Delusional Altruism E-Book

Kris Putnam-Walkerly

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 386

Veröffentlichungsjahr: 2020

Beschreibung

How you give matters. Discover philanthropic strategies for creating transformational change. Whether you regularly donate to charity, run a small family foundation, or are responsible for millions of dollars in grants, you are a philanthropist. Delusional Altruism: Why Philanthropists Fail To Achieve Change and What They Can Do To Transform Giving looks at how you can create transformational change. It reminds us that how we give is as important as the amount we give. The author describes common practices that hinder transformational change and explains how to avoid them, ensuring that your gifts help create the impact you seek. Delusional Altruism--a set of all-too-common errors in philanthropic strategy--can derail a program of giving and result in a loss of efficiency and effectiveness. This book asks philanthropists and charitable organizations to consider whether they have fallen under the spell of Delusional Altruism. Are you cutting out impactful giving in order to save money or avoid uncertainty? Is your philanthropic approach unnecessarily restricted by traditional thinking? This book will help you answer these questions and determine how you can achieve better outcomes through the process of Transformational Giving. * Ask questions that spur learning and fuel innovation * Believe that investment in yourself and your operation is important * Increase the speed of your actions to increase the impact of your giving * Give in ways that create lasting, sustainable change * Follow strategies to make your philanthropy unstoppable Although enhanced opportunities for philanthropic giving are on the horizon, changes to philanthropic practice are needed to prevent this philanthropy boom from becoming under-leveraged. Implementing updated approaches now can lead to positive change for the future. Read Delusional Altruism to learn how you can transform reality with strategic giving.

Leseprobe

Table of Contents

Cover

Foreword

Introduction

The Kenya Community Development Foundation Wants to Change the World

Social Venture Partners India Wants to Change the World

The William and Flora Hewlett Foundation Wants to Change the World

We Are All Philanthropists

Notes

PART I: Delusional Altruism

1 You Save Money on All the Wrong Things

It Starts in Your Mind

Lack of Investment

How Do You Know If You Have a Scarcity Mind-Set?

Why Does This Happen?

Notes

2 You Are Fearful

Fear of “Coming Out” in Support of a Cause

Fear of Being Out and About

Fear of Failure

Fear of Not Being a Good Steward

Fear of Disappointing Others

Fear of Learning You Aren't Right

Fear of Loss

Fear Masked as Guilt

Sometimes the Fear Is Justified

Don't Hold Yourself Hostage to Your Fears

Notes

3 You Respond Too Slowly

Clogging the System with Unnecessary Junk

Complexifying the Simple Instead of Simplifying the Complex

Developing Bureaucratic Bloat

Committing to Speeding Things Up

Notes

4 You Have Too Many Steps

What “Too Many Steps” Means

Too Many Steps Cause Too Many Problems

Why Do We Have Too Many Steps?

Notes

5 You Are Too Overwhelmed to Take Your Next Step

Six Ways Philanthropists Are Overwhelmed

Eight Ways You Contribute to Feeling Overwhelmed

Notes

6 You Are Fooled by Your Own Efforts

You Don't Know Where You Want to Go

You Don't Know How to Get There

You Suffer from Donor Distraction Disorder

Fooled or Fools?

Notes

7 You Ask the Wrong Questions

Wrong Question #1: “How Do We Do It?”

Wrong Question #2: What's the Best Way to Do This?

Wrong Question #3: “Can We Start Right Away?”

Why Does Asking the Wrong Questions Cause Problems?

Note

PART II: Transformational Giving

8 You Start with the Right Questions

Question 1: Why?

Question 2: What?

Question 3: What Do I Know Already?

Question 4: What Don't I Know?

Question 5: Who Else Needs to Be Involved?

Question 6: What Are Our Best Practices Internally?

Question 7: What Are All the Ways We Can Do This?

Question 8: If You Could Do It All Over Again, What Would You Do Differently?

Question 9: How Can We Speed This Up?

Question 10: If This Was to Become Best-in-Class, What Would It Look Like?

Question 11: What's the Risk?

Question 12: Does This Bring Me Joy?

Notes

9 You See and Act Abundantly

The Abundance Mind-Set

Investing in Yourself

Investing in Your Partners

Investing in Philanthropy's Infrastructure

How Will You Know If You Are Embracing an Abundance Mind-Set?

Notes

10 You Are Fast

9 Ways to Get Time Back in Your Day

Three Ways to Speed Up Your Teams and Organizations

Create Aerodynamic Funding

When to Go Slow to Go Fast

Notes

11 You Transform Lives

Change Systems

Change Yourself to Change Systems

Advocate for Policy Change

Address the Root Cause

Seek Equitable Solutions

The Structure of Your Grants

Notes

12 You Are Unstoppable

Eliminate Steps

Increase Agility

Be Adaptive

Increase Innovation

Intentionally Learn and Improve

Notes

13 You Found Your North Star

What Is Strategy and Why Is It So Important?

Strategy Formulation

Strategic Sprint

Don't Leave Home without It

Strategic Friction

Communicating a New Direction to Your Grantees

Notes

14 You Do What It Takes

Step 1: Identify Your Top Priorities

Step 2: Hold Everyone Accountable

Step 3: Change Your Ways

Step 4: Maintain Momentum

Notes

15 Get Moving: Transform Your Giving and Change the World!

Seven Steps You Can Take Today

Acknowledgments

About the Author

Index

End User License Agreement

Guide

Cover

Table of Contents

Begin Reading

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“You need to do this. You can do this. I can help.” This is what it feels like to work with Kris Putnam-Walkerly. What a delight it is to now have in book form the wisdom, inspiration, and tools of a gifted writer and leader in philanthropy. Thank you, Kris. We need your voice, your encouragement, and your mad skills in this work. You are a gift to the field.

Ellen LaPointe, President & CEO, Northern California Grantmakers

Aristotle once told us that giving well is tougher than you think. Delusional Altruism is a welcome guide that shows why he was right and what you can do to get better. Written in practical down-to-earth steps and sensible advice, it's valuable whether you're beginning the journey or wanting to check your current practice. And it even translates well “across the pond!”

Paul Streets, CEO, Lloyds Bank Foundation

Effective philanthropy can elude even the best of intentions. Kris Putnam-Walkerly gets it—and with a page-turning mix of hard truths, good humor, and tough love, she's ready to help you avoid those all-too-common mistakes that prevent your pursuit of the greater good from having its greatest impact. This inspiring and provocative book will change the way you think about changing the world.

Lara A. Kalafatis, Chair, Cleveland Clinic Philanthropy Institute

Kris Putnam-Walkerly brings her visionary gift of change-making philanthropy forward in this book. Not only does she identify many of the common mistaken notions of giving that are found in all types of donors and organizations, but she also clearly shows how to redeem the act of giving with seven strong strategies that lead to better impact.

Tamara Fynan, Executive Director, Community Engagement & Philanthropy, The J.M. Smucker Company

We all know the expression, “The road to hell is paved with good intentions.” My years of experience of working with all kinds of donors show that good intentions are not enough, and HOW is probably more important in giving than WHAT. This book is very important because it holds a mirror to donors' common mistakes and gives them a chance to improve and achieve bigger impact.

Maria Chertok, Director, Charities Aid Foundation, Russia

This is a thought-provoking book full of straight talk and practical advice for philanthropists of all shapes and sizes. Putnam's questions and ideas will push funders to think differently about everything—from strategy to mind-sets to time management.

Kristi Kimball, Executive Director, Charles and Helen Schwab Foundation

My father, cofounder of the Sheraton Hotel Chain, told me that the greatest pleasure his money ever gave him was in giving it away. But he also warned about having a full heart and an empty head; philanthropy done badly could make matters worse. Kris Putnam-Walkerly's book is the perfect answer to the problem my father foresaw.

Mitzi Perdue, Philanthropist & Founder, Win This Fight, Stop Human Trafficking

This book will be that voice in my head that says, “You can change the world. You just need to do it differently,” and then shows me the way!

Peter Long, Senior Vice President, Blue Shield of California

In her latest book, Delusional Altruism, Kris Putnam-Walkerly identifies several key elements to transformational giving alongside the delusions every thoughtful donor should avoid. Readers will gain clear direction on why we all must eliminate the delusions that limit our impact and sharpen our focus to truly transform through our philanthropy.

Wendy H. Steele, Chief Executive, Impact100

Putnam-Walkerly weaves years of successfully guiding leading philanthropists with a straightforward and honest assessment of the field to give us a breath of fresh air in her latest offering, Delusional Altruism: Why Philanthropists Fail to Achieve Change and What They Can Do to Transform Giving. If you're a time-tested pro or thoughtful newcomer, Kris's insights and perspective will help you move from simple charity to high-impact giving!

Jed Emerson, Blended Value

Delusional Altruism is a guide book for anyone who wants to gain a better understanding of how to create the biggest impact with their philanthropic investments. Kris Putnam-Walkerly writes with an insider knowledge of the philanthropy world, analyzing our missteps and offering practical tips for examining our grantmaking practices and making simple changes to further our reach and create positive, systemic changes in our world.

Dolores E. Roybal, Executive Director, Con Alma Health Foundation, New Mexico

We all want to change the world, but sometimes our thinking gets in our way. For philanthropists, clouded thinking can hold you back from helping society in big and important ways. In Delusional Altruism, Kris Putnam-Walkerly shows you how to sidestep faulty thinking, so your resources create the greatest impact possible. I highly recommend this book!

Daniel H. Pink, New York Times bestselling author of WHEN and DRIVE

All philanthropists can support transformational change—but not without some support of their own! Delusional Altruism is a great guidebook to help avoid unnecessary pitfalls on the path to achieve impact. Through her years of experience working with foundations and donors and her passion for making the world a better place, Kris Putnam-Walkerly provides a candid and credible look at why how we give is just as important as what we give.

Kathleen P. Enright, President & CEO, Council on Foundations

Kris Putnam-Walkerly offers insightful observations of the typical misunderstandings that donors and foundations have when they give, as well as useful tools for philanthropists to reflect upon their mind-sets and actions. As a philanthropy practitioner, I can tell the ideas and wisdom shared in her book come from extensive first-hand experiences in the field and continuous reflections. Delusional Altruism is definitely worth reading for those who want to make their giving more impactful!

Yanni Peng, CEO, Narada Foundation and Chair, China Social Enterprise and Impact Investment Forum.

I once thought giving away money was easy. I learned the hard way I was wrong. As Kris Putnam-Walkerly makes abundantly clear, we can easily trip over our own good intentions. In Delusional Altruism, she identifies the ways we often fool ourselves—at times not even recognizing what we are doing—and then goes on to offer practical advice and guidance on how to transform our giving and increase our impact. Whether you are an experienced philanthropist or just getting started, this should be on your reading list.

Henry L. Berman, CEO, Exponent Philanthropy

In Delusional Altruism, Kris Putnam-Walkerly helps us understand that when philanthropists unintentionally restrain ourselves—through fear, a scarcity mentality, or simply asking the wrong questions—we also hold back the change we can make in the world.

Benjamin Bellegy, Executive Director, WINGS—Worldwide Initiatives for Grantmaker Support

A thought-provoking and insightful look at smart giving. Kris scrutinizes the pitfalls that hinder traditional philanthropy, making a compelling case for a more strategic form of 21st-century giving. This is essential reading for anyone who wants to really make an impact.

Emma Turner, Director, Barclays Private Bank Philanthropy Service

It's always a worthwhile endeavor for philanthropists to look at how they can get better with their giving, and Kris Putnam-Walkerly's new book helps them do just that. Her honest assessment of seven Delusional Altruism practices is a must-read for all philanthropists, and her seven strategies for “Transformational Giving” can help all of us get out of our own way and make the greatest impact we can with our gifts.

David Biemesderfer, President & CEO, United Philanthropy Forum

KRIS PUTNAM - WALKERLY, MSW

Delusional Altruism

WHY PHILANTHROPISTS FAIL TO ACHIEVE CHANGE

AND WHAT THEY CAN DO TO TRANSFORM GIVING

Copyright © 2020 by John Wiley & Sons, Inc. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.

Published simultaneously in Canada.

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Library of Congress Cataloging-in-Publication Data

Names: Putnam-Walkerly, Kris, author.

Title: Delusional altruism : why philanthropists fail to achieve change and what they can do to transform giving / Kris Putnam-Walkerly, MSW.

Description: Hoboken, New Jersey : Wiley, [2020] | Includes index.

Identifiers: LCCN 2019057780 (print) | LCCN 2019057781 (ebook) | ISBN 9781119606062 (hardback) | ISBN 9781119606093 (adobe pdf) | ISBN 9781119606048 (epub)

Subjects: LCSH: Charity. | Altruism. | Humanitarianism.

Classification: LCC HV48 .P88 2020 (print) | LCC HV48 (ebook) | DDC 361.7/4—dc23

LC record available at https://lccn.loc.gov/2019057780

LC ebook record available at https://lccn.loc.gov/2019057781

COVER ART & DESIGN: PAUL MCCARTHY

This book is dedicated to my husband, Terry. Thank you for your unwavering support and belief in me. I love you.

Foreword

It's fitting that I first met Kris Putnam-Walkerly at a Points of Light Foundation Board retreat in the fall 2018, where I was moderating a panel on which she was speaking. Points of Light is a nonprofit that seeks to inspire, mobilize and equip people to effect change through volunteerism and service to others—a description that also fits Kris perfectly. She's been advising as a global philanthropy expert for more than 20 years, sharing her deep domain knowledge to help ultra-high net worth donors, funders using donor-advised funds, foundations and Fortune 500 companies make a significant impact for worthy social causes through charitable giving.

From the start of our relationship, I was impressed with Kris' profound insights on the sector, particularly as they relate to the concepts of Delusional Altruism discussed in this book, which commonly plague well-intended philanthropists. These delusional or misleading thoughts and approaches—which often see givers focused on the wrong questions, assigning themselves too many steps or feeling too overwhelmed to even take the next step—hinder their ability to maximize impact in their giving.

Kris' philosophies on overcoming these challenges mirror many of those that I share as president of Fidelity Charitable, an independent public charity that has helped donors support more than 220,000 nonprofit organizations with over $40 billion in grants since 1991. In different capacities, we ultimately strive for the same goal: to drive a higher level of satisfaction and effectiveness in our donors' philanthropy.

One of the biggest hurdles I see hindering this goal in philanthropy, and one of the many provocative ideas that Kris discusses in this book, is the misconception among donors that nonprofit organizations must be frugal in investing in infrastructure. This generally misinformed mindset holds that nonprofits spending the least on overhead deliver the greatest value to the people they serve. That may be the case, but often may not.

As Kris explains, this scarcity mindset is rooted in fear of failure rather than fact. It holds back well-intended people from pursuing their philanthropic goals. Like Kris, Fidelity Charitable subscribes to an abundance mentality when advising donors on worthwhile nonprofits, believing that the more an organization invests into the infrastructure driving their mission, the more long-term, sustainable results they'll generate for their social cause.

Think about it in the context of an organization trying to feed hungry children. A donor operating under a scarcity mindset narrowly focuses on ensuring the funds supporting the organization's infrastructure don't outweigh the funds needed to purchase and distribute food. Thus, if the organization is spending money on administrative overhead, the donor believes it's not properly allocating funds.

In my experience, this is a short-sighted understanding of what it takes to support a truly effective nonprofit organization and create social change. In fact, the organization may be more successful in its objective of aiding hungry children if it is able to attract and retain top talent to aid in its mission, thanks to donor support. Support for state-of-the-art technology could help it deliver more food more efficiently. Support for the nonprofit to advocate for policy changes might give more families the resources they need to feed their children without outside assistance.

Like any successful organization in the private sector, healthy nonprofits also need to invest in people, innovation, systems, and technology to drive productive action, as Kris details. Providing funds to support and train top talent and equipping them with the best tools and resources to do their jobs not only ensures they can effect change in line with the nonprofit's mission—but likely do so more efficiently, and at a greater capacity, than a spartan organization with little means to achieve an end.

I find that this concept of abundance mindset, that you must support an organization itself to support the realization of its mission, is easy to grasp once explained. And yet, comprehension and understanding in the philanthropic sector takes time—the commodity our society seems to be lacking most.

Kris' straightforward, easy-to-read guidance within these pages helps you identify and conquer delusions that may be holding you back from making a measurable social impact through altruistic efforts. These are critical ingredients to making confident, informed decisions to lead a nonprofit or see your charitable contributions put to good use. This book is a rewarding investment for any reader interested in reexamining and changing how you give to accomplish the greatest impact for a cause you're passionate about.

Practical idealists, you must read on.

— Pamela Norley, President, Fidelity Charitable

Introduction

I'd like to introduce you to three philanthropists. Just like you, they want to change the world (or their corner of it). They also share an additional characteristic—let's see if you can spot it.

The Kenya Community Development Foundation Wants to Change the World

A group of Kenyan nonprofit professionals started this community foundation with one aim: shift power to communities. They understood transformational change is possible only when communities can take charge and find their own solutions for development.

So they created a different model for community philanthropy.

Their foundation supports poor and marginalized communities to uplift themselves through their own efforts. It invests in community-led initiatives to meet priority needs. It develops grassroots leadership, builds the capacity of local institutions, and changes policies to ultimately lead to durable, lasting development.

They do this by bringing together a range of local and global donors: philanthropists with considerable wealth; middle-class Kenyans; community residents; and funders such as the Ford Foundation, Wilde Ganzen Foundation, and Comic Relief, among others. Collectively they've allocated more than $22M U.S. to community-led development projects that have benefited more than 2.2 million people.

What does that mean? It means a community dispensary that brings treatment to people's doorsteps, educational access for students threatened by wildlife on their way to school, and renewable energy to improve living standards in local villages.

Social Venture Partners India Wants to Change the World

It wants to do this by changing India, city by city. This venture philanthropy initiative was inspired by Social Venture Partners (SVP) International and launched by a group of Indian CEOs. Since 2012, SVP India has mobilized 180 Indian business leaders, philanthropists, and citizens to raise $460,000 and offer 17,000 volunteer hours to 18 nonprofits, impacting more than 245,000 lives.

SVP India had a goal to improve livelihoods through job creation and vocational training. But its members quickly realized it's not enough to move a few people out of poverty and into jobs by providing small grants. While they benefit from the vast experience and insights of SVP chapters worldwide, they also needed to find an “Indian way” forward that worked effectively in their cultural context.

To tackle massive social problems in India, they needed to mobilize the entrepreneurial spirit of their members, partner with larger nonprofits, and create scalable solutions. Their ambitious new goal? To create a million sustainable jobs over the next five years.

The William and Flora Hewlett Foundation Wants to Change the World

With a mission to advance ideas and support institutions that promote a better world, a staff of 120, and assets of $9.8 billion dollars, the Foundation awards more than $400 million annually to address climate change globally, encourage public engagement in the arts, and equip every student for a lifetime of learning, among other priorities. To give that much money away, they need to make a lot of grants in substantial amounts.

But they realize that to do so, they also need to make it easy for nonprofit organizations to apply. The Foundation, then, did something almost unheard of: They simplified their rules.

Many of their programs allow a nonprofit to simply submit the same proposal to them that it previously submitted to another foundation—without changing a word. What's more, many organizations seeking general operating support can submit a copy of their annual report and an audited financial statement. They don't need to spend precious time writing lengthy proposals and completing cumbersome budget forms.

And that's not all. The foundation can also make grants up to $1 million on a rolling basis with approval from the foundation's president. No waiting for additional board review.

What characteristics do the Kenya Community Development Foundation, Social Venture Partners India, and the William and Flora Hewlett Foundation have in common? They are all philanthropists. Did you guess that additional characteristic I asked you about earlier? It's this: when it comes to changing the world, each one of them knows how to get out of their own way.

We Are All Philanthropists

“Philanthropist” sounds highfalutin, doesn't it? So you might be surprised to learn that “philanthropist” describes most of us. Philanthropists and philanthropic organizations actively promote human welfare. They donate time, money, experience, skills, or talent to help create a better world. They possess a deep desire to solve social problems and help others.

I bet that sounds like you.

You are a philanthropist.

You aren't alone. About half of all Americans and 90% of high-net-worth individuals give to charity.1 Collectively, Americans donated $427 billion in 2018.2 In addition to individual giving, this includes giving through 80,144 independent and community foundations, 2,670 corporate foundations, and 3,311 operating foundations.3

In 2017 there were 463,622 donor-advised funds in the United States, representing an astonishing 60% increase from 2016. These funds held over $110 billion in assets, and donors used them to contribute $19 billion in grants to qualified charities.4

Similarly, about 44% of Europeans donate to charity,5 and the region houses more than 140,0006 registered public benefit foundations. The total amount of annual philanthropic contributions in Europe is estimated at $96.5 billion (87.5 euro).7

China represents one of the fastest growing philanthropic countries, spurred in part by having the largest number of billionaires in the world—819 of them in 2019.8 Chinese philanthropy has quadrupled, from $6 billion in philanthropic contributions in 2009 to $23.4 billion in 2017.9

These numbers will continue to grow. In fact, over the next 25 years nearly 45 million U.S. households will transfer over $68 trillion in assets to heirs and charity.10 That's right—trillion with a T. This wealth transfer isn't just happening in the United States; it's happening around the world. India (home to 119 billionaires) will experience a $128 billion (Rs 8.6 lakh crore) intergenerational wealth transfer over the next decade alone.11

The portion of these assets used for social good represent an upcoming “philanthropy boom.”

And it's not just the countries with the most billionaires who give. According to Charities Aid Foundation (CAF), the world's most generous country in 2018 was Indonesia, followed by Australia and New Zealand. In fact, the top 20 most generous countries (ranked by three aspects of giving behavior: donating money, volunteering, and helping a stranger) include Singapore, United Arab Emirates, and Sierra Leone (the United States ranked fourth).12

The world has a lot of philanthropists. This book is for all of them—but especially for those who aren't quite achieving the impact they seek. They come in many forms: ultra-high-net-worth donors, wealthy families, foundations, Fortune 500 companies, donor-advised funds, celebrity activists, professional athletes, family offices, giving circles—individuals and organizations large and small.

Just like you, they want to change the world.

It might not be the whole world. It might be your small corner: You raise your children to become loving and successful individuals. You volunteer at your kids' school because you want all kids to succeed, not just your own. You donate food and money to your local food pantry because you believe no human being should go hungry. You've identified problems in the world and you want your donations to help solve them, whether you are giving $10, $100, $10,000 or $100,000,000. You hope your contribution, large or small, will help discover a cure for cancer, stop human trafficking, or end genocide.

What's more, you aren't looking for bandage solutions. You want transformational change. Lasting change. You want to tackle the problem at its root, so it no longer exists.

So what is the big secret to this transformational change? It's this: How we give is as important as how much we give or which causes we support.

Let me make it as clear as I can: The key word here is how.

How.

How we give matters. How we give allows us to be transformational.

So when it comes to giving that matters, what stands in our way? The thing between us and that type of transformational giving is something I call Delusional Altruism. Now, by “delusional,” I don't mean we're stupid or crazy. I mean we're hindering our impact unnecessarily, because of a handful of deceptive and illogical thoughts we choose to hold dear. These illogical thoughts are making us get in our own way, and we don't even realize it. When we can't get out of our way, we reduce our speed to impact. When we don't realize it, it's difficult for us to change.

Delusional altruism shows up in our lives in different ways. For some of us, it's a scarcity mentality. For others its fear. Many of us ask the wrong questions, which send us down the wrong paths. Or we let ourselves be fooled by our own efforts.

In Part I of this book, we'll examine the seven most common ways we experience Delusional Altruism. Of course, not everyone suffers from all seven, but suffering from even one can derail a program of giving. The good thing is that no matter how many delusional thoughts you suffer from, none of them need be permanent. You can rid yourself not only of the thought but of the effect that thought has on your giving. In other words, you can turn things around—both in your mind and in the world.

In Part II, we'll look at the top seven strategies for Transformational Giving and how you can use them to defeat any of the delusions you or your organization hold. Together, the philosophy behind these strategies constitute a mind-set that will make you unstoppable. It will alter how you see the world and how you can create change in people's lives.

I hope you're ready to begin. After all, the work you're doing is too important to put off or get wrong. We all need what you bring to the table. The planet is waiting for you to up your game and make your giving as powerful as it can possibly be. The world needs you. Let's go!

Notes

1

.

https://www.privatebank.bankofamerica.com/publish/content/application/pdf/GWMOL/USTp_ARMCGDN7_oct_2017.pdf

.

2

.

https://givingusa.org/giving-usa-2019-americans-gave-427-71-billion-to-charity-in-2018-amid-complex-year-for-charitable-giving/

.

3

. Foundation Center (Active US Foundations by Foundation Type, 2017)

https://candid.org/

.

4

.

https://www.nptrust.org/reports/daf-report/

.

5

.

https://efc.issuelab.org/resource/an-overview-of-philanthropy-in-europe.html

.

6

.

https://www.swissfoundations.ch/sites/default/files/European_Foundation_Sector_Report_2015_0.pdf

.

7

.

https://ernop.eu/giving-in-europe-launched-at-spring-of-philanthropy/

.

8

.

https://www.rockefellerfoundation.org/report/philanthropy-in-china/

.

9

. Ibid.

10

.

https://info.cerulli.com/HNW-Transfer-of-Wealth-Cerulli.html?utm_source=CNBC&utm_medium=Press%2520Release&utm_campaign=1811%2520High%2520Net%2520Worth%2520PR

and

https://www.cnbc.com/2018/11/20/great-wealth-transfer-is-passing-from-baby-boomers-to-gen-x-millennials.html

.

11

.

https://www.fortuneindia.com/opinion/giving-more-power-to-the-people/102342

.

12

.

https://www.cafonline.org/about-us/publications/2019-publications/caf-world-giving-index-10th-edition

.

PART IDelusional Altruism

1You Save Money on All the Wrong Things

Philanthropists like to save money, but they save it on the wrong things. Let me explain what I mean.

Foundation leaders, donors, professional athletes, corporate executives—all philanthropists—want to be good caretakers of their charitable wealth. They want their assets and profits to grow, so there's more wealth to give. They also want to reduce their charitable costs and save money, so there's more left over to give to the causes they care about.

All of this is well and good.

The trouble is, in their altruistic effort to be frugal, they hold back on investment in important things like talent, strategy development, research, evaluation, technology, relationship building, and even their own personal learning. They hold back investment in their grantees, too.

They do this by setting arbitrary limits on how much money can be spent on nonprofit “overhead,” or on when they expect to see grantees' results, but at the same time they refuse to fund evaluation costs. When they do this, they hamstring themselves and the nonprofits they support. They genuinely want their philanthropy to change the world, but they're under a misguided belief that saving leads to impact. They're delusional about the damage caused by their thrift.

Frugality rarely leads to social change.

This type of destructive frugality happens to all types of philanthropists. Let me give you a few examples:

The CEO of a foundation with more than $200 million in assets refused to allow his staff to take company laptops on business trips. Why? For what he felt was a good reason: He worried his staff would accidentally break or lose them, and he didn't want to spend $1,700 for each replacement machine. The problem, though, was that on business trips the staff couldn't get work done.

You might be wondering, “Why couldn't they use their smartphones instead?” This was in the early 2000s. Sure, they had cell phones back then, and even some early versions of smartphones like the BlackBerry. They weren't the powerful, multitasking microcomputers we today call smartphones. The problem for foundation staff was that without laptop computers, they couldn't make productive use of their time on airplanes or in hotel rooms. They couldn't prepare grant recommendations or research funding opportunities. Responding to emails was cumbersome. They certainly couldn't access the foundation's grants management system to review proposals. In other words, while they might have attended a useful conference, foundation staff got nothing else done for three days every time they made a business trip.

Why? The CEO didn't recognize that the value of investing in his employees' productivity far exceeded the unlikely expense of $1,700. With $200 million in assets and an annual grantmaking budget of $10 million, the laptop expense should not have been a concern.

Here's another example, from the grantee's perspective.

A nonprofit requested a three-year policy advocacy grant from a donor to advance an innovative approach to drug treatment. The donor, however, authorized a grant of only one year. But influencing public policy can require consistent effort over the course of years. Efforts include conducting research, raising public awareness, organizing residents, educating the media, and meeting with policymakers. It takes time.

Because the nonprofit lacked a realistic three-year funding commitment, its CEO couldn't hire top talent. The experienced person she wanted wouldn't leave her current job and risk her family's financial security for a one-year gig. The CEO ended up hiring someone who was less proven.

In the no-laptops-on-trips and one-year-of-money-instead-of-three examples, the funders saved money up front. But they did so at the cost of staff productivity and program expansion. They saved money on the wrong things. They were under the delusion that they were being good stewards of their philanthropic assets. Instead, they were getting in their own way.

Why does this happen? Part of the spell of delusional altruism is a scarcity mind-set. Yes, you read that right. Despite access to wealth, philanthropists live, work, and breathe with a scarcity mentality.

The scarcity mind-set happens to all philanthropists. It probably happens to you, too.

A scarcity mind-set is the misguided belief that a Spartan operation equates to delivering more value on the issues funders care about. It's a belief that, by not investing in their own capacity, talent, research, learning, strategy, technology, effectiveness, and infrastructure (or that of their grantees), funders can allocate more money to the causes they support and therefore achieve a greater impact.

Surprisingly, the scarcity mind-set has little to do with money. It has everything to do with belief.

Scarcity-minded donors believe that investment in their own operation is only warranted when the need is urgent. They limit their opportunities based on current capacity, not potential impact. Improvements they make, therefore, are only incremental. They feel they should always do more with less. In fact, they often believe they don't deserve what's best, fastest, or most efficient.

After advising ultra-high-net-worth donors and philanthropy leaders for more than 20 years, I believe this scarcity mentality is one of philanthropy's most detrimental self-created restraints.

The problem with a scarcity mentality is that it hinders your talent, stalls your creativity, and hijacks your opportunities to create systemic change. And it seeps into just about every aspect of philanthropic giving.

I realize you don't want to hear this. You don't want to be a glass-half-empty philanthropist! No one does. But read on. Part of what makes “delusional altruism” so delusional is that we get in our own way without realizing it. Let's learn about how we inadvertently allow a scarcity mentality to creep into our lives.

It Starts in Your Mind

A scarcity mentality is the lens with which many donors view their philanthropy. It's important to understand that this is a belief system that misguides your thinking. It's a trickster. It fools you into believing that you are saving money. That the less you invest in your talent, infrastructure, and knowledge, the more you can help others.

This is of course ridiculous. The deceptive scarcity mentality is all in your head.

Before we talk about the ways that the scarcity mentality shows up in philanthropists' lack of investment, I want to talk about the guises it takes in your mind.

This happens most often when you don't trust yourself to make a decision, you limit yourself based on your current capacity, you believe you don't deserve something, or you believe you are too small to make a difference.

Not Trusting Yourself to Make a Decision

Too often, funders don't trust themselves to make decisions. Instead, without realizing it, they shroud themselves in a blanket of “more information.” Here's how it works: You know (or are pretty darn sure you know) the answer. Then, you waste lots of time and money reassuring yourself you're right.

Here's an example: The leader of a corporate foundation wanted to hire a consultant. Two consultants were recommended highly. Still, she wasn't sure whom to choose, so she cast a wider net. She spent months developing a request for proposals (RFP) to find a consultant and another few weeks disseminating it widely. Next, she spent two months sifting through the dozens of proposals she'd received, scheduling and conducting interviews with finalists, selecting one consultant, and negotiating the contract. Six months later, she is ready to make the hire. Unfortunately, she's now lost half a year of her time, wasted countless hours of dozens of consultants' time, her project is delayed, she's behind in her other work, and the people her company is ultimately trying to help have been forced to wait—again.

What's even worse? After all that time and money she spent to find the consultant, she probably didn't find the best one. Why? Top talent in high demand wouldn't waste that much time applying!

Why do philanthropists do this to themselves? Their scarcity mind-set holds them back. They don't trust themselves to make decisions.

Look, sometimes the people involved genuinely don't know something, and they need to take time to learn. I get it. But in this example, the leader was smart. Think of how much better off everyone would have been had she met with each of the two recommended consultants, plus a couple more she could have easily found by asking trusted colleagues, and simply made a decision.

Limiting Yourself Based on Your Current Capacity

Too often funders say, “I can't” because they look at their current capacity and abilities and simply cannot imagine taking on a new task.

Does this ever happen to you or your colleagues? You postpone a project of strategic importance because you are “too busy” right now. You decide you can't address the root causes of a problem because you don't have enough funds, so instead you fund projects to address the symptoms. You decide not to fund something because you don't know enough about the issue. You choose not to ask community members to inform your funding strategy because you don't feel equipped to address the issues they might raise.

Here's the thing: You might be busy, lacking information, and ill equipped. You might not have enough funds to adequately address the root cause. Great! Now we know where you stand.

But, then again, so what? Your current capacity, knowledge, ability, and funds shouldn't limit the transformational change you can create. You can increase your capacity, gain new knowledge, equip yourself, and leverage additional dollars. It might not be easy. It might take time. And you will probably experience a few bumps and scrapes along the way. That's just fine.

Believing You Don't Deserve Something

Too often, philanthropists feel they don't deserve to [fill in the blank], such as invest in themselves, retain an executive coach, fund a needs assessment, attend a conference, improve their technology, hire top talent, spend time learning with other philanthropists, share their accomplishments publicly, learn how they can advocate for policy change, or fund an evaluation.

Why? Because they have a misguided belief that all their money should go to help others.

This is especially pervasive in family philanthropy, among those who have inherited wealth, and among entrepreneurs who have earned their own wealth. But it's true for most any philanthropist.

Mind you, they might simultaneously be spending $15,000 to graphically design, print, and mail hard copies of their annual report; budgeting $30,000 for new marble kitchen countertops for their third vacation home; spending $100,000 annually to mist the plants at corporate headquarters; or forking over half a million dollars annually on fuel for their private jets.

But when it comes to charitable giving, scarcity rules the roost!

This belief might appear noble. In reality, it is delusional. In order to have the greatest philanthropic impact, you need to be the greatest philanthropist you can be. This involves understanding yourself, understanding the issues and communities you want to help, and investing time and resources to build your philanthropic muscle and know-how.

To help others, you first need to help yourself.

Believing You Are Too Small to Make a Difference

Not every philanthropist is a billionaire. You might be giving away thousands of dollars each year, not hundreds of millions. But a small funder should not limit its aspirations. Even donors with limited means can operate with an abundance mind-set. The world is rife with examples of small funders that created big impact. In fact, Exponent Philanthropy, a U.S.-based network of foundations with few or no staff, philanthropic families, and individual donors, regularly showcases members who achieve “outsized impact” compared to their size.

Too often, however, funders of all sizes believe they are too small to make a difference.

One philanthropy leader had this kind of poverty mind-set when it came to achieving her strategic goals. Her organization organized high-net-worth members to donate to progressive causes. They set specific goals of tripling the number of donor members and dramatically influencing how those donors allocated their funding.

However, she didn't know her baseline. She had no idea how much money her members were already donating to progressive causes. Nor did she know how much influence her organization currently had on her members' giving priorities.

She had a vision for her organization's desired future state, but no idea about its current state. Therefore, it was impossible to create a plan to move forward. When I suggested she conduct research to understand their current baseline, she balked. “No, we're just a small nonprofit. We really can't afford it,” she insisted. Instead, she asked her staff—who were already working overtime and lacked research expertise—to figure it out on their own.

In other words, she was unwilling to make an investment in something of strategic importance to the organization, because she felt her organization was “just a small nonprofit.”

Remember, her membership organization is comprised of high-net-worth donors who saw the value in this organization's work. They paid to be members! The wealth was sitting right there. But she wasn't willing to ask any of them to support this project. I'm sure one of her members would have been delighted to fund a research project that would help more philanthropists donate to progressive causes. But her scarcity mentality held her back and stifled her organization's philanthropic impact.

Lack of Investment

Now that we've discussed the guises a scarcity mentality takes in your mind, let's look at how it shows up in philanthropists' lack of investment.

Lack of Investment in Your Own Talent

Too often funders refuse to invest in the human capital of philanthropy. They think they're saving money, but they're shooting themselves in the foot.

Philanthropy is comprised of people. Donors are people. Family offices are run by people. Foundations are nonprofit organizations staffed by people. When we need legal, financial, and coaching help, we retain people. And the people we want to help are, well, people!

Given philanthropy's people-centeredness, the lack of investment in people is stunning.

What do I mean by investing in people? I mean investing in you