Last week on PD Forum, Liz Palla suggested that philanthropy is much more an art than a science. Philanthropy as an art, she argued, requires “conscious use of skill and creative imagination” rather than simply privileging data that claims to optimize the outcomes of the philanthropist’s investment, essentially promising the most bang for the philanthropist’s buck. I appreciated Liz’s image of philanthropy as an art because it helped me to clarify what bothered me so much about an article by Dan Pallotta, “Why Can’t We Sell Charity Like We Sell Perfume?” that appeared in the Wall Street Journal several months ago and which he revised as talk for TED in March.
Pallotta offers several ways in which nonprofits are currently not but should be allowed to operate like for-profit companies to better equip them to address the “social problems whose scale is beyond easy comprehension” which nonprofits exist to address. They should, for example, be able to pay salaries competitive with for-profit company salaries so they can attract the brightest and most creative individuals to guide their work. They should also be able to market and advertise like for profit companies. “In forty years,” Pallotta points out, “the nonprofit sector hasn’t been able to take market share way from the for-profit sector. But how can it if it isn’t allowed to market?” Finally, nonprofits should be allowed to pay their investors—donors as we traditionally call them—financial returns.
A lot of Pallotta’s suggestions seems sound to me: Investing in a nonprofit’s infrastructure or marketing initiatives can ultimately lead to bigger strides toward one’s philanthropic goal. But his last suggestion gave me pause and made me wonder if Pallotta was missing a fundamental part of philanthropic giving.
If a nonprofit is run like a for-profit company and “investors” in the company receive financial returns, what would distinguish a nonprofit from a for-profit company, a philanthropic gift from the purchase of perfume? Pallotta suggests it’s the unique markets that philanthropy creates that distinguishes it from business: “There are some issues for which there are no markets outside of philanthropy. How, for example, “do you monetize easing the loneliness of the shut-in senior?”
But is that the only difference? It would seem to be if the only goal of philanthropic giving is to solve the problems of the world. But it can’t be if the goal of philanthropy is not only to change the world but also to change the philanthropist. And the description of philanthropy as an art helps us to see that this is what philanthropy does.
In the doing of an art, Aristotle, recognized, we become, by developing the power to execute a painting or musical performance, artists. Through the practice of an art a good is created both outside of us and in ourselves. This is why we make six year olds learn the piano: not because we have no better way to hear Beethoven’s piano sonatas in the comfort of our homes, but because having the art of playing the sonatas will be good for the child.
Pallotta himself recognizes that our model of philanthropy understands the practice to be in someway for the philanthropist’s own good. Our model of philanthropic giving, he argues, was shaped by our Puritan ancestors who were “extremely aggressive capitalists, but . . . also strict Calvinists, taught that self-interest was a sure path to eternal damnation.” Philanthropy developed as “an economic sanctuary in which they could do penance for their profit-making tendencies, at five cents on the dollar.”
For philanthropists motivated by their faith—a fare number of them, we might assume, since nearly a third of charitable dollars go to religious institutions according to Giving USA’s 2012 report—Pallotta has hit on something of the truth in his Puritan parody: We are motivated to give not simply to counter an evil in the world but an evil seen—with the aid of divine revelation—in ourselves. Or, as Benedict XVI put it in a Lenten homily on almsgiving, a tendency toward a particular evil. Almsgiving is
an exercise in self-denial to free us from attachment to worldly goods. The force of attraction to material riches and just how categorical our decision must be not to make of them an idol, Jesus confirms in a resolute way: “You cannot serve God and mammon” (Lk 16,13). Almsgiving helps us to overcome this constant temptation.
In our daily activities we regularly act for our own material benefit. And that’s not necessarily a bad thing. Scripture, as a Augustine notes, assumes self-love when it commands we love our neighbors as ourselves. But if we only act for the sake of material and personal gain, we can develop the habit of thinking material goods and our personal gain are the only things worth acting for. Scripture commends the practice of giving without any expectation of material gains—indeed, offers measures to prevent even the personal gain of prestige by prescribing giving in secret (Mt 6:3–4)—to counter this tendency.
What good habit or art does the doing of philanthropy instill in us instead? Benedict offers an answer to this as well: The habit of Jesus Christ “who, dying on the cross, gave His entire self for us.”
To offer a financial return for philanthropic giving would, thus, frustrate a fundamental end for philanthropic giving—to change the heart of the philanthropist.