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November 11, 2009

Yesterday, I argued that the nonprofit sector is under attack and discussed the critiques of those on the outside who promise that “business” and “market” thinking is the secret to greater effectiveness. But those of us within the sector also do ourselves a disservice by playing into the critiques, and failing to speak with a loud and clear voice about the nonprofit sector.
Let me emphasize at the outset that I’d be the first to argue the sector needs to improve. That’s what the organization I lead, the Center for Effective Philanthropy (CEP), is all about—with a particular focus on foundations. But to deny that philanthropy and the nonprofit sector have made great contributions is preposterous.
Yet how many articles by those within the sector have we read that make the same argument as Mark Kramer’s recent cover story in the Stanford Social Innovation Review?:
“Between 1980 and 2005, U.S. annual charitable giving in constant dollars grew by 255 percent and the number of nonprofits more than doubled to 1.3 million. Today, per capita giving in the United States is three times greater than any other country in the world. Yet, during this same 25-year time period, the United States dropped from second to 12th among the 30 countries that are members of the Organisation for Economic Co-Operation and Development (OECD) in basic measures of health, education, and economic opportunity.”
This is nothing less than statistical sleight of hand.  Total charitable giving in this country is approximately $300 billion dollars annually—an increasing proportion of which supports international affairs—compared to $3 trillion in U.S. government spending. Yet, somehow, philanthropy gets the blame for this decline? Huh?
And, if philanthropy gets the blame for what Kramer cites, does it get the credit for anything?
What about the dramatic decreases in childhood deaths worldwide that have occurred over the past 50 years? Or increases in life expectancy? These are changes which Bill Gates has rightly pointed to in his annual letter and a speech at TED earlier this year to remind us of how much has changed for the better in our world (and therefore to inspire us about what the future can hold).
Does philanthropy get the credit for the drop in tobacco use in this country, particularly among young people, that the Robert Wood Johnson Foundation and myriad charities worked toward despite vigorous opposition from corporate interests (yet another reminder why the sector needs to be separate and distinct from business)?
Or what about all the other terrific historical examples of foundation impact—from the Green Revolution to our 911 emergency calling system to the reform of medical education in the U.S.—that Joel Fleishman and his colleagues have chronicled even as they have pushed foundations to do better?
My view is that there is something to be said for learning from past successes, rather than denying their existence. As Edward Skloot noted in a speech in 2004 while CEO of the Surdna Foundation, “Our earliest American philanthropic ancestors—John D. Rockefeller, Margaret Olivia Sage . . . , Andrew Carnegie—bequeathed a kind of courage and determination to us, a confidence we can take on large-scale problems with deeply rooted causes.” While lamenting that, in the present day, there is too much “small-thinking philanthropy,” Skloot usefully reminds us of what we can learn from our history.
Unfortunately, not all appear to agree. Like Kramer, David Hunter dismisses the achievements of the sector in an article last month in the Philadelphia Social Innovations Journal. “There is virtually no credible evidence that most nonprofit organizations actually produce any social value,” he asserts. He argues, essentially, that the alleviation of suffering is worth little: only the elimination of what causes the suffering in the first place appears to count for Hunter. Of a homeless shelter, he says, “Once the meal is eaten and digested, what has changed?”
What has changed, of course, is one less hungry person for some period of time—and a greater chance that the person will survive and be able to emerge from homelessness. Fortunately, Hunter’s post prompted a spirited debate on the Tactical Philanthropy blog—in which some took him to task.
Still, I found it depressing to read Hunter’s article because I have such respect for him—he served in the past on the Advisory Board of CEP and we have retained him as a consultant to push our thinking on assessment of our own performance. I agree wholeheartedly with his push for a greater focus on assessment, and this is at the heart of our mission! But he undermines his argument by saying that nonprofits have produced no value.
And he refuses to acknowledge that we need both philanthropic interventions that help solve social problems and ones that respond to the inevitable suffering that will occur in any society. Both types of work can be done strategically and effectively.
As I said in yesterday’s post, of course the nonprofit sector needs to improve its effectiveness and impact (just as business and government must improve theirs) if our society is to realize its potential. But if we don’t learn from examples of excellence and impact—not just today’s but also those of past decades—and simply trash the sector as a whole, we don’t have a chance.
For smart, knowledgeable people who have spent most of their careers within the sector such as Kramer and Hunter to negate the historic contributions of philanthropy and nonprofits is factually inaccurate and irresponsible. And, just like the critiques from those outside the sector that I discussed yesterday, the effects are both dangerous and destructive.
Disclaimers and Disclosures: The views I express here are entirely my own. They are of course very much informed by my perspective as president of the Center for Effective Philanthropy, but we have had spirited debates among our Board and staff on the very issues I discuss in these blog entries. CEP’s mission is to provide data and create insight so philanthropic funders can better define, assess, and improve their effectiveness and impact. It should be noted that several of the foundations I cite as examples in this blog, including the Robert Wood Johnson Foundation and the Bill & Melinda Gates Foundation, have been clients of CEP’s and have also provided grant support to the organization. A full list of our funders, by size of funding, can be found at
Tuesday’s post: The Attack on Philanthropy.
Tomorrow’s post: Undermining Ourselves.

Phil Buchanan