How delusional altruism thwarts philanthropic impact
Wednesday, August 26, 2020
This article originally appeared in Forbes.
Don’t let misguided thinking prevent you from creating change.
As philanthropists seek to change the world, many need to get out of their own way. By that I mean that, too often, philanthropists see the change they want to create but prevent themselves from acting on it. And what’s worse, most don’t even realize they’re doing this.
That’s because they suffer from “delusional altruism.” Delusional doesn’t mean crazy. Not at all. It means deceptive, even distractive. And these delusional thoughts slow the process of productive change.
This happens to many philanthropists. It happens to those who are ultra-high net worth donors, wealthy families and celebrity activists. To people leading foundations, family offices and corporate-giving programs. To people donating through donor-advised funds and giving circles. Everyday givers. Individuals and organizations large and small, all over the world.
These philanthropists genuinely want to make a difference and change the world. Maybe not the whole world, but their small corner of it — a neighborhood, a cause or a population in need. Perhaps their contribution is targeted to help students graduate from college, to increase access to quality hospice care, to stop human trafficking or to cure breast cancer.
These philanthropists don’t want a Band-Aid solution. They want transformational change. Lasting change. They want to tackle the problem at its root, so it no longer exists. But this is where delusional altruism often creeps in: Their delusional thoughts prevent them from achieving the impact they seek. Here are just three ways this problematic thinking affects giving:
1. Many philanthropists have a scarcity mentality.
Despite access to wealth, they operate with a mindset of scarcity. They believe all of their funding should be given away to help others, so they maintain a spartan operation for their philanthropy. The trouble is, in their altruistic effort to be frugal, they hold back on investment in important things, including strategy development, talent, technology, evaluation and even their own learning.
They hold back investment in their grantees, too. They do this by setting arbitrary limits on how much money can be spent on a nonprofit’s overhead or by offering only one year of funding for a project that requires long-term investment.
To give an example: Years ago, I worked for a small San Francisco nonprofit. To save money on a fax machine (expensive and novel at the time), staff regularly walked half a mile to borrow one from another organization. How much time and energy we could have saved, and how much more effective we could have been, had we invested in an in-office fax to help us send out our alerts!
Philanthropists with a scarcity mentality save money on the wrong things. They hold back investment in themselves and their grantees, preventing everyone from becoming as effective as possible at creating change.
2. Many funders create too many steps.
They create bureaucracy or too much red tape. Sometimes they simply introduce too many steps, tasks and activities into their grantmaking. Those extra steps delay reaching their goals. They insist on rigid conformity to rules that hinder decision-making. They call for unnecessary duplication. They adhere to practices that are inefficient, convoluted and inflexible.
I know a donor who gives out $5,000 grants to 10 organizations per year. To apply for one of these grants, nonprofits must fill out a lengthy application form, submit three years’ worth of audited financial statements, obtain letters of recommendation from community leaders, and host the donors onsite for an afternoon.
Imagine the time and money each group puts forth just to be eligible for $5,000! Unfortunately, the unnecessary rigor of the requirements created by this funder are far from uncommon.
3. Some funders suffer from “Donor Distraction Disorder.”
Too often, philanthropists don’t have clarity on their strategy. They don’t know what they want to accomplish or how to get there. While they might be very busy reviewing proposals, making funding decisions and attending philanthropy conferences, they can easily get distracted because they don’t know their end goal. Instead of following their North Star, they follow the latest interesting idea from the most recent article they read.
Imagine these scenarios: A surprise candidate is president. You decide this changes everything you’ve worked on in the past few years, and instead you should invest all your time and resources into “movement building.” Or you’ve just returned from a global conference where the buzz was about the United Nation’s Sustainable Development Goals (SDGs) and you decide you should reorganize your philanthropy around these goals.
Now, movements need building, and who can argue with global goals such as “zero hunger” and “reduced inequalities?” The problem occurs when you don’t already know what you want to accomplish with your philanthropy, and you don’t have a plan to get there. When you lack clarity, it’s easy to get pulled into the latest compelling idea or trend.
These are a few examples of several manifestations of delusional altruism. Just one can derail philanthropy, impede impact and zap the joy out of giving.
Once aware of the delusion, however, a philanthropist can quickly change. We can turn things around by embracing a mindset of abundance instead of scarcity. We can ask the right questions, which will take us down the right path and increase our speed in philanthropy. We can rapidly formulate and implement our philanthropic strategies. We can become more innovative, agile and adaptive.
Combined, the philosophy behind these approaches can make a funder unstoppable. You can alter your philanthropic worldview and create more positive change in people’s lives.
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