The role of the donor

If philanthropy is to be promoted it needs to come out of the closet – yet it remains a taboo topic.Research reveals a move towards more active philanthropy; donors want to have more of a voice in their giving, yet organisations they support are failing to allow them in. Here we explore how philanthropists can be empowered to become more dynamic donors.

In a recent BBC News at Ten interview on how philanthropy might be promoted, film producer and politician David Puttnam perhaps spoke on behalf of many philanthropists when he referred to the largely US practice of naming as "tacky".

British philanthropists are more shy than their American counterparts. They tend not to feel comfortable having their name emblazoned on the projects they fund, as is the norm in American philanthropy.

Art collector Charles Saatchi in donating his £25m collection and eponymous London gallery to the nation has perhaps started a reverse movement - he has 'un-named' it, requesting it be known as the Musuem of Contemporary Art. It's a masterpiece of self-effacement, and a monument to the hush that surrounds giving. Or perhaps it is Saatchi's way of making a genuine gift to the nation.

It's true to say philanthropists do not like talking about their giving, or even discussing the issue with their advisors. Philanthropy is a taboo topic.

Independent philanthropy advisor and author of Why Rich People Give Theresa Lloyd understands the need for anonymity and says this may in part be due to a cultural perception of philanthropists who are regarded by many non-philanthropists with suspicion.

“Sometimes donors feel they can’t ‘win’; if they allow their name to be publicised they are berated for seeking publicity and acclaim, and of course if they give anonymously they may be thought to be mean.”

But if philanthropy is to be promoted it needs to come out of the closet and many believe philanthropists have a role to play in making that happen.

Philanthropists Warren Buffett and Bill Gates have done much towards more ‘open philanthropy’, making high profile, billion dollar donations, and now the launch of 'The Giving Pledge' initiative, which directly asks other philanthropists to make an open commitment to give at least 50% of their wealth to charity. It has certainly put philanthropy in the headlines and set blogs alight with commentary, as well as starting a tsunami of re-examination on the best way to ‘do' philanthropy.

At the time of writing four families had agreed to announce their pledge - real estate and construction billionaire Eli Broad, venture capitalist John Doerr, media entrepreneur Gerry Lenfest and former Cisco Systems chairman John Morgridge.

Buffett said the pledge is "inspired by the example set by millions of Americans who give generously (and often at great personal sacrifice) to make the world a better place”.

Will it make a difference? "It would easily double or triple the amount of philanthropy in America," said Melissa Berman, president of Rockefeller Philanthropy Advisors, a non-profit organisation that has advised the Bill & Melinda Gates Foundation on 'The Giving Pledge' initiative.

The Charities Aid Foundation (CAF) estimates a figure of £60bn if the pledge was taken up by the UK’s billionaire philanthropists.

"If we would be able to get this influx for philanthropy from billionaires, it would inspire other Americans," Berman told Bloomberg News at the time of the launch. "And then we could really change what the world is like."

But it’s not just the monetary value the pledge might unleash that’s important – harnessing the power of role models to engage others in conversation is perhaps even more valuable.

The Ambassadors for Philanthropy website, created by philanthropist Dame Stephanie Shirley, the world’s first ambassador for philanthropy, centres on the same idea, and gives philanthropists an unedited voice. Among philanthropists who have videocast on the website are Fred Mulder, Alec Reed, Stefanos Stelio, Marcelle Speller and Matthew Bowcock.

Roberta d’Eustachio, the initiative’s chief of staff, speaking on the impetus for the website, says, “For one thing, that old but deep-seated notion that 'Brits don't talk about their money or their giving…' was begging to be crushed. In fact, it seemed to us that this notion was already dead, but people were still mouthing the words despite the culture moving on. The site chronicles this culture shift so that others in Britain will see the importance of discussing openly what they care about when they give.”

Philanthropy UK also provides a voice for philanthropists through its My Philanthropic Journey column in which philanthropists share their experience of giving. And case studies such as those in the Coutts Million Pound Donors report are also a platform for big givers to share their experience of giving.

The role donors play in promoting philanthropy is increasingly a topic of focus. A 2004 study by the Bertelsmann Stiftung Foundation and a consortium of other organisations, explores the role of ‘donor leaders’ - role models, advocates, conveners, mentors, and standard-setters - in promoting philanthropy.

“Active, visible leadership from well-known, well-respected individuals can play an important role in encouraging greater giving,” it says. “Particularly effective appear to be ‘donor leaders’ – donors who provide visible role models for other potential donors. From global donors on the international stage to local leaders who champion important projects in a particular community, it is clear that such leaders can be both inspiration and models for those with an inclination to give. So-called ‘donor leaders’ can do much to promote philanthropy awareness, knowledge, and engagement."

The paper encourages donors to be open and transparent in their giving. “Such openness affirms the value of social investing, demonstrates the impact of giving, and attracts the attention of other potential donors and the media,” it says.

We know high-profile role models can inspire. Bill Gates and George Soros have helped spawn a new generation of young donors in the United States. It is also said that Ted Turner’s creation of the UN Foundation directly influenced Bill Gates.

However, Craig Lefebvre of socialShifting, Sarasota, in Florida, an expert on use of design and marketing principles for social change, says celebrity or high profile donors are not necessarily the most powerful role models in encouraging non-donors to give.

“I think Bono and high profile 'givers' are great spokespeople to gain 'mainstream attention', but if I wanted to influence high wealth individuals to give (more), I'd look for people more like them. The wealthy like to associate with people they want to be like – so getting people who do give to talk more about why they do and be more visible is important. Universities are very good at tapping into their alumni,” he says.

Donors are more than money providers – they have skills and experience to donate to their causes and entrepreneurial philanthropists are particularly highlighted as those wanting to take more of an active role in their chosen projects. But organisations can find it difficult to let them in.

Mirm Kriegel, director of philanthropy and social enterprise of BBMG, a US branding and integrated marketing firm  says, in her paper From Legacy to Leadership: Is Philanthropy Ready for the New Consumer?,cultivating single donors to build a community of passionate champions requires organisations to invite them in, engaging them actively in decision-making. “It means relinquishing top-down control and inviting them in to shape the conversation. When organisations create opportunities for engagement – including platforms of expression that show identification and belonging – donors and supporters can share the benefits of their actions with others. Brands that open their doors to authentically engage and empower their Passionate 10 Percent™ will be better positioned to build trust, win loyalty and drive innovation and impact.”

Kriegel identifies a ‘Passionate 10 Percent™’ of an organisation’s supporters who should be “authentically engaged and empowered” then they will be “better positioned to build trust, win loyalty and drive innovation and impact,” she says.

The Gates/Buffett ‘Giving Pledge’ is a textbook example. The initiative kicked off with a meeting in New York in May last year with the idea to assemble a group of billionaire philanthropists to discuss strategies and encourage giving, hosted by David Rockefeller and included George Soros, Oprah Winfrey and Michael Bloomberg. Those who take the pledge are invited to pick the causes that they fund and they will be invited to share their views on'The Giving Pledge' website.

Lloyd agrees donors need to be involved. “It’s clear that people need to feel that they are making a difference, that they can learn and be involved. In the US people commonly give to organisations on whose boards they sit. But this is less the case in the UK. Of course this involvement should not extend to influencing the organisation’s overall strategic direction and its values, but there is an expectation that if you give money you will at least be asked for your views. I think that an important role of a fundraiser is to facilitate donors’ overall engagement, and to ensure that those who deliver the mission are involved in this process.”

The BBMG study revealed another major finding around the power engaged donors can bear on others. 'Enlighteneds’ – the 10% of Americans most driven by their values when making decisions – are three times more likely to be influencers who shape the conversations and behaviour of the other 90%. They’re three times more likely to talk positively (and negatively) about a brand to their friends and family, and to help create content and spread the word.

“In short, they’ll do your work for you – if you’re in their favour,” says Kriegel.

We said at the outset of the article that philanthropists are shy about their giving for many reasons – but that does not means they are unwilling to talk. Confidential networks and events, such as those run by Coutts, Barclays Wealth and workshops run by the Institute for Philanthropy among others, that allow donors to meet, talk, inspire and educate are the kind of safe havens more donors require, according to New Philanthropy Capital’s paper The Business of Philanthropy.

These events are important for another reason – they provide for an often overlooked aspect of philanthropy, namely pleasure. Few donors are purely altruistic and they want to enjoy their giving, both the reward of making a difference and the pleasure in the process of doing it.

The Funding Network’s (TFN) pioneering social giving evenings, described as the ‘Dragon’s Den’ of charities and donors acknowledges this. Founder Dr Fred Mulder, says the events were inspired by his own experience as a donor. Mulder found giving an isolated experience, and values the shared intelligence and fun that comes from working as part of a group. “I had a couple of bad experiences early on in my giving career and I realised that I would be in a much better position if I had a group of people that I could check in with.”

There is general agreement then that philanthropists have an important role to play in promoting philanthropy through their powerful networks and the positions they hold. However, if philanthropists are to put their mouths where there money is, there needs to be more openness from philanthropists and those who seek to engage them. They need to fling open their doors and genuinely invite in donors to take ‘a seat at the table’ – donors need a voice within, if they are to use it with out. The Buffett/Gates 'Giving Pledge' is a fine example, inviting those who take the pledge to share their ideas and shape the future of the project at regular ‘givers' dinners’.

If taboos are to be broken around philanthropy, more philanthropists need to overcome their shyness and speak up – again 'The Giving Pledge' initiative may help by offering a banner under which philanthropists can mobilise together and march towards a tipping point.