Philanthropy
The Four Fundamental Questions of Philanthropy
How to decide what to do with $600,000,000.
The Ford Foundation, the second largest foundation on the planet, with assets of $12 billion, is about to hire a new CEO. What will the new CEO do with all that money? How, among all the possibilities available to her, will she decide to focus the foundation’s grantmaking?
The new CEO will want to honor the foundation’s previous commitments. She won’t want to make any sudden moves. But having exercised the necessary prudence, and having consulted her board, toward what star will she steer her course?
Granted, if you took all the giving in one year of all the foundations in the United States—approximately $34 billion—the sum would barely equal three percent of all nonprofit operating expenses. In fact, it wouldn’t even cover the expenses of the 70 largest nonprofit hospitals (and there are 3,000 nonprofit hospitals in the United States).* Nevertheless, with an annual grantmaking budget of $600,000,000, the new Ford Foundation CEO will be able to move the needle significantly on any number of issues.
Imagine that it fell to you, dear reader, to invest $600,000,000 each year in charitable work. How would you do it?
I can’t imagine anybody doing this successfully without first attempting to answer the Four Fundamental Questions of Philanthropy:
1. What are we living for? What does human flourishing look like? What is my vision of the Good? Is it the greatest happiness for the greatest number? When does the Categorical Imperative trump the Greatest Happiness Principle? Is life little more than moving things from one place to another until we die? Is it simply a long series of credit card purchases marked by some poignant, half-remembered moments with friends and family?
2. How do I understand (social) justice? What’s our responsibility to one another in a complex, industrial society? How much suffering at “the bottom” should be tolerated if the overall statistics look pretty good? Is the notion of a social contract at all coherent? If so, who gets to shape it and how?
3. What is the role of a foundation in society? What is the appropriate role for private (viz., foundation) capital in addressing social needs? What’s the proper mix of public and private funding for social goods like the arts, job training programs, health care, or education? Should foundations take up the slack when, under pressure to reduce taxes, governments cut funding for social programs? What should be the relation between a foundation and other institutions? Between a foundation and individual citizens?
4. Apart from my board, the legal authorities, and God Herself (not necessarily in that order), to whom should I be accountable and in what ways? Are things getting better or worse, for whom, and how quickly? When should a current need trump a possible future need? How did we get into the current mess in the first place? If “systemic” issues are involved, how far can or should we go in attempting to change the system? Is it my foundation’s responsibility to keep the issue—whatever it is—from becoming an issue again? To what extent should I risk great failure in an attempt to obtain a great social good? What’s the received wisdom** I need to question? Do I know the history of my own field well enough to say what counts as failure and what counts as success? Do I understand what contributed to these failures and successes?
* According to nonprofithealthcare.org.
** E.g., ‘The primary purpose of education is to prepare young people for the work force,’ ‘A nation’s health is measured by the growth of its GDP.’
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COMMENTS
BY Album
ON March 7, 2007 12:35 PM
To my mind’s eye, these proposed questions (of which there are not merely four) are some of separate tiles included in the make-up of the fundamental question mosaic. This mosaic, when viewed from afar, expresses something along the order of “What does it mean to be human in the world today and tomorrow?” For all human time, all sorts of clarity of purpose questions have been posed in philosophical arguments. For some individuals, the answers to life’s “fundamental questions” lies in theological doctrines and practices; for others, careful and considerate observance and analysis of the human condition tells them what they believe they must know in order to act; and still some believe the answers become apparent with time. In my estimation, regardless of the manner in which one seeks to anwers one’s interpretation of fundamental questions, many of the questions might well be less difficult to answer if brought just a touch closer to home. The mosaic is intriguing, but the tile tells the story.
BY DR. PAUL W. HORN, PH.D.
ON March 8, 2007 04:39 PM
MAJOR PROBLEM: MOST FOUNDATIONS ARE IN THE HANDS OF THE LIBERAL-LEFT, AND NOT SURPRISINGLY,
THAT WHERE THE MONEY GOES.
WHEN YOU SAY. ATYPICALLY, “GOD HERSELF” I STRONGLY SUSPECT THAT YOU ARE OF THIS ILK
YOURSELF.
WE NEED BALANCE IN HOW THE MONEY IS DISTRIBUTED. IF BOTH SIDES ARE WORKING ON THE SAME
ISSUE, WE WILL BEGIN TO MOVE IN THE DIRECTION OF FINDING OUT THE “TRUTH”.
I REALIZE THAT “RELATIVISM” IS THE BEDROCK OF LIBERAL-LEFT THINKING, AND THUS TRUTH NO LONGER
EXISTS LIKE THE TEN COMMANDMENTS.
THUS: MEASURING THE EFFECTIVENESS OF A DONATION IS NEARLY IMPOSSIBLE, SINCE THERE ARE NO
ABSOLUTE YARDSTICKS.
BY Mohammed Bougei Attah
ON March 9, 2007 02:03 AM
Many in our world of today will readily have answers on how best to utilize such huge sums of money. This will however differs differ from one area to another. For our part of the world in Africa, the question that first hit individual will be the purpose for which these funds are meants, the source and how many people do need support - which is unending.
BY Danielle Walker Palmour
ON March 9, 2007 03:28 AM
It seems to me that the 4 questions posed are ones to be answered by an individual donor rather than someone working in an institutional context in which the aims and objectives of the specific organisation (made up of Trustees, stakeholders, staff and those seeking and holding grants) also come into play.
The new CEO might wish to start with these questions, but would also need to elicit answers more broadly.
BY markflaming
ON March 9, 2007 11:05 AM
I have to disagree that these four questions constitute a relevant starting point. The main challenge to channeling large sums of money into charitable work is structuring the funding so that enhances the effectiveness of the implementing organizations. I think that the reason that this challenge still looms so large is precisely because funders have spent more time sorting out their answers to such questions than working out the mechanics of funding relationships that encourage recipient agencies to innovate and increase impact. If funders get that role right, they will nourish thousands of robust answers to these never-ending philosophical considerations and our lives will be much richer for having more to contemplate.
BY purushothaman pillai
ON March 14, 2007 05:50 AM
the Indian/my approach, Philanthropy is personal to the donor; to receive money for personal gains is sin; hunger forms the very first theme for giving; it is acceptable to beg to get educated; good food brings good health; the one who received the benefit should never forget the person who donated; giving for advertisements as in the case of few corporates and foundations are bit of sin; a man born in this world survives whether giving is there or not, god take care of every-one; money is one way foolish
BY Veredigno Atienza
ON March 14, 2007 09:25 AM
I have a written a book on what my best lights tell me is the highest form of philanthropy: that of creating systems of justice. I have nothing against philanthropy that promotes the arts or music or theatre or education or environmental consciousness. However, in my part of the world, where democracy, markets, and economies are hijacked by the all-powerful and all-resilient elites, there is a serious need to empower the people and the poor. Systems that allow people empowerment are the greatest priority. If the people are empowered, they will be in a position to handle situations that foundations and governments are better off leaving in the hands of the people.
Veredigno Atienza
“Creating Systems of Justice:Philanthropy at the Highest Level”
BY Tony Diaz
ON March 14, 2007 11:08 AM
well I have a suggestion. As we all know children obesity has increased dramatically over the last few years. Soon and I mean real soon you will see a new non-profit organization called 4kids2befit that its main focus is helping children learn how to adopt a healthy lifestyle through a fun program focusing on eating habits, food choices, and exercise. There will be a team of doctors, fitness trainers and others assisting in this program. the investment in our youth should be our number one concern. More to come…
BY Neal
ON February 28, 2008 03:53 PM
Dr. Horn’s response raises interesting questions. Why are the largest foundations mostly liberal (or are they)? Where are the clearly conservative multi-billion dollar foundations? What happens to conservative million/billionaire’s fortunes? Do liberal billionaires give their money away while conservative billionaires keep it in their families?
Dr. Horn suggests foundation money is not being distributed in a balanced way between liberal and conservative organizations. Is there data to support this? Is there evidence of conservative foundations giving money to liberal organizations?
Would a conservative organization accept money from a foundation that has a broad approach to diversity that includes supporting lesbian and gay staff and their families or would that be too big of a conflict to overcome? Would liberal foundations give money to conservative organizations that work in some ways within their values (such as fighting poverty) but in other ways work against their values (such as fighting against immigration rights)?
I agree with Dr. Horn that there needs to be more collaboration. I wonder, though, if the national rhetoric has us too divided to allow groups with some similar objectives and some distinctly dissimilar values to work together.
Lastly, Dr. Horn’s somewhat accusatory tone to his email is one reason why liberal organizations don’t work well with conservatives and vice versa. The name-calling and labeling that occurs is clearly a roadblock to developing collaborative relationships.
BY dstoker
ON February 29, 2008 12:16 AM
These are the fundamental questions of life. I think there are a couple principles to follow—
Freedom to Choose: I think we need to give the poor more choice in deciding what projects will be delivered to them. I think of that great book and definition of Development as Freedom. I also think of William Easterly’s suggestion of giving project “gift certificates” to the poor and letting them choose what projects they want in their village, sparking greater competition, quality and efficiency from organizations.
“Where much is given much is required”: I think the educated and wealthy have a moral responsibility to act as private citizens to give back and use their privileged opportunities and good fortune, not to “consume it upon their lusts” but better society first.
Special individuals can leverage donated money to exponential levels: I think Bill Drayton and Ashoka have a great track record of finding such people. Muhammad Yunus and microcredit is perhaps the greatest example of leveraging donated funds to recycle and grow and touch multiple lives. If Ford can find the next generation of Muhammad Yunus’s then their impact would soar.
Wisdom opposed to popularity: I think the private sector has a huge role to play in the social arena. I think it is more feasible to gather an educated and wise council of people to make appropriate decisions in the private sector than depending on elected officials to make such decisions. The requirements needed to successfully win popularity contests are too often dominated by special interests and instant gratification of constituents. We need the best minds, the best research, and the best managers coupled with the money of the most successful businessmen. We have proven solutions to many problems but funding does not always follow sound research and wisdom, I think of the book Millions Saved.