Reconstructing Philanthropy

March 10th, 2015

In his SSIR article “Reconstructing Philanthropy from the Outside In” Paul Shoemaker evaluates a funder-to-funder take on how to create breakthrough social change. Using the iconic Empire State Building to build a metaphor, he points out that it was the innovative construction practices that made it unique rather than the architecture or height that most people think of first. Shoemaker notes that philanthropists have “good materials (committed people, financial capital, promising solutions) but are sometimes using outdated practices that are often more grounded in an inside-out, funder-centric point of view than the external realities of the grantees, programs, and systems we seek to change.” He thinks that for philanthropy to achieve a breakthrough akin to the Empire State Building “we need to fundamentally change the underlying practices we use to construct our philanthropy.” 

Shoemaker asserts that while there are “several practices that would go a long way toward effectively reconstructing philanthropy,” providing unrestricted funding is the foundation upon which everything is built. Shoemaker renames restricted funds “quite damaging dollars (QDD)” because they don’t allow organizations to pivot as external needs and conditions change to enable them to make the largest impact.  He mentions a myriad of ways that these QDDs can have unintended negative and sometimes debilitating consequences. Like many, Shoemaker recommends that if you can’t trust an organization to spend funds wisely you shouldn’t be making a grant in the first place. Shoemaker concludes, “Eliminating QDDs would create the opportunity for radically different, trusting relationships; enable the effective investment of more dollars toward what organizations truly need; and transform how nonprofits work with funders.”

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