Newsletter 11/27: New twist on charitable giving: trust
Newsletter 11/27: New twist on charitable giving: trust
Plus: Charlotte apartment boom is forcing rents down; Big Union County flea market to close; Plan to bring vacant Independence Boulevard lanes back to life; Interfaith Thanksgiving canceled
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Gifts without strings create a collaborative, effective relationship between donors and nonprofits, supporters say; a ‘changing culture and conversation around philanthropy’
Trust-based philanthropy enables local nonprofits to innovate and provide highly effective services for community members, such as Care Ring's mobile health clinic that works weekly in neighborhoods across Charlotte. (Photo courtesy of Next Stage)
By Kerry Singe
A new approach to charitable giving is gaining ground.
Call it angel investing for nonprofits.
Philanthropy has traditionally looked like this:
A person or group picks a charity. They dictate a program to support. They write a check.
Later, the organization shows the donor statistics verifying how it accomplished what it said it would do.
“When you give with restrictions, it suggests you know better than the nonprofit,” says Josh Jacobson, CEO of Next Stage, which consults with nonprofits. “We recognize philanthropy is inequitable — people who have the money to give are coming from a place of privilege. When philanthropy comes with this red tape, it’s a continuation of that privilege as a framework.”
The new way?
Trust-based philanthropy.
Donors give money to nonprofits for leaders to use as they see fit, no strings attached.
Charlotte nonprofit leaders say it is more effective and respectful toward those benefiting from the donations.
Leaders say this new approach is needed. The traditional method, they say, can hamstring organizations and hurt the people who need the most help. Trust-based philanthropy has been talked about in nonprofit circles for more than a decade, but the idea has grown more popular in the wake of the pandemic and the summer 2020 protests calling for greater awareness of racial injustice.
Defining success: Community leader Jamall Kinard got a first-hand look years ago at how financial support and success could be misaligned. He worked for a nonprofit that supported students in public schools to empower them to be successful in class and life.
His employer’s funding depended, in part, on hitting specific goals. Yet, Kinard felt the goals missed the mark as the organization was deemed to be successful even though many students ended the academic year frustrated or disillusioned.
“As long as we hit the metrics mandated by the people giving us the money, they were calling that success,” he says. “But it was the wrong way to solve the problem.”
Today, Kinard leads a different nonprofit, which is being funded through the more collaborative, trust-based approach. As executive director of Lakeview Neighborhood Alliance, Kinard works closely with United Way of Greater Charlotte, which gives the alliance money to support operations and works closely with the alliance when selecting vendors to provide services for the neighborhood.
Kinard says he is able to have honest conversations with United Way about what is working well and the challenges his group faces. If there are setbacks, such as when water pipes burst and an office move was delayed, he doesn’t worry about funding being pulled. Leaders from all sides communicate regularly.
“I think United Way has tapped into a great approach,” Kinard says. “People, like the service providers, are accountable to us now. It is inviting people in, instead of calling people out in the conversation, in a more conscious way.”
‘Myth of 15 percent’
Philanthropic giving, or the value of money donated and time volunteered, worldwide has been estimated to be worth more than $2.3 trillion, according to Citi. In Charlotte, a 2019 report by UNC Charlotte’s Urban Institute estimated that households in the 32-county Carolinas Urban-Rural Connection region gave a combined $4.6 billion annually, while grants and donations from foundations, corporations and bequests amounted to an additional $2.15 billion.
The history of philanthropy in the U.S. mirrors generational changes. The Silent Generation, people born between 1925 and 1945, approached philanthropy with a relatively trusting outlook, Jacobson says. Once members of this generation found a cause they liked to support, they tended to stay committed long-term.
The Baby Boomers, however, were much less trusting and saw nonprofits akin to government agencies needing oversight. In the 1970s and 1980s, charities were growing larger and spending more on administrative costs.
That helped lead to what author and nonprofit advocate Dan Pallotta calls “the 15 percent overhead myth” in his 2013 Ted Talk, “The Way We Think About Charity is Dead Wrong.”
People began scrutinizing nonprofit budgets, praising money spent on programming (e.g. bags of rice to support a food bank) and critiquing money used to pay for operational costs, such as employees to do marketing campaigns or repairs to a heater in the nonprofit headquarters.
“That no more than 15% should be spent on overhead has been drilled in everyone’s head,” Jacobson says. “That really keeps an organization from ever growing. If they can’t invest in marketing and human capital, we keep nonprofits small and prevent them from growing to where impact could be greater.”
The Women’s Impact Fund in Charlotte started changing how it gave funding in early 2020 because of the pandemic. It chose to give unrestricted funding and encouraged nonprofits to “do what you need to do to serve folks during this time,” says executive director Patricia Massey Hoke.
The change, for example, allowed a group that works with immigrants that had received money for health services to pivot and serve hot meals to hungry families.
The Fund has continued to give unrestricted grants, which also has meant changing its oversight from reviewing metrics tied to a specific goal to having a relationship-based approach. That means talking with nonprofits about how things are going and asking how the Fund can support them in other ways, such as by having members volunteer or leverage their networks.
“There is a changing culture and conversation around philanthropy,” Hoke says. “We are all benefiting from that.”
Part of April Whitlock’s mission at LendingTree is to help emerging nonprofits act like businesses. Whitlock serves as head of corporate citizenship and is executive director of The LendingTree Foundation. She also oversees the LendaHand Alliance Cohort, a multi-year investment that gives 10 non-profits $125,000 a year for three years.
Whitlock describes the approach as relational philanthropy, which includes providing unrestricted funding and sharing social capital and her organization’s assets. She says the 10 nonprofits chosen for the cohort had great ideas but needed a safety net.
“They needed an angel-funder,” Whitlock says. “They needed someone to say, ‘You are amazing, your idea is amazing, and you need support to take it to scale.’”
LendingTree does not dictate how the nonprofits spend the money, but Whitlock supports the nonprofits by meeting with them quarterly and providing help with items such as consulting services, board member training, fundraising and marketing.
Whitlock says nonprofits have succeeded in ways such as increasing revenues from $300,000 annually to more than $1 million and hiring staff. She is also working to raise awareness among donors of the need to fund all aspects of a nonprofit.
“Why do we treat for-profit businesses very differently than we treat nonprofits?” Whitlock says. “I’ve been at dinner with folks who say ‘I would never give money that goes to pay for salaries.’ But why? Someone has to do the work.”
Shifting power structures
In the Lakeview community in west Charlotte, residents are getting more say in how services are being provided for them. That’s a big change in how things have historically been done, particularly for poorer people of color, Kinard says. [Edited 11/27/23 to correct location of Lakeview]
“Philanthropy is built on whatever foundations, corporations or whomever decide they want to give. They have mandated what the problem is and what the solution is, and it is very problematic. It’s not built on relationships. It’s not built on hearing what people have to say,” Kinard says. “We’ve allowed that type of philanthropy to reign throughout America and across the world, and I think it’s more of an ego stroke than about solving societal problems.”
Instead, Kinard says, trust-based philanthropy works when power is redistributed from being held solely by those with the money. In his neighborhood, residents now weigh in on the quality of services paid for by United Way and provided by a third party.
One service provider, for example, had promised to be available three days a week, but residents did not find the provider accessible. Kinard says United Way has listened to residents, and some vendors have been replaced while others made changes based on the feedback.
“United Way has found a way to shift the power relationship,” he says.
Jacobson says accountability will always be important, and donors should ask questions about how money is being spent. But return on investment may be demonstrated differently than it has in the past. Instead of metrics, a nonprofit may provide a site tour. Regular and honest communication is a must. Donors may need to take a longer-term outlook. Ultimately, Jacobson says, it comes down to the relationship that is built.
“We should be trusting nonprofits more. Nonprofits are overseen by professional staff, and people are sacrificing to do this work,” he says. “I’m not going to ask to see the kitchen and check the grill of my favorite restaurant to know it’s clean back there. With a nonprofit, as long as the value proposition is clear, why would I care how dollars are spent?”
Kerry Hall Singe is an award-winning former Charlotte Observer business reporter. In addition to writing for various publications, she helps her clients tell their stories and manage content across multiple media platforms.
The Charlotte Ledger is the media partner of The UnFundable Project, an initiative by nonprofit consultant Next Stage that seeks to raise awareness about trust-based philanthropy through a grant-making initiative. The Ledger is a media partner because we believe local nonprofits play a vital role in improving the quality of life in the Charlotte region. Find out more about The UnFundable Project, including a February celebration, here.
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➡️ Coming tomorrow: The Ledger’s annual charity shout-out, highlighting local nonprofits recommended by our community of paying members.
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How local stocks of note fared last week (through Friday’s close), and year to date:
Charlotte’s apartment construction boom is leading to lower rents, data shows; -4.6% in South End
The recent surge of apartment construction in Charlotte is pushing rents down, even in some of the hottest areas of town.
New data from real estate information company CoStar Group shows that average rents are down 4.6% in South End, 3% in uptown and 2.2% in SouthPark, compared with a year ago. Apartment vacancies in the Charlotte region have hit a record high of 10.7%.
It’s simple supply and demand at work: The number of people moving into apartments in the Charlotte region is increasing (+6,500 this year), but the number of apartments available is increasing even faster (+11,000), resulting in higher vacancy levels that are forcing apartment owners to drop rents.
“We have started to see supply catch up with and now exceed demand, which is leading new and existing properties to compete for renters by lowering asking rents and offering concessions,” says Chuck McShane, CoStar’s director of market analytics in the Carolinas.
In early November, the average rent for market-rate units was $1,559/month, down from $1,589 a year earlier. But it’s still above the $1,271/month in November of 2019.
And don’t expect spikes in rents anytime soon, McShane says, because there are 31,000 apartments under construction in the Charlotte region. But fewer groundbreakings this year could translate to tighter supplies and higher rents in late 2025 and 2026, he says.
Here’s the breakdown of average rent changes in the last year by submarket:
Union County, +1.3%
Gaston County, +0.8%
East Charlotte, -0.4%
Iredell County, -1.1%
Cabarrus County, -1.2%
University, -1.2%
South Charlotte, -1.7%
North Charlotte, -1.8%
SouthPark, -2.2%
Huntersville/Cornelius, -2.3%
Uptown Charlotte, -3%
West Charlotte, -3.3%
South End, -4.6%
York County, -4.8%
—TM
Related Ledger article:
“Charlotte’s rising rents take a break” (🔒, Oct. 5, 2022)
Big Union County flea market to close after 39 years; ‘It’s Black Christmas for everybody,’ vendor says
Sweet Union Flea Market — one of the region’s largest flea markets, where hundreds flock to buy and sell goods every Saturday and Sunday — will close Dec. 31 after 39 years of operation.
In a letter to vendors last week, the family that owns the market said it’s closing because of the ages of three of its owners, who are in their 60s and 80s. The market is owned by the Love family and sits along U.S. 74 west of downtown Monroe.
“None of the remaining Owners want to be responsible for the running of the Market. Nor do the grandchildren,” the letter said. A voicemail left for the Love family on Sunday was not returned.
Union County property records show the tax value for the 16-acre parcel the market sits on is $2.8M.
The flea market was started in the spring of 1984 by Vann Love, a Monroe plumber and contractor who also opened the Sweet Union Playhouse at the same location, according to Charlotte Observer archives. A tornado swept through the market in October 1990 and destroyed it, but it was rebuilt in the months that followed.
Former Charlotte Observer food writer Kathleen Purvis wrote in 2007 about the flea market’s changing demographics and Latin American food offerings as a result of the growing Hispanic population who did business there.
Vendor Luis Roberto Maestre started selling ice cream, popsicles and mini doughnuts at the flea market in 2008 under the business name “La Michoacana” and was able to grow the business to expand to a brick-and-mortar popsicle store called Paleteria La Michoacana in Concord in 2015 that still operates today.
Maestre told The Ledger that the 600-some vendors were shocked to get letters from the Love family on Nov. 19 with news that they’d have only weeks left to sell at the flea market. For many families, Sweet Union Flea Market sales are their main source of income, he said.
“Everyone cried. It’s Black Christmas for everybody,” he said.
He said vendors wished they’d have been notified earlier that the family intended to close the market, so they could have pulled together and possibly purchased the business. He said some are reaching out to local government officials to see if there might be another place where the flea market can operate. —CB
After years of sitting empty, those lanes in the middle of Independence Boulevard could be used again starting next year
There’s now a timeline for the reopening of the long-empty bus lanes in the middle of Independence Boulevard: next year.
The lanes in the middle of Independence have been unused for the last few years and are an occasional source of aggravation for commuters stuck in traffic who see a couple empty lanes that could be used to speed things up.
The lanes, separated by concrete barricades, have been closed since the reconstruction of the Hawthorne Lane bridge as part of the project to extend the Gold Line streetcar. The bridge reopened in 2021, but the lanes need some minor construction work to reopen and become suitable for buses to use.
Now, that work appears to be within sight: The Charlotte City Council tonight is expected to approve spending $950,000 to do the work. The council’s agenda says the construction is supposed to be complete “by mid-2024.” The lanes are eventually destined to become express toll lanes — but that is likely many years in the future. —TM
Related Ledger article:
“You Ask, We Answer: What’s the deal with the empty bus lanes on Independence?” (🔒, Oct. 6, 2021)
You might be interested in these Charlotte events
Events submitted by readers to The Ledger’s events board:
THURSDAY: Sustain Charlotte's 704 Impact Academy - Session 1, 6-8 p.m., Charlotte Art League, 4237 Raleigh St. Impact 704 Academy is Sustain Charlotte’s advocacy-focused series about sustainable land use and transportation. Attend one, two, or all three sessions and meet others who share your desire to make an impact! This no-cost event is supported by Southminster. Light refreshments will be provided. This is an alcohol-free event. While we won’t have childcare available, you’re welcome to bring your kids and supervise them. Free.
◼️ Check out the full Ledger events board.
➡️ List your event on the Ledger events board.
In brief:
Interfaith Thanksgiving canceled over Gaza protest: The Mecklenburg Metropolitan Interfaith Network canceled its annual Thanksgiving service last week after learning of a protest planned at the event by members of the Muslim and Arab communities, who said they wanted to raise awareness of what’s happening in Gaza said they wanted to have a discussion of “the issue of Zionism.” (Observer)
Raise for Novant CEO: Novant Health CEO Carl Armato earned $5.03M in 2022, a 19% raise from his 2021 compensation. He leads the Charlotte region’s second-largest hospital system, behind Atrium Health. (Biz Journal, subscriber-only)
Troubles for Gastonia’s baseball team: Gastonia’s minor league baseball team, the Gastonia Honey Hunters, has been kicked out of its league, and the city of Gastonia is attempting to push the team out of the city-owned stadium it plays in, according to a lawsuit. The Honey Hunters had encountered financial trouble and had fallen behind in payments to the league, utilities and players. (Gaston Gazette)
Money-laundering allegations against sneaker store owner: The founder of the Plaza-Midwood sneaker store Social Status has been accused by federal authorities of participating in a money-laundering scheme. According to court documents, James Whitner Jr. received payments for shoes and apparel that were improperly sold to Chinese sellers. Whitner, who has not been charged with a crime, said the allegations are unfounded and unjustified. (WCNC)
Tepper’s Panthers frustration: Upon leaving the locker room after the Carolina Panthers’ loss Sunday on the road against the Tennessee Titans, owner David Tepper “shook his head and yelled, ‘F---!’” (The Athletic’s Joe Person on X/Twitter)
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