Will philanthrocapitalists and hyperagents really change the world?

"As philanthropy enters a second golden age, real social change is getting lost in the hype of market-based giving," writes Linsey McGoey in Fortune.

The first 'golden age' was the 19th century, the time of Andrew Carnegie and John D Rockefeller Sr., McGoey reminds us. According to her, "From Carnegie’s spending on public libraries to Rockefeller’s investment in biomedical advances, their giving helped to shift charity from the dispensing of alms in a largely unsystematic manner to a business in itself, overseen by paid philanthropic advisors".

One trend in the ‘second golden age’ that is significant, she suggests,  is 'philanthrocapitalism'. This she summarizes as "a more muscular philanthropy that seeks to combine profits with poverty alleviation".  She is not entirely accurate. Matthew Bishop and Michael Green, who coined the term, described the concept succinctly as "philanthropy led by the world's wealth creators... applying business techniques and ways of thinking to their philanthropy".

Paul Schervish, cited several times by Bishop and Green, is the scholar who has, more than any other, studied the philanthropy of US wealth creators. He described one of the characteristics wealthy philanthropists' as 'hyperagency'. Hyperagency means “… being able to construct a self in a world that transcends the established institutional limits and, in fact creates the limits for others”.

Schervish also points out that these hyperagents are the 'producers' of philanthropy in a market where the currency is not money but emotions, and the producers are not troubled by competition.

Another trend in the second golden age, according to McGoey is the effective altruism movement, championed by Peter Singer. Singer has declared Warren Buffett and Bill and Melinda Gates  “the most effective altruists in history.”

McGoey's concern is that the hype around the second golden age is ignoring questions about its effectiveness. "Its progress," she says "often seems to be measured and underpinned by self-sustaining feedback loops". Giving in the US has remained stubbornly around 2% of GDP. 

Foundations are a growth industry in the US yet extreme poverty , meanwhile, continues to rise.

"Today’s philanthrocapitalists see a world full of big problems that they, and perhaps only they, can and must put right," Bishop and  Green wrote. 

Another commentator, Michael Edwards, sets that notion to rights in 'Small Change: Why Business Won't Save the World', his rebuttal of Bishop and Green’s book. Edwards believes that “business thinking and social transformation operate on entirely different logics”.

Finally, McGoey points to an alarming paradox from the first golden age which, hopefully, is not destined to be emulated in the second. She quotes from David Nasaw, Carnegie’s biographer, “Carnegie … became, if anything, more ruthless in pursuit of profits once he had determined that those profits would be distributed during his lifetime.” Then she juxtaposes this tweet from Martin Shkreli, “I donated a total of $5,000,000 to various causes recently. Looking forward to telling you all about it.”  Shkreli is the former hedge fund trader, who was vilified for raising the price of Daraprim - a drug that fights parasitic infections in AIDS and other immune-supressed patients - by 5,000%

Has quality of donors been sacrificed for quantity

The month since the death of 92 year old Olive Cooke has been filled with extraordinary commentary and concern about fundraising in the UK.

Nonprofit 'trade' journals have run articles featuring an array of the UK nonprofit sector's biggest names:

• 'Charities in crisis over Olive Cooke case, Shawcross says' (Third Sector).
• 'Shawcross and Bubb lock horns over the fallout of the Olive Cooke case' (Third Sector). 
• 'Rob Wilson writes to IoF asking for greater protection for donors' (Civil Society UK).
• 'Etherington’s suggestions ‘won’t address public concerns’, says Peter Lewis' (Civil Society UK).
• 'Fundraisers should need a licence to practise, says former IoF chair Mark Astarita' (Civil Society UK).

A quick guide to the cast of characters - William Shawcross is the chair of the Charity Commission, Sir Stephen Bubb is the Chair of the Association of Chief Executives of Voluntary Organisations (ACEVO);  Rob Wilson MP is the Minister for Civil Society, Sir Stuart Etherington is the CEO of the National Council of Voluntary Organizations (NCVO); Peter Lewis is the CEO of the Institute of Fundraising (IOF). Unmentioned in the headlines yet central to many of the arguments is another organisation, the Fundraising Standards Review Board (FSRB).

On reading this you might be surprised at the number of worthy sounding bodies and their titled representatives and wonder how fundraising in the sceptred isle could have fallen into such disarray. Here is a brief sypnosis.

A 92 year old lady, known to have complained about the high volume of charity appeals directed her way was found dead beneath a 245 foot high bridge. The media instantly linked her death to the pressure of the incessant fundraising approaches made to her. Within days the British Prime Minister, David Cameron urged action be taken. Both the FRSB, the independent regulator of fundraising, and the IOF, a professional association for fundraisers and fundraising, responded to the incident and ensuing media pressure. The FRSB launched an inquiry into charity fundraising approaches.  The IOF announced strengthened rules for its fundraiser members.

The media pressure continued, notably in the tabloid press. The Mail on Sunday for example ran a story written by an undercover journalist who underwent training with telephone fundraiser, Listen Ltd. The journalist described  how "staff are trained how to cynically squeeze cash from potential donors including 98-year-olds and cancer sufferers." Several household name charities such as Oxfam, Cancer Research UK and the RSPCA were forced into defending their links with the telephone fundraiser. A commentator described the entire ongoing saga as a “a pent-up stream of concern and complaint” [12].

The debates signalled by the trade press headlines above are indicative of the discomfort of the charity sector. NCVO chief executive, Etherington pointed to the conundrum of “The Institute of Fundraising’s dual identity, being both the champion of fundraisers, and a body with a key role in regulating fundraisers". He noted that the IOF as the representative of fundraisers sets the code which the Fundraising Standards Board adjudicates fundraisers against". The players, in other words, are setting the umpire's rules.

The commentary has been joined by the academic and research community. Jo Saxton, chief of an independent  a research consultancy, NfpSynergy wrote: "The sector needs to get its house in order, providing donors with a much better sense of their rights when it comes to giving".   He reminded fundraisers of an apparently forgotten 'Fundraisers Promise", published on the FRSB website.

Among the Promise's statements are: “If you tell us you don’t want to be contacted in a particular way, we will not do so” and “we take care not to cause undue disruption or nuisance”.

Plymouth University’s fundraising think tank, Rogare, is responding by bringing forward a project to develop new ‘normative’ fundraising ethics.  The core of the new norm will be presented at IOF’s Scotland conference in October.  It is that, "ethical fundraising balances the duty of fundraisers to ask for support, with the rights of other stakeholders not to be put under ‘undue’ pressure to donate", says Rogare Director, Ian MacQuillin.

Most interesting to me, of all the various opinions expressed, is one by a veteran of  charity fundraising, Chris Washington-Soare. In a blog he bemoans fundraisers "have fallen for the growth-over-quality revenue generation model for far too long" [16].

In the future, Washington-Soare argues, "Our focus needs to be on nurturing high-quality, high-value donor relationships and slowing down the hamster wheel of growth".

A version of this blog first appeared as an NPQ Newswire on 22 June 2015

What's the 3rd sector for?

What do we have a third sector for? 
By third sector I mean that group of activities that are done not by elected governments and not by privately owned enterprise. The sector sometimes called the voluntary sector, the civil sector or the non-profit sector.

Let's think of some of the things that this sector is doing today.

• At great risk to their lives humanitarian aid workers are attempting to bring relief to the hundreds of thousands of innocent men and women and children trapped in the maelstrom of Syria Iraq.

• Again, risking their lives, medical workers are dealing with the nightmare of Ebola in central and west Africa

• Scientists and researchers working in our universities and research institutes are discovering new mechanisms for combating and curing life destroying disease.

• Activists of all sorts are putting themselves in dangerous and uncomfortable situations, often defying governments and large corporations in order to promote a vital discourse around the delicate balance between the natural and man-made orders.

• Other activists are fighting for freedom from oppression, torture, executions and shining lights into some of those dark corners of our geo-political world where our governments and commercial enterprises are constrained, or afraid to intervene.

• Organizations are providing support, counseling and practical assistance to a range of minority groups whose votes or dollars are insufficient to trigger the interest of the other two sectors – minority groups such as but not limited to children at risk, disabled of all sorts, minorities of many kinds, refugees, homeless and so on.

• Artistic and cultural artefacts and practices are being preserved and promoted through museums, galleries, theatres, opera houses and concert halls as well as a myriad performing groups and talented individuals.

In all these cases, these activities are happening not because they win votes toward political power or generate financial revenue and private wealth. These activities are happening because thankfully in the circuitry of human existence there are links and conductors of empathy and moral imagination. We are able to see, feel and hear the plight of others then imagine, articulate and execute ways to make a difference.

This, it seems to me, is what the third sector is for. I have nothing but respect for those of my friends and colleagues who have chosen to work in government or private sector. However, I am very comfortable being part of this vital other partner in the success of humankind and the preservation of our globe.

Data protection spells disaster for fundraising

I was struck by the headline of an item in Third Sector. "EU data protection plans 'potentially disastrous' for charity fundraising" it proclaims.

The article went on to quote from a report from a fundraising agency "Fundraising depends on big numbers and economies of scale; by generating enough new donors, the cost of finding and keeping each one gets small enough to make donor recruitment profitable." My question is, "Does it?" 

Without wanting to denigrate the commitment of those of you fundraisers who specialize in mass appeals, my understanding of successful fundraising leads me to quite the opposite conclusion. Could it not be that instead of disaster, perhaps restrictions on the use of lists, telephone campaigns and direct mail would be a victory for effective fundraising?

Effective fundraising, it is generally reckoned even by those who practice more mass-market approaches to fundraising, requires building a relationship. So what if suddenly we switched our effort from list-buying, mailing and calling segments, postcodes and sociodemographic profiles? Instead, what if we spent our time identifying and researching people who  really are connected and close to us? Who are part of our real social constituency not just the product of data analysis. Our existing donors, our volunteers and their families and friends? And, those that have been touched by and share in our causes? What if we actually took time to talk personally and directly to these people? What if we got to know them on a one to one basis? What if we asked them to become part of a network of personal connections? What if our contact with them was social, face-to-face and responded to their interest and passion for what we do uniquely, valuing them as a person instead of as a data point?

That, of course is the basis of major gift fundraising. It is also the way to successfully approach business partnerships and to get support from trusts and foundations.

However, if we step back in time it was also the way that philanthropy originally was born. Mass-market fundraising only really started in the early part of the last century. Street fundraising originated with the YMCA and wasn't popularised until the 1980s by Greenpeace. Direct mail fundraising is really only a post World War II phenomenen. Its precursor direct mail marketing began the 1900s. Telephone fundraising, as I'm sure many of you know came much, much later.

Prior to these, fundraising for social causes including the arts and education was achieved by personal connection between social activists, volunteers and donors. The main fundraising tools were events of various sorts including balls, concerts and lectures. Fundraising letters were written personally -think of Mrs Jellaby in Dickens' Bleak House. Other forms of  eighteenth and nineteenth century fundraising also included financial tools and instruments curiously similar to those that we describe as "new philanthropy". The significance of any of these older forms of fundraising is that they involved networks of individuals interacting viscerally, personally and socially.

So, if suddenly, governments introduced regulations that limit our ability to buy lists, to mail and telephone people whom we don't know, will that really be such a disaster?

"You mean, there is philanthropy in India?"

I am just back from a trip interviewing philanthropists in India.  You may wonder what I am interested in Indian philanthropy for. 

One reason is the depressingly frequent and blunt question I often get asked: "You mean, there is philanthropy in India?".*
I have commented before, (Is US Philanthropy exceptional?)that I think it is a mistake always to think of United States as the model of philanthropy. Philanthropy is a comparative infant United States compared with the rest of the world (India's philanthropy long preceded America).  To counter these misapprehensions here are some examples of Indian philanthropists I have met.

Example one, is a husband-and-wife team who started their own foundation after building a successful investment advisory service. Through the foundation, they apply their investment skills to advising,  investing, and fundraising for a range of social activities. Three of the social initiatives that they were actively involved in when we spoke were, firstly, an orphanage for children of sex workers in Mumbai. Second, an organisation managing rural ashrams for treatment and rehabilitation of leprosy patients, and other disabled or marginalised people. And, third, an initiative that ran education programs for children Mumbai’s slums. All of these three were initially started and run by local social entrepreneurs.

My second example, is the second generation family owner of a mining company.  His family foundation has focused on implementing  a social model enabling the families of the company’s workers themselves to manage all aspects -  health, education, sanitation and sustainability -  of  their own  village communities. This, self-sufficient management model is being extended to 300 or more similar industrial villages across India. From, this initial focus on village management has grown a larger commitment to the management of wider regional ecosystems. As part of this wider initiative, the foundation is now also building a university, which will provide research and training specific to the region’s challenges. The region is the poorest in India.

A third philanthropist whom I interviewed is the founder of one of India's most successful IT companies.  We spoke initially about the philanthropic foundation arm of the international business he founded, which supports health, education, culture, and the destitute. As well, it invests in rural development of some of India’s poorest and hardest to reach areas.  Later, more reluctantly, he was encouraged to talk about the substantial gifts he and his wife personally make to universities in India and abroad. And, also their quiet giving to India wide projects in education and sanitation.

Of others I have spoken to, one was the representative of a third-generation philanthropic family. Noteworthy, was her commitment to her personal philanthropic giving to arts and education quite separate from the family's traditional corporate philanthropic support of health, education and the environment.

Two other individuals I met had made fortunes from international careers in finance.  Both, with their wives, had made their personal  commitment to give away at least 50% of their wealth.

It's way too early to draw any specific conclusions from this small sample. I intend to interview 20 or more others. However, they and other conversations that I continue to have confirm my view that philanthropy is vibrant and strong in India.  The fact is that philanthropists in India have for centuries founded universities, schools and education programs, hospitals and healthcare and provided housing and facilities, not just for workers but entire communities.

It is, I suggest, in societies closer to home, with isolated and commendable exceptions, that a culture of philanthropy has yet to take deeper root.



*The research will also contribute to a PhD in philanthropy at the Asia Pacific Centre for Social Investment & Philanthropy at Swinburne University)

What does size matter?

Have you ever thought what would your ideal size fundraising office would be? I have been reading a couple of reports recently that appear to suggest that the ideal number of staff is around seven. 

That made me wonder what exactly an ideal fundraising team would look, sound and feel like.

The most recent of the reports came from the Association for Health Care Philanthropy. The report Characteristics for Sustaining High Performance applied statistical analysis to benchmarking data drawn from North American hospitals, health foundations and University medical schools. The results identify a group of 12 organisations raised almost  four and a half times as much funding as the rest. It then discovered that the most significant difference between this group and the others was the size and resourcing of its fundraising teams. Further drilling down in the data revealed these highest performing organisations put their main focus on major gifts.

The second report I have been looking at is the Ross-CASE survey of UK higher education fundraising – Giving to Excellence.  It looks at funds raised and money spent on fundraising. It breaks this data into clusters based on the age of the universities' fundraising activities. Again, the results showed a significant increase in total funds raised correlated to the size of fundraising team and the team budget. The institutions, described in the report as having 'moderate fundraising programs' have 10 fundraising staff compared to only 3 staff in 'emerging fundraising programs'. The former spend slightly more than three times as much on fundraising. But they raised almost 15 times as much funding. Again, the report remarks that "very large gifts" were the source of much of this funding. increased engagement with alumni is a another feature of those organisations with more resources and staff.

So what might be ideal fundraising team be? Being prescriptive is a little foolish, given I don't know your particular circumstances. However I would suggest an effective team would comprise a full-time operations/database manager, a dedicated researcher, a data entry officer, a direct marketing manager (responsible for telephone/digital/mail campaigns), two major gift fundraisers and a director. Here is why think each of these positions are so necessary.

The database is the engine room of the fundraising ship. To keep her sailing requires a dedicated Chief engineer. The last thing anyone wants the middle of a major event, or a mailing from telephone campaign are glitches or data crashes. The operations manager will keep on top of all that is needed to ensure that this doesn't happen or that speedy recovery is possible.

Prospect research is absolutely essential for effective major gift fundraising. That person with the right instinct and interest, who enjoys discovering piecing together the interests and connections of your potential donors will make connecting with them, then developing your relationship with them significantly easier.

The data entry officer is that orderly person to make sure everything is recorded accurately and on time. Addresses, thank yous, reminders etc will go out to the right people at the right time.

The lifeblood of fundraising is the steady, frequent flow of regular donations. Your direct marketing manager is the person ensuring that stream continues to flow. That stream, incidentally, is from where your researcher fishes your major gift prospects(if I'm not mixing metaphors too much).

Then the two major gift specialists. Why two? Because, as both these studies have shown it is from major gifts that most funding will come. Managing the major gift process and, especially, managing relationships with major gift prospects is a demanding (although very exciting and enjoyable) role. A good major gifts manager will probably be capable of managing between 50 and hundred major gift prospects. As they manage these prospects through the major gift cycle they will need to get to know them better and spent more more time on them. The Pareto principle will apply and 80% of a major gift manager's time may need to be spent on only 20 prospects as the ask gets nearer. Of course, this time is not spent face-to-face with the prospect. It involves juggling diaries, preparing briefings, planning and logistics to ensure that the right people make the right ask at the right time.

And then there is the director. The metaphor I prefer to use for the director is that he or she is the film or stage  director,  or orchestra conductor managing all the forces. Backstage, onstage, singers, stars or support artists. He or she is seldom the star but always there ensuring optimum performance and making sure the audience and the players alike get exactly what they want to achieve from their respective involvement in the great fundraising and philanthropy performance.

Anyway, those are my thoughts.  What are yours?  There's a couple of other positions you might want to throw in. An events manager? Social media manager? What if you are too small an organisation ever to aspire to this many positions - what roles could you double up?

I'd love to see and hear your thoughts.

What is a charity regulator for?

What's a charity regulator for? And should we have one? Is a charity regulator the same as a charity evaluator? And if not what is a charity evaluator for?  Some thoughts have been rattling around my head and I am curious about what others think.
Australia and New Zealand are relatively newcomers to charity regulation. Canada and USA don't have any.  The grandfather of them all is the Charity Commission of England and Wales founded in 1853. It has been a lot in the press these days. It seems almost nothing it can do will keep everybody happy. Is it a policeman? It is a champion for charity? Should ask questions, be provocative, or simply, quietly and effectively 'regulate' the sector?

Meantime what are charity evaluators such as Guide Star, Charity Navigator and Give Well supposed to do? How do you in fact evaluate a charity? Do you look at its overheads? The proportion of donations that reach beneficiaries? Should its reserves be under the microscope? The Chief Executive's salary?

There are a handful of academic papers on charity regulation that are worth a read. One such has the nice title 'Light-handed charity regulation'. Wouldn't that be a nice idea some of you might say. However, for me it was useful in obtaining an overview to answer my opening question.

Regulation, in essence, is required to provide transparency and confidence in the charity sector to the public. The obvious analogy is a corporate regulator which ensures that investors in publicly listed companies can make appropriate decisions before risking their money. However, in a sense everyone's money is at risk with charities. Charities enjoy a privileged position with regard to not paying some taxes. Likewise donations to charities are privileged by the tax system. So it is in the public interest to ensure that charity is bona fide and the public's trust and money is not misplaced.

However the question of proportionality and the burden of regulation frequently arises in discussions. My bias on this question is reflected in my liking for the title of the academic paper above. That is because I believe that 90+ percent of those who devote part of their life to volunteering or working for charities nonprofits do so with noble intentions. Yes of course there are aberrations and rip-offs. But I wonder if we put these against the aberrations and rip-offs in the private sector which would be the more numerous and the greater in the value gouged?

Let's turn to charity evaluators. My understanding is that they are for enabling potential donors to get a look at certain key criteria regarding the charity's performance in order to help them make choices. The challenge here is what criteria and how to evaluate them?

It was with some relief that the sector recently read that three largest US evaluators now recognise that overhead is a poor measurement of a charities performance.

But what is a good measurement of a charities performance? And can you apply that measurement to each and every charity? Such is the diversity of the charity world, I struggle to think of a single measurement which could have universal application. Then there's the wider argument of whether quantitative measures provided effective evaluation? Or whether quantitative stories from beneficiaries and others on the ground are best?

I'd be delighted to hear and read what you feel because I think this is too important an issue to be left without debate.

Charity vs philanthropy

This month you will have been in a world where people in the Phillipines are crying out for basic necessities while million dollar gifts are on the rise to universities. Is this a dilemma for you as a fundraiser?

I believe not. But the dichotomy is illustrative of a wider principal – the distinction between charity and philanthropy.  The distinction is practical not semantic.  The roots of both words (one Greek one Latin) are comparable.  “Love” is in the etymology of both.  Both have been used interchangeably in the English and other languages for centuries.  Yet in practice there is I believe a distinction.

I have friends in the Philippines who are volunteering to help provide the essentials of life to their fellow citizens in some of the more remote regions of Cebu.  They point out that 150 pesos (about $3.50) = 3 packets of noodles, 2 canned goods, 1.25liter of drinking water , 2kilos of rice.  A modest contribution can make a big difference to one or more person’s individual condition.

Contrast this with gifts to Australia universities by Andrew and Nicola Forrest  or Graeme and Louise Tuckwell.  These multi million dollar gifts will fund research and scholarship.  What will be done through enhanced research and scholarship?  Or rather, a better question is what has been achieved throughout history by researchers and scholars?  We may not live in a perfect world but the achievements and progress we enjoy has to a large degree been the fruit of  education and inquiry.

The analogy, it seems to me is with curing symptoms and finding causes.  Both are essential. Charity and philanthropy are both essential.  We need to develop expertise at both.

Another paradox was in the philanthropy news this month.  Bill Gates - channelling Peter Singer - asked “why anyone would donate money to build a new wing for a museum rather than spend it on preventing illnesses that can lead to blindness?”

The essence of that dilemma was encapsulated by this remark in the Wall  Street Journal.  “Somerset Maugham said in his novel Cakes and Ale: ‘Beauty is an ecstasy; it is as simple as hunger’." Philanthropy has a role in contributing to both.

What do you think?

 

 

 

Is US Philanthropy exceptional?

Is US philanthropy exceptional and is it unfair to judge Australia against US standards for wealth and philanthropy? Those were two questions posed in media I read last week.

"We overdo this thing about philanthropy because we don't compare with the Americans. There is no one with money in Australia if you compare us to the wealth in the US," said Harvey Norman chief, Gerry Harvey in TheAustralian. 

My friend, Sabith Khan posed the question, "Is US philanthropy exceptional?" in his blog The Clockwork Muse.   My response? US philanthropy is not exceptional and we do ourselves a disservice by thinking so.  Yes, it involves institutions which are native to the USA - such as the US tax treatment of donations.  But the US concept of philanthropy was inherited and remains consistent with other, much older cultures including the Islamic culture of giving which in turn spread to Europe around the 13th century.  Many of the institutions of philanthropy in the US were adopted from Britain. Among the institutions inherited from Britain was the legal concept of 'charity' which is based on the Elizabethan statute of 1601. 

British philanthropy was well developed in the nineteenth century at the time that it was only beginning to take root in the US. Its development from Tudor times to the early nineteenth century is described by the two great histories of British charity written by WK Jordan and D Owen. Reduced to its essence it is a tale of the emerging haves recognising a responsibility for - even a self-interest in - alleviating poverty and providing better education and health.  Many of the ways in which 18th and 19th century British philanthropists met these challenges were equal in their innovation to today's so called, "new philanthropy".

The newly wealthy US industrialists, moved by similar concerns about the welfare of the communities from which their fortunes had been created, looked across the Atlantic for ideas.  Some such as Andrew Carnegie and George Peabody were active in both Britain and the USA.

Some of the significant differences, especially the significantly higher levels of donations by US taxpayers stem from the era of World War I and its aftermath. By that time the British state had begun to take more responsibility for welfare and the relief of poverty.  For example, the old age pension was created for Britons in 1908.  After the War, under the influence of the Fabian movement, the British government took further responsibility for education, culture, health, welfare and religion. The influence of the Fabians was significant in the development of these social institutions in Australia and New Zealand too.

Conversely, in the USA much of this responsibility for welfare and poverty was taken up by philanthropy - supported, nonetheless, indirectly by the state through the generous tax treatment of philanthropy.  Tax rebates on philanthropy were created in 1913 when income tax was first introduced in the US. Olivier Zunz describes US philanthropy as "self-taxing for the common good" and cites Tocqueville who talked of it in his descriptions of Jeffersonian (early 19th century) America, as "self interest properly understood". (Zunz O, 2012, Philanthropy in America: a History, Princeton University Press, Princeton).

Britain has no such direct tax relief on charitable donations though relief is available to a donor who "covenants" a regular payment to a charity. Instead through Gift Aid, the charity receiving a donation also can claim an additional amount equivalent to the tax payable by the donor on her donations.

In contrast, however, Australia actually preceded the US by introducing tax deductibility for gifts to charity as early as 1907 in Victoria.  Tax deductibility was enacted federally in 1915. So in that regard, Australia cannot claim to be different from the USA.*

What about wealth, as suggested by Gerry Harvey?  The following data from Wealth-X Ultra High Net Worth Report ought to give pause for reflection. The USA has 60,280 UHNWIs (i.e. with over $30 million financial assets) with an average worth of $133 million.  Australia has 3,350 worth on average $122 million.**   As percentages of their respective populations, UNHWIs represent 0.019% of the USA total population, 0.015% of Australia.*** Oceania saw the greatest growth in UHNW population, with an increase of 5.9%, largely driven by the continued growth of Australia. That excuse is disappearing as fast as the wealth gap is narrowing!

  

*New Zealand also offers tax relief on donations though until recently it was capped at a very low level.

**New Zealand 485 worth $126 million. UK, 10,515 worth $126 million.

***0.011% of New Zealand and 0.017% of UK population.

Whiteboards and herbal tea

There's a bit of a barney going on about 'Strategic Philanthropy' between a couple of prominent US 'philanthropoids' . It's fun to read yet somehow I feel that it’s forgotten a basic of philanthropy. Philanthropy is about love of mankind.  Real people not statistics.

William Schambra , started the ding dong with a provocative address in which he suggested that foundations in general and the Hewlett-Packard Foundation in particular were preoccupied with "whiteboards and herbal tea".  Well that wasn’t precisely what he said though it's amongst the memorable phrases.  What he was arguing was that there is a trend, in foundations especially, toward applying scientific models and metrics.  This, he says, threatens to usurp actually going to the frontline and listening to the wisdom and experience of those working at achieving the objectives of the grant seeking charity.

In response Paul Best, the head of the Hewlett-Packard Foundation paints a picture from an imagined past.  What if, he says, 19th Century philanthropy had ignored newly emerging medical research into bacteria and accepted frontline advice based on past practice and local wisdom?  Would serious problems have been tackled? (Note, that he has conflated the original argument into a defence of science as a whole, rather than Schambra's example which referred to a particular use of a specific scientific approach to foundation decision making).

The initial argument, it is acknowledged by Schambra, actually was made in an article Letting Go  in Stanford Social Innovation Review (SSIR).   It presents a real life case study of a foundation (Hewlett-Packard funnily enough!) which funded, entirely off its own bat, a  program that failed in its objectives.  A little while later some people closely involved with the intended beneficiaries of that funding came back to the foundation with a much better considered proposal.  A proposal designed from the perspective of the beneficiaries, in the knowledge of their specific circumstances and conditions.  It was funded and it was a success.

Now I am a fundraiser not a philanthropoid. For me, resonating through this argument is a more important one for  fundraisers.  When you are making your case for support or when you are running stewardship programs, are  you taking your donors or potential donors to the frontline? Are you introducing them to the people for whom their support makes a difference?

Creating a case for support in my experience is one of the hardest things a fundraiser has to do. It requires you to take a leap out of your world and into the wider world where your beneficiaries and your donors are.  You will have to talk to beneficiaries and learn their needs, wants and aspirations and turn these into stories, using sounds, feelings and pictures.

Of course, there's another strategy that you can use. How much time are you actually spending time in the frontline yourself.  Working alongside your program staff and the beneficiaries of your work. Or at the very least interacting with program staff, asking them questions and showing interest in what they do.

In fact by building rapport with your program staff, spending time in their shoes you will be able to do a much better job of  selling your case for support and dealing authentically with your donors and prospects

India's philanthropy long preceded America

Jamsetji Tata established his philanthropic foundation in India before even that of Carnegie.

This is a discovery made while exploring High Net Worth Philanthropy in India. In this blog interview first published in The Clockwork Muse, I explain how I got interested by philanthropy in India, its dimensions – social, cultural and religious and whether there are differences from Western notions of giving.

1. Please tell us a bit about how you got interested in High-net worth giving in India?

 Like many Protestants I knew very little about traditions of giving other than the one in which I grew up – church collections on Sundays, occasional street day appeals and organized charity appeals for the likes of Oxfam, Red Cross and Save the Children.  Somehow I formed the impression that it was the West alone that provided relief and succour to the developing world.  I never read or heard discussions about indigenous traditions of charity or philanthropy other than my own – even in my early days as a professional fundraiser.

Around 2005 I was working for a firm of international fundraising consultants and through them met Major General Surat Sandhu, who had recently retired from Help Age India to become a fundraising consultant. Sometime later, knowing that I was visiting India, he invited me to give a workshop to some Indian fundraisers. For the first time I began to understand a little bit about NGOs and philanthropy in India. As time went on I became more a more struck by the scale and prevalence of philanthropy in India.

More recently when I was considering the focus of my research for the Ph.D. I wanted to do.  I was reading the extensive press coverage generated by Bill Gates and Warren Buffett’s first visit to India to promote the Giving Pledge. There was a great deal of discussion by Indian HNWIs themselves about their practice of philanthropy. I had never seen that in the West!  It seemed to me here was a fruitful area for further research.  Especially, of course,  because Ph.D. research is supposed to cover topics that haven’t been researched before. The sad fact is there has been almost no academic research on any aspect of Indian philanthropy.

 2. What is your background and experience ?

 As I mentioned briefly above, I am a fundraising consultant. I also train fundraisers. I began my career as an actor, then an arts administrator, then I became a fundraiser first in the arts and then in higher education – universities.

3. What have you uncovered so far about giving behaviors in the subcontinent?

 It’s hard to give a simple answer. The subcontinent is a complex mix of religions, castes, ethnic traditions, geographies, histories, politics and social class. All of these are reflected in one way or another in giving behaviors. However once again I would like to reiterate that there is, or are, strong traditions of giving.

4. Any surprises?

 No surprises other than the initial surprise that philanthropy and giving are so much a part of Indian culture.

 5. What is unique about Indian philanthropy, as compared to western notions of giving?

 I wouldn’t necessary claim that there is anything unique about Indian philanthropy, in comparison to Western philanthropy. One thing to remember is that Western philanthropy grew from traditions that were introduced from the East. The first endowed universities and hospitals in Europe were the result of Medieval Knights returning from the Islamic territories of the Middle East where they had been introduced to the tradition of Islamic philanthropy and waqf.

US philanthropy is an infant in comparison to the traditions of the Middle East and Asia having been imported from Europe in the 19th century.

6. Noam Chomsky said recently in an interview that most Indians are indifferent to others’ suffering? Do you agree with this, purely from a philanthropic perspective

I have great respect for Noam Chomsky as an intellectual and a great liberal. I don’t think the reported comment was particularly profound. He made an interesting observation about the reaction of someone else – Aruna Roy. And he tried to generalize it through his own sensibilities. I think he missed the mark and I hope that it isn’t held against him.

 7. What is the role of philanthropy in a society such as India? How does this intersect with the state’s responsibility?

 There is much debate about the role of philanthropy in societies around the world. The philanthropic sector is sometimes called the third sector to distinguish it from the state sector and the business sector. There are some things that can be achieved by philanthropy which cannot be achieved either through the state or by business. There are also some things that can be done in partnerships of all three – the state, business and philanthropy. Of these, I suppose it would be fair to say, philanthropy has the most freedom to innovate and take risks. Certainly this appears to be a growing trend both in the West and in India.


8. How do you foresee the understanding of philanthropy growing in India, going beyond Corporate Social Responsibility? The field is pretty nascent in India, is that right?

 As I have said already philanthropy is far from nascent in India. In fact, in comparison, it is American philanthropy that is nascent! There is much confusion about corporate social responsibility not just in India but all over the world. Corporate social responsibility and corporate philanthropy are not synonymous. In India the debate about corporate social responsibility has been renewed as a result of the government making it mandatory for some companies. However the definition of corporate social responsibility is still far from determined.

You may be alluding to the fact that there is a strong tradition of philanthropy within the business classes and industrial dynasties of India. There is in the public mind some confusion between corporate philanthropy, family philanthropy and CSR because of this. Similar confusion may even exist amongst those business families themselves.


9. Any concluding thoughts.

 A strong motivation for my undertaking this research into philanthropy in India is a belief that the world should recognize that there is much more to philanthropy than there is contained in Western philanthropy. Until now, 90% if not more, of the research that has been published has been published either by American or British scholars about American, British and Western European philanthropy. I was lucky enough to spend some time in the Middle East and was introduced to Islamic philanthropy. That began my curiosity and interest into other traditions of philanthropy.

India is remarkable because within one country there are so many different traditions. I think the world has a lot to learn from India.