Three currencies that are more important than money for philanthropy

More often than not, when we talk about philanthropy, the assumption is that we are talking about money. Which is fair enough – money is clearly a pretty important aspect of philanthropy: some people have lots of money and could give it away, others don’t have enough money and need more to improve their lives, and pretty much every nonprofit organisation I’ve ever met would say that they could do with more money to support their work.

But recently I have been thinking about some of the other ‘currencies’ that philanthropy trades in, and have been led to wonder whether these are often just as important, if not more important, than money?

I should note that I am using the term ‘currency’ deliberately (if slightly imprecisely) here to evoke the idea of a medium of exchange i.e. something that can be used to transfer value between different holders. This is obviously one of the key functions of money, but it is not the sole function – money also plays separate, and important, roles as a store of value and a unit of account. Likewise, money is not the only thing we can use to exchange or trade in value, so it makes sense to talk about other forms of ‘currency’.

So, what are some of these other potential currencies, and why are they so important for philanthropy?

Trust

The importance of trust has been a regular motif in discussions about philanthropy in recent years, from a number of different angles. At an individual level, the question of whether relationships between givers and recipients are based on trust, and whether this flows in both directions, is seen as increasingly important. And at a systemic level, there is the question of whether we, as a society, are willing to place trust in the whole idea of philanthropy as a means of delivering public good, and if so, why.

Trust-based philanthropy has gained traction as an approach, in part as a corrective to the paradigm of ‘strategic’ philanthropy which dominated thinking about philanthropy throughout the 20^th century and into the 21^st. Critics argue that emphasis on being ‘strategic’ had led to philanthropy becoming too directive and top-down, and that the increasingly technocratic nature of funding relationships meant that the element of human connection was in danger of being lost. Instead, it is claimed, those who want to give effectively must be willing to place trust in the organisations and people they are giving to. In practice, this means giving unrestricted grants (i.e. those with few or no strings attached in terms of how they can be used) and moving away from the relentless demand for metrics and measurement (on the basis that this can often become a form of control). A major benefit of this for nonprofits and civil society organisations is that it can give them the freedom and flexibility to dictate for themselves what the priorities are and how best to address them. Which, it is often noted, is particularly valuable for social movements or for organisations seeking longer-term change, for whom strictly delineated funding programmes with 3 year timescales tend not to be a good fit.

We need to be clear, however, that these benefits generally don’t come for free. Whilst it is theoretically possible to create trust from nothing, simply by choosing to place our trust in someone or something without any prior reason to do so, this tends not to be the case in practice. More often than not, just like money, trust needs to be earned and grown over time. So, taking a trust-based approach to philanthropy is not the ‘easy option’; in fact, it may well be more labour-intensive than the alternatives, since it requires work on the part of both giver and recipient to build and maintain trust for a relationship to flourish. In many ways, of course, this hard work is the point, because the very process of building trust has its own value, above and beyond the outcomes this trust subsequently enables.

A greater willingness to give might come from building trust, but things can also flow the other way; so, giving can be a means of building greater trust too. This is something scholars have long known – in a chapter on the “Moral Economy”, for instance, the sociologist David Cheal explains:

“In mass societies it is often the case that difficulty in trusting others, or an absence of trust, is felt to be an acute problem. The responses of others are often unpredictable, because their motives are unknown, and thus the outcomes of lengthy chains of inter- action are uncertain. Under such conditions the psychological demands of selecting appropriate lines of action are considerable, and practical solutions must be found to decision-making problems. Those solutions will include practices that achieve trust as a routine feature of everyday life. In a moral economy, trust is generated as a result of members sharing a common way of life. Individuals’ commitments to fulfill their customary obligations to others make their actions predictable, and thus keep the complexity of the social environment at a low level… Norms of beneficence resolve interaction ambiguities and thereby increase the stability of systems of relations.”

Historically-speaking, the idea of philanthropic giving as a means of increasing trust between giver and recipient has often been highlighted as an important part of the role philanthropy plays in helping to bind society together. In a speech to a meeting of the committee for the relief of the Lancashire Cotton Famine in 1862, for example, the Earl of Derby proclaimed:

“[Philanthropy] may be a link to bind together more closely than ever the various classes in this great community, to satisfy the wealthy that the poor have a claim, not only to their money, but to their sympathy ― to satisfy the poor also that the rich are not overbearing, grinding tyrants, but men like themselves, who have hearts to feel for suffering, and are prompt to use the means God has given to them for the relief of that suffering.”

It is possible, of course, to read this as merely another version of the idea of philanthropy as “riot insurance” – i.e. a means for the rich to do just enough to help the poor that it dampens down the threat of social unrest. But there is also a more charitable reading, in which we take seriously the idea that giving between individuals in society – whether rich or poor – can lead to genuine relationships of trust and mutual respect. This, it seems to me, is part of what MacKenzie Scott is getting at, when she writes:

“The potential of peaceful, non-transactional contribution has long been underestimated, often on the basis that it is not financially self-sustaining, or that some of its benefits are hard to track. But what if these imagined liabilities are actually assets? What if these so-called weaknesses foster the strengths upon which the thriving (or even survival) of our civilization depends?… What if acts of service that we can feel but can’t always measure expand our capacity for connection and trust? What if care is a way for all of us to make a difference in leading and shaping our countries?”

The trust that individual philanthropic funders and civil society organisations are willing to place in each is clearly important, but just as important at a collective level is the trust that we as a society are willing to place in the very idea of philanthropy, and in the structures and institutions we created built to put this into practice. And this is an area where there are some significant challenges right now.

Non-profit organizations and philanthropy have tended to enjoy reasonably high levels of public trust. For sure, there have been times throughout history when this has been less true, and there are places around the world where it is less true right now, but broadly speaking people seem to think that organisations which exist to serve a mission rather than make money, and people who give their private assets away to achieve public goods, are OK. However, this needs to be set against a wider backdrop of long-term decline in public trust in institutions that has been going on for decades. Whilst non-profits and philanthropy might still rate favourably in comparative terms against many other kinds of institutions, if the overall amount of public trust they are able to rely upon is shrinking, that should still be real cause for concern.

Two crucial determining factors in this story about whether we are willing to trust philanthropy are authenticity and legitimacy. Do we believe that the motives of philanthropists and the organisations they fund are genuine? And does what they are doing fit in with our beliefs about the appropriate role that philanthropy should play in our society? The motives of those who choose to give away their money have called into question throughout history: are they doing it for purely altruistic reasons, or is there some element of self-interest? Of course, the reality is that “pure altruism” is an almost impossibly high bar, as any seemingly selfless philanthropic act tends to bring the giver benefits to some degree as well – whether that is simply the “warm glow” of doing a good deed, or something murkier, like the deliberate effort to launder an otherwise-stained reputation. So even in cases where giving is genuinely motivated, it is not difficult for anyone who is so inclined to identify other ways in which the giver might be benefitting, and then magnify these in order to cast doubt on their authenticity.

Of course, the further problem for philanthropy at a collective level is that clearly not all giving is genuinely motivated. Whilst I would argue that we should resist the cynicism of those who claim that examples of wealthy individuals using giving to burnish their own reputations, obscure wrongdoing or exert power show that all philanthropy is inauthentic and morally bankrupt, we must acknowledge that these examples are real, and that they pose a major challenge to the legitimacy of philanthropy. Recently-released documents relating to the disgraced financier and sex offender Jeffrey Epstein, for instance, highlight the role that philanthropy played in helping to build and maintain his networks of influence – both as a tool for crafting public perceptions, and as a way of creating reciprocal relationships of obligation between wealthy and powerful people. (By which I really mean “men”). Whilst many philanthropists and people who work within philanthropy might feel as though this doesn’t in any way reflect their own experience, it would be naïve not to think that these kinds of stories have an impact on wider public perceptions of wealth and of philanthropy. And that is why it is so important for anyone who cares about the legitimacy of philanthropy to speak up, and to clearly and unequivocally call out examples like those coming out of the Epstein files, where giving has been perverted to serve the needs and ends of wealthy people rather than making any genuine effort to support the common good.

At the same time, technology is now adding new dimensions to the challenge of maintaining authenticity and legitimacy. The siloed nature of online debate, and the ease with which mis- and dis-information can spread, has created fertile conditions for the growth of conspiracy thinking; and philanthropy is a favourite target. Figures like Bill Gates and George Soros, for instance, have long been lightning rods for all kinds of insane theories. And it was telling that when the YouTuber and philanthropy influencer MrBeast recently attracted criticism for a video in which he spoke enthusiastically about laboratory-grown chicken meat, it took almost no time at all for people on social media to suggest that this was because he was now being “controlled” by the Rockefeller Foundation, with whom he announced a partnership last year.

A further challenge on the horizon comes in the form of Generative AI and its promise of easily accessible tools enabling people to create images, videos and other content that are entirely fabricated, but can be almost impossible to distinguish from reality. In part, the challenge will be that malign actors may deliberately use these tools to attack philanthropic organisations they disagree with or disapprove of. But perhaps the more significant challenge is that even when the use of these tools is well intentioned (including by nonprofit organisations themselves), it will contribute to a wider erosion of the notion of authenticity in the digital realm – because we can no longer be sure that what we see and hear is true, or that people are who they say they are – and this will then seep out into all other aspects of our lives.

In light of these challenges, it will be crucial for nonprofits and philanthropic organisations to find ways of maintaining their authenticity. A key part of this will be strengthening the real-life relationships they have with supporters and with the people and communities they serve. This is where the nonprofit sector may come to realise that it has brought additional challenges upon itself, by becoming too transactional, or by embracing managerialism and professionalization at the expense of genuine participation (as the scholar Theda Skocpol has powerfully argued has been the case in the US over many years). To strengthen relationships with supporters and the public, it may therefore be necessary to go back to first principles, and to rediscover some of the fundamental values of associational life; or to look to the success of online social movements in recent years, and to learn from the ways in which they have been able to engage a younger generation through shared aims and genuine opportunities for involvement. When the distance between nonprofits and their supporters reduces or disappears, this will hopefully allow trust to flourish.

Power

The second important currency for philanthropy is power. Although most philanthropy involves giving away financial resources, the donor often retains the ability to dictate where priorities lie, and how those resources should be deployed, so they retain an enormous amount of power. This is in line with the paradigm outlined by Andrew Carnegie in his essay “The Gospel of Wealth”, where he argued that wealthy individuals have a moral and societal responsibility to give back during their lifetimes, and that when they do so it was best for them to determine how money should be spent on behalf of those they were giving to. Inequality, Carnegie thought, was an inevitable consequence of capitalism – which in his view was the best available system for structuring society – and reflected a meritocratic reality in which some individuals rose to the top through superior abilities and greater effort. Those individuals, Carnegie argued, should then put their abilities and effort to work for others through philanthropy.

The idea that power should remain in the hands of the donor even when money is being given away is rarely stated explicitly, but could argue that it has been baked into so many of the structures and models we use in modern philanthropy that it doesn’t really need to be. As Kim Fellner, Director of the National Organizers Alliance put it back in 2002, “civil society without power analysis is the opiate of the funding class”. A growing number of modern donors and funders are acknowledging this; recognising that if they want to address the underlying causes of structural inequalities, rather than just their symptoms, this requires taking conscious approaches which focus on redistributing power or ensuring that it is used on behalf of the people and communities they are trying to serve. In practice, this may mean adopting more participatory models, in which those who would traditionally have been seen as the passive beneficiaries of philanthropy are instead given active roles in deciding how resources are used. It may also mean giving longer-term unrestricted funding, as MacKenzie Scott has championed; or even handing over resources entirely through asset transfers, as the UK’s Lankelly Chase Foundation has announced it plans to do.

Modern power-shifting approaches to philanthropy are in part a rejection of the Carnegian paradigm. But even if you disagree with Carnegie’s somewhat paternalistic vision, I have no doubt that he was sincere in his beliefs about where power should lie if philanthropy is to function most effectively. That is not necessarily the case for all donors, however; there are certainly others who have viewed the relationship between power and philanthropy much more cynically. Philanthropy, in the eyes of these donors, may be a tool to bolster their own power and influence, or to wield it over others. It is now apparent that this is something Jeffrey Epstein knew all too well. The picture emerging from the recently published files of his correspondence is of a man who used his ‘philanthropy’ extremely strategically as a means of connecting himself to other wealthy people (despite the fact that he was often giving far less than them), and making himself valuable to them through the connections and influence he was able to offer. As a piece in the Fair Observer noted recently:

“To be invited to [Epstein’s] townhouse was to find oneself in a room that looked like a parody of a New York Review of Books launch party. Nobel laureates traded bon mots with hedge-fund managers, movie stars were seated next to cabinet officials and tech founders, spiritual gurus, literary publicists and the occasional ex-prime minister mingled. The currency traded was visibility and access.”

Power comes in many forms in philanthropy, and as a currency is closely linked to trust. If donors and funders adopt methods of giving which place genuine trust in those they are giving to, then power, as well as money, can potentially be redistributed. Likewise, even when donors don’t necessarily give away power, if they are seen to be using it on behalf of those they are giving to – perhaps by amplifying their voices, or by lending weight to efforts to influence policy – this can help to build trust. Conversely, however, when it seems as though philanthropy is merely a means to an end of gaining power, or when power dynamics within philanthropy are exploited or not dealt with responsibly, this can damage the trust that recipient organisations are willing to place in funders, as well as the trust that society more broadly is willing to place in people and institutions that claim to be philanthropic.

Hope

The final currency I want to highlight that is important for philanthropy is hope. This might sound dangerously like I am veering into the realm of inspirational Instagram memes, but I think it is vital to acknowledge the central role that hope plays. Philanthropy is often a reflection of hope, because it is stems from a belief that the world can be made better. But just as importantly, philanthropy can be a powerful tool for creating and sharing hope. Right now, there are many major challenges facing society – from climate breakdown and biodiversity loss to the impact of AI, the erosion of democratic norms and the threat of war. In the face of these challenges it is easy to feel pessimistic and helpless, which is why anything that can bring people optimism and give them a sense of purpose and agency is so important. And this is a role that philanthropy can and should play.

In part, this about philanthropy bringing hope to the givers. During the research interviews that Beth Breeze and I conducted for our book Rich Expectations: Why Rich People Give, I was struck by how often the wealthy people we spoke to talked about their giving being something that gave them hope, at a time when it is often easy to be despondent about the state of the world. One donor, for instance, told us that “I am so lucky because the people we work with are part of the solution not the problem. They are a beacon of light: Remarkable people doing remarkable stuff, it gets me out of bed in the morning.” Another, meanwhile, said, “It’s easy sometimes to feel hopeless. Then you talk to people who actually work in places like Yemen and actually they’re quite upbeat. Things are bad, but they are still seeing some improvements and they have a strategy, and people are working together and their local volunteer, are extremely committed. So, there are still plenty of positives to take away.”

One of the challenges is that it can be easy for those of us giving at an everyday level to question how meaningful our donations are, and to think “why even bother?” (I know that I have found myself thinking this on more than one occasion). And even those giving at a much higher level might harbour similar doubts when they consider their philanthropy in proportion to the scale of the challenges they are trying to address. But this kind of thinking betrays an individualism and egoism that I think we have to avoid: if we fixate on the impact of our own donation or the exact contribution it has made, it is easy to have doubts about how effective our giving is. If, however, we are willing to subsume our own interests within wider collective efforts, then we can still derive hope from the fact that when all of our individual acts of giving (whether large or small) are added up, they can make a real difference. I think there is also something to be said for allowing ourselves to derive hope from the act of giving in itself. Even if we are under no illusion that the issue we care about is likely to be solved anytime soon, or that our individual contribution is going to make a measurable difference, philanthropy can at least offer us a sense that something can be done. We shouldn’t, of course, become complacent, or assume that we have “done enough”, but we should allow ourselves to enjoy the sense of satisfaction – however fleeting – that comes from choosing to do something. If we don’t allow ourselves even that small bit of hope, then philanthropy becomes a pretty grim prospect, which most of us would struggle to stick with.

As well as being a source of hope for those doing the giving, of course, philanthropy should bring hope for those on the receiving end. At its most basic level, this might simply be giving a nonprofit organization the hope that it can remain sustainable and continue its work. But it could also mean offering the hope of growth, or of finding space to explore new approaches and interventions that could prove transformative. And at the furthest end of the spectrum, some philanthropy may even try to offer the hope of fundamental structural change that could make philanthropy itself unnecessary in future. All of these different kinds of hope are valid, and which kind a donor tries to offer will depend on how they view the purpose of their own giving. The constant, however, should be that bringing hope is seen as a vital part of the function and role of any philanthropy.

To return to where this article started; money is a crucial part of philanthropy.  But it is certainly not the only currency that philanthropy trades in, and at times may not even be the most important. It is equally vital that we pay heed to the role that trust, power and hope play, and that we design our approaches with these currencies in mind, so that they can be maximized and shared effectively, rather than hoarded or squandered.