Beware The Dark Side of Philanthropy


Magazine article

So you’ve decided that you really can’t spend it all, so why not get into this philanthropy game; it sounds fun and you can join a new club. Well, you are right. It is fun and along the way you can fundamentally change lives for the better, often at a price that seems impossibly low. And of course, the learning is fantastic.

Then you start to meet people and organisations and generally most “first time” philanthropists are “blown away” by what people achieve in the changing the world space. However, you worked hard to earn your money and it seems right and proper to ask some searching questions and that is the right way to go; but this is where a well intentioned activity can become a little grey, possibly even a little dark.

Your question, whatever its nature, is often given a little too much weight and credibility by the charity. The surprising reaction can be – “that’s an excellent question,” “your insightful inquiry is very helpful.” Now although we all have relevant life and work experiences, to be able to immediately translate the experience of say running a chain of garages, a department of a bank or a travel business to the subjects of poverty and exclusion does not make sense. It does not qualify you to be knowledgeable on the subject of small children and reading skills or exclusion on a run down housing estate. However, your questions are not necessarily wrong, or indeed uninsightful; just be aware that they may not be as brilliant as you are told.

So why are you accorded such commendation? The answer is easy and a little crude; essentially it’s to keep “the money sweet!” Is this corrupt? Not in the slightest; when you started your business, what would you do for those angel investors, or bankers to invest? Would you find them smart and agreeable? Probably. Hey, it’s human nature. Nobody is at fault; it’s a kind of weak unwritten contract that nobody acknowledges.

However there is redemption from the dark side! It is easy to ask closed questions, indeed it’s very comfortable. Far better to ask about the administration costs than to ask a question to improve your understanding of the mission. Closed questions can lead to the answer the charity you’re supporting thinks you want. I once asked a brilliant organisation which had produced a toolkit for supporting child carers if they had considered setting up a social enterprise to provide sustainable funding. Three weeks later I received a funding proposal for just such an idea; however they didn’t have the skills or competencies for such a venture. However they did brilliant work and that should have been my focus in the questions I asked. Worst of all they gave me what they thought I wanted, even though I had asked a genuine question.

The most rewarding questions are very open; to ask about the passions and motivations of an organisation. Ask them to talk about their successes and where they might see them changing in the future. Find out about their challenges, notably around funding. Most importantly, remember that you are not trying to conduct a Jeremy Paxman style interrogation. Once they feel comfortable, you can have a constructive and helpful conversation.

The next great approach to avoid living on the dark side is thinking about the venue. Inviting a potential recipient of your money to your office, favourite eatery, club or house is not the best way forward. Go to where they operate and meet the team and the clients. It may be uncomfortable at first for you but if you want to get the best out of the meeting you will want them to have the opportunity to perform well so you can see how good they really are. Whilst your gleaming, marble clad office is congenial, it might be intimidating to others.

Another aspect of the “dark science” is that of measurement and impact. I believe it is important to understand more about this subject and there is much good work currently being done. However, for some organisations, notably the small ones, it’s a tough subject. You know that in your personal relationships, friends and family, you will on occasions, try to help someone who is not doing well, or who is not dealing well with some of what life has to throw at them. If, after this support, you were asked to measure your impact or effectiveness, you might find it tough to offer anything other than qualitative comments. However, you will often be dealing with organisations which are working on just such issues. If, for example, you were interested in funding improvement in self esteem, could you measure it? Probably, but it could be difficult and costly.

When you have come from a corporate background, measurement can be much easier. These days, the return on capital reigns supreme. It is kind of easy; you put a certain amount of money in and hope to get more out. The return on “human capital” can be more challenging. My plea here is to ensure that you don’t push measurement and impact beyond its practical and realistic use – these are people we are talking about, not units of production.

Finally there is a darkest relationship issue. All the best things come from trusting relationships. When there is trust there is more opportunity for shared success. Once you have trust, the organisation that you are involved with can come to you and talk to you about their real challenges rather than selling you success only. Trust is earned and invested in, it is not automatic; in fact we live in a society that prefers to check and audit than trust. Trust can shine a bright light on your involvement with a great organisation.

So, is there a dark side of funding? In my view: a very definite yes. Is it intentional and malicious? Generally, no. Can you make better philanthropic decisions in the light? Without a doubt. Don’t be trapped into some notion of applying with rigour the lessons of business; apply them with appropriate care. Remember, you are dealing with people who are trying to help disadvantaged and excluded people and provide opportunities for those that have never had any.

In conclusion, ask open questions, go to their sites and talk to their clients, put measurement into a helpful context and learn the power of trust – live in the sunshine!


This article is tagged under:

  • Philanthropy Advice
  • Promoting philanthropy