I have some questions and would love your feedback.
- Why do investors take credit for picking great investments (“look how smart I am, I bought XYZ stock!”), while philanthropists, especially foundations, claim that the credit goes to the nonprofits they fund (“the grantee did all the work”).
- Why is it acceptable for investors to talk about investments they think are bad (“Don’t buy ABC stock, their management is terrible!”), while philanthropists never badmouth nonprofits, even if they think they are ineffective?
- Related to #2: Why do public companies generally ignore all the talking heads who say negative things about them, while nonprofits find it intolerable to have a prominent person speak negatively about them in public?
If you’ve read this blog for awhile, you probably think these are leading questions and that I have a firm bias about which approach is better. But I’m truly asking these questions with an open mind. Recently I met with the director of philanthropy-focused grantmaking at a large foundation. I brought up the idea that publicly talking negatively about ineffective nonprofits (especially those that the foundation thought were not “fixable”, say because management was incompetent) would produce a positive social impact by directing other donors’ funds away from the bad nonprofit and towards more effective competitors. She told me that it was a primary value of the foundation to not harm grantees.
I think that is a very compelling counter argument and I’m interested in how readers view my three questions above and the idea that not harming grantees means never saying anything negative about a nonprofit.