Breaking the Power Imbalance Between Charities and Philanthropists

Philanthropists need to meet the needs of charities, not dictate their terms, writes Gemma Salteri, executive director of CAGES Foundation and speaker at the recent 2016 Philanthropy Australia Conference.

The philanthropic dollar could be the most innovative dollar in Australia, particularly for catalysing positive social change. But to make a substantial positive difference to the local and global community, we need to break down the ingrained power imbalance between charities and philanthropists.

There is a misconception that the charitable sector needs philanthropists more than philanthropists need charities. In fact, our success as philanthropists is reliant on the charities we support being functional, successful and efficient. The charities are the experts, with the ability to shift social outcomes. The best thing we can do as funders is support and advise in a way that gives those charities the best possible chance of success. This requires us to listen to what organisations need from funders – not to dictate what we think they need to do.  

Through due diligence, we need to ensure that the charities we support are aligned with our own theory of change. This may look like operational funding rather programmatic funding, or it may require involved venture philanthropy or distance chequebook philanthropy. But to be successful, the philanthropy provided must match charities’ needs, and the dollar must be responsive and adaptable when those needs change.

Part of adapting to this change should involve the formalisation of data sharing so funders can better understand where the money should be allocated and where it would have the most impact. Big data can help to make big decisions, but without publically available information on who is granting and where, we are not able to make the most effective funding decisions. Engaging in this public dialogue will also aid in understanding how the sector is performing, what is working and what isn’t.

So how do we measure how successful we are as funders?

We need to shift the conversation away from the charity’s performance and look at our own. How are we performing as funders? Are our processes and reporting requirements for charities appropriate and beneficial? Are we approachable, responsive and professional? Last week philanthropists from across the globe came together at the 2016 Philanthropy Australia conference to talk about the future readiness of the industry.

Some argued that the establishment of industry standards and benchmarks could aid in transparent funding and highlight what it looks like to be an effective funder. Perhaps, philanthropy should have the same disclosure obligations for public and private ancillary funds that we have for charities. No matter the criteria, we should always be held accountable to our own performance indicators and benchmarking standards.

Unlike grants and donations, which can be done privately and without scrutiny, philanthropy is constantly put in the spotlight. When we establish structured giving, we may just help encourage open, honest conversations between funders and charities and ultimately help us all shift the social dial.  

It is a privilege to work in philanthropy. The people I meet, the community that embraces me and the general good will and willingness to share stories constantly inspires me. There is a lot of amazing work being done by charities that are being funded by philanthropy, yet there is a way that this support could do more – and leveling the power imbalance may just be the answer.

About the author: Gemma Salteri is executive director of CAGES Foundation and discussed the future of philanthropy at the 2016 Philanthropy Australia Conference.