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[Review] 'Giving Done Right: Effective Philanthropy and Making Every Dollar Count'

April 03, 2019

Back in 2016, Bill Gates, in the context of his partnership with the Heifer Foundation to donate 100,000 chickens to people around the world living on $2 a day, blogged about how raising egg-laying fowl can be a smart, cost-effective antidote to extreme poverty. As Phil Buchanan tells it in Giving Done Right: Effective Philanthropy and Making Every Dollar Count, the idea, however well-intentioned, attracted scorn from some quarters, including Bolivia, where the offer was declined — after it was pointed out that the country already produces some 197 million chickens a year. The episode is a pointed reminder that being an effective philanthropist isn't as easy as it might seem.

GDR_image-quote_4DonorsPage4-600x300And Buchanan ought to know; as the founding CEO of the Cambridge-based Center for Effective Philanthropy for the past seventeen years, he has worked closely with more than three hundred foundations and scores of individual givers, exploring the landscape of American giving, distilling lessons learned (both successes and failures), and highlighting what works and what doesn't. (Spoiler alert: there's no single answer as to how to give "right," but few are better positioned than Buchanan to frame the question.) In this slim volume, he lays out a framework that can help anyone engaged in philanthropy to be more thoughtful, open-minded, and willing to learn, adapt, and keep trying.

As Buchanan sees it, anyone can be an effective philanthropist, and there is no one best practice to that end, other than to be as engaged as one can be. While much of the advice he shares is better suited for the well-heeled donor or the program officer at an established foundation (those with the time and resources to think through larger issues, consider options, and evaluate methods for learning from their giving), the panhandler's dictum applies: you don't need to be a Rockefeller to help a fella, and you don't need to be a tech billionaire to carve out a smart, sustainable path for your own giving. Certainly, to give is better than not to give, and if all you have the time to do is to write a check, do that. But if you want to effect lasting change — to move the needle, as it were — then you need to dig in and think long-term.

According to Buchanan, digging in means setting goals, weighing strategies for achieving those goals, evaluating the effectiveness of your giving, and, armed with that information, going back for more. Buchanan's work with CEP has given him special insight into how philanthropists approach their giving, and he's nut-shelled a range of smart propositions designed to help individuals and institutions think more clearly about how and where they give. Take his four types of givers. You can be a "charitable banker," broadly giving because of precedent or simply because you’ve been asked to, but not really having a goal or focus that informs your giving. You can be a "perpetual adjuster," always changing who and what you fund but never having a sense of whether your giving is doing any good. You can be a "partial strategist," connecting some of the dots in terms of your goals, strategy, and effectiveness, but keeping much of your giving unaligned with those goals (for example, a family foundation that strategically works to reduce hunger in its community but allocates half its grants to the unrelated interests of board members). Or you can be a "total strategist," all in on finding approaches that work and rigorously willing to test strategies toward achieving your goals. While most givers start out as charitable bankers, Buchanan wants them to become as strategic as they can be, spending their time, talent, and treasure "maximizing [their] chances of making a difference."

Being strategic isn't quite the same as being on target, however, and the balance of Giving Done Right is a broad-brush effort to tease out the key ingredients of effective philanthropy. For instance, not only do givers need to up their game with respect to understanding the problem they hope to solve, they also need to deepen their understanding of the communities and nonprofits actually doing the work. It's also important to avoid re-inventing the wheel. Chances are you're not the first to want to solve an intractable problem; effective philanthropy means building on what others have learned, supporting their efforts when they work, and collaborating to find new paths when they don't. And it's essential to find the right fit. Not every family needs its own foundation; for some a checkbook at the kitchen table will do just fine, for others it's a giving circle, a community foundation, a donor-advised fund, an LLC, or a programmatically focused, professionally staffed foundation. The key is understanding which vehicle works best with your goals.

Buchanan also has a few dragons to slay, and Giving Done Right starts and ends with an exhortation for givers of all sizes to ignore the misguided lessons embraced by a new generation of wealthy donors. First and foremost is the assumption that nonprofits would be more effective if they were run like for-profit businesses. No one likes bloat or ineffectiveness, but as Buchanan notes, most nonprofits are bare-bones operations that rather miraculously squeeze water from the proverbial stone day in and day out. What's more, most for-profit businesses aren't as efficient as they'd have us believe, relying on a solitary metric — quarterly profit — to measure their success. In addition, Buchanan scolds those who see nonprofits' reliance on philanthropy as "dependency." Without philanthropic support, he writes, tongue firmly in cheek, how would a children's charity keep the lights on, by putting the kids to work? And in any case, he reminds us, the nonprofit sector overall generates nearly $1.7 trillion in annual revenue ($1 in every $10 of U.S. GDP), with 70 percent of that derived from fees and services.

Similarly, Buchanan has no patience for foundations that demand that their nonprofit grantees spend time and money evaluating the impact of their services while being unwilling to fund such work, or for fixating on "overhead" as a measure of nonprofit effectiveness while too often ignoring the full-spectrum cost involved in delivering nonprofit services. And while he's willing to concede that what a successful business tycoon knows about getting rich might (might) provide some insight into how to be an effective philanthropist, it's more likely than not to cloud one's judgment. After all, if the world's problems could be solved by a vigorous application of business acumen, why haven't they?

In Buchanan's view, givers are much more likely to be effective by taking the time to learn what they don't know and proceeding from there. Not everyone embraces that idea. As David Callahan’s The Givers showed, the growth of big philanthropy in an era where government is less willing and less capable of affecting social change has become a hotly contested issue. In January, Buchanan, along with Rob Reich (co-director of Stanford's Center on Philanthropy and Civil Society), Ben Soskis (Center on Nonprofits and Philanthropy at the Urban Institute), and Anand Giridharadas (Winners Take All: The Elite Charade of Changing the World) engaged in a debate on Twitter during which they laid out their views with respect to the role of philanthropy in present-day America, its influence (both positive and negative) on our politics, and the tendency of Big Anything to generate a handful of winners and lots of losers. That debate is echoed in Giving Done Right, with Buchanan staking out a middle ground where philanthropy is celebrated as a reflection of American idealism and pluralism, where giving is good and smarter giving is better, and where the willingness of philanthropists and nonprofits (the unsung heroes of our more perfect union) to work together to solve seemingly intractable problems is to be commended.

Daniel X Matz is manager and content developer for Candid's Glasspockets.org portal. For more great reviews, check out PND’s Off the Shelf section.

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