The Art and Science of Philanthropy
The following is reprinted by permission from the June Donors’ Newsletter, a resource for donors and their advisors on overseas giving to Israel, published by Donor Associates in Israel.
What criteria should a philanthropist use when considering support for a nonprofit organization?
Historically, overseas donors’ giving to Israel was a matter of the heart. They gave in an emotional response to the miracle of the State of Israel and a bond with the Jewish people. Their commitment was based on their identification, shared values, passion, and desire to forge a personal connection with the Zionist enterprise.
Over the past two decades, however, donors have been moving away from automatic giving to Israel, and toward a model that might be considered more “business-like.” For these, generally younger, philanthropists, giving also includes an element of the mind. Their involvement is somewhat akin to making a financial investment where planning, structure, procedures, measurement, monitoring, accountability, evaluation, effectiveness, and efficiency are essential tools in measuring the worthiness of a particular philanthropic investment.
We contend that the ideal approach is to give with both the heart and mind; to merge the “art” of philanthropy with the “science” of philanthropy.
A quintessential concept that defines the philanthropic sector is private initiative for the public good. Indeed, Peter Frumkin, in his book Strategic Giving: The Art & Science of Philanthropy writes that “philanthropy is best conceived as a private activity that allows donors to use their funds to explore their own private visions of the public good.”
Like the business sector, philanthropy is based on a free market environment in which private citizens can take the initiative to form an association with other like-minded individuals and create an organization to advance social change or provide some form of service that benefits a group, community, or society at large. While such groups must be regulated, democratic governments do not judge what a worthy cause is, and what is not. It is up to the marketplace to determine whether an organization will be successful in gaining the support, participation, and funding of clients, lay leaders, and funding.
Like the government sector, the missions of philanthropic organizations are aimed at the public good; yet nonprofits and foundations are more suited to effectively and efficiently deliver services that are in tune with the needs and concerns of their constituents. Governments are highly bureaucratic and structured, which makes them slow to respond, and focused on solutions and programs that are top-down.
The philanthropic (a.k.a. nonprofit, non-government, civil society, independent, or voluntary) sector combines the best of both worlds. Success emerges from a proper blend of the “art” – vision, passion, creativity, initiative, risk-taking, ideas and values, leadership – and the “science”- planning, policies, structure, procedures, concern with details, evaluation, measurement, exactitude, monitoring, accountability, and management.
At one extreme, philanthropy based solely on the artistic elements is like a soul without a body. There is much passion and creativity, but he or she is not thinking about moving beyond the idea to reality.
At the other extreme, philanthropy based solely on the scientific elements is like a body without a soul. There is a plan, structure and accountability, but it is likely to be inflexible, perhaps even irrelevant, and incapable of keeping up with the changing needs of the community.
It is okay if one’s head may be in the clouds as long as one’s feet are planted firmly on the ground.
Too often we hear about philanthropists who see but one side of the coin. Some will only fund new and innovative, start-up projects with seed funding for several years, after which they get bored and look for the next exciting thing to come along. Their actions are based on an assumption that the start-up is ready to move on to the next stage in its development, which naturally entails developing policies, structures, procedures, methods for measuring effectiveness, and the like. Ideally, such funders would like to see their “babies” grow by being replicated as a model for other locales.
Other philanthropists prefer to fund the well-established institutions, such as United Jewish Communities, the Jewish Agency, or major Israeli universities, hospitals and museums. Yet, as time goes by, these institutions, although professionally managed, have a tendency to get bogged down with issues of politics, personalities, structures and the like that seem to imply that it is the organization that is at the center rather than the mission it supposedly addresses.
Regardless of the size or life cycle stage of an organization, nonprofit lay leaders and professional administrators who are capable of finding the balance between the “artistic” and “scientific” will discover that they are the most worthy to receive communal and financial support.
Philanthropists, in turn, should seek to fund organizations that are creative, dynamic, and based on a bold vision, yet able to fulfill their mission both effectively and efficiently.
about: Donor Associates in Israel, Ltd. (info [at] donor.co.il) is a philanthropic consulting firm that provides research, due diligence, on-site oversight, and accountability services for individual, family, and institutional donors and foundations who are major funders to projects in Israel.