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Charity or Philanthropy: Embracing Both the Forest and the Trees

Vice President (FORMER)

I’ve found myself replaying a certain article from Forbes in my mind. Rethinking Philanthropy for the Next Generation shares that, while millennials are “rapidly catching up to (and even surpassing)” preceding generations in terms of charitable giving, they are doing so in three distinct ways:

  1. They’re giving in smaller amounts…
  2. to charitable groups aimed at relieving suffering…
  3. understanding that acting in individual small ways creates leverage as a larger movement.

I found myself agreeing with author Lawson Bader that there is indeed a distinction between charity and philanthropy, but I was left considering how to articulate the distinction to those outside of our profession.

I’m certain that these young donors see their giving as very direct and outcome-oriented, both of which are positive characteristics. But to some extent, I equate giving in this context to missing the forest for the trees. I’d even go so far as to call it reactionary, which stands in sharp contrast to the strategic thinking we, as fundraisers and advisors, encourage our clients to employ with their prospects. I’ve pondered how to explain to these donors why giving strategically is just as – or even more – important than reacting to immediate needs.

What will speak to them?

Philanthropy as Entrepreneurship for All

Much has been made of millennials’ penchant for entrepreneurship. According to a study published in May 2017 by America’s Small Business Development Center and the Center for Generational Kinetics, 49% of millennials intend to start their own business within three years.  So perhaps educating tomorrow’s philanthropists could be a matter of reframing philanthropy as entrepreneurship – from a reactive endeavor to a proactive one.

True philanthropy means thinking ahead and developing a vision to make change rather than waiting for opportunities to present themselves. Philanthropy is entrepreneurial in that respect, so this offers a point of common understanding through which to grow today’s givers into tomorrow’s philanthropists.

Imagine sharing this scenario: An earthquake strikes a shantytown in an impoverished country.  Many are injured and still more are displaced from their homes. Is it preferable to send donations to temporarily house the displaced and care for the injured after the fact?  Or would it have been preferable for nonprofits to have worked with those individuals to teach them marketable skills, help them find employment, and encourage transition into safe housing? Perhaps we go one step further and address the root causes of that country’s income inequality. As a result, the earthquake would almost certainly have injured or impacted many fewer people.

This does not call into question the need for emergency relief in the event of a crisis.  That demand is very real, and the generosity of those who support these areas does not warrant criticism. It should be applauded. But would it not have been better if fewer people had been injured or otherwise impacted in the first place?

Though this scenario is only one relatively simplistic example, I hope it illustrates that strategic, institutional giving – or philanthropy, to use the definition cited by Mr. Bader – has a critical role in impacting outcomes. The vision is, in fact, that philanthropy would set humanity on a course toward a world in which less reactive, crisis-driven giving is needed.

Setting a Course for Change

I won’t for a moment suggest that philanthropy can eliminate the world’s problems. Philanthropy cannot ensure that wars will cease, food will always be plentiful, natural disasters and climate change will not occur, education will be universal, housing affordable, or any of the other very worthy causes toward which a donor chooses to direct charity.  The need for aid in response to crisis will always be there. (In fact, my colleague Jennifer Harris has written a piece on the philosophies behind philanthropy and the human condition.)

But mustn’t we hope for and work toward a better world?  And isn’t part of realizing that vision investing, in advance, in agricultural development, job training, affordable housing, a decreased carbon footprint, or any of hundreds and thousands of other systemic efforts that aim to make change ahead of crisis?

In other words, philanthropy is entrepreneurial at its most basic level, committing support today so that our vision sets us on a different – and better – path toward tomorrow.

Now that’s donor education worth investing in.