Whither Philanthropy?

The Monday Nov 10 WSJ contained a special section offering solutions to the problems with charitable giving.   I immediately noticed that one of the “problems” not given special attention is that many pundits of philanthropy seem to know very little about the history and philosophy of organized philanthropic giving and charitable giving in the US.   The one basic thing they always seem to overlook is why we have such a rich tradition of giving.   One reason is, our history of distrusting central authorities.   Private giving allows a distributed system of decision making that allows ideas to be tried and tested.    And maybe inefficiency is necessary.    Philanthropy is not business.  It need not make a profit.   It does not have to follow common wisdom or yield to political whims.   These are core characterisitcs that should not be casually trifled with.

There is an unfortunate tendency in most of the articles I have read, and the collection in the WSJ this week falls into the trap, of the lumping together what are very different forms of giving with very different purposes and outcomes.

In general, individual charitable giving (think supporting your local soup kitchen or putting money in the buckets or boots thrust at you at intersections or the entry to a supermarket) tends to be palliative.   The hungry are fed, the sick are cared for, the local child gets the needed operation paid for by strangers.    More organized public charity -(think civic organizations or voluntary health organizations focused on curing a particular disease)- often raise funds broadly from the public, usually on an annual basis, and tend to spend funds via a number of directed programs.   Organized strategic philantropy by foundations that spend incomes from private endowments and do not raise funds from public campaigns tend to support strategic initiatives intending to be alleviative.   Private foundations using a social venture capital model (private funds investing in the public good) often aim their efforts at root causes.    How can we not just care for the sick, but understand the causes of illness and how they can be better treated?    How can we not just feed the hungry but understand why in a world of plenty people are hungry?   Private foundations also invest in the public good through their support of educational and cultural institutions so that we all have access to art, music, history, and other opportunities for informal learning.

In my experience, most attempts to discuss “problems” with charitable giving bog down in worrying about “processes.”    How to write proposals?  How much funding for how long?   What should be the reporting requirements?   In reality – the mechanics of giving and granting are easy.    The problem with philanthropy is not the 5% payout.    The hard part of philanthropy is thinking carefully about what you are doing.    Believe it or not – this is hard.    It is expecially hard in a profession filled with outer humility masking inner hubris.  it is hard to maintain skepticism.  It is hard to ask the right questions.    It is hard to risk failure.  There is no magic way to solve social problems.   There is no right way to make grants.    Non-profits needing to raise funds to support themselves are not all equally deserving.    Sure, most non-profits can do a better job.   But they do not need confused “experts” selling them trendy advice.