Government funding is not a growth industry – demonstrated by increasing competition for grants, impending budget cuts and short-term funding priorities – it’s hard to keep up.
Philanthropy has become the great equaliser – bridging the gap between revenue and rising costs.
Results from the Australian Major Performing Arts Group (AMPAG) 2012 survey Tracking changes in Corporate Sponsorship and Private Donations indicate that non-government support of the major performing arts has hit a new high, increasing by $10.8 million or 20 per cent from the previous year to more than $65 million.
Arts and culture is the second most supported sector by private ancillary funds[i], equal to education; and overall donations given to registered cultural organisations through the Register for Cultural Organisations has almost doubled since 2004[ii].
But it’s not just about the money. It’s about the type of money, the role that the donor can play in leveraging other resources, and the ability to encourage a change in behaviour.
As part of the 2010 election, the Australian government committed to commissioning Harold Mitchell to undertake a Review of Private Sector Support for the Arts in Australia (October 2011). The aim of the review was to identify ways for maximising private sector financial and in-kind support in order to supplement existing funding from government.
Mitchell provides a progressive framework for incentivising and broadening giving to arts and culture, building support from the ground up. His recommended improvements include:
One of our favorite recommendations is the development of a crowdfunding initiative with matched funding from government – incentivising capacity building at its best. Crowdfunding is an area of significant potential. The inspiration for impact demonstrated by Kickstarter (USA), who have successful raised over $245 million to date, shows us it works. The double whammy for the arts and cultural sector is that it is as much about building an audience as it is about raising funds.
Other countries such as the UK move ahead in leaps and bounds with initiatives like The Catalyst: Endowments programme – a partnership between the Department for Culture, Media and Sport (DCMS), Arts Council England and the Heritage Lottery Fund (HLF) – committing £100m in match funding to leverage private giving investment in cultural endowments and fundraising capacity building.
We are delighted that the Federal Arts Minister Simon Crean has recently taken the next step in acknowledging the recommendations offered in the Mitchell Report by announcing the creation of a new arts private sector entity to be operational from 1 July 2013 – stay tuned as this will herald a new level of partnership between philanthropy and the government.
[i] Australian Taxation Office Taxation Statistics 2007-08 and 2008-09, The Australian Centre for Philanthropy & Not for Profit Studies Current Issues Sheet 2010/1, updated 6 May 2010.
[ii] Annual Report, Department of Water, Heritage and the Arts, 2010.
Guest Contributor: Dr Wendy Scaife, Senior Research Fellow, Australian Centre for Philanthropy and Nonprofit Studies
This special Public Management Review issue looks at how philanthropy interacts with public policy and also questions who is accountable to whom for what.
Harrow and Jung’s editorial introduces some key issues in this philanthropy/government relationship, as a taster to this edition’s seven articles. They observe that philanthropy’s role in relation to government is variously ‘stop-gap, stakeholder, standard-bearer, and stooge’!
Harrow and Jung also point to a worldwide trend that we are seeing locally: renewed government interest in philanthropy in times of economic downturn and austerity. Talked about as ‘enchantment with philanthropy’ and even ‘courting’, they report that philanthropy is being seen as some kind of white knight in ‘post-recession’ western societies, particularly the U.K. with its Big Society agenda. Their provocative title ‘Philanthropy is Dead; Long Live Philanthropy’ refers to this see-saw motion between philanthropy and the welfare state and the current tip back towards high expectations on philanthropy.
This idea of philanthropy stepping in to fill government’s shoes where regimes are unable or unwilling to fulfill society’s needs comes under scrutiny: does post-GFC philanthropy in fact have the resources to do what governments and societies are expecting of it? Does it want to? Is this simply government’s vision, not that of a cussedly autonomous philanthropy sector? These writers reinforce that this independence of action, the freedom to walk away from or stay with particular directions is the key point of philanthropy/government difference.
Harrow and Jung pose the related 64 billion dollar questions:
‘To whom is philanthropy accountable, and who holds it accountable?’ Government policies are usually debated (at least in theory). But who contests the views of the Gates Foundation’s three board members (Bill and Melinda Gates and Warren Buffet)? Their US$3.8b budget is just a tad smaller than the World Health Organisation, controlled by and answerable to 193 member countries.
In foundations of non-Gatesian proportions too, Jung and Harrow see this independence characterising philanthropy, giving it leadership influence and its public fascination. They raise the role of philanthropy in holding government to account, not vice-versa.
The role of philanthropy-state partnerships is canvassed, interestingly in the area of schools, which should resonate in Australia today. The message is to be wary of partnership rhetoric and to focus on the social provision problem more than the partnership actors.
This editorial and the special issue are not easy reading – many fifty-cent words where five cent ones would do. But the depth of thinking in each article makes it worth the time and brain investment. These articles question the dogma. We need that.]]>
On meeting Richard Branson, Jochen Zeitz, the CEO of Sport & Lifestyle Group said: “I felt mesmerised by him at first, not sure whether I was being charmed by a beast with the nature of a lion or a golden retriever.” Mmm, I know what he means!
Branson’s book is a bright and breezy, easy read. It’s peppered with well-known names, inspirational stories and a Pollyannaish sense of optimism about everything, every problem, issue and event. Much of the time I felt like I was reading an advertorial for all things good about the Virgin Group and Branson.
But to simply characterise the book like that would be doing Branson, and the impetus and fundamental ideas that form the basis of the book, a disservice. Branson’s message is a simple one: business as usual isn’t working, and things have to change.
He writes: “While the industrial age was all about wealth, unsustainable growth through depletion of natural resources and delivering profit to your shareholders, this new era, the ‘Age of People’ is all about shifting the focus to how businesses can and must deliver benefits to people and the planet – as well as shareholders.”
Fundamental to this book is a rallying call to business that ‘doing good is good for business’, which he has titled ‘Capitalism 24902’. Over and over again he states that business leaders must take on a wider responsibility for issues that affect every corner of the globe.
This book is full of inspiring stories, quotable quotes and nuggets of business advice for all businesses, for-profit and not-for-profit alike, and particularly social entrepreneurs. Throughout the book Branson uses anecdotes and examples of bringing together businesses, governments and social sector to create brand new business delivery models that take far better care of our communities. In doing so, he demonstrates the power and influence of philanthropists to build unconventional networks and coalitions to confront global social and environmental issues and achieve large-scale change for the better.
In one of the most telling chapters of the book Branson quotes Julie Hill, a former Division CEO of the infrastructure giant, Costain. She says that: “…the CEO of a business has to have their own personal epiphany about why business has to have a wider stakeholder base than just the direction of the business itself… they have to be citizens of the world and have to understand it, to have a broader mission and become more powerful, almost like government.”
But she stressed, that unless the CEOs themselves have this depth of world view of the humanist perspective, the company won’t really to do anything. They may tick the boxes, but that’s all.
This book is a compendium to, and another expression, of Michael Bishop and Michael Greene’s book Philanthrocapitalism and Michael Porter and Mark Kramer’s writings on ‘creating shared value’. For most people and companies, much of this sentiment is still aspirational.
However some CEOs are taking the lead. Last year Paul Polman, the head of Unilever, launched an ambitious plan to double Unilever’s revenue by 2020 while halving the company’s environmental impact. A July 2012 edition of AFR Boss featured an interview with Paul Polman. They discussed with Polman the challenges of leading a socially driven mission while protecting his company’s core. Polman is quoted as saying: “Our form of capitalism has brought us far, but hasn’t solved everything. We think businesses that make contributing to society a part of their business model will be successful.”
Music to Branson’s ears – and to mine!]]>
The tension between transparency and effectiveness is often not well understood by those outside the philanthropic sector. Like many of the sensitive issues around philanthropy, while engendering often quite passionate differing positions, the transparency and effectiveness tension is often not discussed publicly.
In this video, panel members Brad Smith of the Foundation Center, Phil Buchanan of the Center for Effective Philanthropy, Emmett Carson of the Silicon Valley Community Foundation, Christy Pichel of the Stuart Foundation, with Chip Edelsberg of the Jim Joseph Foundation as the moderator, discuss these tensions with disarming honesty.
As President of the Foundation Center in the US, Brad Smith is responsible for the GlassPockets Foundation Transparency Initiative and believes “the best way to preserve philanthropic freedom is not to hide behind it; rather, foundations increasingly need to tell the story of what they do, why they do it, and what difference it makes”.
He believes transparency is important for foundations for four reasons:
Phil Buchanan is the CEO of The Center for Effective Philanthropy (CEP), a consulting firm that provides foundations and other philanthropic funders with comparative data to enable higher performance.
Fascinatingly, Buchanan began by stating that he believes in transparency but he is not a transparency absolutionist.
If nothing else, he believes that just to take the step on the transparency track, anyone or organisation needs to be brave to do it. By demanding total public transparency we only make people defensive. He feels it is much better to allow people some sense of control, and the choice to make their results public.
However, Buchanan believes it to be morally indefensible to know that something you funded isn’t working and know others are trying to do the same thing and not to share your results. For Buchanan, this is where transparency and effectiveness come together.
Christy Pichel, is Acting President of the Stuart Foundation, a private foundation. From her point of view, for the allocation of foundation resources to be more transparent and effective it would have implications on both money and staff time. While there is no requirement for foundations to be effective, she believes being passionate and caring is not enough. Foundations also need to be effective.
She wondered aloud whether effectiveness reviews of a one year grant, even two, three and five year grants, are really going to reveal much when the issues foundations are tackling are big, long-term, social, environmental and behavioural issues. She questioned whether information we are asking for is actually helpful to recipients – or even to funders?
In many ways Emmett Carson had a very different perspective on questions of transparency and effectiveness. As the CEO of the Silicon Valley Community Foundation he pointed out that in the USA, community foundations already face a very high level of transparency and, unlike the rest of the philanthropic sector, are rated by Charity Navigator. From his point of view the link between effectiveness and transparency is tenuous at best because most foundations aren’t transparent and we really don’t have a good handle on measuring effectiveness.
The panel wrestled with the whole question of transparency. The discussion was fascinating for the very different views held and the implications.
On the issue of transparency of family foundations, Smith felt that issues of transparency are linked to privacy and take on a different dimension for two reasons:
He believed these to be legitimate concerns especially if the family foundation chose to tackle difficult issues such as child trafficking, and sexual abuses, where bad actors are involved.
Carson disagreed. As the CEO of a community foundation, the safety of his staff is of paramount concern. Despite the high level of transparency, they still tackle controversial, complex and tough issues and as a consequence attract their share of threats.
Buchanan noted that if foundations take on difficult, unpopular issues while it is general good to be clear to be about your funding choices, it might not be smart from an effectiveness point of view to be transparent. His point being, that transparency is good but we need to be context specific.
However, it was pointed out that ironically if you are working on something controversial, the more impact you make, the more profile you will attract, irrespective of your appetite for transparency. Carson pointed out that if you undertake something controversial then you need to prepare for a firestorm, media attention and attacks on your website.
The panellists discussed whether large individual donors should be prohibited from being anonymous.
Smith felt there is a big divide between institutionalised philanthropy and the creation of foundation, and individual donors. While sometimes the use of a foundation can be more private because the foundation has the relationship with not-for-profit organisations, he also raised the spectre of the anonymous donor – the one that everyone knows.
While we struggle with the whole issue of transparency and the inherent tensions, generational change, technology and transparency are inevitable. The philanthropic field came late to communications, late to technology and late to social networking – partly as a result of being private and independent.
The next generation of philanthropists and those working in the philanthropic sector will no doubt have a very different relationship with privacy and transparency.
For my part, the moral ambiguity of some anonymous donors is best exemplified by Larry David and Ted Danson in their YouTube clip on Anonymous Donations. In this hilarious skit, Larry is upset that Ted made a donation anonymously and then told everyone about it! Using comedy, they explore some of the most delicate questions around philanthropists and how we treat them. It’s an oldie but a goodie!]]>
Raise the issue of the Bill and Melinda Gates Foundation and, as Michael Alberg-Seberich from Active Philanthropy succinctly puts it: “People are impressed with the donor, they see the strategic work, but they find the size of the organisation tremendous and wonder about issues of power”.
In the September 2011 edition of Alliance magazine, editor Caroline Hartnell, ran a special focus on ‘Living with the Gates Foundation’. Controversially the cover of the magazine showed a picture of a big gorilla, which was reprinted later in the magazine as a very direct reference to the Bill and Melinda Gates Foundation.
This series of articles – many of which were provocative – included titles such as:
In addition to these articles, the magazine included an interview with Jeff Raikes, CEO of the Bill and Melinda Gates Foundation.
In one way or another, all the articles dealt with the issues of power, influence and accountability – and not just of the Gates Foundation, but of philanthropy in general. Importantly, and unusually, these articles air a variety of quite different opinions and concerns.
The most common criticism of the Gates Foundation is that, given its vast resources, it doesn’t fund ‘X’. As Timony Ogden, Editor in Chief of Philanthropy Action, points out: “the root of that unhelpful critique is to be found in the fact that the foundation actually followed the general advice given everywhere to new philanthropists and foundations: find a focus”.
Richard Horton, the editor of the Lancet, cautions that while the Gates Foundation has the right to spend its money how it wishes, because of the size of the foundation, it has the potential to distort the research field and government priorities. Richard worries that Bill Gates’ singular belief in technology to change people’s lives over simplifies the solutions to many of society’s problems. Horton says that social and behavioural issues are not amenable to single technological solutions require much more subtle and complex interventions.
On the other hand, Amanda Glassman, Director of the Global Health Policy Program at the Centre for Global Development, is not concerned that the Gates Foundation’s single-minded investments may squeeze out diversity in both approaches to problems like vaccination and in attention to other areas. “For me,” she says, “vaccination is the quintessential public health intervention. If we can’t get that right, we probably shouldn’t be doing other things.”
Laura Freschi, New York University Development Research Institute in USA and Alanna Shaikh, a global health consultant based in Dushanbe, Tajikistan, state that the Gates Foundation has been able to achieve a great deal in public health in a short time precisely because it is unencumbered by many of the typical constraints of the aid bureaucracies. They argue it has been a valuable catalyst to a slow-moving community. They point out that another clear strength of the Gates Foundation is its willingness to fund programs that others can’t or won’t.
However, they are also concerned with its power, influence and accountability. They highlight that, currently, the foundation is ultimately accountable for its success or failure only to the four decision-makers on its board.
They conclude that: “For now, we know that Gates had done a lot of good in revitalising public health, and there’s no conclusive evidence that they’ve done any harm. But in a possible future where a significant majority of voices involved with public health either receive Gates money or would like to, how will we know?”
Indeed who will be able to offer objective feedback on its goals, practices and impact?
For many, particularly the Europeans, the issue of public benefit is crucial.
Luc Tayart de Borms, King Baudouin Foundation in Belgium, asks: “is the money being spent for public benefit and is it in partnership with governments or imposing on them?” This, he felt, was especially important in a developing country where partners may be weaker.
On a similar theme, Megan Tompkins from the Gerald R. Ford School of Public Policy at the University of Michigan in the USA, posits that possibly the greatest impact the Gates Foundation will have is fostering a debate on appropriate policy for foundations in a democratic society.
In answer to these concerns, Jeff Raikes says: “Philanthropy has entered the public consciousness in new ways that means it is also open to public scrutiny. One should not take it on faith that critics and honest feedback will automatically emerge. But in the days of social media, it is easier for ideas to find a voice and travel across continents in seconds.”
Edward Skloot, Duke University’s Center for Strategic Philanthropy and Civil Society notes that: “Whatever one’s view of its operation, it is clear that the Gates Foundation is absolutely unique – a spectacularly wealthy organisation of talented, determined and proactive individuals, energetically pursing a vast, progressive social-change mission. It has pushed well past the boundaries of traditional foundation behaviour, intervening in and influencing public policy on both domestic and international matters – for good or ill, or very likely for a mixture of both. It is like no other foundation seen since the emergence of modern philanthropy a century ago, and its behaviour will have consequences that will be felt for years to come.”
For my part, I believe that the most significant effect of the Bill and Melinda Gates Foundation is that it has substantially increased the visibility of philanthropy. Through initiatives such as the Giving Pledge and its promotion world-wide, it has created interest and raised the expectations of citizens of all societies of the wealthy to contribute.]]>
London, 2008. Paperback edition published 2010.
Reviewed by Elena Douglas
In politics, most debates focus on two questions: What are you going to do? And how much money are you going to spend on it? Too little attention is given to what is often the most important question: How are you going to do it?
President Bill Clinton, Foreword to 2010 paperback edition
‘Philanthrocapitalism’, ‘venture philanthropy’, ‘catalytic philanthropy’, ‘momentum philanthropy’ are all new descriptions of an ancient practice – giving wealth in the service of humanity – now being combined with the mental models, frameworks and processes of the investment of financial capital.
Bishop and Green take us deep inside the world of the ‘philanthropreneurs’ whose mission is to transform philanthropy and the creation of social benefit and public goods just as they have disrupted other traditional markets. This is the world of Bill Gates, Warren Buffett and George Soros, with Bill Clinton as cheerleader. These are the plutocrats who have taken the ‘gospel’ of Andrew Carnegie to heart, and believe as he did “the day is not far distant when the man who dies leaving behind him millions of available wealth, which was free to him to administer during life, will pass away ‘unwept, unhonoured and unsung,’ no matter to what uses he leaves the dross which he cannot take with him. Of such as these the public verdict can be: the man who dies thus rich dies disgraced”.
So the race is on by these givers to find the ways to spend at least half of their wealth before they die as the new pledge, which already has more than 70 billionaire adherents, requires. But just as Carnegie discovered and as did Aristotle two millennia before him, “To give money is an easy matter and in any man’s power. But to decide to whom to give it, and how large and when, and for what purpose and how, is neither in everyman’s power nor an easy matter.”
‘Philanthrocapitalism’ acutely observes this new incarnation of a now century old theme. It takes us behind the scenes in the vast world of 70,000 plus foundations. It explains for us the new ecology of giving in the US where the art and science of philanthropy are practised at all levels of society from the middle-class up and in all regions of the country. Observers have often accounted for this phenomenon by noting the absence of an aristocracy or royalty which left philanthropy as the ticket to social elevation. It is certainly hip to be a philanthrocapitalist, or a ‘celanthropist’, celebrity-giver or cause-highlighter like Angelina Jolie.
Brickbats are also in order here as well. First published in hard back in 2008 in the middle of the GFC, some of the observations jarred with the reality. The promotion of the investment banking industry, for example, as a paragon of ‘rigorous research underpinning investment decisions’ was ripe for ridicule in 2008 as the sub-prime scandal unfolded. And the book never really grapples with the proper relationship between philanthropists and the State in public good provision. Global philanthropy is dwarfed by global spending by governments. In the US, the world centre for philanthropy, total giving is approximately USD300billion per year, compared to a total annual government budget spend of well over USD1 trillion. Philanthropy can inspire and catalyse activity by the State, but to think it will ever replace it is a plutocrat’s pipe-dream which this book does little to dispel.
Many will be sceptical of the new world dawning as far afield as Australia of ‘MBA-enabled executives in suits into the Birkenstock world of charity’. However there is no doubt that the trend to a far bigger role for different professional skills in all aspects of the giving, asking and investing philanthropic lifestyle will continue to gain momentum. As the authors put it, what the new generation of donors seek is ‘the sort of transparency and accountability that exists in financial markets’. Of course, those of us on the ground know that we are a long way from having genuine, robust measures of ‘social value’ to enable real comparisons to be made. As happens from time to time in the investment world, the pitch gets ahead of the analysis, but we know we are moving in this direction, and fast.
As a window into the new ecology of philanthropy, especially for an Australian online casino reader for whom this is likely to be a window into the future, this book can’t be beaten.
(An interview with the authors, Bishop and Green, was the focus of a Knowledge Connect article in our first edition in Spring 2008 – see the article here)]]>
We have reached a tipping point moment in the geography of global prosperity. There are now more millionaires in the Asia Pacific (which includes Australia) than there are in Europe. With this shift in wealth distribution comes the mantle of responsibility for reinvestment in community, culture and philanthropy more generally. Australia finds itself the society with the most developed civil society and philanthropic architecture in the region however far behind the US we know ourselves to be.
This report tracks the world’s high net worth individuals (HNWIs, defined as those with investible assets of US$1m or more excluding primary residence, collectibles, consumables and consumer durables) and offers key insights into where the wealth is and the growth of HNWIs.
Shifts in wealth have implications for global philanthropy: from the urgency to develop the ‘ecology for philanthropy’ in new regions to new times tailored to a new generation of potential major donors.
First, what are the key statistics:
These shifts in the geography and demography of wealth highlight the importance of understanding the sociology of giving and pro-social behaviour in different cultural contexts. It may mean a greater role for Australian organisations given our more developed civil society and community benefit sector. It is time for us to explore expanding our services and reach into the Asia Pacific. A bold new world awaits.
To read the full report see: World-wealth-report-2011]]>
Earlier this year the UK Government released a White Paper called simply Giving. The motivation for the White Paper was twofold: first, the available evidence suggested a flat-lining of giving in the UK both in terms of time and money; second, a belief that government can stimulate a ‘step change’ in giving by making it easier and more compelling to give; and better supporting those organisations in need of increased funding so they are better able to source funds and utilise those funds effectively.
What measures are proposed in the White Paper to achieve an increase in giving in the UK?
First, new tax incentives and matching government funds for giving to specific programs. As the report notes, ‘while donors do not generally give to benefit from tax breaks, the right fiscal measures can incentivise greater and more sustained giving’ (p. 25). The 2011 UK Budget included a measure to reduce the rate of inheritance tax from 40% to 36% for estates leaving 10% or more to charity. The Budget Papers forecast an increase of £600 million over the lifetime of the Budget for this measure.
Providing matching government funds for private giving is another measure designed to support giving initiatives. An example cited is that of the Evening Standard Dispossessed Fund which was established to assist Londoners exit poverty. The UK Government contributed £2 million in two tranches to match funding from other sources.
Another approach highlighted in the Giving White Paper to encouraging giving is for government to celebrate giving, undertaking information campaigns to support giving particularly in schools and for government itself to lead by example through ministers and the civil service giving time for causes. A number of school-based programs have been supported by government including Giving Nation and Go-Givers (programs involving school students volunteering time to work with community projects and to raise money for community programs). The UK Government is also supporting payroll giving programs.
A third major area of support described in the Giving White Paper involves government investing in community organisations so that they are in a better position to seek and support giving options. The White Paper also refers to initiatives surrounding the provision of government physical and web space to assist organisations.
To read the complete paper see The Giving White Paper.]]>
There is now a large academic literature on philanthropy and giving. Organising this literature is no easy matter. But this was the task Bekkers and Wiepking set themselves in their wide-ranging and inter-disciplinary review of research on why people donate money to charitable organisations. The emphasis is on individual giving. There is little in the review covering corporate giving. The review covers around 500 papers and so provides a wealth of material for readers. And, not surprisingly, the density of the review at times overtakes the key themes being developed.
Bekkers and Wiepking distinguish between eight drivers and mechanisms of giving: (a) awareness of need; (b) solicitation; (c) costs and benefits; (d) altruism; (e) reputation; (f) psychological benefits; (g) values; and (h) efficacy.
An awareness of need is the first motivation of giving. Indeed, it can be viewed as the fundamental prerequisite of giving. You don’t give if you don’t perceive a need in the first place. So where does information come from on need and what sort of information is the most important? Information comes in all sorts of forms. First-hand experience of need and prior connections with those who are the beneficiaries of support programs funded by giving is emphasised in the research literature as increasing the subsequent chances of giving.
Solicitations are a second key mechanism of giving. The research evidence suggests that a significant proportion of all giving among members of the public is in response to being solicited to donate—around 85 per cent of giving was linked to solicitation in two studies. While this suggests a rich vein of potential funds to tap, the research evidence points to donor fatigue and diminishing returns and lower average contributions to increased solicitation.
As the authors point out, ‘giving money costs money’. Economic studies suggest that this cost can be reduced by more generous tax treatment of giving. Reducing obstacles to giving will also increase levels of giving. On the flip side, raising benefits to giving will also increase the level of giving although the role of direct benefits is seen to be relatively minor and may be counter-productive in the long term, undermining the role of intrinsic motivations. Benefits to giving come in many different forms including special access to meetings, dinners and events.
Two further mechanisms impacting on giving behaviour are those of altruism, the concern for improving the lot of the final beneficiaries of the giving, and reputation, or the improved social standing of donors in the community.
The reputational effect of giving is the most studied of all drivers of giving. Giving improves social standing while not giving damages reputation. Giving rises the more visible it is; it rises, for example, in telethons when names are being read out and when visible symbols such as a pin, ribbon or wristband are used to signify that giving has taken place.
Social psychologists have studied the psychological benefits of giving in some detail. Neuropsychological studies show that giving activates areas in the brain linked to reward processing. Giving may alleviate feelings of guilt or produce a feeling of doing good, by acting in line with a particular self-image for example. Donors are motivated in their giving by sensing that they will feel good as a consequence of giving. One of the key research findings is that giving is not only the result of altruistic self-image but reinforces it. Giving becomes a self-reinforcing cumulative process.
Individual values are critical in the giving process. Bekkers and Wiepking suggest that ‘philanthropy is a means to reach a desired state of affairs that is closer to one’s view of the “ideal” world’ (p.18). The ideal world in turn depends on one’s value systems. Those who have pro-social values, are less materialistic, who endorse a moral principle of care and who value being devout are more likely to give than others.
Efficacy is the final motivation for giving identified by the authors. Donors who believe that their giving will be effective in achieving the specified goals of the organisation or project they are giving to will be more likely to give.
The full article is available to subscribers here]]>
I saw this website when it was first launched in 2006 and I’ve watched its development ever since. It was created by some (twenty-something i.e., Gen Y) refugees from the hedge fund industry who wanted to apply their tools of investment analysis, investigation and comparison to charities and to saving lives. When they started, they made assumptions that were flawed and ran into all sorts of difficulties but what I found remarkable was that they were completely transparent about their failings through it all. They have a section, Our shortcomings, which archives all their mea culpa’s and apologies. They learnt on the job and the transparency is a credit to them and mirrors the transparency they want to see develop in the charitable sector if it is to live up to its promise and intentions of saving and improving lives.
So what is GiveWell? It’s an independent, nonprofit charity evaluator. They describe themselves as finding ‘outstanding giving opportunities and publish the full details of our analysis to help donors decide where to give’. Their point of difference is that unlike existing evaluators, ‘which focus solely on financials, assessing administrative or fundraising costs, we focus on how well programs actually work – i.e. their effects on the people they serve’.
We all know how complex and challenging this impact measurement is and so hats off to them. It is surely a model which will grow in importance in global philanthropy. The rationale for GiveWell is that even in the US, land of ‘billanthropy’ or the sport of billionaires, individual donors give more than 100 times each year what the Gates Foundation spends. And individuals are not provided with any quality information on outcomes in making these choices. GiveWell’s mission is to ‘create a global, public, open conversation about how best to help people’.
To view the website: www.Givewell.org]]>