Philanthropy Is Put on the Spot by White House

White House conferences are usually longer on symbols and good feelings than on substance and argument. Last week’s gathering on philanthropy, called “Gifts to the Future,” was no exception. Its main message was the uncontroversial one that Americans ought to be more generous toward the nation’s charities. But along with that call came some other challenges that the philanthropic world might find harder to accept.

One was that, in addition to more money, philanthropy needed a new outlook, an “entrepreneurial spirit,” in the President’s words. Speakers from Silicon Valley explained that that meant foundations and others would need to become more willing to take risks, to become actively involved in charitable projects, to measure results, and to accept the likelihood of failures.

Such an approach to grant making — usually called “venture philanthropy” — is now more widely embraced than it was a few years ago. Yet, to many philanthropists, it smacks too much of a businesslike mentality for dealing with the inevitably tangled and intensely personal problems that charities must confront. Some even see it as a step toward encouraging for-profit businesses to replace non-profit organizations in caring for the needy.

What’s more, the critics of venture philanthropy think the approach has not been tested enough to know whether it really works. But if philanthropy is to be more effective in the next millennium, the White House conference seemed to be saying, it will have to adopt more-venturesome attitudes.

The White House also suggested that philanthropy needed new leadership. To that end, the conference showcased the efforts of young people, minority groups, volunteers, and small-dollar donors — but not, despite the Clinton Administration’s recent interest in faith-based organizations, religious leaders (though several had been invited, a White House aide said). Many of these “philanthropic heroes,” as a handout called them, were at the conference, and their accomplishments were indeed inspiring.

Yet new leadership is easier to call for than to get. The nation’s charitable landscape is — and will continue to be — dominated by large organizations with professional staffs, such as those that filled most of the seats at the White House conference. And such organizations have embraced new directions more readily in principle than in practice.

Moreover, if the much-anticipated (and oft-mentioned) multitrillion-dollar transfer of wealth to the baby boomers from their parents does indeed take place, it will concentrate the potential to give in certain families, rather than spreading it around. So, too, will the creation of more mammoth foundations based on high-tech fortunes, another development celebrated at the conference. Concentrated philanthropic wealth is concentrated philanthropic wealth, even if it may be located on the opposite coast from where such wealth has traditionally been located.

In any event, the age or background of donors will surely matter less in the future than the kinds of values they bring to their efforts — a subject that received far less attention at the conference. If the White House is right in its view that tomorrow’s charities require new leadership, the real (and much harder) test will be found in what those taking on that responsibility decide to do with their time and money.

Judging from the conference, charities ought not to be looking to government for more assistance. Despite its aim of stimulating increased giving, the half-day conference contained virtually no discussion of federal tax policies that might help achieve that goal. President Clinton did promise to create special committees to consider changes in tax rules and other steps to strengthen the “philanthropic partnership between the government and non-profit groups and citizens.” But, with his Administration entering its final year, those well-meaning efforts are more likely to produce delays than actions.

Nor were any commitments made to increase the budgets of programs that provide financial support for charities. To the contrary, by emphasizing the important difference that even a small rise in giving could make, the President and First Lady sent an unmistakable message that new government spending was not essential to dealing with social problems, such as feeding the elderly, sheltering the homeless, or providing more child care.

Indeed, in his concluding remarks, delivered with his customary passion, President Clinton explicitly urged the nation’s donors to do more to assist places “that have been passed over by the economy” and to help those “who are willing to work and have been left behind.”

Those comments may have been a reminder of the Administration’s most important legacy to philanthropy: its 1996 overhaul of the welfare system, which not only has cut government-assistance rolls in half but also has dramatically affected the lives of low-income families. By limiting how much government aid those families could receive, the measure has put more pressure on the nation’s charities to help the poor become self-supporting.

If giving were to increase, the President was suggesting, the philanthropic world should use the additional money to respond more effectively to that challenge. But to do so, many charities would also have to overcome their initial reluctance toward (and, for some, continuing distaste for) a policy they regarded as a disastrous mistake.

Moreover, many would find themselves facing competition from new organizations, including for-profit ones, that are more attuned to the demands of the new, businesslike approach to charitable programs that the conference was touting.

In other words, as welcome as more “gifts for the future” might be, they might not produce the kind of response the President was seeking.

That, of course, is one of the virtues of American philanthropy. Not even a White House conference can prompt it to take on tasks it does not want to.

Leslie Lenkowsky is professor of philanthropic studies and public policy at the Indiana University Center on Philanthropy and a regular contributor to these pages. His e-mail address is llenkows@iupui.edu.