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Power relationships in philanthropy


Shelagh Gastrow provides advisory services to the philanthropy sector, higher education advancement and non-profit sustainability. She works with individuals and families on how to integrate their wealth and their values into meaningful and effective philanthropy. From 2002-2015 she was founder and executive director of Inyathelo and focused her efforts on strengthening civil society and universities through programmes to develop their financial sustainability whilst promoting philanthropy in SA. Her work has gained public recognition locally and internationally.

It is essential for private philanthropy to move away from the old charitable paradigm where non-profit organisations are forced into a state of begging. Begging to be heard, begging to be seen, begging for funds and begging for payment. 

The philanthropic sector is extremely diverse. This is reflected in the very broad spectrum of causes funded by private philanthropy, but also in the way philanthropy is practised. There are individuals who believe that as “it is my money”, any recipient has to toe a line and do what they are told, while there are others who prefer to remain anonymous and enable the recipient to use the funds as they see best.

There are also many philanthropic foundations that have been established specifically to support particular causes, based on the interests and passions of the founder. These foundations have a particular personality when the founder or his/her family are still alive, but as time passes the foundation is often governed by a board that has no links with the original family.

In some cases, as in the US, these foundations become massive bureaucratic global grantmakers and lose the original ethos of philanthropy. In many ways they become private aid agencies, shifting from one country to another and one issue to another, often driven by political factors, with international offices and large travel budgets. 

In the middle of all this are the grantees, the non-profit and civil society organisations that are the recipients of philanthropic funds, and the resultant grantor-grantee power relationships. 

Many organisations believe that without the funds, they are utterly incapacitated. Indeed, there are numerous cases of donors shifting direction, providing a warning to their grantees that this will happen, and then good-bye without any coherent exit strategy to ensure that the organisation is not damaged in the process. This frequently occurs when there is a change in foundation leadership and unfortunately the outcomes can swing wildly every five years or so.

The financial ramifications for grantee organisations when there is a switch is not considered. They may have employed additional people to run programmes and these are nearly always long-term attempts to right the wrongs we face in society. There is rarely any short-term impact when dealing with communities and social change and it is good donor practice to stick around for the long term. The sudden withdrawal of a donor has huge ramifications for organisations, their staff and their purpose.

It is in many ways similar to a product boycott of a for-profit organisation or a commodity price crash. However, we should never forget that philanthropy is fundamentally disabled if it has no partners – in essence, it works through partnerships and the power dynamic between the funding entity and the operational entity on the ground must shift from the distorted perception that money is all. Essentially, philanthropy and grantee organisations are part of the same continuum, including the individual beneficiaries at the end of the continuum. The failure of one impacts on all.

There is no doubt that philanthropic entities themselves occasionally have their own sense of entitlement when they hold the money bags. 

I once witnessed a group of international philanthropists on a philanthropy safari in South Africa, visiting township organisations. The local people made a huge effort to ensure their visit was enjoyable and arranged to showcase the work that was taking place on the ground. The philanthropic representatives descended from the bus, looked around, a few concentrated on the welcomes and they observed the projects. After a few polite questions, they re-embarked and were never seen again. Why would they expect community organisations with threadbare budgets to entertain them with their time, not to mention the tea and cake, and then leave nothing behind?

According to an organisation called Justice Funders, there is a spectrum of views on the role of capital. The most extractive version implies that “individuals and institutions have the right to endlessly accumulate capital and make decisions on how it should be allocated for the public good” and this “perpetuates the power dynamics between givers and receivers”. For many non-profit organisations, this is the paradigm with which they are working.

However, there are strong indications that the critique of philanthropy is hitting home and many efforts are being made to shift the paradigm. Expectations of immediate impact or financial sustainability through the use of philanthropic funds have become far more tempered, with increasing numbers of philanthropic donors taking care to ensure that they support the whole organisation, rather than specific programmes. 

After all, an organisation is not merely the sum of its programmes. It has value because it exists. There is a great deal of activity in an organisation that is not directly related to the programmes it runs. These include the impact its leadership makes on society through action, voice and advocacy, the negotiations that take place between civil society organisations, government and the corporate sector that involve high levels of social leadership, and the capacity to bring people together to effect change. According to Jonathan Raymond of the Stuart Foundation:

“One of the greatest legacies we can leave is a network of strong, healthy organisations, without whom the work on the ground would not happen.”

Raymond also points out that philanthropic foundations “have the ability to commit resources for multiple years, enabling work to unfold over time while an organisation builds capacity and establishes itself”. He indicates that some foundations do the “best interpretation of Sugar Ray Leonard, bobbing and weaving from one idea, programme, initiative, and grant to the next” and calls on foundations to use the inherent resource advantage they have – unconstrained time – and to use it “wisely and responsibly.”

According to Thomas Tierney of the Bridgespan Group and his colleague Richard Steele, in their publication, The Donor-Grantee Trap, there are three basic principles for effective collaboration. They include ensuring that the non-profit organisation is adequately resourced “to get the job done”; to partner effectively by developing “shared goals and a productive working relationship” and to “Get Better Together” by creating space for learning and improvement by both parties. 

It is essential for private philanthropy to move away from the old charitable paradigm that creates a situation where non-profit organisations are forced into a state of begging. Begging to be heard, begging to be seen, begging for funds and begging for payment. 

As Raymond points out, “working in philanthropy is a privilege” and there have to be ways to work together through the continuum. Being stewards of funding has enormous responsibilities and there is no doubt that donors or foundation staff need to undertake a degree of due diligence to assess grantee organisational governance, leadership and that operational skills are in place. 

However, the increased demands for documentation, unpacking every element of the programmes run, the logic frameworks and the bean-counting has often reduced the passion for the cause into a technical nightmare for the grantee organisation. The donor’s bureaucratic demand for paper implies a lack of knowledge and even distrust. How much better could it be if the donor took time to get to know their partners, listen to their experiences and share their expertise if requested.

There is a huge spectrum of philanthropic practice in South Africa, but we are seeing greater interaction between donor and grantee organisations. Our society is relatively small and our local philanthropic foundations are not ivory towers isolated from the rest of society. They are informed, they undertake research and site visits. In most cases, the board members and staff have connections on the ground and engage with the organisations they fund. 

However, the South African philanthropic community cannot resource all the 250,000 registered non-profit organisations that exist in the country and it is up to those organisations to identify and engage with a variety of potential supporters through the use of crowdfunding and connecting with a diversity of other donors, including the corporate sector, international aid agencies, international foundations and government at every level. DM


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