Philanthropy is in trouble. Giving USA reported a decline in giving by individuals in 2018, likely driven by changes in the tax code to dramatically reduce the number of itemizers who benefit from the charitable deduction. An end of year drop in the stock market that year probably didn’t help, either. Meanwhile, data from a variety of organizations tell us the proportion of households that give has declined over the past decade, that even the very wealthy are donating at a very low level relative to their assets, and that young people are contributing at low rates. While it is true that a majority of Americans still give — and donation levels are high relative to other countries — the warning lights are flashing.
Fund-raisers at nonprofits confide to me that this already challenging environment has become more difficult thanks to a constant, unnuanced critique of philanthropy
fueled by understandable frustration about income inequality. They worry some donors will cut back or bow out of philanthropy altogether if charitable giving loses its luster.
People are questioning the motivations and impact of big donors — and even the broader philanthropic and nonprofit sectors. The year began with Dutch historian Rutger Bregman deriding the “stupid philanthropy schemes” of the elite gathered at the World Economic Forum in Davos, Switzerland, in what became a viral moment. Others, like Stanford philosopher Rob Reich, carried the flag, too, arguing that philanthropy is just another way for the wealthy to exercise power in our political system, despite the fact that a small proportion of giving goes to policy efforts.
Leading the charge is writer and Time magazine editor Anand Giridharadas, who has moved from often thoughtful critique in his book, Winners Take All: The Elite Charade of Changing the World, to broad-based generalizations on Twitter like “philanthropy launders bad reputations,” and, most outrageously, in an appearance on MSNBC, “nonprofits are a very crucial part of how the rigged system gets rigged . . . as enablers for plutocrats to continue to harm society.” The cynicism has intensified as it has become clearer that a few individuals who did hideous things — from the Sacklers of OxyContin infamy to disgraced financier Jeffrey Epstein — sought to use their philanthropy as a way to legitimize themselves and perhaps distract from wrongdoing. But, of course, the Sacklers and Epstein are no more representative of donors broadly than Jayson Blair and Stephen Glass — journalists infamous for making up stories out of whole cloth — are representative of print media. That distinction matters, because the tendency to paint all donors with the same broad brush risks undermining a great American tradition of giving back.
Critique is healthy, of course, and some of it has merit. I myself have been a vocal critic of many specific instances of ill-conceived, ineffective philanthropy. But we need to be sure to remember the good that giving can — and does — do. After all, America’s 1.5 million nonprofits doing vital work will pay the price if individual giving to charity continues its decline. That’s why everyday donors, mega-donors, and everyone in between must step up in these final days of the year, when a disproportionate share of charitable giving occurs.
America’s nonprofits are depending on us. Most of them are small and community based, with annual budgets of less than $1 million. Their staffs are often underpaid. Many are doing crucial, heroic work and generating great results. In my role at the Cambridge-based Center for Effective Philanthropy and while researching my book, Giving Done Right: Effective Philanthropy and Making Every Dollar Count, I’ve reviewed survey data from tens of thousands of nonprofits and spent myriad hours with nonprofit leaders and staff.
Nonprofits don’t get the respect they deserve in part because society fails to recognize how uniquely challenging their work is. Unlike in business, there isn’t a single universal metric by which you can gauge results. Instead, nonprofits need to communicate clearly what they’re trying to do, how they approach doing it, and how they know that they’re generating results. Donors should look for organizations working toward goals they care about that can persuasively make that case. GiveWell.org and TheLifeYouCanSave.org vet nonprofits based on their results against their stated goals. And community foundations can match donors with nonprofits that are a good fit.
People should consider supporting local, often unsung organizations like UTEC in Lowell, which helps young people escape street violence by giving them work in one of its social enterprises, including a mattress recycling facility and a cafe. On any given day, UTEC’s workers are at the bedside of someone injured in a gang-related shooting or visiting a gang member in prison, for instance. The overwhelming majority of young people who enter UTEC’s programs stay out of jail and remain employed.
Though some giving is, of course, motivated by ideology, many community-based nonprofits I have visited count Democrats, Republicans, and independents alike among their donors and volunteers. Political distinctions tend to fade away when Americans are working together to help others. Sometimes, philanthropy helps solve problems entirely, as has happened with the virtual elimination worldwide of polio and other diseases. Other times, philanthropy salves wounds from problems that haven’t yet been solved.
In this challenging time in our country’s history, when so much divides us, we can be grateful for the donors and the nonprofit workers and volunteers who are doing their part, often in virtual anonymity, to help others. And, if we haven’t already, we can join in and support them. It’s never been more important.
Phil Buchanan is president of the Center for Effective Philanthropy and author of Giving Done Right: Effective Philanthropy and Making Every Dollar Count, published this year by PublicAffairs. Send comments to email@example.com.