Difficult To Heed Polonius’ Advice These Days

Some notable news via American Theatre, for those who have found it difficult to heed Polonius’ advice of “neither a borrower nor lender be.” (aka pretty much all of us)  The Acting Company has created a program to pay off up to $10,000 of student loan debt for any actor that is cast as in their 2022-2023 touring company.

The loan payment is made directly to the lender at the end of the repertory season. There is language about the available grant funds being split equally between all the actors, up to a maximum of $10,000 which makes me wonder if this is funded by an endowment whose value may fluctuate due to the stock market. Or perhaps they are projecting a set number of actors will have student loan debt and if the number exceeds their projections, the share of the pool will be less.

In addition to receiving the debt relief, the website says the actors will have the opportunity to:

  • Participate in a financial literacy seminar designed to ensure their understanding of the financial impact of grant funds, and to provide overall guidance on financial management and self-advocacy for theater artists. The Actors’ Funds, Artists’ Financial Support Group, or a similar organization will be engaged to conduct a program specifically for our actors.

  • Participate in teaching artist training sessions led by TAC teaching artists and education consultants. This will add to the pool of qualified alumni available to lead The Acting Company’s education programs and provide a potential new source of income to the actors.

  • Complete a season-end survey documenting their experience with the program and its impact on their artistic, professional, and financial wellbeing

Companies have long offered to pay the tuition of employees in order to help with their career advancement. The fact that The Acting Company is offering student loan debt relief is a reflection of national conversation about student loan debt. It will be interesting to see if the tuition payment benefit is replaced or joined by debt relief as an employment benefit.

I suspect it may not be offered to the degree college tuition is. Not every employee will be interested in attending college, but a large percentage of employees may be carrying student debt.  But companies seeking skilled labor may choose to offer debt relief in order to remain competitive.

 

Spend, Not Give Donations?

The folks on the Non-Profit Happy Hour Facebook group posted a link to a Ohio State University (I’m sorry, THE Ohio State University) post which claims that charities should not use the word “give” when requesting donations.

They say it is a matter of feeling in control of how a donation is used. According to an analysis of the responses by 2700 people who participated in seven studies, people would rather give their time rather than money. This conflicts with charities’ general preference for monetary donations.

Overall, the study found that people prefer giving their time to nonprofit organizations rather than their money, because they feel more personal control over how their time is used, according to Malkoc.

“It is not possible to separate ourselves from our time, the way that we can from our money,” she said. “When you give your time, it is still a part of you. You are still living through it.”

The suggestion they make is that using the word “spend” provides people with a greater sense of control and therefore makes them apt to donate greater amounts.

People approached for a financial donation offered more than twice as much when they were asked to “spend” their money ($94) than when they were asked to “give” their money ($40).

And here’s why: Participants were asked several questions that measured how much control they would feel over their donations. Results showed that people who were asked to spend their money reported feeling more control than those who were asked to give their money.

[…]

When given control, people were nearly equally interested in giving, whether it was time or money.

“If nonprofits gave more control over how donations are spent, or made donors feel like they were spending their money rather than giving it, that may alleviate some of the disconnect people feel about financial gifts.”

Having read this, I believe there would have to be a good deal more work done on messaging and terminology employed to give people a sense of control rather than using a term like “spend.” The sense of donations being a transactional relationship is already a big problem in terms of the belief non-profits need to be run like a business; conceiving results achieved in terms of return on investment; large donations providing access, perqs, influence, and naming rights; the last of which many organizations have been trying to disentangle themselves.

Not to mention the growing prevalence of donor advised funds which provide tax benefits and a high degree of control without the obligation to disburse.

It seems like employing terms like “spend” will only exacerbate current problems and serve to entrench the use of restricted giving. While there are ways to give donors a greater sense of control over how their money is spent and technology available to facilitate the process, I would be concerned that this would mean staff would be further diverted from providing core services to underserved communities.

The model the study seems to be suggesting feels like it would be along the lines of the ubiquitous TV ads that told you that for $4/month you could purchase a meal for a child and that you would receive a packet with updates about the child. As a donor to this program, you feel a high degree of control over how your money is being spent.

The better solution is probably to employ broader, more consistent messaging emphasizing unrestricted giving without the expectation of expensive benefits. People absolutely do deserve a sense of assurance and control. You don’t want to give to con artists who are going to run off with your money. But that can come from providing easier access to information attesting to the legitimacy of the charity.

While there are websites that provide that sort of analysis, people aren’t widely aware of them as resources. The metrics these sites have traditionally employed have been problematic. There has been a tendency to focus on overhead ratio as a measure of effectiveness. There are probably a lot of diversity, equity and inclusion issues with what data is used and how it is analyzed too. Ultimately, a complete overhaul over a long term will be necessary.

Inheriting Your Great-Great Grandparents’ Investment In Your Future

Early in April you may have seen that Yellowstone National Park is celebrating its 150th Anniversary by offering an Inheritance Pass for $1500 with the catch that it can’t be used for another 150 years.

Well, actually while the pass isn’t usable until 2172, purchasers get a complimentary annual pass good for a year after the first use.  I am calling attention to this not to suggest this as a possible program, (I mean right now how many of us can guarantee access to our programming in 10 years much less 150), but rather to point out that there is often at least a small niche interest in bespoke arrangements. In this case, the target is families committed to conservation.  It can be worthwhile to be flexible about exploring those opportunities.

Their hope is that the Inheritance Pass—a campaign created by advertising agency Havas Chicago— could create an important legacy among families that are committed to conservation.

Those who choose to invest in the Inheritance Pass will receive it as soon as August of this year. It will feature the name of the donor on the back. Yellowstone Forever says that the money it raises through the campaign will go toward supporting scientific studies, trail maintenance, and wildlife conservation, among other projects.

I tried to find out how many people might have taken advantage of this program in the few weeks it has been available but couldn’t find any information. 

Quite honestly, even though they promise to keep track of the ownership of the passes, I think purchasers have to acknowledge buying the pass is tantamount to making a straight donation to the park. Will there even be websites and email addresses by which to contact Yellowstone Forever to retrieve a lost pass in 150 years?

In terms of my earlier reference to donor programs with niche appeal, the pass one receives is a physical token to accompany the concept of investing in the park to benefit future generations. It would be great if families actually retained the pass across five generations (based on a generation being about 30 years), and presented it for redemption. But the pass is just an appealing prop in a conservation donation campaign.

I would be interested in knowing how they calculate the tax deductible portion of the pass. Do they use $1500 less the current cost of an annual pass to figure out the received benefit value vs. the donated portion? Or will it be the cost of the pass in 150 years which may exceed $1500?

(Actually, given that the person making the donation will receive no benefit, I would assume the whole amount is deductible if they refuse the complimentary annual pass available in 2022.)

People Fund People Not Organizations, So Maybe Do That Even More?

Last month Marginal Revolution blog posted an excerpt of a piece by Adam Mastroianni about how grant funding is broken.  I immediately hopped over to see what he had to say. While his post was mostly focused on grants funding science and the Rhodes scholarship process, there were a lot of common elements that are likely to be familiar to all who apply.

One of the first observations Mastroianni makes is that it is very easy to hack the grant process thanks to relationships you have. This both confirms that people give to people and organizations and that groups that may really need the funding but lack access to guidance, resources and insiders often get locked out.

For instance, most Rhodes selection committees include a cocktail party as part of their interview process. This is a pretty bad way of judging whether someone is a good person, but it’s a pretty good way of judging whether they are pleasant to talk to at a cocktail party, and so Rhodes Scholars are often charming conversationalists and sometimes bad people (see: Bill Clinton, Bobby Jindal, noted anti-vaxxer Naomi Wolf).

[…]

For example, the Rhodes Trust probably hopes that by picking the most accomplished college seniors and giving them a super prestigious prize, they will encourage the youngsters to do lots of brave and risky things. Instead, the most popular destinations for my Rhodes cohort were top-tier medical schools, law schools, and PhD programs (guilty), as well as a handful of consulting companies––exactly where we would have gone if we hadn’t gotten the scholarship.

Generally, Mastroianni’s criticism is that most grant programs reward people who are already successful to the detriment of those they say they wish to help.

Mastroianni’s suggested solution is to take advantage of the flaws in the system to force it to reach into the underserved cracks and crevices. His system, which he refers to as “Trust Windfalls,” essentially allows one to provide a benefit to friends–but only once.

But isn’t it unfair that a bunch of money should go to my friends? Also yes. That’s why, if I was an Agent, I should only get one turn at awarding Windfalls. Then I’d have to pass on the responsibility to someone very different from me who I trusted to give out the second round. If I did it right, Trust Windfalls would eventually find their ways into corners of the world that conventional grants could never reach. Just a few trusted links away from me might be a Botswanan ichthyologist or a trucker smuggling medical supplies into Kiev––people who may not speak English or know the right things to say on an application or even realize there are grants they could apply for in the first place. Making Agents temporary also prevents the Trust Windfalls from being hacked: once people know you’re an Agent, every interaction with you becomes a grant application.

If people hate conventional grant funding so much, why haven’t they tried something like this? Honestly, I think it’s because trusting people seems a lot scarier than it really is. Funders have to trust Agents. Agents have to trust their grant recipients, and they have to trust the person they nominate as the next Agent. (We should maybe call the organization that oversees all this the Trust Trust.) Anybody could betray the trust put in them, which would be a huge shame and very embarrassing.

While this is an interesting idea in theory, I think it is overly idealistic in terms of thinking that people will pass the baton on to people outside their own peer group in any great numbers. Funds may be sent to a biologist studying the ecology of a Latin American country or an aid worker in Ukraine, but is the money going to a life long resident of that country or the sister of a person the Trust Agent went to college with who is working for a university program or an NGO with roots in the US? Certainly Mastroianni alludes to the fact something like this could happen.

I think the structure he suggests has a better chance at providing an equitable distribution of funds than the current system. I like the idea of leveraging the problems of current practice into a solution. But the funding source would probably need to be plugging detailed data into relationship mapping software to ensure that the 4th or 5th recipient in the chain not have multiple common ties with the 1st and 2nd people in the chain.

I guess the fact I can identify a flaw and potential solution so easily indicates it is possible to refine his proposal into something workable.  Take a read of his proposal and see what you think.