The Charitable Question, R.I.P.?

Dear friends in philanthropic advising – you community foundations, planned giving councils, Chartered Advisers in Philanthropy, Purposeful Planners, and more.

We gather around to mourn the soon-likely death of our dear friend, the “charitable question.”*

We lifted it up to friends and clients. We chided the masses of our peers who didn’t come to know it. We extolled it in speeches (with CEU credits to boot), wrote articles and testimonials, and sold it as our competitive advantage on our websites.

But we ignored the diseases that have overtaken its spirit and infected its power. We refused to acknowledge the warning signs of its declining health. The diagnoses:

  1. Declining trust – The annual Edelman Trust Barometer came out this month. What’s the rate of trust in nonprofits “to do what is right”? 50% That’s right, it’s a toss-up. Gallup, the Chronicle of Philanthropy, and others have also tracked declining trust in the nonprofit sector and in our neighbors who govern and run them.
  2. Replaced by newer models – Sure, charitable giving has been growing since the recession. But other uses of money for social impact have been growing at much faster rates – donation-based crowdfunding, impact investing, political giving, perhaps even interest in direct cash transfers to people who are poor. Our social impact doctor, Lucy Bernholz, has been warning us about this for years. We didn’t listen.
  3. Tax reform – While some people believe otherwise, the Tax Cuts & Jobs Act (TCJA) dealt a powerful blow to tax-deductible giving. Our tax-savvy ways of supporting the charitable question – our arcanery and chicanery of CRTs, PFs, DAFs, CGAs, flip unitrusts with a piece of pie at the back end, and more – have power for fewer people. Sure a few wealthy people in your community still can use those. But, let’s be serious. Have they really not already heard the pitch?
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Source: 2018 Edelman Trust Barometer

What’s next?

It’s time to “call time” on our dear friend and hang a “Do Not Resuscitate” sign. In its honor, it’s time to turn our attention to new questions in philanthropic advising, including:

  • How do you want to make a difference in the world?
  • What do you want to change in the world? What do you want to preserve and protect?
  • What motivates you to respond in protest online or in person?
  • If you and your family could have a lasting impact in society, what would it be?
  • How do you want to live out your values (and/or faith) with the resources you have?

It’s past time to be open-hearted about, and prepared to help people explore, a wide range of answers to those questions. Those answers could (and should) include political giving and activism, impact investments, crowdfunding, starting a B Corp or social enterprise, shareholder activism, volunteering, using social connections, and more. Yes, and even 501(c)(3) charities when they earn our trust. In addition to giving to charities and volunteering, wealthy people name as important ways to “give back to society”:  creating jobs and opportunities for others by owning a business, investing in companies based on social impact, and pursuing social entrepreneurship.

Lastly, we have to prepare to respect and nourish the “make a difference” spirit in successor generations who may not answer in the same way as our peers, and whom will likely invent answers we haven’t learned yet.

Let’s lift up the charitable question in our prayers and wish it a peaceful passing. Let’s honor it with adapting to a society that doesn’t automatically trust nonprofits and embraces (or rediscovers) other ways to positively impact that society.

Go forth, friends, and philanthropically advise, now divorcing that advice from tax deductibility and avoidance. Heaven knows, the world needs you more than ever.

And, if you don’t agree with me, great. Let’s talk


* Variations on “the charitable question” include “Do you currently volunteer for or financially support any charitable organizations?” and “Are there any charitable interests you would like to address?”