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Teaching the art of philanthropy

Teaching the art of philanthropy
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First Published: Sun, Mar 13 2011. 10 24 PM IST

Updated: Sun, Mar 13 2011. 10 24 PM IST
Bangalore: Last week, a motley group of philanthropists from across the globe went together to watch Indian philanthropists in areas ranging from education and healthcare to micro-credit go about their routine in Bangalore.
Among the 15-odd charities they met across seven days were the Akshara Foundation, an NGO that promotes literacy; Milk Route, a for-profit, supply-chain network for rural milk producers; Janaagraha, which works to improve urban governance; and Labournet, which works to improve lives of blue collar workers.
The site visits were interspersed with talks by domain specialists such as economist Amir Ullah Khan, and Ramya Venkataraman, who leads McKinsey’s education practice in India.
Considering that Indian philanthropy is as yet emerging, this was an unusual event. What would philanthropists from the UK, Canada and England be trying to learn in self-help group meetings by south Indian NGOs?
These altruists were all participants in an exclusive workshop held by a London-based non-governmental organization that aims to teach what it refers to as strategic philanthropy. Known as the Philanthropy Workshop (TPW), and conducted by the Institute for Philanthropy, this programme was started in association with the Rockefeller Foundation in 1995 to teach philanthropists how to derive maximum impact from their donations.
Tackling inefficiencies
Strategic philanthropy, according to Salvatore LaSpada, chief executive of Institute for Philanthropy, is about finding long-term solutions to problems, rather than treating symptoms. It is about the broader impact and systemic changes. And often, it is simply about cost efficiency.
TPW alumni say this approach is missing among a surprising majority of philanthropists, leading to wasted efforts and indiscriminately written cheques that don’t really make a difference. “There are a lot of (philanthropic) organizations with serious inefficiencies,” said alumnus Albert Pace, the founder of the Canadian Pace Family Foundation, which also works in the area of healthcare in countries in southern Africa.
He tells the story of a network of wealthy Pakistani gentlemen in London. “They were funding every Pakistani charity that came to them—almost 50-60 of them. Each was writing up to one cheque a day. One day, they accidentally run into each other, start talking, and notice something is very wrong.”
The philanthropists, Pace said, realized they were all funding charities whose work was exactly the same; multiple fund-raisers were being carried out for the same causes. So they gave the charities a mandate to consolidate their overheads and management, and reduce the fundraising.
“It became far more efficient,” Pace said, “The charities didn’t have to worry anymore that they were carrying on in a hand-to-mouth fashion. And their costs also reduced.”
Another alumnus is 31-year-old Texan Katherine Lorenz, a grandchil of George P. Mitchell, founder of a Fortune 500 oil-and-gas company, and a philanthropist. As the third generation in a billionaire family, Lorenz herself is a full-time philanthropist, having co-founded Puente a la Salud Comunitaria, a non-profit organization working to eradicate malnutrition in rural Mexico.
For inheritors such as Lorenz who have already made up their minds to work for charity, the challenge is not finding the funds. It is getting the most bang out of the philanthropic buck, as Lorenz puts it.
“There is enormous research available about how to carry on a business, measure returns, handle mergers and acquisitions, but when it comes to philanthropy, there is very little,” she said.
Math of giving
But how can philanthropy be taught? One way is through shared research.
One of the institute’s collection of research papers discusses the relative merits of spend-out model of charity, where the organization exhausts a sum of money by a given date, vis-a-vis the endowment model where small amounts are disbursed across the lifetime of a charity.
“Basic economics dictate that if a trust or foundation’s investment returns do not exceed the inflation rate, the real value of the endowment will never be paid out, which some argue, defeats the purpose of giving,” the paper stated.
It referred to another 2007 paper by Ogden T. that argues that in its first 100 years of existence, the Carnegie Foundation has given away only 20% of the value of Andrew Carnegie’s founding gift.
The Institute for Philanthropy does not give financial or legal advice, though. “If you look at our research, you will see we usually teach using a case-study model,” said Salvatore LaSpada, the institute’s chief executive officer. “We show donors the options they have and help them figure out what they want to do. We educate them on the how, not the what.”
“Philanthropy is a deeply personal thing and no one can advise a donor on what cause they should be passionate about,” says Lorenz, who is deputy director at the New York office of the institute.
However, LaSpada says the workshop is not just about sharing anecdotal information. “We are all about concrete tools and frameworks to analyse social problems.”
The workshop is made of three modules, each of which is for a week, spread out over a year. The first focuses on areas such as strategy formulation, assessing the health of nonprofit organizations and crafting a communication strategy. One of the ideas discussed here is what LaSpada calls mission-related investing.
“You have a big pile of money and use a part for philanthropy. But how do you best use the remaining to produce the right social benefit? If you are working for better women’s reproductive healthcare, you could also invest in biotech companies in the area,” he said. “And if you are funding advocacy for climate change, you might want to look at research on fuel-efficient cars.”
The second module, held previously in Vietnam, Ghana, South Africa, and Brazil, looks to apply the learning in a global setting. This was what was held in India last week.
The third module focuses on advocacy, coalition building and collaboration. After the workshop, the alumni network continues to have access to the institute’s research and meets through advanced alumni modules, network gatherings, skill building sessions and field visits.
Takeaways
What are the participants taking home from the workshop? Said alumnus Lynne Smitham, founder of the Kiawah Trust that works in the area of health and education in India, “When I first came to TPW, one round of our funding commitments was coming to an end. So we took the opportunity to sharpen our focus on women’s empowerment and helping girls in school. We also changed our geography to northern India (Kiawah was earlier focused on southern India and Africa) because we felt we would have the maximum impact there. We also commissioned a second piece of research on women’s empowerment.”
Pace also agreed he is far more tuned-in to the impact of his charity. “We didn’t even know what effect we were having before this. Now, we get reports, pictures; I can see the product of my money. I know, for a fact, that the water that comes out of the pipe down Mt Kenya is actually clean.”
Meeting with potential collaborators is another big upside of TPW. “We went to Rwanda with the workshop and met Josh Ruxin (founder) of the Access Project. As a result, we are now building a hospital with them to reduce the travel time to the nearest healthcare centre in the districts of Rwanda,” said Pace.
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First Published: Sun, Mar 13 2011. 10 24 PM IST