Philanthropy and long term solutions to global poverty
The fact that a mere two percent of the world’s population currently holds fifty percent of all wealth is worthy of some serious inner reflection and concern.1 And with the world’s population estimated to reach 7 billion this year, the divide between the haves and have nots just serves to underscore this concern. Philanthropy will obviously continue to play a pivotal role in reducing inequalities if we are to avoid the disenchantment of deprived populations, but it cannot do this alone. Increasingly we see the relationship between donors and non-profit organisations as now needing to become more ordered, more mature and more iterative. Without this order the major role of philanthropy could be at risk.
Thankfully philanthropic giving is gaining international attention and continues to attract new donors and new initiatives, like the Giving Pledge recently launched by Bill and Melinda Gates that invites the mega-wealthy to donate the better part of their wealth in the interests of achieving some level of global equity and equality. Certainly the financial, intellectual and strategic resources are available to help avoid the series of uprisings recently seen in North Africa that were largely driven by disenfranchised, poor and jobless youth and that have resulted in yet more ‘stateless’ states. In the words of John F Kennedy, ‘Those who do not make peaceful revolution possible, make revolution inevitable’.
So the major challenge is to advance the ethos and structure of giving to, on the one hand, ensure that donors think strategically about their giving, that they maximise the public benefit with their philanthropy and that they spend their money wisely. But on the other hand, philanthropists normally work through non-profit organisations who, just like donors, also need to be strategic in maximising the impact of donor spending. Grantmakers, now more than ever, demand that nonprofits are efficient, transparent and effective. But if there is an urgent need for auditing, assessment and accountability from grantees, there is an equally an urgent need for both parties in philanthropic transactions to be optimally synchronised and responsive to each other’s needs.
To protect the interests of givers, and to provide them with rights, fund-raising professionals have suggested a donor bill of rights. The bill includes the right for donors to be informed of the organisation’s mission, the way the organisation intends to use donated funds and its capacity to use donations effectively for their intended purpose. It also stresses the right to be informed of the identity and credentials of those serving on the organisation’s governing bodies and to expect them to use due diligence in exercising their responsibilities. Donors also need to be assured that their donations will be used for precisely the purpose they were given and to receive appropriate reporting, monitoring and recognition. They obviously have a right to ask questions before and after making donations and to receive prompt, honest and entirely accurate answers2. This all seems well and good, given that nonprofits do owe it to their donors and to their recipients to achieve positive impact.
However, as we have said, the question of rights and responsibilities is not a one-way street. A grantee bill of rights was similarly crafted to affirm that non-profit organisations also have rights when it comes to working with funders. These rights include the right to know a donor’s interests, the right to be refused with explanation, the right to adequate briefing, the right to seek grants larger than the cost of soliciting them, the right to solicit multi-year or sustained support in order to establish continuity and the right to be treated with respect 3.
Issues arising in ASK Inyathelo, a mentorship and advisory service run by Inyathelo with specific focus on the needs of nonprofit organisations, certainly suggests that there is much that needs to be added to the grantee bill of rights: The right, for example, for organisations to insist that funds are paid out in time and in the correct amount as contracted and the right to dialogue should the non-profit organisation feel that a grantmaker is defaulting.
In claiming rights, non-profit organisations affirm that philanthropy is not simply about realising a donor’s wishes. It is a process that demands thoughtful and respectful collaboration and interaction to obtain the best social impact. Even with the distortion in relationships that the transfer of money can precipitate, it is important to strive for a balance, to ensure that the process of seeking grants does not become a procedural nightmare for nonprofits, wastefully sapping their time and energy. By demanding to be treated fairly and respectfully non-profits expose the hidden side of philanthropy, the side where hubris and caprice exacts a toll on grant seeking organisations.
Whatever opposing views exist on the rights of donors and the contra-rights of non-profit organisations, one thing everyone agrees on is that narrowing the distance and improving understanding between giver and receiver is vital. There simply must be absolute synchronicity in all aspects of philanthropy between donors and nonprofits: a synchronicity that embraces each party’s rights, obligations, ethics and responsibilities; that totally aligns strategies and objectives and that describes optimal standards of management, reporting and accounting that both parties espouse to. Only this will lead to the effective use of philanthropic funds. As such, it is key to reducing the gap between the world’s richest and poorest, and to ensuring a better and more stable existence for all through equality.
Adrienne Coetzee
Inyathelo
With grateful thanks to Peter Frumkin who gave me leave to “pick and choose excerpts” from his thought provoking book, Strategic Giving: The Art and Science of Philanthropy. Craig Kennedy, President of the German Marshall Fund of the United States, describes the book as “the most comprehensive and analytical examination of the donor world that has ever been published.” He says it “will become the benchmark text for the field”.
Specific quotes from Strategic Giving are numbered, but many more of the concepts in this article have been formed through a study of this extremely thorough book.
References:
11: Poster insert in the March 2011 National Geographic
2 and 3: Strategic Giving: The Art and Science of Philanthropy. Peter Frumkin. The University of Chicago Press 2006