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Wise Givers: How We Did It
Philanthropy, according to its literal definition, is the practical application of love for humanity. Given the many ways we have of expressing love, it’s unsurprising that evaluating the effectiveness of philanthropy can be controversial. At the very least, it has an element of subjectivity: how do you compare the value to a torture victim of trauma counseling with the value of a college diploma to a former high school drop-out? Both can help the recipient lead a more stable, productive life. And there are ways – albeit crude ones – to measure some kinds of productivity. Income generation, for example, or improved test scores, or the ability to stay free of criminal activity. Not all programs lend themselves to easy and obvious metrics, however, and well-meaning people can, and do, disagree on the best measures of effectiveness.
But just because evaluations of philanthropy are subjective does not mean their results are worthless. Consider performance evaluations – companies could not be managed without them. The best evaluations don’t eliminate subjectivity, an impossible task, but make it transparent and consistent. As long as the criteria are clear and consistently applied, evaluations with some subjectivity can be very useful.
The challenge that we at Geneva Global face in evaluating effectiveness in philanthropy is to define the criteria for effectiveness and apply them as consistently as possible. Keep in mind that we are not ranking the philanthropists profiled here. Instead, we designed a simple methodology to bring to light good philanthropic role models, those people who bring together passion and tough-minded analysis to help them ensure that they are doing the most good that they possible can.
Here’s how we did it:
First, we limited our scope. The project only considered living wealth-holders who were actively, directly and deeply involved in choosing how their money was allocated. By definition, this ruled out people like the Gateses, who, although very involved in their foundation, have hundreds of employees helping research and evaluate grants (necessary given the volume of granting that they do, upwards of $3 billion annually). We wanted to highlight people whose practices could be replicated by givers who didn’t have hundreds of millions to give away. At the same time, we also limited our sample to philanthropists who had given more than $500,000 to their cause of choice over the last ten years. This may have been in one lump sum or in several smaller gifts over time.
For further clarity, we looked at five sectors that attract a great deal of attention today: Domestic Poverty, Higher Education, International Poverty, International Health and Disaster Relief. We are not saying that there are no highly effective philanthropists in areas like K-12 Education or medical research. We simply did not address those areas in this effort. The reason for creating this segmentation is to limit the amount of subjectivity – where comparisons were needed we were looking at philanthropists who were generally trying to achieve the same goals.
Second, we designed an evaluation methodology that we could apply as consistently as possible. While the goal for this round of research was not a comprehensive analysis or a ranking, we wanted the methodology to be the basis on which a more thorough and complex analysis could be done. As a result, we started with the Analytical Hierarchy Process (AHP) – a well-recognized approach for evaluating choices where there are multiple considerations and a degree of subjectivity. The AHP was particularly appropriate for this effort, since it allows for the fact that there are different ways of achieving impact (e.g. directly, indirectly by improving the operations of non-profits, by leveraging other donors, or by influencing policy, etc.; see the summary graphic below). We worked closely with IFF Advisors, an advisory firm that works with philanthropists and non-profits to improve their effectiveness and efficiency, to develop the core criteria. IFF were also very helpful in the research and due diligence phases of the project.
Third, we sought input from others. Although evaluation in philanthropy is fraught with disagreement we still thought many minds applied to this problem of evaluation would be better than just a few. As a result, we consulted with a variety of other thought leaders in the area of philanthropy and measurement, including the Monitor Institute, Templeton Foundation, and Blueprint Research & Design; we also relied heavily on work published by Grantmakers for Effective Organizations and the Center for Effective Philanthropy.
Lastly, we solicited nominations from these and more than 50 other knowledgeable experts, such as Grantmakers without Borders, the Philanthropy Roundtable, Philanthropy Workshop West, Tactical Philanthropy, the Association of Small Foundations and numerous trust and estate lawyers and private banks. We encouraged everyone we contacted to send the nomination materials on to others who might have valuable input.
We received more than 30 eligible nominations from this outreach; our own research uncovered many more. Ultimately we evaluated nearly 100 candidates. We choose the final 10 by interviewing a short list of candidates and reviewing forms 990, measurement documents, theories of change documents and other substantively useful sources of information. We found a number of very interesting philanthropists and programs that were not eligible – we’ll highlight few of them soon in a feature called “Five to Watch.”
There is also a purposeful bias toward diversity in our selections. Other things being equal, we wanted to show that no kind of philanthropy or philanthropist, (“new,” venture, entrepreneur, hands-on, family, self-made) has a monopoly on effectiveness. There are many ways to be effective and we wanted to capture the diversity of sources of wealth, motivations and approaches that can lead to effective philanthropy.
We think the final candidates profiled in these pages are not just inspiring in their efforts to create positive change in the world; they are inspiring in their outcomes. Our goal is to keep highlighting the most effective philanthropists so the spotlight stays on those who achieve results not just those who give large sums.
Do you know of other highly effective philanthropists that the world should know about? If so, we’d love to hear from you. You can fill out a nomination form here.
If you’d like to provide input on measuring effectiveness in philanthropy, please send us an email or leave a comment.
For more on our effective philanthropists project, click here
Further Resources:
IFF Advisors
Monitor Institute
John Templeton Foundation
Blueprint Reseach & Design
Grantmakers for Effective Organizations
Center for Effective Philanthropy
Grantmakers without Borders
Philanthropy Roundtable
The Philanthropy Workshop West
Tactical Philanthropy
Association of Small Foundations
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