trained to become professional musicians, and led nonprofit organizations. We might draw upon a lifetime of challenging experiences that help us deeply understand the strengths and needs of others. We may have graduated from elite universities or the school of hard knocks. Whatever our backgrounds, we know a lot. And we want to be right!
But many funders fear learning they aren't right. They don't want to find out they aren't as smart as they think when it comes to solving the world's problems. So they stop asking questions. They stop learning. They stop looking for better approaches to reaching their goal. This is a scarcity mind-set in action. A funder prefers to stay in denial rather than risk learning they're wrong. If they could overcome this fear and recognize ways they need to change, they would increase their ability to make an impact. But fear overcomes their desire to make a difference.
This happens to many professional athletes who want to give back to their community after retirement. Most want to create their own foundation, without fully appreciating how hard it is to manage a nonprofit organization, create and run quality programs, and raise funds to sustain it. There are lots of other options. You can create a donor-advised fund instead of starting a foundation. That way someone else can manage the back-office operations, stay on top of taxes and reporting, and issue the checks. Or instead of creating new programs, you can invest your resources to expand and strengthen existing ones.
Charles Way agrees this would be a good idea, but it doesn't take into account the vision that most professional athletes have for themselves. Way is a former National Football League (NFL) player with the New York Giants. After his retirement from football, he spent 15 years with the Giants as their director of Player Development, then was recruited to the NFL to become director of Player Engagement. He's now a managing partner with Purple Bridge Management. With the Giants and the NFL, he helped players prepare for life and career after football, including philanthropy. Says Way:
Sure, donor-advised funds would be a great solution. But not too many athletes know they exist and could be a better alternative to starting a foundation. It's also important to realize that, depending on the socioeconomic situation you come from, and the impact that situation had on you, oftentimes that determines how involved and passionate you are about that initiative. Which further fuels the desire to start a foundation—because from their experience, if they don't do something to make their community's situation better, then no one will.
In other words, they could benefit from learning that the approach they think they should take might not be best. There are alternative ways of giving back that might be better for you and more impactful for the communities you want to help. But it's hard to learn we might not be right.
It's easy to stay in our cocoons. We can hold tight to our beliefs and not fully understand the context of a problem or the scale of its solution. We often receive news via apps on our computers and smartphones, filtered to us via unknown algorithms that track what they think we want to know and feed us an increasingly narrow band of information. As a result, it's hard to learn from the opinions of people who have different cultural, political, or professional views.
Thankfully we aren't limited to what our devices tell us! We can learn from the people who are directly impacted by the issues we want to support. But too often we don't. For many, talking to “others” seems scary. So does hiring them or inviting them to join our boards. After all, we might learn we need to question our assumptions, or change the way we work. It's easier to base our philanthropic decisions on the decisions of other ultra-high-net-worth donors, academic research, and environmental scans. Rather than step foot in the blighted neighborhood we want to strengthen, we step into our offices and turn on our computers to learn.
Fear of Loss
In my experience, philanthropists fear two kinds of loss. Loss of the person you thought you were and loss of control.
Fear of losing the person you thought you were goes along with the previously mentioned fear, the fear of learning you aren't right. But it goes deeper.
You might participate in a workshop about undoing implicit bias and learn you have more racial bias than you realized. A lot more. Turns out, you aren't the “colorblind” person you thought you were. You conclude that all this “racial equity” stuff you've been hearing about might just be too much for you to deal with. After all, it will require you and your philanthropy to change significantly. You fear losing the person you thought you were, and you decide it's easier to stay in denial, thank you very much.
I feared losing the person I thought I was during college. I decided to study abroad in Ecuador. I had always envisioned myself as someone who could join the Peace Corps, live in the global South (we called it the Third World back then), and help people in developing countries. After all, I had a double major in anthropology and political science and a double minor in Latin American studies and Spanish. What more could I need?
But there I was in rural Ecuador. I had gotten scabies after living with my gracious indigenous host family, sleeping on a woven mat on the dirt floor of their hut. I was slumped over a toilet throwing up uncontrollably, while simultaneously trying to down a bottle of Pepto Bismol. I couldn't stop itching. I was exhausted, homesick, and desperately missed American pizza.
In retrospect, my predicament makes me laugh. At the time, however, I deeply questioned myself. I wondered if I was really the person I thought I was. And I realized the answer was, “Not exactly.” The reality of living in a poor community in Ecuador was a heck of a lot different than imagining it from Bloomington, Indiana! I experienced a loss of the person I thought I was, and it was hard.
Philanthropists also fear the loss of power and control. There is a lot of power in philanthropy. There is the power to ignite social change by strategically using your philanthropic capital to advance your goals. And there is a lot of power simply being the person with access to wealth. This creates a power dynamic: The giver gives and the recipient receives. Guess who holds the power? With power comes control. Donors get to choose which causes they support, whom they fund, and what they expect will happen with those funds.
Here are some of the ways that funders, out of fear, try to hold on to power and control:
Not offering general operating support. General operating (also known as core support) is a grant in support of a nonprofit organization's mission rather than specific projects or programs. It provides the working capital nonprofits need to sustain their day-to-day operations, address changing needs, and take advantage of unforeseen opportunities. It's the type of funding most nonprofit leaders want, yet too few funders provide. David Callahan, founder and editor of Inside Philanthropy and author of The Givers, argues that many funders don't want to provide general operating support because they fear they will lose control when they let the nonprofit figure out the best way to use the grant. They would rather have control over the money by giving nonprofits clear objectives and goals and tracking their progress to make sure they are meeting their objectives.4
Not retaining outside expertise. Many wealth advisors and family offices could provide substantially more services to help their clients reach their philanthropic goals. And given the anticipated $68 trillion intergenerational transfer of wealth over the next several decades, providing philanthropy services is a great way to engage the next generation and retain clients across generations. If they don't have the expertise in-house (which most don't), they could retain or refer outside philanthropy experts to help them. But they have a misguided fear that if they involve others, they might lose the client or damage the client relationship. They fear losing control. Instead of helping their clients transform their giving (and increase the likelihood that they keep the next generation as clients), they continue providing minimal, subpar, and transactional philanthropy guidance.
Losing
