To give away money is an easy matter and in any man’s power. But to decide to whom to give it and how large and when, and for what purpose and how, is neither in every man’s power nor an easy matter. — Aristotle Corporate grant-making is no accessible business. When working well, philanthropic partnerships can help companies engage employees and customers while contributing to the communities in which they operate.
Yet the history of corporate philanthropy is littered with campaigns that have backfired. Sometimes, marketing around a good cause can lead companies into trouble. Companies can also run into trouble. Philanthropy is at odds with their performance as responsible businesses. In any case, simply writing cheques is making way for more sophisticated approaches.
Many companies’ charitable giving includes everything from in-kind donations, such as IT equipment or office furniture, to pro bono work and volunteering. When harnessing philanthropy’s power, we need to understand the barriers to collaboration. The appointment of committed charity auditors can correctly assess various sectors which charities are addressing.
A network of local social auditors would help ensure more extensive and more effective support and funding reaches the places in greatest need. Improving the scale, distribution and funding for civil society is fundamental for a sector that has never been in greater demand than now. More grantmakers must offer long-term, flexible financing so charities can invest in their capabilities.
Funders must streamline their applications and processes to make funds more accessible to grassroots charities. This is particularly important for smaller organizations that rely on volunteers and lack expertise in grant applications. As grant-making institutions seek more significant influence on public perception, policies and practices worldwide, their need for greater openness and technical assessment has intensified. Good intentions should not excuse poor accountability.
Philanthropic reform ~ not just new philanthropy ~ is essential. The trustees and directors should be as accountable and liable as for-profit counterparts, if not more so. Any harm that their initiatives may cause ~ unintentional or otherwise ~ is rarely discussed.
Charity organizations should also not be allowed deviant behavior. Funders with the cash and conviction to proffer solutions for societal shortcomings should have a duty, if not integrity, to disclose their defects. Global philanthropy would be more credible and productive if the colossal grantmakers publicly debated their most significant programmatic failures.
For any organization, preferential tax treatment should be contingent on performance measures beyond grant giving and wealth redistribution. Institutions unable or unwilling to proffer auditable results should lose their subsidy.
As hedge funds and private equity have transformed global financial markets, entrepreneurial and institutional philanthropists collectively invest billions to change public policy. Globalization has qualitatively complicated the field of altruism. Philanthropic bodies increasingly serve as rivals. There is indeed a thin line between noblesse oblige and philanthropic imperialism. Crossing it is dangerous, but the unaccountable promoters will inevitably cross it. Charitably put, in this emerging era, quality philanthropic governance is crucial to quality philanthropic leadership.
Charities work incredibly hard, often striving to achieve challenging aims under financial and resource pressure. The idea of investing in charity to generate positive social impact, apart from a financial return, has gained traction. It needs to get integrated into the DNA of organizations. Yet, at the same time, the wages of the grassroots workers should be commensurate with their hard work if we want quality outcomes from them.
This is a crucial area where commitment at the grassroots is critical to creating lasting social impact. Impact studies can help us on the path to recognizing and rectifying various gaps that may exist in the planning and execution process Impact measurement is the measuring, assessing, and improving the impact of the charities portfolio on beneficiaries and the overall society in the territory covered by donors through investments.
It enables investors to determine the nature and extent of the investee’s impact at each stage of the investment life cycle. It can also help the organization to apply the learnings to define and refine their investment strategy. Most charities have pushed measurement to the back burner and have concentrated on preparing reports that try to give cosmetic effect to their achievements in corporate philanthropy. We must understand that this is a shortsighted approach.
We need to invest money in impact assessment, which involves costs despite attempts to simplify it. We can improve the quality of reporting by capturing impact outcomes by slightly senior staff who can assess the impact beyond immediate outputs and focus on more critical parameters. Impact assessment is challenging in several situations because of negative externalities, particularly natural disasters.
The best way to overcome the setback is to explain to donors rationally and try to correlate the reversal for their investments because of these unforeseen events. We must make only impactfocused claims and honestly inform the donors of the impact of charities in the transformation of different areas of the lives of beneficiaries. Honest and straightforward facts and possibly credible data should support the positive social gains that are more meaningfully relevant.
Charities seemingly appear to be turning towards the ‘theory of change’ to help them focus, take a fresh look at their goals, and explore if their current activities are helping to achieve them. It’s a challenging approach, but assessing the value of those working on the frontline may be difficult.
It may only be involved in a small part of their charity’s activities ~ one cog in a giant machine with an ambitious goal. The approach is still in incubation, and we may have to wait for evidence to finally recognize its efficacy and acceptability
(The writer is an author, researcher and development professional. He can be reached at firstname.lastname@example.org)