“Philanthropy has begun to use the accountability movement to establish a norm for what sound philanthropic investments should look like. This is where serious harm can occur….Accountability, in the end, is about defining the minimum level of acceptable performance, not the highest level of accomplishment we want to pursue.” – John Bare, Ph.D., Philanthropy, Evaluation, Accountability, and Social Change, 2010
The only bond worth anything between human beings is their humanness. – Jesse Owens
The April 2015 issue of the Chronicle of Philanthropy provided an interesting study in contrasting approaches to giving and fundraising.
The Chronicle covered the release of ethicist Peter Singer’s new book The Most Good You Can Do: How Effective Altruism is Changing Ideas About Living Ethically. Many other news outlets covered the book release, so Singer and the effective altruism movement have been popping up in philanthropy and nonprofit social media frequently this month.
Effective altruism proponents ask us as donors or grantmakers to set passion and self-interest aside and instead rely on data and reason in making your charitable decisions. They want us to continually ask a critical question, “Of all the possible ways to make a difference, how can I make the greatest difference?” They raise tough challenges, such as the morality of using $1,000 to help a local art museum instead of providing lifesaving medicine to many third world residents. And, they urge us to give higher amounts of our income and net worth away, especially to people and countries in the most need. Their challenges are thought-provoking and can seem reasonable, though they ask us to follow their framework for “the greatest difference” rather than our own.
Peter Singer, Eric Friedman, and other effective altruism advocates are adding to more than a century of advocacy for scientific philanthropy and strategic philanthropy – giving based in the head rather than the heart. Nonprofits have experienced the result of that advocacy through increased requests for logic models, theories of change, evaluation plans, and evidence-based practices.
But, we humans make very few decisions purely based on logic and reason.
The Chronicle’s April issue also featured the long story, Scientists to Charities: You’re Doing It All Wrong, and related content. The articles highlighted 20+ years of research into how people make decisions and what motivates our charitable impulse, with a hub of newer research centered at the Science of Philanthropy Initiative. A mix of behavioral economics, neuroscience, psychology, and other sciences has proven that the effective altruists will win few long-term converts.
We are all deeply motivated by impure altruism. We give primarily because it makes us feel good, because we want to feel important, and because we want to appear generous to others. Despite what the strategic philanthropy experts and effective altruists might tell you, these motivations aren’t wrong and it is extremely difficult, maybe unnatural, to set them aside. They are essential parts of our humanness and our need to emotionally connect with and trust others.
At least 87% of philanthropy is driven by individual giving, sometimes through donor-advised funds or family trusts. It is driven first by impure altruism, human values and emotions, fallible thinking, and interpersonal trust. (And trust is already in short supply).
The Chronicle articles provide sound advice for how fundraisers can use the research to improve their communications with donors. They add to the research-based fundraising and communications advice offered by the Network of Good a few years ago in Lisa Simpson for Nonprofits and Homer Simpson for Nonprofits. And they connect with the growing number of popular books on behavioral economics and cognitive biases by Dan Ariely, Richard Thaler, Malcolm Gladwell, Daniel Pink, and many others.
Hey, this applies to you too, foundation staffers
Hold on there, philanthropoids. Philanthropy at foundations and companies is also driven by human beings, with only the occasional robot overlord in charge. It is too easy to dismiss the impact of this research and believe that our academic, management, and grantmaking credentials help us override our humanness. (In fact, research shows the more expertise we have, the more likely we are to fall into some cognitive traps).
We’d be wise to study up on the research cited in the Chronicle and other sources. How could that research improve a foundation’s communications with nonprofits? How could it improve advocacy and public interest campaigns? How could it improve a capacity building effort for key grantees? And, how could it improve internal communications and dialogue between and among staff, board members, and donor family members?
Understanding the drivers of generosity and human irrationality helps us improve our grantmaking and other philanthropic strategies. Our collective humanness informs our organization’s internal culture and the culture of its interactions with customers and partners. And, as management guru Peter Drucker noted, culture eats strategy for breakfast.
Most importantly, how can each of us learn about and fully admit to our own humanness and fallibility? For guidance, we can thank the Center for Evaluation Innovation for How Shortcuts Cut Us Short: Cognitive Traps in Philanthropic Decision Making. This should be a “must read” for foundation staffers and members of grantmaking committees. It helped me uncover and challenge my own faults and watch for them during discussions in grantmaking committees.
We shouldn’t have to give up our humanness to be effective donors or philanthropoids. But, we can definitely use this research, and even the effective altruists’ challenging questions, to grow and evolve as generous people.
Trust in me in all you do
Have the faith I have in you
Love will see us through, if only you trust in me
Etta James, “Trust in Me”
I can easily imagine nonprofit fundraisers singing these lyrics to their donors. Trust is a key to unleashing our generous spirits. Unfortunately, nonprofits will be singing sadder blues songs when they read reports about Americans’ trust in each other and in institutions.
Trust in Others
Our trust in each other has been declining since the 1970s. According to researchers using data from the General Social Survey, trust in others dropped to 33% during the recent recession, down from a high of 46% in the early 1970’s. Sociologist Josh Morgan wrote an article last year describing similar downward trends in other surveys. He mapped the trends in this GIF (darker red means less trust):
The Monitor Institute’s recent Shift Happens report for foundations cites these factors as reducing trust and further dividing communities: economic inequality, social capital, political polarization, racial and ethnic segregation, and people opting out of public schools and public services.
Trust in Institutions
The General Social Survey and an annual Gallup Poll also show Americans’ declining trust in institutions. The surveys don’t track the nonprofit sector as a whole, but do show declining trust in churches and educational institutions as subsets of the sector. The annual Edelman Trust Barometer reports a global decline in trust in non-governmental organizations (NGOs) from 2014 to 2015. According to a Reuters article about the 2015 Barometer, respondents across the world “found concern that NGOs were too focused on money, losing touch with the public, using funding poorly, corrupt, or incompetent.”
The national Overhead Myth campaign hopes to convince donors to look past budgets and financial ratios. However, in a recent BBB Wise Giving Alliance survey, “donors still consider finances to be the most important indicator of trust” in nonprofits.
In the Edelman survey, U.S. respondents reported that their trust in nonprofits to “do what is right” has declined since 2008, with a slight uptick in 2015. We trust nonprofits (65%) a little more than we trust business (60%) and much more than we trust the media or government. And, Edelman says that the general public’s trust is lower in nonprofits than that of the “informed public.”
One-third of Americans don’t trust nonprofits to “do what is right.” That’s not good.
Our lack of trust in institutions and nonprofits also showed in the most recent Volunteering and Civic Life in America report from the Corporation for National and Community Service. The report noted one- or two-year declines in 16 of 20 indicators of civic health, including indicators for trust in others, trust in public schools, and volunteerism.
What, me worry?
It could be easy for nonprofits and foundations to ignore these trends. Overall, charitable giving started rising in 2013. Foundations’ endowments and grantmaking budgets are steadily climbing back to their pre-recession highs. And, individuals and institutions are increasingly deploying their assets for environmental and social results through impact investing strategies.
The research cited above and Pew’s Millennials in Adulthood report should be wake-up calls to fundraisers and their hopes of attracting new donors:
- Millennials are the largest, most diverse generation in the U.S. and will make up 50% of the workforce by the year 2020. They’ll be the largest recipients of an estimated $30 trillion in assets transferred by the Baby Boomers in the next 30-40 years. They’re also least likely to agree that “most people can be trusted” and they’re less attached to institutions than previous generations.
- People categorized as “white” are 25% more likely than non-whites to say that “most people could be trusted.” If this gap in trust continues, trust could erode more quickly as people of color become the new American majority by the 2040’s.
- People with lower incomes trust less, and their trust further declines when income inequality rises. There are no easy or quick answers to closing the income gaps in the U.S.
- Edelman’s 2015 survey reports that only 56% of Americans see nonprofits as a credible source of information about companies. What dampening effect is that having on nonprofits’ partnerships with companies to promote healthy products? Or on foundations’ grants to environmental organizations to speak out against companies in the energy, food, financial services, and other sectors?
I’m not normally a “glass half empty” type of guy. But, I don’t read these reports and trends as a positive signal from the future for nonprofits. Most nonprofits already under-invest in the tools and talent necessary for effective donor stewardship, communications, transparency, and relationship-building. Their poor donor retention rates are one consistent result.
Can nonprofits – and the funders who support them – find new ways to build durable, trusting relationships with donors? What do you think?