How to be a More Effective Philanthropist

by Katrin McMillan CEO and Founder of Hello World

I have sat on this blog post for a long time. The reason? What I am going to say may offend the very people I need to keep onside to keep my NGO running.  And, I have also delayed speaking out for fear of hypocrisy because I too have been part of, and in many ways complicit in, a fundraising system that is broken. But enough is enough. At its worst, today’s philanthropy reinforces an elitist status quo.  At its best, it is a vital lifeline for critical work. A reformed system of giving would mean we could not only do more, but do it better, faster and more efficiently.

The two decades that I have spent raising funds for social organisations have been a bumpy road and often deeply frustrating. I have become used to being patronised by potential funders with next to no experience in human rights work, I’ve ended up at meetings that the philanthropist has willfully mistaken for a romantic date, I’ve attended a dinner at which the donor bragged about the cost of the wine, which far exceeded the value of his donation, I’ve been asked to meet donors at their clubs and ended up feeling as if I had been kidnapped, and I’ve spoken at donors’ blacktie ‘fundraising’ galas that cost more to host than they raised, all in the daily effort of trying to raise money for social causes. This work has taught me some valuable lessons. I am sharing the following advice in the hope that together, as funders and fundraisers, we can effect long-lasting change and direct money where it is most needed.

For Philanthropists…

1.        Use it, don’t abuse it

You may have more money than the charities you support but (and you may not have experienced this in a while) you will probably have less experience. Remember that the charity workers who are soliciting funds will have been tackling the challenges in their area of expertise for quite some time. Approach your new relationship with the aspiration  to listen and learn. Oh, and that old adage you swore by in the private sector: time is money – it is just as applicable to charities. So be respectful of the fact that those trying to create social change are not just cash-strapped but time-poor, and would prefer short, focused meetings too!

2.      Keep it simple

“Giving fashions” come and go. For a time donors preferred charities that had low overheads; then there was the rise in ‘matching;’ now it’s all about effective altruism. But you do not have to do what everyone else is doing. If you made your money in business then you will be used to standing out from the crowd and being innovative. When in doubt, keep it simple: invest in the team, make your donations unrestricted, (respect the charity’s expertise and integrity in knowing where to deploy your money most effectively), and don’t ask for your funds to be matched. Often this will achieve nothing, distract everyone, and delay the important work from starting.

3. Appropriate asks

We should all account for the social value we create, but some funders are so focused on impact measurement that they ask for data sets that are prohibitively expensive to acquire. Impact measurement should grow in proportion to the charity’s growth. And it’s not definitive. There are often outcomes (positive and negative) that don’t show up in data and can only be captured anecdotally.

4.  No reputational laundering, and pay your taxes

If you made your money harming people or the planet, or were paid way more than the value you created for society, or find yourself living in the Cayman Islands, please don’t use charity to offset your guilty conscience or whitewash your reputation. Philanthropy should not be a means of cheating the tax system. Of course give, but pay your taxes first and don’t use charitable giving as a PR exercise. Being wealthy is a great privilege – act accordingly. 

I wrote this Urban dictionary definition of reputational laundering for reference.

5. It’s not a jolly

If you decide to visit the work that you are funding, do not expect it to be fun or exciting. You are probably supporting those who are dealing with extreme poverty or human rights abuses. 

Some pointers:

Dress code – no neocolonial safari outfits! You do not need to be camouflaged, so no khaki. And combat trousers are only necessary when you’re going to war. Your hosts will probably be beautifully and carefully attired. Take your lead from them.

Etiquette – unless you make your own kids sing and dance for visitors to your neighbourhood, do not expect the children of host communities to do so for you. No photos without consent; it’s simply  creepy to take photos of other people’s kids.

Appraisal – having a random group of old white people wandering around an African village is really not the best way to determine if the project is effective (in the same way that inviting those African villagers to assess the value of your business may not sit well with your shareholders).

Ask yourself if you really need to go at all or is your presence actually a burden on the charity? In all likelihood, the cost of your flight and accommodation is money that would be better spent on the work itself.

For Charities…

1.      Be realistic

If you over-egg your impact as a charity, it creates a kind of ‘impact inflation’. When things go wrong and donors’ expectations are not met, they will naturally be worried. This in turn may lead them to question their support of your organisation and perhaps even charitable giving more generally. If we want to create a system in which charities are not penalised when they hit a rough patch (as most will), then we must all be more realistic. Regrettably, none of us has a silver bullet to reduce poverty, end inequality, save the planet(delete as appropriate). What we can do is make a small but meaningful contribution to these issues. It won’t be perfect, but there is still reason to be proud.

2.      Be honest

Sometimes someone who funds your work will have a dud idea that they think is genius. You don’t have to agree with them. If we don’t speak plainly, all we do is feed a system of imbalanced power when it is supposed to be a partnership. So don’t be fearful of calling on your greater experience and knowledge. Honesty is definitely the best policy. If the issue is addressed sensitively then it should improve your standing , confirming to your donor that their money is in safe hands.

3. Be brave

Reject dirty money. I know, this is a really tricky one to navigate. It’s hard to turn down cash when you’re small and in critical need. Surely the ends justify the means? And how do you define “clean” money anyway? I cannot advise you here, except to say that you must establish your own standards. And if you do have to take money that’s not completely squeaky, then have a plan to reduce – and eventually end – your dependence on it.

4. Be kind

Your donor is not just a cheque-book. So ask how they feel about an issue, understand their journey (don’t just tell them yours), discover what interests them (rather than focussing solely on how great your work is) … explore their why.  An understanding of their motivation for giving will help you to fulfil their expectations as well as get the job done. 

4. Be charitable

Charities can be competitive. People in our sector spend a disproportionate amount of time discussing how everyone else is getting it wrong. Resist. Instead, heap praise on your peers and on those whose work you admire. And be generous with your black book. Don’t hoard your donors. Introduce them to other wonderful people who are making a difference. 

Life is a matter of give and take. The charity sector can do better at both.

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