For Immediate Release

EXECUTIVE DIRECTOR PHIL BUCHANAN APPEARS ON CNN TO DISCUSS PENDING FOUNDATION LEGISLATION

Boston, MA: Center for Effective Philanthropy Executive Director Phil Buchanan appeared Friday, May 23 on CNN Financial News' Market Call to discuss pending legislation that would exclude administrative costs from calculation of the 5 percent minimum payout required of foundations. Joining the sponsor of the bill, HR 7, "Charitable Giving Act of 2003," Congressman Harold Ford (Democrat of Tennessee), Buchanan stated that the payout provision could have "unintended consequences" that would hurt nonprofits by prompting foundations to cut activities that are valued by nonprofits.

While not advocating for or against the provision, Buchanan noted that Congress and the public need to understand that effective foundations do much more than "just get the grant check out the door" - providing an array of other services through administrative costs that benefit the nonprofit sector and those served by the sector.

Buchanan cited the results of a 2002 Center for Effective Philanthropy survey of 926 grantees of 23 large, private foundations. Grantees were asked what their preferred level of engagement with a foundation was, from 1, described as "foundation writes a check and there is no more contact," to 7, "active, continuous engagement with the grantee." Just 1 percent chose "foundation writes a check and there is no more contact." Nearly 90 percent chose a 4 or higher and more than a quarter selected a 6 or a 7, the highest level of interaction on the scale.

Rep. Ford defended the provision but said he was open to further discussion on this matter.

ABOUT THE CENTER FOR EFFECTIVE PHILANTHROPY

The Center for Effective Philanthropy is a nonprofit, nonpartisan organization dedicated to advancing the practice of philanthropy by providing management and governance tools to define, assess, and improve overall foundation performance.

Major funders of CEP include: The Atlantic Philanthropies, David and Lucile Packard Foundation, Surdna Foundation, Rockefeller Brothers Fund, John D. and Catherine T. MacArthur Foundation, Charles Stewart Mott Foundation, and Charles and Helen Schwab Foundation.