Philanthropy is a low accountability sector (and what to do about it)

In terms of accountability to stakeholders for continued survival, my ranking of sectors is as follows (from most accountable to least accountable):

  1. Politics: the people you serve vote on your fitness every 2-4 years.
  2. For-profit: the people you serve must give you their money.
  3. Non-profit: the people who care about your issue must give you their money.
  4. Philanthropy: people must be willing to accept your money.

Depending on the specific office / company / non-profit, these rankings might shift a bit, but at the median I think they hold true.

If you disagree, think about this question: which sector is the most ruthless? This is likely where this is the greatest accountability.

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At the structural level, philanthropy is an extremely unaccountable sector. All you have to do to stay in business is have someone be willing to accept your money!

This is not the fault of anyone involved, it’s just the nature of the beast.

I think a few things follow from this structural condition:

Culture matters: Philanthropists, like all humans, care about what people (especially their peers), think of them. Given that direct accountability is not as strong of a lever in philanthropy, culture pressures will play a bigger role. I think the rise in status of evidence based giving has been a positive development on this front.

Governance matters: Certain organizational structures, such as foundations whose governance outlive their founders by 100+ years, should probably limited, as this further decreases accountability in an already low accountability sector.

Rigorous exits matter: In most cases, philanthropy can’t cover the permanent costs of its subsidies, and over time government will generally pick up the tab of continued social programs. As such, it’s government that controls when philanthropy can exit, and the more rigorous government is in its spending, the more accountable philanthropy will be for producing results.

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Again, I don’t think philanthropy is to blame for operating in it a low accountability sector.

It is what it is.

But citizens and governments can increase accountability, and they should do so when feasible.

 

 

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