Richard A. Marker
Senior Fellow, NYU Center for Philanthropy
Principal, Marker Goldsmith Advisors

Perhaps I shouldn’t have been surprised… but I was.

The subject of my advanced strategic grantmaking seminar at NYU was environmental funding. The guest presenter emphasized how funders with a focus on the environment typically fund advocacy projects since so many environmental problems can only be solved by changing public policy and motivating governments to get involved.  There is a limit to what individual and grassroots funding can accomplish unless accompanied by action on the part of governments.  Our guest gave numerous examples of effective advocacy funding and of organizations that have used such funding to achieve genuine impact.

Our guest’s recommendations certainly rang true for me.  In my work advising funders and as a board member of two grant-making organizations with missions to reduce hunger and increase co-existence, I have observed a marked predilection by board members for funding organizations with a commitment to advocacy.  These funders have learned that without addressing systemic and endemic issues, all of the on-the-ground efforts will be like tilting at windmills.  Although small grants to many food pantries can feed a lot of people, a miniscule change in the federal budget allocation can feed many more.  As a result of my experiences on these boards, I have become convinced of the wisdom of committing funds to advocacy as an indispensable component of a balanced funding strategy.  (Of course it is also important to support those local food pantries.  But without supportive pubic policy, there will never be a reduction in the number of hungry children.)

The participants in the grantmaking seminar were not novices in the funding world.  As funders and foundation professionals they had all been challenged with establishing funding priorities and strategies.  I expected that the audience would be receptive to our guest’s recommendations about advocacy funding.  I expected that they would find his advice useful, and immediately embrace his recommendations for enhancing the sophistication of their funding strategies.  I expected that they would understand how his recommendations could help them to achieve the missions of their foundations.  But that was not the case. 

In fact, the reaction of the participants in the seminar was quite the opposite.  To my surprise they challenged our guest.  They asked him why anyone would want to rely on governments to respond adequately and efficiently to human needs.  After watching the response to such catastrophes as Katrina in the Gulf Coast, they asked, can we as funders truly believe that government spending is as effective as support for local on the ground organizations?  These organizations know who is suffering, who is homeless, who is jobless and who is missing.  A local church or non profit may be limited in its scope, but it is thoroughly committed to rebuild a house, provide clothing, and offer counseling.

Furthermore, the participants argued, Katrina was hardly an isolated incident.  Government human service funding has been significantly reduced over the last years, and this has increased reliance on voluntary support for vulnerable populations.  In this environment, dollars given to support direct services will surely achieve more than dollars directed toward advocacy for changes in government policies. 

A rebuttal to these arguments isn’t hard to make. The scale of need for human services outweighs the ability of any non profit to meet it.  For example, in the Gulf Coast alone, 250,000 homes are needed.  The largest number of homes that Habitat for Humanity had ever built before Katrina was 5,000 per year!  And Habitat is by far the largest non-profit home builder in the nation.  Only government has the potential to build enough houses to house Katrina’s homeless.

Similarly, before Buffett’s recent gift, the Gates Foundation’s assets were approximately $33 billion.  A 5% payout on these assets yields a massive $1.65 billion per year.  However, this massive amount is dwarfed by the National Institute of Health’s annual budget of $28 billion.  Gates can do a lot of global health, but it can never do what government can do.  Similar relationships between private philanthropy and government expenditures can be cited for an entire range of human service and educational areas.

My purpose in these comments, and in raising this issue in my seminar, is not political.  Caring and thoughtful people can disagree about the proper roles of government and private philanthropy. The point I want to make is about how the conversation among the participants in my seminar illustrates how societal attitudes influence how we choose to spend our charitable funds.  As I thought more about the attitudes of the participants in my seminar, I realized that I should not have been surprised.  Attitudes toward government are just one of the factors that have led to marked changes in the funding environment over the past few years.  These changes include the emphasis on outcome and impact measures, increases in restricted and targeted giving, suspicion about the effectiveness of giving to umbrella charities, more reliance on private sector benchmarks, and increased interest on the part of funders for a hands-on relationship with grantees. 

While all of these changes have contributed to more effective philanthropy, we must temper our embrace of the attitudes that they represent.  We should not let skepticism slide into cynicism because we risk allowing philanthropy to suffer from the myopia of the dubious.   Recent abuses in the voluntary sector, on both the funding and non profit sides of the table, should not shake our confidence in the integrity of the majority of people engaged in the voluntary sector.  We must insist that our funding dollars be spent with care, but we must also be careful not to allow ourselves to confuse efficiency with effectiveness in how we evaluate our grantees. 

Although it is tempting to give our money only to direct service programs where we can see and feel that we are making a difference, we need to resist the urge to do so.  One might well make the case that this is precisely the moment when funding for advocacy is most needed.  Careful and thoughtful philanthropy can inform the public discourse with a valuable perspective, and can prod the public sector to do that which only it can do.  We must stop and think before we surrender the unique role of philanthropy as the risk capital of society.  We must resist the pressure to accept the idea that private philanthropy can somehow replace a commitment by the public at large to meeting human needs through the collective efforts of government.

Our challenge is to find the best ways to fulfill the missions of our foundations.  Sometimes it is directly, by funding immediate needs with visible results.  Sometimes it is indirectly, by funding advocacy.  The answer will differ for each funder and each foundation – and even for each issue.  But I hope that every decision we make will be informed by consideration of which kind of funding is best suited to accomplish our aims – and not primarily by our skepticism about our society’s, and our government’s, commitment to the greater social good.