How much freedom of choice should donors get?

 

Alice Hengevoss

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Since the end of the ERNOP conference 2019 one particular question has kept me busy. What degree of freedom should donors have when choosing the cause they want to contribute to? Or, as Rob Reich asked in his keynote speech: How much of a free pass should we give donors in choosing the cause they want to engage in?

Foundations are private organizations that contribute to the public interest – their capital is private, their cause is public. So, who gets to decide on how and what to give for? Foundations are set up to give back private wealth to society. On the one side, donors – with their best intent – are moved by a cause they have a personal connection to – be it a passion for water birds of the Camargue or the cultural attachment to French Cathedrals. On the other side, there are broader societal interests at stake that raise important questions on where resources are most needed and how they are to be allocated. And so I find myself asking to what degree donors get to follow their own preferences and whether they have a moral obligation to take into account public interest when giving their private resources?

Reich gives primacy to the interests of society. He rightly criticizes the foundation sector’s low transparency, weak consumer accountability, and strong donor orientation. Indeed, these weaknesses can result in poor choices when it comes to efficient philanthropic donations. Reich highlights the foundations’ moral responsibility toward society by focusing on their capacity to promote innovation. Foundations can bare greater financial risks than governmental institutions and therefore can engage more in long-time horizon research with the objective of solving societal problems. Reich referred to ‘extra-governmental mechanisms of discovery’.

While I fully support Reich’s critics and see the donors’ moral obligation to society, I have not come to terms yet with the question of how this weighs against the donors’ freedom of choice and personal preferences. Should donors have a free pass at the potential cost of inefficient giving? I am not sure this can be avoided. In an ideal world, I would rely on the moral obligation of donors to make the wisest choices when donating. Yet, our world is driven by emotions (and that’s good!), free and at times irrational choices, cognitive biases, and also free passes. So, what do we do? The best solution I see as of today is to assure accurate information for donors, openness to dialogue by donors and society and the need for critical questions, such that informed and just giving-choices be made.

What are your thoughts on this?

Alice Hengevoss is a research assistant at the Center for Philanthropy Studies (CEPS) in Basel.

The European Research Network On Philanthropy is an association of more than 250 academics aiming to advance philanthropy research in Europe. Learn more about their work by visiting the website http://www.ernop.eu and sign up to the quarterly newsletter.


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