Thursday, December 20, 2012

The Changing Face of Philanthropy


Sometimes charities are so wrapped up in their localized, immediate problems they fail to understand what drives people to help. The current uncertain fiscal and political climate probably doesn’t help the situation. People feel more personally threatened and are constantly making do with less, and that affects their viewpoint.  Still, it benefits all of us in the nonprofit sector to examine factors that may drive change.

Recently a client shared a letter from a major funder. The gist of the letter was that the grantor was moving on to support social impact organizations that were trying to eliminate the root causes of problems, rather than supporting local charities dealing with symptoms of the larger issues.

The nonprofit in question just received the first installment of a multi-year grant for capacity building, in the hundreds of thousands of dollars. While they have been offered the full amount of the grant in a lump-sum payment, they are considering refusing the funds, since they don’t know if they will be able to maintain services to the larger population they had been planning to serve. In short, their entire ten-year strategic plan may need to be seriously revised, or even scrapped and replaced.

There are significant lessons and clues in this letter. One, the grant maker (a corporate-supported philanthropic foundation) doesn’t feel that they are “getting the most bang for their buck”. Two, the funding organization is anticipating reduced revenues due to national economic and political issues, and they feel powerless to compensate for that. Three, they truly want the root cause of the situation the nonprofit is addressing to be solved. Four, they feel that the nonprofit’s focus is too fragmented or too unrelated to other groups serving a similar population to achieve that change.

Businesses are successful, and have money to support charities because they don’t spend money foolishly, with no expectation of results. The corporate mentality is crystal-clear in the letter. They simply feel that continuing to support local charities is a waste of their money in relation to what they hoped to accomplish.

Regardless of whether you agree with their decision, the grantor letter exposes some weaknesses in the current methods used to address social ills. If you are feeding the same or greater number of people every year, or rescuing the same or greater number of dogs and cats, donors may not see that as solving the larger problem.

Businesses tend to think in terms of identifying a problem, constructing a solution, implementing that solution, calling the project done, and moving on. The grantor in this situation simply doesn't see an end to ever-increasing need. 

Beyond the corporate viewpoint, plain, ordinary, not-rich people are becoming tired of supporting symptom solutions. I recently had lunch with a friend shortly after “Super-Storm Sandy” hit the northeast. I knew that she had sent money to help the victims of Katrina, so I asked if she was doing the same with Sandy. Her answer surprised me. She told me she wouldn’t send any money unless it was to a charity that would support a ban on building in the same areas. I said, “Well, you’re talking about places like Long Island. A lot of people live there, it’s their home.” She replied “And it shouldn’t be. Anyone could see that this could happen. Look at New Orleans. It’s a fish pond. It’s lower than the surrounding land, and they’re just going right back and building in the same spot. It just flooded again this year. Why can’t people see that they need to move the whole (expletive) city to a safer area? I feel like they stole my money, because they didn’t fix the problem”. She went on to say she felt that charities had no interest in really fixing problems, because then they would be out of business.

It would be of value for all nonprofits to review their programs and incorporate more results-driven data in their proposals. Instead of just sticking your finger in the dike, thereby being stuck in one place, show how your program(s) will rebuild the dike so that you can move on. For instance, while nonprofits can’t lobby, perhaps your organization could implement a program of educating the public on what they can do to eliminate the bigger issues. Develop a strategic plan that shows that you recognize donor fatigue and have a plan to address it. Every bank account can be over-drawn. We might be getting there on a national scale. Before your organization reaches that point, have a plan to be one of the survivors. 

No comments:

Post a Comment