There is a great discussion going on at the Tactical Philanthropy blog centered around the new book The Art of Giving: Where the Soul Meets a Business Plan by Charles Bronfman and Jeffrey Solomon who argue that philanthropists (big and small) should take a more strategic approach to giving. The discussion that has followed the three posts so far gives fascinating insight into the reasons that people give. Katya Andresen at Network for Good, nicely summarizes the two broad reasons that people give: 1) for personal return on investment (recognition, feels good, status, increase in network) and 2) social return in investment (make a difference, create impact, solve a problem, etc).
For me, there are three takeaways from this discussion. First, anyone who raises money in the nonprofit sector should read the posts and the comments. They provide fascinating insight into the various motivations for giving to nonprofits. A reading of the discussion gets a nonprofit fundraiser out of the mentality of raising money around their organization’s needs and into the more lucrative mindset of what is compelling to potential donors.
Second, I think that there is an increasing focus by philanthropists on the second motivation (social ROI), as opposed to a past focus on individual ROI. Because of the past philanthropic focus on individual gain, the resulting nonprofit fundraising activities have centered on activities that provided donors an individual ROI, for example capital campaigns that promise a new building with a donor’s name emblazoned on it, or events that provide networking and exclusive activities, or “thank you” gifts. As social ROI becomes more of an interest to philanthropists, smart nonprofits will focus on creating their logic models and demonstrating impact. And when they do this, I would argue that they will actually be more successful at raising money (see Kay Sprinkel Grace’s Beyond Fundraising).
Finally, we will never get to a place where all individual giving is social ROI focused. As the authors of the new book point out, philanthropy is very much an individual sport that is focused on the individual’s values and what they want to accomplish (whether that be personal or societal gain, or a combination of both):
When you give, you get, and we believe you need to focus on what it is that you are getting for what you give. We argue that what you get in philanthropy is nourishment for that portion of the body that is so sacred it cannot be found in any book of anatomy: the soul, where all that is best in us resides. It is simultaneously the innermost self and the one so external it seems somehow eternal—which makes it the natural connection point for our philanthropy, for we give to improve the world in a lasting way and to leave it with our stamp.
Which then begs the question, will we ever get to a place where social problems are solved through capital raised from individual philanthropists? Charitable contributions to the nonprofit sector make up 12% of the sector’s money. Roughly 80% of that comes from individuals. Government money has been declining and so nonprofits have increasingly focused on dollars from individuals to make up the difference. If individual philanthropy will always have an individual return motivation, is that ultimately a problem for a sector that is trying to provide social goods?
I don’t know, but the discussion and questions that these authors have raised will no doubt help propel philanthropy forward.
Excellent question raised above: If individual philanthropy will always have an individual return motivation, is that ultimately a problem for a sector that is trying to provide social goods?
We at BBMG (values-driven branding and marketing firm) have given this some thought from a branding perspective and would argue that yes, philanthropy must address the demands of today’s consumers/donors, who are increasingly looking for multiple dimensions of value – both practical/personal relevance and social impact described above- along with a third dimension, creating a community of like-minded believers. For nonprofits looking to stay relevant and win donor loyalty in this economy, demonstrating these different dimensions of value seems all the more critical. Feel free to check out our white paper on the topic: http://www.bbmg.com/enewsletter/l2l_whitepaper.html
Mirm,
Thanks for bringing in the third dimension of value–creation of community. That’s an important point. And thanks for the link to your whitepaper.
Why do people give? The model of human motivation proposed by American psychologist Abraham Maslow in the 1940s ‘Maslow’s Hierarchy of Need’ (for me) provides an explanation of why people give. The theory sets out a pyramid (and taxonomy) of human need. At the bottom is ‘physiological need’ and at the top sits ‘self-actualisation’, which requires morality, creativity, problem solving, lack of prejudice and acceptance of facts. All are important facets of giving. I like the idea that when one gets to the top of this pyramid they can then think about those at the bottom. It points to people being self-focussed until they get to the top of the pyramid when they are free to act socially. This is probably too neat an explanation, but like the ‘harmony’ of it. See a good diagram here http://en.wikipedia.org/wiki/File:Maslow%27s_Hierarchy_of_Needs.svg
Thanks for writing Cheryl. Maslow does give us an interesting framework to analyze as we attempt to understand philanthropy. However, I don’t know that I completely buy the argument that you have to reach the top of the pyramid before you can think socially. How do we reconcile that argument with the fact those in lower income brackets give more to charity? And how does his framework account for countless stories about heroes in natural disasters or wartime who sacrificed their own lives to save others? I’m not sure, but thanks for pointing it out and adding it to the discussion.
Mirm,
Thank you for posting your white paper. I believe the discussion of enlightened self interest adds to this conversation. Many of the comments seem rather idealistic and neglect base instincts like obligation, competition, tax benefits, ego (in a base sense), aggrandizement, etc. These motives are not necessarily more important overall than altruistic ones, but should certainly be part of the perceptual preparation for nonprofit leaders.
These questions parallel, to some extent, conversations going on right now in some of the United Ways and other community funds–to what extent should they shift to “impact” giving, that focuses on outcomes and on a strategy based on a particular change model, and to what extent should they continue to support the “favorite” projects of the community, those that not only bring some individual gain but also create that sense of community, but may not really be proven effective in addressing the core social challenges of that community (or, in some cases, even directed at trying to address those)? Can organizations serving the social good align themselves so that supporting them brings greater individual reward? If so, would that increase the alignment?
Great questions Melinda. And you’re right, it’s a huge set of issues that nonprofits and philanthropy alike are dealing with. It will be interesting to see how this all evolves.
I don’t see much discussion about faith. Therefore, I am going to say at least why I give. I agree with most of what was discussed. But I give because I believe God blesses you when you bless others. Unless you are a non-religious, whether you are a Christian, Moslem, Hindu or any other religion they teach to give so that you can be blessed. Abrahams blessing in the Bible was conditional. That is, God told him, he would be blessed so that he can bless others. The driving force of faith is compassion. Compassion is always for the needy, material or emotional need. When you help, “your soul is fed” and you get blessed with you health, or material needs or emotional or mental state etc….