Giving Knowledge: Doing it better together

December is the month that generates the most charitable giving in the US, accounting for about a fifth of nonprofit fundraising revenue for the year, according to some reports. This largesse is preceded by a flurry of appeals that seek to share urgent information. They ask us to give knowledgably, which is important, but giving to build knowledge is equally important and often overlooked as a virtue of philanthropy.

Knowledgeable giving

How do I know my giving is having an impact? Where do I give, and how much do I need to give to make a difference? What are the issues I care about? What are the issues I should care about? These kinds of questions can be confusing and overwhelming. Better knowledge about effective giving can help address them, leading to better philanthropy and a more rewarding experience for the giver.

There is a lot of good work that generates knowledge about doing philanthropy better, ranging from consultants to large donors like MacKenzie Scott, to the experts who staff private foundations. And anyone with Internet access can gain insights from reliable sources like Candid, Charity Navigator, and the BBB Wise Giving Alliance.

The media also helpfully come along during this season to offer giving advice. For example, New York Times columnist Nicholas Kristof draws on his deeply humane reportage to offer an annual recommendation for nonprofits that he and his newspaper support “…to encourage more donations based on rigorous evidence of effectiveness for readers who seek to donate money as intelligently as they earn it.”

The effort to be more “intelligent” in our giving assumes that there is a danger of thoughtless giving, wasting resources, and creating giving experiences that end up not being particularly fulfilling. There is good evidence from our school’s studies of affluent households to show that donors who are better informed give more and do so as more confident philanthropists.

Giving to generate knowledge

From Prometheus’ mythical gift of knowledge to humanity, to the Rockefeller Foundation’s incubation of the social sciences and public health, to the Science Philanthropy Alliance today, philanthropy is intrinsically about knowledge and discovery. Consider the seminal contemporary critique of big philanthropy in a democracy as formulated by Rob Reich. Unaccountable concentrations of wealth that seek to influence public life are hard to justify in a democracy, unless, Reich convincingly contends, they provide for useful experimentation that would otherwise not happen. The market and the government can be limited in their time horizons and by constituencies that are committed to the status quo. Organized philanthropy can provide the space for experimentation, unfettered by the limits of profit and plebiscite.

But experimentation is not valuable for the sake of experimentation. Experimentation is valuable because it can generate better knowledge to inform the policies we should subject to democratic affirmation. If the experimentation did not yield knowledge that led to improvements for the public good, then it would be just another luxury pursuit of the rich and famous, creating at best vanity projects on the fringes of our polity -- and at worst anti-democratic interventions that come at the expense of the public. So, in Reich’s important critique, democracy should make space for big philanthropy so it can generate useful knowledge.

The old fishing adage comes to mind: “give a person a fish and feed them for a day -- teach them to fish and you feed them for a lifetime.” We typically conclude that kindness combined with knowledge can be a deeper, more lasting and effective kindness.

But could the influence also run in the opposite direction? Could it be that the protagonists in the old adage actually learn to fish together because they share kindness and generate the knowledge to fish through cooperation? Is it because they generously combine the products of their individual thinking and work together that they produce useful knowledge? Perhaps it is a non-hierarchical philanthropy that leads to better knowledge -- when we literally put our minds together in open, trusting dialogue to generate new insights.

Think of giving circles and how they gather together the emotional and cognitive resources of a community. Sara Lomelin’s powerful Ted Talk gives you a palpable sense of the collective intelligence that emerges around a group of intimates who put their hearts and minds together to generously understand and to understand generously, generating insights and resources to provide help and improvements to society that would otherwise not happen.

The skeptic in you may think it’s nice to see generosity leading to discovery in a theoretical treatise and in local encounters, but these don’t mobilize the billions and trillions of dollars our social problems demand. But this is how science operates. Even military establishments and large enterprises carve out independent spaces for curiosity-driven research, where communities devoted to discovery for its own sake probe the frontiers of what is imaginable and what can be created. You might call these oases of philanthropic discovery, unconstrained by the demands of commercial return or immediate public utility.

Valuing the gift of knowledge

So, if you buy even somewhat the importance of “epistemic philanthropy” where knowledge serves better giving and where giving can generate important knowledge, you should share my concern that we continue to undervalue this knowledge.

I recently visited the Rockefeller Archive Center (RAC) that houses the records of many prominent philanthropies, including the Rockefeller and Ford Foundations, two of the leading exemplars of modern twentieth century American philanthropy. Their collections inform much about the social, economic, and scientific histories of the Twentieth Century. The institution is a treasure trove of insight into foundations, policy and even family dynamics, holding potential lessons for contemporary counterparts. Too few practitioners are aware of the valuable insights and lessons that await discovery in places like the RAC, our Joseph and Matthew Payton Philanthropic Studies Library and our Ruth Lilly Special Collections and Archives.

It is also remarkable how few subsequent foundations have continued to nurture the records they create in the course of their work so that their successors and curious others can learn from their efforts. Understanding how we got here is vital to figuring out how to move forward, and we rarely see philanthropic wisdom reach back in time to compare efforts to what was tried before in similar circumstances. We continue to generate urgent reports on various topics that do not refer to experiences and lessons of previous eras. Many of these reports are destined to remain outside of a knowledge ecosystem that can be searched and found like the one we have for scholarship. In ten or twenty years when a new report on a similar theme comes out, you shouldn’t be surprised if the earlier one is no longer findable along with its lessons and conclusions.

There are deep deficits in how we generate and circulate knowledge in philanthropy, which is doubly concerning since one of the main purposes of philanthropy has been to build, gather, and share knowledge, so that we can discover better ways of thriving for all.

So, as you make your year-end contributions, consider adding to your individual or collective deliberations some thought about what will be learned through your giving.

Jeannie Sager and Kathi Badertscher are accustomed to “only” and “firsts.” As director of the Women’s Philanthropy Institute, the only academic institute dedicated to furthering the understanding of gender and philanthropy, and Assistant Dean of Academic Programs for the Lilly Family School of Philanthropy, respectively, the two were among the first women be invited to present at the 11^th Annual Non-Profit Sector Development Forum at King Fahd University of Petroleum and Minerals (KFUPM) in Saudi Arabia on December 9 and 10.

“The Women’s Philanthropy Institute was honored to share research insights about women and giving in the United States, and to demonstrate to our colleagues in Saudi Arabia the power and potential of women and generosity from a global perspective,” Sager said.

With the theme “Scaling Impact in the Nonprofit Sector,” the 11th annual forum was sponsored  by the Center of Excellence in Development of Non-Profit Organizations of KFUPM.

Both Badertscher and Sager presented on December 10. Badertscher’s presentation, “Research in the Nonprofit Sector” immediately preceded Sager’s, which was titled “Research and Insight that Grow Women’s Philanthropy.” Both women also participated in a panel discussion with two other invited speakers.

“For over 10 years, this NGO Forum has gathered leaders to learn with and from each other, and to be included as a thought leader and to share rigorous research and data about women and philanthropy is a monumental step for the region as we seek to inspire greater engagement for women,” Sager said.

“It was a great honor to represent the Indiana University Lilly Family School of Philanthropy at the Nonprofit Sector Development Forum,” Badertscher said. “This opportunity gives the school another deep connection to KFUPM and our new dual master’s degree program. I am both humbled and excited, especially as a female ambassador of the school, to have been part of this global event.”

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Eighty-five percent of affluent households gave to charity in 2022 with the value of their average gifts rising 19% above pre-pandemic levels, according to the 2023 Bank of America Study of Philanthropy: Charitable Giving by Affluent Households. The study found that affluent households gave an average of $34,917 to charity in 2022, up from $29,269 in 2017, though less than the $43,195 they gave in 2020 when giving levels peaked in response to needs created by the pandemic and an increased awareness of racial and social justice issues.

“This year’s study shows the generosity of the American people and the strong influence of women and Next Gen philanthropists who are using their wealth to promote positive change in the world,” said Katy Knox, President of Bank of America Private Bank.

The study, the ninth in the biennial series conducted by Bank of America Private Bank and the Indiana University Lilly Family School of Philanthropy, found the percentage of affluent households giving to charity remained high, although 3% fewer households gave in 2022 than in 2020. Of those who did not give to charity in 2022, 44% said it was because of the need to take care of family, up from 27% who said this five years ago, and a reflection of the challenges posed by 2022’s economic and market volatility.

“Observers have questioned how economic shocks and uncertainty will affect philanthropy in America, even among affluent donors,” said Una Osili, Ph.D., Associate Dean for Research and International Programs at the Indiana University Lilly Family School of Philanthropy. “This ongoing body of research serves as an important barometer of giving trends and provides insights into the extent to which giving behaviors may be returning to their pre-pandemic trends, or whether we are on a new path.”

The study included affluent individuals with a net worth of $1 million or more (excluding the value of their primary home) and/or an annual household income of $200,000 or more. The median income and wealth levels of the respondents exceeded the threshold for participation, at $300,000 and $2,000,000, respectively.

Among the key findings:

• Volunteering is on the rebound. While the rate of volunteering among the affluent population has not yet returned to pre-2020 levels, it is up significantly (37% in 2022 compared to 30% in 2020). Affluent volunteers are highly motivated to respond to needs (64%) and by the belief that their service makes a difference (57%). People from affluent households who volunteer are more likely to give to charity than those who don’t (94% and 80%, respectively), and the median amount given by affluent volunteers is nearly four times more than that of non-volunteers.
• Affluent women are a force for change. The vast majority (85%) of household charitable giving decisions are made or influenced by women. Also, 85% of affluent women say they sometimes or always consciously align their purchasing decisions with their values; 42% volunteer; 10% participate in sustainable or impact investing; and 24% specifically give to organizations in support of women’s and girls’ causes and organizations. Despite women’s philanthropic leadership and active engagement, they remain underrepresented on nonprofit governance boards, with just 16% of affluent women compared to 30% of affluent men holding board positions.
• Millennials and Gen Z are more passionate about climate change. Four in five younger affluent households (under the age of 42) gave to charity in 2022. They are two-and-a-half times more likely than older donors to cite climate change as one of the top three causes or issues that are most important to them. While only 27% of younger donors have a giving strategy, they are nearly twice as likely as older donors to say they want to become more knowledgeable about integrating their values and charitable goals into their overarching wealth management plans.
• Robust toolkit of strategies is used to meet philanthropic goals. Almost a quarter (22%) of affluent households overall use a structured giving vehicle, such as a donor-advised fund, family foundation or charitable remainder trust, to meet their philanthropic goals. Of those with a net worth greater than $5 million, 54% have a giving vehicle or plan to establish one within the next three years. Beyond financial gifts and volunteering, 79% overall say the purchasing decisions they make are sometimes or always aligned with their values, meaning they buy from companies that prioritize positive social impact.
• Religious organizations receive the largest share of giving dollars. Of the total dollars given by affluent households, 36% went to religious organizations, which have consistently received the largest share of dollars over time. The median gift amount for religious causes is nearly six times more than the median amount given to basic needs organizations, which received the second highest median gift amount. Still, the overall number of affluent households giving to religious organizations has declined sharply to 39% in 2022 from 47% in 2020.

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