America’s Next Top Philanthropist

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 GiveMN.org 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.