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Indiana University Press
Understanding Philanthropy: Its Meaning and Mission

Understanding Philanthropy: Its Meaning and Mission

by Robert L. Payton, Michael P. Moody
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Philanthropy has existed in various forms in all cultures and civilizations throughout history, yet most people know little about it and its distinctive place in our lives. Why does philanthropy exist? Why do people so often turn to philanthropy when we want to make the world a better place? In essence, what is philanthropy? These fundamental questions are tackled in this engaging and original book. Written by one of the founding figures in the field of philanthropic studies, Robert L. Payton, and his former student sociologist Michael P. Moody, Understanding Philanthropy presents a new way of thinking about the meaning and mission of philanthropy. Weaving together accessible theoretical explanations with fascinating examples of philanthropic action, this book advances key scholarly debates about philanthropy and offers practitioners a way of explaining the rationale for their nonprofit efforts.

Product Details

ISBN-13: 9780253350497
Publisher: Indiana University Press
Publication date: 03/26/2008
Series: Philanthropic and Nonprofit Studies
Pages: 224
Sales rank: 541,119
Product dimensions: 6.00(w) x 9.00(h) x 0.83(d)

About the Author

Robert L. Payton (1927-2011) was president of C.W. Post College and Hofstra University, a State Department official, ambassador to Cameroon, head of the Exxon Education Foundation, and was the first director of the Center on Philanthropy at Indiana University. He is author of Philanthropy: Voluntary Action for the Public Good.

Michael P. Moody is Assistant Professor in the School of Policy, Planning, and Development at the University of Southern California. He is a cultural sociologist whose work focuses on the theory and practice of philanthropy.

Read an Excerpt

Understanding Philanthropy

Its Meaning and Mission

By Robert L. Payton, Michael P. Moody

Indiana University Press

Copyright © 2008 Robert L. Payton and Michael P. Moody
All rights reserved.
ISBN: 978-0-253-35049-7


Introduction: Why This Book?

Oseola McCarty worked for most of her life as a paid-by-the-bundle washerwoman, and yet she managed to build up substantial savings through frugal living—she never owned a car—and slow, steady accumulation. She saved enough so that in 1995, when she was eighty-seven, Ms. McCarty was able to make a gift of $150,000 to the University of Southern Mississippi for an endowment that would provide scholarships for needy African American students.

Although her gift made her famous, Ms. McCarty could hardly have expected the attention she received. On the first anniversary of the gift, she was the subject of a feature story on the front page of the New York Times. Her gift was seen as an extraordinary act of generosity, both because she denied herself in order to save the money and because she was giving an opportunity to others that she had been denied herself. The Times reported that famous people had come to kneel at her feet, to sing to her, to praise her as a saint. President Clinton awarded her the Presidential Citizens Medal, and Harvard gave her an honorary doctorate.

The story of Oseola McCarty's generosity raises key questions about philanthropy: Why did she make such a gift? Why did she decide that philanthropy was the ultimate purpose of her hard-earned savings? How was she connected to the young people she would help? Why do we celebrate and admire her so much more because she gave the money away in this manner, rather than simply because she saved it or worked hard to earn it?

Oseola McCarty's story is about her, about her gift, about the young people who will benefit, about the people who admire her, about their praise for her, and about the media's celebration of her story. Most significantly, though, it is about American philanthropy and American values. In fact, every once in a while we hear similar stories of otherwise "ordinary" people making surprising, extraordinary donations to the causes they care about. Since 1981, Albert Lexie has been shining shoes at the Children's Hospital of Pittsburgh a couple days a week. But he has never kept a cent of the tips he earns. Instead, he donates those tips to the hospital's Free Care Fund—more than $100,000 from a man who earns about $10,000 annually. Do such things happen in other countries? Is there something unique about American philanthropy? What has America done to the philanthropic tradition that it inherited from other places, other times, other cultures?

Another example, from the other side of the world: The terrible civil war that destroyed the former Yugoslavia in the 1990s, and the genocidal "ethnic cleansing" that killed tens of thousands and displaced millions, brought the suffering of displaced persons to the world's attention. Some of the more fortunate were able to flee the war and go abroad to find refuge with relatives or friends. The great majority—hundreds of thousands of them—had no such choice. During the worst part of the fighting they often huddled in basements, fearful for their lives if they went out to seek help or to find water to drink or wood to burn for heat. For years, despite the efforts of relief agencies, many people in Bosnia, Kosovo, and elsewhere lived without transport, without a place to sleep or enough food to eat, without medicine or blankets or adequate clothes. The journal of one of those victims, Zlata's Diary, is a latter-day Diary of Anne Frank.

The story of the former Yugoslavia—and similar stories of the human consequences of civil war, from Rwanda to Guatemala to Israel to the Sudan—also raises some fundamental questions about philanthropy. The first question is one that will recur throughout this book: What business is it of ours? How do we justify intervening philanthropically in another's country affairs to provide philanthropic assistance?

Aid organizations and even individual philanthropists like George Soros found humanitarian grounds for making the plight of these refugees their business, which was enough justification for their philanthropic response. But others who intervened did so for political or economic reasons. Once we intervene for any reason, we face further questions: Are food and blankets and medicine enough? Should philanthropy help families like Zlata's not only find a new home but also make a living? When should we scale back our charitable relief and encourage the new nations to build their own philanthropic institutions so they can "help themselves" and maintain free, open, and democratic societies? And when should we divert our resources to help new refugees in other parts of the globe?

Soros's actions in the Yugoslavian region during and after the war demonstrate one set of responses to these questions. He established one of his "Open Society Funds" there—like he did during the 1990s in most of the emerging democracies in the region—and hired local people to help decide how the money would be used. Grants were initially focused on basic relief and on restoring core infrastructure for necessities like water and electricity. This was a particularly dangerous sort of philanthropic venture in wartime, but this was what the people in places like Sarajevo needed, as they faced daily threats like snipers targeting people at the few places where they could fill their jugs with water. Over the years, the Fund's grantmaking shifted to other priorities such as establishing cultural and educational institutions. These new priorities would be classified more as "development" than "relief," but they are essential for the long-term stability and self-sufficiency of this new society.

These examples of what happens in the name of philanthropy raise questions about the definition of philanthropy, but they also make more concrete the meaning of abstractions associated with that concept—abstractions such as charity, good works, compassion, and community. Ultimately, they lead us to think about the most fundamental questions of the human condition: What should we do when things go wrong in the world? What responsibility do we have for helping others or helping to make the world better? How does philanthropy or "good works" relate to the good life and the good society? These are some of the questions we will reflect on throughout this book. We hope both the questions and our discussion stimulate readers to develop their own answers, for there could hardly be more important questions.

This first chapter will introduce broadly what is to come in the rest of the book, but its main purpose is to explain why this book—and this sort of book—is necessary and valuable. We take the position here that philanthropy is an interesting and important subject that deserves to be better understood and to be taken seriously, and in this chapter we introduce how we will do that by focusing on fundamental questions about philanthropy's meaning and mission. We also review some of the details, facts, and figures of what is going on in this field.

Understanding the Meaning and Mission of Philanthropy

What and Why, Not How To

Our approach to improving the understanding of philanthropy in this book will be somewhat different than most other work in this emerging field of philanthropic studies. Simply put, we will be more concerned with the fundamental "Why" than with the "How" questions. And to get at "Why"—such as "Why does philanthropy exist?"—we need to address a range of related, also fundamental "What" questions—such as "What is distinctive about philanthropic action?" and "What, in essence, is this activity we call philanthropy?"

In this way, our intention is to engage the reader in a joint search for the meaning and mission of philanthropy. We get at meaning by asking, "What is philanthropy?" We get at mission by asking, "Why does philanthropy exist?" We should note that this way of thinking about mission is borrowed from the late Henry Rosso, founder of The Fund Raising School, who argued that the "mission" of any organization seeking to raise funds is not that organization's answer to the question "What do we do?" but rather their answer to the question "Why do we exist?" In this book, we ask that latter question about philanthropy itself.

Doing philanthropy involves acts as diverse as consoling or cavorting with a child who has cancer, taking tickets at an art exhibit, writing a check for a relief agency, investing in the endowment of a private liberal arts college, and raising the funds that make the endowment possible. There are skills involved, sometimes highly specialized and demanding technical skills. But there are also motivations involved, values, a purpose, and an implied justification for voluntary action as the mode of action. We know a lot more about the skills than we do about the motivations or the justifications. We understand finance and management technique better than we understand values or purposes. We understand how to claim a tax deduction better than we understand why we can claim it.

Philanthropy is about ideas and values as well as about action, about doing things. Philanthropy is always an effort to blend the ideal and the practical. If you lose a grip on either perspective, you will have put on blinders.

The most common failing in attempting good works is to be too busy to reflect on things like ideas and values, too busy to talk or read. The surface is often misleading; we have to scrape away the layers of our own experience that prevent us from understanding why we did what we did. The most common fault among most of those who are professionally engaged in philanthropy is that they are preoccupied with the "How" and neglectful, even ignorant of the "Why." They are not "reflective practitioners" in the way Donald Schön argues they should be. Philanthropy, when taken seriously, calls for emotion constrained by reason, action guided by thought.

Much of the scholarly work in the field of philanthropic studies suffers from a similar failing. The dominant focus is on the study of and training for "nonprofit management," which, while serving an essential purpose of teaching the important skills, tends to gloss over the more fundamental questions we want to address here. Management studies rarely attempt to think critically about the assumptions underlying their organizations and practices. This is as true in business schools as in programs teaching nonprofit management. As a consequence, most students of business and nonprofits are rarely prepared to deal with foundational critiques of their practices when they arise.

Similarly, much of the scholarship on philanthropy and the nonprofit sector is more focused on questions of how this activity or sector works or how it works best. And while some scholars have offered explanations for why this phenomenon exists—e.g., because of the "failure" of other sectors—and what is different about it, the theory of philanthropy we set out in this book is distinctive in both its terminology and its perspective. We believe it adds some ways of understanding philanthropy that have been missing from standard explanations. Overall, then, this book tries to facilitate more reflective practice and more informed scholarship by asking somewhat different questions and shining a somewhat different light on the subject.

What Is Philanthropy? An Initial Summary

A book by two contemporary French intellectuals, one a philosopher and the other a psychoanalyst, has the straightforward title What Is Philosophy? Their answer—"philosophy is the art of forming, inventing, and fabricating concepts"—is deceptively straightforward as well, especially given the obvious complexity of their subject matter. They prefaced their answer to their question with the following declaration: "We had never stopped asking this question previously, and we already had the answer, which has not changed."

In writing this book, and in our experiences thinking about and doing philanthropy in some professional capacity—over the course of about fifty years for one of us, a mere twenty years for the other—we have never stopped asking, "What is philanthropy?" Our simple answer, too, has not changed. It is the same answer proposed by the senior one of us many years ago in a previous book: philanthropy is "voluntary action for the public good."

The authors of What Is Philosophy? also provide a useful insight into the form of a second question, "What is a concept?" They begin by asserting, "There are no simple concepts. Every concept has components and is defined by them." A concept, therefore, is a "multiplicity."

The concept of philanthropy is a multiplicity. As we explain in the next chapter, our definition itself encompasses many things. Of course it includes voluntary giving, when we give our money, either in cash or in property, often on the spot but more often by check—or even by deferred bequests, so-called planned giving, that will come out of our estates one day. But our definition also includes voluntary service, when we give our time and sometimes our talent; and our definition includes voluntary association, the organized activity without which most voluntary giving and service would be ineffective or even impossible.

Philanthropy is a multiplicity in other ways as well. While our definition of philanthropy is one answer to the question "What is philanthropy?" we will explore many other dimensions of the answer to that question. Philanthropy is moral action in response to the "human problematic." Philanthropy over time represents the "social history of the moral imagination." Philanthropy is essential to a free, open, democratic, civil society. And philanthropy is a tradition in jeopardy, one that needs our stewardship to thrive in the future as it has in the past.

Our conception of philanthropy is an affirmative one; we do not define the field primarily by what it is not, as the term nonprofit does (although we do use that term often to refer to the sector or organizations in it). "Good works" is another affirmative way to define our subject matter. The philanthropic tradition includes individual "random acts of kindness," as the bumper stickers and t-shirts proclaim, as well as the more visible, organized, and systematic efforts that must necessarily get most of our attention in this book. Some philanthropic good works seek to reduce suffering and misery, and some seek to improve the quality of life. Philanthropy is diverse and widespread, but we try to capture it in a useful conceptual framework in this book.

The Need to Clarify Philanthropy's Mission

Addressing the "What" questions throughout this book will then help us address the even tougher "Why" questions. But it is essential that we try to deal with those "Why" issues, because foundational questions about the very purpose and essence of philanthropy are arising more frequently and urgently than ever before, especially in the United States. These are arising at the same time that the field is experiencing considerable growth. Both scholars and practitioners are being forced to think harder about the basis for the legitimacy of philanthropy, and to justify the existence of this field they need to present a more sophisticated explanation of the unique contributions philanthropy makes or should make.

We've all seen the media coverage of ethical scandals at the United Way—the most visible, local face of philanthropic giving for millions of Americans—and of the misuse of nonprofit organizations as money launderers and shills by people like the disgraced lobbyist Jack Abramoff. Reports have also questioned the ethical conduct and decisions of the Red Cross and other charitable organizations in the wake of both the 9/11 attacks and Hurricane Katrina—for example, decisions about how much of the millions of donated dollars should go directly to victims. Although these stories and others—such as those about the pay packages of some nonprofit CEOs—are not representative of the vast majority of philanthropic activity, they do force us to confront some tough questions, like what really is different about this sector and why we should hold those who work in philanthropic organizations to a higher standard.


Excerpted from Understanding Philanthropy by Robert L. Payton, Michael P. Moody. Copyright © 2008 Robert L. Payton and Michael P. Moody. Excerpted by permission of Indiana University Press.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

Table of Contents

Preface and Acknowledgments
1. Introduction: Why This Book?
2. Voluntary Action for the Public Good
3. Because Things Go Wrong: Philanthropy as a Response to the Human Problematic
4. The World Can Be Made Better: Philanthropy as Moral Action
5. The Social History of the Moral Imagination
6. Philanthropy, Democracy, and the Future
Suggestions for Further Reading

What People are Saying About This

Johns Hopkins University - J. B. Schneewind

There is no one in the country better qualified than Bob Payton to write on this subject. He has more experience in the field and a broader and more sophisticated set of perspectives on it than anyone else I can think of. . . . And there's no one else who has a better chance of educating the broader public as well.

Princeton University - Robert Wuthnow

A bold, thoroughly informed inquiry that challenges readers to think more deeply about the meaning and mission of good works. Written in clear, incisive language, Understanding Philanthropy helps us to understand the multiplicity of philanthropic acts and the fact that we are all affected by them.

University of San Francisco - Michael O'Neill

Robert Payton's decades of philanthropic leadership and humanistic reflection and Michael Moody's social science skills and recent research combine to make Understanding Philanthropy a must-read. This wise and well-written book is one of the best recent publications on philanthropy.

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