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For Your Summer Reading List, Salient Points on Strategic Giving

By Susan Carey Dempsey on July 26, 2010One Comment

In between reading The Girl With The Dragon Tattoo and The Girl Who Played With Fire, I picked up a new volume that reawakened my appreciation of the field in which we spend our working hours. “The Essence of Strategic Giving” may not be the book you toss into a beach bag, but it provides a refreshing look at what makes philanthropy effective, with a few bold-faced names to break up the academic presentation.

How was Jacqueline Kennedy Onassis’ charitable lead trust structured? What are the religious motivations behind Thomas Monaghan’s establishment of law and business schools on the Domino’s Pizza campus? What caused the Kaplan family foundation structure to fracture not long after the founder’s death? Author Peter Frumkin offers these illustrative points in his new, streamlined version of his earlier book, “Strategic Giving: The Art and Science of Philanthropy.” The current volume, to be released by the University of Chicago Press in September, aims to offer fundraisers and donors a more succinct, practical understanding of the discipline underpinning strategic giving.

Frumkin lays out five essential challenges that must be met in order for philanthropy to be strategic. Donors must:

  • Declare what public value will be produced
  • Define the grantmaking methodology and the theory of change to be pursued
  • Find a satisfying, productive giving style and profile level
  • Settle on a time frame and pace of fund disbursement to guide their giving
  • Select the kind of institution through which to conduct their giving

“The single most important argument made in the entire book,” Frumkin says, “is that strategic giving involves the achievement of fit, coherence, and alignment of the five important philanthropic dimensions.”

Frumkin writes perceptively about the tensions inherent in aligning public needs with private commitments in a way that is both beneficial for others and satisfying for the giver.

“When lacking in one of these two dimensions,” he asserts, “philanthropy can degenerate either into a bland and disconnected exercise in transfer payments or into a selfish and shallow indulgence of the leisure class.”

The author also states that there is a lack of political consensus on what constitutes a public need or how one can even be defined.

“One good indication that no clear, compelling hierarchy of charitable causes can be defined,” he writes, “lies in the enduring reticence of the tax code to treat any particular type of nonprofit differently from all the rest. Soup kitchens receive the same tax treatments as avant-garde theaters. Community health clinics working in desperate urban settings receive no advantage compared to suburban historical societies. All public-serving nonprofit organizations are treated the same because the alternative, a differentiated treatment of charities based on their social contribution, is simply unworkable.”

I particularly like this point Frumkin makes further on:

“…few relationships are as complex and as highly charged as the one between donor and recipient…Lurking just beneath the surface are many uncomfortable and unresolved questions about power, class and race, as well as a fair amount of contempt and suspicion. The sad result is that too many donors and nonprofits interact through a highly stylized form of Kabuki theater built on a ritual of smiles, office chat, and elaborate paperwork.”

Frumkin identifies one cause: “The language of needs…has been replaced by a language of opportunities designed to appeal to the interests of donors.” I’ve heard one nonprofit CEO phrase it less delicately: “Foundations force nonprofits to lie.” That may be an overstatement, but that prevailing sense reflects the challenge that continues to face both sides of the philanthropic equation when it comes to communications and alignment. Bridging those divisive elements is on of the key reasons why onPhilanthropy has convened a Summit onPhilanthropy for several years, to offer donors and nonprofits an opportunity to communicate directly with each other.

Frumkin points out that donors, not just foundations, have increasingly wanted to be proactive in their giving, laying out specifically for nonprofits exactly what kinds of proposals they are interested in receiving – often too narrowly. It would be preferable, he says, for both sides to “aim for the broader goal of being able to fund a very broad array of grants limited only by the range of authentic needs.”

It may not be as bizarre and spellbinding as Stieg Larsson’s murder mysteries, but between the covers of this book are compelling characters, challenging paradigms and demanding expectations of those who have taken it upon themselves to change the world. Well worth the read.

The Essence of Strategic Giving: A Practical Guide for Donors and Fundraisers, by Peter Frumkin. University of Chicago Press. ISBN: 978-0-226-26627-5

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