Philanthropy is about people

By Todd Cohen

Nonprofits and philanthropic funders can get so caught up in their causes and strategies that they forget about the actual people they exist to serve, or simply treat them as “metrics” to help gauge their organizational impact.

But several recent reports suggest the demand and supply sides of the charitable marketplace both need to better understand and engage real people in the communities they serve.

Needle-Moving Community Collaboratives, a report by The Bridgespan Group, says fixing tough community problems will require new strategies for how to think and work together.

And The Value of Community Philanthropy, a report from the Aga Khan Foundation and the Charles Stewart Mott Foundation, says social and global progress depends on community giving and participation.

While the first report focuses on global community-building and the second looks at community-building in the U.S., both reports emphasize the fundamental importance of local involvement.

The global report says local participation in community projects can result in greater local ownership and accountability, for example, while the U.S. report says key operating principles for effective community partnerships include the engagement of community members as “substantive partners.”

The global report, in fact, says that “local people helping each other, by sharing resources for the common good” represents a new force in the charitable world that is “driven by ordinary people working form the bottom up of our societies, rather than wealthy people working from the top down.”

Key players in building the “capacity” of communities are nonprofits, which themselves face big challenges in building their own organizational capacity.

The lessons of the two reports on community-building apply to building organizations as well: A nonprofit needs to engage all its constituents in its efforts to work smarter and serve better.

Yet many donors and funders act as if the wealth they control qualifies them as smart charitable investors who know the best way to address tough social and global problems, regardless of the real needs of their clients.

In the emerging social economy, that has to change.

That point was reinforced in an article April 6 in The New York Times Magazine.

In the article, a coffee entrepreneur in Kampala, Uganda, had some sobering criticism of traditional philanthropy.

While he was talking specifically about global aid, his comments have implications for philanthropy in the U.S.

“Every society that has prospered has done it through trade and not aid,” said Andrew Rugasira. “Africa will be no different. Charity doesn’t incentivize. It stifles innovation. It causes chronic dependency.”

To succeed, nonprofits and social entrepreneurs need investments and incentives to develop sustainable business models.

So funders and donors need to find ways to shift their mindset from charity to strategic investment that helps nonprofits and communities build their own capacity to succeed.

And an essential strategy for building the capacity of nonprofits and communities is to engage their clients, partners and other constituents in understanding the social and global problems they face, and shaping strategies to address those problems.

All philanthropy, in short, is local, and its effectiveness is rooted in engaging the people and communities it serves.