Perspectives on Philanthropic Structure

Philanthropy’s structural elements, and the relationships between them, can be seen from distinct perspectives, shaped by ideology, academic disciplines, etc. There is no one way to make sense of how the parts fit together, but looking through a range of lenses can lead us to ask different questions and consider different interests.

Systems thinking in complex systems requires us to seek out multiple viewpoints to better understand the visible and submerged parts of a system.

Let's look at a few examples:

If we see philanthropy as a type of business, tied to social and political systems, its goal might be to amass resources and bolster endowments.

Alternatively, we can see philanthropy as a sphere distinct from the state or the market, which uniquely facilitates voluntary action.

A few academic terms get used to describe some of these perspectives. We try to explain them here:

The philanthropy as business perspective is rooted in the concept of the non-profit industrial complex, which criticizes organizations in the third sector for adopting a resource maximizing orientation that diminishes the value of relationships with individuals and communities left out of mainstream systems.

The vision of philanthropy as an independent third sector draws on the concept of a civil society in which people connect and cooperate to develop aspects of community and society that they value without direct government management and control (while still respecting the rule of law).

From a political ecocomy perspective, the industrial complex is expressly concerned with the outsized influence of market interests over government and private individuals. The civil society view believes in the possibility of a public sphere that can effectively challenge an overbearing state and big business interests.

As we probably all experience from time to time, relationships are messy and fraught. Philanthropy’s many relationships are no different. There are inevitable rubs, or friction, between the state, the market, the voluntary sector, and individuals.

Systems connections are messy, dynamic, and manifold.

Different sectors certainly contain their own conflicting perspectives. For example, wealthy and poor families may make different demands on the state though they have things in common like wanting their children to survive and flourish.

Between sectors there are also conflicting interests which inevitably produce some tension when the exchange between them appears to favour one set of interests over another. Here, we look at some of those tensions from the perspectives of our Money Stories podcast guests.

In the podcast Money Stories, we hear from two economists, a tax specialist, a social worker with lived experience of houselessness, and a community leader, who speak to different structural elements and relational rubs.

Sheila Block and Alex Hemingway from the Canadian Centre for Policy Alternatives look at how philanthropy, especially big philanthropy, can weaken the connection between the state and individual citizens. They are concerned about democratic control. Because a big proportion of donations come from donors' taxable income, Sheila understands big philanthropy to be a tax loophole. Alex raises the concern that we are failing to tackle the wicked problems of our day because we are not pooling our resources effectively. Alex would prefer to see democratic reforms strengthen our ability to address the issues we care most about, equitably, collectively, and democratically.

Argument: Foundations receive taxable income to be controlled by private rather than democratic interests.

Tax specialist Brigitte Alepin argues that our tax code has a bias that incentivizes the stockpiling of philanthropic funds, even though history shows us that each generation produces and gives plenty of its own wealth. Whether surplus income is taxed or donated to philanthropy, Brigitte believes that all Canadian taxpayers have a claim on the use of those funds to improve quality of life today. She uses concepts like tax efficiency to determine the minimum disbursement rate necessary to pay back Canadians for what they’ve given up in tax revenue, and advocates that all income on investments should be spent to tackle the social issues of the day.

Argument: taxpayers have a claim on all taxable income to improve the quality of life today but foundations keep too much in their endowments, for future generations.

Professor Ceema Samimi tells us a story about how foundations, government funders, and charities can be so focused on maximizing resources that they can (inadvertently) devalue the informal relationships necessary to shift power and change lives. Samimi uses the term “Non-profit Industrial Complex” to refer to the relational knot that exists between government, foundations, registered charities, and a wealthy class of donors. This term is part of a larger critique of how philanthropic structures preserve institutional power and limit social transformation.

Argument: In order to be effective, charities should be accountable to those they serve over the government and foundations that resource them.

Liban Abokor of the newly established Foundation for Black Communities (FBC) sees potential in philanthropic structures to create change for marginalized and oppressed communities. Whereas both the state and traditional philanthropy have failed to address the needs and interests of minority groups, FBC is able to attract those donors who do recognize or share in the interests of Black communities. From Abokor’s perspective, there is nothing inherently problematic in the structure of philanthropy. Its limitations and oversights can be addressed through participatory decision-making within minority communities.

Argument: Foundations can and should build wealth for minority communities underserved by a majority-controlled state.

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  Systems thinkers pursue multiple perspectives

  We don't have to agree with all the perspectives or look for right and wrong perspectives. Understanding a variety of perspectives will give us insight into the system.
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  The Effectiveness of a structure depends on where you're standing

  Structure and system purpose are linked. Some feel that a different structure could serve the proclaimed purpose better, while others reject the purpose and the structure, in whole or in part, because it doesn't align with their values and/or interests.
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  Where there's interaction & exchange there is friction

  Philanthropy brings state, market, voluntary sector and families & indivdiuals into relationship and exchange, which creates relational rubs between different purposes and value sets.
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  Argument: Philanthropy diverts tax dollars

  Because many donations come from otherwise taxable income, and philanthropic foundations don't pay taxes, some feel that there should be more democratic control over how such funds are used, or that they should be spent to improve life today, not in the future.
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  Argument: philanthropic dollars should be controlled by different voices

  Tax dollars are often controlled by majority interests, those who the current system generally serves better. The world would be a better place if minority communities, and marginalized people dependent on charitable services, had greater say in the use of philanthropic resources.

Experiences & Observations

If you had to map the philanthropic landscape in Canada, what are some of the different structures (policies, practices, and resource flows) you’ve encountered, or heard about? Which are barriers to and/or enablers of positive change?

Reactions & Impressions

Do you feel these different structural elements and relational rubs apply to the parts of the philanthropic sector in which you are most involved? Where do you feel resistance or acceptance of the arguments presented in relation to a foundation you are close to?

Questions & Hunches to test

Which structural elements, relational rubs, and lenses would you like to better understand? Who could you talk to, or where could you go to learn more?