A fellow recently gave $400,000,000 to start some high-minded new initiative at Harvard. That’s an awful lot of cheese, handed over to the wealthiest and most selective university in the world. And our man gets to claim all of it on his taxes, against paying his share as an American citizen for infrastructure, disease prevention, early education for inner city kids, military spending, and the rest of it required to sustain a modern society. Let’s assume that guy would be paying 20%, though doubtful for a very wealthy person, and call this $80,000,000 that the IRS won’t collect. And we won’t talk about it, those of us in philanthropy. We won’t ask the question, “What is the measure of societal good? How much is too much for Harvard, already the wealthiest educational institution in the Universe?” Why not? Because it is a Squishy Question, a reasonable but uncomfortable one, a question that would require a difficult dialogue about the true societal value of our work and efforts. Is giving to a homeless coalition the same as a private university? Could it be that philanthropy is simply furthering America’s growing wealth inequality that is rapidly damaging our democracy? Would our sector be improved by examining these challenging issues? Most certainly. We need this conversation, just as we need to balance billionaire’s subsidized football stadiums vs. school spending and public safety in our cities. But It ain’t happening anytime soon. Our work in Philanthropy is full of these Squishy Questions that no one wants to discuss. Just a few examples:
- Why don’t board members take their non-profit work as seriously as they do their business? Fundraising is difficult, and board members are so very rarely equipped to do the task well. So, instead of raising mutual expectations of our leaders, investing in our boards as a vital human resource and assessing performance based on reasonable metrics of success, we throw staff members to the curb. We accept non-productive and often disruptive volunteers as the norm and wring our hands at the result. How bad is this getting? We can all tell stories around the campfire about board members with questionable ideas and bad intentions. I witnessed a performing arts organization eviscerate its major gifts program by allowing a mentally imbalanced board member, enraged about being asked to move his seats, to lead a cabal against a staffer. A $2million or more set back for the institution and no accountability.
- What is an acceptable level of overhead and administrative costs? In the last few years this debate has moved so quickly in favor of Impact and Results vs. Costs that it is considered simple-minded to even ask a question about the budget. A nationally known non-profit resource group on Twitter called anyone who might ask about administrative costs “A Moron.” Are you sure about this? I’m not. We need to be able to talk in depth about our expenses, our business model, our returns on investment. Let’s have a look at your gala budget. Is that the best use of institutional resources? Are you sure?
- Why won’t fundraising staff stay longer than 18 months? In our sector we see good people move on and out in wave after wave and we never look in the mirror to examine the reasons for this turnover. If I only date crazy girls, who is the crazy one? Increasingly non-profits are spending vast sums on executive search firms to find their next fundraising professional. $50,000 later for a national search by a headhunter and are the results any better? What is the cost of letting a quality leader walk out the door after a bad quarter, unrealistic expectations or a misunderstanding about some concert seats? If a development director is only going to stay 18 months is that position worth retaining? Could we contract the function out or consider some other approach? Why not?
- When will philanthropy move beyond 2% of our economy? The wealthy aren’t giving more these days as they get wealthier. Rich folks tend to give less as a percentage of their wealth than the rest of us, especially to human service organizations, as they get further away from seeing poverty and human hardship. The American Middle Class gives more to human services because we are closer to it. I’ve been broke and it sucks. Despite more organizations and ever increasing need, giving remains flat as a percentage of our economy. I worry that philanthropy will remain an economic outlier, suggesting boom times in the market. Did you know that $1million gifts and yacht sales track more or less the same when the stock market is up?
- Is philanthropy still a good thing in American society? This is the real question. Is this system working? Friend, I do not know. You and I can give $500 each to a gun related non-profit organization. Organization A might work earnestly to require gun owners to be licensed, trained, and insured in much the same way as automobile drivers have been for decades. Our Organization B, also a non-profit, could be fully committed against any such efforts as an affront to American Exceptionalism. Both gifts are made in the name of the societal good and we as the donors will be made to feel special, having invested in impactful, important, sustainable work. Can this dissonance be a good thing? I will be in honest in saying that I am starting to wonder.
If our sector is to grow we must talk, to each other, with funders, as board members and leaders. It won’t be easy. It must be necessary.