That's Not Giving

Are charities diminishing the value (and meaning) of "giving"? 

This thought occurred to me as I read a post about "Social Impact Giving" on LinkedIn.  The premise behind this funding method, allows funders to "invest" in a social project and receive a profit back (usually from the government) - IF - the project is successful. The idea being that the government has benefitted from the social impact, therefore it's a bargain. If the project fails to achieve results, the funder gets nothing back and the government keeps its money.  It's an interesting model. 

It's important to note that I do not object to charitable revenue generation being tied to profit through models like this or through corporate partnerships.  Corporate sponsorships and cause marketing that promote a profit based organization or product are great opportunities that I'd like to see explored more often.  I think the charitable sector can get a smarter and more innovative by embracing more of these opportunities. However, these things are not "giving" and I think it's dangerous to label them as such.

Give and/or Get?

When I give a gift - I do so with no expectation of benefit back.  Whether it's a gift to a charity, or to a friend or relative, I do give because it makes me feel good to do so.  It's not an investment and I have no desire to make a profit for the act of giving. 

A recent study authored by Aradhna Krisha concluded that "consumers’ direct charitable giving to a charity is lower if they purchase on CM even  if the cause marketing purchase is costless to the consumer (unlike other forms of charitable giving)." [published and referenced on philanthropy.com]

All of this combines to prompt me to ask: Are we diminishing the value of giving and even training people not to give?

I am not attempting to promote "pure giving" (for lack of a better word) over social investing, corporate sponsorship or corporate social responsibility.  However, I would like to encourage everyone to think about the net overall impact these various funding options might have.

If the potential exists to diminish giving, by highlighting and promoting other forms of revenue generation, we need to be prepared for the long term consequences of this. 

I think it is going to be very important for charities to ensure that donors understand the difference in these forms of revenue.  It seems to me that step one in that process is to stop calling these things "giving".  There's no "gift" in Social Impact Giving, where a return on investment is received by the investor. There's no gift in buying yourself some chocolates and having the chocolate company make a donation. You simply made a socially conscious buying decision. 

Some will say that stewardship and recognition programs offer similar rewards and enticements to give and therefore they are the same as these other revenue streams. I disagree.  The most notable difference as I see it, is a lack of profit.  A person may enjoy their name on a building, or other benefits, but these don't exceed the amount given and they are rarely a major motivator in making the gift. 

So while, these corporate partnerships and investment vehicles are all good things - they are simply not "giving".  I believe the charitable sector would be wise to differentiate them from traditional giving and ensure that donors also clearly see that difference.  The future of giving may well depend on it.

Comments

[Elaine_Fogel]

Laurie, your post really made think about this issue. Part of me agrees with you - that giving represents a gift without an expectation of reciprocity. On the other hand, if these social "investors" want to call what they do "giving," so be it, as long as the charity benefits.

[Harm Reduction]

Hi Elaine - thanks for your comment.

The problem is - charities are not benefiting. And that's what the study shows. In fact, they are ending up with less money overall.

Ultimately, charities exist to do good works and donors give because they want to help save lives, the environment, an animal etc. It is the charity's job to do what is best and right for its mission.

If they label something "giving" that isn't - just to please the donor in the short term, and then end up with less money to achieve their good works... everyone loses.

It's the job of charities to have a transparent dialogue with donors, investors and everyone else so that everyone is working to achieve the best outcome. If someone cares more about their investment being labelled "giving" than they do the overall ability of the charity to save lives (or achieve their other goals), then perhaps that's someone who ought to find another organization to invest in.

I think the collective brains of the charitable sector can find a way to communicate this that makes everyone feel good, but doesn't also result in charities losing revenue.

Thanks again for your comment!