Beyond Charity Part I : By Givers/Donors
‘Every action has an equal and opposite reaction’ says Newton’s third law of motion. But when we give our resources (time, money or product) to a cause, our attempt is to ensure that the result (reaction) is
(a) not opposite to our actions or objectives and
(b) atleast equal, if not more, than our expectation!
Our expectations are directly linked to how we choose to give to the cause and vision of what should be achieved. Similarly an organization's expectations are reflected in its mission, nature of work and operational style. This reminds me of a story about three men carrying bricks and the power of their visions. “As I walked along a path, I met a man carrying some bricks. "What are you doing?" I asked. "Oh, we have made these bricks," he replied, "and they will be square and smooth and strong." I met a second man carrying some bricks. "What are you doing?" I asked. "Oh, our community is building a very fine structure," he replied. "It will be spacious and beautiful and strong." I met a third man carrying bricks. "What are you doing?" I again asked. "Oh, our community will have the finest school in the land," he replied. "We will produce the best educated students in the area."
What is your vision? Does your terminology clearly reflect your vision? Is your chosen method of giving capable of achieving the vision?
The following three spotlights explore these questions from the perspectives of the three parties involved in the 'giving' process - the Givers/Donors and their types of giving; organizations and their different roles; recipients/cause and the impact of giving on them.
Givers/Donors
Is the money or resources that you 'give' an investment or an expense?
Charity has been the traditional model of giving. But there is a growing rank of philanthropists, social entrepreneurs, investors and venture capitalists who are through innovative ways enabling social change. They have demonstrated how giving can be strategically converted into an investment.
‘Philanthropy’ is an act to promote human well being and advancement by (i) preventing the causes of suffering or deprivation and (ii) supporting identified avenues of social and economic growth. Generally, philanthropists consistently support humanitarian or developmental causes in which they have a personal interest, affiliation or belief. For example cancer patients and their family members are more inclined to support cancer related research, a nature lover is more interested in giving for wild-life conservation and an art connoisseur is keen to nurture budding talent.
Charity has been the traditional model of giving. But there is a growing rank of philanthropists, social entrepreneurs, investors and venture capitalists who are through innovative ways enabling social change. They have demonstrated how giving can be strategically converted into an investment.
‘Philanthropy’ is an act to promote human well being and advancement by (i) preventing the causes of suffering or deprivation and (ii) supporting identified avenues of social and economic growth. Generally, philanthropists consistently support humanitarian or developmental causes in which they have a personal interest, affiliation or belief. For example cancer patients and their family members are more inclined to support cancer related research, a nature lover is more interested in giving for wild-life conservation and an art connoisseur is keen to nurture budding talent.
Some philanthropists have strategically used their wealth to fund social change beyond their own lifetime and across many future generations. Andrew Carnegie, John D. Rockefeller and Alfred Nobel are a few such well-known philanthropists of the past, whose legacy continues till today.
In contrast, charity is a more sporadic form of giving to charitable or humanitarian causes that touch your heart at that moment. Like seing pictures of devastation on the television or being approached by an enthusiastic young child with a donation box. And sometimes we end up giving in response to the passion of the young child without even knowing the problem or the cause!
A social entrepreneur recognizes a social problem and takes the initiative to solve it by using creative and market oriented methods. By applying entrepreneurial principles to social change, Muhammad Yunus founded the successful Grameen Bank in Bangladesh, Florence Nightingale established the first school for nurses and Dr.Verghese Kurien revolutionized the Indian diary industry through the AMUL Dairy Project.
Investing in catalysts of sustainable development is social investment. It provides resources to non-profit organizations and social enterprises for launching new programmes, building capacities to increase performance or even expand operations. The investment could be in the form of strategic grants, (micro-) lending, loan guarantees, equity investments, social venture capital etc. For instance, Citibank in collaboration with YMCA of Singapore launched the Youth for Causes Programme to provide seed funding to youth for developing and implementing creative ideas that benefit the community. Aavishkaar International was set up by a group of Indians in Singapore to provide venture capital to rural innovators and small entrepreneurs in India.
Socially and environmentally responsible investing has a dual purpose – monetary gain for the investor and the assurance that the company generated the profit while following positive social and environmental practices. It integrates financial judgment with personal values to evaluate the social and economic impact of the investment. For example, the United Global UNIFEM Singapore Fund invested in companies with favorable investment potential and a demonstrated responsibility in their policies towards women. As the Social Investment forum’s website says, “You can put your money to work to build a better tomorrow while earning competitive returns today.”
Each method of giving requires different levels of involvement. Since charity is primarily a sporadic form of giving, it normally involves a smaller quantum of money. In an age of credit cards and cheque books, very rarely do we (people) carry large sums of money in our wallets. Hence when asked for donation on the street, it is the small change that gets given. Considering the smaller amount of money involved, the giver is not normally concerned with finding out more about the cause or; asking for a receipt or; specifying how the money is to be used or; in seeking information on the organizations monitoring and evaluation policy or; checking its annual reports. Philanthropy requires more attention by the giver to choosing the cause, the organization and in expecting accountability for the usage of the given resources. Social investment demands high involvement both before and after the investment has been made. This includes a detailed selection procedure, regular updates from the recipient organization and the impact evaluation. In socially responsible investing, the focus is on identifying companies with desired policies. Post the investment, attention is towards monitoring the market performance of the company and the annual review of its policies. For a social entrepreneur, constantly monitoring performance and plotting results is an integral component of their functioning.
How we finally give, is a matter of personal choice and situation. Some of us would rather give spontaneously as and when the need arises, other might want to plan their giving to particular cause or organization. The chosen method and form of giving reflects our vision of what that money or resources need to accomplish.
Everyday in our personal lives we prioritize our spending and strive to get the maximum return for every dollar spent and minimize chances of loss. Giving to a social cause (deciding on how, whom and when to give your money or time) should also follow the same principle.
A social entrepreneur recognizes a social problem and takes the initiative to solve it by using creative and market oriented methods. By applying entrepreneurial principles to social change, Muhammad Yunus founded the successful Grameen Bank in Bangladesh, Florence Nightingale established the first school for nurses and Dr.Verghese Kurien revolutionized the Indian diary industry through the AMUL Dairy Project.
Investing in catalysts of sustainable development is social investment. It provides resources to non-profit organizations and social enterprises for launching new programmes, building capacities to increase performance or even expand operations. The investment could be in the form of strategic grants, (micro-) lending, loan guarantees, equity investments, social venture capital etc. For instance, Citibank in collaboration with YMCA of Singapore launched the Youth for Causes Programme to provide seed funding to youth for developing and implementing creative ideas that benefit the community. Aavishkaar International was set up by a group of Indians in Singapore to provide venture capital to rural innovators and small entrepreneurs in India.
Socially and environmentally responsible investing has a dual purpose – monetary gain for the investor and the assurance that the company generated the profit while following positive social and environmental practices. It integrates financial judgment with personal values to evaluate the social and economic impact of the investment. For example, the United Global UNIFEM Singapore Fund invested in companies with favorable investment potential and a demonstrated responsibility in their policies towards women. As the Social Investment forum’s website says, “You can put your money to work to build a better tomorrow while earning competitive returns today.”
Each method of giving requires different levels of involvement. Since charity is primarily a sporadic form of giving, it normally involves a smaller quantum of money. In an age of credit cards and cheque books, very rarely do we (people) carry large sums of money in our wallets. Hence when asked for donation on the street, it is the small change that gets given. Considering the smaller amount of money involved, the giver is not normally concerned with finding out more about the cause or; asking for a receipt or; specifying how the money is to be used or; in seeking information on the organizations monitoring and evaluation policy or; checking its annual reports. Philanthropy requires more attention by the giver to choosing the cause, the organization and in expecting accountability for the usage of the given resources. Social investment demands high involvement both before and after the investment has been made. This includes a detailed selection procedure, regular updates from the recipient organization and the impact evaluation. In socially responsible investing, the focus is on identifying companies with desired policies. Post the investment, attention is towards monitoring the market performance of the company and the annual review of its policies. For a social entrepreneur, constantly monitoring performance and plotting results is an integral component of their functioning.
How we finally give, is a matter of personal choice and situation. Some of us would rather give spontaneously as and when the need arises, other might want to plan their giving to particular cause or organization. The chosen method and form of giving reflects our vision of what that money or resources need to accomplish.
Everyday in our personal lives we prioritize our spending and strive to get the maximum return for every dollar spent and minimize chances of loss. Giving to a social cause (deciding on how, whom and when to give your money or time) should also follow the same principle.
Interesting reading links on giving methods:
posted by DevelopmenTwist @ 8:35 PM
0 What R Your Views?
