In Seattle, umbrella funds are adapting to the new philanthropy

An important organization in Seattle, the Alliance for Education, has announced changes in the way it will be distributing money. There will now be more targeting and accountability, and more meshing with the district's emerging strategic focus. Similar changes are going on with other umbrella agencies, including in the arts and social services.

Several factors led to these changes, as the Alliance regrouped under a new director, Patrick D'Amelio. It began as a loyal support group for former Supt. John Stanford, back in the days when a business-led agenda (more testing, stronger principals with more autonomy, directing dollars to the most needy students) was driving Seattle Schools. After Stanford's death and the rocky tenure of his successor, the Alliance too seemed to lose altitude. Some donors circumvented the Alliance by giving money directly to pet projects and favored schools.

Under the reforms, donors will still have some say, but an Educational Investments Task Force will decide if donors' wishes match District priorities, sometimes saying no to donor desires. And there will be more regular reviews of funded projects to see if benchmarks are being met.

The changes underscore a growing drift away from funding along the lines of the old United Way model, where a central agency would survey needs, scoop up funds from many sources (mostly businesses), and disburse the money according to the staff's assessment of needs or by simple formulas such as the recipient agency's budget size. The new philanthropists, mostly from the data-driven technology businesses, called that "throwing money over the wall."

The newer donors prefer more directed donations, where the giver researches the area, donates in a very targeted and accountable way, and avoids the middleman. Other organizations in the old style are PONCHO (a glitzy annual charity auction for the arts, also undergoing changes after criticism about spending too much on the auctions and for funding too many small arts groups), ArtsFund (corporate money for the arts, and adding some separate funds for more targeting), and the Alliance for Education.

The other problem with the older, umbrella-style of charity is that it serves as a corporate shield, cutting off recipient organizations from soliciting. Companies like this approach since it saves a huge amount of time spent meeting with scores of supplicants; they can politely decline the interview request by saying they "gave at the office," meaning to United Way or its equivalent. But this too has broken down, as ingenious nonprofits find ways into other corporate budgets, particularly marketing budgets that buy the company public good will and publicity.

Seattle has always been a United Way kind of town, with very high levels of giving to combined funds. Few cities can match the donations to ArtsFund, which is still growing. (ArtsFund, the former Corporate Council for the Arts, also has new leadership, with Jim Tune replacing former arts czar Peter Donnelly, who retired.) ArtsFund is in the midst of its 39th annual campaign, with a current goal of $3.4 million that would be distributed to more than 70 nonprofit arts groups in King and Pierce counties.

These combined funds are now changing, with the Alliance's new blend of investment priorities and accountability an interesting model as these large consolidated funds move to adapt to the new philanthropy.

• David Brewster is Crosscut's publisher. You can e-mail him at david.brewster@crosscut.com.