The advent of demanding, interventionist, micro-managing donors with low levels of expertise and high expectations is a frequent lament in professional philanthropy. But to see this as a consequence of the so-called ‘new philanthropy’ is an over-simplification – or just plain wrong. Intervention bordering on interference or micro-management is not a new development at all. It’s been around for a long time and it’s just as likely to be found in older donors and traditional foundations as in younger donors eager to make their mark on the social sector who pride themselves on their ‘hands on’ approach.
We’ve all heard stories like these:
‘Using wits and nerve, a man makes a fortune wheeling and dealing in an unregulated market. His reputation as an unyielding, arrogant bully precedes him everywhere. Shocked that his riches cannot protect his own grandchild from disease, he turns his cold eye on the field of medicine. He decides to fund a research institute in New York. Despite his total lack of medical education or knowledge, he dictates not only what condition is to be researched, but what approach is to be taken. He makes clear that he is assessing and evaluating these funds as an investment, and wants to measure how much will be saved in the cost of medical treatment. He funds stingily, only on an annual basis, and demands constant detailed reports. He remains cagey about how much support he will ultimately provide. Not until the institute’s first discovery is not only published and accepted but manufactured and delivered successfully to thousands will he commit any substantial long-term funding.’
‘A few years later, in another American city, a wealthy trader reads a carefully researched report by an educated nonspecialist and is instantly galvanized. He uses his force of personality and financial clout to bully his fellow University trustees into demanding a restructuring that requires the wholesale resignation of the entire faculty of a major division of the university.’
Hedge fund moguls behaving badly? No, no. Just a sneaky retelling (drawn from Joel Fleishman’s accounts) of John D Rockefeller launching what became Rockefeller University, and of Robert Brookings reshaping Washington University’s medical school. Despite the objections of experts in the field, both were convinced that European methods of research and teaching were needed in North America.
A sea change in donor-recipient relations?
Anecdotes aside, though, has there been a sea change in donor–recipient relations? Is this the era of the Self-Inserting Donor? The Self-Indulgent Donor? That viewpoint entails several assumptions worth examining. First, it assumes that there is truly more intervention by donors than ever before. Second, it assumes that private donors are acting differently from professional grantmakers. Third, it assumes that donor intervention does more harm than good.
So let’s examine these assumptions one by one.
Is donor intervention on the rise? I wish we knew. Alas, the debate is largely argument by example, and bad behaviour is way more fun to recount than good behaviour. Much of the history of private giving is unknown, and the historical record doesn’t give us a clear picture of how the well-to-do behaved in various times and places. But think about the Renaissance patrons who had their portraits inserted into paintings, the Victorian ladies who instructed ‘fallen women’ about morals, and the passionate advocates who created conservation. The individual donor as interventionist is not a new phenomenon.
In our era, we are blessed (or cursed) with many more ways to exchange stories about specific donors, donations and debacles. Conferences, travel and the internet give us many more points of contact with many more people. Philanthropy is in fashion, and gets more media attention than in the past. In addition, there are more donors than ever before, so the chances of some really good (that is, fascinating and appalling) behaviour getting out there is much higher.
Part of the fashion for philanthropy among the ultra-wealthy now has to do with not just whether one is a philanthropist but how one is a philanthropist. Involvement is in, passion is in, and commitment is in. What’s sometimes overlooked, though, is that many donors who say that they are ‘hands on’ or ‘results oriented’ are simply saying what’s expected. Recently we asked a family about their approach to philanthropy, and they all declared themselves advocates of ‘venture philanthropy’, interested in innovation, risk, and deep involvement in the organizations they might fund. But they were horrified when asked if they’d be comfortable as one of the first ten funders of a new non-profit. In reality, they do support some innovative organizations – with general operating support, following a very respectful site visit.
Over-involved donors: myths and realities
Are there intrusive donors who carry the value of involvement to ridiculous lengths? Of course there are. Ironically, I’d say that the most extreme examples of ‘hands on’ donors who are over-involved micro-managers are not the new donors we work with. They are often the donors who are oldest in years, whether their wealth came early or late in life, who seek control through their philanthropy as they feel it ebbing in other areas of their life. Or they are people who are detail-oriented in all aspects of their life – they are simply carrying their personality and approach to the world into philanthropy too. In the 21st century, it’s much easier to do that than ever before.
Do private donors act so differently from professional funders? Professional grantmakers and grantseekers console each other over cocktails with serial anecdotes of wealthy donors who are self-indulgent, ego-driven, ignorant, victims of their last conversation, believers in their own press, unwilling to listen, patronizing, and oblivious to the realities on the ground. But let’s face it: once the seasoned – ie older – professional grantmakers leave the bar, the grantseekers say the same things about them. (I am grateful to my chronologically deprived colleagues for these late-night insights.) Every grantseeker has stories about the over-involved foundation staffer who requires meeting after meeting, and demands reports in a bizarre new format. At least private donors can make decisions quickly. This April, along with the Climate Change Philanthropy Action Network, we co-presented the Eileen R Growald Symposium, during which a donor couple decided on the spot to increase their climate change philanthropy from about $1.5 million to about $7 million in 2008.
Do interventionist donors do more harm than good? That’s hard to say, of course. But most experiments fail and most restaurants fold. Some would argue that most foundations have failed to make a difference, along with government and multilateral programmes, where micro-management was apparently invented. The classic American free-market perspective on this question is that the potential benefits from a far-seeing philanthropic innovator are worth the potential damage from the inept and clueless. After all, what’s the alternative? Who will decide whether a donor’s vision is worth pursuing?
No change in the real issue
The real issue here is not whether new donors are fundamentally different from their forebears, or from professionals. The real issue around donor-recipient relations has not changed since the dawn of time: it’s the power dynamic. The boundaries between a genuine gift and an ironclad contract are more fluid than we’re usually comfortable admitting. There’s an imbalance not only of power – who has the money vs who wants and needs it – but also of perception. What seems reasonable and rational to the donor can seem intrusive and arbitrary to the receiver.
This has not changed, nor is it likely to until our sector has solved some fundamental issues: we need agreement on what problems we are trying to solve, and why, and how. We need better understanding of how to frame the terms of engagement in the process of change. We need better ways to describe the experiments that donors underwrite and that non-profits undertake. We need sharper tools to allocate risk and reward. We need some common language that’s based on mutual regard for experience and authority. We’ve needed it for a long time – but rarely has it been in such sharp relief.
1 Joel Fleishman (2007) The Foundation: A great American secret; how private money is changing the world, Public Affairs.
Melissa A Berman is President, Rockefeller Philanthropy Advisors. Email firstname.lastname@example.org