Last year, I coined the term “philanthro-ethics” to describe a particular set of questions of importance to funders. The term derives from the title of the book Philanthro-Capitalism by Matthew Bishop, published a few years ago. It has been quite gratifying to see that others have begun referring to “philanthro-ethics”. There was even an on line conversation about whether people like or disapprove of the term.
This perspective evolved after many years of teaching, speaking to, and advising funders on funder ethics. I learned early in my own career as a foundation executive that I was not fully up to speed on the unique legal conditions all foundations face, nor fully cognizant of the unique ethical challenges that should inform all funders. Indeed, even knowing what is a legal matter, what is an ethical matter, and what is a best/preferred practice matter is often not such a simple distinction and rarely taught.
Over many years of presenting scenarios helping funders get at all of this, I learned that many, many funders, even very experienced ones, had naively transgressed some of these boundaries. No reader in this space will be surprised to learn that I will sometimes hear rebuttals like this one: “that can’t be against the law since that is the way our foundation has been doing it for years.” Foundations, especially family foundations, need to be reminded that our name may be on the door, but it is no longer our money. We have huge amounts of autonomy in how to spend the money for public good, or who can be on the board or who can be employed or what investment policies we choose, but the impenetrable demarcation is when we confuse our autonomy and control with the right to use that money for our own purposes.
Simply abiding by the laws of self-dealing and salary setting is only the beginning. The reason I decided to coin the distinctive term “philanthro-ethicism” was the need to underscore that so many of the laws and the ethics surrounding funders have everything to do with power, the distinct and widely acknowledged power imbalance between funders and grantees, or within the confines of the family/foundation board room. Since that power imbalance imbues relationships in so many ways, and it represents an identifiable subset of ethics and philanthropy, it seemed important to have funders understand our part. Philanthro-ethics covers everything from conflict of interest policies, board composition, site visits, how one responds to requests, the timeliness of sending grant money, how we act among those who seek or have received funds, and much more. It is my belief that when funders behave well, ethically, and with “conscious use of self”, more honest and open relations with grantees ensue, and, presumably, better-informed decisions can be made.
It was only in the last couple of years that I began to fully make the connection between philanthro-ethics and social justice. But not in the way social justice funding is often perceived and defined by the funding community. I do care deeply about issues of systemic inequities, and funding efforts to address and redress them are what social justice funding is all about. But that is not what I mean in this context. I have long felt that funders, inadvertently, permit and even encourage some deep-seated inequities in the non-profit sector. For example, when we review a budget, do we ask about worker benefits? Do we ask about the lowest paid employees or only the highest paid? When we learn about these salaries, do we ask why there are employees who are paid below the poverty line – as happens all too often in social service agencies? Do we ask about staff training and career development? How often do we look at personnel as a key single budget line and wonder why a non-profit cannot hold the line or even reduce it – as opposed to seeing it as its key investment in quality performance? Have we bought into the misperception that non-profit is a synonym for charity – assuming that those who choose to work in this sector should be expected to demonstrate personal sacrifice as the price for being in the sector?
What about expectations? Do we express dismay or disappointment or disillusionment when a non-profit is not run more like a business [we will leave that discussion to another time] while not addressing the undercapitalization that characterizes most small non-profits? Do we deplore the absence of data when we ask overworked caseworkers with inadequate hardware and software support to give what we think they should provide us? Do we act as if we are “owners” of organizations we fund, asking, nay, demanding information on our own time line or site visiting when we want to.
You get it. Is this overstated? Are most funders better behaved than this? Do most already ask the right questions?
The purpose of putting philanthro-ethics and social justice behavior on the communal agenda is that it is a discussion our funder sector must have. And continue to have. To put our grantees on the defensive by asking them to question our questions is often counterproductive for them, and, as we said above, quite problematic given the ongoing and ever present reality of the power imbalance.
The session at GMN will look at scenarios getting at these questions. Your participation will help refine best practices for the field way beyond those who attend the conference.
—Richard Marker is a professor of philanthropy, teaching foundation professionals and philanthropists at the NYU Academy for Funder Education, and also, as of summer 2016, at the University of Pennsylvania. He is also co-principal of Wise Philanthropy™, a philanthropy advisory firm. He writes extensively on philanthropy topics and can be followed on Twitter @rmarker.