. To connect with researcher/author Laura Wilson, contact [email protected].