This article comes from Huffington Post and is a great way to learn what the most common misunderstandings are when it comes to philanthropy. Click Here to view the original.
One of the greatest challenges for philanthropy today is the very term itself –philanthropy. Chances are that when asked, most people would associate the word with wealthy individuals writing big checks to charity. Yet, look up the word and etymologically, it simply means a “love of humanity.” Call me a sap, but I’ve always believed most people have a love of humanity somewhere in their hearts. In practice, this love can be expressed by helping others through the contribution of time, money or other forms of support. Put simply, if you’ve done something to help another, you are a philanthropist.
Some might say we have a bit of branding problem — or maybe we simply need to embrace the real meaning and challenge one another to practice a sort of “everyday giving” — where all individuals do their part. Help a neighbor, volunteer for a cause that lets you do what you love and enjoy, or simply contribute or donate at a level that’s comfortable to a cause you care about. Would it make a difference in our ability to tackle society’s greatest challenges if everyone practiced this kind of “everyday giving”? The answer is yes. The following are five things you may not have known about philanthropy. In understanding this, people will see themselves as philanthropists. Envisioning the power and potential of your own personal philanthropy — and everyday acts of kindness — can change the world.
1. Micro-giving Matters, Too.
It’s true that many organizations rely on large donations to help fund their work, but it’s also true that small donations, when combined, can do extraordinary things. To date billions of dollars have been contributed from millions of “micro-donations” to benefit a broad spectrum of causes and organizations.
At the Case Foundation, we’ve long been champions of this democratized approach to philanthropy — where everyone can participate. We have supported a number of online giving platforms including MissionFish (now PayPal Giving Fund) and Network for Good who collectively account for more than $1 billion in online donations. These, and other online donation platforms such as Indiegogo, Crowdrise, Kiva, GlobalGiving, DonorsChoose and Razoo, have made giving — and the act of learning about great causes — more seamless and transparent. And online giving contests and giving days are an increasingly common way for local communities to increase the impact of their donations to nonprofits. But the benefit to these organizations and causes extends beyond donations — it builds a “big tent” of support that can turn into armies of volunteers, champions and evangelists. It de-risks what can sometimes be an over-reliance on a few large donors. When small donations happen at scale, the impact can be powerful.
2. Young People are Also Philanthropists.
The old way of approaching philanthropy is changing. There is a growing recognition that it is never too early to begin the habit of supporting causes you care about. In recent data, we see that the Millennial generation (born between 1979 and 1999) has been generous and actively engaged in causes they care about — quite the opposite of how they are often characterized by media. In fact, the 2014 Millennial Impact Reportshowed that 87 percent gave financially to a nonprofit in the last year and the majority of them gave gifts greater than $100. Moreover, nearly half (47 percent) had volunteered for a cause or nonprofit through their workplace in the past month. This generation may be pointing the way to a new way forward that inspires giving from a young age and together they have the potential for creating unprecedented social change.
3. You Can Take Risks with Donors’ Money.
There is a widely held belief out there that you shouldn’t take risks with other people’s money. As a result, many nonprofits feel boxed in — since they are funded by “other people’s money” in the form of tax-benefited donations — they don’t feel free to experiment or try new, unproven approaches. Yet all too often, the status quo isn’t getting it done in terms of moving the needle and impacting the daunting challenges facing our communities across the nation and around the world.
Donors and those they fund need to have a conversation about an acceptable degree of risk-taking in the march toward finding new, innovative approaches to drive improved outcomes. For some organizations, this may be one project a year or a modest set of activities, for others experimentation may cut across a large swath of their portfolio. Both parties need to understand that innovation doesn’t happen without taking risks, and when you take a risk, failure is a possibility. If failure happens, fail fast and fail forward. Make failure matter to inform and improve your next set of actions. Too often, nonprofits and those that fund them, say “failure isn’t an option.” Instead as a sector we should agree that it is time for us to be bold, act with urgency and embrace risks with the potential to produce exponential returns.
4. “Doing Good” and Making Money Can Work Together.
Doing well and doing good are not mutually exclusive. A burgeoning movement —impact investing — presents new opportunities for individual philanthropists, family offices, private foundations, private investment firms and venture capitalists to deploy capital for companies that have social returns.
Companies like Warby Parker, Patagonia, TOMS, Revolution Foods and others have proven that companies that the tie a social mission into their business purpose can be successful. And recent research from Duke University and others has demonstrated that social impact investments can be financially profitable and generate social improvement and community benefits.
There is significant momentum amongst corporations, governments and individuals who are increasingly interested in the potential of investing in their communities with programs that “do good” and create returns. In June of last year, nearly 30 corporations, banks, foundations and individuals, including Prudential, the Omidyar Network and Capricorn Investment Group came together at the White House toannounce their joint commitment to invest more than $1.5 billion into companies and funds that strive to generate positive financial and social returns.
5. Philanthropy Is Everyone’s Business.
There is an old African proverb that says, “If you want to go fast, go alone. If you want to go far, go together.” For too long, addressing daunting challenges in our communities has been left to the job of government and nonprofits — often leaving business on the sidelines. But in our experience over nearly two decades at the Case Foundation, we’ve found that cross-sector approaches that give business a seat at the table, often result in greater impact. For too long, business has been on the sidelines when many of the key strengths represented by the sector — from marketing to technology to strategic planning — are crucial to building efficiency, scale and impact. It’s time to invite them in. We need an all-hands-on-deck approach that leverages the strengths of all sectors — including business, as we aim toward our goal of strengthening our communities and lifting opportunities for all.