Why aren't donations going to the right places?

Why Aren’t Philanthropy Donations Reaching Their Intended Causes?

The Bridgespan Group counsels over 50 of the globe’s top philanthropists, and provides donating information and guidelines. A new study conducted by the Bridgespan Group highlighted a widening gap between modern philanthropist’s intentions, and what their donations are actually used for. According to their findings, for the past twelve years, only 20% of donations that are $10 million dollars or over actually went towards social change.

Why such a wide gap between the intent for social change and the actual amount dedicated towards funding social change? The Bridgespan Group points out that most philanthropists donate towards institutions such as hospitals, universities, museums, and other “cultural institutions”. These organizations already have enough money to sustain themselves, and while donating to these institutions is certainly noble, it usually is not creating any new social change.

The study defines social change as “gifts to human services, the environment, and international development”.

To illustrate their point, the Bridgespan Group analyzed the public statements of all United States members of the Giving Pledge, a coalition of wealthy earners who pledge to give at least half of their earnings to charity. According to these statements, 60% of the members indicate that social change is the main reason why they give to charity. Almost 80% of the members state that social change is at least in their top three reasons to donate, meaning that the majority of philanthropists want their money to be used to incite social change.

The report indicates that philanthropists usually decide to give to institutes because it is easier than researching a complex issue and donating directly towards the cause itself. Basically, philanthropists are letting large organizations do most of the research and all of the legwork. Ideally, philanthropists should be eliciting change themselves, yet they feel as though there are not many unique opportunities left to do so, and they opt to donate to large institutions instead.

A second reason philanthropists are giving more to institutions is because they feel it carries less public risk. Many philanthropists feel that if they donate to a charity that goes under, then their money is wasted. In reality, a large donation towards a small charity is exactly what that small charity needs to keep itself afloat. In this sense, not donating to smaller charities out of a fear that they will not survive is a self-fulfilling prophecy. Many aspiring organizations do not survive out of reluctance on behalf of the donator, and a lot of genuine opportunities to help people are lost as a result.

If philanthropists want to see the social change they so desire, reports like these indicate that they must narrow their focus away from traditional institutions if they want their money to be best-spent.

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