Binge Reading Takeaways: 8 Philanthropy Trends of Note

Editor’s Note: This blog post originally appeared here.

Sometimes it happens – my backlog reading pile simply gets out of hand. That isn’t good, so with the new year, I am well along in a binge reading marathon. Lots more to go, but far enough into it that some clear trends are emerging. None of these trends will catch any of my philanthropy colleagues by surprise, but it is very striking to see them writ large, and often. Here they go:

1. Is Philanthropy synonymous with Charity?

While charity is a form of philanthropy, they are not synonyms. Too many think they are, that working in the nonprofit world is a kind of vow of poverty, and it leads to real dilemmas. For example, for some, there is still an assumption that nonprofit organizations that serve human service needs should, by definition, be undercapitalized, and that employees who choose to work there should consider that underpayment should be an implicit part of the deal. While there are very important attempts in our field to redress this unproductive, and ultimately unconscionable, practice and approach, in reading material from around the world and even in the USA, it is clear that we have a long way to go to fully respect and fund this sector, and to treat the trained professionals who provide for those in need with the dignity and compensation they deserve.

Comment: As many readers and those who have heard me speak about philanthro-ethics know, it is my belief that this only changes when we funders take the lead in treating our grantees appropriately. Which leads to the next visible trend:

2. How can we Improve, enhance, and dignify the funder-grantee balance?

For a long time, funders have referred to grantees as “partners”; let’s face it, only a few behaved that way. The challenge is obvious and well known: funders have money and must choose recipients. More recipients want/need that money than will receive it. It is a built-in power imbalance with all sorts of implications. In reading the literature in bulk one is struck by how many affinity groups and organizations are addressing this question and have recommended standards, approaches, models, and examples to show that they are taking it seriously. Implicit in this trend is that funders recognize that we cannot do our job unless we have real, honest, and contemporaneous information. Because of the power imbalance, only we can make that happen and to do so, we have to make those interdependent relationships truly viable.

Comment: is this a trend only at the affinity group level and among a few field leaders, or has this changed attitude becoming the new normal? In my experience teaching “philanthro-ethics”, most funders want to do the right thing, but it requires a very different sense of self to change our behavior, and to build full openness with grantees.

3. What is the proper Role of Philanthropy?

Many in our field have been traumatized by political developments in the USA and elsewhere in the world. Many foundations in the USA that have shied away from even the most legally acceptable advocacy over the years find themselves rethinking that stance. As the safe space for philanthropy closes or is under attack elsewhere in the world, funders are asking if our proper role is to restrict ourselves to safe spaces or align with the change agents. As governments, especially but not only in the USA, move to restrict public support for social services, humanitarian support for those who seek and deserve asylum, limit protections for individuals in the business and political spheres, should the role of philanthropy be to explicitly replace public support or continue to maintain the well deserving educational and cultural institutions that were a mainstay for many years?

Comment: Philanthropy is and always has been in a dialectic with public policy. Not every funder has done so consciously or with full sensitivity to the implications of his/her/our giving, but we have always made decisions about our voluntary support with some awareness of what is or is not publicly supported. However, rarely, if ever, has this dialectic been so intentional.

4. Must Philanthropy be Non-Profit?

This is an interesting one, to be sure. The “doing well by doing good mantra” has infused business school students for the last 2 decades. For some it reflects genuine altruism and belief that the ability to raise capital for scaling of good problem-solving issues is greatly enhanced by the profit motive. That point of view ascribes to the [hoped for] probability that a profit motive has greater promise of sustainability than continually depending on fundraising from individuals and governments.

This has led to a number of important developments: the B-Corp, the LLC, “impact investments”, and more.

Comment: Some of these strategies are well along in working out the kinks, others are still at the “faith” level, waiting for consistent evidence that one can indeed solve all/most social ills using for-profit means. And in many cases, when there is a tension between the for-profit and social good, the for-profit wins out. We are beginning to see evidence that, as welcome as this development is, it is not a guaranteed panacea and it appears that, to address real human need, there will always be an important role for not-for-profit entities.

Comment: Not to put too fine a point on it, but philanthropy [as opposed to charity – see above] has never only been about non-profit entities. Corporations sponsorships may be tax deductible in the US, but the motives are hardly purely not-for-profit; community development banks and their centuries old predecessors such as free loan societies exist for public good no matter their legal structures. Tax systems in social welfare nations incorporate a responsibility to citizens that ideally obviates the need for the kind of voluntary support for education, human services, and health care we see in the USA. They may not call it philanthropy, but citizens make a choice at their ballot boxes how they want to be taxed and spend how that money is to be spent.

5. Is “intersectionality” the Solution?

As I have written in more depth elsewhere, there are two meanings to “intersectionality.” One is a political imperative: if one doesn’t honor the full range of issues, one is in effect denying them all. This approach is filled with red-lines. While it addresses the truth that there is an interconnectedness to most systemic questions, it explicitly posits that a funder [or anyone, for that matter], needs buy into every means test if one can claim to be a fellow traveler.

There is a less loaded definition of the term. It acknowledges the interconnectedness mentioned above, recognizing that no systemic issue can be owned by, or solved by, any single sector. The for-profit world has its strengths and limits, the nonprofit sector does as well, and so does the public/government sector. This meaning of the term also mandates a totality of approach, of practice but not of ideology. By synergizing [sorry for the old jargon] what is best about each, it is possible to look beyond traditional limitations of each.

Comment: In my binge reading, examples of partnerships of the commitment to transcending sector limitations abound on the local, national, and international level. In fact, given these developments, I am in the midst of updating my very frequently requested practicum on funder collaborations to more adequately reflect this welcome, if challenging trend.]

6. Can Systemic Solutions solve what Compassion hasn’t?

The traditional sequence of philanthropic involvement starts with compassion. One sees a homeless person, one has an ill family member, one sees the implications of illiteracy in the workplace. Compassion is the single greatest motivator to “do something.”

It doesn’t take long to realize that it is a painfully inefficient way to be caring. Those individuals still need support, but there must be a more strategic way to distribute food, provide comfort, teach people. Most of 20th Century philanthropy was committed to conceiving more and better sophisticated strategies to deliver those services, and how to choose among them.

In recent years, though, many have become aware that it is insufficient to simply choose among the best-known interventions; one needs to go deeper into the underlying causes, the systemic roots of inequity and all of its implications. To preempt problems rather than remediate them or provide palliatives to them is far more attractive, especially to those who consider themselves disruptors in the business world.

At some point, though, they too discover that there is no such thing as systemic solutions unless those solutions are implemented in real time – on the ground. So, if the traditional progression is “compassion” to “strategic” to “systemic”, we are seeing that it works in reverse for many disruptors.

Comment: in the end, we need interventions everywhere along the spectrum, regardless of where one starts, or why one starts there. And different funders may, legitimately, choose to intervene at any of the stages.

7. Whatever happened to Social Impact Bonds/Pay for Success?

For a few years, every problem had a pay for success solution. After all, if one can solve societal problems and save tax dollars and make money in the process, it would satisfy so many needs at the same time. In its heyday, there was no problem too large for those who ascribed to this model.

What was so striking in this binge reading is how rarely this model has been mentioned. What happened? It is clear that consensus on what measures of success were never that easy. Sure, one can count how many fewer prison cells are needed, but that was the easiest one. And even there, no one anticipated to lobbying efforts of the private prison industry that had everything at stake in the failure of the model.

And when one looks at other places for intervention, the longitudinal studies necessary to test out various models challenge the patience of funders and the will of politicians. The idealization of the model quickly confronted the reality of trying to coordinate sectors with competing bottom-lines, decision making, stakeholders and time lines.

Comment: Several years ago, at the beginning of the SIB craze, I was asked by a prominent international bank to speak at their London office to help make sense of a client’s proposal to clean up the Ganges using SIB’s. Their client began his comments saying that Governments are all corrupt; non-profits are incompetent; religious leaders are naïve; only the private sector has the necessary capital and knowledge to accomplish the job. The proposal could never get off the ground. Why? The Ganges travels through many political areas, it is used by the private sector, but also for religious rites, and millions of individuals for all sorts of reasons of bathing, laundry, garbage, and more. The idea that all of that can be ignored to solve such a complex challenge was both naïve and counterproductive. It illustrated the very complexity of using pay for success models. [I suspect that they found it easier to have me be the reality-screen than to have to challenge their own client. This bank had to know that it was a flawed concept.]

I still believe that Pay for Success models can work in some settings, but they require a political will and willingness to wait quite a while for payout for them to work.

8. What are the words of the year?

There are 2 – one is a repeat performer, the other newly on the list: Impact and Equity. In a sense they are both talking about the same thing: what happens as a result of one’s giving or intervention? Underlying the two words is the conviction that if one is going to give voluntarily, it should make a difference. And that means that something different in fact happens. If one is committed to reducing illiteracy, how many books are distributed matters much less than how many more people can actually read. If one is committed to reducing recidivism, it matters which interventions work. And so forth. Thus “impact.”

Given the erosion of civil society alluded to above, “equity” has become the “impact” that matters. Whether it be racism, misogyny, nativism, or any of the other ways that lead to systemic unfairness, many funders now say that there must be a hierarchy of claims on their investments. Years of well-intentioned funding have simply not redressed these lacunae in the public weal, and recent events in the USA and elsewhere have exposed these gaps writ large. Only by keeping the “equity” value as the only legitimate long-term goal can funders accomplish what the promise of voluntary giving implies.

Comment: Guaranteed that this is not the last year that these words will be on this list.

My binge reading is continuing. I’ll keep everyone in the loop if the list gets longer.