Philanthropy, in its broadest sense, is love for humanity. A philanthropist has to make an ‘active effort to promote human welfare’. This means that a philanthropist is not only someone who donates a lot of money to humanitarian causes; they must also make a significant effort to change a societal problem. Because, philanthropy is not always about money.
New philanthropy has new questions
The question that an earlier generation of funders—most of whom were international foundations—usually asked was, “Has our money made a difference to people’s lives?” Today’s philanthropists want to know what difference their money has made. This is a completely different lens and nonprofits have to learn to answer this question in a language that philanthropists understand.
The philanthropists have some learning to do as well. More importantly, they have to re-learn what their predecessors knew and practised well, the first lesson being that it’s people who change things on the ground, not money.
It is therefore critical to invest in people; the impact lens will have to be turned around and the philanthropist’s calibration of what constitutes change and success must also change.
The balance of power needs to change
As philanthropists, we need to start thinking, ‘What is the change that should happen?’ rather than ‘What is the change we would like to see?’ Just changing the way the question is asked can help alter the power dynamics–however marginally–of the inherently unequal donor-nonprofit-community relationship.
Philanthropists must say the following statement aloud several times, many times over, internalise it and put it into practice: “Listen to what the community wants and therefore what the nonprofit wants; not what I, as a donor, want.”
It is important to remember that the funder is just a resource; the nonprofit–the catalyst. They both exist to serve the community in the manner that works for the communities themselves.
From being donors today, we need to become mindful allies. For that we must place trust in our partners. It also means that we have to build the kind of relationship with our nonprofit partners that allows us to talk about failure openly. [quote]As philanthropists we need to start thinking, ‘What is the change that should happen?’ rather than ‘What is the change we would like to see?’[/quote] Talking about what didn’t work might mean that the INR 50 lakh you invested in the nonprofit was ‘wasted’, but it might save you from pouring an additional INR 5 crore into ‘scaling’ the programme and then everyone realising that it didn’t work or yield the desired outcomes.
Related article: We need to talk about failure
Invest in what the nonprofit needs
Many funders want their money to go directly to the programme; what most of them fail to understand is the money invested in organisational development is key to achieving programme goals. One must therefore offer what is needed to get the job done.
For instance, if there is a programme team of six people, it might make sense to give them money to hire a finance person. The programme team is unlikely to have the skills to manage finances, which means they will spend an inordinate amount of time looking at finances when they could have been working on the programme. Not only does programme suffer, but the finances might be poorly managed as well.
At Azim Premji Philanthropic Initiatives, we work closely with potential grantees to understand their risks and then give them money to manage these risks.
These risks could be anywhere from inadequate internal controls, to poor cashflow management and lack of data around programme management. Nonprofits need money to identify and manage these risks–be it MIS systems, technology support or just overall handholding. We believe that they should have what they need to do the best possible job and then some more, so that they are comfortable and have the courage to go out there and do it.
Related article: Why funders must invest in organisational capacity
Break the silos
There is a clear division between the old guard–staff at international foundations, nonprofits and the new money (CSR and domestic philanthropists). The difference cuts across their world views, their approaches to philanthropy, the sectors they prefer to invest in, the duration of their grants, their expectations from their nonprofit partners and the change they expect to see on the ground.
One way to reduce the distance between these actors is to have erstwhile international funders and staff move into the new philanthropic foundations and institutions. This allows for a greater diversity of opinions and approaches, more rounded perspectives on multiple sectors and, most importantly, the ability to speak and understand the language of the nonprofit.
Even as new philanthropists adopt the approach mentioned above, they must also follow three basic lessons in philanthropy: one, involve the family, especially the spouse, who can be a remarkable driver of your initiative. Two, focus on building an institution, and then scale it up. Three, and finally, remember that philanthropy needs patience, tenacity and time.
*The views expressed here are personal.