Wednesday, April 11, 2007

Establishing standards and practices for charitable contributions could allay the underside of private philanthropy — the unintentional harm it can do as it aims to do good — William Damon said.

“There’s a widespread assumption that the more you give away, the better,” the senior fellow at the Hoover Institution said during a panel discussion last month at the Hudson Institute in Washington.

The two-hour discussion focused on the book “Taking Philanthropy Seriously: Beyond Noble Intentions to Responsible Giving,” a collection of essays by scholars and practitioners in the field of philanthropy. Mr. Damon, director of the Stanford Center on Adolescence at Stanford University, and Susan Verducci, assistant professor of humanities at San Jose State University in San Jose, Calif., were editors.

Among the problems of philanthropy, Mr. Damon said, are that acts of charitable giving can fail to reach their stated goals, underestimate or not properly assess the problem, use resources inefficiently, discontinue projects when funding is depleted, and create dependencies and even resentments among the individuals and groups of people that philanthropy aims to help.

Those problems were among the complaints identified through a five-year examination of contemporary philanthropy that grew out of the GoodWork Project. The project — conducted from 1996 to 2006 by the Stanford Center on Adolescence, Harvard Project Zero and the Quality of Life Research Center at Claremont Graduate University in Claremont, Calif. — is a social-science investigation of how professionals maintain moral integrity during “times of rapid change and indeterminate incentives,” Mr. Damon said in the preface.

The GoodWork study of philanthropy, which ran from 2001 to 2005, examined what constitutes good and ethical work in the field of philanthropy. Research for the study included about 200 interviews with people working in philanthropy, nonprofit organizations supported by foundations and traditional foundations, including donors, board members, foundation presidents and program officers, as stated on the project’s Web site, In addition, four case studies of nonprofit organizations and their funders examined how multiple funding sources can affect an organization, according to the Web site.

“Philanthropy can reach its full potential only by becoming a field that scrutinizes its standards and practices more carefully than it does now,” Mr. Damon wrote in the book. “People working in the field have no means of agreeing upon what counts as success or failure, opportunity or risk, benefit or harm.”

The Hudson panelists debated whether philanthropy needs to develop a greater sense of professionalism.

Ruth McCambridge, editor in chief of the Nonprofit Quarterly, a publication of the Nonprofit Information Networking Association in Boston, suggested that charity recipients be included in the discussion.

“For the most part, philanthropic decision-making is done by elites,” Ms. McCambridge said. “Their worldview doesn’t coincide with the worldview of the people they’re trying to help.”

Charity recipients are not consulted to identify their wants and needs, she said. As such, foundations lack a natural market and line of accountability, Ms. McCambridge said.

“It’s purely judgment of self,” she said.

Rob Reich, assistant professor of political science and ethics in society at Stanford University wrote for the book an essay, “Philanthropy and Its Uneasy Relation to Equality,” which analyzed how tax incentives for charitable giving can worsen social inequalities and cause harm.

Tax incentives can decrease federal and state revenues, Mr. Reich said. Allowing tax deductions for donations to private schools, for instance, can indirectly reduce revenue for public schools and increase disparity, he said.

The provision of tax-deductible donations also fails to differentiate among the social benefits produced by various nonprofits, Mr. Reich said. For example, a $1,000 donation is valued the same whether it is for an art museum or for natural-disaster relief, he said.

In addition, 60 percent of charitable donations go to religious organizations, with part of the funding covering maintenance and operation costs. Social welfare groups receive 2 percent and human services receive 9 percent of charitable dollars — an amount so small, he said, it’s a “shock.”

“Religious groups look more like mutual benefit societies than public charities,” Mr. Reich said in his essay.

This tax deduction is available only to taxpayers who itemize their deductions — just 30 percent of filers, he said.

“Why should we subsidize the liberty of people to give money away?” he said.

To give money away, friendship — not democracy — is needed between the donors and recipients, said Albert “Keith” Whitaker, senior vice president and director of Family Dynamics at Calibre, a national practice in Waltham, Mass., that specializes in multigenerational wealth management.

“People demand to give good and evil for good and evil. If they don’t, no exchange takes place,” Mr. Whitaker said. “Virtue is extreme goodness.”

Philanthropy is a virtue that cannot be defined by rules and instead should be defined by ethos, or character, he said. “Virtue can’t be taught but is learned.”

It needs to be honest and transparent as it develops a body of knowledge that is based on accumulated wisdom in the field, Mr. Damon said.

“There’s a lot of complacency in the field, and it needs to be shaken up,” he said.

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