Giving Well

Being a philanthropist is often a challenge, and this article from the Stanford Social Innovation Review examines the various methods to giving well.

An excerpt.

“Strategic philanthropy has come to be used as a catchall phrase for effective philanthropy. However, I believe that there are three core approaches to philanthropy, each of which can be effective. Each type executes something quite different, and recognizing this distinction is critical to their success.

“Charitable giving seeks to buy nonprofit program execution that will accrue to beneficiaries. It is classic “buyer” behavior, as defined by George Overholser in Building Is Not Buying (PDF). The charitable giver is concerned primarily with the value of the programmatic execution relative to grant size and cares little about the nonprofit enterprise for its own sake.

“Philanthropic investment seeks to provide resources to nonprofit enterprises that increase the nonprofit’s ability to deliver programmatic execution. It is classic “builder” behavior, as defined in Building is Not Buying. The philanthropic investor, like a for-profit investor, is primarily focused on the longer-term increase and improvement in programmatic execution relative to grant size.

“Strategic philanthropy seeks to buy nonprofit goods and services in a way that aligns with a theory of change defined by the strategic philanthropist, or to invest in the growth of nonprofits needed for the theory’s success. Unlike philanthropic investors and charitable givers who provide resources to a nonprofit so that it may pursue a theory of change, strategic philanthropists are concerned primarily with their own theory of change.

“The charitable giver and philanthropic investor both transact with the enterprise but do not seek to be the agent of change themselves.”