The intersection of charity, community benefit, and irrationality
I always find it fascinating when my online discussions, my consulting work, my teaching and my free-time all end up pointing me to a new “ah-ha” moment that reinforces my commitment to all community benefit organizations.
How Donors are Swayed by the Irrational
I just finished reading the book Sway by Ori and Rom Brafman this past weekend. It’s a fascinating look at the many forces at work that lead people to act irrationally. Through an analysis of scientific studies and recent current events, they bring home the power of swaying forces such as fear of loss, the “swamp of commitment,” our own personal tendencies to attribute value illogically, diagnosis bias, the “chameleon effect,” and more. Time and time again, the authors cite studies and give examples of how these forces can lead a business student to pay $204 for a $20 bill, cause smart investors to cling to failing stocks instead of selling, and even lead a head of airline safety to disregard years of training and cause one of the deadliest plane crashes in history.
While reading it, I couldn’t help thinking about the way that these “sways” impact the philanthropic sector. Value attribution will lead some donors to continue to fund high profile nonprofits because they have a higher “perceived value” than other organizations. The “swamp of commitment” will lead other donors to give to organizations that champion causes that they or their friends are passionate about. Diagnosis bias and the “chameleon effect” will continue to marry donors to organizations, even when they know that they aren’t high performing.
Why Charity Is Still Alive and Kicking
Not only will donors always be “swayed” by irrationality, just as all humans are, but “charity” itself has a “feel-good” component that likely won’t be overwritten by movements like the “social investing” movement. Sure, some will get their “feel-goods” from investing in only high performing organizations, but others will feel good about giving for other reasons. Saabira Chaudhuri said it beautifully in a blog post about David Hunter’s recent article about the End of Charity:
[Hunter] seems to be propagating the notion that “charity” will just roll over and die, elbowed out by the more practical “social investing.”
I’d say think again. There will always be people (like me) who donate to causes that make them feel good, without waiting to peruse reams of information or wade through piles of data about how effective a program is. There will always be people, plenty of people, who make shotgun donations because they feel moved or guilty or it’s their birthday or their Facebook friends are supporting a cause so they feel like they should too. Saying that “charity” should die is one thing — saying that it will is quite another.
Turning “Shoulds” Into “Coulds”
The very notion that donors should “[halt] ‘sentimental giving’ to ineffective nonprofits and [divert] the investments to high-performing organizations instead,” prompted my own response on the Wings for Kids Blog. I argued that instead of shifting resources away from organizations that we could instead, “encourage funders to provide the ones who aren’t yet high performing with coaching, training and capacity building instead of pulling out completely.” I also said, and firmly believe, “There isn’t any reason that we can’t work to lift the entire sector at once.”
That desire to build capacity for the entire sector is what led me to my earlier blog post about Hunter’s article, as well as my comments on the Tactical Philanthropy Blog, where I said, “While we’re at it, let’s urge donors to fund cross-sector leadership initiatives, outcomes and performance training, intra-sector sharing of effective practices, mentorship models for new leaders or new organizations, and more.”
Creating a New Future for the Sector
I’ve long been an advocate of holding ourselves accountable for delivering and measuring real outcomes within the sector, and I believe that given the right toolkit, every organization can do so.
Part of building that toolkit is helping build, coach, and mentor an incoming generation of leaders who understand that focusing on “unpleasant truths” and “problem solving” aren’t likely to create the results that will actually lead to a bright new future for the sector. It’s why I felt honored to inherit the “Creating the Future of Your Community” class that I teach for Duquesne’s Master in Leadership program from Hildy Gottlieb and Dimitri Petropolis of the Community-Driven Institute. Leveraging principles from Hildy’s new book, The Pollyanna Principles, as well as the The World Café by Juanita Brown, these students (many of whom are already leaders in their communities) are successfully taking on such diverse challenges as re-inventing a statewide foster care system, building a new community resource center, steering partnership/merger discussions between a local United Way and a Community Foundation, and increasing sophomore retention and graduation rates in a university.
Why are they able to see such success so quickly? In part, because their approach mirrors Pollyanna Principle #5: “Strengths build upon our strengths, not our weaknesses.”
Signs That We’re Ready
What if we really could lift the entire sector to new levels of performance and collaboration? What if we really could build a toolkit for every organization that would help them create stronger and healthier communities? What if community benefit organizations of all sizes and types really could change the world? We believe we can.
Dan Pallotta’s recent blog post about a “Change-The-World” conference and the comments that follow signals that there are many of us in the sector that are wishing for less finger-pointing and more collaboration. Here’s a snip of his post:
It’s time we all got to know one another. It’s time for the venture capital crowd to know that tens of thousands of fundraising professionals are working their asses off every day and that if new funding could be directed their way, there’d be a big improvement in scaling programs. It’s time for fundraisers to know what the medical researchers are doing. It’s time for community-based nonprofits to know that there’s a social finance movement out there and that debt facilities might be available to them to scale up their operations. It’s time for celebrity philanthropists to hear about the structural problems in the nonprofit sector from the people working in the trenches every day.
Our own experience with launching Nonprofit Local confirms that there is also a desire to collaborate, share, and learn from each other. After being “live” for just a little over a month, we’ve had more than 4,000 visits to our beta site from all over the globe and as of the writing of this post, we have 340 members from across the sector who have joined the site. We’re using input from visitors and members to build a community that bridges the gaps between local grassroots organizations, both by creating sharing opportunities within local communities and to enhance global sharing across communities.
It’s been an interesting few weeks of reading, website feedback, classroom discussion and online dialogue. In fact, I’ve already discovered some great new folks, such as Ingvild Bjornvold from Social Solutions and Aaron Stiner from ASU Lodestar Center for Philanthropy and Nonprofit Innovation, with whom I share some common ground. I’m also meeting more of you on our LinkedIn and Facebook pages and through discussions at our site. Although I’ve known for some time that I’m “all in” and ready to help the sector grow and thrive, my “ah-ha” moment is that the sector itself is ready. I look forward to working with and alongside all of you to take us from “ready” to “set” and then “GO!”
Note: With the recent FTC update and hoopla about bloggers disclosing whether they’ve been paid to promote a product, I thought I should mention that, for better or worse, no one’s offered me any money, cool trips, gadgets, or other reward for anything that I’ve written.
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2 Responses to “The intersection of charity, community benefit, and irrationality”
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Laura,
Thanks for the shout out! I too am finding converging thinking about how we can best leverage the work of the millions of passionate and dedicated citizens working for, donating to and volunteering with nonprofit (or community benefit) organizations in the US and across the globe. While there is of course plurality of thought on the details, the convergence seems to be that nonprofit organizations need to engage in serious conversations about our underlying shared values and opportunities for working together if we hope to unleash the talents and dedication of our employees and supporters and the networks of our organizations to fully realize our ability as a sector, and as world citizens, to help positively advance global life. No short order, eh?
The common ideas I hear for how “we” as a sector of organizations can evolve and improve our ability to effect positive change include focusing on shared causes rather than individual organizational success, better demonstrating the power and impact of nonprofit organizations and the talents and contributions of our employees and volunteers to the average citizen (sector-wide advocacy and PR), reworking our organizational systems to become more dynamic and responsive, engaging and harnessing the energy, ideas and skills of the huge cohort of young nonprofit professionals while creating opportunities for cross generational dialogue and partnerships, better engaging with and advocating for the recipients of our hard work – whether they be human, animal, plant or otherwise – creating more open and honest relationships with individual and institutional funders, using the crowd-sourcing capabilities of new media to break down demographical barriers and leveraging our connections to businesses, government municpalities and citizens to engage our communities in a conversation about the big-picture values and desires of our citizens for what is a happy and healthy life.
I believe healthy individuals = happy families = welcoming neighborhoods = vibrant communities = functioning societies = cooperating countries = a wonderful world! And I believe nonprofit organizations are in the best position to lead the conversation about what each of those terms means to our communities and in the best position to help deliver those outcomes. The convergence is we all know we can play a role in helping make our world a better place and we all know that “business” as usual isn’t going to help get us there.
Thanks! And feel free to friend me on Facebook too =)
Aaron – You’re picking up a fan club, and it isn’t just me. I shared your post with the students in the Masters of Leadership class that I teach, and one of them told me that they’ve taken your “healthy individuals = happy families = welcoming neighborhoods = vibrant communities = functioning societies = cooperating countries = a wonderful world” and printed it out and passed it around to everyone at their organization for inpiration. Many thanks again for your post and for your upbeat and inclusive approach.
-LD