‘Kids are the canaries in the coalmine. Where kids are doing well, communities are doing well. Where kids are not doing well, communities are not doing well,’ came the challenge from an audience member.
‘True, but many foundations decide, for example, that education is THE answer to community improvement. That’s like saying, “If only the canaries were smarter …”’ responded John A Powell, director of the Haas Institute, in a breakout session on inequality at the Center for Effective Philanthropy’s 2015 conference in San Francisco on 19–21 May. The purpose of the canary, he stressed, is to tell us what’s wrong with the environment, with the system that surrounds us.
This exchange captured a theme that ran throughout CEP’s conference—the importance of understanding systems, not just symptoms, in order to drive philanthropic impact and effectiveness.
Van Jones, who received a standing ovation for his remarks, challenged the more than 300 foundation leaders to consider systemic bias and not just individual outcomes. He gave as example working to close prisons rather than just treating individual offenders. The latter is certainly important, but the former is an upstream, system change that has the potential to shift the trajectory of the problem, not just outcomes for x number of individuals.
Jones, a CNN correspondent and non-profit leader who worked in the Obama White House, encouraged foundations to step outside of their comfort zone to build allies for change, citing his current prison reform initiative in partnership with Newt Gingrich. ‘Turns out you can work with people you disagree with, on the issues you agree on.’
Further encouragement to push past business as usual was delivered by Henry Timms, founder of #GivingTuesday and exec director of 92nd Street Y, one of the largest social service non-profits in NYC.
Henry put the crowd through exercises to uncover their understanding of what he and Jeremy Heimans in their much-discussed Harvard Business Review article coined ‘new power’ and the way it will transform how people engage in good works.
The power to do good will no longer be concentrated in the hands of large incumbent organizations filled with professionals, but will likely be more distributed through technology-enabled networks where messages are not centrally controlled and brands will be co-created by aligned publics.
Echoing themes of partnership and alliances, Barbara Kellerman of the Harvard Kennedy School challenged our current fixation on what she called ‘the $50 billion leadership industry’.
Why, she asked, have we created a culture where following is seen as less than and inferior?
A terrific challenge for our times as we see foundations with giant communications budgets and branding strategies that trumpet their leadership and distinctiveness from others.
Maybe she’s on to something.
This theme of followership and partnership also appeared in breakout sessions highlighting foundation collaboration, co-creation and examples of shared impact.
Overall, the conference seemed to succeed in challenging current thinking while also providing tools and ideas for improving foundation effectiveness. New research by CEP showed the disconnect between foundation talk about social investing vs the actual work being done in this area.
Perhaps most fascinating was the success of a nine-person panel—which seemed like a terrible idea but actually worked because it showed the breadth of approaches foundations are taking to achieve their work.
Clara Miller from Heron pushed foundations to stop being ‘hedge funds with a tiny philanthropy office on the side’ and put the other 95 per cent of assets to work.
And Sylvia Yee shared the Haas Foundation’s experience of funding marriage equality from the early days of the movement to current successes—describing the donor commitment necessary to see through the many failures and setbacks along the way.
Do conferences change foundation practice? Perhaps yes. Certainly so if participants left with Lynn Perry Wooten’s opening remarks in mind, ‘A good leader’s role is not just to serve, but to enable others to act.’ CEP’s conference provided tools, if foundations want to take action.
The Philanthropy in Asia 2014 conference launched on 20 October in the chambers of Singapore’s Old Parliament Building, the wood-panelled halls where the city-state was founded. Prime Minister Mentor Lee Kuan Yew’s worn leather seat bears his name etched in a bronze plaque on the headrest.
The historic site was purposely selected by Patsian Low, conference organizer at the National Volunteer and Philanthropy Centre, in order to evoke the economic progress that supports increasing levels of philanthropy – and the uneven distribution of wealth that calls for it.
Current affairs played a role in the conference proceedings. Attendance at the swearing-in ceremony of Indonesia’s newly elected President Joko Widodo prevented Mr Tahir of the Tahir Foundation (and recent Giving Pledge signatory) from delivering the keynote, and teatime hallway discussions included many questions to Hong Kong participants about the ongoing protests. Yet the focus remained on the future.
The keynote was ably delivered by Audette Exel of Australia’s ISIS Foundation who described the lessons learned from her long-term philanthropic work with children in remote villages in Uganda and Nepal. The ISIS Foundation (which will soon undergo a name change) is funded entirely by ISIS Asia Pacific, her niche financial services corporation where all profits go towards funding the non-profit foundation. ‘I’m not a successful businessperson now turning to doing good, I am a social activist who figured I needed to learn about business.’ She talked about the importance of ‘purpose’ for all employees, not just those in the social sector, and the fact that more financial services firms need to take up social engagement.
Prapti Upadhyay and I shared highlights from the Lien Centre for Social Innovation’s report Levers for Change: Philanthropy in Select Southeast Asian Countries which outlined key public policies that can encourage strategic philanthropy in the region. These include creating clearly defined charitable legal structures, improving tax policy, encouraging more community philanthropy, building philanthropy advisory services, mandating greater transparency and data collection.
Following that, a plenary panel entitled ‘Windows to the Future: A Networked Philanthropy’ featured Naina Subberwal Batra, director of Asian Venture Philanthropy Network, moderating a discussion with representatives from Twitter, Microsoft, the Bill & Melinda Gates Foundation and the Lien Centre for Social Innovation. Parminder Singh from Twitter described the power of Twitter as a platform for social change and fundraising, citing the spontaneous response to the Jammu and Kashmir floods that resulted in the creation of #JKfloodrelief (and subsequently JKfloodrelief.org). This entirely volunteer-run response, in the first week following the floods, used Twitter to coordinate the delivery of 15 tons of food and 4 tons of life-saving medicine and opened a critical communication platform for emergency relief coordination. Most of the organizers have still never met in person, but they nonetheless created a powerful volunteer team.
In a breakout session on collaboration, Veronica Colondam of the YCAB Foundation in Indonesia described the ways in which lack of a legal structure to incorporate social enterprises is limiting their ability to expand their services to at-risk youth. In the same session, Rob John of the Asia Centre for Social Entrepreneurship and Philanthropy at NUS Business School shared his research on the rise of giving circles in Asia as a means of philanthropy, donor education and community building.
As participants boarded buses to diverse themed dinners, discussions were lively and debates engaging. The gathering provided a great setting for plotting the future course of philanthropy in the region.
This post was also published in Alliance Magazine’s online edition.
Dr. Judith Rodin, President of the Rockefeller Foundation, recently visited Singapore and hosted a series of talks and meetings to stimulate and support impact investing in Asia.
Dr Rodin joined a heavy-hitting panel that included Asian Development Bank, International Finance Corporation, Rangsutra (a social enterprise), Credit Asia Capital, and Impact Investment Exchange Asia (IIX). They addressed a filled-to-capacity crowd at INSEAD business school where 100+ students, investors, philanthropists, bankers and academics listened to their call to action.
The speakers outlined what they perceive to be the many benefits of impact investing: social as well as financial returns, side-stepping inefficient or corrupt governments, unleashing entrepreneurism, and building enterprises that can be sustained without philanthropic support.
The idea that markets can be harnessed to solve social problems is not a new one, but I have observed that the concept holds particular resonance among the socially-minded wealthy here in Singapore and some parts of South & South East Asia. My conversations with current and interested impact investors and fund managers suggest some potential reasons why this might be so:
1) The power of the market is indisputable and omnipresent. Year over year double-digit growth throughout Asia has decreased the percentage of the population living in poverty (though absolute numbers remain frighteningly high) and the creation of a middle class has been achieved and appears sustainable in some countries.
2) Fewer wealthy individuals have ‘cashed out’ of the enterprises that made their money. Wealth is more likely to come from family businesses and ideally successive generations continue to run those businesses. The money feels more like ‘working capital’ than an endowment.
3) Family offices are built to manage investments. Impact investing fits better within that organizational ethos. Language matters in establishing comfort and familiarity. ‘Structuring deals’ is more compatible with those in the family office than ‘making grants.’
4) Many third generation, high net worth individuals in their 30s and 40s have a finance or investing background. The generation of ‘new philanthropists’ here in Asia are ex-bankers, MBAs, Ivy/Oxford-educated and they feel called to use that unique skill-set to make their social impact.
Of course, among the converted sat plenty of skeptics. Many traditional investors questioned the entire category of impact investing—asserting that ‘social’ is another term describing higher risk and that true investors would never pay a higher price than necessary for an investment: everything else is philanthropy.
Indeed, the feeling of philanthropy was very much in the air, despite the finance lingo. While some people pitch impact investing with assurances that investors can put money here even if they don’t care about social returns, that proposition rings hollow. The people I’ve met who are intrigued by impact investing care a lot. They are bringing their hearts and their minds to the proposition. And that impulse is very much grounded in philanthropy—from the Greek origin philanthropos: love of mankind. So while some impact investors dismiss the term philanthropy, still others believe they are redefining or adding new dimensions to it.
Impact investing—here or anywhere—is not for the faint of heart. Impact investing that achieves broad scale, is a theory that has yet to be fully proved. But it posits an exciting possibility. As such, it requires risk-taking, strategy, patience, determination, humility, and passion. Passion to make a difference and chart new territory. This is not the settled homelands of philanthropy, this may be its new frontier.
In the coming months I’ll be interviewing key philanthropists and impact investors in the region to hear, in their own words, some of their successes, challenges, and motivations. I hope you’ll join the conversation.
This piece is cross-posted on the @Alliance Magazine website which can be found here.
Elegant and well-heeled would be the best way to describe them. I smiled at these two women of indeterminate age who I had just met at the launch of the UBS-INSEAD Study on Family Philanthropy in Asia. As I moved to introduce them to one another, they both laughed and said, “We’ve known each other since…” putting the flat of their hands forward at small-child-height.
“ We were neighbors,” the petite Chinese woman said.
“Our apartment was here, and their apartment was there,” said the smiling Indian woman, pointing her finger in the upward diagonal.
“Didn’t you play marbles?” One asked the other with a mischievous grin.
“Oh yes, all the time. And with the boys!”
“And every day your mom—rest her soul. She was a real force of nature. She would go to the market over there on…”
“And my father, he’s not well now, but we take care of him at home…”
“Yes, we knew each other.”
“ But it’s not like that anymore.”
“ No nothing is like that anymore.”
There was silence as I imagined them thinking about all the changes—education, jobs, marriage, kids, and clearly wealth—that had happened since those long-ago days. For a brief moment I could almost see the bustling apartments these women described, in the brand-new nation Singapore was 30 or so years ago. Where families knew one another, children played in empty lots, and what bound everyone together was that they were all strivers.
We drifted apart as the 150+ person crowd wandered into the auditorium to hear the current state of family philanthropy as described by the recently completed study. Despite the fact that we are all living in the midst of Asia’s economic engine, the stats were still mind-boggling.
- China now has over 1 million US dollar millionaires.
- In recent years, Indian households have witnessed the highest absolute gains in wealth in the world.
- By the end of 2009 there were some 3 million Asian Pacific high net worth individuals, equaling the number in Europe for the first time, and their wealth totaled US $9.7 trillion.
But the rising tide has not raised all boats.
- In sheer numbers the region is still the largest locus of poverty and deprivation in the world. In 2005 there were over 660 million people in India and China alone who lived on less than US $1.25 per day.
- In India, the wealthiest 5% of the population control 40% of the country’s wealth.
All of these statistics from the report were only the prelude to the substance of the discussion. Through 200 quantitative surveys and over 100 in-depth interviews, the report’s author Mahboob Mahmood, Adjunct Professor of Entrepreneurship and Family Enterprise captured themes on motivations for giving, priorities, and philanthropic approaches.
The image that emerges is a charitable sector led by closely held family businesses with a strong entrepreneurial ethos, complex intergenerational relationships, delicate succession and legacy challenges, and a deep awareness (particularly on the part of the patriarchs and older generations) of the power of education to change the course of lives in a single generation. Philanthropy is a useful mechanism for reinforcing shared values with the goal of supporting family cohesion and harmony.
Education is by far the largest area of investment, with poverty alleviation and health distant seconds and thirds. Arts/culture (4%), the environment (4%) and civil rights (1%) were small also-rans.
Among the challenges cited was lack of experienced staff, the perception (and sometimes reality) of a limited number of high-impact NGO partners, and difficulty in finding philanthropic co-investors who are aligned in mission.
The incredibly generous families who participated in the study are to be lauded for their leadership. They are impressive fonts of giving but as yet there exist few networks of strategic philanthropy that can achieve what the authors called, “sustained transformational impact in Asia.”
I was struck by the words of panelist Laurence Lien, CEO of Singapore’s National Volunteer and Philanthropy Centre and a member of one of Singapore’s most philanthropic families when he said, “The most important use of philanthropy is social innovation and social change. Charity is important, but there is much more to do.”
His comments took me back to the conversation I’d had earlier with those two elegant, well-heeled ladies. Money provides privilege to those who possess it but it also changes everything. It can create fractures in families, as well as in societies. It can disconnect people from their broader community. And the relentless drive for economic growth can take a deep toll on cultural traditions as well as our physical environment.
The challenge ahead for philanthropists in Asia, indeed philanthropists everywhere, is to engage with communities in developing solutions. Charity is usually top-down, highly transactional and rarely transformative. It is important, but not enough. Transformational impact can be achieved by moving beyond charity with strategic analysis, community engagement, and emphasis on our shared vision and common destiny. Networks and collaboration are required. Civil society can play an essential role in reweaving the fabric of society. But it requires more than charity. It requires vision more than just money.
The title of this post was at least partially inspired by the Jesse J. song my kids adore which is on a regular loop in our house…
This post was originally published as a guest blog on the Good Intentions web site.
The aid community has been having a healthy debate about whether gifts-in-kind (GIK) othertimes called SWEDOW (stuff we don’t want) donations are a good or bad thing. The most recent spark to the flame occurred in February 2011 when t-shirts declaring the Pittsburgh Steelers the 2010 Super Bowl Champs were donated by the NFL to World Vision International for distribution in Zambia, Romania, Nicaragua, and Romania. (follow @GoodIntents or @texasinafrica on Twitter, for the low-down)
Critics argue that these kinds of giveaways harm poor communities more than they help because they flood the markets with free goods which underprice clothing and thereby put local tailors, dressmakers or small clothing companies out of business.
But are all clothing donation programs created equal?
As an advisor to Ashoka, I was invited to meet Anshu Gupta at a coffee shop here in Singapore to learn more about this fellow’s work. He’s polite and a bit reserved until he starts talking about Goonj, the organization he founded in 1999. Goonj, which serves 21 states in India, receives donated clothing, largely from upper and middle class Indians, and then using hundreds of trained local volunteers, cleans and distributes that clothing to Indians too poor to afford even basic clothing.
But the process is far from simple. Middle class women in Mumbai donate jeans. Rural women in Tamilnadu don’t wear jeans. They wear saris. And they might not wear saris made of the same cloth that women from Delhi might donate. So Goonj volunteers have a highly developed cataloging system that allows them to identify, separate and group clothing according to where the recipients can actually use it. In addition, recipients engage in neighborhood-building work in exchange for clothing. Goonj’s community organizers have developed a variety of means of helping communities help themselves using this recycled resource as an incentive, commodity, and exchange.
Goonj sees its mission as giving people clothing to help them move toward self-esteem, skills building and self-sufficiency. So the right clothing exchanged for work or expertise in a respectful way, is critical to the model.
So I’m so impressed with Goonj and I’m asking myself how is this charitable clothing donation different than the process employed by some large aid organizations? Seems to me there are a few key points of what makes Goonj effective:
1) Locally driven.
2) Culturally respectful.
3) Organized around the needs of the recipients, not the needs of the donors.
4) Fueled by creative re-use. Their newest initiative is using clean, recycled cloth scraps to make locally produced sanitary pads for poor women. A real public health and sustainability breakthrough.
5) And it recognizes that poor communities are looking to build markets of exchange and value, not destroy them. Those who extend the life of resource are performing an important function in the community’s ecosystem, they are not passive recipients.
When I met him, Anshu was asking for assistance in further developing his business model, training other NGOs to replicate the Goonj program, and seeking experienced volunteers to document and write case studies about their work. He was actively seeking support and critique. I was stopped in my tracks by World Vision’s statement that it has never evaluated their gifts-in-kind programs because “they are gifts, not programs.” Wow. There are so many things wrong with that statement that it’s still blowing my mind.
My point here is not to denigrate or bestow sainthood on any organization. World Vision is full of smart and dedicated people, so I have no doubt the organization will change and grow, as will Goonj.
But this discussion encourages us all to respond energetically to our charitable impulses, while also being open to learning when those impulses might need refining in order to be responsive to community needs. There is no shame in having an idea or program that needs improvement. The shame is in being too close-minded to make the improvements.
As we were parting Anshu summed it up perfectly when he said, the problem with most programs is that “we always give what we have, not what people need.”
Please share your ideas for how we might be able to change that.
Once upon a time, there was a farmer with a goose that laid golden eggs. When he first got the goose, he was delighted. What could be better? Without doing anything, each morning he woke to discover a new golden egg. He was rich! Soon he was richer than his neighbors and got infinite pleasure in buying new, expensive toys for himself and his family. After awhile, the farmer was spending so much money on frivolous things that he stopped farming. He bought cheap corn for the goose —which resulted in smaller golden eggs. He stopped feeding the other geese and as her friends and family began to die, the farmer’s special goose became unhappy and stopped laying eggs altogether. Soon the thin, sad goose laid down and refused to get up. The next day she died.
As the farmer sat despondently at his kitchen table, he glanced across the road at his neighbor’s farm. How had he not noticed that his neighbor had become successful? The farmer wandered over in the hope of discovering his neighbor’s secret. When he walked into the gate he saw miles of fields planted with healthy crops, trees lush with fruit, and then he saw the most surprising thing of all: a large, clean coop full of happily clucking geese laying lots of golden eggs. The farmer was astonished. He found his neighbor and asked him where he’d bought all those geese because he wanted to go buy more. His neighbor looked at him and laughed. “I didn’t buy all these geese, I grew them. I started out with one. With careful cultivation, I found out what foods helped her grow, which foods helped her lay golden eggs. Soon she was raising a family and heading up a community of geese all laying golden eggs.” He looked at his friend’s ramshackle farm across the way and said, “Surely you haven’t forgotten. We are farmers not merchants. Our job isn’t to buy things to sell, it is to prepare the soil for things to grow.”
This adaptation of the well-known parable came to me as I was thinking about the ongoing debate of whether capitalism can or should be a driving engine for social change. I wholeheartedly believe it can. Capitalism can develop “mission along with margin” but the success of the venture in creating lasting social change is, I believe, dependent upon understanding who you are: a farmer or a merchant.
In this oversimplified parable, farmers are concerned with creating the conditions for growth, because an organic increase in soil fertility creates a farm that is a better ecosystem of productivity. Merchants are primarily concerned with creating products that, when sold, give some immediate benefit. Both are good. Both are necessary. But they are necessary in different situations. In microfinance, for example, farmers may be needed, but in the development of solar panels, we may need merchants. As a grantmaker, one will likely set different financial and programmatic objectives based on whether a grant is funding a merchant or a farmer.
Here in Asia, the contrast between creating conditions for long-term growth or products for immediate benefit is being played out in daily news reports on the rapid rise, and equally rapid decline, of SKS Finance, the microcredit company with backers such as by billionaire Vinod Khosla and George Soros. SKS raised $358M in its closely-watched IPO. But the rockstar rise of SKS has been matched by the rapid tumble its stock has taken. Reports of a rash of suicides allegedly caused by high interest rates, clients who were overextended on credit, and tough repayment requirements are said to have affected the crash.
In a matter of one month, a company that had been the exemplar of microfinance-going-to-scale stands on the brink of major changes that may dramatically reshape the players and the way microcredit operates.
SKS has been contrasted with other players in microfinance such as Grameen or ACCION. To be clear, these two organizations charge high interest rates. And they also engage in the practice of collecting repayment on a weekly basis. But some evidence suggests that the differences between them and SKS are as important as the similarities. Microcredit organizations that fall into the “farmer” category focus on social support as a key element of success and repayment. They develop long-term relationships with clients. They recognize that microcredit may be an ideal central organizing tool, but it is only one tool that poor women need to get closer to self-sufficiency. These microfinance organizations use their profits to create farm insurance products that help the poor avoid losing everything due to bad weather. They create savings programs and educational loans to build skills that take people beyond subsistence. In other words, they use revenue to cultivate the soil, not prematurely take profits.
Don’t misunderstand me: profit-making and profit-taking are not bad. However, the idea of calling a purely capitalistic business that “also happens to do good” a social enterprise seems to be a bit of a fantasy. There are always trade-offs. The social enterprise makes profits while asking what more it can do to re-invest those profits into the communities, people and relationships it is helping to build.
The story of SKS is not over. Some say this incident is but a stumbling block on the path to even greater microfinance expansion. But the question I would ask is, are those changes technical or fundamental? “Merchants” may look at Grameen or ACCION and say, “We can sell that product too,” but they are missing the point. “Farmers” focus on all the inputs needed for long-term growth in the community, not just the products that generate short-term profits. It remains to be seen whether SKS and others are nurturing or killing the golden goose.
This piece is co-posted at the Center for Effective Philanthropy blog.
2010 ushered in do-goodism 2.0. The opportunities to check-in, check-out, or slack-out “for good” have never been greater. Voluntourism is on the rise, as people want to see and feel more of their vacation destination than a five-star resort may offer. But there are downsides, as I recently discovered at a cocktail party fundraiser.
The otherwise delightful woman to whom I was speaking was explaining how she and her husband had recently traveled to Cambodia with their kids in order to give the teenagers an understanding of poverty and their responsibility to help others less fortunate than themselves. I was interested.
When planning the trip, she explained, her kids had immediately dismissed Habitat for Humanity and other “traditional” groups because they wanted an authentic, personal experience. Prior to the trip, they’d gone online and researched places they could go and things they could do. They’d found a small village that was building a library and some houses and that needed materials and books. “Perfect,” she thought. Emails were exchanged, arrangements were made.
But, she then went on to explain, the trip had all but been ruined by the fact that when they arrived the locals took the books and materials they’d brought and proceeded to build the structures themselves. Her kids, who had planned what they wanted to do and how they would direct the building process, were sidelined by locals who took over and did all the work themselves. Her kids were invited to participate, but they weren’t allowed to lead “their” projects. The goal of the trip, she complained, had been for her kids to feel how they could make a difference and this experience hadn’t provided that at all. “Overall, it left a bad taste in their mouths for future volunteer work,” she concluded.
It was then that I yelled, “It’s not about you!”
In my head.
Aloud, I asked her politely, “Whose volunteer experience is this anyway?”
Nick Kristoff’s recent New York Times piece on Do It Yourself Aid raised similar feelings. While it is great to get out and feel like “I’ve made a difference,” shouldn’t the emphasis in that sentence be on “made a difference” and not “I?” When the primary purpose of volunteerism or aid work becomes our own experience of self-fulfillment, we’ve crossed a line. And unfortunately, sometimes the term social entrepreneur with its emphasis on one person, is synonymous with a “me” orientation that is antithetical to strategies that have been effective in creating lasting social change. Similarly, some social enterprises may be praised for taking a bold approach that makes perfect sense to donors, but which might not be highly prioritized by those receiving. Recent criticisms of TOMS Shoes and other “buy one, give one” programs raise important issues. If TOMS Shoes are being sourced and made locally, then that is sustainable change. If they are shipped in, then it’s mostly plain vanilla charity with excellent marketing. Almost by definition, these donor- or giver-centered approaches can leave out indigenous/local groups that are working to help themselves, but keep getting left out of others “solutions.”
So that begs the question, how much should one’s own need for achievement, media, or notoriety influence decisions about giving? Volunteering? When, as funders, do our demands for metrics and causality shift from necessary rigor and become instead attempts to assign egotistical ownership? When is our desire to develop a strategy that is “unlike other foundations” truly innovative, and when is it merely chest thumping?
For foundations, I think strategic philanthropy, as outlined by many of CEPs studies and reports, gives a great framework for allowing impact — not ego — to drive action. And personally? Well I love feeling that I’m making a difference, whether it is buying green products or volunteering or contributing to organizations I love. By doing these things I create a sense of community, connection, and empathy that benefits me as well as those on the other end of that support. The act of giving is mutually beneficial. But at the end of the day, it’s not only about me. Giving, volunteering, and the work done to support nonprofits becomes transformative when the goal is something much larger than just one person’s pride or fame or even self-actualization.
Do you have strategies for keeping your ego in check?
This piece was originally posted on the Center for Effective Philanthropy’s blog which can be found at http://www.effectivephilanthropy.org. I am a member of CEPs board of directors.
This piece was originally posted on the Center for Effective Philanthropy’s website where I have been a guest blogger. The Center for Effective Philanthropy (www.effectivephilanthropy.org) provides foundations with comparative data to enable higher performance.
A recent Harris Interactive poll suggests that Americans intend to give less in 2010 than in 2009. A combination of high unemployment and economic uncertainty have caused generous people to feel slightly less so. Despite this fact, it is also clear that Americans are giving more in new ways this year than ever before. Five years ago, we didn’t have the option to Tweet for Change, or, through Foursquare, Check-in for Change.*
One young woman who was interviewed about “check-in giving” through the CauseWorld app said, “CauseWorld makes me feel like I’m doing some good in the world every day. I don’t have much money to give to charity these days, like most people, so having a chance to direct money to some really important causes means a lot to me.” Declines in charitable giving have occurred in the past, but never before has that decline been coupled with the rise of so many other quick-hit ways to express generosity.
If the desire to be generous can be assuaged by directing someone else’s money, will we still feel compelled to give? Will we be willing to sacrifice our own money to support the causes we care about? For example, Starbuck’s has tested making charitable contributions as a benefit of checking-in. While this may be an appealing experiment to Starbucks regulars, it should be noted that these $4-latte-lovers are not offering to drop their Starbucks habit in order to direct those funds to charity.
Questions such as these were raised by Malcolm Gladwell’s New Yorker piece as well. Will casual support displace deep commitment? The jury is still out, but I think the potential difference in how nonprofits receive funding from individuals could, over time, be quite important. In aggregate, annual giving—usually defined as contributions from individuals—represents a core, stable funding base for many nonprofits. In fact, annual giving is often the counterweight to time-limited or non-renewable funding from corporations and foundations.
If, over time, nonprofits receive more and more funding from these embedded giving/contribution consolidators, will that negatively affect nonprofits’ cash flow? One recent study by Network for Good suggests the answer is yes. When offered a gift, the question nonprofit leaders often ask is not just “how much?” but “how often?” They all know that a consistent gift of X is almost always more valuable than a one-time gift of X+. So that leads to another question, how can nonprofits convert those casual givers to become regular givers?
In order to help nonprofits do this, foundations need to support the development of fundraising practices that help nonprofits engage with these new giving vehicles. Nonprofits shouldn’t simply be passive recipients of grants from social media philanthropic aggregators, they should be active participants. But as Beth Kanter regularly points out in her blog posts, an effective nonprofit social media fundraising strategy requires thought and time (and funders, that means money).
Nonprofits will need to learn how the ease of transaction (“Press # now on your cell phone to give a dollar to Haiti relief efforts”) can be maintained without nonprofits having to cede the entire relationship to a charity portal. In his recent Harvard Business Reviewpost, Dan Pallota also points out the importance of foundations placing strategic emphasis on their grantees’ fundraising capacity. While I am a strong advocate of general operating support, I think that foundations should go further to engage with grantees about fund development and adapting to the changing technological landscape.
Those of us who fund nonprofits can often be heard criticizing the lack of strategy and financial planning among nonprofits. But if embedded giving allows people to express support for many groups, will that lessen people’s allegiance to specific groups? Maybe funders should be putting more thought, research, and money into helping nonprofits creatively respond to these new fundraising challenges and amazing opportunities.
* Geo-location sites like Foursquare and Gowalla are game-like mobile phone applications that invite people to “check-in” when they have arrived somewhere and give a quick status update, similar to Facebook. On most sites, people gain points or credits the more often they check-in. Companies are beginning to offer coupons or time limited deals when people check-in. Causeworld is a similar site which gives people points they can use like frequent flyer miles to make donations to charities.
This piece is my first post for the Center for Effective Philanthropy as a guest blogger. The Center for Effective Philanthropy (www.effectivephilanthropy.org) provides foundations with comparative data to enable higher performance. Over the years, CEPs surveys of grantees has changed the way the foundations I have worked at have operated. And CEP provides benchmarking that helped us compare ourselves to similar foundations and to our own performance over time. Despite my move to Singapore, I continue to sit on CEPs board. These blogs will be a few of my thoughts on philanthropy, NGOs, aid, Asia and effectiveness.
When I was fresh-faced and just starting to work in philanthropy at a woman-focused community foundation, I made lists. I would write down the problem or issue I wanted to tackle, then make a list of reasonable solutions. For example:
- Make it a crime
- Lock up the criminals
- Get women legal services for safety & to pay for the divorce
- Provide counseling for the kids
- Get mom a job
Then I would look at the money I had available (never enough) and divide it equally among each of the reasonable solutions. Confident I was doing all I could to address the problem of family violence, I talked earnestly with the board of directors about the importance of our “multi-faceted” approach. (now, that word looks quaint, but trust me you used it a lot in the 80s too).
Next, I would turn to the giant map of Los Angeles we’d hung on the wall and divided into what we called neighborhoods, but which were really more economic descriptors than geographic locations—South Central LA (Compton but not Ladera), Westside (Venice, but not Santa Monica), Hollywood (but not West Hollywood).
We would push pins into the places where we made grants—red for violence prevention, blue for economic development, green for arts, etc.—and we aimed to distribute those pins fairly and evenly from the San Bernardino mountains to the shining sea.
I did due diligence – financial assessments and site visits – on every organization that received a grant. We gave project but not general operating support. And we considered ourselves partners with the groups we funded.
And that’s how we did it.
This was what we called our strategy if someone had asked us that question, which really no one ever did. Far more frequently, what people wanted to know was “why should I give to a women’s foundation?”
Why I could talk about passionately:
– Because the status of women is a barometer of equality in any society
–Because if women flex our giving muscles to demand that solutions have a gender lens we will develop better solutions
– Because women are the backbone of financial decisions in most families and communities
– Because well-educated women give a lot more of their joint wealth to their husbands’ alma maters than they do their own
– Because sisters are doin’ it for ourselves.
The list went on and on.
At the core of the answers to “why?” was a belief that women didn’t want to be saved. Women wanted tools to make good decisions for themselves and their families. Women wanted the opportunity for hard work to result in something more than 63 cents on the dollar.
And that belief saved us from ourselves. It put us in partnership with the (mostly) women’s organizations we funded. Over the years, those partner nonprofits joined our grantmaking committee and our board of directors. They challenged our approach—why not general operating support? They challenged our funding partners—can Virginia Slims buy a table at an event? Uh, no. Their staff members wrote checks contributing their hard-earned dollars to the Women’s Foundation* because they felt like we were all part of the movement. And they helped us to understand how to prioritize “solutions” by telling us which ones mattered most in which communities, which ones were dead wrong in others, and how to add ones we’d never thought of ourselves.
We practiced an early form, I think, of what Peggy Saika recently called “democratic philanthropy.” Now not every foundation is willing or able to be as fully participatory, but it makes a huge difference if you can be. I learned, in those early years, that folks did not take kindly to the notion that their communities or their lives were problems to be solved. By starting from a place where we stated our “why” values and listened to theirs, we found we were in alignment. And that alignment allowed us to be on the same side of the table in determining “how.” And even working through massive disagreements on “how.” But that’s what partnerships are about.
In short, we found that good strategy starts with listening. And not just sporadic listening, but listening that is built into the processes of our grantmaking. If we understand how our grantees see the world, it makes us smarter, better partners.
* I am pleased to say that the Women’s Foundation of California has come a long way since my early days of strategy development at the Los Angeles Women’s Foundation 24 years ago. The Women’s Foundation of California is one of the most thoughtful, grassroots and policy oriented foundations I know and I owe them so much for helping me learn what I know about philanthropy and social change.