Bottom Line: Tierney and Fleishman have a ton of experience and have written a good book aimed at foundations and philanthropists. They advise people concentrate their giving on “fewer/bigger/longer” projects and proactively go out to seek world-class organizations that are already working effectively in the area of interest.
The Stanford Center on Philanthropy and Civil Society (PACS Center) hosted a talk last Thursday night by Tom Tierney and Joel Fleishman, the authors of Give $mart. Bill Meehan moderated.
The book centers around 6 questions:
- What Are My Values and Beliefs?
- What Is “Success” and How Can It Be Achieved?
- What Am I Accountable For?
- What Will It Take to Get the Job Done?
- How Do I Work with Grantees?
- Am I Getting Better?
This approach (starting with values, tracking metrics, and looking for continual improvement) resonates with me and the approach that I outline in Giving Back.
There were some interesting stats quoted:
- The Non-profit sector in the US is about $300B, or 2.2% of GDP, #1 world-wide. Runner-up UK accounts for only 0.8% of GDP.
- The Boomer generation will be passing some $40 trillion on to successive generations, as much as $6 Trillion of it might go to non-profits.
The Emergence of Venture Philanthropy
They made the controversial assertion that “Philanthropy’s natural state is underperformance.” Saying that it does good, but could do more if attention were paid to how to give money. Tierney noted that the mid-90’s marked an inflection point for not-for-profits. Since then, a language for social change has emerged (“social return on investment, social entrepreneur”), and we’re seeing a talent transfer with business people like Omidyar, Gates, and the Bridgespan partners leaving their business roots to focus on working in philanthropy (but bringing their business point-of-view and skill set). There’s also a whole new level of information transfer with Stanford Social Impact Review (the new “journal of record” for the non-profit space, according to Fleishman) and papers and case studies published by Bridgespan–with this much shared learning, there are bound to be fast changes in the space.
The authors noted a change in funding strategies where historically, most foundations have been set up to last “in perpetuity”, while more of the current generation philanthropists are creating “spend down” foundations, so they will see the results in their lifetimes, or the money will be spent within the next generation. It gives the foundation management a different mindset if they don’t have to preserve the institution forever.
Andrew Carnegie, the Original Engaged Philanthropist
Fleishman described Andrew Carnegie as the prototype of an engaged philanthropist: At age 36, Carnegie said that he would devote the rest of his life to giving away what he had earned. His innovations included the creation of TIAA-CREF (to provide pensions for educators) as well as the first Challenge Grants (offering to fund the building for a library if the town would pay its ongoing operating cost and buy the books. He constructed 2500 libraries on those terms.) He also worked to bring world leaders together to avert World War I, and created the Carnegie Institute (later part of CMU.)
Silicon Valley vs. East Coast Philanthropy
Asked about the differences between Silicon Valley philanthropy compared to the traditional power centers on the East Coast, the authors noted that there is more of an orientation to experimentation here “Let’s try it and see what happens,” with a willingness to experiment outside the conventional boundaries.
“Overhead” as viewed by Business and Non-Profit Leaders
They pointed out an interesting difference between the for-profit and the not-for-profit world. Businesses proudly proclaim “Our people are our most important asset.” and payroll is commonly 25% of costs. But when those same business leaders shift over to the non-profit space, that “most important asset” suddenly becomes “overhead” and is squeezed to 12-15%.
Advice for Your Philanthropy
Tierney and Fleishman strongly encouraged philanthropists to be “not merely giving your money–giving yourself, your time. Put your life into it!” “If you don’t the things you really care about, you’ll just give money–not time, not get your friends involved.” These personal connections with causes are the “anchors” that keep you going and prevent you from just being adrift.
A personal thanks….
Tom and Joel were signing books at the event, and I was really impressed that they not only took the time to sign them, but listened to me as I explained my interest in their work, and personalized the dedication, offering their best wishes for the success of Giving Back!