By Todd Cohen
Philanthropy needs an overhaul.
The critical social problems we face require more focused and aggressive solutions than are likely to emerge from the confused and sluggish marketplace that philanthropy has become.
The good news is that this generally unregulated market — in which donors and grantmakers supply charitable resources, and charities demand them — already is in the throes of a retooling.
Ignited by growing competition for dollars, technological change, new wealth and a new generation of entrepreneurs, innovation is sprouting, fed by consultants, professional advisers and other brokers helping to shape and connect supply and demand.
Despite those changes, however, much of philanthropy has grown stale. Many funders still operate by writing checks in response to pleas for assistance, while many charities still write grant applications to fit what they believe funders want.
And the network of support groups working to make the nonprofit world more effective often is focused on the technical aspects of philanthropic enterprise, not on the deeper values of social progress and economic justice.
In a world riddled with hunger, poverty, racism, poor health, illiteracy and environmental insult, technical skill is critical – but not enough.
It’s time for philanthropy to take a hard look at itself and where it’s headed.
The keys are to revive the traditional tools of planning and partnership rooted in a commitment to social change.
Grantmakers and donors, for example, can think anew about what they want to accomplish, shape strategies to actively address causes they care about, find charities most likely to advance those causes – and invest the time and resources those charities need to be effective.
And charities can take stock of themselves, figure out the training, technology and other resources they need to be more effective, and actively involve funders in their work.
Consider two recent news items.
The medical center at the University of Virginia received $52.6 million, the university’s second-largest gift ever, thanks to estate plans made more than 60 years ago by an alumnus of its law school.
And two North Carolina foundations are investing $600,000 in a collaborative effort that aims to raise $16.5 million from national, state and local foundations to strengthen Latino groups serving Latinos.
The two initiatives offer windows into philanthropy’s past and future.
Although set in motion six decades ago, for example, the Virginia gift represents a practice that charities are turning to anew in the face of fierce competition for dollars, rising social needs and shrinking government support.
By cultivating active partnerships with donors, charities increasingly are working to secure deferred gifts — and thus a continuing source of long-term support — through wills, trusts and estate plans.
The Latino collaborative joined by the Warner and Z. Smith Reynolds foundations in North Carolina also represents a blending of traditional and emerging philanthropic practices.
Echoing entrepreneurial approaches used by the Carnegie, Ford and Rockefeller foundations in earlier generations, the initiative is in sync with the strategy shared by both foundations of investing in groups they believe will help carry out the aggressive social agendas they have set for themselves.
The Latino initiative also reflects the growing practice of collaboration, with foundations contributing to a funding pool to support causes they care about.
These emerging practices revive strong traditions of philanthropic innovation and focused commitment to attacking critical social problems.
They also renew hope that philanthropy can be a powerful force for change — if it is willing to change itself.