Self interested foundations

David Leonhardt, "Economic Scene" columnist, looks at this question in this Sunday's "Money" issue of the New York Times Magazine. Online here. As Leonhardt looks at social science research on this question, particularly that done by economists, he asks:

"To put it bluntly, is charitable giving a high-minded form of consumption?"
That is a question for an economist, and Leonhardt sheds a lot of light on it. I'm more interested in the broad findings he cites of researchers who studied the effects of matching gifts, as well as pyschological research, and the economists' persistent search for rational behavior. All of which point to findings that some of what motivates giving is not rational, it is feel good. It is self interest. In the words of the researchers, it is "warm glow."

This is, no doubt, going to strike you as either painfully obvious or ... painfully obvious. Some may be moved by this finding the same way I was when I learned that one national government had invested millions of Euros in sleep research to reveal that the best cure for being tired was to take a nap. So why do I bring it up?

First of all, self interested does not mean self-serving. A donor can be self-interested in public health, even though she has private insurance and a primary care doctor. She may be interested in public education, access to the arts, and religious tolerance - even though she has no children, can't paint, and isn't observant. She can also be interested in public health, public education, the arts and religious tolerance - and a direct user of free clinics, local schools, museums, and active in a congregation. She may make enormous grants to homeless shelters in her community because she cares deeply for the poor or because she doesn't want people on her street or because she doesn't want government paying for services or to stop religious organizations from providing social services or other reasons all together. She may help someone because she was once in their position, doesn't ever want to be in their position, or sees herself indirectly benefiting from their direct benefit. Passions may be shaped by personal experience, or political frameworks, belief systems or the advice of trusted elders - any of these influences or all of them may be at play, and they don't, and shouldn't, be used to make self-interest synonymous with self-serving.

Second, if if those of us in philanthropy know these research findings about motivation to be true, why do we ("we" meaning organized philanthropy, staffed foundations being the most frequent culprit of this) insist in pretending that it isn't? There seems to be some pride in pretending that our organizational program areas and focus are informed only by community needs, scientific assessments, or research and dispassionate analysis?

I see it differently. At some point all foundations are set up to address issues that were of self interest to someone...there may be degrees of this, sure, but I challenge us to find a single foundation - public, independent, corporate - as formal and as rational and as market aware as you like - and not be able to trace the organization's work to someone's "self interest" in two or three (OK, maybe even six) degrees of separation. Someone chose the areas to work in, someone picked the issues, someone defined the programs - some of them (lots of them) do this with a lot of research, community input, and credible analysis. But the initial setting of parameters - geographic, issue-based, religious, demographic - you name it, will reveal the "self interest" of the donors, their lawyers, trustees, children, accountants, professional staff.

Try it. If you find a foundation for which there is no trace of self-interest, let me know. Why? Because I think acknowledging the role of self interest is nothing to be shy about - in fact, it makes sense to me that organizations established to pursue the interests of the donors will be more effective - donors will be more engaged, staff may be hired for their professional knowledge and personal passions, and everyone involved will care about the work. I'd even go so far as to posit that establishing a funding organization to advance the interests of the donors is more likely to lead to the use of research, analysis, and a broad range of expertise than not.

Self interest gets a bad rap in philanthropy even as research shows that it is "ever with us." Let's change the argument from "either self interested or effective" to one that uses that self-interest to motivate smarter giving.

1 comment:

EG said...

I think you could only get away from being self-interested if you actually became close to democratic (letting a community or their representatives decide what cause and who to give your money too). I agree that self-interest gets a bad rap.

I think part of the reason though is that saying giving is "self interested" challenges the notion that it serves a "common good" (despite that capitalism and even, to an extent, democracy are systems built by aggregating everyone's individual self interest).

The other reason is that, if you look more broadly at the economic and legal research in which Leonhardy's discussion is rooted, it's about whether we should have the charitable contributions deduction and tax exemption. If giving is mostly self-interested, a bunch of the arguments people use for those policies disappear. (Why should the warm glow of giving to the non-profit symphony be treated differently than the joy of going to a very for profit rock concert?) My point being that we don't like self-interest because it might draw attention to exactly how much goes on in the whole sector - not just in philanthropy - that is closer to self-interest than widespread public interest or the interests of those least well-off in our society.