Week 10

Foundations and Funders

This weeks readings centered around foundations and funders. It was interesting to read about the Oregon Community Foundation, I was really surprised to see how big it was and how much it could accomplish. It was also surprising in doing the scavenger hunt to see just how many grants and money is out there.

I agree entirely with the plan in Obama's budget which we had to read. It seems that today taxation is getting more and more regressive as though that is going to solve any problem. I like the fact that Obama's proposal is fiscally responsible and only effects the top tax bracket. It's refreshing to see that there are some changes in the tax loopholes. I think there's a misconceived understanding that rich people give a higher percentage of their wealth to charity, I'm not so sure that that's true. I feel as though we are really saddled with a deficit and all the tax breaks to the rich are not really helping. In order for fiscal responsibility people need to make sacrifices (as the middle class is making with government benefits) the upper class is going to have to make similar sacrifices.

It seems as though the future of nonprofits is pretty hazy. It was interesting reading the article by Stannard-Stockton about how it must react to the “new normal.” I agree that philanthropists really need to stay on their toes while the crisis unfolds. It seems as though cuts in the nonprofit sector would be the normal reaction to a crisis like this. However, there has been evidence of the contrary.

The article by Goldmark seemed like a shot of reality. It seems as though non-profits have to have a clear mission and goals in order to receive money. It was interesting to see the different measure of non-profit effectiveness. Instead of return on investment or any kind of market efficiency it was impact. I feel as though this is the money appropriate way to measure the success of a nonprofit albeit unclear. Of course, determining all of this is far from simple. It seems as though “impact” is a subjective term and there are certainly steps in determining what impacts one thing more than another.

Additionally it was interesting to read about the Bill & Melinda Gates Foundation.  It seems as though the foundation has been a great success and has been particularly good at reducing soil erosion and promoting sustainable agriculture (two topics I'm really interested in).
http://www.gatesfoundation.org/learning/Pages/overview.aspx

 

It was interesting to read about the Lake Winnipeg watershed and the role the Community Foundations of Canada had.    It was interesting to see how this one foundation would try to attract other foundations to help with the effort of improving the water in Canada.  I was surprised to see that many of the foundations came together and mobilized to work together.  I had thought that foundations would be competitive or in conflict.  I was very happy to see that they worked together to improve the watershed.  One part of the solution was educating the community to treat the water better.  It seemed as though once these foundations pooled their resources together they were able to be more effective.  People were able to get together and work on the environment, but it certainly required some context.  The mayor was very progressive and the foundation was proactive in involving the community.

www.cfc-fcc.ca/doc/environment/thinking-like-a-watershed.pdf

 

International Nonprofits

International Non-profits

One of the topics in the reading was about the merits (or demerits) of foreign aid. One side of the issue, presented by William Easterly claims that foreign aid is a failure. Easterly made several good points in the video. One is that foreign aid (in this case the Worldbank) can be a bureaucratic nightmare. Not only does the Worldbank have many administrative shortfalls but so too does the government of the poor countries. Both the poor countries and the Worldbank don't have the capacity or the incentive to track the aid efficiently. Some of the problems that Easterly talked about was lack of feedback between the poor countries and the Worldbank, the lack of accountability, and the lack of transparency. I found Easterly's article to be true in some respects but utterly flawed in others.

Easterly's article frames the Worldbank as the model of all foreign aid, which clearly shouldn't be the case. The Worldbank and the IMF can be failures when requiring economies to restructure and open themselves up to multi-national corporations The problem is not that they give foreign aid it's the loops they require the developing countries to jump through. Therefore, Easterly's primary problem with foreign aid is not systemic but administrative (http://www.heritage.org/research/reports/2003/09/imf-and-world-bank-intervention-a-problem-not-a-solution). Should it be administered in the proper way, as it was with Spain, it can be a success. In 1986 Spain received 10 billion dollars in foreign direct investment (FDI) aid in exchange for liberalizing their economy (among other things). Prior to the aid Spain's economy was in shambles – a closed “backwards” economy. The aid allowed Spain to build up its infrastructure and reinvigorated it's domestic industries. There are clear administrative differences between the way the EU gave aid and the way the Worldbank did that need to be understood. The FDI in Spain was well coordinated between the Spanish government and European investors and it's success was a win-win for both parties (http://wehner.tamu.edu/mgmt.www/NAFTA/spring99/Groups99/bunny/final.htm)

Foreign aid can work as Ngozi Okonjo's article explains, there just needs to be structural changes in how it is administered. I don't think that anyone would argue that foreign aid is a panacea – pouring money into the problems alone is not the solution. Rather foreign aid can be as Ngozi claims can be a facilitator, a catalyst for growth, as it was in Spain. Ngozi claims that when you give people aid they are going to be productive in the economy, from an economic standpoint if so many African people weren't sick or debilitated they could give back to the economy. Therefore aid is more than just humanitarian, it is economical. The failure of the Worldbank aid as I'm sure Easterly could agree was the lack of coordination between the two parties. Had there been more coordination, and had the aid been administered in more economically catalytic ways – such as infrastructure or empowering women (as Ngozi argues), it could have been more of a success.

The website for the Mercycorps was really interesting. I feel like Mercycorps is a really good organization that has a lot to offer, it's also pretty cool that its headquartered in Portland. One of the goals for Mercycorps is to help with indoor air pollution. Environmental health problems to these third world countries is not CO2 emissions but things as fundamental as indoor air pollution – something that doesn't really effect first world countries. According to the World Health Organization indoor air pollution is responsible for 1.6 million death every year (http://www.who.int/mediacentre/factsheets/fs292/en/index.html). This is because people have to rely on wood, dung, crop waste or coal for cooking and heating (without chimneys) and the particles from that result in pollution and severe health problems. The “energy crisis” for first world countries is declining oil reserves while for the third world it's finding wood or fuel for survival. Mercycorps helps by providing clean cooking stoves, helping people build mud stoves, and providing more efficient ways of cooking/heating. The result is that there is less pollution in these developing countries while at the same time there is a reduced exposure to smoke which leads to improved health for women and children.