Mary Ellen Capek and Molly Mead, authors of Effective Philanthropy: Organizational Success through Deep Diversity and Gender Equality, talk about how a new understanding of diversity and gender equality can strengthen organizations and increase public benefit.
Why is philanthropy important today?
Although philanthropy is increasingly common in many countries, the
U.S. has the most institutionalized history of philanthropy—driven at
least in part by federal income-tax exemptions for contributions to
organizations that are certified "charitable" or "nonprofit" by state
governments. In 2004, more than 66,000 foundations with over
$476.7 billion in assets gave an estimated $32.4 billion in grants to
nonprofit organizations to support a variety of activities, including
research, health, education, arts, and culture as well as both systemic
and charitable efforts to alleviate poverty and improve people’s lives.
Foundation resources are money that would otherwise be added to federal
and state treasuries, money otherwise taxed and used for public
benefit. For this reason alone, the public should know more about how
foundations are managed. By virtue of their "power of the purse" as
well as more subtle forms of influence, these foundations are key
players in U.S. social, economic, and public policy and are also
increasingly influential internationally. So for all these reasons,
philanthropy is important to know more about. And when foundations
learn to function effectively, the potential for public benefit is
tremendous.
Your book is called Effective Philanthropy. What do you mean
by "effective" philanthropy?
While many [philanthropic] foundations, especially larger,
professionally staffed foundations, work responsibly, collegially, and
for "the common good," many more—an estimated five out of six U.S.
foundations—are unstaffed and, for want of a better word, idiosyncratic
because they are influenced by family members on their boards or
financial advisors who may or may not have "the common good" as part of
their portfolio. Given
their inherently elite status with so few outside pressures to change,
foundations are the least likely organizations to model cutting-edge
effectiveness initiatives.
Effective philanthropy succeeds at amassing, managing, then allocating
financial and human resources in ways that have the greatest positive
impact in the sectors that foundations choose to fund. To allocate
resources effectively, foundations must have vision and strategies for
their grant making that allow them to analyze issues and concerns they
want to influence, identifying both challenges and potential resources.
They must be able to find the nonprofit organizations most likely to
produce the results they intend. They must be able to structure their
grants in ways that will be most useful to their grantees. And they
must evaluate what they do to ensure they are having the intended
impacts. The
most important findings from our research revealed links between foundation effectiveness and
institutionalizing nuanced understandings of diversity, what in the
book we call "deep diversity," including gender.