Worth Knowing: From Best Practices To Next Practices
In Search of Long-Term and Sustained Philanthropic Impact
This past decade has seen much public attention on philanthropy due, in part,
to significant gifts by some well-known philanthropists — such as Warren
Buffett — and some notable scandals. Even after the most significant economic
downturn since the Great Depression, the U.S. "is still home to the most
generous people who care and remain committed to supporting nonprofit
organizations and the philanthropic world." In fact, in 2015, giving in the U.S.
was estimated at $373 billion.1
While challenges over the years caused the field to focus on practices to
improve the efficiency and effectiveness of philanthropy, current challenges
require an even deeper demand of philanthropy's ability to address the
most pressing problems of our time, amid continued economic uncertainty,
government budget reductions and an increase in demand for services. Given
these concomitant forces, it has been said that we are entering into a "new
normal" that will force all of society to "manage more aggressively against
scarcity," including philanthropy.2
This article addresses key practices that foundations would do well to focus on
and incorporate in order to increase impact in the context of today's and the
AN AMERICAN TRADITION
Philanthropy has its roots in religious beliefs, and in values and
principles of civic participation. Throughout history, civilizations
have used personal resources to assist those who were less
fortunate. Philosophies supporting civic participation and shared
approaches to problem solving were readily embraced by early
settlers of the New World — government was distant and weak,
which forced settlers to join together and help each other to
build community and support the public good. In 1630, John
Winthrop preached "A Model of Christian Charity" to Puritans
bound for New England, emphasizing the obligation of the rich
to care for the poor, and the obligation of the poor to do the
best they could.3
John Harvard's gift to the institution that now bears his name
is considered one of the earliest philanthropic gifts in America.
Harvard bequeathed £779, half of his estate, and his library
of around 400 volumes to the new college in Cambridge,
Massachusetts, upon his death in 1638. In 1639, the school
was renamed Harvard College in honor of its first benefactor.
Fast-forward 150 years to 1789 when Benjamin Franklin
set up a charitable fund with "a thousand pounds of sterling"
(about $4,400 at the time) to benefit worthy young Philadelphia
apprentices and to support worthy projects in Boston. The fund,
a precursor to the current-day private foundation, terminated
200 years later, awarding over $2 million to charity.
In addition to wealthy individuals, persons with relatively little
worth also shared their resources with others. In 1887, Denver
religious leaders founded the Charity Organizations Society, the
first United Way organization, which planned and coordinated
local services and conducted a single fundraising campaign for
22 agencies. The first campaign raised $21,700. However, it
was not until the Industrial Revolution, when many Americans
amassed great wealth, that organized philanthropy had a
significant presence. In 1911, Andrew Carnegie set aside
$350 million in a fund to benefit charity; in 1913, John D.
Rockefeller set aside $580 million, creating the first private
foundation. These foundations, which were created before
personal income tax deductions for charitable gifts were
allowed in 1921, are still at the forefront of philanthropy.
1 Giving USA Foundation™ | Giving USA 2016. The Annual Report on Philanthropy for the Year 2015.
2 Rip Rapson, "What's Next: Philanthropy in an Age of Government Retrenchment," from Remarks at the Memphis Alliance for Nonprofit Excellence and the Minnesota Council of Nonprofits,
3 John Beardsley, "A Model of Christian Charity," by John Winthrop, 1630.
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