Avoiding the Seven Deadly Sins of Philanthropy
Habitually failing in the aforementioned ways is a charge that can be laid at the door of only the tiniest fraction of grantmakers. But most program officers, from time to time, are guilty of one or more of the lapses. People who make their living practicing philanthropy probably, as a class, have ethics no worse than those of other professions. However, given the high ideals of philanthropy and the enormous potential it offers to society, the public has a right to expect that the ethical behavior of program officers should be higher than that of the average professional. That belief has infused the foregoing chapters, in which I have implicitly addressed ethical issues without labeling them as such. The ethical sensibility being so essential to grantmaking, however, it seems appropriate to dedicate this chapter to a distillation of important ethical issues, moral imperatives you will find important to follow.
First, Do No Harm
This idea comes, of course, directly from the oath of Hippocrates, but it is just as appropriate to the world of twenty-first-century philanthropy as it was to the world of Greek medicine in the fourth century B.C. The focus of this book has been on making positive change, and that is as it should be. As a grantmaker, you should concentrate on maximizing the enormous potential inherent in philanthropy to change the world for the better.
It is good to remember, however, that the best of intentions can render the worst of results. Helping hands can also inadvertently do harm. To be sure, there are probably no program officers whose first thought on rising in the morning is, “I cannot wait to do some social damage today!” But harm done unwittingly is still harm. And the types of unwitting destructiveness that grantmakers can wreak are many and varied. How can you unwittingly do damage? By turning away risky but high-potential ideas. By funding them but ending support too soon. By funding too long, thus fostering dependence. By giving a project too much money too soon. By taking too long to make up your mind. By requiring an applicant to jump endlessly through hoops. By funding an organization that has no credibility in its own community (and refusing to fund organizations that have local credibility).
The really insidious thing about the types of unwitting harm described here is that the grantmaker can cite so many seemingly good reasons for making the decisions that cause the problems. The high-potential grant is too risky. The foundation needs a high turnover rate in its grant commitments so as to retain flexibility in grantmaking. Some projects are “old friends” and deserve support indefinitely. This project is so promising, it needs to brought to scale quickly. Quality decisions cannot be rushed. The foundation needs a lot of information before it can be expected to make a decision. It is important to fund stable and respectable organizations, not shaky fringe groups. Good rationalizations all, but the road to programming hell is cobbled with good rationalizations, and those listed here make excellent paving stones. The ethical program officer must focus on doing good and resist the blandishments of the many “good” reasons for doing harm.
Brook No Arrogance
Abraham Flexner, much-respected former program officer with the Carnegie Corporation and the Rockefeller Foundation and author of the eponymously titled report that transformed medical education in the United States, repeatedly admonished his fellow program officers, “Remember: the grantseeker always comes to you, psychologically, on his knees” (1952). The power dynamic is clear, and it is clearly unequal: foundations have the money, and grantseekers need the money. Although it is true that enlightened program officers realize that foundations need good grantseekers too, the fact remains that you can act as imperiously as a Roman Emperor and still experience no shortage of people willing to tolerate the abuse in order to get the grants. True, the absence of any semblance of a partnership in such situations renders it unlikely that the grants will have a positive impact, but imperious grantmakers can generally be as arrogant as they wish to be, so long as they continue to meet the minimum 5 percent payout requirement.
It is difficult to overstate the damage that program officers with ravenous egos can do. They can crush creativity, stifle initiative, and wreck partnerships. A “do it my way or hit the highway” grantmaker sometimes inspires grantees to say what they must in order to get the grant, then, after getting it, to surreptitiously do what they wanted to do anyway. But whether grantees abjectly do as the program officer dictates or rebelliously violate the terms of the grant, in either case the power of partnership is squandered.
Like a persistent current, the flow of foundation work pushes grantmakers toward arrogance. They are flattered and feted, charmed and cheered. It is all too easy to progress from being surprised by this royal treatment, to enjoying it, to expecting it, to demanding it. As a program officer, you cannot proclaim innocence simply because you are not deliberately swimming with the current. If you merely float, it will sweep you away. The ethical grantmaker must constantly swim against that current of arrogance. You must treat all proposals and all people with respect. An open attitude is essential, and as we discussed in Chapter Two, you should discount much of the praise you receive. Self-criticism and humility are just as important to your work as are creativity and intelligence. You must always be a steward of resources, a servant as well as a leader.
Tell No Lies
Work in foundations is particularly rife with opportunities to spare yourself unpleasantness by telling the proverbial little white lies. An applicant may be hurt if you were to candidly critique his or her proposal; how much more pleasant it would be to blame a negative decision on a cut in the grantmaking program's budget rather than on the inferiority of the idea described in the proposal. A trustee at a board meeting asks a question that you cannot answer; you could admit to ignorance before God and everyone, but how much less embarrassing to concoct a plausible answer. The director of a funded project is alienating a potential funding partner by her behavior; how much simpler it would be to pretend not to notice and to advise her to keep to the same course.
Little white lies have the seductive attribute of feeling good at the moment they are uttered. They promote pleasantness, avoid embarrassment, save work. Like so many other quick fixes, however, they usually turn sour as time goes by. The negative effects are sometimes subtle, but they intrude on the near, middle, and long terms. In the near term, opportunities to learn and grow—for all involved—are lost when you take the easy way out. In the middle term, you will, if you fib often enough, at some point be caught in a lie. In the long term, if you are caught often enough, your credibility will sink to the level of that late, unlamented daily, Pravda.
How much better it is in the long run, then, simply to tell the truth. Mark Twain once sardonically wrote: “Truth is the most valuable thing we have. Let us economize it.” Shorn of their cynicism, his words hold good advice. It is unnecessary to be tactless about truth telling, nor do you need to disclose every bit of information in your possession. If, however, you take care to ensure that everything you say and write is true, the result will be the happy conjunction of the morally right and the pragmatically sensible. The ethical program officer will regard truth telling as a beacon and focus on it, no matter how high the seas. To ignore this beacon is to chart a sure course for the rocks.
Tolerate No Conflicts of Interest
An old lament goes like this: “When I became a grantmaker, I found that I had eaten my last bad meal and lost my last true friend.” Although that may overstate the case, it is true that program officers are constantly being courted by people who want money. Frequently, these grantseekers come bearing gifts. You soon discover that you rarely need to pay for a lunch and frequently are offered enticing gifts: books, fountain pens, even high-tech gizmos. It may be more blessed to give than to receive, but in philanthropy you seemingly get to do both.
The ethical question this raises is easy to frame: When does a gift cross the line and become a bribe? Some foundations have a simple answer: accept on gifts, on matter how modest. If you accept nothing, not so much as an after-dinner mint, you cannot have worries about the ethics of accepting something. Although effective, this policy is also pretty crude. In some cultures, such as in Japan and in Latin America, gift giving is an important part of any relationship, and refusing a small gift creates a large insult. Such a “zero tolerance” policy can also give rise to absurdities. If, while you are on a site visit, an applicant offers you a one-mile ride across campus in a university vehicle, should you refuse and opt to walk or, perhaps, accept the ride and then requisition a few dimes from the foundation's petty cash drawer to reimburse the university for its transportation cost? To avoid such ludicrous situations, most foundation allow program officers to accept a single gift of less than $25 in value. This allows the foundation to respect the customs of others and avoid absurdities, while proscribing transactions big enough to influence a program officer's judgment.
This is a sensible compromise, but it is not a panacea. For one thing, it requires you to become an appraiser, constantly gauging whether the proffered gift has a market value of $25 or more. If there is any question in your mind, you should follow the old rule: “When in doubt, your wallet should come out.” Certainly, you should pay for all meals, lodging, and significant transportation expenses. Anything that is close to the $25 line should be declined: accept an imprinted ball-point pen, for example, but decline the gift of a gold-filled fountain pen.
Apply a similar logic to board memberships: it is acceptable to be on the board of an organization applying for assistance from the foundation that employs you, so long as you make the conflict known and excuse yourself from reviewing the request or managing the project should it be funded. The ethical program officer gains no undue benefit from the position, whether in terms of monetary gain or intangible influence. The standard need not be the same as that for Caesar's wife, who had to be “above suspicion,” but should meet what might be called the Daily News standard. You should behave in such a way that no embarrassment would come to you or to the foundation should your actions become the subject of the banner headlines in the Daily News.
Another conflict of interest that you should avoid is to serve as the lead program officer on a request from an organization to which you have connections. Examples would include an organization whose CEO or board chair is a friend of yours; an organization that until recently employed you; an organization that employs or has as a board member a close relative of yours; or your alma mater. Such situations, at the very least, would call into question your objectivity, and could raise issues of favoritism or even nepotism. It is always best to ask a colleague to handle such requests, for no matter how meritorious they might be, your handling them would not satisfy the Daily News standard.
Accept No Exclusive Diet of Materialism
To paraphrase Calvin Coolidge, the currency of philanthropy is mainly currency. Moreover, the staffs of many foundations are dominated by businesspeople or academics. Small wonder, then, that philanthropy tends to focus on the material and the intellectual, to the exclusion of the spiritual and the affective. Much that is good can be accomplished by focusing on lucre and learning, but not all good things can be achieved with only these two ingredients.
Many, if not most, program officers were drawn to philanthropy in the first place by their passion and by their sense of connection to a larger good. Once the grantmakers are working in a foundation, however, these spiritual motives tend to be overshadowed, if not overwhelmed, by the daily demands of budgets, strategic planning, and policy work. After the material world has crowded out every other consideration, program officers may be efficient, intelligent, and financially savvy, but probably not as compassionate, empathic, or able to perceive deeper meanings as they should be to properly give away money. Cut loose from its spiritual moorings, philanthropy becomes indistinguishable from any other calling: it merely recycles money made in the private sector quite efficiently into the nonprofit sector, instead of making grants that go to the heart of human needs and longings. This is philanthropy as it might have been practiced by Mussolini; the trains run on time, but in the larger human sense, they have nowhere to go.
Keeping a connection to the spiritual in foundation work does not happen automatically or serendipitously; it must be a conscious act of will. Just as you must set aside time for strategic planning and budgeting, so you must reserve time for reflection and connections to deeper meanings. If you do not, the material quickly crowds out the spiritual, and you lose a crucial dimension of your work. The ethical program officer is moved by the spiritual as well as by the material, by what cannot be measured as well as by what can. You must always remember that “not everything that counts can be counted.”
Lose No Opportunities
The required 5 percent payout measures only the flow of dollars; it does nothing to ensure that those dollars are spent wisely and effectively. On a dollar-for-dollar basis, the dullest, safest, and most unimaginative grants count for just as much in terms of meeting payout as the sharpest, riskiest, most imaginative ones. It is up to you to take the extra step of seizing opportunity—that is, getting the most out of every dollar spent.
In some foundations, the dichotomy between ossification and opportunity in grantmaking comes into sharp focus when one examines the types of organizations that get supported. The old, established, wealthy, and large—in short, “safe”—organizations get the grants, while the new, struggling, poor, and small—in short, “risky”—ones get the rejection letters. It is far easier to give grants to the “old guard,” for it requires less pregrant due diligence and less postgrant management and TA. But in nearly every case, it is also true that more of the grant funds are consumed by the higher overhead of these larger organizations, so that, on a dollar-for-dollar basis, the impact they can deliver is sometimes less than that of their “new” counterparts.
It requires an act of will for you to see that opportunities are not lost in the face of “business as usual.” This is not to say that some grants to old-guard organizations are not justified or useful, or that they should be cut out of the foundation's agenda altogether. It is to say, however, that you must make room so that the “new” organizations have a realistic chance to be funded. What you need is openness to both the great ideas and the extra risk and work, so that philanthropy can do the most for those who have the least. Foundations should not run an exclusive club of grantees. The ethical program officer ensures that opportunities remain viable for those organizations that can produce societal change, whatever their past record or current balance sheet may be.
Allow No Formulaic Responses
Some anonymous grantseeking sage once remarked that the number one killer among foundations is a dread disease called “hardening of the categories.” Once the foundation has contracted this illness, it begins to lose its flexibility. Not only does it tend to fund members of the old guard exclusively, but it goes beyond that to demand only tried-and-true ideas from these organizations. Funding hardens into a set formula, and the formula becomes sacrosanct. No matter how potentially significant a proposal might be, and even if it issues from the oldest of the old guard, if it is out of the formula, it is out of luck.
Individual program officers, just as much as foundations in general, are susceptible to hardening of the categories, particularly if they have been in philanthropy for a long time. Funding by formula is an occupational hazard, caused by a witch's brew consisting of too much work, too little time for reflection, and too little attention to the requirements of the spirit. The formulaic program officer is a negative force, given to ignoring most good ideas and jamming the rest into preconceived pigeonholes so tightly that they lose their potential for doing good in the world.
Formulaic funding can be counteracted. Some larger foundations offer senior program officers sabbaticals so that they can refresh and renew themselves. The subjects of these sabbaticals can take many forms, from quiet study to strident activism, from private journal work to public commentary. Some program officers are “loaned” to other organizations, to work in entirely different environments. Smaller foundations sometimes support more modest efforts, such as allowing program officers to attend multiday workshops. Even a brief change of pace can work wonders in breaking the back of formulaic grantmaking. Any foundation, no matter what its size, can schedule time for reflection and nurturing of the spirit. Whatever the arrangement, the hope is that the grantmaker will return to work refreshed, with intellectual curiosity revived, openness to new ideas restored, and a willingness to take risks revivified.
The ethical program officer will constantly strive for the flexibility and the creativity that are the antithesis of funding by formula. If you feel yourself slipping, seek an opportunity for renewal. Should that not prove efficacious, step aside and let others with a fresh perspective take on the challenges of grantmaking.