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Looking Back, Looking Forward Part 2: Big Questions

Date: January 16, 2020

Phil Buchanan

President, CEP

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This is the second in a series of four blog posts reflecting on philanthropy’s first two decades in the 21st Century and hopes for the next one. The first post discusses the public conversation about philanthropy during 2000-2010; the second focuses on 2010-2019; the third focuses on the practice of philanthropy during the first two decades of the century (as opposed to the discussions about it); and the fourth shares some hopes for the new decade underway.

In my last post, I discussed what I call philanthropy’s “Business-Knows-Best Decade” of 2000-2010 (spoiler alert: it doesn’t). In terms of public discussion, I think the decade that followed from 2010-2019 was the “Rising Tide of Critique Decade” in philanthropy. Whereas the criticisms of philanthropy of the first decade were focused on perceived (in)effectiveness, the criticisms during the more recent decade — especially in the latter half of it — asked more fundamental questions.

But first let’s go back to 2010, by which point it was at least a little less likely than it had been in years prior that you’d receive an annual report from a “venture philanthropy” outfit touting increases in “lives touched” by their “portfolio” of “investees.” Still, there remained a powerful bias among donors to look for the analog to ROI — the universal measure by which to gauge vastly different efforts — rather than conceding the impossibility of such a metric and embracing the complexity of assessment in philanthropy.

Also prevalent in 2010, still, were widespread negative stereotypes about nonprofits and their staff, along with entreaties to them to operate “like a business” (as if this was a synonym for effectiveness). This, of course, continues today.

But at the very least, there was more likely to be debate and questions raised about these issues in this second decade of the young century. New powerful voices in the sector like Vu Le — author of the widely read NonprofitAF blog — emerged to give voice to the many nonprofit leaders who had grown tired of the “bizsplaining” they encountered every day from donors and board members.

The critics of the late 1990s and early 2000s who had slammed philanthropy for under-performing and put forward approaches rooted in ill-fitting business analogies began to fade into the background, or retire altogether. But new critics emerged during the years since 2010, coming at philanthropy from a very different angle and raising big questions about the role of philanthropy in a democratic society.

These skeptics were not worried so much about the perceived under-performance of philanthropy as they were about philanthropy as an extension of the power of elites in a capitalistic society to keep a system that worked for them … well … working for them. One way these elites ensure that, the critics argued, is through an undemocratic influence on policy.

Worries about undue policy influence by the wealthy (including through their foundations) are not new, of course, in the scope of American history. But they were on the rise again in the second decade of the 2000s.

Education scholar Diane Ravitch had slammed the “billionaire boys club” in her 2010 book, The Death and Life of the Great American School System: How Testing and Choice are Undermining Education, for what she regarded as its anti-democratic influence on educational policy. Also focused on philanthropy’s role in education was University of Michigan scholar Megan Tomkins-Stange, who carefully chronicled the approaches of four foundations in her under-appreciated 2016 book, Policy Patrons: Philanthropy, Education Reform, and the Politics of Influence.

And, in a book published that same year titled No Such Thing as a Free Gift: The Gates Foundation and the Price of Philanthropy, Linsey McGoey of the University of Essex made many of the very arguments that would go mainstream just a few years later. The inside jacket of her book reads: “The businesses fronting the money often create the very economic instability and inequality the foundations are purported to solve. We are entering an age when the ideals of social justice are dependent on the strained rectitude and questionable generosity of the mega-rich.”

Sound familiar?

For whatever reasons, the critiques by Michael Edwards that I referenced in my last post, as well as those by Ravitch, Tomkins-Stange, McGoey, and others — such as David Callahan in his 2017 book, The Givers — didn’t seem to catch fire in quite the way that a triumvirate of critiques of philanthropy published in 2018 did: Anand Giridharadas’s Winners Take All: The Elite Charade of Changing the World; Rob Reich’s Just Giving: Why Philanthropy is Failing Democracy and How It Can Do Better; and Edgar Villanueva’s Decolonizing Wealth: Indigenous Wisdom to Heal Divides and Restore Balance.

Indeed, as I spent much of 2019 on the road talking about my own book, Giving Done Right: Effective Philanthropy and Making Every Dollar Count, perhaps the most frequent question I was asked was what I thought of Giridharadas’s, Reich’s, and Villanueva’s critiques!

Although the three books are often lumped together, each is different of course — and others have reviewed and discussed them thoroughly and thoughtfully elsewhere. So I’ll refrain from too much gratuitous book reviewing and instead simply note that the three authors raise thoughtful, important questions.

But I also can’t help but add that the three authors share an unfortunate tendency to make sweeping — and often harsh — generalizations about philanthropy that belie the complexity and diversity of the sector. Giridharadas, for example, has asserted that “philanthropy launders bad reputations,” that “elite giving cannot be separated from self-protection,” and that “nonprofits are a very crucial part of how the rigged system gets rigged … as enablers for plutocrats to continue to harm society.”

Additionally, the authors mostly reside in the land of theory, too often taking a utopian perspective that is a luxury afforded, really, only to authors and academics. Only Villanueva — the sole practitioner of the three — offers pragmatic advice for funders who want to support nonprofits doing crucial work effectively. Indeed, he is alone among them in deeply considering the actual needs of nonprofit organizations.

Perhaps this is why many foundation leaders, in interviews my CEP colleagues conducted for a report on foundation influence on policy that we will be releasing in the coming months, say the critiques haven’t affected their approach to their work. Foundation CEOs, after all, typically don’t have any connection to how the money they’re charged with distributing was accumulated, meaning that Giridharadas’s argument that philanthropy is a ruse to distract with one hand what is being done with the other doesn’t feel directly relevant to how they seek to be effective grantmakers.

One foundation CEO told my CEP colleagues, “I find this debate at the national level to be incredibly overheated, overstated, and not terribly productive or helpful because it’s trying to leverage the populace’s distaste for elites without recognizing the social value that individual organizations and institutions and fields bring into the democratic process.”

In other words, the generalizations miss the mark.

In this way, the second decade of the 2000s was similar to the first. If 2000-2010 was about a broad critique of philanthropy as insufficiently effective and requiring an injection of “business thinking,” 2010-2019 was too often about an equally generalized and unnuanced critique arguing that philanthropy is supplanting government in a way that is anti-democratic and perpetuates inequality.

But evidence is scant that this is broadly true — as opposed to true in some specific and high-profile cases. A tiny proportion of overall foundation funding goes to advocacy, and in our policy research (again, report forthcoming), we see that even the largest foundations, while seeing policy influence as important, generally devote a small portion of their efforts to it. Of those who do policy work in a big way, many seek explicitly the kind of “systems change” that empowers those with the least power and seeks to elevate — rather than supplant — those voices.

Strangely, then, just as “philanthrocapitalism” idealized business at a rather odd moment, when the economy was collapsing, the critiques from Giridharadas and others seem to idealize government at a rather inopportune moment, when government dysfunction is on spectacular display (at least at the federal level). Yet somehow, the critics seem to suggest, philanthropy and nonprofits are to stand down from exerting what influence they can and instead wait until the reformers and thinkers have “blown up” or reimagined the system.

I don’t think so.

The answer is neither the importation of business analogies nor the idealization of government. Rather than putting all of our hoped-for-change eggs in one sector basket, we need to tend to each.

Furthermore, we need to educate the public on the distinct role of nonprofits supported by philanthropy. Indeed, the larger narrative about philanthropy and nonprofits matters!

I have argued, for example in this Boston Globe Magazine piece last month, that negative publicity about “toxic gifts” from genuinely toxic (and criminal) people like Jeffrey Epstein and the Sacklers has fueled the increasingly frequent and too-sweeping disses of philanthropy and nonprofits broadly. This is troubling because it threatens to undermine much good work and an American culture of giving at the very moment that tax policy changes have reduced the number of citizens who receive a tax incentive for their charitable contributions. This comes on top of an already declining rate of household giving.

This all matters because it will hurt — and actually may already be hurting — vital organizations doing crucial work. More than half of nonprofits expected revenues to be flat or down in 2019, CEP learned in a survey of nonprofits we conducted at the end of last year.

We need to push back against the sweeping and often uninformed generalizations. When we do, we will see that among leaders of the largest philanthropic institutions in the country, there is more agreement with the critics than many might imagine about what the role of philanthropy should be — and how it should be practiced.

More on that in my next post.

Phil Buchanan is president of CEP and author of Giving Done Right: Effective Philanthropy and Making Every Dollar Count, published by PublicAffairs last year. Follow him on Twitter at @philxbuchanan.

Editor’s Note: CEP publishes a range of perspectives. The views expressed here are those of the authors, not necessarily those of CEP.

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