October 20, 2005
Dead End Giving
We've all heard about the 'gift that keeps on giving' -- an aspiration that connects sustainability with charity. This is particularly important in a world of markets, networks, organizations, friends and family because (1) organizations use charitable resources to achieve chosen ends; and, (2) all organizations are businesses -- that is, have some kind of focused set of services or products that depend on continually generating as well as using resources.
Put differently, gone are the days when most charity went from individuals to individuals. Instead, our charitable gifts go to organizations -- intervening businesses whose purpose is to provide assistance and help to individuals.
And that means we who give must pay attention to the sustainability and performance of the business of those charities we favor. We must think of ourselves, at least in part, as investors in those businesses.
All of which makes the following anecdote troublesome. An extremely wealthy person recently chose to gather other wealthy people to hear from a variety of experts about philanthropy. As initially designed, one panel was to cover 'social investing' -- an entire field of thought that specifically connects investment thinking with organizations who 'do good'.
Yesterday, I learned that the panel had been cancelled by the wealthy sponsor who declared, "There is nothing about so-called social investing that is remotely connected to philanthropy."
We need to celebrate all -- rich and poor -- who give charity. Let us then stand up and applaud this wealthy person for the initiative behind this gathering. It is a good thing.
And, let us hope that the conference sponsor will hear and learn more about 'gifts that keep on giving' because the same investment thinking that made this person's wealth can and do make charitable organizations more sustainable.