April 18, 2024

Wealth Matters: Giving Strategically, When the Government Can’t Help

Now, a new book “Give Smart” (Public Affairs), written by two philanthropy experts, Thomas Tierney and Joel Fleishman, argues that the wealthier philanthropists around the world can focus on solving problems that government cannot undertake while also paying for research into new ideas that may be adopted later.

“Philanthropists can innovate, but the government must sustain,” said Mr. Tierney, chairman of the Bridgespan Group, which advises nonprofits. “This innovation can be accompanied by scaling up. It’s very different from providing shelter to the homeless or food to the hungry.”

He categorized what he and Mr. Fleishman, a professor of law and public policy sciences at Duke University, were advocating as “a shift from not just serving to solving.” Mr. Fleishman, described their approach as a how-to guide to strategic or venture philanthropy.

But their strategy is not without its detractors. “Philanthropy needs to be looked at as a continuum,” said Lorie Slutsky, president of the New York Community Trust, which manages about 2,000 charitable funds. “This is one important piece on the continuum. But you couldn’t do strategic philanthropy in a settlement house without individual donors who provide support or government contractors.”

How, then, should donors give in a time of increased need for social service programs? The answer is that it is easy to give money away but hard to do it in a way that will solve a problem.

HOW TO DO IT Some of the best examples of strategic giving come from people who set their sights on a narrow problem.

In 1953, John Dorr, who made his wealth through an engineering firm, theorized that many accidents were caused when drivers hugged the center line on highways when fog or snow reduced visibility. He began lobbying for a white line to be painted on the shoulder of highways. But highway departments balked at the cost, $150 a mile. So Mr. Dorr got permission to paint a white line along the edge of the Merritt Parkway in southern Connecticut. It was credited with reducing accidents, and a decade later the white line was adopted around the country.

With bigger problems, focusing on the component parts is the key. This is what Donald and Doris Fisher, who founded Gap, did in the 1990s when they started financing charter schools. Mr. Fisher had become concerned about the state of public schools in San Francisco, where he grew up. He figured that if he found a way to improve schools there, the model could be marketed around the country just as Gap’s khakis had been.

Today, their son John Fisher says that 75 percent of the family’s giving is tied to supporting not just the Knowledge Is Power Program, or KIPP, the charter school network his family has heavily financed, but to groups that work all around the charter school movement.

“Each of the organizations we backed really focus on a particular area, whether it’s advocacy or running great schools or finding the next group of leaders,” said Mr. Fisher, who advises KIPP. “If KIPP is focused on running great schools, where else can we benefit KIPP?”

While charter schools are well known now and have become popular with strategic philanthropists, they were not when the Fishers got involved.

And with governments cutting existing social service programs, most innovation is probably going to come from private donors.

“Government is a lot less flexible to testing out the new idea and documenting it,” Mr. Tierney said. “That’s why we talk about giving smart. It’s not enough for philanthropists to give away money. You need to build the initiative, particularly in a time of hardship.”

PITFALLS Doing that is not easy, and there are several major pitfalls with strategic philanthropy. The first is what the authors call “fuzzyheadness,” which they define as a big gap between what people want to achieve and what their money can accomplish. If there is any doubt, even the Gates Foundation, with $37 billion at its disposal, has had to pick and choose what to finance in its global health effort.

Article source: http://feeds.nytimes.com/click.phdo?i=d7b7cea6291ddfc8143a2e1ea783ddd5

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