The following is a conversation between Amir Pasic, Dean of Lilly Family School of Philanthropy, and Denver Frederick, Host of The Business of Giving on AM 970 The Answer WNYM in New York City.
Denver: Every industry has changed dramatically over the course of the past quarter-century. This would certainly include the field of philanthropy, which has truly become a profession. One of the leaders in the professionalization of this field has been the Lilly Family School of Philanthropy, and here with us to discuss that and the nonprofit sector at large is Amir Pasic, the Dean of the Lilly School of Philanthropy.
Good evening, Amir, and welcome to The Business of Giving!
Amir: Thank you for having me.
…we believe that generosity, caring for each other, and giving is such a fundamental part of the human condition and a fundamental part of our society, that they deserve a lot more research and a lot more discussion than they have been getting from the conventional disciplines.
Denver: I think there are probably a number of listeners out there who are not aware that such a school even existed. So, let me begin by asking you: Why a school of philanthropy?
Amir: We started as a center of philanthropy over 30 years ago, and we believe that generosity, caring for each other, and giving is such a fundamental part of the human condition and a fundamental part of our society, that they deserve a lot more research and a lot more discussion than they have been getting from the conventional disciplines.
Denver: Give us a sampling of the kind of courses you offer at the school and what types of degrees you confer.
Amir: One of the most popular courses that we do is the History of volunteering and philanthropy in America, and that is one of the courses that a lot of the undergraduates who come to our university take, and they become fascinated by the importance of voluntary activity in building our country, and not only our country but civilizations around the world.
And then when the students come into the program, they take courses on the ethics of philanthropy, what is good philanthropy. They take courses on the economics, the law of the nonprofit sector. They take courses on comparative civil society to understand the context around the world. And then they take some more practical courses on grant-making and fundraising so that they get a full picture of both sides of philanthropy, if you will, both the giving side and the asking side. And then they’re always required to do internships and apply a lot of the knowledge that they learn as well.
Denver: Where is the school located?
Amir: We’re located in Indianapolis, Indiana.
Denver: Well, there you go. So, now, do you have to go out there to take these courses, or do you offer courses in other cities around the country, or perhaps even online?
Amir: In terms of the academic courses, the Master’s program is available entirely online. We have many students who join us from different parts of the country and even internationally, and the first time we encounter them is when they come for graduation. In terms of the bachelor’s and the Ph.D. program, you do have to be in residence.
But outside of our Master’s program, we also have a training program, which we…not… to confuse people call The Fund Raising School, which is a non-credit training program for fundraisers that’s been around for quite a while, and that’s available in 18 cities around the country and online as well.
Denver: The Lilly School partners with Giving USA, and what you guys do is you issue an annual report on philanthropy for the year. How much was given in 2018, the last year reported? Is that number going up? Is that number going down? Or are we kind of just going around and around?
Amir: Americans gave about $420 billion last year, and the Giving USA is the annual measure of where the money comes from: Is it individuals, foundations, and corporations? And then where it goes to: religion, education, health care, and so forth.
And it has been keeping up, if you will. Giving has been keeping up. It’s been about 2% of GDP for many decades, and we’ve seen, last year, in particular, giving went up nominally, meaning the dollar amount went up, but if you account for inflation, it went down a slight bit. Many of our economists believe that this is the initial effect of the tax reform that we have been through, but it remains to be seen what the long-term effect of that will be.
Denver: It’s really hard to tell because I do remember December was a horrific month for the stock market, and I wonder if that may have had an impact as well.
Amir: Absolutely. The level of giving in the United States is very closely connected to or correlated very closely with the S&P 500, so with the level of the stock market. You’re absolutely right. Our experts looked at the volatility and the decline at the end of 2018 and worried that that was one of the reasons.
Denver: Looking at this report, Amir, last year and over the last several years, do you detect any trends, either hopeful or cause for concern?
Amir: I think the hopeful trend is that giving has maintained its 2% level of the economy, if you will, and overall giving seems to be keeping pace. One of the things we have detected is that the number of households in the United States that give is going down slightly over the last 10-15 years.
We used to confidently say that Americans give more frequently than they vote, and I’m not sure we can say that anymore, which is also troubling because we think that giving is an important part of our democracy as well.
Denver: What’s that percentage now?
Amir: It’s around the low 50s; it used to be above 60%. We used to confidently say that Americans give more frequently than they vote, and I’m not sure we can say that anymore, which is also troubling because we think that giving is an important part of our democracy as well. So, there’s a lot of us who are worried that the level of giving by everyday folks may be going down.
Denver: I think there’s an assumption that when 50% of the people or families give, it’s the same families every year. But that really isn’t the case, is it?
Amir: No, it’s not the case. I mean, there’s a lot of change over the years, and some people will give one year, and then they’ll wait and give a little bit later. So there’s a lot of nuance in terms of that 50% because it’s not always the same 50%.
Denver: The Faculty of the Lilly Family School wrote a very comprehensive piece titled the “Eight Myths of US Philanthropy” – really enjoyed reading that. And I want to talk about a couple of those with you. We’ll start with religion.
Twenty-three percent of Americans now say they have no religious affiliation – that’s as many as Catholics or Evangelicals. So, it only follows that there is a decline in religious giving. Would that be the case?
Amir: Again, the reason we call it a myth is because that’s not the whole story. There’s certainly less formal affiliation, especially emerging generations, with formal congregations. Giving to congregations, narrowly measured, has been going down over the last 25 years or so. It used to be that over half of all American giving would go to congregation-like entities.
But what researchers also look at are Catholic Social Services, World Vision, a lot of nonprofits, social service-oriented organizations that are actually imbued with some kind of a religious mission, and they’re a big part of the social service sector as well. So that there is a kind of religious giving that takes place that’s not going only to congregations.
And then even if you look at congregations, there are important differences and nuances there. There are some larger congregations that are continuing to grow and some of the smaller ones, for example, that are experiencing the decline. So you overlook a lot of the important features of what’s happening in terms of giving and religion if you just simply say it’s going down in one direction.
…your large gifts of tomorrow begin as small gifts today.
Denver: Very interesting.
Here’s another one. You hear in many development departments it takes as much work to get a small gift as it does a large gift, so focus on those big gifts because small gifts don’t really matter. Do small gifts matter?
Amir: I think small gifts matter a lot. If you’re talking about… if organizations existed for one day and you needed that one gift to survive that one day, of course, you would go for the very large gift. But you want organizations to last over a long period of time, especially if they have missions that fit longer periods and need to be there over long periods of time.
One of the things we know is that your large gifts of tomorrow begin as small gifts today. So, building the base for the future is important; so you have to focus on small gifts. Of course, there are also particular issues where small gifts are crucial, for example in natural disasters and emergencies when people kind of surge to help people in need. That’s usually the result of a lot of very small gifts that help strangers who are often in different parts of the country. So, small gifts in emergencies matter a heck of a lot.
It’s a measure of the relevance of your organization as well – the number of small donors that they have – because it measures the breadth of the champions that you have that support you…If you have one person or one foundation who thinks you’re doing great work, that says something different than if you have thousands of people saying, “This is my organization.”
Denver: I think the health of a nonprofit organization is really correlated to the number of small gifts they have because when you see a few organizations that are dependent upon one or two big gifts, if they ever go away – those gifts – they’re in real trouble.
Amir: Absolutely. It’s a measure of the relevance of your organization as well – the number of small donors that they have – because it measures the breadth of the champions that you have that support you. So, it’s also a measure of your relevance. If you have one person or one foundation who thinks you’re doing great work, that says something different than if you have thousands of people saying, “This is my organization.”
Denver: And donors are more than donors. They’re advocates. They talk about it. They host things. They participate in walks. They really help spread the word.
Denver: Another thing you hear often is that African Americans are a new and emerging demographic in charitable giving. What is the myth surrounding that sentiment?
Amir: The myth is, as you say, that they’re emerging, that African-Americans and other underrepresented communities are now just beginning to give, when we see that there have been donors, African American donors, from even before the Civil War. One of our professors, Tyrone Freeman, is writing a book right now that will come next year on the life of Madam C.J. Walker, who was the first self-made American woman millionaire and happened to be African American, and lived around the time of John D. Rockefeller. She’s just one indication of how we have kind of overlooked the importance of African American giving over the history of our country, which has been substantial.
Denver: One last one, Amir, and we’ll turn our attention to endowments.
At a time when we face so many urgent issues, many people believe that these endowments could be far better used if they were working to address these critical needs instead of being all tied up sitting there. What would your take be on that?
Amir: Well, certainly in some situations, that might be the case, but there used to be a time when – and many organizations still believe– that endowments are critical to be able to sustain their work over a long period of time, and endowments can cover things like information technology, human resources, and marketing that are not necessarily seen as particularly urgent to current donors. But for the health of an organization, they allow them to do their important work over longer periods of time and sustain their impact in a way that simply project-based or program-based funding does not allow them to do.
Denver: Let’s move on. Under the auspices of the Women’s Philanthropy Institute, which is at the Lilly School, you recently quantified the number of charities in the US dedicated to women and girls, and the amount of charitable giving that they receive. What were those findings?
Amir: This was a very important study because we increasingly see the importance of investing in women and girls, and yet we didn’t really have a baseline to understand how many organizations there were, and how much money they were given, so this was the beginning of a new index that will establish a baseline so that we can see how giving to women’s and girls’ issues increases over time. What we found was that the amount was relatively modest. Less than 2% of giving goes to women’s and girls’ issues when we measured it. But now, at least, we have a baseline so that we can measure it going forward.
Denver: That makes a big difference when you’re tracking something like that, and it gives people an incentive to give more and move that number up.
Another index you have is a Global Philanthropy Environment Index. You look across the world and you take into account the factors in different countries…. I think 79, all told… which foster philanthropic contributions, and also which ones inhibit them. Tell us about that.
Amir: This is an effort to measure the ease of doing philanthropy in 80 countries around the world. We look at things like the tax situation, the government’s policies toward philanthropy. We look at the cultural situation. We look at the ease of making gifts inside the country and making gifts across borders.
What we do find is a little bit of what you would expect, that North America and northwest Europe lead the world in terms of the ease of doing philanthropy in those countries. But the purpose of the index is not simply to create a popularity list or a list of who’s at the top and who’s at the bottom. It’s really to start a deeper dialogue about: what does philanthropy and caring for each other mean in different countries? So, we’re using really the index as a way to begin a conversation with people who are interested in philanthropy in different countries to better understand: What does philanthropy mean in your country? How do you care for each other? What is the role of the government? Also, with the purpose of informing policymakers so that they can make more informed decisions about philanthropy.
As it increases in interest in many countries, policymakers are not ready to understand what it means for them. Often, they feel that philanthropy supports civil society, that it may potentially threaten the government. Others are trying to figure out: How do we collaborate with this sector to help improve our impact in society? And then there’s other people who have made some wealth who are trying to understand what it means for them to have these unprecedented levels of wealth, and how that can have a social impact that is beneficial for their country.
Denver: What did you find out about the philanthropy in China?
Amir: I think China, we’ve found important restrictions on the freedom of people to be able to give money freely, and there were some recent policy decisions that have made the activities of outside international entities more difficult in China. But at the same time, we see an enthusiasm for the potential for philanthropy to engage in social services in China.
Denver: Earlier this year, Amir, you announced a new program to help Muslim American nonprofits expand their fundraising and other capabilities, and also help other nonprofits better understand the practice and tradition of philanthropy in Islam. Tell us more about that initiative, and what are some of the charitable motivations of Muslims?
Amir: Islam is one of the fastest-growing religions in the United States, and it’s often misunderstood. One of the hopes of our effort is to support the Muslim philanthropic sector in the United States to become more professionalized, to have better talent. We hope to contribute to their understanding of how to run organizations better and how to understand the whole sector more thoroughly. But also, hopefully, to help Americans who haven’t had much engagement with Islam or Muslims to understand that there are social service organizations inspired by the Islamic faith who are doing things that are very similar to what other social service organizations do, and so hopefully build some understanding across faiths as well.
Denver: Amir, do you believe that the field is generating the level, the volume, the quality of research that is needed to better inform philanthropists and nonprofits about best practices and models?
Amir: We certainly, at the Lilly Family School of Philanthropy, put a lot of emphasis on research and the importance of understanding this important sector of our lives. So we’re trying our best to generate research, and with colleagues and other universities and other research institutions, collaborate quite intensively to create more knowledge about how Americans volunteer, how they give money, how they engage in voluntary activities of all kinds, ranging from helping others to expressing their beliefs.
But we do think that there’s not enough research. When you think about how much research there is on a daily basis coming out of the business sector, or how much information there is about the government, the third sector is still way behind in terms of generating data and information about what’s happening.
…it’s a fundamental and profound leadership challenge, and an ethical conundrum for leaders who, I think, have to reach out to their broader community more intensively and help interpret what this means for their particular organization. It is not an enviable pursuit or situation to be in, but you know this is also a moment to step up to the challenge.
Denver: Here’s a hot issue in philanthropy and that is, many institutions, especially cultural institutions, they’ve received significant grants from individuals whose source of wealth is now being questioned, and there’s a lot of pressure on them to refuse those gifts, or in some cases even return them.
And this is just not a case of the Sackler family and the opioid crisis. This is extending to things such as individuals who’ve made their fortune in oil or coal or munitions. What is your opinion of how these organizations need to go about finding the correct course of action?
Amir: It’s a fascinating issue, and we live in a fascinating time where there is an intensive scrutiny of the origins of wealth, and wealth in general, because of our growing consciousness of inequality. But in some ways, it’s not new. When Andrew Carnegie was building his libraries all across the United States, there were some municipalities that rejected his funding because they felt that his business practices did not reflect the values that they held at the same time.
So, in some ways, it’s not new, and it is an important challenge for the leaders and the community of these organizations. I think what leaders are noticing is that they have to engage their broader community more intensively. So the people who work for them, their boards, their broader community that is interested in what they do, let’s say, that if they’re a museum, they have to show some moral vision and help interpret: Is money that comes from coal or carbon-based industries no longer palatable? Is the community willing to make the sacrifice of funds in order to eliminate that kind of funding for what they’re doing?
And so, it’s a fundamental and profound leadership challenge, and an ethical conundrum for leaders who, I think, have to reach out to their broader community more intensively and help interpret what this means for their particular organization. It is not an enviable pursuit or situation to be in, but you know this is also a moment to step up to the challenge.
Denver: It really is. I’ve had a number of those leaders on the show who said they have their gift acceptance policy under review right now, but it’s one thing to have it under review and another thing to decide what you’re going to do because it’s a tough situation, and sometimes it’s a fluid situation… because things change, societies change, environment changes, and things which were acceptable three years ago may not be acceptable three years from now.
Amir: Indeed. This is what is seen in the UK, for example, because after the big scandal at the London School of Economics, there was a royal chartered review of gift acceptance policy across universities. And in Oxford University, most recently, that has a very systematic review policy; the faculty were up in arms about a donation from a relatively mainstream donor, Stephen Schwarzman, because they felt that the whole private equity model was somehow inimical to their values, which is quite a remarkable statement if you think about how mainstream private equity has become to our business life.
… my hope is, really, that there will be a profoundly deeper appreciation for philanthropy as something that is valuable and something that we need to nurture and think about more systematically as increasing parts of all the serious things we do today are taken over by machines and robots for us.
Denver: Let me close with this, Amir. If we were to have this conversation again, let’s say in 10 years’ time, what do you believe would be one or two things that would be at the very top of our agenda relating to philanthropy and the nonprofit sector?
Amir: That’s a wonderful question, so let me be Pollyanna-ish in some way, or extremely optimistic. So, I think in 10 years, a lot more of our economy will be automated. Algorithms will solve a lot of everyday problems for us so that the things that we’re going to focus on are really those things where we can care for each other, express our generosity, and express who we are in terms of what we want to give to each other and to the world.
So my sense is, my hope is, really, that there will be a profoundly deeper appreciation for philanthropy as something that is valuable and something that we need to nurture and think about more systematically as increasing parts of all the serious things we do today are taken over by machines and robots for us.
Denver: Maybe, and not too far up on the Maslow hierarchy of needs, as you’re saying?
Amir: Exactly. So that’s another way to interpret that as well. So, we will be focusing hopefully on our higher faculties and those are all about generosity and caring for each other.
Denver: Well, I certainly do like ending on an optimistic note. Well, Amir Pasic, the Dean of the Lilly School of Philanthropy, I want to thank you so much for being here this evening. Share with us some of the information that visitors can find on your website, and also maybe how they can sign up for one of these courses that you offer in those 18 cities you spoke about.
Amir: Absolutely. It’s very easy to find us. If you just google Lilly Family School of Philanthropy or go to our website, which is www.iupui.edu, which is our home institution, you can find all the information there as well. We are in 18 cities around the country in terms of our fundraising training, which is quite accessible as well, and also available online. But we’re not hard to find if you just google Lilly Family School of Philanthropy.
Denver: And you’ve got some great information on that website, I will add.
Amir: Great. Well, thank you so much.
Denver: Thanks, Amir. It was a real pleasure to have you on the show.
Amir: My pleasure.
Denver: I’ll be back with more The Business of Giving right after this.
The Business of Giving can be heard every Sunday evening between 6:00 p.m. and 7:00 p.m. Eastern on AM 970 The Answer in New York and on iHeartRadio. You can follow us @bizofgive on Twitter, @bizofgive on Instagram and at www.facebook.com/businessofgiving.