Of course, that was before the money dried up.

The longtime head of Harvard Management Company, Jack Meyer, quit to start his own hedge fund in 2005 after growing fed up with criticism over the eight-figure salaries some of his managers were pulling down and with persistent meddling from top Harvard officials. Two particular annoyances were Summers, who had been questioning Meyer’s investment strategies, and Robert Rubin, a member of the Harvard Corporation, who frowned on Meyer’s aggressive strategies and wound up on the “warpath” with Meyer, as one person put it.

• When Meyer left, he took much of Harvard Management Company with him — including 30 portfolio managers and traders, as well as the chief risk officer, chief operating officer, and chief technology officer. The place became “like a Ferrari without the engine,” according to a portfolio manager who arrived after Meyer left. This angered Rubin, according to someone who knows him well: “In Rubin’s opinion, Meyer crippled the institution.”
More…

With over 77,000 Votes, St. Jude Children’s Research Hospital(R) Wins $797,123

MINNEAPOLIS, May 26 /PRNewswire/ — In just two short weeks, St. Jude Children’s Research Hospital(R) tallied 26.6% of total votes, coming in first winning $797,123 in the first-ever Target giving campaign on Facebook(R). Bullseye Gives, which kicked-off on May 10 and concluded on May 25, 2009, invited Facebook users to visit www.Facebook.com/Target to help Target decide how to divvy up $3 million among ten national charities. With more than 3,000 wall posts* from inspired voters, the campaign also created a place for the online community to share their personal stories and experiences.

With 291,399 votes tallied, Target will donate a portion of the $3 million amount to each charity based on their percentage of votes, which included:

— St. Jude Children’s Research Hospital – 77,427 votes (26.6%) =
$797,123
— American Red Cross – 77,118 votes (26.5%) = $793,942
— The Salvation Army – 38,004 votes (13%) = $391,258
— Operation Gratitude – 22,627 votes (7.8%) = $232,948
— Breast Cancer Research Foundation – 19,264 votes (6.6%) = $198,326
— Feeding America – 15,574 votes (5.3%) = $160,336
— HandsOn Network/Points of Light Institute – 11,378 votes (4.0%) =
$120,845
— Parent Teacher Association – 10,904 votes (3.7%) = $112,259
— National Park Foundation – 9553 votes (3.3%) = $98,350

— Kids In Need Foundation – 9,190 votes (3.2%) = $94,613

“On behalf of our patients and families, a heartfelt thank you to Target and the thousands of Facebook members who voted for St. Jude Children’s Research Hospital during the Bullseye Gives campaign,” said David L. McKee, chief operating officer and interim CEO of ALSAC, the fundraising organization of St. Jude. “This remarkable program gave the online community a simple way to provide much-needed funds to many worthy causes. We are humbled by the incredible show of support for our lifesaving mission.”

Funds raised through the Bullseye Gives campaign will support the groundbreaking research and lifesaving care at St. Jude, including the St. Jude School Program. For children undergoing treatment, school can offer a familiar and reassuring routine. In addition, school helps patients maintain a sense of identity, hope for the future and most importantly educational parity with their peers back home. With this in mind, the St. Jude School Program offers several services to assist patients with their academic progress while they undergo treatment at St. Jude. The St. Jude School Program is accredited as a Special Purpose School by the Southern Association of Colleges and Schools.

During the two-week campaign, Bullseye Gives generated incredible results and voter response, including:

— Target Facebook Page added 97,091 new fans
— During the campaign, the Target Facebook Page increased daily views by
4,800%*
— Target Facebook Page experienced a 3,000% surge in wall posts, with
more than 3,000 personal stories shared throughout the campaign*
— More than 167,000 fans on Facebook voted for the charity of their
choice

— St. Jude Children’s Research Hospital and American Red Cross received
over 53% of total votes

“We’re grateful to the online community for their passionate response to Bullseye Gives and their willingness to share personal stories about why these charities are important to them. We’re excited that all ten amazing charities will receive a generous donation, as well as increased awareness through social networking platforms,” said Laysha Ward, president of community relations, Target. “The voices of the online community reinforce that giving to those who need it most is a nationwide priority. We encourage the more than 167,000 voters to continue their support of these organizations or other worthy causes.”

As part of company’s continued commitment to service, Target offered to connect all Bullseye Gives participants with local volunteer opportunities through a partnership with VolunteerMatch, an organization that offers an array of programs to support community and civic service 365 days a year. Over 2,200 fans on Facebook clicked through to the VolunteerMatch service page to find causes and volunteer programs in their local communities.

Since 1946, Target has given 5 percent of the company’s income to support education, social services, the arts, and volunteerism. Today, that 5 percent adds up to more than $3 million every week. For more information on Target giving, visit www.Target.com/community.

About Target

Minneapolis-based Target Corporation (NYSE:TGT) serves guests at 1,699 stores in 49 states nationwide and at Target.com. Target is committed to providing a fun and convenient shopping experience with access to unique and highly differentiated products at affordable prices. Since 1946, the corporation has given 5 percent of its income through community grants and programs like Take Charge of Education. Today, that giving equals more than $3 million a week.

Facebook(R) is a registered trademark of Facebook Inc.

* As of May 22, 2009

Contact: Kristen Dinisio Jones
IMRE
410-821-8220

Target Communications
612-696-3400

Visit the Target Pressroom: Target.com/pressroom

Source: Target Corporation

CONTACT: Kristen Dinisio Jones of IMRE, +1-410-821-8220; or Target
Communications, +1-612-696-3400

Web Site: http://www.target.com/

The global financial crisis is creating severe hardships for individuals and reducing government budgets for relief. The crisis has placed great stress on nonprofit organizations and reduced the assets of both philanthropists and foundations. How should grant makers respond?

First, we need to stay focused on the commitments and long-term strategies we have already adopted. Whether we are working to improve the life chances of disadvantaged children, mitigate the catastrophic consequences of climate change, or alleviate poverty in Africa, these problems will be with us over many economic cycles. They can be solved only through perseverance, and this argues against switching directions just to address short-term crises. That doesn’t entail being hard-hearted toward those in immediate need, but does require some hard thinking about the consequences of diverting significant attention and resources from long-term goals.

Second, as unpleasant as it may sound, we need to recognize that the stress on nonprofit organizations provides opportunities for efficiencies and consolidations. Unproductive groups feel little pressure to change their practices in flush times. This is a time for some sorting out. So while we all want to help strong nonprofits weather the current crisis, it’s a time to consider redirecting money from marginal organizations to ensure the survival of high-performing ones.

Third, we must think strategically about how to deal with the decline in our own assets. The variables in our control include how much of our assets we spend to make grants and cover our administrative expenses.

Most foundations design their budgets so they will distribute 5 percent of their assets. Although that is the minimum percentage required by the Internal Revenue Service, many foundations treat it as a ceiling, as if their primary goal were perpetuity rather than solving social and environmental problems.

Restricting payout to 5 percent should not be sacrosanct. The real question for foundations is whether they will make more of a difference to society by spending now or husbanding resources for the future.

The answer may be different depending on the problems we seek to solve. Grant makers that focus their money on perennial causes, such as education and the arts, may find that distributing 5 percent of assets is just right. But in realms such as global warming or nuclear proliferation, where prevention is vastly cheaper than cure, spending only the minimum now may be wildly counterproductive.

Then there is the question of administrative expenses. Our job in managing foundations is to spend money effectively. Lavish internal budgets, oversized staffs, and self-indulgent processes work against this. But the opposite extreme is also counter-productive.

Our ultimate goal is to achieve our missions most effectively, and this is not cost-free. If we didn’t care about impact, we could easily give away our philanthropic capital in one day[--]even Bill Gates and Warren Buffett could.

Giving money effectively, especially for complex causes or to aid distant countries, requires an expert staff, great skills in getting to know people working on the ground, and strong intelligence networks. Maintaining a staff and other administrative expenses are justified so far as they help achieve our social missions. We should use this time to check and see how much of our administrative budgets are adding to the quality of the foundation’s work and how much might be trimmed.

Our bottom line: in periods of financial stress, don’t lose sight of your fundamental goals and strategies, and make sure that your assets are deployed to achieve them most effectively.

————————————-

Paul Brest and Hal Harvey are the authors of Money Well Spent: A Strategic Plan for Smart Philanthropy (Bloomberg Press 2008). Brest is the president of the William and Flora Hewlett Foundation and Harvey is president of ClimateWorks Foundation.

Drawing on examples from more than one hundred foundations and not-for-profits,
Money Well Spent gives readers the framework they need to design a smart strategy, addressing such key issues as:

§ Effective use of tools—education, science, direct services, advocacy—that can achieve your objectives
§ How to choose the forms of funding to achieve stated goals
§ How to measure the impact of grants or programs
§ When to be patient and stick with a winning strategy and when to abandon a strategy that isn’t working

This is a book for everyone who wants to get the most from a philanthropic dollar: donors, foundations, and not-for-profits.

Examples of strategic philanthropic successes included in
Money Well Spent by Paul Brest and Hal Harvey are:

§ Ploughshares Fund, whose mission was quite large—preventing the use of weapons of mass destruction—used its $4-million-per-year budget to make a principal contribution to the International Campaign to Ban Landmines, helped renegotiate the Nuclear Nonproliferation Treaty, and also supported high-level, off-the-record negotiations between senior U.S. analysts and North Korean officials that may have averted a war during the Clinton administration.

§ The F. B. Heron Foundation, which focuses on asset building in low-income communities, notes that its core support grants are evaluated on the basis of the grantees’ planning documents, and the foundation thus measures progress in terms of the organizations’ own ambitions and plans.

§ The Abdul Latif Jameel Poverty Action Lab (J-PAL), a research center at MIT, specializes in conducting random controlled studies in developing countries. For example, J-PAL randomly assigned girls in Kenya either to a group that was promised merit-based scholarships and cash grants for school supplies if they scored well on academic exams, or to a control group. Just being eligible for scholarships led the girls to think of themselves as “good students” and led to higher academic grades. Both student and teacher attendance improved, and even boys showed improvement in their test scores.

The U.S. Charitable Sector: A Snapshot, 2007**
Approximately 1.4 million nonprofits are registered with the IRS.
The nonprofit sector of the economy accounts for 5.2% of GDP.
The nonprofit sector is responsible for 8.3% of the salaries and wages paid in the U.S.
In 2005, individuals, foundations, and corporations gave $260 billion in donations to nonprofits. In 2005, 25% of Americans, 65 million people, volunteered their time to nonprofits.
In 2004, the 1.4 million nonprofits received around $1.4 trillion in revenue
and controlled $3 trillion in assets.
1,400 nonprofits have assets over $500,000,000.
263,200 nonprofits have assets over $1,000,000.

# # #

Hal Harvey, left, and
Paul Brest, right

Photo: John Storey

About the Authors of Money Well Spent

Paul Brest is the president of The William and Flora Hewlett Foundation. Before joining the Hewlett Foundation, he was a professor at Stanford Law School, serving as dean from 1987 to 1999. He teaches a course on judgment and decision making in the Public Policy Program at Stanford University and is coauthor of the forthcoming book Problem Solving, Decision Making, and Professional Judgment.

Hal Harvey, a former director of The Hewlett Foundation’s Environment Program, is now the president of ClimateWorks. He is also the president of the New-Land Foundation and has held positions at several different not-for-profit foundations, including the Mertz-Gilmore Foundation, the Heinz Endowments, and the Ploughshares Fund.

# # #

The Ultimate Gift by Jim Stovall is not a thick book … and its chapters are short … but it’s very much to the point. It is the story of a rich uncle who leaves a portion of his considerable fortune to a less than over achieving family, while leaving the Ultimate Gift to a spoiled, overindulged grand nephew in whom he places all of his hopes for the future.

Charitable activities are a natural outgrowth of civilization and affluence. Certainly, in our country we see stunning examples of charitable works, whether it is the outpouring of aid to disaster stricken areas, home or abroad, or the incredible amount of wealth donated by the likes of Microsoft® founder Bill Gates and many others like him.

The Gates Foundation, with assets approaching $30 billion, lists one of its main goals as improving health care in developing nations throughout the world. Matching that level of philanthropy is out of the question for most, yet there remain many avenues for charitable works for the rest of us.

The government has provided tax incentives to encourage charitable works. They understand that it is more efficient to allow private enterprise to provide for these needs, than rely on inefficient government resources to provide the similar services.

And that is why the tax laws are structured to support charitable giving … in lieu of profits for invested dollars, those willing to give are rewarded with tax breaks.

Choosing benefactor(s) for organized annual gifting can be difficult, if not downright confusing. A solution is to form a donor-advised fund through a public charity. Many local community organizations as well as a number of mutual funds offer donor-advised funds.

Charitable contributions are considered an irrevocable gift, but the donor may choose to whom and when gifts are made. This flexibility allows the donor the opportunity to give differing amounts each year without having to stipulate the exact recipient. It greatly simplifies record keeping … instead of keeping a drawer full of receipts and cancelled checks for your tax preparer, you have one receipt. This allows the donor the opportunity to give to many different charities, but not have to track each gift.

Technically, the fund is not required to follow donor directions for distributions, although this is rarely the case. In most cases the donor can continue to advise the fund as to investment policies and strategies.

Unlike a private foundation, where 5 percent of the foundation assets must be given away each year, the donor-advised fund is not bound by a strict dispersal formula. Donor-advised funds work well in situations where the donor has fluctuating income but would like to keep dispersal of charitable donations at the same level.

Bruce Fenton is a financial consultant, a writer, and the Managing Director of Atlantic Financial Inc. Bruce welcomes inquiries, comments, and questions. He can be reached by contacting The Fenton Report.

Public policy supports conservation of lands in its undeveloped state by providing both Federal and State income and estate tax breaks for owners who donate property or property rights to conservation organizations. Using the set tax breaks correctly in an estate plan can serve to keep land in a family that might otherwise have to be sold to pay taxes.

Land can be valuable to us in many ways. To an investor, the value of a parcel of land is in the profit to be made from its sale. To an owner of commercial property, the property’s value is in the rents that can be collected for its use.

Due to the dramatic increase in property values in recent years, a family of otherwise modest means may own land of considerable appraised value. Upon the death of the last surviving parent, the heirs may face the obligation to pay state and federal estate taxes without having the financial resources to meet that obligation. Their only recourse may be to sell all or part of the land which was left to them, despite their own desires and the expressed wishes of their parents. In short, the failure to plan for the future of valuable family land after death may grant control over that land to the taxing agencies of government. Fortunately, there are alternatives.
By reducing the appraised value of land, the donation of a Conservation Easement to a Land Trust can reduce income and estate taxes. Since most of the appraised value of land is in its potential for development, the donation of development rights to a Land Trust leaves only the remaining value as taxable. This donation may also create a tax-deductible, charitable contribution in the year of the gift.

Thus, the donation of a conservation easement can protect land in two ways. First, it protects the conservation values of the land according to the specific restrictions contained in the conservation easement. And, second, it protects the integrity of the land from the threat of sale to satisfy estate taxes. Furthermore, this protection option can reduce income and property taxes for the parents while still living.

Since each conservation easement is individually written to address both the personal needs and the intentions of the donating landowner, land protected by a conservation easement can continue to be used by the donor’s heirs as the family has been accustomed. A family farm, for example, can be used, in perpetuity, for the production of crops and the pasturing of livestock. And, every bit as important, it can provide a home for the future generations of the family that has cared so deeply about its farmland.

Although Land Trusts have been protecting lands in the United States for over a century, most have been founded in the last 30 years. The earliest examples—such as the “Village Improvement Societies” of New England, the Maine Audubon Society (founded in 1843), and the Cincinnati Museum of Natural History (established in 1800)—were located in the eastern states. In 1965 there were 132 active Land Trusts all across the United States. By 1991 the number had increased to over 900, preserving nearly 3 million acres of valuable lands.

At the Special Olympics’ Annual Winter Games, very special developmentally disabled athletes competed in four winter sports for medals, cheers, and hugs from teammates, family, and coaches. They each qualify to compete based upon performances at qualifying events. They race on skis and snowboards down alpine racecourses, on cross-country skies and on snowshoes through the woods.

The Special Olympics, started in the 1960’s by the Kennedy family in Massachusetts, has grown into a worldwide movement with over 1,000,000 athletes from all over the globe competing. In the Northern California organization, more than 13,000 compete each year in 19 different sports and 7 program championships.

The athletes, ages eight and up, train for their sports under the direction of volunteer coaches. The Winter Games participants begin with weeks of dry land training followed by 6 to 10 days of on-snow preparation. They are divided into competitive categories by ability and then age.
All athlete expenses and equipment are provided by the Special Olympics organization. The Special Olympics organization relies on corporate sponsorship to pay the biggest share of the expenses, while individual donations from a variety of fund raising events help pick up the difference. Additionally, individual and corporate sponsors donate most of the food and hundreds volunteers and coaches supervise and assist with the activities.

It is very hard to capture with words the joy and the spirit of the events days. It is equally hard to comprehend that 30 years ago many of these athletes would have been institutionalized because these opportunities to grow as individuals did not exist.

Last year I met with a friend who was concerned about the state of the local economy and how it would impact his young family. We discussed a number of options including selling his expensive home and relocating to a less expensive environment. To my surprise, that is exactly what he and his family did…sold the home and moved to a community in Central California.

When I asked “Why there?” The answer was one word…“schools”. His wife, a former CIO in a large San Francisco firm, and now a stay-at-home mom, used the Internet to research California schools. She found, arguably, the best Northern California school system for her young boys.

When they visited the community, they were impressed by the level and quality of instruction, the clean, well-maintained schools, the willingness of the community to fund education, and the active involvement of the parents. They found teachers excited about their profession…who were paid enough to live above the poverty level.

This is but a small anecdotal commentary on the value good schools bring to a community. Any realtor with an ounce of experience will tell you that good schools enhance real estate values—they upgrade the quality of life for the entire community, making it a more desirable place to live. Crime rates are lower in communities with good schools. And good schools train their graduates to make a positive contribution to their community.

Most families have three financial goals: Educate their children, pay their taxes, and prepare for a comfortable retirement.

Education and retirement are inextricably linked. The archenemy of retirement is inflation. A well-educated and productive workforce keeps inflation down. Retirement dollars go further in a low inflationary environment.

Many retirement plans are built around extracting value from real estate, either by selling and downsizing, or through equity withdrawal such as reverse mortgages.

There was a survey conducted a few years ago by Runzheimer International (a management consulting firm based in Rochester, WI), and SchoolMatch (a school information and counseling service). Their research studied over 16,000 school districts nationwide and correlated property values to the quality of the school as measured by pupil performance on scholarship exams. Their findings conclusively supported assumptions that good schools add value to the property in the area.

Supporting good education requires tax dollars. Unfortunately, many misguided individuals take a shortsighted approach to this process by resisting all efforts to improve the schools. Their arguments are specious and self-serving, often grounded in rhetoric that has nothing to do with the educational process.

If these arguments are allowed to prevail, over the long run, the “best and brightest” will leave the community for better education and not return to contribute. The quality of life in the community will gradually lessen to the lowest common denominator.

“To resist is to drive down the value of property. To not support is to degrade your local community. In my mind that is like allowing your yard to go to seed, your plants to die, your house to go unpainted…in other words, an investment in local schools can the be the most important investment you make in your home!”