Magic Christian Theory of Philanthropy: Fruitless Loops Frustrate Fundraisers

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Each step of the grant interaction with the Southeast Area Foundation seemed to get more difficult—harder to understand exactly what was expected, even strange as new processes and unusual conditions were added, but still the volunteers of the SouthWay Community Trust kept at it. At stake was $10 million promised over the next 10 years for the very low-income Near Southside Atlanta neighborhood, on the condition that they craft a plan to reduce poverty that could pass muster with the Foundation. It seemed worth the first two years of meetings and planning sessions, despite the constantly changing players from the Foundation and in the neighborhood.

As three, and then four years passed with no sign of an actual transfer of funds, neighborhood leaders tired of the oddly elongated cycle of leadership circles, planning task forces, consultants, priority-setting meetings, and then again more leadership circles—and to what genuine purpose?

Local civil engineer and neighborhood resident Raphael Entenza suspected the worst—that somehow there would never be any money for the Near Southside, that somehow their neighborhood had been pulled into some sort of a peculiar, sick game. So many apparently sensible steps had failed to produce results, even after hundreds of hours of meetings. Entenza decided to sue for breach of contract, arguing that the Foundation had failed to deliver after the SouthWay had satisfied its part of the arrangement.

The week after the suit was filed, along with its unwanted publicity, the Southeast Area Foundation’s philanthropy took an even stranger course. The Foundation suddenly issued six grants totaling $10 million to previously unknown organizations in the South Atlanta neighborhood:

  • $1 million for youth development and leadership cricket teams, ages 7-13;
  • $2 million capital renovation fund for evangelical urban ministries (restricted to building exteriors in one of two results-based, research-proven soothing colors—cerulean blue and woodland green);
  • $2.5 million for job skills training in food preparation in Scandinavian vegan cuisine;
  • $500,000 for a feasibility study of a 3/4 size highway clover leaf and underground civic meeting room at the main South Atlanta intersection of Georgia Avenue SE and Coca-Cola Street;
  • $1.75 million for community organizations to conduct GIS mapping and resident interviews about their attitudes on the positive aspects of poverty; and
  • $250,000 over 10 years to the Cobb County Community Foundation for regranting as startup funding for innovative, long-term projects with proven outcomes that eliminate systemic causes of poverty.

How could these surprise grants be understood by the Near Southside residents? Was it an abuse of power—or simply ineptitude? Or could it have been a peculiarly developed sense of irony and puckish sense of humor backed by millions of dollars?

The possibility that charitable contributions could be given sarcastically is sometimes the only plausible explanation for otherwise unexplained phenomena—or is it? In the wide world of stressed-out people experiencing difficulty raising funds, the concept of “Magic Christian Philanthropy” has been rumored, but never proven.
Neither faith-based nor mystical, this lesser known form of charity takes its name from The Magic Christian, a 1960 novel by Terry Southern (screenwriter for the 1960s films Easy Rider and Dr. Strangelove). In the novel (and later 1969 movie with Peter Sellers, Ringo Starr and John Cleese), eccentric billionaire Guy Grand spends his money on practical jokes and in other odd ways — including launching an intentionally dysfunctional luxury ocean liner dubbed The Magic Christian— filled with pranks that force people who think they are elegant into all sorts of undignified situations—all to prove that there is, in fact, nothing so degrading that someone won’t do it for money.

“Yes, we made plenty of plain old grants by making a decision after reading some of these nonprofit proposals,” said Karla Duster, president of the Southeast Area Foundation, “but frankly I got tired of reading the same old thing, day in and day out.”

This led the Southeast Area Foundation, which makes grants in eight states from an office in Fort Knox, Tennessee, to suspend grantmaking for three years to find out what communities really wanted. “We had it up to here with feeding institutions; we decided to go directly to the people,” Duster said, and so created the Community Ear Horn Initiative, named after the early device used to assist hearing. The Foundation convened forums and listening sessions in each of the eight states, and dispatched staff and consultants to put their “ears to the ground.”

“We discovered that what our communities really needed was for us to hire more staff and expand our offices so that we could hear them better,” Duster reported, and she immediately set out to meet the communities’ need. “This is not going to be business as usual; in fact, we may be the most innovative foundation out there right now.”

Innovative, certainly, but also opaque and perplexing. After seven years of planning, none of the community leaders exposed to Southeast Area Foundation activities could actually say what the Foundation did. “I think it might be leadership development, or maybe community planning, but after three years of talk I quit going,” said Bernadine Stranahan. “But they always find new people for their meetings because they pay for your travel, feed you very well, and have top-notch facilitators.”

One veteran Foundation insider denied any adverse intent, and was emphatic that there are times when “unusual” grantmaking is the only logical course: “Once in a while you realize the world needs a gentle tap on the head,” said Andrew Carnsale from his West Palm Beach investment office. “If you felt responsible for every disease, or social or environmental problem, you’d never sleep. We know that philanthropy cannot do everything, and sometimes the best we can do is help people change their thinking—sometimes in ways that they will not understand.”

At the other end of the charitable exchange, the people that may (or may not) understand the goal of these idiosyncratic interventions tend not to see the practice as harmless fun, but usually chalk up the same experiences to some unknowable cause for why their fundraising pitch went awry.

One of the few that guessed at the actual cause is Washington D.C.-based Jack Downing. “They say you can’t fight city hall! Politicians are at least subject to election. When the foundations rule your fate, they may as well be Gods for all the accountability!” fumes Downing, who temporarily resides in the isolation wing at St. Elizabeth’s hospital in Washington.
Downing spent six-and-a-half years in a fruitless loop of planning grants and project proposals for a global climate-change campaign, with constant encouragement and repeated delays, until at last he was awarded a $7 million grant. His sense of accomplishment after so many years of struggle was tempered by the conditions set in the 38-page agreement letter: no lobbying; move the office to Baltimore; and satisfy an unexplained 22:1 matching requirement before funds could be released.

Downing’s funder is unapologetic. “If we told people what to do, they would revolt,” explained T_______ Adams, real estate developer and founder of the Adams Foundation. “But if we gently nudge people during the grant process, they are more amenable to learning—what I call ‘the teachable moment,’ Adams said.

Despite the occasional complaints and two lawsuits, the more negative feedback the Southeast Area Foundation board received concerning its unconventional approach and lack of clarity, the more they were convinced their president was breaking new ground. It’s not clear from three days of interviews and travel with the Southeast Area Foundation staff as to whether they seriously believe their own guidelines and are somehow poor communicators, or are just especially convincing at appearing serious while knowing the slow motion chaos they wreak on unwitting participants. As was true with all of the foundations interviewed for this article, officers and directors of the Southeast Area Foundation refused to confirm or deny whether their program made use of any type of indirect strategy.

“You’re wrong if you think we are trying to mess with people’s minds,” protested Karla Duster, “but you have to know that the democratic process is always messy. These communities should be more patient.”

Privately, one retired foundation leader expressed regret that people who raise funds for charitable organizations are so rigid in their thinking and can’t conceive that foundations would themselves innovate by taking alternative approaches. “I swear, these people make us do it, with their ‘oh so serious’ pitches. Well guess what, if you don’t want to do these things, don’t take the money. It’s not like someone has put a gun to their heads,” said M_______ S______.

Yusef Arak, president of the Association of Large Foundations, shook his head when asked about the practice of “Magic Christian Philanthropy.” “Let me guess, you found some people that have been turned down for grants—or better yet, you’ve been talking to Jack Downing.”

“Philanthropy is not just about giving away money—if it was, anyone could do it. Sometimes the biggest contributions aren’t the money, but helping think through a new idea; and sometimes the quickest way is not a straight path.”
Arak was especially adamant about the next point. After taking a long sip of coffee from an unusually bright blue SouthWay Cricket Leadership coffee mug , Arak closed his eyes, leaned back and said softly, “Like the Lord, sometimes philanthropy has to work in mysterious ways.”

Phil Anthrop is a consultant to foundations in G-8 countries.