Tuesday 25th October 2016                 Change text size:

Philanthropy is what sustains the charitable sector, not money

photo: Marco Michelini via stock.xchng

Mitchell Kutney explores what it means to be a philanthropist.

This piece originally featured in Blue & Green Tomorrow’s Guide to Philanthropy & Giving 2013

It appears that Philanthrôpía first entered the English language as a term to describe plants whose seeds stick rather too readily to people. Philanthropy was then modernised by Sir Francis Bacon, who is largely credited with preventing the word from being owned by horticulture.

Bacon considered philanthropia to be synonymous with “goodness”, which correlated with the Aristotelian conception of virtue, as consciously instilled habits of good behaviour.

Then in the 1700s, an influential lexical figurehead by the name of Samuel Johnson simply defined philanthropy as, “Love of mankind; good nature.” This definition still survives today and is often cited more gender-neutrally as the love of humanity.

Click here to read The Guide to Philanthropy & Giving 2013

In the online Merriam-Webster dictionary, the definition of philanthropy is, “Goodwill to fellow members of the human race; especially: active effort to promote human welfare an act or gift done or made for humanitarian purposes an organisation distributing or supported by funds set aside for humanitarian purposes.”

As Marty Sulek writes, the precise meaning of philanthropy is still a matter of some contention, its definition being largely dependent on the particular interests of the writer employing the term. Nevertheless, there are some working definitions to which the community associated with the field of ‘philanthropic studies’ most commonly subscribes.

One of the more widely accepted of these is the one employed by Lester Salamon, who defines philanthropy as, “The private giving of time or valuables (money, security, property) for public purposes; and/or one form of income of private non-profit organisations.”

This is the definition that resonates the most with my experiences in the non-profit/charitable sector.

Among famous philanthropists, the people that come to mind are Bill Gates, Warren Buffet, John Wilson McConnell, Michael Bloomberg, John D Rockefeller and George Soros. All of these people have donated enormous sums of money and have certainly earned their title as philanthropists. But what made them philanthropists? And who decided that they were philanthropic enough to be labelled philanthropists? After all, being a philanthropist is a highly esteemed role.

Now this may not come to anyone’s surprise, but there are some commonalities between these famous philanthropists, with the most outstanding being their massive accumulation of wealth. Is it a coincidence that these figurehead philanthropists are also extremely wealthy? Or is it a requirement to be a philanthropist?

This is an important question to ask because in the lexical evolution of the word philanthropy, nowhere does it state only the wealthy can be philanthropic. We can certainly conclude a massive accumulation of wealth is correlated with increased philanthropy, but is wealth a prerequisite of philanthropy?

With our understanding of metrics, it is common practice to normalise values in a base number in order to discern actual impact (the result of outcomes). For example, when calculating the value of a basket of goods, we account for inflation; or when reviewing incident rates, we base it on per capita basis.

What do we ground philanthropy in? It would make sense to calculate charitable giving based on proportional wealth versus absolute wealth, as one would think this would be more philanthropic.

For example, if I made a $100 and gave away $99, that would be more charitable then if I made $1,000 and gave away $500. This however is not the case when it comes to philanthropy.

Furthermore, irrespective of the proportional size of one’s donation relative to one’s wealth, and irrespective of the lexical evolution of philanthropy, it seems that to me, one must give away a wealth of money in order to be considered a philanthropist in modern society.

If my statements are deemed accurate, I would pose a policy question: what if we were to bring philanthropy back to Francis Bacon’s definition of philanthropy as simply “goodness”? Would that not mean so much more? If we deconstructed the underlying emphasis on riches and replaced it with goodness, would a revitalisation of giving perhaps begin to take place?

The charitable sector has not yet returned to pre-recession giving rates and has systematically been cutback from government, foundational and philanthropic support. Organisations such as Imagine Canada are pushing for new tax credit benefits to revitalise the sector and crowdfunding has surfaced as a viable alternative for raising dollars in the non-profit sector.

Moreover, the non-profit sector is increasingly being pressured to participate in revenue-generating activities on a cost recovery basis. Though these are potential solutions to the current stormy climate within the charitable sector, the financial shortfall affecting it is a growing problem that will require a real cultural shift to remedy.

So while this shift is taking place with a focus on changing tax policies, revenue-generating activities and funding alternatives, I would argue the bigger picture is being lost. Philanthropy is what sustains the charitable sector, not money.

The charitable sector is in a period of flux right now and is moving to the furthest extreme of whatever prospective alternative presents itself. I believe in order for the charitable sector to obtain steady change, the conversation should not be about money, but rather it should be about values.

What does it mean to be charitable? What does it mean to be a philanthropist? If being charitable is purely like a business, and if being a philanthropist is just giving away massive amounts of money, it comes as no surprise to me that the sector is in trouble now, despite the negative impact of the economy.

While the financial shortfall is a real problem, another equally important problem dogging the sector is its own values.

Mitchell Kutney’s work focuses on reimagining the roles of philanthropy and social change to create sustainable solutions. He has spearheaded a number of successful non-profit initiatives in Canada and holds a master’s degree from Carleton University in Public Policy. This article originally appeared on his website, where you can find a fully referenced version.

Further reading:

Philanthropists urged to take more risks and ‘talk about failure’

Impact investment and philanthropy: we need to ‘redefine how we all think about returns’

Ben Goldsmith on fixing the environmental crisis through philanthropy

The Guide to Philanthropy & Giving 2013

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