September 28, 2006 | Read Time: 2 minutes
PRESS CLIPPINGS
Nonprofit groups around the country study the Robin Hood Foundation and borrow its ideas, says Fortune magazine (September 18). But “perhaps most important, Robin Hood has brought the idea of philanthropy to a younger generation of superwealthy Americans who might not otherwise have considered it.”
Robin Hood was founded in 1988 by Paul Tudor Jones, a financier in New York who was worried that a great depression was about to hit the country. He decided he wanted to found a charity that could help impoverished people, and went ahead with it before he knew whether his economic forecasts would turn out to be true.
The foundation, which has distributed $525-million since it was created, has a relationship with its grantees “not unlike that of a private equity fund” with its clients, says the magazine.
“If the client organization is thriving, Robin Hood helps guide expansion efforts,” the magazine says. “If it is struggling, Robin Hood digs in, sending consultants and meting out advice on office space and leases, technology, legal, and HR.”
Robin Hood, whose approach is being copied by groups in London and San Francisco, spends more than $500,00 a year gathering data on its grant recipients and has an economist on its staff to analyze costs and benefits.
The organization measures the success of a grant by estimating its benefit to the poor per dollar of cost to Robin Hood, says the magazine, a calculation designed to make it easy to compare groups that have different approaches and missions. Each year, it stops making grants to about 10 percent of the organizations it supported previously because the groups have not proved their efficiency.
Robin Hood’s pitch to donors is especially appealing, Fortune says, because the organization’s board members have agreed to cover all of its administrative expenses, allowing the group to promise that all the money raised from other sources goes directly to charitable causes.
The organization gives away all the money it raises each year and does not have an endowment. “Why put away money for a rainy day when it’s pouring out?” says David Saltzman, executive director of Robin Hood. “New York City is arguably the richest city in the history of the world and yet the majority of babies were born into poverty last year. Why would we keep powder dry under those circumstances?”
The article is available online.
