America’s Next Top Philanthropist

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Last week, Barron’s joined the ranks of those who want to determine the best philanthropists (or in this case, most effective)—a trend that’s been gaining steam for the past decade. The magazine ranked the 25 best givers of the year, tapping Pam and Pierre Omidyar for the top spot.

I’m not one to dismiss lists—let’s face it, these kinds of lists have become de rigueur at this time of year and they sure do make life easier. But that may be part of the problem. It’s way too easy to throw up lists—with nary an explanation as to how these folks were chosen, under what criteria and by whom, exactly—and much harder to hunker down and grapple with what is effective philanthropy anyway?

Our friends at the Center for Effective Philanthropy, in fact, have been studying that question for years and are still trying to find an answer because they know how challenging it is to make something as abstruse as philanthropy and the social sector operational. So how are Barron’s and the Global Philanthropy Group able to know not only who the most effective philanthropists are but how they stack up in relation to one another?

I sent this article out to my large network via email to see what they thought, and I got an earful—from funders, nonprofit leaders, and journalists, nearly all of whom were troubled by the list, and especially, the lack of clear methodology in selecting the awardees. There was also concern about the appearance of bias, especially given the GPG’s client list and who was selected (one person remarked, “is it just a coincidence that nearly everyone on the list is doing international work?”).

I had a larger question, though—one that goes beyond the effort to determine what’s effective philanthropy and what isn’t (a discussion that I do believe is very important and warrants serious attention). It’s about what appears to be the assumption—tacit or otherwise—behind this and other attempts to distinguish good philanthropy from bad: That giving away huge amounts of money to “solving the world’s problems” is inherently better (or more effective or strategic) than helping people or organizations in one’s own backyard. A perusal of this list confirms that this assumption seems to be in play, with most of the awardees being focused on international, large-scale, complex issues that often require the assistance of an array of experts in figuring out ways to solve them.

But is that the only kind of philanthropy that’s effective? While we need big-scale/scaled up philanthropy, we also need the other kind—the kind wherein resources are provided to people and organizations in communities struggling to make ends meet. Among those are the people who run nonprofits in thousands of communities nationwide and are providing health care, child care, food, and housing for millions of Americans reeling from an economic recession that’s one of the worst we’ve ever seen.

With a relatively small amount of money, one executive director recently told me his nonprofit was able to “feed 8,000 more people last month.” If that’s not effective I don’t know what is.

In Minnesota, $14 million was raised in 24 hours for 3,400 nonprofits, thanks to an online campaign organized by and that local funders matched. This unprecedented effort offered a new, collaborative, community-based approach to meeting real needs in real communities. Why not spotlight it—and the notion that some of the best philanthropists aren’t individuals but networks or collaborations—in discussions about effective philanthropy?

Some would argue that the above examples are charity, or are simply meeting needs, not philanthropy. Well, that’s another debate, but I’d aver that perhaps we need to come down to earth a bit and realize that no matter how much money foundations have, most are probably not going to be able to resolve the world’s problems by themselves or even in concert with other entities. That doesn’t mean that they shouldn’t continue to try—they should and they should be strategic about it. But they also need to keep in mind that not all philanthropy is about huge, massive social change, logic models, and grandiose experiments; it’s also about meeting real needs in real communities.

Happily, community and local foundations realize that and are stepping up all across the country to do so. Not only are they meeting needs, they’re also adapting their operations so they can get resources to organizations faster and more efficiently because they see first-hand the pain that’s occurring on the ground. Is that charity? Perhaps, but to many, it’s been enormously helpful and, yes, effective, in doing what philanthropy’s supposed to do.

So, as philanthropy becomes more visible—a good thing—and more sophisticated in terms of its strategic impact (something we’d also like to see, to be sure), it may be time to have a new discussion—one that doesn’t start by decoupling what has sometimes been derided as charity with real philanthropy. As many nonprofits—especially those trying to survive these hard times—would attest, there’s room for both, and both can be refined and evaluated in terms of their effectiveness. In fact, it might be interesting to ask a representative sample of the entire nonprofit sector whom they think are the most effective philanthropists and why. Their answers might be illuminating—and result in much more interesting lists of the most effective philanthropists.

  • Liz Hollander

    As someone who has been on both sides of this equation, Cindy’s points are well taken.

    I was proud of the RI Foundation responding to desperate human needs by making unsolicited grants to address homelessness, hunger and unemployment. That’s leadership!

    I am involved with a non-profit that “goes deep”,not broad, and transforms the lives of kids and their parents and their neighborhood but is always being pushed to “go to scale”. Bigger is not always better.

    I love the idea of polling the non profit sector, we’d all learn a lot.

  • Rachel F

    Hear, hear!

    But please don’t diss logic models. Everyone has one. You write:
    [quote]But they also need to keep in mind that not all philanthropy is about huge, massive social change, logic models, and grandiose experiments; it

  • Barbara Parker

    Cindy,I totally agree with your premise. Since the world of philanthropy is way above my radar, my question: Is it somehow more prestigious for foundations, etc. to fund global initiatives rather than taking a long hard look at the conditions in their own backyards? When so many in this country are hurting so drastically, I don’t understand how their needs are so often overlooked.

    BTW, I have similar feelings about the troop surge in Afghanistan. The money that it’s going to require — not to mention the cost of human life — to try and prop up a country that’s been in upheaval since the beginning of time, it seems to me is foolish.

    Brilliant, provocative article. I’ll be interested to read the comments.

  • Irene Sterling

    Dear Ruth, I’m in the rain in NJ, too and very sorry to have missed you today. But thanks so much for the reminder that we non-profit leaders should be servant leaders. I just came back from our local non-profit alliance where I cantinue to be shocked at the blindness of some of our members. Grace and peace, Irene

  • Cindy

    To Rachel:

    Uh oh! I didn’t mean at all to disparage logic models. To be honest? I love logic models and am actually hired quite a bit to help nonprofits and foundations construct them because I think they’re are extremely helpful in clarifying goals, strategies, and outcomes–something the sector continues to need. What I meant by the comment you cite is that we shouldn’t lapse into thinking that these kinds of things are ONLY what matters in philanthropy (we sometimes get trapped in our own jargon and inflated sense of importance), rather than taking a step back periodically to realize that it’s sometimes the small and non-lofty things that make the most “impact.”

  • Jeanne Bowman

    may I quote your post on logic models? This is clear, succinct, timely and relevant to the non-profits I work with.

  • Rachel F

    Jeanne, absolutely!

  • Leo Arnoult

    I would agree that as attractive and meaningful the larger social change philanthropies are, we need to lift up the more local charitable organizations that are keeping the finger in the dike until those global changes are realized at some point in the distant future at least. However, the real challenge is establishing criteria that can be agreed upon. Not sure this is feasible, but we can start by establishing reasonable outcomes measures for each area. They may be qualitatively and quantitatively different by sector but must be based on some coherent measures if we want an objective determination.

    The problem with this is there are many not for profits that may be realizing the results but do not have the funds to conduct the internal or external research to document their achievements. So in the end, we should acknowledge those whose performance deserve recognition with a spirit of humility and perhaps avoid suggesting that any list is anything more than a best guess of who the best are or maybe just stop saying “The Best” or “The Top” and just say they are “Among The Top or Best” as determined by objective criteria in their sector. As regards the philanthropists who give maybe we need to segment more and acknowledge them based on levels so that sources who give are not just acknowledged by their absolute levels of giving, but set some thresholds a such as companies or foundations at certain defined levels who give proportionately higher relative to their capacity based on size of assets, percent of net profits, etc.

    Keep up the good work!

  • J. Pratt

    Baron’s spotlighting of their version of the “25 most effective givers” was equal parts philanthropy and celebrity, leaving little room for plain citizens or community engagement. Virtue is its own reward, but has anyone calculated the now much sought after PR value of celebrity philanthropy? (Then there is the matter of how the 25 made their wealth — and the consequences — but no room for that here.) I would like to see the Cindy Gibson thesis continue — to expand the pool of “most effective” (including local and grass roots) and to look at the prospects for philanthropy building long term trusting relationships.

    –Jon Pratt

  • Robin Grinnell

    Great observations, Cindy. Local philanthropists are somewhat overlooked – maybe the numbers just aren’t grand enough to garner media attention. I have been privileged to work with the Cook Family Foundation in Michigan. The Cooks have taken up the charge to build the infrastructure and sustainability of local nonprofits (many small) by supporting a long-term capacity building initiative. In addition to their traditional grants, the CFF supports organizational assessments, targeted training, consulting and equipment needs. The orgs who participate in the program receive an average investement of about $40,000 over 2.5-3 years. For these rural, community-based orgs, that’s huge. And we’re definitely seeing results.

  • Leigh Oetker

    Thanks so much for putting into words what I have felt for many years as the ED for a local foundation in a rural area. Particularly in these challenging economic times,we are stepping up along with other local funders to partner around supporting our “safety net” services and changing the way we do our grantmaking to make it responsive to the community’s needs-I hope we are making a difference by listening to those who know best-I am so tired of the big grantmakers getting all the credit-local grantmakers making a local impact in their communities is where real change happens-give me one example where “big” money has truly created major change? I would counter that those changes happen incrementally in communities across our country who truly know what they need. Thanks for letting me vent and for your spot on perspective.
    Leigh Oetker

  • Jill Blair

    Great points Cindy Gibson! A few thoughts…we all too often use the word and concept of “scale” to mean “good.” While big isn’t bad it also isn’t always better – corner markets have their place in our economy. And we surely suffer when we eliminate/lose them. The same is true for the independent sector. The value is in the diversity – meeting different needs in different ways. On the question of what constitutes “effective” it is always necessary to know where you are going in order to know whether you have arrived. Effect – impact – impression – these are relative terms. Our effectiveness is the relationship between intended value and value created. And yes indeed, we we all benefit from objectivity in the measurement of created value. CHEERS!

  • Cindy G.

    Thanks Jon, Leigh, Jill (yes, I TOTALLY agree about the overuse of the word “scale”), Leo, and Robert for your thoughtful comments. Now what do we DO about this? 😉