What is Philanthropy?

Thanks to Phil Cubeta for highlighting my new blog today.

In my earlier definition of Tactical Philanthropy I stated:

"Philanthropy is at its core a series of financial

Phil takes (polite) issue with my definition, saying instead:

"Let me say that to me philanthropy at its core is a personal, moral,
and political (in the largest sense of serving the polis or community)
act, virtue, or way of being in the world.  Sometimes philanthropy is
financial. But giving can be of time, attention, talent, or even of
one’s own blood, as in giving blood, or shedding blood in a good
cause.  Philanthropy at its core is a civic virtue. That said, unacted
virtue, or virtue that acts ineffectively, is imperfect. Financial
giving is indeed a financial transaction, or set of tools. The tools
are tactical. They should answer strategic ends, and the strategies
should answer to vision. And the whole ensemble should create life,
energy, and disproportinate results, as when a gift sparks a cultural
movement, or inspires a whole community to come together around an
issue.  Giving, indeed, "transforms reality."  Some of that is
"results," in the sense of metrics. But reality also changes when a
businesslike donor who is all about money, metrics and results, puts
her glasses on the table, looks out the window, and says, "You know, I
set out to set others straight, to fix others, to help them. And now
after these last few months face to face with those in need I see how
blind I was, how out of touch, and how arrogant.  I have learned more
and gained more from those I help than they ever have from me.  I only
wish I could do more. Can I?"

I think that Phil is right, that philanthropy is not simply a financial act and that any financial tactic must serve a strategic need. You may be able to execute a highly leveraged financial gift, but if it goes to an inefficient nonprofit, or one that does not support your world view, the tactic goes to waste.

The word Philanthropy is a word whose definition is somewhat vague. The Merriam-Webster dictionary defines it as:

"Active effort to promote human welfare"

The blog Giving Back posted a good discussion of the definition back in August that looked at both expansive and more limited definitions. I should probably be clear about my definition.

To me, philanthropy describes the practice of passionate giving of capital resources. When I use the word, I’m not referring to volunteer work. But don’t take that as any slight to volunteers. I’m an owner of a small business and so I know full well that success in any endeavor requires both capital and labor resources and neither is more valuable than the other since neither resource has any value at all without the input of the other.

When I think about my business, I don’t think of it as a "series of financial transactions". I’m not in business simply for financial reasons, and my goals are not simply financial goals. Too often when people analyze businesses they fail to fully understand that business is more than just financial transactions.

Philanthropy faces the opposite problem. Too often people fail to realize that giving is a financial transaction and instead focus on the greater purpose for which they give. When I state that philanthropy is at its core a series of financial transactions, I do so to remind people that no matter how much you care about a cause you can help them far more if you tactically approach the gifting process and recognize it as the financial transaction that it is.

However, let us not lose sight of the greater purpose of of philanthropy. It is not only a financial transaction. It is certainly not just a tax deduction. A philanthropic gift is a exercise in being human. It is a action whose most important purpose is to make the world a better place.

May we all leave the world a better place than we found it and may we all make use of the most effective techniques when we choose to give back so that our passion is not diluted by inefficient actions.


  1. Dan Bassill says:

    Thanks for inviting me to this discussion. Phil and I have met and exchanged ideas in several forums.

    I met with a donor the other day, who has supported my cause for several years. In the conversation he said “we don’t like people to tell us how to give, and we don’t tell others how to give”.

    As a middle man, this puts us in a sensitive position. In order for Chicago to have a full range of volunteer-based tutor/mentor programs, lots of donors will need to support many programs for many years. If someone does not find a way to focus donors on that goal, lots of money may be spent, but with little long term result.

    In your article you concluded by saying philanthropy “is a action whose most important purpose is to make the world a better place.”

    I agree. However, I don’t think one donation makes the world a better place. It’s a random act of kindness, no matter how large or well intentioned it is.”

    I think that it takes many donations, by many people, repeated over many years, and focused on a blueprint of needed actions, and actors, to make the world a better place to live.

    It takes the work of many people to help a child grow up, or to cure a disease, or to end hunger, even for a few people. None of these problems are solved with a donation made in one year and not repeated in the next year, or for many additional years.

    To me my role, is to help connect a wide range of potential donors, non profit leaders, researchers, youth and volunteers, with each other, and with information about what works, in an army that works for a long time to help inner city kids move through school and into careers.

    It will take a similar effort to end AIDS, rebuild after Katrina, or solve water problems in India.

    If that’s what you’ll be doing in efforts to support tactical philanthropy, I think your work is much needed.

  2. Thanks for stopping by Dan. I think you’re right that isolated acts of kindness, while never negative, are not enough to cure the world’s ills. I’ll expand on my concept of The Second Great Wave of Philanthropy in future posts, but I am not referring simply to The Great Wealth Transfer. Instead, I believe that the way that people give and the types of people who give are in the midst of a great transformation which will make the philanthropy of the 21st century fundamentally different from the philanthropy of the 20th century. Using more efficient financial transactions and techniques is just one small part of this new trend. The broader trend will be dependent on many more people than ever before participating in the act of philanthropy in a much more continuous nature than people have in the past.

    I look forward to our ongoing dialog and encourage other readers to chime in.

  3. Dan Bassill says:

    I think that the Internet has revolutionized what will happen in the next century. It’s impact on philanthropy can be just as much. In fact, my hope is that an organization’s web site becomes its grant proposal and donor solicitation and that social networking becomes the advertising that draws donors to a cause, and educates them to be more sophisticated shopppers.

    The Internet not only build connections of more peole, but enables intermediaries to have a larger impact. Many organizations are using GIS/mapping tools to show where help is needed in places all over the world. At https://www.tutormentorconnection.org/Links/tabid/560/rrcid/13/rrscid/27/rrpid/1/rrepp/20/Default.aspx I have links to many web sites that demonstrate this potential and provide meaningful information for people interested in using their donations for a greater good.

  4. […] philanthropy blogs were relatively few and far between. Phil Cubeta and I immediately got into a good back and forth (which is why I was a bit nostalgic over Phil’s most recent broadside). But in reviewing some […]