Giving With Impact

Today we're going to talk about family philanthropy, how families can manage conflict when it arises, and strategies for preparing a new generation of philanthropists to take the lead at family funds. We have three guests who have a vast amount of experience with family philanthropy across generations.

Participants:Host: Barbara Wheeler-Bride, Editor, Stanford Social Innovation ReviewKyle Endres, Executive Director of We Don’t Waste, a food recovery organization working with communities across the Denver Metro region Vince Hall, Chief Government Relations Officer at Feeding AmericaAlisia Robin, Senior Manager of Strategic Partnerships and Non-profit Outreach at DAFGiving360

In this episode, we’re going to share a conversation about the impact of elections on charitable giving, and how non-profits can engage in advocacy for policies that are crucial to the communities they serve.

In today’s episode, we’re going to talk about funding and supporting the arts, and art education. In recent years, many school districts across the United States have made the difficult decision to cut arts programs, including drama, music, and visual arts. Today, we’ll talk about the value of funding arts education in our public schools, as well as in communities outside the formal education system where the value of experiences with art are helping develop life skills, social and emotional skills, civic engagement, and more.

In its broadest sense, the field of impact investing can be defined as an investment strategy that seeks to generate financial returns while also creating a positive social or environmental impact. Impact investing is attracting growing numbers of organizations and increasing amounts of money. By some estimates there are nearly 200 registered impact investment funds, and many foundations, networks, and mainstream financial institutions are active in the field. Impact investing contains a range of expectations about appropriate financial and social returns. Some investors are drawn by the hope of earning substantial financial returns by investing in businesses that have a social mission, while others are drawn by the desire to achieve more sustainable impact than they could achieve through philanthropy alone. Although the growing interest in impact investing represents an opportunity for the social good sector and an important source of growth capital for social ventures, the excitement that surrounds the field is a growing source of concern. Exaggerated claims raise expectations about the ability of impact investing to provide both outsized financial and social returns, something that is not always possible. So, what should investors be considering when looking to have a positive impact in the world through their investments?

Traditional approaches to solving various social and environmental problems taken by government, philanthropy, and nonprofits have tended to focus on specific areas like housing, education, or health. But experience has shown us that these problems don’t exist in a vacuum. A recent article published in SSIR talks about the importance of placed-based strategies for addressing challenges faced by communities and outlines several new approaches being pursued to uplift these communities. Some organizations are achieving remarkable change by focusing on transforming place first and foremost, rather than focusing on specific problems or goals in a siloed manner. They pursue holistic place-based systems change. But what does this place-based approach look like in practice? And how can we help leverage resources and relationships to empower community and achieve lasting and transformative change?

Modern philanthropy provides us with a wealth of opportunities and approaches to help create the change that we want to see in the world. One such approach that continues to grow in popularity is the idea of collective giving, which often translates to giving circles. It’s estimated that there are currently over 2000 giving circles in the U.S., with over 150,000 people involved in these circles, helping to donate nearly $1.3 billion. Giving circles can provide donors with a way to increase both their knowledge and understanding of issues and solutions, and their impact on those issues, while helping them to connect with other like-minded donors in their community.

Since the late 1990’s, the philanthropic sector has been focused on data- and results-driven approaches, often referred to under the umbrella of “strategic philanthropy.” It can be argued that this thinking has strengthened the field of philanthropy in many ways, helping to bring greater rigor and focus to the hundreds of billions of dollars in annual charitable giving. At the same time, some have argued that an unexpected outcome of these practices is a distancing between donors and those grantees who are doing the work of effectively addressing issue areas, lessening their voice, and reinforcing systemic inequities. These critiques have led to the emergence of the movement known as trust-based philanthropy. At its core, trust-based philanthropy is about redistributing power—systemically, organizationally, and interpersonally—in service of a healthier and more equitable nonprofit sector. So, as a donor, how do you reconcile these two approaches? What does each mean for giving strategies? And are they really as disparate as some would believe?

Research tells us that there are certain resources most donors consult when starting to assemble a strategy for their philanthropy. These include peers, family, and well known, publicly-available sources of information on nonprofits like Guidestar or Candid. But among those top sources are also their existing financial advisors – people they already trust and are comfortable talking with about their finances. While many advisors may initially engage in financially-focused charitable conversations such as how much to give and the tax implications of various types of gifts, these discussions often become much deeper. They can include donors’ motivations and goals for giving, or the best ways to identify a cause or organization, and even how to involve their family in their charitable plan. So, how do you start these deeper conversations, whether you’re a donor or an advisor? And what does this sort of strategy entail? And – perhaps most importantly – how does all this planning help the organizations and causes that donors are looking to support?

So, you’re a thoughtful, impact-focused donor, and you’ve done your homework and identified some nonprofits that you’d like to support. But deciding what type of gift to make can sometimes be as challenging as knowing what cause to fund in the first place. Restricted gifts, unrestricted gifts, endowments – what are the differences, and what are the benefits of each type of gift? How can you ensure that your giving is helping to accomplish your overall philanthropic goals – your purpose for philanthropy, as it were.

A 2014 report by the Center on Wealth and Philanthropy at Boston College estimated that $59 trillion will be transferred to the next generation from 2007 to 2061, the largest wealth transfer in US history. Lifetime giving to charity in that same period is estimated to be $20.6 trillion. At the same time, there is an increasing desire among families to work together to use their resources to solve social challenges, with longer life spans and greater understanding of the benefits of multigenerational philanthropy having encouraged more multigenerational collaboration. And while a variety of challenges can compromise the work, successful intergenerational giving strategies can foster an ongoing tradition of giving, make an impact on issues the family cares about, and deepen family relationships. What contributes to these successful strategies?

Not only will C-19 continue to roil our lives and our society, but we also have to think realistically, and accept the likelihood that other disasters may arise while we still attempt to deal with the one at hand. What can the philanthropic sector’s response to past disasters teach us about our current crisis, and what can we do to prepare for the inevitable fact of other crises that may emerge?

The philanthropic sector has weathered many challenges; but nothing matches the scope and speed of the impact of the COVID-19 pandemic. What are the areas of most pressing need? How can we think about selecting the most effective nonprofits to address those needs? How can individual donors respond to multiple needs arising from a global pandemic?