Shelley Strickland
WORKING PAPER FOR ASHE 2008 CONFERENCE
Philanthropy is an indirect catalyst for economic development,particularly to improve the greater Kalamazoo community.
Use the logic model developed by public affairs and philanthropy scholar Peter Frumpkin (2006). He contends that while external factors and broader economic and political forces are also considerations, three primary interrelated elements factor into the logic model (see Figure 1).
First, the theory of leverage considers the tactics a donor might employ. These tactics take two forms. One is the type of grant-making technique (project grants, short-term, grants, matching grants, loans, large grants to a few select recipients, issuing requests for proposals, high-engagement levels, funding overseas, joint ventures, and capacity-building grants). The second tactic is the programmatic technique (funding in communities, not program areas; new initiatives and pilot programs; support for nonprofit collaboration, not isolated work; private funding for public programs; funding of commercial ventures within nonprofits; funding for organizations created by grantmakers; and funding for independent evaluations). The combination of tactics informs the theory of leverage, which determines the philanthropic inputs.
The theory of change can be considered the core of the logic model. Frumkin contends that five possible change theories exist in philanthropy. Donors attempt to train individuals for leadership in a field, build stronger organization, create new networks, influence political channels, and generate new ideas and programs “with the goal of shaping the underlying paradigm and conversation.” The theory of change affects the activity, outputs and outcomes of a gift. Scholarly and media attention on the Promise has primarily focused on these elements.
Finally, the theory of scale determines the broad public impact. This can be measured in terms of financial strength, program expansion, comprehensiveness, multisite replication and the acceptance of a new doctrine within a field.
Current scholars, then, are not discounting pioneering concepts; they instead claim that economic concepts on philanthropy are incomplete, inconclusive or incorrectly prioritized.
Rather than either a public goods explanation of philanthropy or a focus on private consumption, Duncan (2004) advances a third model: “impact philanthropy.” He claims this model will predict philanthropic behavior because it captures the ways philanthropy interrelates with other aspects of giving, such as the relationship of a charitable organization to its donors or fundraising activities. His model accounts for negative gift externalities in ways previous research does not. For example, an “impact philanthropist” who seeks pleasure from seeing the measurable result his or her own personal giving alone makes on a charitable organization could actually have that charitable fulfillment decreased by others’ gifts. Duncan’s previously noted concept of “impact
philanthropy,” a new alternative to economic theories, helps account for explanations of why donors such as those to the Promise did not provide operating support. An impact philanthropist, as opposed to a public goods or private consumption philanthropist, perceives a greater impact by targeting a specific part of the production process that can be measured (Duncan, 2004).
Tax deductions do not fully explain motivations for the ultra rich. “The mega giver takes every advantage of the tax laws. But tax savings isn’t the primary force behind giving. And for many, tax isn’t a factor at all” (Panas, 2005, p. 162). With an estimated $250 million endowment established (Lydersen, 2006) for the Promise in particular, the donors were not likely motivated by taxation implications.
The remarkable resources of such donors, exemplifying the concentration of wealth in a select few, present the opportunity to alter our society and our marketplace, especially as they bring creative approaches to philanthropy
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