March 5th, 2018
Recently the NY Times published an extended piece on what has happened in the years since November 1989 when the Berlin Wall fell. The Wall has now been gone for longer than it stood. It has been gone long enough for decidedly revisionist theoreticians to bemoan its loss, xenophobes to blame its loss for precipitating an influx of “foreigners”, for Europe to have gone through celebratory post-nationalism and reactionary tribalism. It was a metaphor for a world with clear binary choices made more complicated without it.
On a personal level, its fall marked a life-changing experience for me, one that shaped a good deal of my professional involvements and interests since. As some of you know, I was in Berlin that day. For a short while after that, I would, in an attempt at humor, take credit, but after it became clear that re-unification was more complex and nuanced than originally imagined, that made little sense and wasn’t very funny. [I had been a guest of the West German government for several weeks prior to that famous day and stayed on briefly afterwards. My presence was pure coincidence.]
The Fall of the Wall is remembered as a peaceful symbol of the end of the Cold War. Only days before, if one stood at the Reichstag and looked into the space between the walls, one saw a killing field. Few recall that tensions were very high in the days leading up to 9 November. All of the armies occupying Berlin were on full alert, we were warned to stay away from Checkpoint Charlie, and there was on overriding sense that something could happen any second. The history that must be told is the miracle that no solider on either side, in a moment of panic, lost his [yes, his] cool and started shooting. It could easily have happened.
The result, ultimately, would have been the same but it would have been remembered very differently. The Cold War didn’t end with a whimper exactly, but it certainly was not the Bang it might have been. Thankfully.
As I said, it changed me. It wasn’t that I had been parochial exactly, but I had never been very focused on international issues, the dynamics of the many diasporas of many peoples, and the implications of an implicit post-nationalism that characterized that era.
After that experience I invested heavily in recrafting my own career, developing programs with several governments, speaking in many other countries, and cultivating some modest expertise as a frequent observer of a rapidly changing world. [Initially, most of this focused on Europe but subsequently I have had the privilege of speaking and meeting on 5 Continents – Australia being the only remaining outlier.]
There are many things I learned during those years – most notably a very profound respect for how history shapes one’s worldview. Watching the Republikaner march in Munich, or observing how Jews in the evolving Europe would lie low even 2 full generations after the Holocaust – then celebrate that they are more than survivors only to witness a resurgence of vitriolic anti-Semitism, or how Germany’s view of a post-nationalist Europe resonated with so few outside of Germany, or how the Czech and Slovak republics could become Czechoslovakia for only one year, only to divide again, or Brexit, or how long submerged ethnic identities exploded – in both wonderful and terrible ways, or how difficult it has been, even to this day, for some countries to come to grips with their own uncomfortable pasts, and more, has been extraordinary… and instructive by providing perspectives on today.
Given the frightening challenges to democratic ideals in the USA, and also in many other countries, it is clear that too many forget or deny that history is filled with destructive mis-steps. The USA is not the first nation or people that celebrated its exceptionalism, only to become an also-ran in subsequent centuries. Unconscionable divides between the haves and the have-nots have led to outright revolutions and decades of instability. Pluralistic societies cannot take for granted that tolerance and integration will be foregone conclusions in the future. Isolationism, in the form of national “superiority”, becomes a cancer on the body politic.
The Berlin Wall, with all of its metaphor and symbol, represented a binary understanding of the world. When that facile and simplistic overlay was removed, we learned that the world had not anticipated how complicated it would be nor was it adequately equipped to deal with the tribulations and challenges that have followed. My hope is that history will look back at our currently tumultuous time and see it as the last gasps of failed visions of totalitarian and xenophobic aspirations. If there are any abiding lessons to be learned, it is that we cannot rely on “history” to make sure that we survive these times intact, and we certainly cannot count on the self-discipline of trigger happy leaders.
February 26th, 2018
If you are a wealth advisor [or relationship manager, or any of a myriad of other titles for managing other people’s investments], you have seen the studies. Year after year, they consistently show that your clients may be pleased with the investment service you give them, but, as a rule, they don’t believe you are up to speed with your philanthropy advising. Moreover, they consistently show a disconnect between your self-perceptions and those of your clients.
There are numerous explanations:
1. For many, the simple answer is that it isn’t your job. Your job is to maximize value in a trusted relationship with your client. You make them as much money as you can according to a predetermined risk factor and anticipated longevity. Your compensation is based on money under management. [we’ll return to this point in a moment.]
You have no objection to philanthropy as an objective, and indeed are delighted when wealthy clients establish foundations or trusts so you can provide investment services to those entities, a win-win solution. Thus, you gladly have a “philanthropy” conversation, but all too typically as an investment vehicle.
But ultimately philanthropy is not an investment vehicle but represents money out the door for social good. It isn’t what you are trained or paid to do so it doesn’t occupy a lot of planning time. You may discuss the idea of philanthropy, especially vis a vis taxes [see #2] but your expertise rarely extends to how to spend the money to accomplish a social good. Clients who want a constructive conversation on philanthropy are often disappointed because, for them, philanthropy is what good they might do with the money they have made, not how they invest it.
2. Many wealth advisors do discuss philanthropic vehicles, but all too often only as a tax reduction or avoidance strategy. Where your clients spend it isn’t your concern, but properly structured, philanthropy can certainly reduce the tax burden. Indeed, l have heard multiple wealth advisors brag how they can use philanthropy to get their clients’ taxes down to $0. [Long time readers know how I feel about that!]
Studies have consistently shown, though, that tax savings is not a primary motivator for being philanthropic or altruistic. Taxes and tax savings may influence the specifics of how one structures ones giving, but if one isn’t altruistic or generous, it won’t be any more – or less – satisfying than any other tax reduction vehicle. But those who do want to be altruistic ultimately have a different set of concerns and questions, and whether to set up a trust or a private foundation or a DAF or even an LLC may be real solutions, but only as long as they are solutions to the real questions a client wishes answered. Yes, the vehicles matter, but they satisfy clients only if they reflect the values they want conveyed through them.
Philanthropy is ultimately not about maximizing value but maximizing values. So, as many very well-intentioned wealth advisors and trust attorneys do, simply asking about philanthropic interests and presenting structural alternatives without a deep understanding how philanthropy works is not satisfying to a client.
3. The next challenge is a very legitimate legal and structural issue. You are required to define who is your client and have a legally defined trusted relationship with that client. Often, though, philanthropic planning is a multi-generational matter. Even if the client is the only one expressing interest to you, without understanding the functional dynamics of a family, a perfectly legal and efficient solution may be far from efficacious and even counterproductive down the road.
Don’t misunderstand. I am well aware that many of you do try hard to establish relationships with the others in a family, some very successfully. But even then, most members of the family know to whom you are ultimately responsible and can sense your primary loyalty. [After a lot of years in this business, I can report that there are many foundations and trusts that handcuff or disempower or even antagonize surviving family members because the founder’s attorney did what was legally required but strategically flawed.]
This structural dilemma matters because only a very few people of wealth ever look beyond their wealth advisor or estate attorney for philanthropy advice. As one who speaks frequently at conferences for family offices and wealth managers, I regularly find myself meeting those of wealth or their advisors who express surprise that there are those of us whose expertise is philanthropy per se, and not money managers who happen to specialize in managing philanthropic assets.
Which brings me to the two key takeaways of this piece:
4. What do philanthropy advisors do – and how wealth advisors can collaborate with them?
Philanthropy advisors help their clients [individuals, foundations, families, and other entitles that distribute money] make good, informed, and ethical decisions. A philanthropy advisor can help determine what a funder’s goals and values are, whom they want involved in their decision or legacy, what style of giving is most consistent and meaningful, and what impact they want their giving to have, and for whom. Some advisors are “full service” – supporting every stage in the process including decision making and back office support; others are specialists in one or another area along the continuum such as strategy or family systems or evaluation or are specialists in a particular content area.
Very rarely do philanthropy advisors manage a client’s money.
Therefore, philanthropy advisors are rarely your competitors. On the contrary, they can be partners or collaborators who can help you do your job better. That collaboration can work so the services provided to a client can be seamless.
Most philanthropy advisors define a “client” as the entire family or the entire foundation. It is quite common that, to do their job, a philanthropy advisor may need to challenge the stated priorities and assumptions of the “founder”. It may not always be comfortable – for the founder or the other professionals, but it may be the optimal long-term way to go.
Experience has taught me to add a caveat to wealth advisors: philanthropy advisors are usually at the end of the financial food chain and rarely are they a source of investment business for wealth mangers. The reason for collaboration is not to get new business but to serve your clients’ full range of needs and interests more effectively.
5. What can wealth advisors learn about their investment approaches from the philanthropy world?
For well over a decade, the philanthropy/foundation world has been absorbed by the idea of “impact.” Why spend money, however well intentioned, if at the end of the day it doesn’t reduce poverty or illness or illiteracy or homelessness…? Results matter.
A derivative corollary to that is that there can and should be an alignment between how one spends one’s money and how one earns it. If one wishes to reduce illness or pollution, it is surely very dubious that investments in fossil fuels or tobacco make very much sense.
In the philanthropy sphere, this is not new. It has been discussed and finely honed for quite a while, and there are robust answers at every philanthropy, family office, and investment conference. There is now a maturity of the field, a growing range of credible options, and a conviction that impact and values-based investing need not be an outlier in any viable philanthropy investment strategy.
Here is the emerging news: What works for funders and foundations can work for individual investors as well. Many, especially but not restricted to younger funders, are beginning to ask about values-based funds or approaches beyond the philanthropy realm. Far too many money managers still think of these approaches as financial compromises or outside of mainstream investing. If a money manager resists, you may be sure that others are eager for the business. [In our own case, we made it clear to a money manager with whom we were working that that we were prepared to change because she tried to dissuade us from values-based investing. She studied up, learned a bunch of things that surprised her, and withdrew her objections.]
Those of us in the philanthropy sector have been at this for over a decade. Impact investment isn’t a panacea, and not every approach is a slam dunk, but alignment of values and investment should be a no brainer for every investor. And if you are a wealth advisor and need help understanding how this can work for your clients, I know a lot of folks in the philanthropy sector who would be happy to help.
A number of readers have asked for more specific recommendations how wealth advisors and philanthropy advisors can collaborate. Please contact us directly for a “how-to” list of several proven ways..
February 20th, 2018
In the almost 16 years since I have become self-employed, I have learned that there are both professional advantages and disadvantages. One of the double-edged swords is the ability to say or write whatever one wishes without clearing it with anyone. Of course, that doesn’t mean that there aren’t consequences to that freedom. For example, not everything I say in my public presentations or in my writings endears me to all of my fellow philanthropoids, and I am aware that such outspokenness has cost me some contracts. I sometimes say things that challenge common orthodoxies in the field. This post is another example of that.
Before my Jeremiad, let me be very clear: I am a big believer in the indispensability of voluntarism in giving of time, money, and leadership. This is true everywhere in the world and has been for as long as there have been structured societies. I also believe that it is advantageous [but not mandatory] that there be some incentives to do so, such as tax deductions, although this is far less universal. In a very high percentage of the nations and peoples of the world, education, healthcare, social welfare, and much more would simply not exist if it were not for that voluntarism, whether organized by faith based or secular institutions’.
Moreover, full disclosure, for a good part, but not all, of my career, I was a beneficiary of that voluntarism. I was employed by universities, non-profits, and foundations all of which exist because of voluntary giving. [I have also been employed by for-profit companies and am now mostly an independent contractor – a profit making venture most of the time.]
Having stated my bona fides, and affirming the necessity of our sector, what is my beef?
It is that our sector continues to advocate for the wrong things, or more correctly, inadequately advocates for what will truly make a difference.
The recent tax law, which I consider to be an embarrassment and an abomination for its shameless pandering to the super-wealthy and its concomitant disregard for those in need, has probable real implications for charitable giving. I say probable because it is by no means certain that the tax changes will in fact yield lower giving.
I agree with the pundits that it will probably depress giving by mid-level donors in the short run, but history doesn’t support that that depression will continue over time. In fact, if one looks at the implications of tax changes on charitable giving over the long run, one sees short term gains and short-term losses concomitant with tax changes, but that over time giving reverts to a mean and has remained there for a very long time. [There have been many pleas and attempts to increase that percentage, but with only marginal success.]
Moreover, most studies show that charitability is only marginally influenced by taxes, and when it is, it mostly has to do with how – not whether – one gives.
Having said that, it is true that this is a time when we need every incentive possible because of the vastness of the needs, and the tax sham certainly doesn’t do that.
But even were charitable giving to double, it would only make an incremental difference in the moral hole the USA has dug for itself in its recent policies. Maybe the tax scam will save the average person in the USA a few hundred dollars as they promise, but it comes at the same time when congress is radically reducing support for health care, education, food insecurity, and – if they have their way, social security and Medicare! The probable financial net loss to most people far exceeds the incremental tax savings.
And this is all accompanied by a reduction in consumer protection and in abetting climate degradation.[If I wanted to get “political”, I would add to this shameful litany the incessant attacks on the judiciary, the press, science, and the truth, but let’s leave that discussion to another time.]
Not only do these changes portend economic hardships for many, but underneath, a veritable meanness of spirit, a culture of misanthropy, the very opposite of what our field is supposed to stand for.
To be fair, many in our field have been actively and assertively leading the good fight. But for too many institutions in the fields of philanthropy, the advocacy begins and ends with charitable deductibility and similar self-authenticating issues. Yes, it is worthy to encourage charitable giving, but hardly sufficient to redress these wrongs. As a field committed to improving our world, making it more sustainable and equitable for all, our voices should not be heard as defending our own needs, but rather demanding that what we stand for matters. These are public policy matters; they are a reflection of our tax priorities; they are statements about our national character, our ethics, and our values. Optics matter.
Most of us are in the field of philanthropy because of our visions for what our limited [even if generous] resources can help bring about. Let’s not let those visions be reduced to transactions on a tax return.
What then is the proper role of philanthropy in these times? There are numerous approaches.
a. Risk Capital: A recently widely disseminated piece out of the venerable Ford Foundation reaffirmed philanthropy’s role as society’s risk capital. Most of us in this field come to that same conclusion at an early point of our ventures in this field, and it is always worth re-discovering and re-affirming our uniqueness. After all, who besides our field is exempt from plebiscites, or is accountable to stakeholders beyond our own boards. We can, should, and must take risks that other sectors might legitimately shy away from. [That doesn’t exempt us from appropriate humility that our guesses or investments may be wrong, but when we are right, our investments can be transformative.]
In normal times, I would applaud this recent reaffirmation of our unique role, but these are not ordinary times. Our risks work best in times of stability and a common commitment to basic societal institutions. Our risks are more suspect if the education, social service, health care, and even cultural institutions are not adequately supported. Are we supporting risks to get us back to an authentic baseline – or avoiding our responsibility?
b. Funding what government won’t. Some segments of our sector celebrate examples where voluntarism of money and time have successfully replaced programs that taxpayer supported institutions no longer can afford. Those successes or noble experiments most typically are present in the education sphere, but not restricted to them.
However, leaving aside the moral challenge of having human needs dependent on the good will of voluntarism, or whether this reflects public policies that are sustainable over time, on a practical level it is simply impossible to privatize all of the basic needs of an industrialized, or post-industrial society. The scale, the alignment of need with available resources, and the accountability to the public make it all but impossible.
c. Continuing to support what we always have This approach has served society well in the past. The need for cultural or local institutions will always be there even after a particular disaster or financial crisis passes. Many argue that those continuing investments save many millions of dollars over time and give a much-needed social stability especially in times of turmoil.
The logic of such support is unassailable, but today there are radical changes in the funding landscape. When Ultra High Net Worth funders can give 9 and 10 figure gifts to museums and orchestras and universities, what real difference does the average person’s – even the average wealthy person’s – annual gift make? At this time when our disruption is not primarily financial but ethical and existential, does keeping to the well-trodden best express our best philanthropic interests?
d. Becoming real change agents. Over the years, I would often challenge funders [clients and students] when they would say that they want their funding to “make a difference.” I point out that “making a difference” means that something is different than it would be without your funding, and that often means taking chances. [see a. above]. Some would acknowledge that they mean something much more modest than being a change agent, rather that they want to focus on institutions that will be sustained or enhanced by their gift. Others took the message to heart and thought long and hard about what difference they really did want to make and if they were prepared to be disrupters.
At this time in history, the disruptions are being caused by public policy challenges that go deep and wide. To be change agents requires going beyond an “industry” or “priority interest” in our funding. To be change agents even requires going beyond our own sector. It means leveraging our resources, all of our resources – financial, influential, and knowledge – to address potential cataclysmic disruptions. [In the case of the environment, these are clearly not exaggerations; in the case of the character of our nation, they are also existential.]
I think you can gather where I stand. That doesn’t’ mean that funders who choose a, b, or c. are bad funders, but they should be conscious of where those decisions sit in the context of current needs. For those who share my alarm at the fragile state of our union and planet, it is hard to shy away from a commitment to d.
Advocacy matters more than ever before. As funders, let’s make sure we are advocating for that which can indeed make the difference.
February 13th, 2018
This past week encapsulated many elements of my professional and volunteer life at present. I met with clients and potential clients; I attended philanthropy association events and related public lectures; I participated in international interreligious meetings and met many involved in those endeavors in our new hometown of Washington, DC The client part is beyond the scope of this particular post, but what emerged from the rest raised some challenging dilemmas for those of us committed to a more equitable world. To wit:
A profoundly moving and engaging 2-day meeting of the Alliance for Virtue occupied much of Tuesday and Wednesday. I was invited as a past chair of two international interreligious organizations, and a quondam continuing participant in this realm. This particular gathering was primarily, but not exclusively, for those of the 3 Abrahamic traditions. Leadership, though, was heavily from the Islamic world and given the abysmal mischaracterization of Muslim leadership heard in the USA, this meeting was a profound and resounding rebuttal.
Let us be clear: even as treacherous as the USA has become, and it has, the risk that most of us in this country take in supporting diversity, pluralism, and mutual acceptance is minimal. We may get trolled sometimes, although most of us aren’t famous enough for the trolls to bother. A few put their jobs in jeopardy by being outspoken, but even though I have personally lost at least 2 contracts because of public statements, they neither defined me nor radically altered my income. I am not diminishing that some in the USA do face death threats and challenges to the comfort of their daily lives, but all of these pale in comparison to the jeopardy that those in the Near and Middle East can face daily. It is humbling indeed to hear strong voices on behalf of mutual acceptance from those who will return home to genuinely existential challenges.
Another session last week that forced some introspection was a public “debate” program sponsored by the Century Foundation and organized in DC by the Wagner School. The topic was the indispensability of integration as a precondition for successful educational institutions. I, like the vast majority of those present, began with a facile assumption – that of course integration is far preferable and likely to yield the long term optimal success for the largest number of students, including those most at risk. However, the spokesperson for the “no” side was far more persuasive. His argument was that most schools are racially and economically homogenous and to wait for that to change is both politically Pollyanna-ish and does a disservice to current students. Educational [and other support systems] need to provide tools for success wherever they are. Since educational experience can never be divorced from larger socio-economic realities, until or unless the system can address all of that, school integration becomes nothing more than tokenism – from which students return to their more organic and homogenous lives. [He did not argue that elimination of segregation or affirmative action are not valid and worthy goals, only that they can get in the way if they are perceived to be preconditions to achievement.]
In other words, achieving equity in the educational sphere remains a complex example of interconnected factors [forgive me if I don’t use the word “intersectionality”]. Funders whose goal is equity in the educational sphere need think twice about what will work and what will count. Ideologues – across the political divide, beware!
The final piece was an inspirational presentation at WRAG’s annual Cafritz lecture. Given by Rukaiyah Adams, an African American Woman Foundation CIO [all of which were relevant in the context of her remarks], she challenged funders to think more holistically about the relationship of their investments to their grantmaking [remarkably, still an approach that some people find challenging]. Her finance and personal background gave her a distinctive point of view – one that should persuade all but the most resistant wealth mangers.
Less typical of such presentations, especially by finance types, though, was her insistence that funders need to work with their grantees – and even in their own staffing practices – to make sure that equity is not just a macro funding goal, but one made manifest in actual practice. Equity funding, she posited, only really matters when it actually results in more just distribution of resources and honors people at every stage of organizational life. [Followers of my philanthro-ethics posts over the last few years won’t be surprised that her strong advocacy resonated with me and reflected much of my own point of view.]
For me, what emerged from last week was a renewed commitment to the mandate to work for, advocate for, fight for, and fund equity that is real. It isn’t a bad reminder for all of us in the philanthropy and social justice realms everywhere.
February 7th, 2018
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.
January 1st, 2018
Long time readers will find resonance with this post. This was written a while ago but not published; it is being posted as we begin 2018. At a time when a new tax law has exacerbated the divide between the very few super-haves and the rest, when upward mobility has come to a virtual standstill in America, and when some political forces clearly reject equity as a value, it seems obligatory to reaffirm our philanthropic and public policy commitments.
It was quite by chance that I learned the functional difference between equality and equity. It was sometime in the mid-70’s and I was Associate Chaplain at Brown. Brown’s unionized workers were on strike, and through a series of incidents, I got to know the leaders of the union and also happened to be friendly with the university president.
The strike began in the summer but, as it continued into the school year, it began to have more visibility and was proving to be a divisive presence on campus. As often happens, that led to a hardening of positions. The positions were very clear: The union wanted to give everyone a raise, and wanted that raise to lift the lowest paid workers to a defined minimum. The university was offering a percentage across the board, but was not willing to give a high enough percentage to accomplish one of the key bottom line goals of the union.
One day, I learned that the next negotiating session was to be at noon that day. I asked the union if they would be open to considering a split solution: giving everyone an across the board percentage increase, but having a one-time supplement to the lowest paid to bring their base salary up to an agreed base minimum. They said yes. I called the university president before the negotiations and suggested this solution. I wasn’t in the room, but that afternoon the strike was settled.
I learned that day that “equality” [in this case of “across the board percentage increases”] was not the same as “equity” [in this case, achieving the goal that no employee should be paid less than a living wage.] It is a distinction that subsequently has served me well as an executive/ceo, a consultant, and a philanthropy funder, educator and advisor.
For many years, in my speaking and teaching about best grantmaking practices and relations with their grantees, I have urged funders to not confuse the two. To ask an established university or museum or hospital for quarterly financial and program reports should be a no-brainer; to ask a 3-person non-profit start-up for detailed quarterly reports may be needlessly disruptive. On the surface, it seems fair: after all, a funder is treating all grantees equally. But functionally it is way off balance. If every funder expects detailed quarterly reports, and, typically, they are all different, it can take hours upon hours of adminstrativia away from the service or program the funder is actually funding. The bottom line is inequitable even if equal.
The same is true for proposal submissions, evaluations, site visits, and more. I have long urged funders to be aware of their impact on their current or potential grantees in all of their procedural practice. [For more on the topic of funder-grantee practices, see my numerous articles on philanthro-ethics.]
One way of understanding the difference is that equality [of access] should characterize the entry point; equity should define the desired outcome.
Which brings us to why this distinction is so crucial in our field at this time in history.
We, as funders, haven’t always been so great on the equality of access area, although thanks to the current momentum in our field in articles, conferences, self-studies, etc., we are getting better at it. But we are only beginning to scratch the surface of “equity as impact” as one key measure of our success as funders.
This has always mattered, but given the profound erosion of commitment to public support for education, health care, housing, child support [to say nothing of civil liberties, the press, access to the ballot box], as funders this should matter a lot. Our advocacy and our direct funding need to address cataclysmic challenges to populations at risk, and redress losses. The recent tax sham/scam should only reinforce the centrality of equity as a driving force for all funders.
The lesson I would urge upon us all as many of us re-think how we do business in this new and problematic era is to be careful to build equality of access into all of our work, and to work toward a commitment to equity as an essential impact of our grantmaking.
These times demand no less.
December 27th, 2017
Some years ago, when Mirele and I began to help other funders and foundations develop their strategies, we realized that we needed to “walk the walk” and develop our own. We did, and I am happy to say that our strategy has served us well for quite a while. It has done what it is supposed to: given us a framework for considering where our philanthropic dollars should go, and, as important, when to say “no.” The process works.
Our own priorities are definitely not “place based” but are completely “values based.” That doesn’t mean that there are never locally based recipients; of course, there are. But the reason they receive our funds is not because they are where we live but because they are consistent with our values and involvements.
Some recent personal experiences have made me wonder if we have been too absolute in our funding approach.
1. We moved
As many readers know, we have recently relocated our residence from New York to DC. [Needless to say, we will continue to be regularly engaged in philanthropy related work in New York and elsewhere in the world.] After 20 years, such a move is not without emotion. What has been striking to me, and in retrospect not so surprising, is that the most touching reactions to our relocation were by those with whom we had a “place based” relationship. Many of those were personal friends with whom we will continue to connect, but many of the most meaningful reactions and notes were from individuals active in organizations with a local focus. Perhaps also not surprising: Our move mattered much less to those whom we know in more national and international contexts even if they happen to live in New York and our meetings are typically n NY – their focus and our fellow board members are from all over so our move was not that significant to our relationship. I daresay that all of this should hardly have been a surprise, but I hadn’t realized how striking the difference would be. And, more important, it made me aware that our personal place-based involvements really had made a bit of a difference.
2. There are differences between NY and DC
We also discovered a real difference in the way the Washington area philanthropy world is organized. In many of the places where I have spoken or consulted or lived, there is no divide between locally place-based funders and those whose funding priorities transcend those boundaries. But in DC there is a very clear divide. One is either a local funder or part of the other Washington – the one of outsiders and transients. [We have noticed that the same seems to apply in social and organizational contexts as well.] One is forced, almost, to declare if one is a local. [By the way, DC comes by that concern honestly – for decades, it has been under-supported by the national government that limits its electoral enfranchisement. And it is true that many residents are in fact passing through with no real commitment to the place. Many organizations with headquarters here are focused on their national agenda and ignore a local one.]
3. There are limits to systemic level philanthropy
Another development in our field has, independent of our move, precipitated my own re-thinking. Many big-picture funders are interested in solving the big systemic challenges. They make “big bets”, take on massive “challenges” and think beyond the limits of predefined sectors. They want impact, and they want it now, measureable, and sustainable. I, for one, am all for that, and identify myself with those ambitious goals.
What many have been slow to realize, though, is that change takes place on the ground. One can attempt to eradicate illiteracy and food insecurity and poverty and malaria by major policy initiatives of multi-sector collaborations. But at the end of the day, those initiatives only make sense if individuals can actually read, and individuals have adequate nutrition, and individuals have enough resources to function, and individuals are no longer ill. Systems don’t feed them or cure them – they are fed and taught and cured by someone on the ground, in local communities.
Implementation is key. There is no systems change, no matter how persuasive and innovative, unless someone on the ground can implement those systems. Therefore, many funders have come to understand that a commitment to systems change can only work with a concomitant commitment to understanding [and funding] place-based institutions that can make it stick.
While our pockets are much, much shallower than the mega funders who have pushed systems change as step one, our priorities and funding practices have been aligned with them. Maybe it is time for a re-think. Perhaps we don’t have to renegotiate our “values approach” to our giving, only where our dollars will have the greatest impact. In other words, it is a false trade-off between “place-based” and “values-based.” One can support the values inherent in systems thinking and recognize that without a commitment to implement them in real places, they are simply abstractions.
In the meantime, we are spending our early months in our new locale getting to know our local DC colleagues, and about their funding practices. Let’s see where all of this goes.
December 21st, 2017
Most Americans know in their hearts that Congress passed a scam under the guise of tax overhaul. Since the bill was written behind closed doors up until the moment it was passed, with no hearings or public review, all any of us could do was express our concern about what should or shouldn’t be in it. I suspect that very few of us will be thrilled when the details come out. But what we know so far is that very few of us should take much pleasure even if taxes for some go down for a bit.
Why do I say that?
The entire assumption that tax reduction is a cherished goal in any society is bizarre. Taxes are what pay for public services that we want or need, and in almost every case are better provided by a responsible government. Most of us who are not science deniers want to breathe clean air, drink healthy water, eat food that we can trust. Most of us want to travel in safe cars, buses, planes, and trains. Most of us want Congress to respect our decades long contract to respect our defined benefit plan called social security, and would like to be assured that dealing with health needs won’t bankrupt us even in our old age. Most of us want an education system that educates us effectively and fairly regardless of our zip code and ethnic or racial background. Most of us want to know that we have a just judiciary, a trained foreign service, treaties that others can trust, and a military that can protect us with a clear moral standard.
Most of us, I suspect, even want a Legislative Branch and an Executive Branch that understands and endorses all of these things, although I guess I should not expect miracles on that one.
The tax overhaul does none of these things. In fact, it is predicated on two things: that cutting taxes as a goal supersedes all other goals [especially of course for the very wealthy who shouldn’t have to shoulder a tax burden they can easily afford]. And that in order to do so, we can reduce or eliminate public commitment to achieve any of the above goals that define every other modern nation.
Most of the analyses of the sham vision for America only look at the tax burden. And most independent analyses reveal that even the taxes for most people, even if they drop modestly for now, will rise no later than 8 years from now – sooner for others and immediately for some. But that is only part of the story. If health insurance costs rise, it effects our personal bottom line even if it is not through a tax. If people die or get ill because of removal of government guaranteed protections, who will pay for the additional burdens on families? If there are no assurances of fairness in the workplace or schools or on our streets, what resources will remain to correct inequity and those lost communal resources? And much, much more.
Our taxes may go down a little; our net standard of living will deteriorate a lot.
Now – none of this rant is new info, but it needed to be said to get to the next part of this post. Whom do they think will pick up the slack? Economists have almost unanimously said that the trickle-down theory is bogus. And besides, there is no incentive for the private sector to be better employers or even feel the need to hire more people at a time of increased automation and on-line commerce.
That leaves the voluntary sector, otherwise known as the non-profit or non-government or public interest sector. And voluntary is the key word. Americans have a history of generosity, and our tax system has historically rewarded that generosity. History has also shown that tax changes have only a short-term impact on that generosity – short term up or short term down, but over the long haul, giving reverts to a mean.
If that history proves correct, we are in even bigger trouble. Because the burden of a large complex society will fall to those voluntarily funded [professionally directed] organizations. Who will compensate for a reduction in educational funding? Who will provide sustenance to the newly homeless and unemployed and uninsured?
Does anyone really believe that, as good and broad as that sector is, it can pick up the massive slack of government reduction? Does anyone really believe that voluntary giving will increase 3 or 4-fold to even begin to make a dent in that new donut hole of financial vulnerability created by the tax cut scam? The demands on this sector will make those of recent recessions pale.
And this, finally, is where I grade our sector in the run-up to the vote.
I don’t think we did so well. [I am in this sector – mostly on the funding side – so I have to include myself in this accountability.
There were some on the funder side [e.g., NCRP and the Forum to mention only a couple of which I am aware] who spoke eloquently about the impact on people and not the impact on taxation of potential changes in the law. In my mind, they got it – and spoke to the underlying issues. To be fair, I am sure that many other groups also did but I simply didn’t see their public advocacy statements.
However, the overriding attention of the philanthropy support world focused on two things: keeping the Johnson Amendment [a topic for another time] and holding on to tax deductibility for charitable donations. Both of these are worthy goals that I support, but they missed an essential point.]
When the foundation world takes a lead role in advocating for tax deductibility – without a clear articulated vision of other societal needs, it sounds like any other industry group’s self-promotion. We, I hope, are different from the NRA and the Fossil Fuel lobbyists whose lobbying effort are not related to a larger vision for society but for their own self-serving agenda regardless of the negative consequences on society as a whole. I would hope that those of us in the philanthropy world are better than that. We don’t do philanthropy and support wonderful and striving nonprofits just because it is in our interest, we do it because what we support can make a difference to millions of people. At the end of the day, our sector should care about our impact more than our institutions.
But most of the statements that I saw, and received in my in-box, were for advocacy efforts for continuing tax deductibility, with little about the totality of the impact on society as a whole. The sound-bites sounded like another bennie for rich people who wanted to make sure they kept another one of their deductions. Not the best optics for a sector that really does care.
Now, I know that many will take umbrage at this characterization, that the organizations did provide research that shows the financial impact on fundraising. But I have been concerned about these optics for a long time because our sector is not an independent one. We are constantly in a dynamic, if virtual, dialogue with public policy, not independent of it.
Advocacy for charitable deductibility should be tied in with a larger vision of why this sector exists at all, of the pervasive inequity in the social weal and our national policies that reinforce that inequity, of what taxes should in fact support, and how, bottom line, to assure that all citizens are treated fairly and have the necessary means to live respectively and with dignity.
I have devoted most of my professional life to this sector. I believe that it is necessary and reflects something good about every society that supports a thriving voluntary sector. But I don’t believe that our sector should replace public support for basic human needs, and that is what this tax bill implies. I know that most in the philanthropy world agree – I only wish we had said that as loudly as we advocated for deductibility of our contributions.
November 22nd, 2017
Those who read these posts exclusively for observations about the philanthropy field may want to stop reading now. This post has a very clear political point of view.
Let me be clear. I find Fake Judge Roy Moore to be despicable. Only some of that enmity emerges from his evident/purported child molestation history although by itself it would justify that judgement. [I personally have little doubt of his guilt but, in anticipation of my next sentences, will acknowledge that he has not yet been found guilty of these crimes – as opposed to others of which he has]. What bothers me at least as much is his disdain for our legal system, the US Constitution, his xenophobia and racism. Found guilty [and exonerated by a president whose own moral compass points due south], he relentlessly pursues an elected office where he can further his unconscionable world view and advances the destructive voices of his rabid supporters. He and his fellow travelers bring shame on our country, his party, his State, and all that decency requires. He and his advocate in the White House have brought dishonor to our international reputation and our political system. Shame.
I guess there isn’t any subtlety in that paragraph!
That alone would warrant a loud plaint. This next item emerged by chance and, by now, is, sadly, less in the public eye, but no less shameful.
Last week, I had the honor to be a speaker/presenter at a philanthropy conference in Orlando. When I travel, I try to speak with as many of the staff at the hotels and the behind the scenes conference enablers as possible. One learns a lot. It seems that many of those who provide those services in Orlando are from Puerto Rico. I had extended conversations with 4 of them. One of the questions I asked was what impact the hurricane had on their families. Shockingly, all 4 of these people, each of whom I met randomly, had lost relatives during or caused by the storm! How many more there must be? My goodness, we on the mainland have no concept of the depth of abandonment our government has wrought. Is it racism? Their disenfranchisement? Their relative poverty? I will leave the analysis to those with more in-depth knowledge of Puerto Rico – all I know is that this is a continuing and profound blemish on our national character. Shame.
The list goes on: The widespread loss of respect for the judiciary and the press reflect a frightening erosion of understanding and belief in our constitutional system… The unconscionable denial of a commitment to saving our planet – under the guise that climate change is only a politically motivated opinion… The perverse and counterproductive belief that the primary responsibility of elected officials is to cut taxes rather than support our citizens… The willingness to consider privatizing Social Security and Medicare thereby abrogating a decades old contract with each and every taxpayer… The cynical erosion of the Affordable Care Act under the proven false claim that they have a better way to provide health care to more citizens more cheaply… The frightening acceptance that racism, anti-Semitism, anti-Islamism, xenophobia, and nativism have a place, any place, in a civil society.
Shame. Shame. Shame. Shame.
We must never ever accept that any of this is normal or acceptable. Ever. And especially on Thanksgiving week, a time for an honest consideration of the current state of our national character, these should give us all pause.
November 15th, 2017
I recently had the pleasure of meeting a very respected colleague in our philanthropy field. He and I are contemporaries, but I daresay he is better known than I, a detail of some relevance to this post.
Our conversation veered into observations about developments in and the state of our field. For many reasons it is growing, there is both consolidation and expansion at the same time, there are those pushing philanthropic giving into more assertive spaces, there is a recognition of both the expansive capacity and the severe limits of what philanthropy can accomplish, and, for both of us, a sense that not everything that is purported to be new really is.
About that last point: Both of us have been in the field long enough to find others “discovering” things that we had, ourselves, done or written about a long time ago. We are both bemused that the eureka discoveries are simply rediscovering what so many have said before. There is an admitted ambivalence in seeing these things: we could constantly post corrective references to our own writings and accomplishments – to remind folks of our contributions to the field of philanthropy learning, or, alternatively we can accept that everyone needs to learn philanthropy practice in his or her own way, at her or his own pace, and it is ok for them to claim discovery.
As a quondam university educator, I learned very early on, that, for students, if they didn’t see it, it didn’t happen. It mattered not that a year or 5 or 10 or 20 years earlier, other students had planned the same activity, studied the same text, written the same insights. The very process of learning those same things is indispensable to education. Otherwise, I came to understand, one would have a hard time justifying teaching Aristotle very year! So as tempting as it was to tell the students what their predecessors did wrong or right, and it would have been so much more efficient to have done so, it would have been a counter-productive disempowerment. It took more of my time and patience, but the long-time result was far superior.
So, as I said, my better-known colleague and I have learned to smile knowingly, hold our tongues, and keep silent as others take bows for their “innovations” and “insights.” Probably as it should be.
But perhaps not always. It is one thing for individuals to learn anew what comprise best practices, how not to abuse the power imbalance, and the challenge of saying “no” to so many. But it is something quite different to find a shocking absence of institutional memory among the many organizations and affinity groups in our field. One of the costs of the absence of institutional memory is forgetting that our field matters, and always has. We are responsible, collectively, for billions of dollars, an entire sector, and a great deal of public policy. We are not the sole supporters, the sole influences, and the sole determiners of public policy. But we do matter.
Institutional memory should be in play when challenges to the public weal are prevalent; when civility has become a rare and precious commodity in public discourse; when public policy is set by the highest bidder. Only our field has the independence to call it out. We have the independence – and I would say the responsibility – to advocate for decency, support for the most vulnerable, the interconnectedness of our policies with our funding priorities. This is not a new role for philanthropy: most of the patriarchs [yes, most but certainly not all were men] in our field understood this. Whatever their motivations and personal histories, they came to understand that polity requires civility, that civility requires equity, and that equity is only possible with the financial resources to make it so.
Institutional memory would have saved the time and money needed to hold summits to address what many have said before, what many have said long before my colleague and I said these things. Our advocacy and involvement in public policy are not new, and not only brought about by the current fragile state of our democracy, but have always been there. And we have paid a price as many have been reluctant or slow to speak, advocate, connect the dots, and recognize our unique mandate.
As funders, we engage in our own strategies, struggle with our own decisions, look for tools to enhance the impact of our philanthropic dollars. Maybe not easy, exactly, but absorbing and demanding. Sufficiently so that we may lose sight that we are always, by definition, playing in a larger sphere. Our decisions don’t only decide what worthy group or organization or city gets funded, but also what doesn’t. And writ large, our decisions say something important about what our public policies should look like, and which sector should have which responsibilities.
Advocacy matters. Why? Because, while philanthropy does matter, a lot, it never has and never will have the resources to solve systemic problems alone. Indeed, there is no systemic challenge that does not require a public policy commitment. It is wrong to allow politicians to deflect responsibility to the voluntary sector to solve such problems, and it is equally wrong for our sector to choose to ignore our mandate to keep educating political forces of their responsibility to the citizenry.
As one who has been educating philanthropists and foundation folk for almost 2 decades, I am never surprised that those in our field have to learn and re-learn basics of the laws [they differ depending where in the world one lives], ethics, and best practices that make us thoughtful and responsible funders. That is why we teach what we do, and it helps guarantee that our field continues to develop standards of excellence, and behaviors built on humility and an understanding of our power imbalance.
But best practices are not the same as understanding the uniqueness of our potential in shaping a larger society based on values. For that, we need to understand our roles at a more basic and profound level. We matter because we are advocating by our decisions, whether we intend to or not. We owe it to ourselves, our field, and our communities to do so with greater intention.