Table 2 (pp. 134–35) identifies several types of harm that can result from philanthropic acts. Some of these are so obvious that they bring into question the common sense, and even the motivation, of any philanthropist who causes them. Other harms detailed here are more subtle, apparent only to those who worry about indirect and unintended consequences.
The philanthropists whom we interviewed were by no means oblivious to these sources of potential harm. Indeed, they identified most of the harms detailed in Table 2. But the recognition of potential harms was far from complete or consistent among the people with whom we spoke; rather, it was distributed scattershot among the group. All the philanthropists were concerned about particular negative outcomes that they themselves may have personally encountered, but they showed little awareness of any such outcomes of other philanthropy. Nor did they look for guidance to any third source, such as a domain-wide document analyzing the matter and setting out recommendations for dealing with it. Philanthropy, unlike most professions, has not produced for its practitioners a set of common codes, beyond the minimal requirements of the law, that mitigate or prevent adverse consequences that may result from philanthropic activities.
This is not merely an academic or hypothetical point. Even though the harms listed in Table 2 emanate from the propitious event of some person or institution coming into money, they can do as much damage as actions taken out of hostility. Consider the following examples, drawn from our interviews with both philanthropists and recipients.
Direct Harm to Lives. The annals of philanthropy contain cases of egregious harm done to persons who have been used as means to such desired ends as medical and scientific research. One of our interviewees pointed to the deal with a philanthropist that Arctic explorer Rear Admiral Robert Peary felt forced to make after he left the Navy: “In order to fund his expedition, Peary went into the world of philanthropy. And he found a philanthropist who had achieved most of his money from the railroads in the late 1800s, and one of the things the philanthropist wanted was some human specimens of Eskimos for the higher purpose of research. So Peary went up to Greenland and he brought back six Greenland Eskimos, five of which died of pneumonia within the first three months of being in New York City.”
In the course of the twentieth century, ethics codes, research boards, and legal sanctions arose to prevent this kind of blatant dis- regard for human life. Today’s contemporary sensibilities reject the idea of endangering humans for the sake of research. But many argue that the temptation is still there, especially with disenfranchised and voiceless populations such as natives of distant lands, the mentally impaired, the critically ill, prisoners, infants, and the unborn. And tragic mistakes still do occur, such as in the case of Jesse Geisinger, a victim of experimental gene-therapy research. The risky procedure that led to Geisinger’s death was administered by a university laboratory that had been funded by more than two dozen private and public philanthropic agencies. According to his family, Geisinger was not made aware of the dangers of the procedure to which he was subjected. Also in recent years, concerns about fatal results from well-intended research have been raised in connection with control trials for AIDS research and other high-profile, philanthropically supported scientific ventures.
Weakening Valuable Nonprofit Organizations. It is strange to think that a nonprofit group that relies on charitable gifts could be somehow harmed by some of those gifts. Yet this can be one more instance of the bitter irony that Andrew Carnegie noted when he remarked that many gifts exacerbate the problem they were designed to solve. Like individuals, organizations can become overly dependent on charitable donations and can acquire unhealthy habits in the wake of this dependency.
The most prevalent—and corrosive—set of bad habits is acquired in the effort to keep the money spigot open. Often this requires not only salesmanship but also some modification of the organization’s activities to match the donor’s priorities. This is not always a bad thing: donors may have constructive ideas about projects and services that can help an organization meet its mission. But sometimes the donor’s requests (or demands) can undermine the mission by inducing recipients to operate in ways that depart from their better judgment.
For example, an art museum or a library may have its hands full simply providing its basic services to the community that it serves. Everyone agrees that such services enrich the community in irreplaceable ways, yet the museum or library constantly struggles to meet its budget, and few donors are interested in providing mere survival funds. What they are interested in are splashy new programs that garner special acclaim and publicity. The temptation for staff is to launch programs as a way of chasing funds, even if this further saps their organization’s infrastructure resources and diminishes its capacity to provide its essential services.
This temptation is exacerbated whenever an organization is required to go to multiple donors, all of which have their own idiosyncratic beliefs and priorities. Creating proposals to satisfy a multiplicity of diverse, and often contradictory, expectations can be an exercise in Rube Goldberg–style design. Consider, for example, the case of a medical research lab trying to raise money for exploratory work in diagnostic testing:
We were able to secure an initial seed grant from NIH [the National Institutes of Health] and then a larger grant from a private foundation that required matching funds. That got us entangled in a long series of conversations with smaller foundations, family run, and then some wealthy individuals who were interested in this area. They all wanted their own proposal in language that addressed their issues, they all had conditions and suggestions about how to go about things, but none of them knew any more than any layman about medical research. One of them wanted us to start with a survey of what doctors would be likely to use given their time constraints and then build the design around that. Another said we should bring in scientists with different perspectives than ours to collaborate with, to make sure that we covered all the bases. They even had ideas about what to look for, sampling issues, technical stuff that they must have gotten opinions about from the press. Most of the ideas were totally unworkable, and the back and forth on it has been frustrating and distracting and it continues to be to this day, even from the groups who finally decided to fund us on the grounds that we laid out. We’re not sure that we won’t get the rug pulled out from us somewhere down the line for some arbitrary reason that will pop into someone’s head.[4 ]
The distractions here include expending time and resources on constant fund-raising and proposal writing, combating illegitimate pressures to adopt poorly conceived strategies, and living with the insecurity of not knowing when or why future funding may be cut off. Such distractions can weaken recipients’ capacities to pursue their primary missions by blurring their focus and making long-term planning impossible.
The “venture philanthropy” approach, guided by funding models drawn from business, is especially prone to confronting recipients with debilitating distractions of this sort. Among the practices that can undermine recipients’ work are (1) positioning the philanthropist as a “partner” in the venture, with shared authority over operations, rather than as a more distant, hands-off investor, and (2) expecting predictable results similar to quantifiable business outcomes from work on complex social, cultural, and scientific matters. Trying to hold nonprofit organizations to such standards can be worse than unrealistic: it can place at risk the uniquely valuable services that they provide to society.
Many in the “new philanthropy” school pride themselves on their wish to start from scratch, ignoring the old practices and traditions that, they believe, will hinder the effectiveness of their “investments.” A determination to improve on past practices is always laudable, but in most fields it is understood that this can be accomplished only once the field’s best practices have been under- stood and mastered. It is hard to imagine someone trying to become a doctor by saying, “Oh, medicine is all wet, I am starting from scratch.” Yet that is what many venture philanthropists are in effect saying, thus risking not only repeating the mistakes of their ancestors but also making new ones. But medicine has a solid domain as its touch point; and a certain level of understanding of that domain is required for certification to practice in the medical field. Because philanthropy has never developed its own domain, it has no way of recommending, let alone requiring, responsible practices to those who enter the field with no expertise or experience of their own.
Disrupting Real Social Improvement. At any time in any society, there is a wide variety of efforts dedicated to improving the human condition. Some of these efforts are aimed at social change, others at preserving endangered features of the past. Some efforts are focused on developing fresh ideas through discovery and research, while others look at implementing ideas through new social and economic policies. Some efforts are local and community based, while still others are geared toward as broad a scale as can be imagined.
All such efforts are subject to market tests of one kind or another. A new idea must prove itself before it becomes persuasive. A social or economic policy must withstand assessments of its outcomes before it becomes widely adopted. In the natural course of events, contending ideas and policies attract advocates and compete with one another on the basis of their validity, utility, and efficiency. Social progress can be defined as the success of ideas and policies that lead to genuine improvements rather than those that lead to degradations. Societies that encourage unhindered generation, expression, and testing of innovative ideas are those most likely to enjoy perpetual improvement.
As a powerful intervention, philanthropy plays a role in determining which ideas and policies win out. Moreover, this role has increased exponentially in recent years, as the growth of philanthropic organizations and resources has created a philanthropic presence in almost every effort aimed at social improvement. On its face, there is nothing at all wrong with this: an essential characteristic of a free society is that any person and group has a right to play an active role in determining the direction of the society’s future. But with every right comes a responsibility. It is a legitimate question—and one that pertains directly to our examination of good work—as to whether philanthropy is prepared to play its increasingly decisive role in a responsible manner.
From our interviews with executives and staff of large philanthropic organizations, four conclusions that speak to this question emerged:
Contemporary philanthropy is biased toward goals of social change rather than goals of social preservation.
Philanthropic decisions usually are made by people several steps removed from the problems they address and with little training in disciplines that study such problems.
Philanthropic decisions rarely reflect the judgments of practitioners who have actual experience dealing with the problems addressed.
Philanthropic decisions are heavily influenced by new trends that sweep the field with much enthusiasm and little skepticism, magnifying the effects of these sudden shifts in direction.
Moreover, both the biases and the limitations of training and experience seem to be largely invisible to many who deploy philanthropic resources. For those who are new to philanthropic giving, there is often little reflection about core assumptions or alternative ways of orienting to such basic issues as the wisdom of change versus preservation. Other philanthropists might not know enough to justify the move to application and the cessation of discovery.
As an example, in our interviews we found an unsolicited and unexpected consensus about one instance of this effect: the large-scale school reform efforts of the 1990s, which were experimental attempts to improve schooling through often massive injections of funds into school systems nationwide. When asked for examples of failures in philanthropy, more than three-fifths of our interviewees noted prominent initiatives of this sort, and none cited one of these efforts as a successful example. The reasons offered by our interviewees varied; some of them with a special interest in education made observations about principles of school change that are too technical to go into here. But there was agreement that funding patterns favored some approaches over others in arbitrary and unjustified ways, and the effects of these patterns were exacerbated by a group-think mentality that led most major foundations to support the same small circle of highly promoted initiatives. As for assessment, in most cases it was impossible to determine exactly what had happened because of poor documentation; and in the few cases where such identification could be made, the results were generally disappointing.
The irony is that all this came at a time of lively experimentation in school reform, with much energetic competition among distinct approaches. At best, it is clear that the foundation-supported efforts contributed little to this fertile movement. At worst, it can be claimed that these efforts soaked up human and capital resources (there are only so many educators and school settings to go around, and when they become committed to one initiative, they become unavailable to others); that they crowded out more promising but less visible approaches that had not yet gathered the necessary momentum to sustain attention in the face of the more publicized initiatives; and that they resulted in a general discrediting of schooling improvement efforts.
I was fortunate to interview John Gardner, the visionary leader of America’s nonprofit sector, shortly before his death. Gardner too worried about philanthropy’s blindness to its own failures. He pointed to a belief system similar to the one I have discussed in this book: the sense that those who attempt good things need not concern themselves about the inadvertent consequences of their actions. Gardner, with his long history in the philanthropic world, knew better. He had seen much genuine social progress made possible by the generosity of charitable donors and the good work of philanthropic foundations, but he had also seen mistakes, setbacks, wrong turns, and serious harms caused by money incautiously given. “One of the problems with these things,” he told me, “is that they go up and down, up and down.” He went on to say: “There’s something about lofty ideals that is at odds with clean-cut self-evaluation. You know, ‘How can you criticize us when our ideals are so great?’ That’s why I like that cartoon from Peanuts of Charlie Brown on the pitcher’s mound [watching the ball fly over the fence], saying, ‘How can we lose when we’re so sincere?’”
Those practicing such endeavors as medicine recognize that their efforts may result in harm as well as good, so they establish procedures and standards to minimize the possibility of harm. Although some practitioners of philanthropy take seriously the possibility that money-giving interventions may bring unsuspected harm, this recognition is distributed neither widely nor consistently across this diverse and growing field. Does philanthropy need accepted procedures and standards beyond the minimal legal codes that it is required to follow? Or should it be regulated less like a profession and more like a voluntary and pluralistic array of altruistic acts— diverse expressions of the charitable impulse that should always be welcome, no matter how they are done?
Unfortunately, these questions have not been resolved in philanthropy. The only codes of conduct that the field has examined are (1) a philanthropic act should reflect the donor’s intent, (2) it must conform to legal requirements of the state, and (3) it should advance the public interest in some loosely defined manner. And even with respect to these principles, the agreement is often grudging, with foundation staff chafing under the donor-intent principle, donors often chafing under the legal restrictions, and everyone squabbling about what best serves the public interest.
Without shared norms that go beyond minimal legal requirements, it is impossible for any enterprise to reliably mitigate the potential harms it may cause. Most fields discover this case by case, after the fact, and respond by adopting a new norm. For example, patients are butchered by incompetent surgeons, so a new norm of medical training is established; a sexual scandal rocks a church, so a new norm of pastoral relations is endorsed; investors in the financial markets lose huge sums of money because of misleading information, so new norms of advising and accounting are put in place. Harm is not an acceptable risk, no matter how noble the intentions. Philanthropy shares with medicine and all other well-meaning interventions the imperative to take all imaginable precautions to prevent unintended harms that its actions may trigger.
[4 ]Details of this story have been altered at the request of the recipient, but any nonprofit research center will recognize the general pattern.
See Education Week, October 21, 2000, for further details on the disappointing outcomes of the school reform movement as well as some rare exceptions.