Monday, December 6, 2010

Philanthropy: A Holiday Pie Worth Sharing

By Kit Bakke, author of Godine's Miss Alcott's Email

The older I become, the more I realize that luck and chance run our lives far more than any sort of “deserving.” Of course I’ve made tough choices and of course I’ve worked hard, but many people make tough choices and work hard and still don’t end up happy and healthy with their butts in a tub of butter, which is pretty much how I’d describe my situation.

If you start by being a white middle-class educated American with a house, a car, a fridge, an oven, and a computer with an Internet connection, you’ve exceeded the resources of 95% of your 6.8 billion fellow human beings. Put another way, if the world’s population were shrunk to a village of one hundred people, half the world’s wealth would be in the hands of six of them, mostly Americans. That’s us.

Being aware of our luck, my husband and I have become increasingly involved in the philosophy and practice of philanthropy. The language of giving is interesting — it used to be called “charity” and now it’s often called “social investment.” Like so much else in our society, philanthropy has become increasingly organized, results-driven, studied, monitored and, one hopes, more creative, collaborative, and effective.

Charitable giving in the US runs a little over $300 billion annually. This includes corporate, foundation, and individual gifts to all sorts of national and international nonprofits including churches, schools, social service organizations, and environmental and arts institutions. Corporate giving is about 5% of all gifts, foundation giving about 20%, and individual giving makes up 75% of all charitable donations. So next time you think you are small potatoes compared to the Gates Foundation, think again. You are part of, by far, the biggest slice.

Food banks, shelters, and community clinics have been inundated with service needs over the last two years, and in many areas that need continues unabated. Donations dropped in 2009 (the second least-charitable year since 1956), and although they appear to be picking up for 2010, it hasn’t been enough to meet the increased need. More bad news is on the way as states are slashing their human services and Medicaid budgets for 2011. Preventive and bridge services are often the first to be jettisoned, which only adds to the long-run economic, social, and human costs. For some reason, we’d rather house the mentally ill in jails (most colleges are cheaper) and care for them in expensive emergency rooms than provide them with less expensive supportive housing, counseling, and appropriate treatment.

Donors nowadays aren’t shy about questioning the effectiveness of the organizations they give to. Being part of a successful result is a bigger draw than being guilt-tripped. Gone are the days when a donor would trust United Way or the American Cancer Society to spend their charitable dollars with no follow-up reporting. There is now a flurry of research going on to help nonprofit organizations figure out how to measure and communicate the results of their work. For instance, a health care clinic for low-income people can’t just report the number of patients they saw; they need to provide information on what they did for those patients and whether or not those patients got better.

The Center on Philanthropy of Indiana University is an excellent resource for trends in research on philanthropy. There are even data showing that people who volunteer and donate to nonprofits are happier and healthier than those who don’t. Talk about win-win!

Another excellent resource is Charity Navigator. They have recently upgraded their rating system to include three areas: financial health (Is the organization financially stable and how much of its budget goes to overhead vs. direct service?); accountability (Does the organization engage in ethical practices, have good governance structures, and is it accountable to its constituents and target populations?); and outcomes (Can the organization demonstrate positive change in the lives of the people they serve?).

I am a member of the Washington Women’s Foundation, which gives away about $500,000 annually to nonprofits in five areas: the arts, the environment, education, human services, and health. We have three criteria for our grant review process in addition to Charity Navigator’s important list. We want to fund projects and organizations that are responding to urgent and critical needs, that incorporate new approaches to ongoing problems, and that are working on bold new ventures.

Which slice of the (guaranteed calorie-free) philanthropy pie do you like?

Happy holidays to ALL 6.8 billion of us!

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