How philanthropists really decide where to give

The natural place to start, as a fundraiser, is at your desk. You judiciously read every webpage, article and report about a potential funder’s strategy in search of the best fit between a donor and the work you are doing.

And then, research completed and grant application submitted, you’re surprised to figure out that the fit isn’t there after all. The pieces don’t snap together cleanly, your proposal has been turned down. Then what?

Perplexed, you may head back to your desk to do a little more research.

Please don’t, because the answer you’re looking for is not somewhere on the screen or hidden away in a Google cache.

Philanthropy – whether a $25 donation to an Indiegogo campaign or a multimillion dollar grant from a huge foundation – is always personal. The published philanthropy strategies you are researching are a sensible narrative that pulls together a bunch of threads, but they are not the whole truth. Far from it.

Think of it from the other side: there simply is no such thing as the best place to give a donation (heck, there’s no such thing as a best car) so there’s no analysis that gives the philanthropist the right answer no matter how much they spent trying to figure out the problem.

All the best philanthropists I know have a healthy dash of angel investor in them. Angels invest in people above all else, because they know that when you can find that rare combination of grit, belief, tenacity, vision, people skills, humility, audacity, courage, and, and, and….

You see, that’s the point.

The list is too long, the unicorn-like combination of attributes so rare, that it’s always, fundamentally, about someone’s belief in you.

(and, for those keeping track, ‘you’ is not just the founder or the CEO.  Not by a long shot).

It’s all personal

You can read every webpage about every foundation’s strategy.

You can scour CSR reports to see about a company’s social priorities.

You can analyze an individual’s past giving and the boards they serve on to understand their philanthropic priorities.

That all will help, but don’t be fool yourself.

Philanthropy is and always will be personal, deeply personal. There’s no such thing as the best place to give a donation, and there is no analysis that gives the philanthropist the right answer.

This is why all the best philanthropists have a healthy dash of angel investor in them. Angels invest in people above all else, because they know that when you can find that rare combination of grit, belief, tenacity, vision, people skills, humility, audacity, and, and and….

You see, that’s the point.

The list is too long, the unicorn-like combination of attributes so rare, that it’s always, fundamentally, about someone’s belief in you.

(and, for those keeping score, ‘you’ is not just the founder or the CEO, not by a long shot).

Why I (like everyone) gave to ALS while on vacation

A friend and colleague asked me.

It was personal and I didn’t want to let him down.

It was (a little bit of) a challenge to how macho and bold I could be.

It was public.

Turning something like this down, given who I am and my values, would be just a little bit shameful.

Everyone was doing it.

It was fun.

I could talk to my kids about it and get them involved in it.

It was easy and quick to do.

I could share it with friends in a way that felt totally positive – without putting them out. In fact, many friends said “Thank you! I was hoping to be challenged.”

It incorporated video, and allowed me, in 30 seconds, to create a video I was happy to post and that I knew would be entertaining (no edits, no storyboards, no nothing).

Did I mention how fun it was?

That’s a pretty good list to choose from for how you fundraise. I’m positive you won’t hit all of these, but if you’re hitting none of them then you’re pushing a rope uphill.

And the really tricky bits that I can’t stop thinking about are:

I did give to ALS, but most people won’t. That’s totally fine as long as what you create is huge.

The specifics of the organization I was giving to, and the cause, didn’t matter. This would have worked for any cause.

I talked to my kids about ice water not about ALS.

Pretty quickly my head starts to swirl about ends and means, whether (some? all?) philanthropy should be fun and what is lost when it is fun (and what doesn’t happen when it’s not).

When giving is more like eating dessert than it’s like eating your vegetables, is that a problem? Certainly not, today, for the folks suffering from Amyotrophic Lateral Sclerosis.

(and for those keeping track, the ALS Association has now raised nearly $100 million from 3 million donors…versus about $23 million last year).

Deep and abiding respect for…

…the philanthropists who, along with you, make it all possible.

The philanthropists who dare to dream of a different, better world.

The philanthropist who decides, when she doesn’t have to, to do something, not just to talk about it.

The easy thing to do is to badmouth fundraising, to slight it in some way, to say that you’re above it or say that you respect it but you don’t know how to do it and you don’t really want to do it. It’s easy to say that it’s someone else’s job – because how important, how strategic, is it really?

It’s easy to, quietly and behind closed doors, gripe about how hard fundraising is…and then to chuckle about how difficult some donors themselves are…and then to slide down the slippery slope all the way down to a lack of real, deep, abiding respect.

Without that respect, you’re a terrible fundraiser. Without that respect, change doesn’t happen. Without that respect, you don’t get the chance to meet and learn from the incredible philanthropist who combines exceptional success and accomplishment with off-the-charts humility.

Without that respect, you don’t get to change, they don’t get to change, the world doesn’t get to change.

Generosity Day – is it about the money?

Our stories hold truths for us.

One of my truths is that my journey into generosity began with an encounter with a person on the NYC subway asking for money (FOR homeless people, he was not himself homeless as far as I know).

Saying “No” in that situation makes a lot of sense.  If you don’t believe that, check out Zorro’s very personal comment to yesterday’s post.  He said that his son is homeless, that if someone gives his son money that money will be spent on drugs, that giving to his son is irresponsible behavior.

I don’t know the big answer to the question that Zorro is asking.  My personal answer has been that saying “no” all the time and automatically made me feel less human; and I also don’t believe that every dollar given to a homeless person makes that person worse off.

Even though my story started there, Generosity Day isn’t, for me, about whether or not I give to the homeless.  That said, at the outset, I did feel like giving money more freely was a critical ingredient (the critical ingredient?) to my own practice of generosity.  Four years in, I don’t feel that as strongly, but I still ask myself whether an active practice of giving is essential to a practice of generosity.  Put another way, can I fully explore generosity without directly confronting my relationship to money?

This is one in a long list of questions that’s a work-in-process for me, but here’s where I am today: in today’s society money plays a huge role in defining us.  It is one of our scorecards and an important source of our identity.  (Ugly to say that out loud, but it feels like a fair generalization).  And I think that part of seeing abundance and our good fortune in the world is letting go more of the money we have.  This is where the ancient notion of tithing comes from – that our good fortune flows from the blessings we have received, and part of our work on earth is to share these blessings with others.  (Even if a conversation with religious or doctrinaire underpinnings isn’t your cup of tea, I think it’s impossible to look at the world – the whole world – and deny that some or even most of my or your good fortune is due to accidents of birth.  We won a lottery we never knew we’d entered.  At yet, ironically, it is mostly up to us to decide what to do with that abundance.)

That said, my own practice of giving money is still evolving.  These are hard, challenging, very personal questions.  Broadly, I do give more than I used to and, as important, I agonize much much less about each time I give.  I experience less scarcity.  And that feels right to me.

I also know that this is only part of the equation.  These days I’m as interested in generosity of spirit, the generosity of a heartfelt apology, the generosity of giving time to help another, the generosity of putting yourself out there and (really truly) expecting nothing in return.  So today, for where I am, money is not the focus of my own inquiry, but it’s an important piece of the puzzle.  That said, I do feel that a practice of generosity, a practice of recognizing and sharing abundance, must impact to how we think about, hold on to, and let go of our money.

My hope for this year’s Generosity Day is that people will share their own stories of generosity – the questions they ask themselves, the insights they’ve gained, the fears they confronted (or failed to confront).  Simple stories.  Happy stories.  Hard stories.  Stories that make you laugh.

Stories about what they did on Generosity Day – and before and after.

Fun tools on the Generosity Day site make it easier to commit today to what you’ll do tomorrow. Or just throw a #generosityday into your online updates and we’ll see it!

The impact-to-scale ratio

Every so often, I cannot help but comment from afar on corporate social responsibility (CSR).  I worked in this area for IBM and GE before coming to Acumen, and I greatly appreciate what it takes to get big companies to do things differently – to incorporate a broader set of stakeholders and to think in terms of longer time horizons when making decisions.  I also know how hard it is to move the needle on this stuff (e.g. Nike).

With this potential for impact, as a general rule I’m always amazed at what companies can get away with talking about and not talking about in public forums.

Simply put, should it be OK for a company to talk about a single program or initiative if that program / initiative is tiny relative to the scope of the entire organization?

I don’t think it should be, but time and again I’ve heard CEOs of companies with $50 billion to $100 billion in revenues give major speeches about $20 million programs (that’s 0.2% of revenues!).  Not once, but often.  And the programs are used as proof points for statements about how the company conducts its business globally.  It would be no less absurd for a CEO to talk about one call center or to talk about its smallest division in its smallest market – which of course would never happen.

There should be some minimum threshold of impact to scale before any CEO is allowed to talk about anything of this nature.

The reason we care about how corporations behave is because of their size and scope.  So: Apple’s supply chain matters a lot, what Apple does in and around Cupertino is good to know but essentially irrelevant.  Pepsi’s Refresh program is a wonderfully innovative form of corporate philanthropy coupled with crowdsourcing, but their opportunity for real global impact starts and ends with what they are and aren’t doing about obesity and  diabetes.  When Wal-Mart puts its weight behind fluorescent bulbs it matters.  If BP were to shift a major portion of its business away from fossil fuels the world would care, but Deepwater made it pretty clear that they are not “beyond petroleum.”

I’ve argued before that we can do much better than “more than nothing” when talking about the role of corporations in building a better world, and when you get Fortune 50 CEOs in a closed room to talk about the world and the future it’s clear that all of the top companies care deeply about these issues and see them as core to their long-term success.

But somehow we keep on falling into this trap of talking about nice, ancillary philanthropic endeavors as if the person on the stage is running a medium-sized nonprofit and not a multi-billion dollar, global institution.

We can do so much better.

Each and every dollar

If you work at a nonprofit, as I do, you might pause and consider: each and every dollar for your organization comes from a gift.

Obvious at some level, but if you stop to think about this for a second your perspective changes.  Think of the seriousness and the intention of every donor, the dreams – small or big – they attach to the donation they have made.

I’m not at all advocating for penury for nonprofit staff; in fact I firmly believe that we need the best people to create massive change.  The problems we are working on are so important, so challenging, so complex, and pay is part of the equation in getting and keeping the best folks.

But there’s a certain humility that comes with remembering that you are working on someone else’s dime, that no matter where you are and what you are doing, you are engaged in service work thanks to the trust that someone has placed in you and in your organization.

It never ceases to amaze me that the nonprofit sector has a reputation for being less rigorous, less focused, less fast-paced, less strategic than the private sector.  First, because all the people I know who work at nonprofits put their hearts and souls into their work every day.  Second because once we’ve made the decision to do this work we have no choice but to be completely committed and to do our best work every day.

The minimum bar is to treat the money your organization spends like your own.

The higher bar is to remember that it is a gift from someone else, entrusted to you to make a change in the world.

It’s a huge responsibility.

Too big

Of all the reasons cited to give or not to give a philanthropic donation, “you’re too big” is the one that I have the hardest time digesting.

First, a clarification.  In my experience, most people who say that they want the size of their donation to be significant relative to the size of the organization they’re supporting rarely say “I am really good at spotting great startups but don’t feel like my expertise extends to bigger organizations.”  Rather, the underlying message seems to be, “when you were smaller, I knew my gift made a difference.  Now that you’re bigger, I’m not so sure.”

Analytically, we can agree that size is a poor predictor of effectiveness (you can be big and effective or big and ineffective; small and effective and small and ineffective).  Yet the concern, more often than not, seems to be size itself.  There’s rarely any overt assertion that through growing the organization became less effective (to wit, often one would imagine that size provides some scope for efficiencies).

In the face of this critique, rather than take the question at face value and conclude that we are not as good as we could be at communicating our own effectiveness (read: we need better metrics), instead we slice and dice ourselves up programmatically to create a closer approximation of transparency and accountability.  We make the big black box of “what we do” smaller – so we communicate a sense of “this is where your money is going” – as a proxy for answering the real question – “how effective have you been?”

It’s true, we won’t persuade all the people all of the time.  Smaller just feels right to some people, and that’s going to be their (appropriate) choice no matter what we are able to show them.  Nevertheless, our job is to be able to answer, in a convincing and rigorous fashion, how much change we created with the money we were given.

I’m not talking about “for $20 you can ________” (fill in the blank).  I’m talking about real change at a big scale, shared with an educated, interested philanthropist who is open to a real conversation.

When have you seen this work best?  Worst?

Gifto reducto ad infinitum

A donor with $50,000 to give faces a surprising conundrum: she knows, intellectually (and perhaps in her gut) that $50,000  is itself not enough to make lasting, large-scale change.  However, we can all agree that $50,000 is an awful lot of money, and the donor is well within her rights to ask what will happen as the result of her donation.

Donors who push hard on this question may be asking one of three things.  It could be about accountability (“I’m going to make sure you’re not going to waste it”); it could be about comparison shopping (“the nonprofit down the street told me they could buy __________ with this money”); or it could be about the story they need to tell someone (their board, their spouse, themselves) about what they “bought” with the gift.

The real challenge here is that a number of seemingly contradictory truths happily co-exist: if you give someone in need $5 worth of ________ (de-worming; safe drinking water; emergency shelter), their lives will absolutely be significantly better for a period of time – so 10,000 “significantly betters” are potentially on offer for this $50,000 donation. OR a few medium-sized things can be built (a library, a well, a school) for $50,000. AND we also know that large-scale, lasting change comes in much bigger bites – whether to fill that school with teachers; to transform the educational outcomes for a community; to dig not one well but instead to build an organization that’s going to solve the water problem for a village or a hundred or a thousand villages.

So $5 and $50,000 and $5 million and $50 million all co exist.

More complicated still, each of those numbers is, alternately, either really big relative to the problem ($5 is a lot for a subsistence farmer making $1-2 a day), and small for the problem ($50 million doesn’t hold a candle to the annual health budget of even a very small, very poor country).

Echoing a theme from yesterday, the only truly satisfactory answer I’ve found is around solidarity: this is a change we are making together, this is what success looks like, let’s make this happen…and you figure out the piece that you can do relative to your own ability to give.

I recognize that this isn’t the strongest sales pitch, and that part of our job as people who mobilize resources is to right-size the solution to the funds being given – since it is 100% true that a gift of any size, when given to an effective organization, makes a significant impact.  But I still feel at some level that the game of optimizing a message to a particular giving level inevitably falls short of all the honest-to-goodness complexities of solving real problems in the real world.

If investing = sexy…

If investing = sexy, and if sexy = better = innovative = how we’re going to solve all the world’s problems…well then, Houston, we have a problem.

There’s huge momentum around using investing capital to solve social problems.  The question isn’t whether this is a good thing (it is!); the question is, how do we do this in a way that doesn’t devalue grant funding, that doesn’t inexorably end up at the conclusion that if you’re getting your money back (and then some), you win, and if you’re the grantmaker, you’re doing something that’s not as important/innovative/worthwhile.

What a shame that would be.

What happens when we build large-scale enterprises that serve tens of millions of people, but the service still remains out of reach for many?  Is the grant funder who provides capital to makes the service more affordable doing anything less noble, less valuable, less impactful than the equity investor?  What about the person who put up the first $500,000 with no expectation of ANY return so that the whole thing could get off the ground?

The thing that’s in scarce supply isn’t investing capital – heck, there are trillions of dollars fleeing the European fixed income market and looking for a place to alight.  What’s scarce is risk capital that will take a bet on a person or an idea and help it scale; and high-impact capital, which will take a powerful, existing infrastructure and make it accessible to those who can’t afford it…all in a way that doesn’t distort the market.

In the US, there’s no notion that the person who puts up $15M to fund cancer care for the poor is somehow doing something less important or less impactful than the bondholders who financed the initial construction of the hospital itself.  If anything, the donor is MORE celebrated.  Different tranches of capital are all playing their roles in an attempt (not completely successful nor a complete failure) to provide high-quality heathcare.

We’re obsessed with “building the market” for investing in enterprises that solve large-scale social problems.  That’s good.  But let’s not confuse that with making the world safe for investors to get their money back.

We’ll know the market is functioning not by measuring how much money is swirling around, how many funds there are, and their total capital under management.  We’ll know it’s functioning by measuring how many new blueprints for social change we’ve created; how many people’s incomes have increased; how many people no longer need a permanent handout.