Is $2.5 Million for New Offices for a Grantmaker Group a Sign of Bloat in the Sector?

Philanthropy New York, one of the premier regional associations of grantmakers, is hitting up its members for $2.5 million to finance a move to new and improved office space. Should it get the money? 

First some backstory. The group's current lease at 79 Fifth Avenue ends in June 2015 and renewing was not an option. The association raised $1.67 million back in 2005 to move to its current space, so now’s the time to move into the next decade.

PNY established "Fund for 2025" to raise $2.5 million for its upcoming move, and the money will go toward a Philanthropy Information and Networking Center at 1500 Broadway in Times Square, technology upgrades, program expansion, and the establishment of a public policy fellowship program.

“If our members are to be fully positioned to tackle the complex issues our city, nation and international communities face, we must be able to provide the appropriate level of educational programming and convening that undergirds their work,” said Fund for 2025 Co-Chair and Altman Foundation President Jane B. O’Connell. “The need to move presents a particularly well-timed opportunity to create the physical space that will support the ambitious elements of our new strategic plan, and position PNY to respond to the demands of the growing foundation community.”

PNY’s first step is to create a new physical space, which will cost $935,300. Then, it’ll have to kick in $300,000 for technology and communications and $816,000 to create the public policy fellows program. Finally, $351,000 of this money will go to expand program capacity and $106,000 to developing new lines of fee-based services.

That's some serious money. But will a new physical space really translate into better grantmaking and more opportunities for nonprofits and New York’s most vulnerable residents?  

It's a question worth asking, and here at IP we're always attuned to the problem of bloat in the philanthrosphere, and not just at foundations, with their armies of program officers micromanaging grantees instead of just providing the multi-year general support that everyone needs. We also think about bloat as it relates to the maniacal networking among funders. In addition to a multitude of funder affinity groups, many of which have their own staffs, there are 34 regional grantmaking associations, with combined annual budgets of $34.8 million. 

Naturally, there's also a Forum of Regional Associations of Grantmakers, with its own five-person staff. And we haven't even mentioned national outfits like the Council of Foundations and Exponent Philanthropy. 

Our quick math finds that regional grantmaking associations, along with the top two national funder groups, together spend around $50 million a year. 

Anytime you see associations of associations, you have to start wondering. Professionals of all stripes like to think they're so important that they need constant hobnobbery among peers to exchange profound thoughts on trends and best practices in a field that, to them, stands at the center of the universe.

Sure, when you're talking about advertising firms pumping dues into professional groups, or jetting off to networking conferences, who cares? But philanthropy is different, since every dollar that goes into this kind of thing is a dollar that doesn't go to the ultimate intended beneficiaries of taxpayer-subsidized charitable giving. 

What should we think about all that spending? Is it too much? 

I suppose one way to approach that question is to look more closely at what a place like PNY actually does.

Like most such outfits, PNY does a number of things beyond the most obvious mission of creating a place where philanthropoids can network and learn from one another. (PNY has about 285 members engaged in grantmaking in the New York City region.)

PNY also helps the philanthropic community connect with the spheres of government and public policy as well as business, and helps to nurture partnerships across sectors.

“Neither we nor any grantmaker can hope to have real impact without creating partnerships,” said the Surdna Foundation’s Phillip Henderson has said in touting PNY. “Philanthropy New York understands the importance of collaboration and plays a special role bringing prospective partners together.”

That makes a lot of sense, and Henderson is right about the crucial leveraging potential of partnerships. Remember, even the biggest foundations are tiny in comparison to the problems they're tackling, and have miniscule resources compared to government and business. The New York City Department of Education spends as much money in a week as the Ford Foundation spends in a year. 

The leverage point also extends to all that networking among funders, who are more likely to make a dent in problems if they know what best practices to embrace and, in some instances, concentrate their fire in a coordinated fashion. There needs to be places and people that help makes these connections happen. 

PNY has ramped up its programs from under 100 meetings per year to around 170. Its new space will feature smaller staff offices and larger meeting spaces for philanthropoids to gather and put their heads together. PNY currently employs 12 staff.

Clearly, the funders think this is money well spent. Over $2 million in early pledges has already come in for PNY's Fund for 2025 campaign. 

And I guess we'd have to agree with those funders. Yes, networking can involve a lot of free lunches and self-important blather, and the bloat question needs to be addressed in a sector that loves to schmooze and hear itself think aloud.

In the end, though, nobody can dispute the value of leverage in the face of society's biggest challenges.