Are Philanthropists Doing It Wrong?

Last week, financial writer Felix Salmon published a blog post entitled “Philanthropy: You’re doing it wrong.” His post particularly takes to task the practices and behaviors he sees in wealthier donors.

Though Salmon doesn’t use the term, much of his column pushes back against donor “hyperagency.”  In The Modern Medici,  Boston College professor Paul Schervish described hyperagency as “the enhanced capacity of wealthy individuals to establish or control substantially the conditions under which they and others will live.” Schervish wrote that very wealthy people have the inclination and ability “to be producers rather than simply supporters of philanthropic projects.”

I agree with some of Salmon’s thoughts, especially those that encourage philanthropists to give with a light footprint. Donors should always be mindful of the limited resources most nonprofits have, especially for daily operations and operating reserves. Paul Shoemaker, Executive Connector and Director of Social Venture Partners Seattle, provided similar advice in his “10 Things We’d Like to Tell Every New Philanthropist” posts for PhilanthroMedia in late 2008. (I’ve collected those into one PDF here: 10 Things to Tell Every New Philanthropist).

But, some of Salmon’s advice misses out on the many motivations that drive giving (Schervish’s paper called them determinants of charitable giving). Salmon seems to favor altruistic giving that efficiently maximizes social impact, but doesn’t favor common motivations such as legacy, opportunities for family philanthropy, emotional and social affiliation, or gratitude.

He also sees setting up a new foundation as a likely waste of financial and human resources. This sometimes can be true. However, he doesn’t mention the many inexpensive ways donors can establish and run foundations, and doesn’t mention that sometimes a foundation or donor-advised fund can be the best option for a large one-time financial event such as the sale of a business or a large inheritance.

Like many pundits in the philanthropy press and blogosphere, Salmon believes philanthropists are doing it wrong. Unfortunately, like those pundits, he defines “wrong” as “doesn’t match my personal values, interests, and worldview.”

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