Posts Tagged ‘types of donors’

Is the answer “taxes”?

Tuesday, August 24th, 2010

Interesting article in the NYT about giving patterns at different income levels. As has been known for a while, the poor give more as a proportion of their income. Lots to dig into in future posts:

  • What really motivates people to give? Maybe the rich don’t give as much because the tax deductibility isn’t as much of an incentive as we think. What would be a better motivation given the “compassion gap” the article talks about?
  • The article is framed in terms of the upcoming debate over extending Bush’s tax cuts for the very wealthy, setting up a dichotomy between charitable giving and taxes. Is the answer to the question framed in the title of this blog, “democratizing philanthropy?,” just…taxes? Do more taxes = more democratized philanthropy, because the decision-making is put in the hands of democratically elected leaders? Is that the right premise? How much of that decision-making is actually in the hands of democratically elected leaders vs. the hands of appointees in what the Brits call “the civil service” who have less (if any) accountability to the public?
  • “Americans pride themselves on their philanthropic tradition,” the article observes, “and on the role of private charity, which is much more developed here than it is in Europe, where the expectation is that the government will care for the poor.” This speaks to varieties of capitalism, a topic I’ve considered at length on this blog. Motivations for giving in each type of system might be an interesting new angle on that topic.

Fundraising and campaigning (part 2)

Wednesday, July 28th, 2010

In a previous post, I asked, “how are [nonprofit] fundraising and [political] campaigning related?”

Electoral and legislative campaigns have to do fundraising from the public and from various institutional interests (corporations), akin to how nonprofits fundraise both from the general public and from institutional donors (foundations, corporations, and government).

Why don’t political campaigns and nonprofits compare notes more often about successful fundraising strategies, particularly from individuals? Fundraisers learn a lot from commercial marketing techniques, but for whatever reason, the lessons of political fundraising/campaigning operations aren’t tapped, from what I see.

One reason may be that nonprofits are afraid of anything having to do with lobbying. While there are restrictions on the amount and kind of lobbying 501c3 nonprofits can do, they are allowed to lobby, and foundations can support them in those efforts (check out Alliance for Justice for more info).

But whatever the reason, why aren’t members of the Association for Fundraising Professionals reading Campaigns & Elections magazine?

My two questions and why they matter

Friday, April 23rd, 2010

All right. So there are two questions that animate this soon-to-be-renamed blog.

  1. What is the role of philanthropy in a democratic society?
  2. What does it mean to democratize philanthropy?

Why do these questions matter now?

First of all, it’s important to distinguish between individual, major-donor, and institutional philanthropy. Individual philanthropy is what you or I do – give to organizations that we know, because we’re asked by people we know, or because we care about the cause and happened to come across them. Major-donor philanthropy is what people who can give upwards of (say) $25,000 do. Most of the time, they give for the same reasons you or I do; but there’s a growing movement for such folks to give in a different way (whether that’s more strategic, more tactical, more informed, more engaged, whatever). Institutional philanthropy is when a major donor sets up a free-standing organization that more or less takes over decision-making for grants. These three are along some kind of a continuum with lots of things in between, but those are the major points along the continuum.

So the first question matters because for all three of these types of donors, their role in a democratic society is becoming more important. Individual donors, as we saw after Haiti, have more tools at their disposal to give, and may – may – be incentivized to give more as a result. You vote with your feet, you vote with your pocketbook, your voice is your vote. When your pocketbook, your voice, and your (virtual) feet are connected through social media, and you see the results in Haiti getting millions or, heck, Obama getting elected, you may – may – think about your own power, and your own role in shaping the conditions of your own life, in a different way. So there’s something there.

Major donors don’t just vote with their pocketbooks on their philanthropic investments, they open them for political candidates and political causes. Major donors activated to be more strategic or tactical philanthropists may – may – think differently about how they engage in politics as donors. Particularly in the wake of Citizens United, when the threat of being overwhelmed by corporate donations is real.  So there’s something there.

And institutional philanthropy, the world of foundations and social investors (yes, I know that’s a problematic conflation, but bear with me), is paying much more attention to the real meaning of public-private partnerships, and what its relationships with government look like. The role of the Tactical Philanthropy community in helping shape criteria around the Social Innovation Fund it seems augurs things to come. So there’s something there.

The second question matters because institutional philanthropy is set up in this country within a legal framework of tax-exemption that was created by government and could be changed by government. In response to the potential for such changes, the classic move within institutional philanthropy has been to say, “don’t regulate us, let us come up with ways to regulate ourselves.” Fine. So what do those look like? Enter discussions of diversity, the 5% payout rule, etc. So are the changes needed to head off potential regulation about making philanthropy more democratic? And what would that mean? What would it look like? So there’s something there.

I’m learning the art of brevity for blog writing, so I’ll stop there for now. But I’ll keep coming back at the outset to my two questions and why they matter, as I start to map out the terrain I’ll cover on this blog.