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Nonprofit news roundup – Week of 01.21.08

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* With roughly $2 billion in assets, internet-search firm Google launched its philanthropic arm, unveiling nearly $30 million in grants and investments for the first set of major five- to eight-year initiatives to tackle big global problems, a massive undertaking, known as Google.org, that philanthropy experts say blurs the borders between the for-profit and nonprofit worlds, The Wall Street Journal reported Jan. 18 [subscription only].

* A new study shows university endowments are reporting an average investment return of 16.9 percent for the last fiscal year, the strongest since 2000, but still not keeping pace with the broader U.S. stock market, The Wall Street Journal reported Jan. 17 [subscription only]. The fading success of alternative investments such as venture-capital and hedge funds, which have come to account for over 40 percent of an average college endowment’s investments, has become evident as many underperformed regular stocks, a study by the Commonfund Institute shows; despite strong returns universities on average spent only 4.4 percent of their endowments last year.

* More nonprofits are filling their top-level management positions with for-profit recruits, who often find the transition surprisingly lengthy and strenuous, BusinessWeek reported Jan. 10. The Bridgespan Group, a management-solutions firm for nonprofits, predicts the nonprofit leadership deficit will have grown to 640,000 positions by 2016 because of baby-boomer retirement, sector growth and a lack of internal training programs.

* The Red Cross may cut as many as one-third of its headquarters staff, or nearly 1,000 employees, and trim regional management, The New York Times reported Jan. 16. The cutbacks come in the face of a $200 million operating deficit, but also have been cited as a positive move for an organization many have long thought top-heavy.

* Yale University will sharply increase financial aid for all undergraduates whose families earn $200,000 or less annually, The New York Times reported Jan. 15. The move, which will increase the university’s annual spending on financial aid by $24 million to over $80 million and cut students’ average costs in half, comes at a moment when Congress is pressuring universities with large endowments to spend more and reduce charges.

* Cancer-research funding may take a new, more daring direction if funders like venture capitalist Andrew Rachleff have their way, The San Francisco Chronicle reported Jan. 15. Rachleff is using his multimillion-dollar cancer research fund to back innovative, high-risk projects, arguing that more traditional scientific funders must learn to be less cautious if they hope to cure diseases like cancer.

* Churches are facing more frequent visits from the tax collector as creative fundraising schemes that include real estate portfolios, sports centers and shopping malls tread the divide between charity and profit, The Wall Street Journal reported Jan. 2. Though much of the public scrutiny has been fixed on mega-churches, even more traditional congregations are facing accelerated assessments.

* Andy Grove, co-founder and former chief executive of Intel Corp., has pledged to donate as much as $40 million to the Michael J. Fox Foundation for Parkinson’s Research in New York to fund basic research and encourage further donations by setting up a “Grove Circle” of givers, The Wall Street Journal reported Jan. 11. Grove, who was diagnosed with Parkinson’s in 2000, says he considers such collaboration a good way to provide continuity to the various Parkinson’s research projects he supported in the past.

* A second founder of nonprofit watchdog GiveWell has been reprimanded by the organization’s board for adopting a false name in order to promote GiveWell online only a week after the group’s other founder and former executive director was punished for a similar infraction, The New York Times reported Jan. 15. Both suffered $5,000 pay docks and will remain with the organization as program officers.

* The Boston Foundation’s recent report on the state of the city’s arts community prompted a “die in” by members of smaller arts groups that jokingly requested $500 “encouragement grants” for funeral arrangements, The Boston Globe reported Jan. 12. The “artyrs” acted in response to the report’s assertion that while Boston’s larger institutions showed signs of sustainability, small, struggling organizations should consider shutting down.

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