Philanthropy s Darker Side: The Well-Intentioned Harm

Philanthropy’s Darker Side: The Well-Intentioned Harm

In the earlier quotation, Carnegie was referring to the harm of supporting bad habits that sustain poverty. By now, this particular harm is recognized by most of the people and organizations that give significantly to charity. But other harms too can emanate from philanthropy (see Table 2)—some of them, to use Carnegie’s metric, at least as grave as the problem that the gift was meant to solve.

Table 2: Typology of Harms

Type of harm	Description	Example
Direct harms to lives	Harms done to persons, including but not limited to the recipients of the service provided by the philanthropy.	Medical trials on human subjects.
Weakening valuable nonprofit organizations	Harm done to nonprofit organizations and their personnel. Examples include pulling nonprofits away from their own missions and priorities toward the funding priorities of foundations; creating frustration in personnel regarding grant requirements (including length of grant cycles, reporting, and evaluation); inappropriate influence in the organization by the funder; provision of insufficient general operating support that negatively impacts the staffing and pay of the nonprofits and their personnel.	A medical research lab trying to raise money for exploratory work in diagnostic testing.
Disrupting real social improvement	Undue influence of people biased in their approaches to social improvement, with a tendency to be swept up in funding trends, and with little direct connection to the social problems and practices their resources are meant to address. This harm includes the crowding out of ideas that do not fit into the fashionable philanthropic trend of the moment.	The large-scale school reform efforts of the 1990s.
Destabilizing communities	Philanthropic bias toward social change whereby decisions are generally made by people removed from the problems they address, with harmful results to the communities that the philanthropy intends to serve. This harm includes fostering turf wars and competition between grant seekers.	The urban renewal of the 1950s and 1960s in which neighborhoods were replaced with the development of “projects.”
Creating unhealthy dependencies	Unhealthy dependencies can be created in three constituencies: government (excessive devolution of responsibility); nonprofits (over-reliance on single sources of funding); and recipients (reliance on unstable nonprofits).	Irrationalities in the welfare system, past and present.
Creating an underclass of nonprofits	Some nonprofits doing good work are less equipped to navigate the requirements of the funding world. They may lack the professional staff. to draft sophisticated grant proposals and the personal connections to the foundation world necessary to successfully pursue funding.	Social clubs established in the 1970s by and for low-income recovering addicts. [3]
Subverting democratic principles	Undue influence on issues of public policy by a small and unrepresentative group that controls vast amounts of resources.	The eugenics movement of the early twentieth century.
Harm to the philanthropic endeavor	Certain practices can undermine the credibility of the field of philanthropy. For example, the existence of an exaggerated sense of what the philanthropic sector has the capacity to do, accompanied by a lack of transparency and accountability about what they actually do, can erode the public trust. Malfeasance and/or mishandling of philanthropic resources can do the same.	Prosecuted cases of fraud, abuse, corruption, and other misuses of donated funds.
[3]See W. Schambra’s article “The Friendship Club and the Well- Springs of Civil Society,” available on-line at www.schumachersociety.org/lec-sch.html.

Moreover, trends in philanthropy since the days of Carnegie and his wealthy peers (Ford, Rockefeller) have exacerbated this potential for harm. One such trend is the increasing bureaucratization of the foundations that the original donors set up. A self- sustaining bureaucracy can create careerist incentives for its staff, enticing them to depart from the important interests of the recipients that the foundation was meant to serve. Another trend is the emerging popularity of business and marketing models in the philanthropic world (sometimes called “venture philanthropy”), creating pressures that can distort, and in some cases directly interfere with, the missions of the grantees. I discuss these and other examples in detail below.

How well are philanthropy’s possible harms taken into account by those who practice this worthy endeavor? Do practitioners of philanthropy ensure that their good intentions actually lead to constructive rather than destructive outcomes? Do they exercise the kind of caution, wisdom, and humility that Hippocrates urged on practitioners of medicine, that other domain of benign and lofty intentions? We have found many admirable standards of conduct among those who work in philanthropy. For example, there is a widely shared sense that those who dispense funds are “stewards” of the money that they control, and, accordingly, that they have a sense of responsibility to the public interest. There is an avowed respect for the grantees that they serve and a stated determination to act in a way that demonstrates this respect. There is a common belief in strategic thinking and planning, so that philanthropic funds may be used efficiently and to maximum effect. There is a widespread commitment to accountability, the honest assessment of grant-making results.

But when we spoke with grantees who received philanthropic funds, we found a huge gap between the perceptions of the philanthropists and the experiences of the recipients. Recipients rarely felt that they had been treated with respect; they felt that their efforts had been undermined by restrictions or requirements imposed on them as a condition of support; and they questioned both the priorities and strategies of the philanthropic world.

The sense of disenchantment among these recipients surprised us, because we spoke only with highly successful grantees who have maintained long careers largely financed by generous support from the philanthropic organizations that they were now criticizing. Perhaps they could be accused of biting the hands that feed them, but (to switch food metaphors) they were not suffering from the taste of sour grapes. Are the hard feelings of recipients simply the resentment of people who don’t like being forced to jump through hoops to garner support for their cherished causes? Or, as the people who are closest to the problems that philanthropists are trying to solve, is their discomfort a clue to shortcomings to which philanthropists should attend?

Although the perceptions of recipients may be distorted by their own personal trials in wresting needed support from philanthropists, their overall skepticism provides clues about the challenge of doing good work in philanthropy. Among other things, it suggests that doing good work may not be as straightforward as it first appears. It is clear that the happy act of giving money away is not always sufficient to win the gratitude of those who get it. Does that mean that the gift is also not always sufficient to improve their conditions in life? And, going even further down the skeptical path, could this beneficent act somehow worsen the conditions of those whom it is intended to help?

Indeed, the more I have examined this field, the more I have become convinced that, to do good work in philanthropy, it is necessary to begin with an awareness of potential harms and an under- standing of how to handle them. Yet the problem of potential harms, beyond the most obvious misadventures, is rarely recognized and even more rarely discussed in philanthropy today. The problem of harm lies at the heart of philanthropy’s greatest challenge: to ensure that changes inevitably brought about by the intervention of giving someone money will end up improving the conditions of individuals and communities. Until philanthropists take seriously the reality that any change can lead to unwelcome outcomes—and until it develops a systematic set of standards and methods to protect against this possibility—it will always flirt with irresponsible risks, hardly a hallmark of good work.