The 3 Ps of Philanthropy: Philosophy, Process & People

By | November 11, 2013

The 3 Ps of PhilanthropyWith the rapid changes around us, including the stations on the philanthropic journey, I find that many donors are seeking the philanthropic model best suited to them.

Those engaged in philanthropy are becoming more discerning and diligent about managing their philanthropy and life’s many choices. Hence I believe they should treat their philanthropic portfolio just like they do their investment portfolio.

The 3 Ps – of Philosophy, Process and People, can be applied to their philanthropic portfolio management too:

Philosophy: The beliefs and values that directs philanthropic decisions.  Are you looking for reach (touching as many lives as possible) or depth (few lives touched but high impact)? Do you rely on external input (through an NGO, development agency or an intermediary) or prefer to do the research yourself through personal contacts and experiences?

Process: Refers to how the philanthropists translate the philosophy into a community engagement plan. Who makes the decision? Do you understand the social issues that are to be addressed? What is the potential risk associated with the philanthropic direction (e.g.: impact risk, reputational risk, operational risk etc.)

People: Refers to the network of people involved in the philanthropic engagement. Who are they? E.g.: younger members of the philanthropist’s family, non-profit leaders, intermediaries like philanthropy advisors etc.

Just like investment portfolios are made up of various asset classes, based on investment philosophy, the philanthropic portfolio should also reflect the philosophy and risk appetite of the philanthropist. The philanthropists can continue to make altruistic donations or contribute towards more measurable causes that address poverty, health and education. Additionally they can also allocate resources to address more long-term and subtle influences and causes. This would address the urgent need to support causes like research and advocacy to effect policy changes, bring systemic social changes at local or national levels and build governance and leadership skills of non-profit collaborators, among others.

Those engaged in philanthropy are becoming more discerning and diligent about managing
their philanthropy and life’s many choices.

There are examples of philanthropists “taking risk” with their philanthropic efforts:

  • CASE Foundation calls it their ‘Be Fearless’ approach.
  • Rakesh Junjunwala of India requires that grantees apply at least 30% of his contributions for institutional capability building
  • Dan Pallotta of AIDSRIDES directs his philanthropic contributions exclusively to non-profit operations, administration and fundraising/ revenue generation, never as program grants.
  • Rockefeller Foundation funds the exploration of risks in international development to help promote innovation and expand philanthropic opportunities in these ‘risky’ areas.
  • The Gordon and Betty Moore Foundation provides funding to test out ‘game changers’ social hypotheses that have only a 25% chance of working.

There is a growing expectation that philanthropists need to step-up their ability to take risks and include high-risk causes in their philanthropic portfolio. Their high risk appetite which helped them build strong investment portfolios in their wealth generation efforts, need to reflect in their philanthropic activities too.

 

SDK_0460Usha Menon (@UshaMenon_Asiais a keen observer and active global participant of the non-profit sector for the past 26 years. She is Executive Chairman of Usha Menon Management Consultancy (Asia), an international training and consultancy service that is focused on shaping the world through social-impact organisations across Asia. A celebrated speaker, connector and consultant on non-profit management, fundraising and philanthropy, she has worked with and inspired non-profit leaders and donors across the globe in over 30 countries. For more, visit her blog: Asian Nonprofit Insights.