Crowdsourcing versus Philanthropy

nextgov-medium New Orleans      In the United States, this is supposedly the season for giving.  Traditionally that has meant that retail establishments go wild trying to seduce all of us into local stores, big malls, mail order deliveries, and, increasingly, online shopping.  On the hope for a generosity “rub off,” the season has also become the time when direct mail appeals outnumber holiday greeting cards for many of us, and, as work slows down and people take vacations for the holidays, our email in-boxes are more stuffed with appeals for support than our stockings ever were.   Many of us do what we can, both every day, when we “give at the office” so to speak through our daily labor, and in trying to throw a few dollars here and there to groups we keep on our personal lists.

            In the spirit of the season, The New York Times ran an op-ed from Darren Walker, president of the Ford Foundation.  Despite all reports and evidence to the contrary that most of philanthropy has become extremely directed and transactional, Walker went old school, and spoke to the better side of philanthropy’s nature, saying:

We, as foundations and individuals, should fund people, their ideas and organizations that are capable of addressing deep-rooted injustice. We should ensure that the voices of those most affected by injustice — women, racial minorities, the poor, religious and ethnic minorities and L.G.B.T. individuals — help decide where and what philanthropy puts money behind, not in simply receiving whatever philanthropy decides to give them.  

Honestly, I’m not sure how many foundations and philanthropists still walk that walk, including the Ford Foundation, but at least Walker has not forgotten how to talk the right talk, and that’s something to be thankful for anyway!

            Besides the rich and their institutions become increasingly transactional, I also have the feeling that neoliberalism of a sort has also infected “giving” with the explosion of “crowdsourcing.”  Not able to depend on philanthropy or the rich and pretend any longer that they will carry the weight their tax exemptions allow them or that banks make smaller loans anymore, crowdsourcing is essentially a transfer of many funding prospects to friends, family, and fellow travelers, much like our social services safety net as well.  The Wall Street Journal recently trumpeted the fact that the microfinancing and lending service, Kiva, in trying to develop a more effective business model in the USA, has added a crowdsourcing requirement so that prospective borrowers would prove they have “skin in the game” before getting a loan.  They also claim that with friends and family on the hook, the payment rate is 92%.

            This may be the giving season, and as Ford’s Walker says, we need to “fund people, ideas and organizations,” but with the infection of neoliberalism in all facets of modern life and social fabric, part of the message continues to be that it’s not about justice, as Walker argues, but too much about “just us.”

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Philanthropy for the 96% — Part I

giving-usa-8-5-x-11-infographicMissoula     Giving USA recently issued a report on philanthropic giving accompanied by numerous back pats that giving is once again up and has finally exceeded the pre-recession levels. This giving aggregates individuals, foundations, and corporations. No doubt the absolute sum ponied up by the 1% is a pile of this, but 72% of the giving was by individuals, and historically it is well documented that the rich give a smaller percentage to charity than those with considerably less.

Sadly, as a New York Times columnist, Ron Lieber, noted, the darkest cloud in what was intended to be a feel-good press release on the increased generosity of the American people is in the area of international giving, where people are inarguably poorer and in more desperate need. Such giving was down by 3% and of the $358 billion given, only 4% when to international work and projects. The Princeton philosopher, Paul Singer, was quoted as disappointed since he has argued “the case that individuals have a moral obligation to do much more for people in faraway places” and has challenged us all to “tilt our charitable allocations heavily toward the global and less toward the local.”

Directing ACORN International and working in many of these areas, I know too well how true this can be. For months an item will come and go on my “to do” list about sending out an e-blast or some kind of appeal for support, but the marginal success of such efforts has pushed it off the list for several years running. So why is this? What is this antipathy or inability to empathize globally all about? Is it something people around the world have done to make our grips tighten on our dollars or is it something undone on the part of those working globally?

Most compellingly, and most understandably I think, it is natural that people want to give to outfits they can see and where they might even personally benefit, even if indirectly, through community favor, praise, or participation, and given the limited language facility and the expense and narrow structure of most people’s travel in the warp of industrial tourism, malls, cruises, and manufactured authenticity, how can anyone be surprised at the limited range of international philanthropy. I also think many Americans, partially because of the steady roar from the rightwing, believe they have already given through their tax dollars and foreign aid, despite the facts on how little we really give as a percentage of our budget and how limited the gifts really are in terms of eligible countries and in ways that might be constructed as truly philanthropic nationally as opposed to in our national, ideological or commercial interests. None of that benefits the poorest populations of the world or perhaps more importantly the poorest populations of countries that are now ranked as “middle income” even though continuing to contain shocking levels of deprivation for hundreds of millions.

We also see huge philanthropies like the Gates Foundation and many others give to the big ticket world health problems like malaria, AIDS, and so forth, rather than overall prevention or poverty alleviation, which is confusing to smaller donors wanting to make a difference and maintain a voice. The frequent embrace of disaster philanthropy by too many of the world’s largest charities is also confounding, like the scandals at the Red Cross and recent reports on how few houses were built compared to promises in places like Haiti. Many of the world’s largest NGOs are also publicly funded sending a message once again that failure means a waste of tax money rather than an urgent call for more personal donations.

The largest gifts internationally continue to be remittances from migrant workers and immigrant families back to their home countries, communities, and relatives, yet, tragically, there are few policy initiatives helping magnify such lifeline contributions that exceed the $16 billion given internationally as charity, but do not even count as philanthropy in such totals or even as tax deductions, allowing these small, regular contributions and their givers to be prey for financial institutions and money transfer organizations rather than honored guests at any community’s annual charity ball.

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Philanthropies as Government Shadows

americas-shadow-government-1New Orleans       Whoa!  You just know it’s getting hard out there when you find yourself nodding your head in some agreement with a senior fellow of the hardcore conservative Manhattan Institute, which over the years has been in the first ranks of community organizing attackers and ACORN-baiters.  There it was though, a Wall Street Journal op-ed by  James Piereson called “Philanthropies as Creatures of Government,” and there my head was, bobbing uncontrollably in agreement.

Of course much of his argument was poppycock and the usual fear-the-government, semi-Big Brother, line, but then there was this paragraph:

But the reasons the philanthropic sector should be independent of government have nothing to do with government spending or taxes.  Philanthropy is an integral part of civic society and, as such, offers alternative ways to address public problems.  Private philanthropy, at its best, can insure that new and sometimes unpopular ideas are funded and are not crowded out by political pressures or the bureaucratic groupthink that evolves when organizations are turned into instruments of government.  It allows those who have accumulated wealth to apply their own insights to alleviating poverty, improving education or strengthening the arts.  That was the original purpose of the philanthropic sector: to support programs privately that government could not or should not support.

He then talks about how the demarcation lines are collapsing between the private and public sector, quoting Irving Kristol, one of the intellectual saints of the conservative pantheon.  Of course the full-on assault of business and their conservative vassals for privatization of governmental services pulled this wall down, but that doesn’t take away from a point of agreement that the left and right seem to share about philanthropy, that it is squandering its mission by being unwilling to take risks, innovate, and fund programs and projects that are controversial and that government would not support.  The point of philanthropy should not be simply to leverage government, but step up where government has to step down, to break new ground, when government bunkers in the hillside.

Recently talking to lawyers about the necessity of their giving community organizations options, rather than advice, particularly if they had not looked at all of the consequences of such advice, I used the example of the corporate and tax status of community organizations. I used the standard example that being a nonprofit did not require incorporation at all since unions and many others are unincorporated associations of groups.  Furthermore as a nonprofit the question of being tax exempt is heavily freighted and electing a tax status, especially if not necessary, might handcuff future directions and actions of the organization.  Too many lawyers as a kneejerk reaction advise applying for 501c3 or 501c4, tax exempt status, and it’s wrong for many, if not most organizations, and cripples their ability to move independently of government and the politics that drives policy.  One voice in the room, simply and quietly, said, there was little choice because “funders” were demanding such tax decisions.How tragic!

Philanthropy has to have a higher purpose than providing the rich with a tax deduction, just as nonprofit work has to have a higher purpose than bending and tailoring our mission to the demands of money, private or public.  We may have a place though that the right and left can find agreement that philanthropy cannot simply be a shadow shackled to government.  We will never agree on the “ends,” but we might have consensus on the “means,” when it comes to foundations and the fact that they need to maintain their independence.

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Sorting Out the Issues, Interests, and Impact of the Clinton Foundation

clinton_foundationNew Orleans    The donors and activity of the now named Bill, Hillary, and Chelsea Clinton Foundation are becoming a front page political issue that increasingly seems like to roil the coming Presidential campaigns.  From what we know now, including recent reports from the Wall Street Journal, it seems possible to make an early assessment on the likely political impact of the issue.  So, far my assessment is that it will likely deny the chances of Bill or Chelsea ever winning a Nobel Prize, but in and of itself, the foundation will not be a decisive factor in Hillary’s winning or losing in her bid.

The primary issue raised is whether or not donors, including foreign governments and some of the rich individuals close to them or seeking favor from and for them, who are sometimes carrying heavy reputational baggage, would have undue influence with a potential candidate due to their donation and special relationship with the foundation.  This issue is at the heart of transactional versus transformative politics and philanthropy.   It is also politically impossible to prove because any quid pro quo understandings would be unspoken, whether sought by the donor or implicitly understood by the gift seeker.  The fact that it smells bad, doesn’t necessarily mean it is bad though, and that’s important to remember although in public life largely irrelevant.  Nonetheless no one will doubt that many of the donors hoped for something in their own self-interest from the donation and some are obliquely clear about their motivations, even while they try to put lipstick on the pig.

Whatever little fire may be under this smoke should allow Hillary to walk away from the scene, because she had a day-job during most of the foundation’s activity, and it was about Bill and how he spent his time, so it will stick more on his shoes than hers.   Looking at the list of the big donors and their connection to countries is a mixed bag.  Ukraine is a big hitter along with Saudi Arabia, but so are England, Germany, Canada, and India.  For the foundation they come off looking like a giant, unfocused slush fund of sorts with nebulous grab bag programs around economic development, healthcare and opportunities for women and girls.  Haiti has pretty much destroyed any mantle of success around development.  Some of the drug pricing arrangements, particularly in Africa have been significant but won’t stand tall enough in a storm, and the advantage of the women’s programs is already being undercut by criticisms focused on contributions from countries with abominable policies for women.  The lack of clarity between the foundation, the Clinton Initiative, and likely political donors muddles even more.  A foundation policy of disclosing donation “ranges” rather than transparent amounts and information is also not something that going to get them any kind of good governance award from the Journal of Philanthropy. 

You just wish they stood for something more firmly that could give a better explanation to the controversy.  I’m no huge fan of billionaire Bloomberg, but I have to respect the fact that he hates smoking and traffic deaths, guns, and sugar-soda fed obesity and is willing to put his money behind his mouth and step into controversy about it.  He can because it is his money after all, so critics be damned.  The Clinton Foundation is a channeling agency for the rich, whether people, governments, or corporations.  The Clintons are certainly rich themselves now, but not Bloomberg, billionaire rich, and this is where a history of messy and the message get woefully mangled.

In short, for Hillary the foundation controversy itself is one she can outrun and outlast.  Perhaps harder will be the general “guilt by association” problem not with individual donors and suspect governments, but the huge distance she has opened up between how she rolls with the rich and the rest of us.  Way past peoples’ boredom with any foundation issue will still be a nagging feeling that her crowd is not our crowd, and solving that problem is not a matter of convenience, but of urgent necessity.

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The Chemical Worker’s Song by Great Big Sea

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The Lessons of Philanthropy Leverage: Bloomberg, GiveWell, and Walmart

Source: givewell.org

Source: givewell.org

New Orleans  There were three pieces about philanthropy oddly found together in the New York Times recently, that though they came from surprising sources, in some instances made very interesting, and amazingly accurate, even if sometimes depressing, points.

            One was an interview with billionaire, former New York City Mayor, Michael Bloomberg, about his notions of philanthropy having given out over $3 billion already with plenty of more where that comes from.  Ironically, of all people, he was quoted telling a story about the arrogance and ignorance of wealth.  Seems a hedge fund guy cornered him behind a cactus plant a couple of years ago when he was Mayor and with a mixture of enthusiasm and intrigue told him he and his buddies would raise a billion to totally change the city’s school system over the coming couple of years, so “How about that, Mr. Mayor?”  Bloomberg seems to have said, “Great,” but also mentioned to him that the school system spent $22 billion per year in New York City.  He says he never heard from the guy again.  These guys know numbers, so the cactus schools’ conspirator could easily tell that Bloomberg was math shaming him that essentially one penny on a dollar, $220 million per year on $22 billion, was not going to be enough to leverage change.  The morale of his story:  the people through their collective contributions, otherwise known as taxes, have way more money than the richest billionaires combined.  The reminder for the rest of us, is that this is why they try so hard to use their little to leverage our lot in the direction they want to go.

            Unfortunately, that morale and lesson was presented elsewhere as a case study for how the Walmart Family Foundation has spent $1 billion over recent years to try to twist public schools in their more conservative, ideological direction.  Their spokesperson was less self-aware than Bloomberg, simply spouting a sophomoric rationality about it being better to help somebody, even if you couldn’t help everyone, rather than dealing with an honest analysis of their impact and investment.  The irony that a family that has made billions from its low price appeal to low-and-moderate income families, spends money to attempt to create elite alternatives to mass education, often in the name of minorities and the poor, was lost on him, the family, and the foundation.

            The third, and most refreshingly honest, appraisal was a piece on something called GiveWell, that had promoted a pristine kind of view of philanthropy on the premise that if they collected sufficient data on charitable organizations and their efforts, they could create trust from donors and make a difference.  Unsaid was that the premise that drives such an outfit is in equal measure a profound distrust of charities rooted in a belief that they are mismanaged and handled money and operations poorly, and a belief that data is pure and objective.  After pursuing this data-driven strategy for some years, GiveWell seems to have stepped back from its claim in making recommendations that its chosen charities are “proven, cost-effective and underfunded,” to now simply saying they are “evidence-backed, thoroughly vetted and underfunded,” recognizing that the only true reality in the work may not have been GiveWell’s initial prejudices, but the fact that the charities were underfunded.  In a refreshing piece of honesty, they seem to have even concluded that “the cost to seek the data may outweigh the benefits and that the data might not be all that reliable anyway.”  Actually organizing in more than a dozen countries, I won’t bore you with how hard it is for me to get monthly reports, much less something that would look like something to the data crunchers!

            The lessons the GiveWell boss has learned though only go so far.  He still believes that somehow more “transparency…will unlock an unbelievable amount of money if only people have trust in where it is going,” proving mainly that either his initial prejudices remain profound or that his naiveté about how much philanthropy is driven simply by tax policy rather than the desire to do good remains unblemished, even while the percentage of charitable giving by the rich continues to drop while their wealth soars to unbelievable heights.           

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Big Claims and Baby Steps for Corporate Social Responsibility in India

CSR wall painting at Xavier Institute of Engineering

Mumbai    A week ago in Delhi I read an interesting argument on the op-ed page of the Economic Times by Kiran Karnik in which he argued that businesses in Indian needed to start going beyond the simple limits of corporate social responsibility (CSR) and begin a direct “engagement with the government and, importantly, civil society organizations on matters of social consequence – going beyond the narrow interests of business.”  He mentioned examples including land acquisition (development), environment, mining, and water, but the list could also include sanitation, education, housing, poverty, and more.  Such engagement he reasoned was superior to the simple (and sometimes simple-minded) rupee-based “philanthropy” of CSR because he called on corporations to use the full range of their power and influence, including on issues like human rights, corruption, governance, and even accept “a duty to promote the welfare of all citizens, to democratic and egalitarian values, and to the country….”

Part of the backdrop for such a high-minded call arises from an increasing consensus in many sectors of Indian society that holds that solving some of India’s more intractable problems requires a different level of CSR for its companies.  There is discussion about making CSR a mandatory expenditure for all companies.  As Karnik indicated, “The new Companies Bill may well include a clause on this [CSR] – probably a ‘comply or explain’ provision.”  Heady stuff!

On the ground level we are ready for a lot more CSR to meet the huge needs for support for ACORN’s organizing in Dharavi and elsewhere in India, but our experience with the reality is often with baby steps from smaller outfits, rather than the big claims made by Karnik.  Many of our partners have developed relationships with us that are remarkable, like the Blue Frog jazz club, the Xavier Institute of Engineering, the American School and others.  Sometimes the lessons of CSR are harder.  A bank with 125 volunteers wanting to paint classrooms ended up making the wall around Xavier more lively, but having their eyes larger than their stomachs, we ended up scrambling to pay for the paint!  In other cases companies have met our desperate needs for space by offering to build sheds next to temples, not realizing that a significant percentage of our wastepickers are Muslim!   We hope we’ll get there certainly, but the learning curve is steep and requires a lot of bridge building.

It would be interesting to see if India made CSR mandatory or at least a default that had to be addressed.  The gap between common or community interest proposed by Karnik and the more common first impulses of many business here “to build their brand” or claim they are “doing good” in some marginal way, regardless of the practice, are still mostly “business as usual” for CSR in India.   Of course that’s not surprising really, since that is also the way CSR works in the USA, Canada, and most of the rest of the world as well.

discarded books donated by the American School

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