Tag Archives: the philanthropic mind

In philanthropy, a deal is not always a deal

DealPhilanthropic gifts are not like business deals. That’s despite the fact they often involve tens of millions of dollars and some of the world’s most successful business people. When the terms of a business deal change and are at odds with the original agreement, no one disputes the right of either party to pull out. But when it comes to philanthropy, the rules, behaviour and attitudes are different.

A great example is a story that appeared in the New York Times last December. It details the saga of the beleaguered Paul Smith’s College that successfully solicited a $20 million naming gift from prominent philanthropists Joan and Sanford Weill. There was however a small problem. It seems that the school’s founder and original benefactor had, as part of his testamentary gift to school, stipulated that it forever be known as Paul Smith’s College of Arts and Sciences. The school’s creative solution was that it would change its name to Joan Weill-Paul Smith’s College.

It seemed like a win-win. The terms of the Smith beneficiary gift were maintained while providing the Weills with the recognition they sought. Not so fast. It seems that although the college was operating at a deficit, there were many who objected to the agreement and the whole matter was forced into the courts. A judge eventually ruled that the evidence of financial hardship was insufficient to allow the name change.

With the deal no longer viable, the Weills withdrew their gift. That seems not only fair but also unquestionable. Apparently, not everyone agreed. A lawyer representing the alumni association said it was unfortunate that the Weills were not going ahead with the gift and vilified them by saying, “If they really wanted to give a gift to the school, it shouldn’t be contingent on something as self-glorifying as naming the school after Mrs. Weill.”

Hang on a minute. The terms of a multi-million dollar deal can’t be met but when the agreement falls apart, one of the parties is subject to harsh criticism. That would never happen in a business deal.

Interestingly, in our interviews with Canada’s top philanthropists, we discovered that the Weills may be an exception in the world of philanthropy. Numerous top donors told us about gifts that had gone wrong but amazingly, in almost every instance, the philanthropist had continued to support the organization. We’re not talking about small oversights. These are cases where the terms of the donor agreement were not met, where funds were not used as stipulated and in one case, where a donation had been used to build a library instead of a gym. And yet, in almost every instance, the philanthropist remained a supporter of the organization.

Jay Hennick’s comment likely resonates with many donors. “What I really should have done is said, ‘Give me back my money.’ But I didn’t think it was the right thing to do.”

Whether it was the right thing or not, it’s clear that the rules for philanthropic deals are definitely not the same as those for business deals.


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Should philanthropy be risky business?

risky-businessMany of the world’s most prolific philanthropists made their money by taking risks. But do they have the same appetite for risk when it comes to their philanthropic endeavours?

Certainly, many of the projects funded by the philanthropists we interviewed were groundbreaking and inherently risky. The joint JD/MBA programs that Jay Hennick wanted to create at both the Universities of Ottawa and Toronto were one-of-a- kind in Canada. Through his insistence on collaboration, Carlo Fidani frequently brings together individuals and institutions that have no prior experience working together, creating situations in which results are far from guaranteed. In his advocacy work on behalf of the charitable sector, Donald Johnson has staked his personal reputation on many initiatives with no promise of success.

Many of those we interviewed spoke directly about risk. In analyzing the risk versus the results of the medical research projects he funds, Mark Krembil told us, “…. but I am looking at getting results. So if I spend $100,000, I understand the risk. It’s like an investment. It may be worth nothing …. And if I’m lucky, more than skilled perhaps, I’ll hit a home run and that’s kind of what we’re after at the end of the day.” In describing his support for a new genre of educational institution, Gil Palter said, “So we are one of the handful of founders, people who effectively put up venture capital, the risk capital to open the doors …”

That’s a great segue to a very thought provoking item that recently appeared in the Stanford Social Innovation Review. The article, titled, Philanthropy: The New Risk Capital?, links the need for early stage research capital with the philanthropist’s “growing demand for more impact from their charitable dollars.” Author Christian Braemer draws this conclusion. “Providing donors with open access to research funding, increased giving efficiency, and facilitating greater engagement through a modern marketplace will boost innovation funding and increase overall giving, if for no other reason than by creating an experience that simultaneously appeals to both the heartstrings and fiscal sensibilities.”

What’s really intriguing is that this new approach to philanthropy “… allows savvy entrepreneurs-turned-philanthropists to incorporate the strategies, wise investments, and risk-taking that anchored their own successes in business, and at the same time solve major problems in the innovation life cycle.”

We’re not sure that all of the top Canadian philanthropists we interviewed are ready for this new giving paradigm. For many, however, the ability to use the risk-taking profile by which they earned their wealth as a means of maximizing its philanthropic impact will prove very attractive. For them, philanthropy as risky business may, in fact, be good business.

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Is philanthropy really altruistic?

hand_heartThat may seem like a ridiculous question. If someone donates money to help other people or causes, clearly he or she is being altruistic. But hold on a minute. What happens if you enjoy or take pride in the support you provide?

In our interviews, more than one of Canada’s top givers questioned whether philanthropy was truly altruistic. Honey Sherman made the point succinctly. “If you feel satisfied about your help with [causes] then you are no longer being totally altruistic.” Or as Aditya Jha put it, “Philanthropy is giving to yourself.”

For those who are uncomfortable with the tension between philanthropy and altruism, Honey provided reassurance when she told us, “It’s okay by the way to do a selfless thing for selfish reasons.”

Seth Godin picks up the point in a recent blog post appropriately titled Narcissistic Altruism. He rightly contends that, “Everyone who does good things does them because it makes them feel good, because the effort and the donation is worth more than it costs.”

It’s interesting that so many of those who give the most in Canada told us about the many ways in which they have benefitted from their philanthropy. Maybe Honey Sherman is right when she says, “there’s no such thing as true altruism.”

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10 Surprising Major Gifts Discoveries

We’re really excited to be presenting ten of the most surprising and meaningful results of our research at the AFP Congress in Toronto on November 19. This is the first time we are  sharing anything from the research we have been conducting over the past year and a half. Our interviews with many of Canada’s top philanthropists revealed points of view and attitudes that could not possibly have been predicted. Those that attend the session will undoubtedly leave new with insights and perspectives that will make them better major gifts fundraisers.

Obviously there were many more than ten surprising discoveries and the truth is we had a hard time narrowing it down. While we will leave our top ten for the AFP session, we thought you appreciate hearing about those that didn’t make the cut. In the coming weeks, we’ll present you with the findings that round our top 20.

We look forward to sharing all of our research and insights when the book is published in the spring of 2013.

Now, back to preparing for that AFP Session….

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Philanthropic Personalities and Trends, July 13

While we are completing the manuscript of The Philanthropic Mind, we still keep our eyes fixed on what’s happening in the world of philanthropy. We are particularly attuned to stories that explore the lives, attitudes, opinions and accomplishments of philanthropists. Trends in philanthropic giving are also on our radar.

For those who share an interest in the enterprise of philanthropy, we thought we would share the best of what we have read. We hope you enjoy these.

1. An interview with Alexander Soros, son of George and a next generation philanthropist. From Alliance Magazine

2. Charles Bronfman’s views on philanthropy and the “edifice complex.” From the Globe & Mail.

3. Inspiring proof that you don’t have to be rich and famous to be a “hero of philanthropy.” From the Tapei Times.

4. Here’s a great way to get the next generation of philanthropists involved. From Forbes

Two views on whether Silicon Valley’s new titans of technology are as charitable as they should be
5. The positive approach from Wall Street Journal
6. And the approach that challenges from Non Profit Quarterly

7. In our interviews, cultural differences in attitudes to philanthropy were very apparent. Here’s an encouraging piece on the rise of high net worth philanthropy in India. From NDTV.

8. And finally, here’s an interesting trend – boomers are less likely to leave their wealth to their kids but more likely to bequeath it to charities. From Non Profit Quarterly

Hope you enjoyed these. We’ll be posting more in the weeks to come.

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Five Definitions of Philanthropy and one Shocker

What is philanthropy?

Well, the Oxford dictionary will tell you that philanthropy is “the desire to promote the welfare of others, expressed especially by the generous donation of money to good causes.”

But how do philanthropists define philanthropy? Our interviews with many of Canada’s top philanthropists have revealed a number of interesting and thought provoking responses. Here is a small sample.

Some of the responses were what we expected to hear.

  • Philanthropy is an obligation of the rich. If you have a lot of money you have the obligation to give back.
  • Philanthropy is giving money AND giving time.

Others revealed a more intellectual response.

  • Philanthropy is a partnership between the individual, institutions and government.
  • Philanthropy is a system of giving – a way of life – as opposed to a series of small charitable acts.

Some were brutally honest.

  • Philanthropy is work. It involves investing the time to give consideration to options and proposals and then making appropriate decisions.

And then there was one response that really made us take a step back.

  • Philanthropy is a status symbol. It’s another step into the higher profile demographic. It means you’ve hit success.

We had to consider whether this philanthropist was a flaming ego-maniac or simply a realist? At first it seemed crass, particularly juxtaposed with the humility of so many of those that we have interviewed. But it’s hard to deny that having your name on a building reflects a measure of wealth – which in our society is certainly equated with status.

There are other indications that this philanthropist may in fact be right.

The reality is that this century has seen giving become a more admirable value. In the past five years the Trendwatching organization has identified at least two consumer trends that are adding value to giving. In looking at spheres of status, they identified the Giving Sphere and said, “whether it’s giving away your riches, your time … giving is the new taking.” And in their report on what they call Generation G, they say “for many, sharing a passion and receiving recognition have replaced ‘taking’ as the new status symbol.”

The Gates/Buffett Giving Pledge and the rise of corporate philanthropy are indications of the same trends.

This small sample of responses certainly demonstrates that there is much to be learned from listening to what Canada’s philanthropists have to say. We look forward to telling you more.

In the meantime, we’d love to hear what you have to say. How do you define philanthropy?

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Size doesn’t always matter

Does the size of a philanthropic gift determine its meaningfulness to the donor?
In one of our recent interviews with Canada’s top philanthropists, a donor told us that his first meaningful gift and the one that may have given him the most pleasure was $200 to the university of which he was an alumnus. Not surprising. But what he told us about the rest of his giving history to the institution deserves attention. His most recent gift is quite significant – in the mid seven figures. However, he can recall little detail and nothing notable about all the gifts between the $200 gift thirty years ago and the multi-million dollar gift most recently.

Listen to his words in describing that first gift. “A couple of hundred bucks felt significant at the time. I was only making about $30,000 a year. It was my alma matter and I had a good time there and obviously universities need money. It wasn’t necessarily meaningful financially but it was meaningful spiritually.”

This is what he had to say about the intervening gifts. “Had I committed to other [gifts] before that of lesser amounts? Probably, but I don’t even remember any more. I might have agreed to a gift of $50,000, which at the time seemed significant but today I don’t even remember making the gift. I guess there had to be other gifts that preceded it [the multi-million dollar gift] because you just don’t one day donate that much money.”

What’s going on here? This is an intelligent and very successful businessman. Is it possible that he has forgotten the many intervening gifts? I don’t believe so but it appears he has forgotten their significance. And before we’re too critical, let’s face the fact that he did end up being an extremely generous supporter of the institution. So, all was far from lost.

So what was lost by the forgotten significance? Who knows for sure. Perhaps he would have given more. Perhaps he would have been a stronger advocate for the institution, helping to solicit other gifts. Perhaps if he would have spoken as “spiritually” about all his gifts, more people would have been motivated to give.

The message to today’s fundraisers is to try and make every gift as meaningful as that first $200. This donor had a strong sense of affinity, felt deep responsibility, perceived the need and was sure his gift was going to accomplish something. And he felt great – spiritual – for making it. What if every donor could feel that way about every gift.

There’s also an important lesson to those just embarking on a philanthropic career. The number of zeroes in the gift amount won’t always make you feel better. There are other, more significant considerations. Take the lesson learned from this philanthropist and remember that when it comes to meaningful philanthropy – size doesn’t always matter.

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