Effective Philanthropy Means Getting Ahead of the Crowd

Back Commentary Jul 27, 2016 By Winnie Comstock-Carlson

Across the country, generous donors contribute about $335 billion a year to support more than 1.5 million nonprofit organizations, both large and small, according to recent surveys from Giving USA and the National Center for Charitable Statistics.

Locally, the people of Sacramento were just as generous, donating $7.1 million on the Big Day of Giving on May 3 to one fund shared by 570 nonprofit organizations throughout 18 Northern California counties. Those organizations fill many needs in our community — from protecting people from abuse and feeding the hungry, to simply collecting donated flowers to brighten someone’s hospital stay.

In an era of significant income disparity, an increasing number of people rely on the services provided by nonprofits. At times, the needs can seem overwhelming. In a region with so many agencies providing a bewildering array of services, how does a community decide which needs are most important? Some needs are simply so large and complex that they require a community-wide consensus to establish priorities.

Related: Charitable Organizations Need More Than a Mission

At the same time, a new generation of donors expects to see results from the money they give to nonprofits. Past generations donated for the sake of it, considering it a civic duty to support the common good. A new generation sees their donations as an investment and expects to see a return on it. A 2015 report from the Camber Collective, a consulting firm focused on charitable organizations, concludes that 49 percent of donors want to know how the money will be used — in effect, expecting a social return on investment.

In a way, this shift poses a challenge that calls for a new approach to solving big problems. Traditionally, nonprofits identified an issue they were concerned about and addressed it head-on as they rallied support for their cause. No doubt, all needs are important to one degree or another. But some needs are more readily acknowledged by the community.  

Better addressing complex problems requires a broader social economy. It requires a collaboration that involves business and political leaders to establish priorities and reach some agreement on the community’s most pressing needs. In turn, that focuses the efforts of nonprofits and improves their effectiveness.  

Bill Roby, executive director of the El Dorado Community Foundation has seen this philosophy of “emergent philanthropy” produce results. In September, his community will open a new $3.2 million facility to support the Boys and Girls Club, constructed over the last three years. The project is a success, he contends, because it emerged from discussions among community members; their involvement was encouraged.

Responding to the voice of the community made the most effective use of the foundation’s resources to support the Boys and Girls Club, rather than the foundation dictating to the community what it perceived as a priority need. Listening to what the community talks about and responding to the needs identified in that conversation makes nonprofit dollars go further and improves the social return on investment that today’s donors seek.  

The most effective nonprofits work the way sparrows fly: toward a common goal identified by local community members, and without crowding or intruding on one another. Together, they move in the same direction for the benefit of all.