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From the Archives: Giving Well: Guidance Counselor

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Michael Bailin’s new style of grant making creates sustainable programs that help more young people and serve as models in the field. Photo by Walter Smith

Always interested in highlighting philanthropic efforts, Worth in its October 2002 issue featured Michael Bailin, president of the Edna McConnell Clark Foundation from 1996 to 2005. During his tenure, Bailin helped to transform the foundation’s grantmaking strategy, and the piece helps demonstrate to others how to employ new grantmaking tactics for their own charities and how to contribute to EMCF, as well.

Michael Bailin’s obsession with a good yield on the dollar is unusual in the nonprofit world. If an organization won’t commit to measuring return on investments as a condition of a grant, he won’t sign a check. The group must agree to follow a business plan that includes methods of tracking the performance of program participants. “That’s how grantees can stabilize and grow independently,” he says.

As president of the Edna McConnell Clark Foundation in New York City, Bailin is pioneering a brand of philanthropy that should make waves if other foundations follow suit. The business world is watching: This year, Harvard Business School made EMCF the subject of a case study. Bailin has instituted rigorous screening procedures to identify youth organizations that are most worthy of funding. His team of portfolio managers puts candidates through 200 hours of due diligence, evaluating the effectiveness of their programs and forcing them to define clearly their main objectives and obstacles, and their plans for becoming self-sustaining.

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Bailin was thinking about high yields long before venture philanthropists started tracking the performance of their funding. During the 17 years he spent at Public/Private Ventures, a youth development research firm he founded in Philadelphia, he zeroed in on how to get at-risk kids to improve their grades, stay off the streets, have healthier pregnancies and enroll in college.

Bailin set out not to apply lessons from the business world but to make sure that worthwhile charitable organizations are able to grow instead of lurching from grant to grant. Since taking the top job at EMCF in 1996, Bailin has been converting the scope of grant making from wide and shallow to focused and deep. The $25 million that EMCF rants each year has been divided among some 100 organizations. Going forward, Bailin plans to carve the funds into only a dozen new multimillion-dollar grants each year. In doing this, Bailin essentially creates capital markets for selected nonprofits, giving them breathing room. No longer restricted to program expenses, grants can now be used for under-resourced areas such as R&D and overhead, including hiring personnel and modernizing accounting systems.

One grantee, the Harlem Children’s Zone, has used EMCF grants totaling $5.7 million over four years to implement a nine-year business plan to triple the number of children it reaches. How does it measure yield? By using bar-coded ID cards to track grades, school attendance, teen pregnancy and dropout rates.— Shahrzad Elghanayan

For more on investing in youth programs or monitoring performance measures, visit emcf.org.

Reprinted from the October 2002 issue of Worth.

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