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When Big Philanthropy Fails

I came across this article recently (noting that it’s from November 2021) that I found incredibly disheartening and I wish had sparked a different conversation. CNN’s intention behind the article wasn’t to discuss big philanthropy, but as I read through it, I couldn’t help but think there was a missed opportunity to examine the realities of the gift that has left thousands of students miserable and whether the University of Michigan really did right by their students with this gift.

As income inequality has grown in America, the world of philanthropy has reflected that. The old adage was 80% of an organization’s dollars come from 20% of their donors, but the reality looks more like 90/10 today.[1]

There’s been a huge push in the last few decades to hyperfocus on cultivating and soliciting fewer/bigger donors, and in that push a trend has occurred - organization’s capitulating to donor’s wishes and structuring poor gifts (as opposed to denying them or compromising) that align with the donor’s world view, but not necessarily with the organization’s needs.

“Big Philanthropy is definitionally a plutocratic voice in our democracy,” Reich told me, “an exercise of power by the wealthy that is unaccountable, non-transparent, donor-directed, perpetual, and tax-subsidized.”[2]

Case in point – Charles Munger gave a $200m gift and is considered an “amateur architect.” I have no doubt the University of Michigan needed additional housing built, but the strings attached to Mr. Munger’s gift were that they follow his uneducated designs. That left 4,500 dorm rooms windowless, where students must use sun lamps and students are experiencing significant mental health drawbacks. Students are desperate to break their leases.

Not that these consequences should’ve been a surprise. Who wants to live in a windowless bunker? Who is Charles Munger to stipulate his gift must follow a design – which is neither informed by social science or good architecture. More importantly, why didn’t the Advancement team at UCSB push back and even consider, denying the gift? What good did this gift really do? Did the organization really do right by the donor and the university?

Organizations often make the mistake in the pursuit of fundraising dollars to lean into the donor’s wishes and affirm the donor’s bias, while ignoring what the end goal really was (in this case, decent housing).

I’m not postulating on whether big philanthropy is either “good” or “destructive.” There are great books, articles, and discussions on both sides of the aisle. Instead, what I’m asking the fundraising community today is, wouldn’t we be better off by focusing on building and finessing a marriage between our donor’s wishes and our mission, especially when it comes transformational gifts?

[1] [2]

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