Why Competitive Philanthropy is a Risk

Why Competitive Philanthropy is a Risk

Australia’s richest man, Anthony Pratt, has vowed to give away $1 billion in an extraordinary act of generosity unmatched in the nation’s history” went the Herald Sun this week, as did most other news outlets.

The philanthropy of Anthony Pratt, as well as that of Andrew and Nicola Forrest, Westpac Bank and the Ramsay Foundation, is of inestimable help to people in need across Australia. It is rightly applauded, but the focus of the reportage on top-line numbers and competitive positioning might be counter-productive. Dr Daniel McDiarmid, Principal Consultant at AskRIGHT, explains why.

 

Mega-gifts vary

Mega-gifts can be simple statements of aspiration, contributions to a personal foundation for later distribution, allocations to a corporate endowment, real-money right-now, pledges that will be paid over time, or a combination of these.

In newspapers, radio and social media, the gifts are positively reported (deservedly so). But the details of the gift are usually skipped over, with little useful commentary or critique. Focus is on the top-line number. In addition to the focus on a single number, there are often apples-versus-orange comparisons with other gifts. Did Mr Pratt’s $1,000,000,000 intention really need to be contrasted with the Forrest’s recent $400,000,000 commitment? Doing so was an injustice to both eruptions of generosity.

 

It could lead to fewer, or smaller contributions

But it is not just sensibilities at stake. There is a risk – a real danger that focus on top-line numbers might lead to fewer or lower contributions from wealthy Australians. The proportion of Australians who make donations is already in decline (Giving Australia 2016), a fact disguised only by an increase in the level of contributions being made by those who keep giving.

In the rarefied world of mega-gifts, the price of “who-gives-the-most” has now exceeded AU$1billion. There aren’t very many who can play at that level. So, will people play?

Competitive people tend to hold back from competitions they cannot win. This year some of the reporting of a major Chief Executive-focussed fundraiser was not on the splendid array of participating industry chiefs, but on the individuals who raised the most for the cause. The effect? Less money was raised overall.

It is likely that the publicity dissuaded some from participating or from vigorously pursuing supporters. Remember, competitive people hold back from competitions they cannot win.

While fundraisers have known for decades the value of “witnessing” to lift gift amounts, making it competitive might prove counter-productive.

 

If you are a philanthropist or wish to be, why not differentiate your giving by offering suggesting it as a matching (dollar for dollar) gift or challenge (realised when hurdle is achieved) gift? This approach gives prominence to your contribution, and encourages others to step up.

Fundraisers, let’s encourage detailed reporting of philanthropy. Let’s thank, celebrate, emulate, criticise, and celebrate again — but let’s not focus only on the top-line number.

 

Can we help you with your fundraising reporting? Book a free 30-minute consultation with one of our fundraising consultants now.

 

Dr Daniel McDiarmid

Dr Daniel McDiarmid

Principal Consultant at AskRIGHT
Daniel is a highly experienced and innovative fundraising professional with more than 30 years of success raising funds for higher education, research, religious and other organisations in Australia and New Zealand.

To find out how Daniel can help your organisation, contact d.mcdiarmid@AskRIGHT.com.
Dr Daniel McDiarmid