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7/9/2016 12:00 AM

Pepco’s philanthropy includes support for both local and national groups and events that help raise awareness in sustainability, safety and wellness.

OVERVIEW

Recently acquired by energy giant Exelon, Pepco Holdings is one of the largest energy delivery companies in the Mid-Atlantic region, serving customers in Delaware, the District of Columbia, Maryland and New Jersey. Through its subsidiaries, Potomac Electric Power (Pepco), Delmarva Power and Atlantic City Electric, the company provides regulated electricity service and natural gas service to about 2.3 million customers. Pepco also provides energy efficiency and renewable energy services through Pepco Energy Services. In 2015, Pepco reported sales of about $5 billion and employed nearly 5,200 workers.

GIVING

Pepco’s charitable giving includes a combination of sponsorships, cash grants, employee volunteerism and fundraising support for both local and national groups and events that help raise awareness in sustainability, safety and wellness. Some recent examples of the company’s support include:

  • Anacostia River Cleanup at River Terrace. Pepco employees and their family members join the Anacostia Watershed Society, the District Department of the Environment and other local organizations on Earth Day to clean up the shoreline along the Anacostia River. In past events, these volunteers filled two industrial 40-yard refuse containers with trash and recyclable materials.
  • March of Dimes March for Babies. Pepco employees also participate in the March for Babies hosted by March of Dimes. March for Babies supports research and programs that help women have full-term pregnancies and healthy babies.
  • The Montgomery County Agricultural Fair. The Montgomery County Agricultural Fair is a community-based event that helps bring family fun and sustainability together. At Pepco’s booth, the company strives to raise awareness of the different energy-saving programs it offers.
  • The PHI Community Foundation Golf and Tennis Classic. The company sponsors this Golf and Tennis Classic event each year to help raise money to help local families in need with their winter energy bills. The tournament has raised nearly $2.3 million since its inception. Most recently, proceeds from the event were forwarded to Interfaith Works of Montgomery County, the Greater Washington Urban League and Mary’s Center in Prince George’s County.
  • The American Heart Association’s Greater Washington Region Heart Walk. The company has supported the American Heart Association’s annual Heart Walk event for many years, in hopes of raising essential funding for cardiovascular research.
  • Zoolights. Pepco has been the lead sponsor of Zoolights for six consecutive years. This all-LED holiday light show is free at the National Zoo in Washington, D.C., during the winter. Pepco volunteers are on hand to provide tips on energy efficiency and related topics.
  • The Pepco Edison Place Gallery. For more than a decade, the Pepco Edison Place Gallery has worked with nonprofit arts organizations to sponsor a series of diverse, high-quality art exhibits on behalf of the local community. The gallery is free to the public year-round. In addition to its regular exhibits, the gallery opens its doors to nonprofit partners who are looking to hold meetings and various fundraising events in the facility.

In addition, as part of its commitment to educate customers about energy-efficient and environmentally friendly practices, the company funded the construction of the Pepco WaterShed Sustainability Center.

A living classroom and laboratory for sustainable energy and water practices, the Pepco WaterShed Sustainability Center features a solar home and hands-on, interactive displays that educate visitors with energy-saving ideas they can apply in their own homes. The center features real-life demonstrations of native-plant landscaping, constructed wetlands, edible green walls, smart thermostats, high-efficiency HVAC systems, electric vehicle charging ports and more. The center is open to the public and serves as a unique outing opportunity for students and educators.

Visit the company’s website for more information.

7/2/2016 12:00 AM

New research shows the typical 15 percent cap on nonprofit overhead expenses is too low and hurting nonprofits.

If your company or corporate foundation currently sets the typical 15 percent limit on the amount of a grant that can be used to cover overhead and indirect expenses at a nonprofit grantee organization, you may want to rethink that position. After examining the financial records of 20 well-known, high-performing nonprofits, the Bridgespan Group found that overhead varied between 21 percent and 89 percent of direct costs, just due to the nature of the organization’s work. In other words, the restrictions funders are placing on their grantees may be far too low—and leading to a “widespread, vexing starvation cycle” that prevents them from maximizing their impact, according to Bridgespan, a consulting firm specializing in the charitable sector.

The researchers found that flat-rate reimbursement models, common throughout the nonprofit sector, aren’t appropriate because the type of work a nonprofit engages in might require dramatically different levels of overhead and administrative costs than another group doing something else.

Because there is no generally accepted definition of what falls under the umbrella of “overhead,” the researchers started by identifying the indirect costs that should be tracked—those that are not directly attributable to a specific project but are nonetheless necessary and inextricably tied to a nonprofit’s ability to accomplish its goals:

  • Administrative costs. Costs of shared functions housed in headquarters, including leadership, finance, human resources, technology, legal, and bids and proposals.
  • Network and field expenses. Costs for maintaining field and network operations outside of headquarters.
  • Physical assets. Costs for maintaining and acquiring project-related equipment, such as lab equipment and facilities.
  • Knowledge management. Costs for building and maintaining subject and program expertise and internal knowledge, including staff costs.

The researchers then broke down nonprofits into four broad segments based on what they do and how they do it—U.S.-based direct service providers; U.S. policy and advocacy groups; international networks; and research organizations—and calculated the range and median indirect costs for each segment.

Indirect costs for the different segments varied considerably. For example, nonprofit research labs have a median indirect cost rate of 63 percent, nearly two-and-a-half times the 25 percent median rate of direct-service organizations covered in the Bridgespan survey.

But even within each segment, indirect costs ranged a bit, from 21 percent up to about 38 percent for U.S. direct service organizations; from about 23 percent up to 60 percent for U.S. policy and advocacy groups; from about 37 percent up to almost 70 percent for international networks; and from about 39 percent up to 89 percent for research organizations.

In all cases, indirect costs exceeded the typical 15 percent cap that is common among funders.

That difference, the researchers said, is due to the nature of the nonprofits’ work, not because of any inherent inefficiencies. In that sense, the variance in overhead costs mirrors the for-profit sector, where some industries have intrinsically higher indirect costs than others. For example, the study said, consumer staple companies have a median indirect cost rate of 34 percent, while information technology firms go as high as 78 percent. That’s not because IT companies are inefficient—their work just has different overhead requirements, the argument goes.

With so many funders holding to a 15 percent limit for overhead—or in some cases, 10 or 20 percent—nonprofits have to get creative with their finances to make up the funding shortfalls, the researchers said. Foundation program officers might team up with grantees to recategorize some indirect costs as direct costs so that they can be covered by the grant. Other times, funders award capacity-building or general operating grants to close the indirect cost gap, or come up with some other work-around to cover those expenses.

“As a result, we do not know as a sector what it really costs to achieve impact,” the researchers said.

Corporate grantmakers can help remedy this by adopting what Bridgespan calls “pay-what-it-takes” philanthropy—that is, allocating sufficient resources for grantees’ indirect costs, without holding to some arbitrary, precalculated idea of what that figure is. It means having an honest discussion with grantees about their finances, in an environment where they feel comfortable relating such information without fear of repercussions, the researchers said.

“It shifts from an emphasis on what it takes to fund a program to what it takes to achieve impact,” Bridgespan’s researchers said.

For more information on the study, including a discussion on different approaches to addressing the indirect costs of grantees, go to www.bridgespan.org.

6/21/2016 12:00 AM

Brooks Brothers supports a variety of charitable programs, including breast cancer research, affordable housing and environmental programs.

OVERVIEW

Brooks Brothers is one of America’s oldest clothing retailers. Known for its classic styling, the company has sold its men’s suits and outerwear for nearly 200 years, and recently began selling women’s and children’s apparel as well. The company sells its wares in about 200 upscale retail stores and outlets in the United States, as well as about 100 more stores in 15 other countries. Brooks Brothers is privately owned.

GIVING

Brooks Brothers offers a combination of corporate giving and grantmaking through the Golden Fleece Foundation, which the company founded in 2007 to support charities serving the various communities where the company does business.

On the corporate level, Brooks Brothers supports numerous local and national nonprofit groups, providing cash resources, fundraising and employee volunteerism. Some examples of charities supported by the company include:

  • The American Red Cross. Brooks Brothers has a long-standing relationship with the American Red Cross. Its affiliation with the organization began in 1898, just 18 years after its inception, when Brooks Brothers made its first donation of $100 to the Red Cross Society during the Spanish-American War. Ever since, Brooks Brothers has continued its commitment to the American Red Cross with donations, blood drives and more.
  • The 9/11 Memorial. To benefit the 9/11 Memorial, the company crafted a special version of one of its most memorable ties, adorned with the black and teal colors of the 9/11 Memorial logo. Brooks Brothers donates 100 percent of profits from the tie’s sales, but in any event no less than $40 per tie, to the 9/11 Memorial.
  • The Breast Cancer Research Foundation. The company supports this worthy organization whose mission is to achieve prevention and a cure for breast cancer in our lifetime by providing critical funding for innovative clinical and translational research at leading medical centers worldwide.
  • The Central Park Conservancy. Brooks Brothers supports the Central Park Conservancy, which was founded in 1980 with the goal of reversing Central Park’s dramatic decline in the 1970s and restore it to its former splendor. Today, the Conservancy works to restore, manage and enhance Central Park, in partnership with the public, for the enjoyment of present and future generations.
  • Dignity U Wear. Dignity U Wear provides brand-new clothing to people in need, with special programs focused on school children, women in crisis and military veterans. Brooks Brothers is a founding partner for the group’s Suits for Soldiers program, which helps the nation’s veterans as they re-enter the work force.
  • Housing Works. Brooks Brothers supports this group in its mission to end the dual crises of homelessness and AIDS through advocacy, the provision of lifesaving services and entrepreneurial businesses that sustain these efforts.
  • Project Angel Food. Project Angel Food’s mission is to nourish the body and spirit of men, women and children affected by HIV/AIDS, cancer and other life-threatening illnesses. Brooks Brothers provides cash and volunteers who cook and deliver free meals throughout Los Angeles County.

Complementing these efforts is the Golden Fleece Foundation, which is funded primarily through the generosity of Brooks Brothers customers, employees and corporate partners. The foundation coordinates fundraising efforts of these groups to make a significant difference in Brooks Brothers communities, and deliver the combined efforts of charitable events and drives to the most in-need causes.

For more information, visit the company’s website.

News Briefs
7/26/2016 12:00 AM

The National Philanthropic Trust has launched a new, free online exhibit chronicling a nearly 500-year history of philanthropy throughout the modern world.

The National Philanthropic Trust has launched a new, free online exhibit chronicling a nearly 500-year history of philanthropy throughout the modern world. The History of Modern Philanthropy looks at the following distinct time periods and associated themes: 1500 to 1750, “New Meaning in a Changing World”; 1750 to 1890, “Upheaval & Reform”; 1890 to 1930, “Lasting Change”; 1930 to 1980, “Redefining Philanthropy”; and 1980 to the present, “Global Outlook of Giving.” The digital exhibit includes some 200 one-paragraph entries and nearly 100 historical images, documents and audio/video clips to enrich the viewing experience. The exhibit can be seen online at HistoryofGiving.org.

News Briefs
7/22/2016 12:00 AM

The Walmart Foundation has awarded $2.6 million in grants to nonprofit organizations that support veteran reintegration.

Reaffirming its support for transitioning military members and their families, the Walmart Foundation has awarded $2.6 million in grants to nonprofit organizations that support veteran reintegration. The grantees include the American GI Forum National Veterans Outreach Program, which stabilizes veterans through housing and job assistance among other services, which will receive a $1 million grant to expand services to veterans’ spouses and veterans over 40; and Swords to Plowshares, which will receive a $1.6 million grant to enhance the California Veterans Employment and Training Collaborative and the Texas Veterans Employment and Training Collaborative.

News Briefs
7/18/2016 12:00 AM

The Citi Foundation has awarded grants to 40 nonprofit organizations to establish new approaches to long-standing urban economic challenges.

The Citi Foundation has selected 40 nonprofit organizations as inaugural recipients of the Community Progress Makers Fund, a $20 million grant initiative to support visionary nonprofit organizations in their efforts to establish new approaches to long-standing urban economic challenges in the United States, including economic development, environment sustainability, urban infrastructure and affordable housing. According to the foundation, the Community Progress Makers Fund will support community organizations that are leading urban transformation efforts that create economic opportunities for low-income households and communities. The 40 organizations work in six U.S. cities—Chicago, Los Angeles, Miami, New York City, San Francisco Bay Area and Washington, D.C. Each organization will receive $500,000 in core operating support, will have access to technical assistance from leading national researchers and experts and will have opportunities to connect with other grantees to share and learn best practices.

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  • Meet the Editor

    Nicholas King
    Editor

    Nicholas King has served as editor of Corporate Philanthropy Report since 2007, and he continues to be impressed with the philanthropic efforts of the nation’s business sector.

    Drawing on an educational background in English and environmental policy, Nicholas began his journalism career in 2000 when he was brought on as editor of Environmental Laboratory Washington Report, a niche-market subscription-based newsletter serving the environmental testing industry. After seven years of honing his craft, Nicholas expanded his writing/editing portfolio to an entirely new field of interest - corporate philanthropy. As editor of Corporate Philanthropy Report, he stays abreast of the latest developments affecting corporate giving—and the charitable/nonprofit sector more broadly—providing his readers the “need to know” information vital for making the best use of their limited charitable dollars.

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