If Philanthropy is Strategic What About Nonprofits?

July 12, 2011 //

By Jill Blair

On June 22nd Chris Gates, Executive Director of PACE (Philanthropy for Active Civic Engagement), wrote a blog post for TWI in which he argued that in this “new world” of “strategic philanthropy” nonprofits need to approach funders with an appreciation for their experience in and knowledge of the field – to consider philanthropy not just as a source of capital but a source of wisdom as well. He suggests that once upon a time there was a more patient philanthropic sector – willing to give a good idea and an inspiring leader a chance, but NOW the world has shifted to greater accountability and expectations for results.

Initially I found myself disagreeing with Chris…fundamentally – on the issue of the “good old days” and also the days since then. But instead of leading with argument, I will pause and offer the following.

Financial philanthropy (meaning giving away money – not just time) started in this country with wealthy men who turned their attention from wealth creation to social problem solving. And in that frame of the “good old days of philanthropy” Andrew Carnegie both defined the problem (lack of literacy and proper education) and the solution – libraries. One could argue, using Chris’ description of strategic philanthropy, that Carnegie paved that road one hundred years ago – he was the original strategic philanthropist.

Between then and now what we have witnessed is an explosion of nonprofit endeavors – many starting as volunteer efforts that converted over time into nonprofit corporate entities – with boards of directors and self-defined intentions for doing good. And at the same time, philanthropic institutions proliferated and professionalized. In this frame, the world began to divide between those who DO the work and those who PAY for it. Chris implies that in this same world the Program Officer plays the equivalent of a lending role (without the payback). In this world, and at that time, the foundation’s capital is used to underwrite the building of a social sector situated at least in theory to solve problems.

But time passed and the world has changed – or has it?

Over time nonprofit and philanthropic corporate entities have evolved. They evolved their understanding of the sector within which they were operating – a sector bereft of methods, manuals and measures of success; they evolved their understanding of the depth of the problems they were intending to solve – moving from symptom-based to systemic-solutions; and they evolved their understanding of their own capacity and contributions – with nonprofits beginning to resist the temptation to over promise and foundations beginning to assess their expectations and whether a more active and directive role might better position them for achieving success.

In this “new world” we have more and more philanthropic institutions that not only focus on very specific problems, but consider themselves to be part of and therefore responsible for solutions. In this “new world” we have more and more nonprofit corporations that broker the world of problems and solutions by serving as intermediaries – platforms for capacity-building, research, knowledge management and service delivery – agile and willing to apply expertise across any number of issues (problems and questions) in order to produce positive results (solutions and answers).

Is this a paradigm shift for philanthropy or are we witnessing philanthropy returning to its roots of both defining the problem and the solution? Is this a paradigm shift for nonprofits? Perhaps it is –perhaps nonprofits are moving from mostly mission-minded to mostly mercenary.

Back to Chris’ post…he urges nonprofits to reconsider their relationship to this “new philanthropy” where funders are coming to the table not only with a bucket of money but with a point of view. I do agree with Chris. We are in a moment of transition if not transformation in the social problem-solving sector – and the burden is on nonprofits now to find themselves in this new world – to discover, perhaps rediscover, their purpose, power and possibility.