Monday, December 3

The difference between philanthropy and fundraising

Most nonprofit development offices are divided so that the responsibility of working with low dollar donors is separated from the staff who cultivate corporation, foundations, and major donors.

I know some nonprofits that rely on big gifts from a small group of philanthropists in order to keep their doors open, however I personally feel better when an organization has hundreds (maybe thousands) of individual members who give provide many nonprofits with their mandate to exist.

Sure, one donor could write a $100,000 check and provide more operating assistance than 2,000 donors who give $50 each through direct mail. However, low dollar donors provide an important endorsement that the nonprofit's work matters. On the other side, all too often it can seem as if major donors are more interested in using their gift to avoid taxes on their wealth or to advance their own social status.

A long time reader sent me two links to the New York Times yesterday that reminded me of my personal fundraising bias:

Stephanie Strom writes about an I.R.S. investigation of the Maddox Foundation of Hernando, Miss. who agreed to transfer millions of dollars in assets to the Dan and Margaret Maddox Charitable Trust in Nashville, TN.

Tennessee went to court in an effort to bring the foundation’s assets back to the state after its directors moved it to Mississippi without seeking court approval. It argued that Dan Maddox, who left more than $100 million when he and his wife died in a freakish boating accident in 1998, had little connection to Mississippi and had intended that the bulk of the money be used for charities in Tennessee.

After the move, the foundation began paying Robin G. Costa, its president and the executor of Mr. Maddox’s estate, handsomely and covering a variety of her travel expenses. The foundation bought a minor league hockey team and an Arena Football League team, contending that the purchases were charitable in nature because they encouraged local economic development.
Charles Isherwood writes a piece about the graffiti of the philanthropic class after visiting the Shakespeare Theater Company in Washington and finding names on everything. He observes:
But once upon a time a discreet collective plaque or a name in the program seemed to suffice. We live now in a different age. Celebrity has become a luxury product like any other, and the wealthy can purchase a tasteful morsel of the respectable kind through charitable largess.
I'm sure some bloggers like Phil at the GiftHub or Sean at Tactical Philanthropy could offer different opinions of this difference between fundraising and philanthropy. I'm also curious what others think.

(Photo credit to Stephanie Kuykendal for The New York Times.)

1 comment:

Jeremy Gregg said...

Thanks for bringing up this important issue. I think that you make some great points, but also overlook some of the difficulties associated with receiving thousands of small gifts.

I blogged on it here:

Thanks for the work that you do. I hope that my response helps stimulate further discussion on this important topic!

Jeremy Gregg, Editor
The Raiser's Razor