Power dynamics in the philanthropic sector?

There has long been perceived a kind of class warfare between foundations who have the money, and nonprofits who beg for the money.  This is summed up by one of my favorite quotes, “Ah, philanthropy, it’s what allows a nonprofit to stand on its own two knees.”  There is a painful truth to this, acknowledged by both sides.

But the problem lies only partly with the dollar disparity.  There’s also the tendency to think in Us and Them terms, the Powerful and the Powerless, which happens at all levels up and down the philanthropic food chain.

A reader of an earlier post thought my intent of a Consumer Union for the philanthropic sector would be to protect nonprofits from the misbehavior, inattentiveness, or disappointing effectiveness of foundations.

But I don’t mean that – I think nonprofits and foundations are fundamentally allied, and that thinking of each other in Us and Them terms is dysfunctional and counterproductive to the overall effects of philanthropy, for those on the giving end and those on the receiving end.   Philanthropy is the work of both foundations and nonprofits, both with similar missions, both interested in benefiting the same people, both governed by IRS’ section 501 — and each needs the other.  Unfortunately, there’s misbehavior, inattentiveness, or disappointing effectiveness on “both sides” of the line.  [I’m curious how much of audience deserts me at this point.]

No, my point is to protect the public from unsubstantiated claims of all kinds of philanthropic organizations throughout the philanthropic sector – including foundations and nonprofits and the myriad of hybrids existing today — so that the public is better assured of getting a “safe and effective” product, with beneficial effects all around.   After all, we the public are all consumers some of the time, like when we use the educational, health, civic, or cultural services of a university, hospital, block club, or museum. What should those organizations do to earn our respect?

“But the foundations have the money,” I’m always told when I try to make the case that both foundations and nonprofits make up the larger class of philanthropic organizations, “and so there’s a power struggle, a class struggle, between the haves and have-nots.”  And there’s some truth to it, but… Plenty of nonprofits are bigger than foundations.  Plenty of nonprofits have more clout than foundations.  Disrespect, gaming, and ineffectiveness happens throughout the sector, without regard to “who has the money.” Disparities in power run throughout the sector.  And feelings of abuse or neglect by those with more happens throughout the sector; I wouldn’t say that nonprofits act any more nobly or ignobly than foundations.

Partnership is what’s needed throughout the sector, not displays of wealth and power and the hubris that goes with it.  What’s in short supply is r-e-s-p-e-c-t for the capabilities of potential partners, and respect for the opportunity of increasing the capabilities of others.  Respect is essential for partnerships, and partnerships are essential for philanthropic effectiveness in taking on large social issues.

Perhaps in denial somewhat, I would say that some of the wealth and power thing is illusory; when you’re on your knees, you naturally feel inferior, and when someone in front of you is on their knees, you naturally feel superior.  A helpful fact is that each philanthropic organization, whether nonprofit or foundation, gets its money from somewhere else.  More and more philanthropic organizations are in fact intermediaries, in function if not in name, receiving philanthropic assets (time, talent, and treasure) and distributing philanthropic assets elsewhere –also time, talent, and treasure but hopefully transformed in ways that help achieve a mission.   One can imagine the staffs of the Gates Foundation and the Anonymous Peoples Action Program as both givers and recipients, both recipients and givers, both givers and takers.  In other words, the grantmaker/grantseeker distinction is a less apt description of philanthropic entities these days, as most philanthropic organizations play both roles simultaneously.  The philanthropic food chain is a long and twisted one, with complex role differentiations.

But not in denial, it’s unfortunately the case that a big fly in the equity ointment is the ways traditional foundations, especially private foundations, are traditionally accountable to and governed by different interests, traditionally class-based, than traditional nonprofits are.  This hobbles the work of the sector as a whole, to say the least.  Wouldn’t it help if foundations and nonprofits really were allied, really could work in partnership?

Can we have another refrain of the r-e-s-p-e-c-t chorus?

Steven E. Mayer / June 17, 2011