Angela M. Eikenberry School of Public Administration
University of Nebraska at Omaha
Presenter
Presentation Notes
Thank you for the opportunity to speak to you today. My interest and research is related to understanding the role of philanthropy and nonprofit or charities in democratic governance. I think this is an important area for consideration because in today’s political environment, governments around the world have increasingly looked to voluntary efforts and philanthropy as means for addressing all sorts of collective problems in society. Today, I’m going to briefly summarize what we know about philanthropy in relation to broader governance issues and then talk specifically about research I’ve done on giving circles to help to understand their role in democratic governance and the degree to which we can and should rely on philanthropy to address basic needs/issues in society.
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Social contributions of philanthropy • Enables donors to use private funds to create
social and political change, • Locates and supports social innovations, • Meets the psychic and social needs of
donors, and • Affirms democratic pluralism as a civic value.
Presenter
Presentation Notes
Philanthropy is indeed seen as important, and unquestionably good, in U.S. society. Peter Frumkin (2006) outlines what are seen as the important social contributions of philanthropy: it enables donors to use private funds to create social and political change, locates and supports important social innovations, meets the psychic and social needs of donors, and affirms pluralism as a civic value.
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Philanthropy’s shortcomings
• Largely non-redistributive and inadequate, • Fragmented and short-term in focus, • Maintains elite control; wealthiest have larger
say in social policy, and • Creates “us vs. them” ethic among citizens.
Presenter
Presentation Notes
We often hear less about some of the shortcomings of philanthropy. Research suggests philanthropy in the U.S. typically does not go to those most in need. For example, a study sponsored by Google and conducted by The Center on Philanthropy at Indiana University (2007) found “less than one-third of the money individuals gave to nonprofits in 2005 was focused on the needs of the economically disadvantaged. Overall, most donations in the U.S. go to support community churches and synagogues, YMCA’s, museums, and schools—“services that donors themselves use—and are not freely available to target the neediest and to sustain safety nets” (Wolpert, 1997, p. 101). Beth’s work in the U.K. also shows similarities. This makes sense because we know from the work of Schervish and Havens and others, that people give to who and what they know, have benefited or with which they identify. On the other side of the equation, charities in the U.S. that rely heavily on giving are less likely to serve the poor (Salamon, 1992). Overall, there has been no real expansion of giving as % of GDP over past 30 years in the U.S. even though rhetoric that philanthropy will fill the gaps left by a rollback of the state. Philanthropy is also largely fragmented and short-term in focus because of philanthropic particularism, or the way voluntary agencies and nonprofit organizations, their donors and volunteers choose to focus on particular causes. Even in cases where certain charitable causes serving the poor enjoy popularity among donors, there are difficulties associated with meeting the needs of the poor and addressing deep-seated societal problems as Poppendieck shows in the case of the emergency food system in the U.S. For this reason, philanthropy largely serves as a band-aid or even mask for deep structural problems. Philanthropy also tends to allow wealthy elites to maintain the control they have in society. Because wealthier individuals donate more as an absolute amount and receive a larger subsidy for giving, wealthier individuals have more of a say in who benefits from charitable giving compared to less wealthy individuals (or those who are not able to give at all). Finally, when the social world becomes divided into givers and receivers, “haves’ and “have-nots,” Poppendieck notes, philanthropy may serve to erode “the cultural prerequisites for a vigorous democracy [because] we become a society of givers and receivers, rather than a commonwealth of fellow citizens.”
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Counter Democratization Trends • Modernization of Philanthropy
– Professionalization & subordination of volunteer – Rationalization & bureaucratization lead to reduced
opportunities for direct participation
• Marketization of Philanthropy – Emphasize individual over collective – De-politicize social change – Focus on symptoms rather than root causes – Donors become consumers
Presenter
Presentation Notes
Added to this are trends that I’ve argued elsewhere may run counter to a more democratic contributions of philanthropy—the modernization and marketization of philanthropy has led to less emphasis on collective decision-making and engagement. By modernization, I mean the increasing professionalization and rationalization/bureaucratization of philanthropy. By marketization, I mean nonprofit organizations’ growing reliance on the generation of commercial revenue, increased emphasis on performance-based contract competition for government funding, cause-related marketing and social entrepreneurship. Simultaneously, donors have taken on a more entrepreneurial way of giving as well as replaced giving with buying (such as with CRM). I’ve shown elsewhere the problematic implications of these for democratization. If we have time later, we can discuss this further.
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Collaborative Giving
Presenter
Presentation Notes
Yet, while all this is going on, we have seen in the past several years the emerging emphasis on collaborative giving through many mechanisms, including giving circles. The growth of collaborative giving in recent years results from several key trends. Funders see collaboration as critical to address today’s persistent social and environmental problems. They are highly motivated to leverage resources and knowledge to improve giving and investing. And for individuals, there is the added desire to connect with others, network and “have fun while doing good” in an increasingly individualized and fragmented society. Some individual donors want greater involvement or engagement in their philanthropy, while others want easier ways to give to the community. Giving circles allow for both. • To become more involved in the giving process; want to be more engaged with community organizations. • To have fun; to be social with a purpose. • To be part of a larger group and leverage individual contributions; make more of an impact. • To give back to the community. • It is an anonymous, safe place to learn about community organizations and philanthropy. • It is easy, simple and non-bureaucratic; an alterative to the time commitment of traditional volunteering. • For individual empowerment; something I can do on my own. • To connect with others; to be social while doing good and/or network with peers in the same industry. • To promote philanthropy; especially with family. • It provides a new focus during a life change. • To fulfill a quest to be more spiritual and generous.
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Questions Do giving circles: 1. Provide opportunities for democratic participation?
• More/diverse people • Giving more, in more engaged way • Meaningful participation
2. Expand who benefits from philanthropy? • Redistribute resources • Address problems adequately
Presenter
Presentation Notes
Given the shortcomings and counter trends taking place in philanthropy, I wanted to understand if giving circles could address these and serve to democratize philanthropy. I’ve conducted several research studies to get at these and other questions. Data comes from about 75 interviews, a survey with 340 GC members & a control group of 246 donors, observation and participant observation and lots of secondary data.
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Giving Circles in the U.S. 1. Donors pool and give
away resources 2. Donors decide where the
resources are given 3. Independent from any
particular charity, typically 4. Educate and engage
members 5. Social/networking
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Over 600 identified across the U.S. and in many other countries.
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chairs
members members members
committees
Small Group
Formal Organization
Loose Network
Types of Giving Circles in the U.S.
Presenter
Presentation Notes
Let me give you an idea of the breadth of giving circles. They come in many shapes and sizes but my research in the U.S. identified three “ideal” types of giving circles. The New River Valley Change Network is a group of about 12 individuals—mostly women, university students and others with varying backgrounds and experiences—who meet once a month in each other’s homes and offices in Blacksburg, Virginia to give away money they collectively contribute to a fund held at their local community foundation. Each member donates about $10 a month or $100 a year. The members decide together, through a consensus decision-making process, where to give their money. They like to fund small organizations and endeavors that might lead to social change. The group occasionally invites community experts and activists to their meetings to find out about projects or organizations in need of funding. Washington Womenade raises money by holding frequent potluck dinners where attendees donate $35 to a fund that provides financial assistance to individuals who need help paying for prescriptions, utility bills, rent, food, and the like. Membership in the group is fairly loose; “members” show up when they can and the focus of their time together is highly social. In 2002, Real Simple magazine did a story on Washington Womenade, leading to the independent creation of more than 40 Womenade groups across the country. Social Venture Partners (SVP) Seattle, one of 24 SVP affiliates in the United States, Canada and Japan, asks Partners to commit approximately $5,000 annually for two years to participate in the group. SVP Seattle chooses organizations to receive grants through a rigorous process conducted by a grants committee. They fund in the areas of early childhood development, K-12 education, out-of-school time, early learning advocacy and policy, and the environment. The group follows a venture philanthropy philosophy that emphasizes long-term relationships with funding recipients, the provision of seed capital and organizational advice, and close tracking of funding recipients’ progress and effectiveness. Most SVP Seattle Partners also donate their time to the organizations they fund to help with capacity building efforts.
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Questions Do giving circles: 1. Provide opportunities for democratic
participation? • More/diverse people • Giving more, in more engaged way • Meaningful participation
2. Expand who benefits from philanthropy? • Redistribute resources • Address problems adequately
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Opportunities for democratic participation
Membership – Diverse professional backgrounds, including
nonprofit professionals – Experienced and “new” to philanthropy – Diverse wealth-levels – Diverse racial/ethnic/identity backgrounds
According to our survey, members of giving circles give more, on average, than donors who are not in giving circles. Although this finding is tempered when income is taken into consideration, we found that when donors are more engaged in a giving circle, are in a giving circle longer, they give more. In our sample, people in more than one GC tended to donate a lot more than other people, with an average of $13,400 compared to $6,833.70 for members in one giving circle and $4,944.60 for the control group. The differences are quite statistically significant.
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Opportunities for democratic participation
Giving • Members give to more organizations
Presenter
Presentation Notes
Giving circle members also give to a larger number of organizations on average than other donors.
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Opportunities for democratic participation Giving • More strategic
I understand more of where my money’s going and what it’s doing for that organization.
Presenter
Presentation Notes
In the survey, we asked respondents to indicate the degree to which they consider various strategic aspects when making larger charitable contribution… When comparing GC members with the control group, all areas were greater for GC members. Soliciting input from others or collaborating and taking into consideration cultural differences were especially greater for GC members.
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Opportunities for democratic participation
Meaningful participation: • Opportunities for agenda setting, decision-
making & face-to-face discourse. • Build capacities of members:
– Education about issues/philanthropy – Skills as philanthropists/grant makers – Leadership, administrative opportunities – Empowerment (esp. for women, loose networks)
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Presenter
Presentation Notes
GC Members are more civically engaged than other donors. Civic engagement includes: Solve problem in community, Volunteer, Belong to group or association, Help raise money for charity, Hold leadership role in group or assoc., Vote in local/national election, Talk to others about election, Took part in protest, Give money /volunteered for political candidate, Contacted media, Not buy something for social/political reasons, Sign petition, Buy something for social/political reasons , Contact public official It is not possible to say if participating in a GC causes a higher level of civic engagement or if GCs attract people who are already civically-engaged. but, we did find in the survey that civic engagement increases the longer the person is in a giving circle and the more giving circles he or she belongs to.; but decreases with size; that is as the giving circle gets larger, the correlation with civic engagement gets smaller.
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Questions Do giving circles: 1. Provide opportunities for democratic participation?
• More/diverse people • Giving more, in more engaged way • Meaningful participation
2. Expand who benefits from philanthropy? • Redistribute resources • Address problems adequately
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Expand who benefits
Funding Recipients: • Smaller, grassroots, local organizations • High-risk & entrepreneurial, well-run with strong
leadership, or mixed portfolio • Individuals in need or doing good works
Presenter
Presentation Notes
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Expand who benefits
Presenter
Presentation Notes
GC members are more likely than the control group to give to organizations that support women, ethnic and minority groups, and the arts, culture or ethnic awareness. Even when control for race/ethnicity and gender. Giving circle members are also statistically less likely than the control group respondents to give for combined purpose funds and for religious purposes or spiritual development. This suggests that it is possible the giving circle itself is seen as a replacement for more traditional combined purpose organizations such as United Way and religious affiliations.
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Addressing Needs
Presenter
Presentation Notes
What about addressing needs? What we found is that formal organizations do the best in this regard. Generally, members in formal organizations take a systematic approach to becoming educated about an issue area and who is doing what within that area. They then try to focus their funding on filling the gaps, where funding is most needed in that particular area. Small group members, though still attempting to educate themselves, are less comprehensive in trying to understand an issue area and actors trying to address problems. Generally, they are more focused on organizations rather than issues. They look closely at whatever organization comes across their radar screen and then the issues related to that organization and decide on funding based on this limited information. Finally, loose networks are focused on funding individuals. They are not systematic at all about understanding issues or organizations; rather they provide funding in reaction to referrals or stories.
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Conclusions • Internal democracy vs. Democratic outcomes
– Small groups • Equal participation
– Loose networks • Empowering/non-bureaucratic and build personal
identification
– Formal organizations • Most systematic about identifying needs in the community,
educating members, finding funding opportunities, and enabling members to engage with funding recipients
Presenter
Presentation Notes
So, small group giving circles seem to be the most democratic internally—they provide the most opportunities for all members to participate in decision-making, agenda setting, deliberation, and capacity building within the group, which also seems to lead to civic engagement beyond the group. However, creating these opportunities depends largely on having a small, informal structure, and taking the time to sustain such a process, which also serves to limit activities that take place beyond the group. Thus, in many cases small groups are unable to have a comprehensive view of the needs of the community and thus fill in the gaps appropriately. More formal and larger groups are better at this, but then have less opportunities for engagement and lead to less external engagement. Loose networks are even less comprehensive in their approach to finding funding opportunities because they respond to individual needs, though they have the redeeming qualities of empowering members internally. One conclusion from the giving circle context is that democracy within the organization does not (or cannot) lead to democracy in society more broadly.
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Conclusions
• GCs: – Provide opportunities for democratic participation
• To some degree address: – Expanding who benefits from philanthropy – Short-term & fragmented focus – Elite decision-making – “Us vs. them” ethic
• Adequacy in addressing needs questionable
Presenter
Presentation Notes
In conclusion, giving circles address many of the negative aspects of philanthropy and counter-trends; however, they have limits to what they can do. This raises a question about the degree to which we want to rely on philanthropy, even the most democratic of mechanisms, to address basic needs/issues in society? Practical Recommendations – Engaging Donors Concentrate on retaining and engaging donors – particularly in the grant making process Use giving circle as a platform for increasing donors’ awareness of community needs and resources Offer opportunities to volunteer and become involved with nonprofit partners Don’t worry about diverting funds through the giving circle
