America’s philanthropists are giving more generously than ever, but they are also increasing restrictions on their gifts and seeking demonstrable outcomes.
This shift comes at a time when big money — however it is made, spent, or donated — is increasingly suspect in the eyes of the American public.
For both these reasons, it’s time for those of us who rely on charitable giving to start developing a new compact with our supporters. Whether our mission relates to education, health, science, ecology, community services, culture, or, in our own case, public policy, many of us have to rethink and revise how we maintain our financial support while protecting our independence and integrity.
Through most of the last century, benefactors often let their beneficiaries allocate gifts as they saw fit. Sometimes the donations took the form of endowment, ensuring reliable and all-purpose funding in perpetuity.
While unfettered and long-term giving is still crucial for most nonprofits, more and more donors are concentrating on projects that are in line with their own civic, cultural, intellectual, and humanitarian interests. They also want to see evidence of results from their contributions in their own lifetimes.
Hence the surge of project-based — that is, restricted — funding and the increased desire of donors to monitor progress.
A similar change is also apparent among foundations, including large, long-established ones as well as newcomers. In the past several years, world-renowned philanthropies have reordered and consolidated their priorities to focus on specific social goods and ratcheted up their engagement with their grantees.
The other main sources of funding — individuals, corporations, and governments — want to know the specific causes and projects for which their charitable donations will be put to use.
In response to this trend, nonprofits are faced with a choice: They can reject the restrictions and forgo the donations, thereby limiting the funds they raise; or they can accept donations that make nonprofit work possible on the condition that donors refrain from trying to influence the outcome of that work.
Our organization and others like it have long operated by that principle. Our door is open to a potential donor who wants to support research on an issue in which our scholars have expertise. The door shuts when it becomes apparent that the contributor is looking for what has been called “Jeopardy” research (“Here’s the answer we want, and we expect you to pose the question accordingly”).
Today’s philanthropic environment calls for a new, forceful agreement between donors and nonprofits that clarifies and fortifies the boundary of the no-go zone.
Still, no matter how assiduously donors and nonprofits commit to staying on the right side of that line, others may see the relationship straying into what they regard as a gray area, or worse. For example, universities and think tanks take money for independent research from donors who also — and separately — support political and partisan causes. Even with explicit assurances that there are no strings attached to the research funding, a recipient often has to fend off allegations that the relationship compromises the institution’s ethical standing. In such cases, the more transparent donors and nonprofits can be about the terms of a donation, the better able they will be to deal with controversy.
But controversy is inevitable and growing. Our own organization and many others with a similar mission are under intensifying media scrutiny.
In America today, constructive criticism and civil debate are often drowned out in a cacophony of discontent, pessimism, fear, and grievance that registers in public-opinion surveys. One result is a welter of distrust and anger directed at national institutions, political authorities, big business, academe, religion, sports, and elites, especially the superrich.
Washington think tanks are especially vulnerable because of their proximity and connections to the federal government, which is in poor repute in the eyes of many of its constituents.
Those of us who work in the nation’s capital should not waste time on protests or lamentation, and by no means should we go into a defensive crouch, letting critics impose their admonitions on how we ply our trade.
That said, we have an obligation to explain our policies and practices, and we cooperate with journalists and others who can — and often do — play a positive role in holding us to high standards. In addition to defending our funding, we’re also prepared to treat reasonable inquiries as a basis for self-correction when we see a need for it. In our own case, we conduct, at least annually and sometimes more often, reviews of donor guidelines, conflict-of-interest policies, and other rules, as well as our compliance with them.
The challenge to nonprofits is to seek the funding we need while shoring up the independence that we cherish. How these imperatives are reconciled will vary from one institution to another, given the differences in their goals and business models.
Our own experience led us, several years ago, to adopt additional procedures in an era of restricted giving and widespread mistrust. These innovations, which we’re constantly updating, give us confidence that project-specific support is compatible with independent inquiry and conclusions.
So is consultation with donors on the concept of a proposal, as long as we and they agree on the delineation between discussion of the project, which can be helpful as well as appropriate, and the decisions that we in management and our scholars must make by ourselves, independently.
We insist that the contents of a project and its product, however it is funded, must be rooted in rigorous research by scholars operating under the aegis of academic freedom. To that end, we require a donor’s explicit and unambiguous acceptance and observance of that injunction, including in letters of inquiry, proposals, gift agreements, memoranda of understanding, and stewardship and implementation plans.
If a donor attempts at any time to exert influence over a project and its results — whether during the planning stages or once the work is underway — we will walk away, refusing the donation or returning the money if it’s already been accepted. There have been several instances when this has happened.
Corporate support for nonprofits that engage in public education and policy issues — universities, scientific and medical-research organizations, and think tanks — requires special care, clarity, and strictures. On the recipient’s side, there should be peer review of the product as well as public disclosure of corporations that are supporting the organization.
Rules like these that apply to the organization as a whole should be accompanied by ones that regulate individual scholars’ outside, part-time consultancies or membership on corporate boards. Those doing the research or carrying out the project should be required to provide full, frequent, timely, and detailed disclosure of perceived or potential conflicts of interest, accompanied by recusals and other measures to avoid conflict. These rules should extend to part-time, nonstaff experts as well, so that their consulting work in the for-profit world is not misunderstood to have the imprimatur of the nonprofits they are affiliated with.
Along with our reliance on detailed agreements with donors and robust rules, all of us in the nonprofit world owe it to ourselves, our constituencies, and the public to listen carefully to critics and take seriously admonitions and suggestions that we find valid. But we must also be prepared to gird — and defend — ourselves against criticisms that we believe are flawed, and work harder to inform those who are questioning our practices and principles.
Starting in the last decades of the nineteenth century, the founders of American philanthropy were innovators. They had the ultimate entrepreneurial satisfaction — inventing an entirely new and vital sector of America’s economy and civil society that uses private wealth to advance the public good.
Today’s philanthropists are also innovators. They made their fortunes placing big bets on bold ideas that have paid off in new products and services, often transforming society and the economy. As they have turned their energies and resources to the nonprofit sphere, they are investing in our expertise in the areas they care about. And that means investing in our independence. If they were contracting for our knowledge to support their views and commercial objectives, the result would be worth little to them, since it would lose credibility. From a recipient’s standpoint, of course, we would be betraying our core values.
While we and our donors understand that this precept is both nonnegotiable and mutually beneficial, we must adapt to the temper of the times. That will require thickening our skins as well as strengthening our safeguards with better internal controls, stricter mechanisms to ensure accountability, rigorous oversight from our boards of trustees or directors, ongoing self-criticism, and constant receptivity to useful cautions and suggestions from outside.
Each of our organizations is, after all, itself a work in progress, in two senses of that word: We’re constantly adapting to change, and we’re doing our best to promote change for the better in society.
Whatever our specialty, it is a microcosm of a common goal — the improvement of an imperfect world. Whether our mission and passion are providing children with better education, combating disease, alleviating hunger and homelessness or improving how we govern our communities, from local to national to global levels, those of us who depend on philanthropy are just as eager as our benefactors to see progress in our lifetimes.
We will both come closer to that goal if the support we receive also has two dimensions: Our donors provide the financial resources that are our lifeblood, and they join us in protecting our independence, which is not just our heart and soul but the very value proposition we offer.
Strobe Talbott is president of the Brookings Institution, where Kimberly Churches is managing director and chief development officer.
Note: A previous version of this article misidentified Mr.Talbott and Ms.Churches.
We insist that the contents of a project and its product, however it is funded, must be rooted in rigorous research by scholars operating under the aegis of academic freedom. To that end, we require a donor’s explicit and unambiguous acceptance and observance of that injunction, including in letters of inquiry, proposals, gift agreements, memoranda of understanding, and stewardship and implementation plans
