Philanthropists are good people….
But they’re getting rarer by the second.
If you’ve never worked in major philanthropy, you might find it hard to believe that giving away money “well” is a challenge.
Recently, I collected over 100 responses from various philanthropists on the challenges they’re facing with managing their giving. I began this project with trepidation, largely due to my own preconceived notions about it. I interviewed donors, reviewed data from private philanthropic groups, and analyzed summaries. Then, I used AI to help synthesize the information. ChatGPT sanitized it a bit more than I would have liked (there’s a LOT there) but it’s a start.
We can’t begin to build something better until we begin to listen. Here’s an attempt.
Major Challenges
1. Difficulty in Finding Qualified Charities:
• Sending Letters of Inquiry (LOIs) to uninterested foundations is time-consuming.
• Open LOIs are expensive for both charities and philanthropists.
2. Tracking and Impact Monitoring:
• Philanthropists struggle with tracking gifts, pledges, and assessing the impact of their contributions.
3. Transactional Feelings:
• Donors often feel like ATMs, with charities constantly requesting funds without building genuine relationships.
4. Communication Gaps:
• Charities and philanthropists don’t know what to expect from each other, leading to misunderstandings and disappointment.
5. Workload and Time Commitment:
• Both donors and charities desire transformational connections, but the effort required can be overwhelming.
6. Overhead Costs:
• Ongoing tension regarding the appropriate level of overhead costs, with public scrutiny affecting perceptions.
7. Power Dynamics:
• Donors sometimes use their financial contributions for personal gain, which can be disempowering and directive for fundraisers.
8. Collaboration Challenges:
• While desirable, collaboration often increases workload and costs and can make organizations feel controlled.
9. Barriers to Meaningful Connection:
• Geographical, linguistic, and denominational differences pose challenges to connecting meaningfully.
10. Personality and Interaction Difficulties:
• Shy and introverted fundraisers and donors find the philanthropic space challenging.
11. Dependence Concerns:
• Donors worry about charities becoming overly reliant on their contributions.
12. Duplication of Efforts:
• Tension arises when donors are asked to fund organizations perceived as duplicating the work of others.
13. Fear and Resource Scarcity:
• Charities fear a scarcity of available funds, while donors fear wasting resources on less impactful projects.
We can’t begin to build better systems — to reimagine philanthropy, proxies, or shortcuts to building trust — if we can’t begin to hear one another. Really hear.
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Dan and I are starting to build WellFunded.io — tools for Philanthropists to manage their giving wherever they do it, and a standardized grant form for Charities to eliminate the $70B they spend annually filling out grants, and playing the major donor fundraising game. I’d love to connect with you to have you help reimagine what a healthier fundraising sector could be.
