Thursday, November 21, 2002

Not like other industries

We've made a big point of defining philanthropy as an industry (see our publication "Industry Excerpts," (available at and, for the most part, foundation executives, commercial gift fund vendors, researchers and others seem to be on the verge of agreeing with us. But we know that two key charactersitics of any industry, competition and regulation, play slightly irregular roles in philanthropy. For example, while there is significant competition between purveyors of giving products - commercial financial advisers, banks, community foundations, other foundations - for managing philanthropic financial assets, the need to pool funds and work together is also critical if these dollars are going to make a difference. So alliances and partnerships are as important as competition.

Regulation, on the other hand, is a powerful shaper of philanthropic action, and an area that the industry as a whole seems hell-bent on ignoring as a tool for improvement. Other industries - everything from toys to technology - recognize the influence they can have on the regulations that matter to them. They actively support everyone from their chamber of commerce to their industry trade assocations to their political action committees to ensure that regulators know their positions on issues. Philanthropy, on the other hand, prefers to keep an arms length from most policy actions regarding the industry. At the state level in particular, organized philanthropy is woefully unorganized when it somes to proactively monitoring, recommending, and working with policy issues vis-a-vis giving and nonprofits.

How do these two elements of industry - regulation and competition - and the odd nature of them in philanthropy, help us to understand the nature of the whole beast, and how might we focus on them as levers of improvement? Any ideas? email

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