Prevention at the expense of the cure

Let’s face it, these days it’s simply not in vogue to be considered a philanthropist (or philanthrocrat) driven by a spirit of benevolence.  We have entered the era of the venture philanthropists, the philanthrocapitalists, the tactical philanthropists.  In philanthropy, strategy is now the name of the game. Philanthropists and their foundations are finding smarter ways to give and more innovative ways of funding for impact. If this group of strategy driven philanthropists had a mantra it would likely be prevention, prevention, prevention. But when everyone wants to be the funder helping to build the fence at the top of the cliff,  what does that mean for those people who need the ambulance at the bottom of it?

The philanthropic sector in Australia is racing towards a new level of maturity.  It’s vastly more professional than it was as little as five years ago. But professionalism has led to a recognition that supporting prevention and mitigation programs offers greater bang for the funder’s buck.  There is no disputing the fact that prevention is less costly than the cure. However, if we as a sector are encouraging a greater focus on prevention, perhaps it’s important to stop for a moment and consider at what cost?

Photographer : Cybele

I’m fortunate enough to work for a foundation that has the capacity and the inclination to fund across the grantmaking spectrum. Funding programs that seek to mitigate against homelessness are great, but there is still a desire at Board level to make sure issues of food security and the need for refuge are also addressed. For some, funding the ambulance at the expense of the fence might appear counter-productive but we’ll always need the balance.

I wrote recently about the growing recognition that great philanthropists can balance the head and the heart. Perhaps the reality is that the benevolent urge to help those in need is the heart of funding. Trying to make progress on the problems and difficulties (a great post here on the difference) that affect our communities is more a challenge for the head.

I remember reading once that Bill Gates sat his young daughter down and tried to explain to her the work the Gates Foundation was doing to find a vaccine for malaria. As they flicked through pictures of the devastation caused to those individuals already struck down she asked ‘who is helping them?’.  It was a reminder to Gates, and should be to all of us, not to forget those with immediate and real need for support. It’s important that we don’t leave behind those organisations working at the bottom of the cliff for the sake of increased bang for the buck.

For some funders, prevention is the best way to give within their limited resources.  For others, their philanthropy will be driven by a desire to address the need they see every day. I don’t ever think we’ll get to a stage where all funders are focusing prevention at the expense of the  ‘cure’. We do however, need to be careful not to dismiss programs and organisations working to provide immediate support,as having no place in strategy driven philanthropy.

As a sector, philanthropy needs to be more introspective.  Perhaps it’s time to shift our focus from funding where government can’t or won’t and start looking more closely at where the philanthropic gaps are. That requires new levels of collaboration and a transparency around our foundation missions and objectives.  If we can get the balance right and find a way to solve problems and service our society’s greatest difficulties, then as a sector we will be more impactful.

You can connect with Caitriona Fay on Twitter via @cat_fay or any of the eggs via @3eggphil.  


Philanthropy, the Next Generation

The Australia Council’s Artsupport team held two private events last week in Sydney and Melbourne, to launch an initiative targeted at cultivating a new generation of giving in Australia. I went to the Melbourne event as an interested philanthrocrat, wanting to hear the stories of the three panellists (more about them below). But my interest was mainly sparked by a desire to know what’s being done to encourage greater giving in Australia, given the ongoing negative press about wealthy Australians’ meanness. It’s a common talking point, as our blog attests.

Artsupport’s purpose is to grow cultural philanthropy in Australia. It began in 2003 with just two staff members in Sydney but now has representatives in every state and territory (except Tasmania). It’s estimated that, so far, the initiative has facilitated more than $50 million of new philanthropic income to around 200 Australian artists and 600 arts organisations – as their page of the Aus Co website says, this is a strong outcome for a government investment of nearly $5.2 million: providing a return of nearly 1,000 per cent.

The two events last week are billed as stage one of a three-year ‘New generation of giving’ plan to build a community of young philanthropists, aged between 28-39 years, with inherited or self-generated wealth; through panel sessions, dinners and other networking events (a field trip to the US was mooted…..).   The younger generation, where better to start?

The Melbourne event was held at Comme, a swanky bar in Melbourne’s CBD and a favourite after-work haunt of the be-suited ladies and gentleman of the city. A smart choice given the invitees, if we’re to go purely on stereotypes that is. In fact the choice of venue called to mind my blog ’Giving is Sexy’ which explored UK research findings into why donors give and non donors don’t.

The three panellists were:

  • Dr Sam Prince, Founder of the Emagine Foundation and Zambrero Fresh Mex Grill Restaurants
  • Danielle Caruana, aka Mama Kin, co-Founder and director of The Seed (previously known as The JB Seed)
  • Thora Klein-Gibaud, Former Director, Jurlique International and someone whose passion for music is lived out through Ngaringa Farm Arts Foundation.

Each had a very individual story about what inspired them to give, how they chose the focus of their philanthropy, what they aim to achieve through their giving and, in a good reality check, some of the problems they experienced along the way. It was inspirational stuff and I hope the intended next gen philanthropists left the evening duly inspired, with a sense of what is possible, and a better understanding of the drive, determination, motivation and nous they will need if they decide to step up to the plate.

I was certainly inspired by Danielle’s story. To me it was the most accessible of the three (I am neither an entrepreneur, nor someone with inherited wealth). The Seed’s philanthropy was born on a very small scale, using collaborations which drew on Danielle and her co-Founder, John Butler’s, networks in the music industry to amass enough support to create a fund to “help Australian artists from any background, creating art and music across any genre, to establish themselves as self-sustained, professional artists”. It has since gone on to grow and grow, supporting more and more artists. In essence, it was a great idea which met (and still meets) a need and was able to galvanise people around it. Food for thought.  If you’re interested in knowing more about The Seed, this little youtube video will give you a great insight:  

The New Generation of Giving initiative has good potential and I’ll watch with interest to see how it develops, because it is of inestimable importance to encourage and nurture the next generation of philanthropists.

You can follow the musings of Claire Rimmer on Twitter via @ClaireMRimmer

The condition of being human

It’s not often we stop and consider the role humanity plays in grantmaking. In this age of ‘it’ words where it’s easier to quantify the need for evaluation, social returns and collaboration, perhaps humanity is a just a little passé.

Last week Paul Connolly of the TCC Group wrote a blog for Tactical Philanthropy examining the need to balance the humanistic and technocratic in philanthropy. He wrote:

Philanthropy must heed a growing body of research across the neuroscience, psychology, and behavioral economics fields that confirm the importance of synthesizing logic and instinct, head and heart, linearity and serendipity

With Connolly’s viewpoints still fresh in my mind I wandered across to the University of Melbourne to hear the inaugural Philanthropy Australia Oration, Reflections on Philanthropy: In cash or in kind?  For love or for money? For now or forever? given by Emeritus Professor Dorothy Scott. Before even beginning her oration Professor Scott clarified that she would be focusing entirely on the in-kind aspects of philanthropy.  My heart dropped a little on hearing this.  Were we about to hear the same old line about Australians being great volunteers? Thankfully the oration was beautifully devoid of the usual clichés, with Professor Scott warming us up for what was to come when she began:

I must confess that I am a little ambivalent about the academic and professional dimensions of philanthropy.  There is a risk that they may suppress the philanthropic impulse, as literary criticism may suppress the love of literature.  Philanthropy is about the head and the heart and we have heard a lot about the head in recent years.  I think it time to talk about the heart again.

In her oration, Professor Scott argued that philanthropy was in fact embedded in our humanity. She went on to contend that while Australia’s current and past philanthropic heritage has been shouldered by those of religious traditions, there is also much secular-inspired philanthropy that we should remember to reflect upon.

The distinction around secular-inspired philanthropy is an important one to make.  The obligation to give is less muddied. And yet, as we’ve discussed on this blog previously, incentives will exist nonetheless. Dick Smith came out over the weekend threatening to name and shame those millionaires who don’t give – for some that might be incentive enough.

Perhaps in this time of professionalism in philanthropy it is time to take stock?  It’s easy when faced with the paperwork, budgets and meetings to forget that philanthropy is after all defined as a love for humankind.

I’m often reminded in my work that philanthropy is about ‘people’.  Backing people, helping people, encouraging people and inspiring people. Of course there are smart ways to do this, approaches that help to ensure the best results.  But at the end of the day we should not forget about the humanity of it all.  To quote Paul Connelly:

The best philanthropic leaders are not only analytical, objective, and expert, but also self-aware, respectful, and intuitive—and can adjust the mix when needed. They understand, for example, that even if a seasoned nonprofit leader has not explicitly depicted a program logic model, he or she may have an excellent implicit strategy based on deep experience and wisdom. Funders cannot afford to leave their humanity outside the workplace.

Is it possible for a funder to leave their humanity outside the workplace?  Not the good ones.

You can follow the musings of Caitriona Fay on Twitter via @cat_fay

The administration obsession

You may have seen a couple of articles run in the Sydney Morning Herald a fortnight ago examining the administration and transparency of some of Australia’s better-known celebrity foundations.  In the firing line were the McGrath Foundation, The Shane Warne Foundation, the Cathy Freeman Foundation and others. The journalists rightly point out a number of inconsistencies regarding the required public transparency of the non-profit sector here in Australia. Both articles contend that without adequate transparency the donating public can never know how much of their dollar is actually making it to their cause of concern.

The inconsistencies raised in the articles are nothing new to non-profits.  The sector has long struggled under the burden of a fragmented regulatory system and been crippled under the red tape of multiple compliance obligations. It’s hoped that the establishment of the Australian Charities and Non-profit Commission (ACNC) will help to reduce the burden on the non-profit sector while providing a new level of transparency sector wide.

What the two articles also helped to highlight was that there continues to be a lack of wider public understanding around administration costs in the non-profit sector. Held up for high praise were those organisations with the bare minimum of administration costs, while those with professional staff and overheads were the inferred to be less effective and somehow less impressive.

It might well be that those organisations highlighted in the article are ineffective but examining administration and fundraising costs will only paint a partial and sometimes misleading picture.

I’ve worked for a grantmaking organisation that was incredibly strong on applicant organisations submitting ‘real world’ budgets. A budget submitted without a provision for administration costs and contingencies was considered poor, full stop.  Administration costs were considered realistic if they were in the 8%-25% field (depending on the project type).  Any lower or higher and it deserved some prodding. Equally, it was considered poor project management if an applicant didn’t factor at least 10% of the total project costs for contingency costs.

For that particular grantmaking organisation, low administration costs increased the risk of the project operating at the margins, which in turn increased the risk of the project failing.  As a grantmaker they decided to mitigate against that risk. When I called organistions to ask why they had submitted application budgets with low or no administration costs their responses were generally the same – most thought putting the actual administration costs in the budget would reduce their chances of success with the grantmaker.

I’m reluctant to suggest that there is any ‘right’ range for administration fees. What’s really important is that donors examine the administration figures within the context of the organisation’s activities and mission. There is no one rule.  As a donor you need to be more savvy and a donating public we need to expect that administration costs are a reality for charities.

I’d also encourage donors to recognise that staff within the non-profit sector deserve to be adequately reimbursed for the work they do. One of the great tragedies of non-profit sector is our high staff turn-over, and inadequate remuneration is partly to blame. Working in the most challenging of areas, doing the toughest of work, it’s imperative that the non-profit sector hold on to good staff. That includes senior managers and CEOs whose leadership is so valuable in ensuring the ship is pointing in the right direction.

You can follow the musings of Caitriona Fay on Twitter via @cat_fay