Changes in Atlantic Philanthropies' funding: infrastructure groups are scrambling.

In its typical quiet fashion that eventually causes sector-wide tidal waves,. Atlantic Philanthropies is altering its funding focus. The once anonymous Bermuda-based foundation, funded with the billions of Charles Feeney is in the midst of a strategic planning process that already has ramifications for influential nonprofits.

Alan Ruby, senior vice president for U.S. and Asia-Pacific programs for Atlantic Philanthropies, explained simply, "The board has decided it would cease to fund not-for-profit research in the U.S."

Though the organization has indicated it was looking at possibly focusing its programming on aging, health, and youth issues--which would be in keeping with much of its past funding--Ruby said no final decision had been made and a decision should come "no later than March" 2003. "We've tried to be as transparent about what we're doing as possible," he said.

Notably missing among its past funding. area is nonprofit infrastructure research groups. The organization in the past has funded higher education, health, pre-collegiate education, the nonprofit sector, aging, and other areas, according to its Web site. From 1998 to 2000, 10 percent of its allocations, or $152 million, went to the "nonprofit sector" program area. "We've talked with people about how we'll exit from this area," Ruby said. "We have no desire to destabilize these organizations."

Ruby said Atlantic Philanthropies granted out a "global target of about $400 million" last year. "We fell a little short of that," he said, with approximately 40 percent of the money going to U.S. groups. He said no decisions have been made with regard to future allocations ratios. The organization's endowment, with investments throughout the world, stands at approximately $3.7 billion in the current market, Ruby said.

Harvey Dale, former president and current board member of Atlantic Philanthropies, said the organization's changes should be considered part of the life of a foundation. "After I stepped down as president, my successor thought it would be time to take a review (of the focus areas)," Dale said, referring to John Healy. "That's ongoing. Some tentative decisions have been taken" and more are likely to happen over the next few months. "It's what any good foundation should aspire to do to keep (up with changing needs)."

And, changes will continue from year to year, Dale said. It will probably adopt new areas, which would cause other focus areas to become smaller. "It will support in a different or lighter way in the future," he said, "without ever hurting donees."

"I perceive this as an ongoing, continual process," Dale said, "intensively studied now. It's a difference in degree, not in kind."

Ruby said the organization, which counts some of the most respected people in philanthropy on its board, such as Dale, did not hire a consulting firm for the strategic planning process. "We do have a facilitator and adviser," Ruby said. "Most of the work is done in-house."

"It's a real loss to the nonprofit sector," said Peter Shiras, vice president of program for Independent Sector, the Washington, D.C.-based coalition of nonprofits. "Their funding has been very significant in this court of philanthropy and nonprofit sector research."

Shims also said Atlantic's decision will have a ripple effect, as any leadership loss would create. "A number of people at Atlantic Philanthropies have been real thought leaders and demanded of their grantees a kind of intellectual rigor that was essential," which will be missed, he added.

Independent Sector's most recent grant from Atlantic was $1.2 million for sector research. Public support for the organization, where such a grant would fail on the Form 990, represents about half IS's $7.1 million budget on its FY 2000 report.

"I think one of the challenges for the sector as a whole is to engage additional foundations in support of the field of philanthropy and the nonprofit sector," Shiras said. "There are some real challenges and opportunities for the nonprofit sector."

"For NCRP and organizations like us, Atlantic Philanthropies has been very generous," said Rick Cohen, executive director of the National Committee for Responsive Philanthropy, referring to the infrastructure subsector, such as Independent Sector, Council on Foundations, NCRP and others. He declined to state the amount of Atlantic's support.

Cohen said there are three phenomena affecting infrastructure groups: funding mainstays that choose to de-emphasize such giving; funding mainstays that, because of current market conditions, have less to devote to infrastructure groups; and newcomers to philanthropy that don't understand the infrastructure needs. Such newcomers arrive in philanthropic circles "without much of a history of philanthropy," Cohen said. "They understand issues, but they don't understand the infrastructure underpinning the issues quite as well."

Cohen said the ripple effect of the departure of Atlantic Philanthropies funding "is to wake up the infrastructure groups. They have to talk about their collective needs and educate funders better about what their role is and demonstrate the impact and value they bring."

The change of Atlantic Philanthropies' funding of the American nonprofit sector brings a number of long-hidden issues to the surface, said Jon VanTil, professor of Urban Studies at the Camden, N.J., campus of Rutgers University. "In its early years, the (apparently) stated policy of the 'anonymous donor,' who everyone knew was Feeney, that mention could not be made of his gifts, created an Aesopian set of open secrets usually communicated by means of facial expression. For organizations like IS and NCRP, taking secret money challenged, to say the least, their public commitments to transparency and openness in philanthropic giving," said VanTil.

"The move from anonymity improved things somewhat, but AP remains stingy in the information it provides the public on its work. The whole episode deserves a careful review as a case in very private philanthropy," he said.

Anonymous giving has its place, according to VanTil, who has written several books on civil society and is a contributing editor to The NonProfit Times. That place, he explained, is "when it is given to a recognizable philanthropic entity for disbursement. I believe we need to question whether secret foundations have any place in a democracy. As for publicity-shy billionaires, I would offer this advice: If you have money to give and want to keep your name private, bring it to a community foundation and ask for their services in disbursing your funds openly, fairly, and accountably."