Giving with Confidence: A Guide to Savvy Philanthropy

Foundation.

Introduction

Beyond Flickers

When the subject of philanthropy comes up, I often find myself thinking about lightbulbs.

Lightbulbs?

Let me explain.…

During my years as executive director of the David and Lucile Packard Foundation, the lightbulb metaphor frequently surfaced in conversations with Dave Packard.

If your knowledge about a problem is equivalent to a one-watt bulb, Dave used to say—speaking like the engineer that he was—then the area of your illumination will be very small, while the surrounding darkness seems limited. Coming up with an answer is easy because you have no idea what lies out there beyond your tiny flicker of light. You don’t know what you don’t know.

On the other hand, when your knowledge reaches the equivalent of a 100-watt bulb, you grasp far more, but the amount of darkness surrounding you is also perceived to be much greater. You face complexity, ambiguity, and the unsettling realization that there might not be a single simple solution to your problems.

Now and then, we’d be at a meeting, discussing some social issue or community project, and someone would come up with an approach that would solve all the problems. If we only did this or tried that, everything would be fine! Then Dave might tilt his head towards me and whisper, One-watt bulb…

Of course, we’re all one-watt bulbs on some subjects. But when we’re talking about something as multifaceted and important as philanthropy, it’s best to state from the outset that none of us has a fully illuminated view of what works best amid a vast and almost limitless universe of funding possibilities.

For that, we have to rely on the accumulated light of our friends, colleagues, mentors, and peers.

Throughout my career, I’ve learned again and again how much I still have to learn. And after nearly four decades spent working in the foundation world, I’m convinced more than ever that donors who have approached their own philanthropy with imagination, courage, energy, and persistence can point the way towards better giving for us all.

Which is why Fred and I have written this book.

We want to draw upon the example of thoughtful donors and their field-tested techniques to assist:

individuals giving as little as $5,000 annually,

families or individual donors giving as much as $500,000 each year, and

trustees and volunteers in family foundations.

Why mix individual giving with foundation philanthropy? In reality, the majority of our country’s 90,000+ foundations are basically family affairs. They operate with assets of $1 million or less. They have no paid professional staff. The responsibility for effective grantmaking sits squarely on the shoulders of the trustees, who face the same dilemmas confronting individual donors: scant time, limited means, and only passing acquaintance with the byways of good giving.

In other words, when it comes to effective philanthropy, we’re all groping somewhere in the shadows, if not quite in the dark. We need to turn up our collective wattage to a vast and informative luminosity.

We shouldn’t kid ourselves. Good giving is difficult. No less a thinker than Aristotle warned that giving away money is neither in every man’s power nor an easy matter. Hence, it is that such excellence is rare, praiseworthy and noble. Andrew Carnegie, less philosopher than practical man, put it more tartly: It is more difficult to give money away intelligently than it is to earn it in the first place.

My own experience with philanthropy has been concentrated in the foundation world, a realm rich in opportunities. Foundation executives have access to capital, colleagues, public officials, and leaders in private industry. Sometimes we can even tap the power of the media when we imagine that it will serve our interests. Or we can trundle up to our own private mountaintops and maintain an Olympian silence.

Yet foundations are actually small potatoes when it comes to giving. Individuals deserve the credit for most of our nation’s charitable contributions. But since they lack an organizational structure and collective public profile, they’re too often ignored in discussions about what makes philanthropy move ahead…

…or veer off course.

This book is written from both sides of the aisle. We’re aiming to incorporate some of the best ideas from organized philanthropy and individual giving to provide a means for improving the reach, scope, and impact of all our contributions. Nobody has a monopoly on wisdom. We depend on one another.

So what’s amiss with philanthropy today? From my perspective, our giving as individuals and small family foundations too often turns out to be:

Impulsive Donors respond to the proverbial (and sometimes literal) knock at the door. That neighborhood canvasser for Greenpeace may make a sound case for saving the world’s oceans. But if you really back their program, and you have the means, wouldn’t it make more sense to make a larger, more thoughtful gift than the one you’re likely to hand over on the spot?

Routine Donors may think hard and long about their first significant contribution to a group, but afterwards, often for years, giving lapses into habit. That’s not to say that long-term, few-strings-attached support can’t be an excellent strategy. (We’ll argue as much in a coming chapter.) But a sustaining commitment differs from an automatic, unexamined gift. Routine can kill the romance in philanthropy. Giving should be electric.

Disconnected Personal relationships are the lifeblood of philanthropy. They’re what get us giving in the first place—the pitch from our alma mater, the church pastor, or an old friend testifying on behalf of her favorite cause. But following the first check, the contact between donor and recipient organization often collapses, to the impoverishment of both sides.

Overreaching Some donors grow disenchanted when their initial support fails to eliminate a global scourge such as hunger or poverty. Others misread their contribution as a license to tinker with the organizational gears and pulleys. In both cases, philanthropy suffers. Good giving requires a dose of realism and a light touch.

Instead of succumbing to these four flaws, I want to argue for giving that strives to be:

Deliberate

Thoughtful and imaginative

Connected in all the right places

Ambitiously realistic

It bears repeating: There isn’t any one right way to be an effective donor. Experience teaches us that the methods of good giving are numerous, diverse, and sometimes mutually exclusive. Only the dimmest bulb thinks his way is the only way.

But before we delve into the heart of how to give effectively—which makes up the remainder of this book—let’s take a moment to explore some of subtle forces governing the psychology and culture of philanthropy.

Giving—and What Gets in Our Way

Giving brings us happiness. The accumulated wisdom of the world’s great religions and philosophies tells us so. Our own experience confirms the fact. In terms of quantifiable evidence, we can now turn to laboratory studies showing how generosity recalibrates brain activity and lowers stress levels. Interviews with donors and volunteers reveal them to be happier and healthier than their more tightfisted, disengaged peers. One finding even links giving to increased personal prosperity, with our bank accounts expanding as we donate greater amounts of money and time to causes beyond the welfare of our immediate families.

In sum, giving is good for us. (And not just for the wealthy. America’s working poor rank as our nation’s most generous people, giving away the greatest percentage of their annual income.) Whatever our material resources, giving can help us wring genuine meaning from mere existence and fill our lives with sustaining, enriching personal relationships.

Then why is it so difficult to do well?

Three factors come immediately to mind.

Time Most of us don’t want to turn our giving into a part-time job, particularly when we’re dispensing modest amounts.

Timing With kids still in the house, college to pay for, and retirement somewhere around the treacherous bend, the emphasis on philanthropy can feel out of sync with life’s rhythms.

Uncertainty Even if we’ve got the money and the hour seems ripe for a sudden spike of generosity, there’s always the nagging question: How do I know my contributions will produce their desired results?

Over the years, I have also come to believe that our instinctual drive towards generosity often gets derailed by more subterranean factors. As donors, we must contend with powerful and largely unconscious fears about:

Skepticism Most individual gifts are very small relative to the needs. In this world of unending trouble and strife, does our pittance really make a difference?

Conflict Not everybody wants to stick out their neck by supporting a controversial cause (which is one reason why Planned Parenthood lists so many of their gifts under the heading Anonymous).

Scandal The financial misdeeds of a few highly placed officials in prominent national charities have caused too many people to mistake these disgraceful exceptions for the rule (when the real problem in nonprofit life lies in how little most staff are paid).

Arrogance If I’m rich enough to give away my money, then I must be knowledgeable enough to give it away wisely. (See Aristotle and Carnegie.)

Mortality Giving reminds us that our small fortunes may have a longer life than our frail bodies.

Embarrassment Imagine that gnawing feeling in the pit of your stomach as you watch an organization you’ve supported for years suddenly sink. Now what does that say about your judgment?

Timidity Many of the best nonprofits probe society’s deepest wounds. Not every donor is willing to bear close witness to this level of deprivation and suffering.

Privacy Philanthropy is a matter of public record. Who wants the limelight shining on their bank account and personal decisions about giving?

Fatigue If you give once, you’ll be asked to give again and to give more. Nonprofits must keep asking in order to survive. But for donors, it can feel exhausting, unending, and even disrespectful.

Let’s also keep in mind that our motivations for giving are never pure. That may sound jaded, but I prefer to regard this truth as yet another reflection of the human psyche’s boundless complexity. Consider the great American philanthropists of the nineteenth century who bequeathed upon posterity all those public libraries, endowed universities, and world-class museums—even as they busted unions, paid off officials, and burnished their reputations as robber barons.

Our own motives may prove no less complex.

We give in gratitude, to repay the world, in part, for the countless benefits and opportunities we enjoy because of the struggles and sacrifices of those who came before us.

We give to assuage our consciences—about people suffering on the other side of the world or a few blocks from our homes.

We give because we’re asked by someone we like, admire, or (for complicated reasons we may not like to admit) cannot refuse.

We give because we want to feel that we’re part of the solution, a contributor to society, a person of upstanding character and sound vision.

We give to get something back—enhanced standing within the community, a reputation for selflessness, richer relationships with other people, or even peace within our family’s conflicted factions.

Whether we’re aware of it or not, we are usually looking to be rewarded for our giving. Most often, that reward comes in the form of a gratifying emotional experience. Which should be expected. We are social animals. (Aristotle again.) Our contributions of time, talent, and money help sustain us both as individuals and as a civilization.

In the end, the reasons behind our giving may not matter. I suggest we dispense with plunging the psychic depths in favor of recognizing the extraordinary opportunities that presently await us as donors. In truth, the time has never been better to cultivate our skills as individual philanthropists.

Why now?

To begin, there’s simply the huge amount of wealth sloshing around our collective checkbooks and brokerage accounts, despite the current downturn. Even in the midst of the worst economic climate in a generation, more than two million Americans still possess investment assets of more than $1 million. And by midcentury, some $40 trillion, according to the most modest estimates, will have traded hands in the greatest intergenerational wealth transfer in history—with higher estimates peaking at $130 trillion. Despite the present difficulties and future perils, we remain a very rich nation with millions of individuals enjoying stable lives of plenty. We can count ourselves among the most fortunate human beings to have inhabited this planet.

Equally important, we need to acknowledge the fact of our own immense freedom. Individual donors enjoy unrivaled independence and autonomy in determining how to use their money for the common good. Unlike business leaders, who must respond to the demands of shareholders, or elected officials, who find themselves bound by tightening budgets and a restive electorate, individual funders and small family foundations are largely responsible only to themselves. As a result, we can move fleetly, conducting our grantmaking with rapid dispatch, jettisoning the stacks of proposals, evaluations, and supplementary materials that too often bog down the foundation world. In light of this independence, our giving should be bolder and less self-interested than anything the business world might attempt—and more imaginative and daring than any program or policy the government is likely to launch.

Finally, we can take comfort in the fact that we now know a great deal about what works and what does not. Decades worth of experimentation, evaluation, revision, and scaling-up success