We Need More Philanthropists Who Listen

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As I read the responses to Peter Buffett’s recent op-ed in the New York Times, I started to wonder if Buffett’s most important point was getting lost. The central problem Buffett highlights—the one that many in philanthropy are uncomfortable talking about—is that people of wealth, as Buffett puts it, “are searching for answers with their right hand to problems that others in the room have created with their left.” We’ve created a system where the individuals and companies that perpetuate environmental disasters, human rights abuses, and growing wealth inequality are empowered to direct resources intended to eliminate these problems. That so many have glossed over this point is particularly concerning because the social sector would be a lot stronger if more of us took Buffett’s comments to heart.

Major donors directing dollars intended to address problems they have created is a problem encouraged by many private and community foundations and leads to the “charitable industrial complex” that Buffett warns of, where people spend more time applying social service Band-Aids than creating systemic change. This is why, if we’re ever going to dismantle oppressive systems, those most impacted by poverty, racism, and other forms of injustice need to be the ones deciding how and where to direct philanthropic dollars.

Howard Husock writes on the Forbes site that the main problem with modern philanthropy isn’t a reluctance to fund change-oriented work, but that philanthropy is, “unfriendly to the creation of wealth that provides the resources to solve such problems.”

I’d argue the opposite: more people should be actively opposed to the accumulation and concentration of wealth, because that’s what created many of society’s problems in the first place. It’s not anti-capitalist or anti-American to see that the Great Recession tipped millions of working-class Americans into poverty or that wealth inequality is growing to dangerous levels. Even if this did result in a stronger philanthropic sector, it is not something to be celebrated. And, in reality, nonprofits are struggling to keep up with rising poverty, especially in the face of sequestration.

That said, my goal is not to condemn those who have accumulated wealth and now spend that wealth to fund social services. It is understandably difficult for those who are benefiting from the status quo to fund programs—especially advocacy and organizing—that lead to real social change and opportunities for all people, rather than just those at the top. However, I don’t think they should be the only people in the room making decisions about how to solve problems they’ve played a part in creating.

Husock goes on to say, “Not only is Buffett far too dismissive of the good that can result when the Kenyan poor have access to cellphones to facilitate commerce—he is far too pessimistic about what philanthropy, well conceived, can accomplish.”

Once again, Husock overlooks the role that unfettered capitalism has played in creating and perpetuating deep poverty in Kenya, throughout Africa, and here at home. Do we really think Shell Foundation leaders are the best people to make decisions about improving environmental health when Royal Dutch Shell creates toxic and unsafe environments worldwide? Probably not.

Phil Buchanan, writing for The Chronicle of Philanthropy, adds, “It’s unfair to issue sweeping generalizations about the motivations of individuals who [find] themselves with great fortunes.” Which is a reasonable point. There are many people with inherited wealth—like those working with Resource Generation and Bolder Giving—making a conscious effort to use their money for systemic change. These are the people who launched the Tax Us More campaign because they understand that concentrated wealth isn’t good for anyone. While not perfect, Bill Gates and Warren Buffett have gathered dozens of Americans with considerable wealth with their Giving Pledge. But even with the best of intentions, Gates, Buffett, and other men and women with inherited wealth don’t know what it’s like to live paycheck to paycheck and they don’t live in the communities they seek to support with their philanthropy. As Peter Buffett points out, “Over and over, I would hear people discuss transplanting what worked in one setting directly into another with little regard for culture, geography or societal norms. Often the results of our decisions had unintended consequences.”

Strategic grantmaking has become a popular trend in the world of philanthropy, but it is not without considerable flaws. Strategic grantmaking has the allure of familiarity to donors and foundation leaders from the profit-sector: Set a goal, establish quantitative outcomes, and use financial incentives to get results. Some aspects of this are hard to argue with. I think we can all get behind the idea of monitoring impacts to ensure our grantmaking is doing what it’s intended to do. But, as Bill Schambra explored here at Nonprofit Quarterly, strategic grantmaking almost always puts philanthropists in the driver’s seat, which leads to focusing on problems that might not be a community’s priority, a tendency to ignore problems that activists on-the-ground try to draw attention to, unreasonable timelines, and attempts to quantify things that are not measurable in numbers.

But there is a better way: one focused on listening.

Foundations all across the country are approaching grantmaking differently. North Star Fund in New York, Headwaters Foundation in Minneapolis, Hawaii People’s Fund, and MRG Foundation, the organization I lead here in Portland, Oregon, just to name a few. A quick look at our websites will show that we all have different funding priorities, donor bases, and strategies. But we all have one thing in common: The power and responsibility to allocate resources is vested in activist grantmakers, individuals deeply embedded in the communities we support, instead of donors, corporations, or foundation staff—who can be far removed from the impacts of poverty and injustice.

Activist-led grantmaking creates a different relationship between wealthy donors and our foundation, which, in and of itself, supports social change. When wealthy people relinquish decision-making power and step aside to support those most impacted by injustice, we get the most responsive funding decisions, shift power dynamics in our communities, and create institutions that reflect our values for true equity.

Buffett deserves praise for recognizing that he doesn’t have all the solutions, “My wife and I know we don’t have the answers, but we do know how to listen. As we learn, we will continue to support conditions for systemic change.” When foundations don’t listen to and learn from those most impacted by injustice, they miss the opportunity to get at the root cause of problems to create long-term change and better lives for those they serve.

We need more philanthropists like Buffett who are willing to listen and more foundations who follow the lead of those closest to the problems we’re trying to solve if we’re ever going to fund anything but Band-Aids.

  • Kenda

    I like that you identify that so-called philanthropists are not putting their money in the right places but just keeping a system of dependence going. But I do not agree that the accumulation of wealth which causes poverty. Poverty is generally caused by bad decisions which leads to trouble and fear which leads to dependence which leads to more bad decisions, trouble and fear and so on. The safety nets we established to help people have trapped them. We need to release people from these bonds which will be painful and then teach them to succeed without dependence on “programs” so that they too may accumulate wealth. No guarantees but accountability and reward for success. Government taking money from people — redistribution of wealth only serves to divide and penalize people who planned save and succeeded. If people want to give their wealth away that is their business but to take it because you are afraid of wealth is unfair. Instead stop the dependency of people without wealth and let them be free enough to need to struggle to get wealth for themselves and encourage their ingenuity and success.

  • Dr. Gray Keller

    Good points, but from my experience corporate nonprofits need to listen to philanthropists – after all, without their resources the corporate nonprofits of America would be in trouble.

  • Terry Fernsler

    This is true if nonprofits believe that philanthropic resources are the only ones on which they need to rely.

  • Mat Despard

    Very well stated. Sharon reminds us that philanthropy and the general business of nonprofit work is about power – control over resources, with benefits trickling down to people nonprofits intend to help. I’m eager to learn more about how nonprofits and their funders can engage people directly affected by growing inequality in setting the agenda.

  • lee reagan

    This sounds great but I wonder how it functions. Who are the activists leaders? How do you become one of the leaders? Also, many philanthropies hire program officers to guide their giving. How does this play into the issues that are in this article?

  • Mat Despard

    I have a few ideas about how we can “release” poor people from the bonds of these programs: 1) raise the minimum wage to a living wage; 2) make our regressive $400 asset-based tax policies (mortgage interest deduction, etc.) progressive; 3) ensure that anyone who is capable of going to college can afford to do so; and 4) ensure that everyone has health insurance.

  • Paul T Hogan

    This may be one of the best summations of the heart of the problem that I’ve read. The idea that you can’t fix a problem with the same thinking that created it applies very well. And while I believe that many different approaches working together are needed to address the critical issues raised here, including activist grantmaking, the heart of the problem is the system itself.

    I believe capitalism has already begun a significant, and desperately needed, evolution. It will still be capitalism at the end of it, but it will be a capitalism that recognizes that it cannot survive if everything has been extracted and no one has any money to buy whatever is left to produce. The existing form of capitalism demands that all costs be absolutely minimized, and where possible, externalized to the communities (the taxpayers) in which they work.

    Not all companies do this; many are completely responsible and provide a net benefit to their communities. But many, usually larger corporations, become a net loss to a community — despite bringing many jobs — because of below-poverty wages, abrogation of environmental waste and clean-up responsibilities, failure to respond to regulatory citations, excessive demands for property and sales tax relief, and a willingness to view defensive litigation as ‘the cost of doing business.’ Communities have come to realize that the ‘big box’ is often much more of a Trojan horse.

    In a number of states, corporate law has been modified to include the ‘for-benefit corporation,’ also known as the ‘b-corporation,’ or the ‘low-profit, limited liability corporation (LLLC).’ These are best understood as ‘hybrid’ corporations; a combination of for-profit and not-for-profit. In essence, the corporate charter demands that the corporation act in the best interest of the communities in which it works rather than acting for the absolute greatest financial benefit of the shareholders. And the shareholders agree to this arrangement. And a large number (growing rapidly) have been formed.

    This directly addresses the issues raised in the letter above, and those raised by Mr. Buffett. If corporations agree to pay living wages, address environmental issues, operate within regulatory limits, and pay appropriate taxes, much of the work of the non-profit sector would disappear. There would be no need for the ‘excessive’ taxes that form the social safety net, or the taxes paid by individuals that replace those not paid by corporations. And on and on.

    Every economic system that has been formed by humans has evolved (or disappeared). There is no reason at all to imagine that capitalism as has been practiced over the past 100 years would or should remain the same. While we are probably a good decade away from reaching the tipping point of numbers of for-benefit corporations in the US, it is undeniably true that we already have begun the process. And that is (or will be) a net benefit for a great many people.

    Paul T Hogan
    Buffalo, NY

  • Sharon Gary-Smith

    Thanks Lee for your comments. Your questions could lead into an entire book of responses, and gave me lots of food for thought.

    Our activist leaders are former grantees and community organizers from allied groups.. his brings credibility and accountability to our foundation’s work. In addition to providing technical assistance to grantees, our staff works year-round to recruit activists to our grantmaking committee and to ensure we have rich and diverse representation that mirrors all communities in Oregon. In response to your inquiry about program officers and how to do grantmaking differently, our model of activist grantmaking is intentional in moving the power of giving money to those who are embedded in their community, and have knowledge of the issues.

  • Sharon Gary-Smith


    You are absolutely correct in stating there is a need for nonprofits and funders to engage those most affected in the decision-making process. At MRG, instead of holding the money over the heads of nonprofits, we place the decision-making responsibility in the hands of those activists who work in the communities, who know what the issues are and who have a vision for what is possible. In this way, MRG and other social justice funders make a small correction to the imbalance of power that you’ve talked about.

    I’d love to hear more about what you’ve read elsewehere and what you think is missing because this is a conversation we should all be having more often.

  • Elizabeth Castillo

    Very reminiscent of Christopher Emdin’s TedX talk about Equity. He defines it as listening to what a person needs and then acting on that need, not imposing your ideas onto them.

  • Lisa Turner

    @Mat Despard I would only add three other ideas to “release” people from their bonds of dependency: 5) affordable housing stock to meet community demand 6) broadband access in rural areas and 7) eliminating food “desserts”

  • Kate Lillis

    Peter Buffet’s understanding of the philanthropy dynamic is encouraging. I hope his insights change the thinking of other foundations and donors.

    I think Sharon Gary-Smith’s article is thoughtful and spot-on. To the extent that funders’ thinking begins to change, it then becomes necessary for people to learn how to truly listen. To listen without assumptions and judgments and unconscious bias. That is a difficult but necessary step to changing the face of philanthropy. An organization that provides grantees and grantors with the skills to truly listen to each other to create a funding environment suggested by Buffet and Gary-Smith is Be Present, Inc. Their website is worth taking a look at: http://www.bepresent.org.

  • Carolyn M. Appleton, CFRE

    In my experience in fundraising, there is sometimes a gap between philanthropists and those who are eye-to-eye with the critical issue(s) that need to be addressed. While generally fearless myself when it comes to “telling it like it is,” I know some fundraising professionals who are afraid of ruffling the feathers of major gift philanthropists with the stark truth. Hence, philanthropists may not always receive the information they need to respond properly to a critical nonprofit need. Diplomacy must give-way to honesty. Having said this, will a nonprofit lose donors if it is brutally honest? I’ve found just the opposite, but to train nonprofit professionals today to be entirely honest and not fear they will “scare off” their prized donors is a challenge. I have to admit, if I was a significant philanthropist, I would tend to ask questions of those at the most basic levels of the nonprofit organization (not just the leadership). Professional advisors are certainly helpful when it comes to assessing nonprofit budgets and tax returns; but oftentimes those nonprofit staff members “in the trenches” have a better sense of critical issues than their superiors.

  • Wilfred Kulungan

    I am a philanthropist and a Director and Founder of Kulungan Foundation Ltd established and incorporated in London . Our Visionis to build and establish a new, more industrialized and progressive rural and urban scenes in Malaysia with its Natives having been elevated to a developed, progressive, highly competitive and respected position within the economic systems of Malaysia, the region, and the world in general. And our Mission is to identify all available resources- natural, financial or others- and to aggressively create new assets, opportunities, facilities a nd mechanisms to be innovatively optimized and suitably modified for the effective and speedy empowerment of the Natives of Sabah towards the achievement of the Foundation’s Visions and Objectives, both for short-term and long term strategic implementation. We establish our policy consistent with our Vision and Mission statement. We maintain our commitment to accountability that transcends specific standards and places a priority on openness and ethical behavior in the charity’s programs and activities.

  • Jonathan Lewis

    Coincidently, my Huffington Post today is called How-To Selfishly Listen To Unselfishly Lead Change: http://www.huffingtonpost.com/jonathan-lewis/how-to-listen-selfishly-t_b_3822957.html. We ALL need to become better listeners!

  • Claire Lyons

    Sharon, thank you for your perspective and your leadership at MRG. Imagine our world without the confines of “sectors”. Imagine the people inside corporations ( I was a “Strategic Grantmaker” @ a Fortune 100 foundation ) working hard at their jobs because they have to pay their bills … so many of them volunteer and give to their communities and issues beyond their neighborhoods. We all have a stake in what works and what doesn’t work as well. Wealth accumulates no matter the society. I’ve seen it first hand all over the world. Philanthropy is an essential distribution channel. I for one advocated, led and still adhere to the tenets that philanthropy should be as strategic as possible! It is not a destination, but rather a process which is dynamic, responds to inputs, insights, demands, data from 360degrees. No sector has the sole “best” solution. Over 20 years in nonprofit leadership topped off with a decade of corporate giving I am ever more convinced the future of extraordinary social change and benefit will be led by those who join together, who will reach beyond their sectors, go beyond identity of “non” or “for” and live, engage and act in the “and” of collective mutual benefit. I espouse and practice community driven development. Strategic grantmaking is not at odds with as you put it community activist grantmaking….it is at the intersection of expressing need and shaping response where we must spend more time together listening and solving together. Bringing more into the conversation and solution, regardless of “sector” is what excites me.

  • Nancy M. Thurston

    Sharon, your solution to have “wealthy people relinquish decision-making power and step aside to support those most impacted by injustice” is a strong step toward justice.

    Yet I want even more. I want all activists—donors, grant makers and grantees—at the table together making decisions. That way we don’t just flip the power differential, we transform it.

    Admittedly, this is hard. Very hard. We live in a world with thousands of years of injustice including inequitable distribution of power, resources and access. None of us makes it through this culture untouched. Listening, as you indicate, is critical. When everyone is at the table, however, too often experiences in our personal past or cultural history can profoundly skew our listening, and response, in the present moment.

    The more I practice knowing myself “outside the distress of oppression” and listening in a “conscious and present state”, the less often I stumble while building “strong, effective relationships” across our differences were we are able to “sustain true alliances.” This practice, known as the Be Present Empowerment Model, is particularly critical when working with the flow of money, where some of our wildest emotions rise to the surface. (www.bepresent.org)

    Diving deeply to “get at the root cause of the problems to create long-term change and better lives” takes serious preparation. But it is time. Future generations are depending on us to bring about the level of social change that Sharon so clearly articulates.