Phil Buchanan, president of the Center for Effective Philanthropy (CEP) and author of Giving Done Right: Effective Philanthropy and Making Every Dollar Count, visited the Lilly Family School of Philanthropy to share insights about his book, effective philanthropy in today’s society, and his thoughts on recent critiques about philanthropy.
Read on (and watch some videos!) to learn more about his thoughts on different topics and trends in philanthropy.
Amidst multiple critiques of philanthropy, Buchanan believes that philanthropy is a critical force for good in U.S. society. He explained that it is important to critique philanthropy that does wrong and to debate about how it’s best implemented, but that writing off all big philanthropy doesn’t benefit the sector. In addition, Buchanan critiques the idea that philanthropy itself can be undemocratic, citing examples where it has strengthened U.S. democracy and society.
In essence, he encourages people to “not lose sight” of the importance of nonprofits in carrying out the important work of philanthropy.
He also critiqued the application of business practices to the work of philanthropy and nonprofits, which makes a great deal of sense to me. Economics uses the “three failure theory” to explain the emergence and respective roles of philanthropy, government, and business. While imperfect in practice, this theory goes a long way in discussing why the different sectors exist and their uniqueness to the field. The sectors themselves are diverse and unique, so why would we use “business thinking” to improve nonprofits?
Nonprofits doing good work
Related to this point on critiques, Buchanan also cited how several nonprofits and philanthropy are doing good. One such movement from the third sector resulted in the passage of Florida Amendment 4, a Florida law that gave ex-offenders the right to vote. He also cited the case of Bryan Stevenson, a crusader working on restorative justice with the Equal Justice Initiative.
I agree that we need to highlight the positive impact of nonprofits (and philanthropy). I think of an organization I worked for before, which targets short-term issues of food waste and hunger relief, as well as the longer-term issues of unemployment and underemployment through a job training program. With a small budget, a large number of passionate volunteers, and a dedicated staff and board, this organization is positively making a difference every day. How can it, or donors (whether institutional or individual) who fund it, be accused of not contributing to the greater good?
Buchanan also mentioned that when he’s meeting a new group of people, he asks each of them about a nonprofit that’s played a role in their lives. “It often brings people to tears when they talk about it. Can you say that about government or business?”
Operating support/what foundations can do to help support nonprofits
Buchanan mentioned multiple ways that foundations can support nonprofits. “Work in partnership with them, and learn from them and the rest of the community about what the community needs.”
In addition, he emphasized the importance of foundations providing flexible funding and operating support to grantees.
“If you meet an organization whose goals align with a foundation’s goals, be willing to give them the long-term, flexible support that they need to be effective.
“While we’re seeing several larger foundations leading the way in providing this support, there’s still a need for foundations as a whole to increase this kind of support to their partners.”
If foundations invest in making the world a better place, doesn’t it make sense to provide flexible funding for them to best do their jobs? I took a class on foundations, and am currently in one now about human resources that stress the importance of human capital. People, and relationships, are essential to the nonprofit sector. I see them as part of program support – you need to have people running the programs to make an impact. You need updated technology to make an impact. You need to be able to think long-term to make an impact. You need to have the lights on to make an impact!
So why would foundations provide program support that doesn’t include flexible support for long-term, nonprofit operations? It’s a question I continue to ponder as the benefits of providing operating support continue to be demonstrated.
Thoughts on the school
Buchanan emphasized that it’s important to study philanthropy as its own area. “The data and resources that are produced by scholars for practitioners are informing thoughtful conversations about the field.”
I happen to agree. I’ve never received a business education, but I have to believe that it would be difficult to study the nonprofit sector and philanthropy in business. Sure, you’ll learn something about management, but nonprofits are completely different from for-profits. For-profits serve stakeholders. That could be its shareholders or customers. Who’s a nonprofit stakeholder? You have donors, recipients/clients, the board, other volunteers, the community, etc.
And the list goes on. I don’t argue that many companies do recognize the importance of giving back, and social enterprises are growing, but if a nonprofit and a business are different entities, then we need somewhere to study philanthropy and nonprofits, and learn about the ethics, the history, the economics, the laws, civil society, and the role of foundations from a uniquely philanthropic perspective (taking into account, of course, how it can partner with business and government to create more impact).
Buchanan explained that it’s important to study the unique contributions of the nonprofit sector. Where better to study that AND critically analyze the critiques of philanthropy than a school dedicated to it?
There’s much more to Buchanan’s talk, so check out the recording of his presentation. Or learn more about his book and discover CEP’s work.