Mind the Giving Gap
Unleashing the potential of UK philanthropy
Research, Respect and Risk: three maxims for doing philanthropy well
Mary Rose Gunn
Founder and Chief Executive, The Fore
In our society of seemingly ever-increasing inequality, for those that want to make a difference now, there is philanthropy. But what may come as a surprise is that in 15 years in the funding sector I have never met a donor who has found it easy to give away money well. So how does a budding philanthropist make sure their support is making a difference and feel engaged with the causes they are supporting? There are some simple principles that can help.
First however, there are a few myths that need dispelling. With the likes of super-donors Bill Gates and Mackenzie Scott (ex-wife of Amazon founder Jeff Bezos) in the news it can be easy to think that those with modest sums to distribute can’t make much impact. This is absolutely not the case. To small, community-based organisations, even a few hundred pounds can make or break things. When the recipient is chosen carefully, small sums can create social change because the budgets of many charities are mind-bogglingly small. For example, ReMade Wigan builds the skills of tens of extremely vulnerable women, enabling them to lead fulfilling and independent lives, on an annual budget of under £30,000. Or The Listening Place saves hundreds of lives each year by offering ongoing one-to-one volunteer listening support to people at risk of suicide, for just £250 per person.
And if we want solutions to the challenges we face as a society, new social purpose organisations must be able to start and grow – arguing there are already too many and they all must merge won’t help innovation. 99.9% of small charities and social enterprises are run by good but over-stretched people who are in it because of the difference they are making. And small organisations rarely waste money – not least because it is so hard to raise. This doesn’t mean there aren’t lots of areas for cost-saving or greater efficiency, but these improvements generally require an investment of time or resource that it is very hard for charities to raise (more on that later).
So how can philanthropy be done well? It comes down to three things: research, respect and risk.
Research may seem obvious but it is something that many potential donors forget when they start out. In the age of the internet there is no excuse for not being informed about an issue that you care about enough to be thinking of supporting. Philanthropists who have a basic understanding of what’s worked and what hasn’t in helping solve knife crime or isolation amongst the elderly can ask the sort of questions that will quickly reveal a good project over a bad one. Research will give insights into where the support is needed – it may be that youth mental health provision in your area is quite well covered but there are access problems for a specific group. 360giving provides data on grant funding given in the UK by the top 200 funders, while organisations like ours publish all our awards so anyone can benefit from the due diligence we’ve already done to find high quality small organisations. Community foundations based all over the UK are also fantastic sources of local charity knowledge. Collaborating with others has the potential not only to save time and money, but also to share knowledge and risk. This is still far too rare in the philanthropic world.
When it comes to more detailed insights, speaking to local experts is invaluable. Social entrepreneurs are passionate about their causes and bend over backwards to help, especially if they think you might support them. But be careful not to take advantage. Donating a small sum in recognition of time that might have been spent, if you decide a bigger donation isn’t appropriate, will always be appreciated because time with you is time away from their beneficiaries. Starting with a smaller donation is also an excellent way to get to know an organisation. Check back in after six months and find out how things have developed before suggesting going further if progress is strong (maybe even before they ask for it!).
Second, and perhaps the most important of all, is respect. In the philanthropic world there is long running debate about the unhealthy power dynamic between funders and funded – rightly highlighted by issues of social and racial justice. When one person has something the other needs, it is never going to be a meeting of equals. If funders are aware of the power they hold and respect the knowledge and time of those running small charities and social enterprises, much of the negative impact of the power dynamic can be mitigated. I don’t know many philanthropists keen to solve homelessness who know how to persuade someone sleeping rough into a shelter, but I do know fantastic grassroots social entrepreneurs who can. Without the expertise and ability to connect with beneficiaries that charity staff and volunteers possess, the philanthropist’s wish to create social change is going to be a lot harder to achieve.
Everyone knows that no one ever changed anything without taking some chances. People know this instinctively, and they see it happening in business all the time. Why, then, do philanthropists find it so hard to take risk when supporting social causes? In philanthropy there are two types of risk: the uncomfortable kind and the exciting kind. The first happens when people aren’t convinced of each other’s motives and parties are not aligned in what they are trying to achieve. But in good philanthropy the risk should feel exciting – yes it might not work, but if it does the results will be thrilling. And the trust that relationships are based on provides the flexibility needed to ride the bumps in the road when they occur.
Philanthropy done well should feel more like angel investment than shopping. Good philanthropists are not just buying outcomes, they are investors who have listened to the mission of an organisation, believe in it and want to back the change it is trying to create. Donors and social entrepreneurs are partners in sharing risks and trying new things. And when you do manage to change lives, the reward of knowing you played even the smallest part is electric.