Strategic Philanthropy vs Charity

This is an interesting question that I had a fantastic chance to explore recently with a small cohort of individuals in New York City. Each year I choose one thing to learn about that is not related to my day job and this year that topic was foundations and philanthropy. At first glance charity and strategic philanthropy are very similar but the more you dive into it, the more you can see the differences.

First we must define philanthropy — by definition philanthropy at it’s core is the investment of private capital for the public good. Charity or donations are what we all think about when we get the solicitation in the mail around the end of the year asking for a year-end donation to help a cause that is close to our heart. These donations tend to go towards an immediate need, usually are smaller dollar amounts but are given by a large number of people. These are crucial to the operations of non-profits and make an impact in the community.

The idea behind strategic philanthropy is to take it to the next level. It doesn’t mean that it has to be a large donation but instead it focuses on solving problems at their root. Strategic philanthropy works to identify opportunities for leveraging change much greater than the size of the investment — small amounts of money that start making large impacts. These investments tend to be long-term in nature, upstream focused and come with a higher risk for a higher potential return. These are often focused on changing systems and regularly have an influence or public policy connection.

After spending five days looking at the difference between charity and strategic philanthropy I have a much better respect for some of the amazing work being done across this country in our non-profit sector. During my time in New York City we were able to conduct over a half dozen site visits to see social entrepreneurship in action. It is amazing to see some of the truly innovative approaches to societal problems. At the bottom of this post I have included three of the best individuals/organizations I had a chance to interact with during my visit.

In the end it is not a question of strategic philanthropy or charity, it must be both. We will always have immediate needs and charity/donations help solve those gaps. I think it is imperative though, that everyone also keep an eye on how they can think strategically about their philanthropic dollars and find those times when we can give to help target root causes for issues and help our investments multiply many time over! Some years you will give more to charity while another time you may see a truly innovative idea and can make a strategic investment directly to the root cause. The most important thing is to keep watching for ideas and investing in our community to keep this an amazing place to live.

Innovative Organizations and Individuals

Echoing Green — Outstanding organization investing in individuals who are making a difference. We had the opportunity to meet with Cheryl Dorsey, President of Echoing Green who was outstanding.

Red Hook Community Justice Center — Innovative community justice model which is reinvigorating the community. The Red Hook community of southwest Brooklyn, where 70% of residents live in public housing, had been plagued with crime and drug issues but this new approach to justice is helping it take back it’s streets and improve the lives of it’s residents.

Honorable Michael Corriero — Amazing individual who helped form Manhattan’s Youth Part as one of the first models for dealing with 13, 14 & 15 year-olds who were charged in adult court with serious crimes. Corriero grew up in the tenements of Little Italy and went on to become a State Supreme Court Justice. He has since retired and is now the Executive Director of Big Brothers Big Sisters of New York City.