PHILANTHROPY IN THE NEWS

Stars and Gripes: concerns over new figure on US philanthropy

This month saw the release of the 2023 Giving USA report. This is the authoritative annual look at trends in charitable giving and philanthropy in the USA, and the findings were a source of concern for many.

For one thing, the headline figure for total giving was down: falling 3.4% in 2022 to $499.3 billion (a drop of 10.5% when adjusted for inflation). As reported by Associated Press, this is only the fourth time in 40 years that the US has seen a drop in donations from one year to the next. But perhaps even more worrying for many observers was the confirmation that levels of participation in giving have fallen dramatically in recent years; so even when headline figures have seemed to remained strong, this has in reality been masking an ever-growing reliance on a smaller number of donors giving larger amounts.

Inequality.org published a useful article analysing this trend towards what it calls “top-heavy charity”, and warning that it poses a risk to the nonprofit sector for two key reasons. Firstly, because when nonprofits are heavily reliant on a small group of big money donors, they are far more subject to the whims and preferences of those donors. Thus existing concerns about skewed power dynamics in philanthropy become even more acute. And secondly, there is the risk that a lot of the money coming from bigger donors won’t even go directly to frontline nonprofit organisations, since these kinds of donors are far more likely to be using intermediary structures such as private foundations or Donor Advised Funds (DAFs). You would, of course, hope that the money would still make its way to the front line eventually, but there are longstanding concerns that DAFs, in particular, have led to a “bottlenecking” effect in US philanthropy: where a lot of the money seemingly coming into the philanthropy sector in the form of donations is actually getting “warehoused” in DAFs rather than making its way through to operational nonprofits.

Concerns about falling participation in giving and the role of DAFS were a big part of the conversation at the recent Gates Foundation Greater Giving Summit 2023 (which I wrote about in a WPM article). There have also been similar concerns for a while in the UK about whether our charity sector is becoming similarly over-reliant on a decreasing pool of donors giving larger amount (which I discussed with Angela Kail of NPC on a Philanthropisms podcast episode about the cost of living crisis last year). So this seems set to be a source of much debate for a while to come yet, as we try to work out whether it is possible to reverse the trend and increase levels of participation in giving so that we can expand the base of support for nonprofits in coming years.

Culture shock: UK museums & art galleries forced to turn to philanthropy?

There was an interesting article this month in the New York Times (and therefore paywalled, sadly), which links into this theme about increasingly reliance on big money philanthropy. The piece outlines the challenges facing art galleries and museums in the UK as government funding - on which many have traditionally relied - is cut back, and reports that many are now thinking about how they can up their fundraising game in order to attract more individual major donors in future.

The article touches on some interesting questions around tainted donations: for instance, in the wake of controversy over the donations of the Sackler family, are some donors worried about opening themselves up for scrutiny and potential criticism? Or are organisations which refuse money from some sources actually finding that they get more donations from other sources as a result, from donors who respect them for taking an ethical stand? It also highlights some of the challenges that arts and cultural institutions may face as they try to attract a younger generation of philanthropic donors; many of whom are less inclined to support the arts than they are to focus on social justice and climate issues, and who may have strong views on things like diversity, equity and representation that will require museums and art galleries to make significant changes even when they do manage to attract them.

As Paul Ramsbottom, CEO of the Wolfson Foundation (and all-round good egg) points out in the article, the arts are often at the sharp end of debates about the relationship between philanthropy and state funding too; since arts organisations, donors and policymakers may have widely differing views about whether such things should fall within the responsibility of the state or be left up to the generosity of the public. And this may have a significant impact in terms of the willingness of donors to give and the willingness of arts organisations to fundraise, as well as in terms of the decisions that policymakers take.

Image by Geographer on Wikimedia Commons, CC BY-SA 3.0

A. Soros, A. Soros, My Kingdom for A. Soros: The passing of the baton at OSF

Big news in the world of dynastic mega-philanthropy this week, as it was reported that every right wing conspiracy theorists favourite bogeyman, George Soros, has announced his intention to hand over control of his $25 billion philanthropic juggernaut, Open Society Foundations, to his 37 year old son Alex. This perhaps comes as less of a surprise at this point, as Alex Soros has become increasingly involved in his fathers business and political dealings in recent years (he is president of the Soros Super PAC and is the only member of the family to sit on the Investment Committee for Soros Fund Management), but from a longer-term perspective is still seems quite remarkable, since Alex Soros is the second-youngest of George Soros’s five children. For many years his older half-brother Jonathan was seen as the natural successor to his father, but they had a falling-out more than a decade ago that has still not been resolved so he is out of the picture.

For those wondering what this will mean in terms of OSF’s future direction (and for philanthropy more generally), it is obviously hard to be certain over the longer term. But for now at least, it seems safe to say that we aren’t about to see the end of the Soros name as a lightning rod for conservative criticism of liberal philanthropy, given that Alex Soros is, in his own words, “more political” than his father.

Image by World Economic Forum, CC BY-SA 2.0

Everyone loves a listicle…

I’m not entirely sure this one qualifies as “news”, but there was an interesting list of philanthropists this month in the luxury lifestyle magazine Robb Report. The exact focus of the list wasn’t entirely clear (the headline subtitle proclaimed it a “line-up of charitable foundations and investors uplifting communities in more way than one”, which is fairly vague tbh), and as a result it was quite eclectic. (Rory Stewart as a “Trailblazer” for taking over the Presidency of GiveDirectly? Hmm). However, the people featured on the list are all doing interesting things in terms of broadly progressive philanthropy, and I hadn’t heard of some of them, so it’s worth checking out.

Image by Chris McAndrew, CC BY 3.0. (And yes, remarkably this was Rory Stewart's Stewart's official UK Parliament profile picture, despite the wonky collar).

Blank Cheques

Speaking of interesting donors that I wasn’t previously aware of but will probably be referencing regularly in future, there was a good piece by Drew Lindsay in the Chronicle of Philanthropy this month about Diana Blank, an 80-year old who has given away more than $1 billion over the last 30 years, after receiving a lucrative divorce settlement in the early 1990s.

There are a number of noteworthy things about Blank that emerge from the article. The first is that she has somehow managed to stay largely under the radar despite giving a significant amount in an area of the US (the Deep South) that has far fewer big money donors than many other parts of the country. One explanation for this may be that Blank has almost entirely eschewed any form of name recognition in her philanthropy (and is still pretty reluctant to talk about her giving, to the point where she declined a request to be interviewed for the article).

Image by Mike Cohen, CC BY 2.0

The second notable thing about Blank’s philanthropy is that she has decided to spend down the assets of her foundation, The Kendeda Fund; thus adding it to a small (but growing) list of foundations that have decided to “sunset” themselves out of existence. The Kendeda Fund has only been operating since 2007, but she decided in 2013 that she wanted to get all of the money out of the door by the end of 2023.

The final notable thing about Blank’s approach to giving, which forms the central crux of the article, is that from the outset she has adopted the sort of “trust-based” approach now being made famous by Mackenzie Scott. Like Scott, she has focussed on placing her faith in nonprofit leaders (many of them from Black and minoritised communities), by giving their organisations longer-term grants for core operating costs with few, if any, strings attached. And like Scott, Blank has attracted praise for her approach – with one grantee declaring that Kendeda Fund offered  “a master class in utilizing a more open, less formulaic giving strategy to truly empower the people on the ground doing the work”. However, as with Scott,  some have also raised more critical questions, such as whether her desire to avoid centering herself as the donor has resulted in a certain lack of transparency (the Kendeda Fund didn’t even have a website until 2015).

In any case, the article is well worth a read.

GiveDirectly to jail: do not pass go, do not collect $1m

The mention above of Rory Stewart and GiveDirectly is also relevant to another article I spotted this month in Vox. The story concerns a recent report from GiveDirectly, detailing how nearly a million dollars was stolen from GiveDirectly aid recipients in the Democratic Republic of Congo (DRC) in 2022.

As the article makes clear, fraud is almost unavoidable when you are talking about systems as complex as those involved in international aid and development; but there is a substantive difference between opportunist one-off fraud and systemic fraud that takes advantage of structural flaws in the system. Unfortunately, as GiveDirectly acknowledge, the situation in DRC was a case of the latter rather than the former; as some of GiveDirectly’s own staff in DRC conspired with others outside the organisation to take advantage of weaknesses in their payment processes in order to divert mobile banking payments away from their intended recipients and into personal accounts.

Image by WorldRemit Comms, CC BY 2.0

There has been a lot of focus in recent years on direct cash transfers, and the model has a particular fan base among the Effective Altruism community. Some of those advocates may be worried that news of such a large scale fraud affecting one of the biggest and best-known cash transfer organisations will damage trust in the model as a whole. And perhaps they are right to be concerned. However, GiveDirectly should also get a lot of kudos for being so upfront and transparent about what has happened. There is no point pretending fraud risks don’t exist when it comes to international development - whether for traditional INGOs or cash transfer organisation - so it makes little sense to try to sweep this kind of thing under the carpet. (Although one suspects that many incidents in the past have been dealt with far less openly…) All we can do is try to get better at catching this kind of fraud and abuse earlier, and the only way we can do that is by naming it when it happens and ensuring that we learn from it.

WHAT WE'VE BEEN UP TO

Here’s a little update on what we have been up to at WPM over the last month.

Yorkshire Funders Conference 2023

I traveled across the Pennines from my home in Liverpool to take part in the Yorkshire Funders annual conference 2023 in Leeds, where I gave a keynote speech asking “What is Philanthropy For?” (and also ran a workshop on “Technology Trends: what funders need to know”). I had a great time at the event, with lots of opportunities to meet people in person for the first time (which is always very nice!) I also turned my keynote speech into a blog for the website, so you can read it at your leisure...

NPC AI Event

I also took part in an event hosted by NPC, where Tania Duarte of We And AI, and NPC's Tris Lumley of NPC discussed the the opportunities and challenges that generative AI might bring for the charity sector (although in the end our conversation ranged far wider than that!) 

WINGS Philanthropy Transformation Launch

I helped to moderate a panel discussion as part of an event to mark the launch of WINGS new Philanthropy Transformation Initiative. You can find out more about that initiative on the new dedicated website, and you can also watch the launch event back if you missed it.

On the Philanthropisms podcast

The podcast this month featured a conversation with philosopher and lawyer Patricia Illingworth about her recent book Giving Now: Accelerating Human Rights for All, as well as a deep dive into what recent developments in artificial intelligence might mean for philanthropy and civil society.

Transforming Society Podcast

Bristol University Press’s Transforming Society podcast published the last of three mini interviews with me about my recent book What is Philanthropy For? In this one, I talk to Series Editor George Miller about tainted donations, and whether it is ever possible to put bad money to good uses.

Charity Law Conversations podcast

I also guested this month on Winckworth Sherwood’s “Charity Law Conversations” podcast, where I chatted to host Ruo Wu about a whole host of things including how I got into philanthropy, what’s in my new book, tainted donations and the impact of AI. Ruo is one of those people I have known on social media for ages but never really had the chance to sit down and talk to properly, so it was great to have the chance to do that!

UPCOMING EVENT: IG Advisors Book Club

If you are in London on the evening of the 10^th July and you fancy talking to me (and lots of other interesting people) about my book What is Philanthropy For?,then you can come along to the book club event being hosted by IG Advisors. I know the original tranche of tickets sold out (ooh, get me…) but the event has been moved to a bigger venue and some more tickets were made available so you might still be able to get some.

OTHER GOOD STUFF

Wealth Shared:

This month saw the launch of a fascinating new project in my adopted home city of Liverpool called “Wealth Shared”, in which a group of randomly selected strangers from the L8 postcode are going to get the chance to deliberate collectively and decide how to give away £100k. I have been helping out a bit advising on the project and I was lucky enough to sit on the first meeting, which was absolutely fascinating! It’s definitely worth keeping an eye on, and you can sign up for updates if you are interested.

Mr Fix-it to the Ultra-Wealthy:

There was a really interesting profile in Vice this month of Ray Flemings, who has become the go-to fixer for many of the world’s richest people. The article details how he uses his connections and persuasive powers to get his clients access to experiences and items that often even their money wouldn’t otherwise be able to buy. There is some discussion in the piece about the responsibilities that come with wealth, and the role that philanthropy plays; and also quite a lot about how extreme wealth usually doesn’t bring happiness. An eye-opening peek into how the 0.001 per cent live.

Rich White Men:

FastCompany had an excerpt this month from a new book that looks like it offers a powerful critique of wealth inequality, racial injustice and elite philanthropy in the US: Garrett Neiman’s Rich White Men: What It Takes to Uproot the Old Boys’ Club and Transform America. Judging from this snippet the book is pretty unflinching in its analysis, so it may make for uncomfortable reading. But I, for one, plan to get uncomfortable and read it asap!

LLCs and the legitimacy of philanthropy

Alliance Magazine this month was themed around how new vehicles and tools for giving are shaking up philanthropy, and as part of that it featured a really thought-provoking article from Aaron Horvath and Micah McElroy of Stanford’s Center on Philanthropy & Civil Society, looking at the growth in use of the Limited Liability Company (LLC) structure by elite donors in the US and why this brings new challenges in terms of philanthropic accountability and legitimacy.

The Helvellyn Foundation

Spears Wealth Management magazine this month featured an interview with Becky and Lauren Holmes, the daughters of entrepreneur Bill Holmes, who are taking the lead in running the family’s Helvellyn Foundation and starting to emerge as some of the UK’s most interesting young philanthropists in the process. I was lucky enough to meet Becky and Lauren a little whole ago, and I think what they are doing at Helvellyn Foundation and how they are beginning to talk more widely about philanthropy and wealth is fascinating and definitely worth keeping an eye on.

In the mood for giving?

I stumbled across an article on Phys.org this month about an intriguing new paper in an economics journal on “Preheating Prosocial Behaviour”. There is a lot of literature in economics and neuroscience about the “warm glow” effect that comes from giving, and what the mechanisms for this might be, but this paper looks at things from the other direction and asks whether feeling good and being in a good mood before being asked to give makes you more likely to donate. The paper suggests it does, which might offer a useful practical finding for fundraisers.

This is not necessarily entirely new, as I have certainly seen other papers that have explored whether things that positively affect your mood (e.g. the hormone oxytocin, or “chill-inducing music”) result in higher level of giving. However, this detail on the experimental design was worth the price of admission by itself in my opinion:

“They asked volunteers online to decide how to split $50 between themselves and a charity. But first, the would-be philanthropists had to watch either the cheerful “Hakuna Matata” scene from Disney’s The Lion King or a neutral clip about microbes.

The researchers found that those who watched the relentlessly optimistic singing warthog and meerkat duo donated 7% more to charity and were more likely to give away the entire amount than those who watched the microbe video”.

Outstanding stuff. 10/10, no notes.

Image by Paal K., CC BY 2.0

Some Kind Ole Monsters…?

A bit of happy Metal/philanthropy crossover news this week, with this story about Metallica donating £40K to a homelessness charity in Leicester, UK (near where they were headlining the Download music festival). This seemed like some uncomplicatedly good news (and, more importantly, I was pretty damn pleased with the pun I came up with for the title for this segment) so I thought I would include it.

AND FINALLY: Bruce Wayne, unfairly maligned philanthropist?

I couldn’t leave out one of my favourite articles this month: a piece on comic book website CBR.com taking issue with the portrayal of Batman alter ego Bruce Wayne’s philanthropy in the movies. The article argues that in the original comics, Wayne is depicted as thoughtful and committed altruist, but in recent screen adaptations he has been painted either as greedy or as incompetent when it comes to philanthropy. I have to hold my hands up to not knowing enough DC lore to assess this argument’s merits in any critical way, but I am 100% on board with this kind of trash cultural/philanthropy cross-over content so I whole-heartedly applaud the fact that it exists.

Right, that’s definitely enough for this month. I will probably take a bit of a break over the next month or so (as I’m off on various holidays with the family), but I will be back at the end of August with another edition of the newsletter taking in everything that has happened over the summer.

TTFN,

Rhodri