Philanthropy and Power: Ethical Decision Making in a Volatile World

Caren Croland Yanis is an independent advisor and a member of the Board of Visitors at IU’s Lilly Family School of Philanthropy. Caren was the Executive Director of the Oprah Winfrey Foundations in the 2000s, and then the President of Crown Family Philanthropies before starting her own firm, Croland Consulting, in 2016.

It’s long been known that power imbalances exist in philanthropic giving but identifying those imbalances may yield some surprises. Lopsidedness in the philanthropic sector goes beyond the donor-nonprofit relationship. It crosses generations and vocations. Inequities live in the myths and assumptions, and the very way we think about philanthropy. Here’s where we need a paradigm shift.

Grantor/Grantee Relationships

Inherent imbalances in the relationships between donors and nonprofits are straightforward: donors have money, networks, time and authority, and non-profits need those resources to do the work they set out to do in the world. Keep in mind that 75% of public charities, according to the National Council of Nonprofits, have less than six months of reserves on hand and 10% only have enough to keep the lights on for thirty days.

For charities, navigating the power imbalance may mean life or death, and for donors, it’s the difference between being told what you want to hear and reality. Anand Giridharadas, author of the controversial book, “Winners Take All: The Elite Charade of Changing the World,” said, “I’ve found that real change escapes many changemakers because powerful illusion guides their projects.” Bryan Stevenson has the solution to those illusions when he talks about the importance of “being proximate" to the communities we invest in and working closely with the people who will be affected by those investments. Often that takes a lot of time, but inevitably it leads to stronger results.

Governance and Tipping the Scales

Let’s face it: in family philanthropy there are no natural predators. If a foundation runs afoul of the IRS or the state Attorney General, shame on them and their advisors. Of course, we’ve seen private foundations paying for family vacations, and engaging in self-dealing. Those activities are both clearly unethical and illegal. Staying compliant is low hanging fruit.

Family foundations benefit when the governance model, and specifically decision making, is designed to empower everyone at the table to participate and be heard. Generating equity around a family foundation boardroom table means having a codified set of rules, an agreement that frames a process for decision making. One tool that encourages trust, is for family board members to call one another by first names in the boardroom. When G2 Members refer to their parents as Mom and Dad, which are terms of endearment under other circumstances, the power is squarely placed along generational lines.

Family leaders looking to preserve and ensure that family values are passed down, can count on equity and inclusion as a solid tool for making it happen. Key here is that the as the world changes, emerging generations will carry on a donor family’s intent because they are empowered to contextualize family values to fit the changing times.

Donors who lack trust in the next generation have been known to exert dead hand control in their estate planning, literally controlling behaviors from the grave. But intense focus on control can backfire and end up causing more problems than it was intended to solve, as noted by the Wall Street Journal.

Philanthropic organizations in Kenya and South Africa have similar philanthropic environments. In Kenya, a moderate philanthropic environment (at an overall score of 3.50),[1] is largely fueled by strong cultural heritage and informal philanthropic giving, with increased support in recent years from the government and philanthropic alliances to boost the country’s formal philanthropic environment. In South Africa, the modest philanthropic environment (at an overall score of 3.51),[2] is compounded of historic, social, and cultural public engagement, which has promoted philanthropic values, with growing support from the government through legislative measures to support philanthropic organizations and giving.

The global outbreak of COVID-19 has significantly affected the philanthropic landscape in both countries. Findings from the 2022 Global Philanthropy Environment Index (GPEI) show that in both Kenya and South Africa, donations from the public, increased collaboration among donors, and funding and resources leveraged by charitable organizations delivered services to vulnerable communities. At the same time, many philanthropic organizations lost funding support and even collapsed. The 2022 GPEI also found that philanthropic giving and funding support increased in both countries in response to the COVID-19 pandemic to provide emergency and essential services.

Now, the latest study: Digital for Good: A Global Study on Emerging Ways of Giving project explores some of the emerging vehicles of philanthropy that have become more prominent in recent years, such as crowdfunding, mobile giving, workplace giving, retail giving, and online volunteering.

The increase in internet penetration, digital media and networks, and mobile technology, presented an opportunity for South Africans and Kenyans to connect with the outside world during the pandemic lockdown, as well as help vulnerable people and communities outside their neighborhoods. As traditional funding and grant resources halted or ceased due to the COVID-19 pandemic, civil society and philanthropic organizations turned to innovative ways of securing funding and resources.

In Kenya, as researchers at the EAPN note, “crowdfunding and workplace giving became alternative forms of raising resources both locally, and among employees of organizations to fill the gap that had been left by the closing of international funding sources.” Technology-based fundraising and crowdfunding tools were especially successful during the pandemic as the lockdown did not impose any restrictions on the outreach, use, and collection of donations through platforms such as M-Changa and M-Pesa in Kenya. Similarly, both crowdfunding and workplace giving emerged as successful new vehicles due to their accessibility and ability to foster a sense of community through helping others with COVID-19 related needs.

Our research partners in South Africa highlighted that “the popularity of new giving vehicles in South Africa witnessed exponential growth during the pandemic.” Crowdfunding platforms in South Africa, such as Backabuddy, JustGiving, Islamic Relief, and many others, witnessed an increase in uptake and use during the pandemic. Retail giving also experienced growth in the early stages of the pandemic, due to individuals donating part of their shopping basket to designated relief collection points in various shopping malls and stores. Many people also opted to increase their donations through loyalty cards. A similar rise in mobile giving, payroll giving, and virtual volunteering was also noticed.

About the Global Study

The Digital for Good: A Global Study on Emerging Ways of Giving report explores the most recent development of philanthropy in partnership with organizations and experts in eight countries: Brazil, China, India, Kenya, Singapore, South Africa, South Korea, and the United Kingdom. By exploring the emerging vehicles for philanthropy, this global study offers new insights for civil society leaders, philanthropists, and the public to better understand and shape the ever-evolving state of philanthropy.

Such a global study has the ability to develop the global network of philanthropy researchers and to build capacity in countries where philanthropy seems to have the potential to grow rapidly in the following years. It also provides a better understanding of global trends in philanthropy while putting a spotlight on local developments as well.

“Working collaboratively on an international research project provides observed and lived context on how the practice of philanthropy is unfolding within local communities and societies, while bringing an outside perspective which when combined with internal experiences can create a desirable knowledge synergy.” — Wycliffe Nduga Ouma, Research Associate, The Centre on African Philanthropy and Social Investment (CAPSI).

“Such a research collaboration promotes knowledge exchange, skills building, transfer of knowledge, and visibility of research and philanthropic partners. The potential to grow the culture of documenting philanthropy practice is huge, particularly from an African context.” — Evans Okinyi, Chief Executive Officer, East Africa Philanthropy Network (EAPN).

Wycliffe Nduga Ouma, PhD is a Research Associate at The Centre on African Philanthropy and Social Investment (CAPSI) at the Wits Business School. With over 8 years of research experience, Wycliffe is also a consultant for CAF South Africa on various projects including employee volunteering programs, knowledge management, and Thought-Leadership.

Evans Okinyi is the Chief Executive Officer at the East Africa Philanthropy Network (EAPN). Evans is a seasoned non-profit executive with over 9 years of progressive experience in networks management, policy formulation & implementation, and stakeholders & partnerships.

Mike O’maera is part of the Program Support team at the East Africa Philanthropy Network (EAPN). Mike is an experienced communications & knowledge expert with 15 years of experience in research and knowledge fields and is well-versed in communication for development.

Shivant Shrestha is a Research Associate at the Indiana University Lilly Family School of Philanthropy. Shivant is a part of the team on global philanthropy and cross-border giving, including the study Digital for Good: A Global Study on Emerging Ways of Giving. His other research areas focus on environmental philanthropy, climate giving, and public engagement in climate science.