Are Philanthropists Too Ambitious?

(By Kasia Moreno)

Not only are philanthropists hugely ambitious, they also want to make their own mark. When asked how they realize their philanthropic ideas and goals, the highest percentage of respondents (34%) said that they look to their own business experience, while the smallest percentage (20%) said that they partner with experts in the field. The reason for this determination is often their success in business, which they want to repeat in philanthropy.

Much like the field of high technology, philanthropy has now become a frontier and incubator of creativity and innovation. Some of the world’s greatest entrepreneurs, academics and artists have devoted themselves to creating systemic change, fostering economic development or scaling up giving.

Ambition prevails among philanthropists. Forbes Insights  released a report about a year ago (sponsored by Credit Suisse), which I edited, “Alleviating Global Poverty: Catalysts of Change,” based on a survey of more than 300 wealthy individuals. A full 73% of these wealthy individuals say they seek to affect international or government policies right at the start of their giving. It is, of course, true that ultimately global poverty cannot be eradicated without the right international and national policies. But is shaping those policies too tall a task for an individual philanthropist?

Not only are philanthropists hugely ambitious, they also want to make their own mark. When asked how they realize their philanthropic ideas and goals, the highest percentage of respondents (34%) said that they look to their own business experience, while the smallest percentage (20%) said that they partner with experts in the field. The reason for this determination is often their success in business, which they want to repeat in philanthropy.

But such ambitions lead to fragmentation in philanthropy, while the best way forward may lie in cooperation. “There are two crushing weaknesses with the philanthropic model today,” says Michael Porter, Harvard Business School professor and chairman of AllWorld Network, which aims to rank all the scalable growth entrepreneurs in the developing world. “There is not enough money to give away. And there is too much fragmentation and not enough large-scale impact. That is why we haven’t gotten a lot of great results yet.”

Intellectually, the wealthy understand this. Forty-eight percent of survey respondents agree that there are too many overlapping organizations within the non-profit sector. “If effectiveness is a goal, a philanthropist should ask himself or herself the question: ‘Will I be more effective on my own or with others?’” says Credit Suisse’s Bill Woodson, co-head of Private Banking Americas Ultra-High Net Worth Business, in the report.

It is beneficial to work with organizations that are established in the field and have much experience. While such organizations will tend to be biased toward solving a problem in a way consistent with their mission—an approach that may be at odds with the philanthropist’s point of view—they also are knowledgeable about other proven problem-solving methods, and also how other organizations deal with various issues.

But given the emotional component of philanthropy, the majority of new philanthropists want to put their unique stamp on their favored cause. “Though we understand the desire to put your own imprint on your philanthropy very strongly, we feel that often it would be more effective if you learn from others, collaborating on achieving systemic solutions to global issues,” says Woodson.

One solution to the tension between the intellectual and the emotional is to separate philanthropic activities into two or more categories—the ones where you can do a great job and give it your own imprint, such as local or region-specific charities, and those areas in which you cannot be the most effective without partnering or collaborating with larger charities, governments or corporate partners.

Source: Forbes

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