A few weeks ago, the members of the Giving Pledge met in person for the first time. The event was very hush, hush (except for AOL founder Steve Case’s tweeting), but I’ve had an opportunity to speak with someone who was there. Partly the event was about giving the billionaires who have pledged to give away at least 50% of their wealth a chance to get to know each other. But one of the themes was an ongoing discussion of what the Giving Pledge should be all about.
In my own writing on the Giving Pledge, I’ve stressed the idea that the big opportunity is for the Pledge to affect the way everyday Americans think about giving. I’ve run an analysis that suggests that the Pledge, at best, might result in a 10% increase in total charitable giving if viewed in isolation. But if the Pledge encourages donors in general to give more, it could increase giving by 100%. Warren Buffett, the primary driver of the Pledge, seems to be thinking this way too and has said “We want the Pledge to help society become even more generous. We hope the norm will change towards even greater and smarter philanthropy…”
My understanding is that the opportunity for the Pledge to affect overall giving was an important topic of discussion at the gathering and that the group is still wrestling with what they might do to change the norm to “greater and smarter philanthropy”.
Here are a few ideas I have. I’d love to see more ideas added in the comments:
- The Pledgers, especially when they act under the banner of the Giving Pledge, are a form of “smart money”. They should recognize that who and how they fund will trigger others to act similarly, especially if they speak or write publically about the reasoning behind their decisions. Each of them should consider writing an annual letter outlining their prior year giving and their current thinking and model the letter on Warren Buffett’s annual letter to his investors (which has already served as the model for Bill Gates’ annual philanthropy letter).
- Those Pledgers who seek to engage in results-focused philanthropy should be public about what sorts of evidence nonprofits have provided them that have triggered them to give. There is still much debate about whether donors actually care about evidence and if they do, what sorts of evidence they seek and what sorts might actually reduce their empathy. It would be hugely useful to nonprofits who focus on results to know how they can best share their evidence base in ways that will increase funding.
- The Pledgers have access to something that few members of the smart giving movement have access to: Media. Pledgers should use their access to the media to speak regularly and passionately about philanthropy and particularly the idea of results focused philanthropy. To date, coverage of the Giving Pledge has mostly focused on the decision of the Pledgers to give away a lot of money. If the Giving Pledge as a group can reframe the “story” around the Pledge to one about smart, sophisticated giving they will make the project relevant to donors who simply don’t have the resources to give away huge amounts of money, but can still “give smart”.
- The smoking hot, third rail of the Giving Pledge has got to be the groups’ attitude towards impact investing and the role of for-profit corporations in creating social value. If even a small sub-group of Pledgers got involved in impact investing, they could single handily transform the market. Similarly, if a few of them used their vast corporate investments to influence the corporate social responsibility discussion, they could have a vast impact. Wal-Mart in recent years has gone from a punching bag of the environmental movement to becoming one of the most important positive influences on corporate environmental activities. The Giving Pledge members are in a unique position to catalyze the whole impact economy, not just the field of philanthropy.
What else might the Giving Pledge consider as they try to increase and enhance America’s cultural relationship with philanthropy?
Go global. In regards to the smoking-hot rail (love that), the growth in the for-profit sector is in developing countries, and implementation of CSR here would go a much longer way.
They’re already beginning talks with billionaires in China and India. Next up needs to be the continent of Africa.
Imagine the “smoking-hot third rail” that would emerge if the US’s billionaires came together to channel their resources out of the country and into the developing world.
I do think that going global is part of the plan. But the question remains, what should the global movement be about?
The group needs a clear, consistent message to deliver to a broad audience. It needs to (1) repeat it often and (2) help fund the development of a non-profit capital markets infrastructure that will help grow annual giving from 2% of household income to 5%.
Re: (1) Their mantra might be something like (note to marketers: feel free to improve this) —
“Join the 50/5 pledge. We’re giving 50% of what we have. Will you give 5% of what you earn?”
Re: (2) They might start by establishing actual charitable brokers (“the Charles Schwab for your Cause”) who help individuals invest their 5% in a manner similar to how stockbrokers and online trading sites help folks structure and manage their for-profit portfolios.
Yes, developing a message that goes beyond “Very wealthy people should give away a lot of money” is critical. I know the intent of the Pledge is much more, but a larger message has yet to coalesce.
I have reservations about your suggestion about philanthropists sending out annual letters to “investors”. Warren Buffet is, rather, the exception that proves the rule. The more that philanthropy can be practiced privately without the public and media scrutiny, but with regulatory and IRS oversight and sound private governance, all the better. Over 60% of businesses worldwide are private in sector after sector, they out perform their public peers.
Do philanthropists need to have the un-informed public and media non-sense surrounding their decision-making, risk-taking and engagement? Nothing would discourage folks more from putting capital to work for the good of others and society if they felt obligated to disclose their aspirations, goals and outcomes to an unruly public and invite the counter-productive and undesirable input of those who can’t possible help them achieve their goals.
So that you don’t miss the point, if philanthropist want to practice in public, that’s fine. But if corporate-like and government-like public disclosures become the de facto standard and eliminate the free-will of the giver to practice privately, the net effect will not be positive.
I think that philanthropy is private action for the public good and therefore donors should always have the option to give privately. But the Giving Pledge members are making a very intentional decision to “go public” and my post is about how they can best leverage the Giving Pledge platform.
Being public about your giving opens up a significant opportunity to do more good in the world through influencing the decision making of people around you. But this strategy should be seen as an option that private philanthropists should consider, not a mandate of any kind.