“‘I just want to know we made a difference’, one multibillionaire philanthropist, in her sixties, told me”, writes Phil Buchanan in the introduction to his recently released book “Giving Done Right: Effective Philanthropy and Making Every Dollar Count”. How to make a difference, how to be most effective and achieve the greatest impact is at the core of the book. Buchanan, founding executive director of the Center for Effective Philanthropy, takes us to the inner circles of nonprofit and philanthropy leaders, their successes and failures, their ambitions and unfulfilled aspirations. An essential read for donors and foundations who seek to improve their giving strategies and learn from other’s experiences.
Myths Surrounding Philanthropy
Written from a practitioner’s perspective, Giving Done Right debunks some of the widespread myths surrounding philanthropy and argues that it is important to understand the unique role of the nonprofit sector and its challenges. Thus, in “You Can Read a Balance Sheet?!” (p. 13), Buchanan demonstrates that, unlike the common misconception goes, nonprofit and philanthropy managers and leaders are no less talented than their counterparts in business. Sometimes challenges that they are facing are even larger and require not only financial and legal expertise but also management skills and the ability to tackle complex societal problems.
“Donors’ overhead obsession” (p. 22) is another issue Buchanan critically addresses. He demonstrates how important core funding is to make the nonprofit sector more robust and resilient. Instead of prescribing overhead ratios funders should focus on the results. Core funding allows nonprofits to invest in their professional development, use of technology or long-term strategy. Overhead costs, he concludes, are a poor indicator of the nonprofit’s performance. If there is mutual trust and understanding of the desired social outcomes, donors should provide nonprofits more flexibility and resources for long-term planning and allow more flexibility. While the importance of supporting not only programmes but also organisations becomes more and more evident, research on the nonprofit sector suggests otherwise. “Fewer than 8 percent of the grants represented in CEP’s data are unrestricted, multiyear, and six figures or more annually. For 30 percent of the hundreds of foundations in our data set, fewer than 2 percent of grants have these characteristics” (p. 119-120).
Giving Is Not Like Business
One of the strongest and convincing arguments of Giving Done Right is Buchanan’s critique of contemporary business-approaches to philanthropy. Giving is not like business, he argues, though many donors treat social problems as investment objects, disregarding the complexity of these problems and their roots.
Philanthropy and the nonprofit sector are not about competition but collaboration. This sounds very simple, if not even banal. However, it is not. While some foundations take long-term strategies seriously and invest huge resources in their implementation, they often do not share the insights with the wider community. Often funders seek to find solutions in isolation. Admittedly, no one likes talking about one’s own mistakes and failures. And yet, this is how we can learn and ultimately tackle difficult issues.
While unique strategies and positioning make sense in a competitive environment, they do not apply to giving. Buchanan emphasises the danger of applying business thinking to giving. “Goal selection shouldn’t focus on uniqueness. Quite the opposite – it should happen with an eye toward overlap and opportunities for collaboration” (p. 72), he writes, and one cannot agree more. This is what the recent report by Beyond Philanthropy, now Wider Sense, found out in the European context: foundations and philanthropy support organisations need to work together and to align their goals in order to meet the most pressing challenges in today’s radically changing world.
Philanthropy Under Scrutiny
Giving Done Right was released in spring of 2019, following the publication of Anand Giridharada’s bestselling “Winners Take All: The Elite Charade of Changing the World” in August 2018 and Rob Reich’s “Just Giving: Why Philanthropy is Failing Democracy and How It Can Do Better” in November 2018, two most influential books criticising the role of philanthropy and its negative impacts. One would have expected Buchanan, who has an extensive knowledge of the foundation sector and is a fervent advocate for the unique place and power of philanthropy in our societies, to engage with these critiques. However, he hardly does.
Unlike Anand Giridharadas, Buchanan is not interested in the source of giving or how philanthropy is interrelated with wealth and politics. Unlike Rob Reich, he is not seeking answers to the question whether giving is just and why philanthropy has an uneasy relationship with inequality. Instead, he writes: “We tend to focus on the challenges and problems we see. After all, there are many today, including disturbing threats to our democratic institutions, growing inequality, and a rising tide of racism.” (p. 5).
Driven by his practical experience in the foundation and nonprofit sector and his profound knowledge of the giving practices in the United States, Buchanan is passionate about providing a guidance to funders and donors, not in assessing the role of philanthropy in today’s societies, its contributions and failures. How philanthropy can be most effective and strategic is guiding his thinking throughout the book. Donors need clear goals, implementation strategies, trustworthy partners to pursue these goals and a thorough analysis of performance indicators. Furthermore, Buchanan provides recommendations to donors on how to build supportive, strong relationships with grantees.
Based on decades of experience in advising nonprofits and foundations in the United States, Giving Done Right will be of interest to donors, foundations staff, nonprofits, philanthropy support organisations and researchers both in the US and around the globe.
Dr. des. Hanna Stähle
Hanna Stähle holds a PhD in Slavic Cultural Studies (summa cum laude) from the University of Passau. She is Aide to the General Secretary of the Association of German Foundations and Project and Communications Manager at DAFNE. Follow her on Twitter: @Hanna_Staehle.