Strategic Giving: The Art and Science of Philanthropy
by Peter Frumpkin
University of Chicago Press, 2006
435 pp., $39
A friend of mine is a “Boston Trustee” at one of our oldest downtown law firms, meaning that for the last few decades a small number of families have entrusted their most important financial and sometimes familial matters to him and his firm. When it comes to charitable trusts, however, his firm has provided him with the advice of a number of philanthropic experts, who help define the grantmaking process, evaluate proposals, and subtly but not-too-subtly let him know which grants they think wisest. He, in turn, has delegated much of his charitable role to them, while at the same time teasing them gently as “the mandarins.”
The complexity of contemporary finances and law probably makes this arrangement a necessity for my friend. He is involved closely in a wide variety of charitable endeavors, but he is not trained as a philanthropist (if such a thing is possible). Rather, he is a humanist, and as such, he seems to have the broadness of mind and of judgment not usually connoted by the term “mandarin.”
Peter Frumkin has a similar broadness of mind and judgment, deepened by a profound knowledge of the literature of philanthropy. So as I read his book, I thought about how it might help people like my friend, people who as donors or as friends to donors are struggling with the growing problems in this field, such as newly declared professionalism and specialization, and with the age-old problems of effectiveness and accountability and “charity versus philanthropy.”
My first advice to interested donors or advisors is to skip the book’s first three chapters and go right to chapter four: “The Idea of Strategic Giving.” In the first three chapters, Frumkin does as complete and dispassionate a job as I can imagine laying out the old and new problems besetting philanthropy. His clarity by itself adds a great deal to the ever-raging debates. But he resolves nothing here. While perhaps fascinating to mandarins, who pass shibboleths like “legitimacy” and “relation to the public sphere” back and forth, I doubt someone without professional pride to defend will wait 124 pages to get to Frumkin’s substantive argument.
This substantive argument is twofold. First, he contends that recent attempts to conceive charitable giving as a “public trust” and to require that the field become “professionalized” have made philanthropy more transparent, but at the cost of donor passion and insight. These attempts have thereby also made it less effective. As Frumkin puts it, “While grant making professionals may have the best of intentions and strive earnestly to have philanthropic funds achieve their highest values, something is still lost when the delicate balance of public purposes and private values is tipped in the direction of the former to the detriment of the latter.” What’s lost, in Frumkin’s view, is “idiosyncratic and unexpected private formulations” about the common good and its needs, as well as “provocative giving” that leads to change; in short, pluralism and innovation. So what’s a donor to do? In response, Frumkin offers what he calls the “philanthropic prism” (though it’s more of a pentagon or even a pentagram). This prism connects five essential questions and topics that every donor should consider if he or she is to achieve “strategic giving.” In Frumkin’s words:
First, all donors must declare for themselves the value to be produced through their giving. This means answering the question: What is valuable to my community and me? Second, donors need to define the type and scope of program that will be supported. In so doing, they must answer the question: What kinds of nonprofit activity will work best? Third, donors have to select a vehicle or structure through which they will conduct their giving. They must answer the question: What vehicle can best be used to accomplish my goals? Fourth, donors must find a giving style and profile level that is satisfying and productive. They should reflect on the question: What level of engagement and visibility do I want for my giving? Fifth and finally, donors have to settle on a time frame that will guide their giving. This means thinking about how to respond to the question: When should my giving take place?
Again, thinking through and answering these questions embodies, Frumkin argues,“strategic giving.” Donors don’t need to pursue these questions, he admits, but they should if they want to “find personal satisfaction from their giving and to maximize the chances of producing significant public benefits.”
Chapters five through nine each take up one of the elements of this philanthropic prism, from discovering philanthropic value to determining a time frame for giving. Frumkin’s treatment of each topic is rich and discursive. His treatment of “spending down” private foundations is particularly insightful, in which he argues that such an approach often reflects a donor who is both activist (wanting to do things with his money now rather than save it for the future) and optimistic (believing that spending now will change matters for the better instead of saving it to palliate perpetual problems). This insight does not repudiate famous examples of donors who have required a spend-down because they were pessimistic about the likelihood of future trustees following their intent. But it does add a new level of understanding.
These chapters also contain a number of useful stories of real-life donors or foundations, but not so many as could be. Most of Frumkin’s prose is argumentative rather than narrative. This is a bit puzzling, since his avowed desire is to return donor passion and involvement to the center of philanthropy, and one crucial way to ignite that passion and commitment is by expanding donors’ or prospective donors’ moral imaginations. Nothing expands that imagination the way that stories of others’ deeds and decisions can. Indeed, I wonder why Frumkin did not choose a few examples of strategic philanthropy and follow them through the substantive chapters. Has any donor provided such an example in its completeness? If not, why not?
A related absence in this book is any sustained treatment of religious giving, which Frumkin notes (twice) comprises the largest amount of giving in America. He does narrate briefly the story of Thomas Monaghan of Domino’s and now Ave Maria fame, but he does not dwell on the religious aspect of his giving. Elsewhere, when he briefly touches upon religious teachings around philanthropy, in discussing Maimonides’ “ladder of giving,” he almost perversely gets it wrong, saying that Maimonides wants to keep donors and recipients apart, in order to stem shame. If his main desire is to explore and awaken donors’ values and commitment to give, this inattention to religious motives seems odd.
These missing elements point to what I see as the central puzzle of this book: it celebrates the donor, but in a way that would sink rather than inspire donors’ spirits. Will knowing about “philanthropy value creation,” “philanthropic logic models,” “prosocial value orientation,” and “the endogeneity problem” help most donors? Will directors of operating foundations really be helped by a short account of transaction costs economics, or CEOs with corporate foundations by one on population ecology? Doubtful, at best.
But I do expect that these terms, style, and manner of proceeding could have a significant impact on grant writers at large nonprofits and grantmakers at big foundations. This observation leads me to conclude that Frumkin has accomplished something very clever in this book. Much of his work, as presented, would be too circuitous or too opaque for most donors. But it is just the sort of thing that the “professionals” in the field expect, nay demand, from scholarly researchers. Frumkin has achieved a fine accomplishment: a powerful attack on professionalism, written in the most professional terms and style.
This clever strategy should not deter the thoughtful donor. Each page of Frumkin’s work is valuable, and donors will find chapters four through nine especially so. Every donor or prospective donor should spend time pondering Frumkin’s “prism.”
But my mind turns once more to my friend, the “Boston Trustee.” I doubt he could take the time or find the interest to read Frumkin’s fine book in full. But his “mandarins” might. And here I find the special genius of the work: it is an anti-mandarin tour de force, couched in terms and style that mandarins will find irresistible.
Albert Keith Whitaker is director of family dynamics at Calibre, Wachovia’s family office; research fellow at Boston College’s Center on Wealth and Philanthropy; and director of the Morton Foundation, Inc.