Thursday, September 29, 2022

A new approach to philanthropy

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Shreya Christina
Shreya has been with for 3 years, writing copy for client websites, blog posts, EDMs and other mediums to engage readers and encourage action. By collaborating with clients, our SEO manager and the wider team, Shreya seeks to understand an audience before creating memorable, persuasive copy.

Emily Kane Miller is Founder + CEO of giving ethica social impact company, and Ethos Tracking, a related social impact data management tool.

Late to the party, I was binge watching recently The Gilded Age. It’s a historical piece through and through – the costumes, social norms and technology of the day take us all hypnotically back in time to 1880s America.

That is, until we meet Clara Barton. Following in the footsteps of the true pioneer, the show’s Clara meets up with wealthy ladies of the day to raise money for the founding of the Red Cross in the United States. The majority of the women involved appreciated the work of the Red Cross, but were mainly recruited for reasons unrelated to the mission of the Red Cross. As someone with decades of experience in philanthropy, I was struck by how shockingly contemporary it all felt.

We are on the cusp of self-driving cars, drone delivery, and the metaverse. But when it comes to philanthropy, it often feels like we’re stuck in the 19th century.

During that time, names like Carnegie, Rockefeller and Vanderbilt became inseparable from many of the nation’s leading cultural institutions, schools, hospitals and community organizations. Board service, fundraising and attending major events gave well-rested families the opportunity to participate in important causes and a key to social status.

A fundraiser’s Rolodex — not details related to the social work itself — was typically their key to success. Relationships – not impact – were often the primary goal.

Certainly, in the current philanthropic landscape, there is an increasing focus on data and impact measurement. As the founder of a social impact data management tool, I’ve seen this first hand. On the donor side, some philanthropists are using technology to extensively analyze their donations and think critically about their impact. In 2019, the Rockefeller Foundation and the Mastercard Center for Inclusive Growth $50 million pledged to build data science capabilities for social and civil society organisations. More generally, millennial and Gen-Z donors are quite focused on results.

So also non-profit organizations are increasingly establishing statistics and KPIs and tracking the impact. According to a study90% of nonprofits collect “some” data, but the majority – for various reasons, including resources and know-how – do not optimize it. Many donors and non-profit organizations are slow to adapt to the data revolution, which I think is why the donor management model from Clara Barton’s time remains largely intact.

On one level, the reason for this is simple. People often participate in philanthropic work because of an underlying passion, deeply personal experience, or geographical, historical, religious, or cultural connections. Each instance creates a common bond and a warm environment for relationships. This is a good thing. “Philanthropy” literally means love for humanity. Completely removing the relational piece would no doubt hinder the work.

That said, relying on relationships to boost budgets is passé and unreliable. A “yes, and…” approach is needed.

Using data and measuring impact is a more strategic, inclusive and effective way to manage funds, and I think it should be the main motivator for donor engagement. Today’s challenges are too great and resources are too scarce not to sustain impact.

To get there, we need better data, more smart analysis, and radical transparency on all sides of the equation.

From the non-profit perspective, the first question should be: Why: Why are we doing this work? Are we as strategic as possible? Does it serve our mission? The next question is: what: What can we do best when it comes to this mission-oriented work? What are the related goals and measurable results that we can benchmark, monitor and report against? And finally, how: How’s this work going? Are we on track? If not, what have we learned and how are we going to change that?

This requires data, tools, expertise and time to be sure. Financiers should be willing to support this kind of expertise and workflow, and even provide capacity building resources when organizations are looking to move up to the next level. But more importantly, it requires vulnerability. Nonprofits and donors must have deep trust. Donors who care about the organization and its impact will want to understand this level of detail and need to make room for nonprofits to share everything that’s going on, not just the successful parts. It’s not to say that 100% of donors should all flock to work that is universally “the most effective.” However, when donors identify their key focus areas, they must work hard to support the most impactful work in that ecosystem.

If you’re starting all over again, you’re not alone. When it comes to KPIs, many organizations have input but have not yet established output. So the most important step is to start building that muscle.

In general, there are two major pain points: what to measure and where to put that data.

First, it’s critical to keep track of the things that really matter – that which is directly related and related to your impact work. Start by identifying measures that support your theory of change. If you have a goal for a specific type of impact, locate data related to your engagement strategy that supports those efforts. Don’t bother measuring work that falls outside of these major efforts because it takes time and resources.

Second, consider how and where the information will live. If you are dedicating time and resources to this process, it is critical to have a strategic data management plan in place. Make sure you know who will manage the collection and cataloging and that it’s a sustainable process that can be built on over time – a one-time effort left unused in the long run isn’t worth much. The data center you set up should be built on an intuitive framework and supported by clear usage guidelines, so it’s not something that only makes sense to the people close to work. Consider a “phone-a-friend” test – ask someone who isn’t confused with you to rate your system. If it makes sense to them without the context from within, it’s a good sign that your data is being formatted beyond the people organizing it.

The 19th century model of philanthropy paved the way for the importance of giving back. But as times have changed, so must our approach. Giving back can no longer be centered around the who. The present time asks for what, why and how to sit at the table. I think Clara Barton – a woman dedicated to moving the needle in her time – would have wanted it this way. Business Council is the leading growth and networking organization for entrepreneurs and leaders. Am I eligible?

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