While no one can help but be impressed by the generosity of the American people-donors of some $140 billion dollars and untold hours of volunteer time in 1996-charity today suffers from an effectiveness gap: The good intentions of Americans are not matched by the impact of their giving on people in need.
This is the major finding of the National Commission on Philanthropy and Civic Renewal, of which I have had the pleasure of serving as chairman for the past nine months. The Commission was convened in September of 1996 under the auspices of The Lynde and Harry Bradley Foundation to look at the ways that Americans are-and should be-spending their time and money to rebuild community institutions in our most impoverished neighborhoods. Bradley’s distinguished trustee, Reed Coleman, served as the very capable vice chairman.
Although the philanthropy that generates the most public attention is typically large gifts to well-established national charities from famous foundations like Ford and MacArthur or celebrated individuals like Bill Gates, the real warp and woof of American giving consist of tens of millions of lower-visibility charitable acts. Those don’t get as much attention as the Big Deal gifts. They should. For they, like the large benefactions of major donors, aren’t always as sensible as they need to be if we’re serious about helping the poor and needy in our midst. The goal of our Commission’s report is to reorient American philanthropy-both the high-profile and low-visibility kinds-toward greater effectiveness, smarter giving, and more of the community-based, results-oriented organizations that have a genuine impact on people and neighborhoods.
Our Commission’s report, Giving Better, Giving Smarter: Renewing Philanthropy in America, argues for this change in direction by emphasizing four themes:
First, charity is America’s secret weapon in dealing with our most urgent social needs. Yet we have found to our dismay that much giving is-if not exactly wasted-then haphazard, misdirected, and misspent. That is what most concerns us.
Second, the confluence of two trends has resulted in an era of tremendous opportunity for a new kind of American philanthropist that I call the civic entrepreneur. We are entering a new and unprecedented era of giving marked by the largest intergenerational transfer of wealth in our nation’s history and a boom in new wealth created by risk-taking entrepreneurs. In addition, America has developed a different (and, I would say, overdue) attitude toward government, an attitude that itself creates new challenges. A new kind of giver-the civic entrepreneur-is required to ensure that our money and time is invested so that it actually makes a difference in our communities and in the lives of those in need.
Third, the new type of giving is not intended to replicate or imitate what government does. It has its own special mission, a distinctive and vital mission far beyond the reach (or proper role) of government. Our report challenges the private sector to embrace this mission.
Finally, in many communities the most effective institutions-sometimes the only institutions-working to rebuild neighborhoods and save lives are often church-based organizations. Individuals, of course, are very generous to churches and other religious organizations. Yet foundations and corporations give them next to nothing. I don’t know why this is so. I’ve been told that some corporations won’t give to religious groups because they are afraid of violating the First Amendment. But that is absurd. The First Amendment applies to government, not to the private sector. Government has certain proper limits placed upon it regarding religion. But private philanthropy-both that of individuals and of institutions-has no such limits. The fact that it imposes such limits on itself is perplexing to me. It needs to change.
Let me suggest a few examples of what I mean by giving that is haphazard, misdirected, and misspent.
Haphazard. A careful public-opinion survey was conducted for the Commission by the highly regarded Institute for Social Inquiry at the University of Connecticut. The data show that 63 percent of Americans(almost 2 out of 3)“mostly make decisions [about giving] every time someone asks.” Only 35 percent, or one in three Americans have an “overall plan for giving.”
Misdirected. By misdirected giving I mean giving that, however well-intentioned, aims at the wrong place. For example, the Presidents’ Summit on Volunteerism issued a call for “Big Citizenship,” under the guise of volunteering. Federal programs to supervise volunteerism-such as the recently proposed initiative to promote reading in schools-are unwarranted when we already have a vibrant volunteer sector that operates without government’s “helping hand.” Government’s promotion of volunteerism can quickly become government supervision of volunteerism. Big Citizenship rapidly evolves into Big Government.
Yet the era of big government is said now to be over, in no small part because we have come to understand that government can’t solve the moral and spiritual and character problems that worry us most today. Government can replace lost income with Food Stamps, but government is not very good at all at providing the discipline, the incentives, the accountability, and the moral and spiritual strength that only private initiatives can inject into a distressed community. The Summit on Volunteerism, in this sense, missed an unparalleled opportunity to direct giving toward the organizations that are actually making a difference in communities and in the lives of those in need.
Misspent. Finally, by misspent giving I mean giving that is largely wasted, with little or no real benefit either for the donor or the intended recipients. A recent, rather stunning example of misspent giving was a program in Chicago called Families for a Better Life, funded by the television personality Oprah Winfrey. In 1993, Ms. Winfrey promised $3 million to support a program designed to get families off welfare, out of public housing, and into lives of self-sufficiency.
By 1996, that program had spent $1.3 million. Yet it managed to serve only seven families (out of 1,600 who applied and 30,000 who had contacted it). According to Harvard’s Peter Frumkin, “Of the five families who completed the program, three succeeded in moving out of public housing. The employment gains were equally disappointing: Two parents found full-time work, two worked part-time, and one parent was enrolled in a training program.” The program thus cost about $250,000 per family. Today, the program has been ended and we know nothing about why it was such a miserable failure. No public report has been published and, if one were conducted, no evaluation has been made available to the public. Not only did the program accomplish next to nothing-at very high cost-its failure hasn’t even served to deepen our understanding of why some things work and others don’t.
Our commission believes that over the last several decades, as government has expanded into areas once handled by private philanthropy, philanthropy began to see itself as aligned with government. But private philanthropy retains key advantages that make it different from government and that are worth emphasizing. Among these are philanthropy’s capacity to be personal, flexible, local, efficient, and-when necessary-controversial, and to work hand in hand with religion. Based on these advantages, the Commission has arrived at five challenges that philanthropy must be willing to take on.
First, charity and philanthropy must focus on effectiveness, not just goodwill. Second, charity and philanthropy must keep their mission and methods distinct from those of government. Third, charity and philanthropy must tenaciously resist government encroachment. Fourth, charity and philanthropy should tackle well-defined, concrete problems, not broad social theories. And, finally, charity and philanthropy should be driven by an entrepreneurial spirit, rebuilding communities and opening paths to self-reliance for the poor and to economic opportunity for impoverished neighborhoods.
These are tough challenges. But we have tough problems and it’s time that we look less to government to solve them and expect more from ourselves. No one else will solve the manifold problems that we face. It is our responsibility. It’s time to get moving.
Copies of the Commission’s report are available for $20 (postage and handling included) by writing to the National Commission on Philanthropy and Civic Renewal, 1150 17th Street, NW, Suite 201, Washington D.C. 20036. Payment must accompany order requests, with checks payable to the National Commission.
The report and the executive summary are also available at the Commission’s website: www.ncpcr.org.