What Lessons Do President Obama’s Gifts Offers to Donors?

The “First Philanthropist” of our nation, President Obama, has announced the 10 organizations that will soon receive portions of the $1.4-million that came with his Nobel Peace Prize.

Not surprisingly, the list represents a careful set of choices.

After all, surely the President, his family, and his advisers know that not only will those organizations be scrutinized for scandal but also his choices will be interpreted for insights.

Without first-hand knowledge of how the choices were made, it is hard to analyze them with precision. But the opportunity for a philanthropic advisor to “reverse engineer” the president’s decisions to see what they might reveal is too tempting to resist. And this kind of exercise can help all of us think through our own values, assumptions, and choices about our giving and public service.

At the organization I oversee, Rockefeller Philanthropy Advisors, we encourage donors to build a philanthropic road map that lays out the donor’s motivations, the issues he or she cares about, potential approaches to take, how involved to get with a charity, and the best ways to make a difference.

So let’s use that overlay to imagine President Obama’s reasoning:

Motivations. Philanthropy is, by definition, a voluntary act. For it to be sustained, it must reflect visceral, fundamental, unshakable factors such as the donor’s faith, beliefs, values, experiences, and desire to leave a legacy. You need to know why you’re giving.

What can we deduce about why President Obama gives? He has answered that question, at length, in the books he has written and in his public life, including his service on the board of a foundation. He is a faith-based giver, with a strong belief that we should help those in need. He expresses his faith through philanthropic decisions that help individuals, one by one, overcome barriers.

Every one of the organizations selected provides direct services—housing, food, education, scholarships—to people facing barriers or hardship, whether longstanding or situational.

Causes. Sadly, there’s a surfeit of issues to tackle through philanthropy—poverty, education, culture, human rights, health, the environment. We frequently remind donors that even the world’s largest philanthropy, the Bill & Melinda Gates Foundation, cannot seek to deal with all the issues.

President Obama’s choices are largely focused in two broad areas: education and crisis relief. Just over half of his donations will go to U.S. college scholarships for underrepresented students, those who are needy, or are members of racial or ethnic minorities.

The second largest percentage, about 40 percent, will help people affected by current crises: the wars in Afghanistan and Iraq (with spillover into Pakistan) and the earthquake in Haiti.

President Obama’s largest donation ($250,000) will support the families of injured U.S. military service members. His second largest donation is to the Clinton Bush Haiti Fund, which is dedicated to Haitian earthquake victims.

Finally, President Obama selected an African organization focused on health, sanitation, and nutrition.

As a snapshot of one set of philanthropic decisions, this is pretty well focused. Most donors spread their gifts across many more causes.

What’s intriguing, of course, is to think about what did not get any money, such as community service and volunteerism; job training; arts and culture; childhood nutrition and health in the United States; climate change—all topics on which President Obama and first lady Michelle Obama have spoken out. How did he choose the issues he focused on? Did his wife have a voice in those choices? She has worked quite a lot on behalf of military families. How about his daughters?

We’ll never know (and sadly, it’s not really our business) why the president selected the issues he did. A few days after those gifts were announced, the president spoke at length about national standards for public education, and he spoke repeatedly on the campaign trail about education as critical to America’s future.

Approach. “Don’t fund the problem, fund the solution,” we tell donors (or indeed, anyone who will listen). You need to make some fundamental decisions about how you think change will happen. So it’s not just about focus; it’s about seeking solutions.

So what is President Obama’s view of how change happens?

In the field of education, clearly the president has concluded that too many young Americans live in circumstances that don’t encourage college ambitions, whether because of the cost of college, lack of support from their schools, or lack of experience and examples within their families. And he has decided that the solution lies in scholarships and application support.

Other donors, of course, see the solution in different kinds of public schools altogether, in programs that provide mentors and tutors starting in middle school and in lowering the cost of college. President Obama’s choices seem to reject those institutional solutions in favor of specific and focused efforts to intervene in the lives of young people.

In terms of people whose lives have been devastated by war, earthquakes, and prolonged economic crisis, President Obama seems firmly in the camp of providing help directly, not through avenues like research, advocacy, social enterprise, or efforts to change how social systems work.

His choices declare, in other words, that direct services can give people the opportunity to change their lives, even if the society they live in has not itself changed. In fact, he seems to say, individual change is what creates social change. This is, of course, just what one would expect from a community organizer who embraces the notions of people’s innate capacity and of the grass-roots nature of change.

Involvement. We ask donors to think about how much time they can devote to their giving and how public they want to be. Will you become a champion for your issue and seek to raise money for it and increase attention to the cause? Can you make site visits and evaluate programs as they are put in place? Do you want to take risks on new, untested groups? Do you want to make big bets on a few groups or spread your money around?

Realistically, President Obama has little choice in these matters. He cannot get deeply involved in the charities he has selected. Nor can he remain an anonymous donor. And given the scrutiny, he must choose well-established, soundly run organizations.

He cannot concentrate his gifts on a few groups, because of the risk entailed. Even though he created the Office of Social Innovation and Civic Participation, he cannot realistically give money to the untested and untraditional.

Impact. How will President Obama know whether his decisions made a difference?

In simple terms, because the President has focused entirely on direct-service organizations, he will be able to get information on the number of people helped. The beneficiaries will be able to report on the number of military families housed; the number of scholarships; the number of villagers with clean water.

None of those measures, of course, will answer the question of whether the underlying problems have been solved. But that is not the way the president has framed his choices.

His real impact, of course, may be in inspiring other Americans. His clear focus on educational opportunity may appeal broadly.

Imagine the impact if Americans began to think about using their giving to help more Americans have access to college, whether through better public education, support for college ambitions, scholarships, or affordable options. And his support for people around the world, not just in the country he leads, may broaden our giving horizons. Imagine the impact if more Americans gave money for basic education, food, housing, and sanitation in communities around the world.