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Innovative philanthropy

The non-profit world needs to learn a thing or two from the private sector if it wants to survive
Dan Pollotta, "The way we think about charity is dead wrong" TED talk (photo: Youtube screenshot)
Dan Pollotta, "The way we think about charity is dead wrong" TED talk (photo: Youtube screenshot)

Philanthropy is involved with basic innovations that transform society, not simply maintaining the status quo or filling basic social needs that were formerly the province of the public sector.” David Rockefeller

Loving kindness is greater than laws; and the charities of life are more than all ceremonies.” The Talmud

Philanthropy is a fundamental part of the Jewish religion, and one of the main obligations a man has towards mankind, according to Jewish Law, and Western morals. The Hebrew term for charity or philanthropy is “Tzedakah”- literally meaning righteousness, originating however from the word “Tzedek”, which means (social) justice.

And what suffices as charity, or social justice, in accordance with Jewish law? Charity is the giving of 10 percent of one’s earned money and assets to the poor, the needy, or any cause deemed worthy in a man’s eyes as needing financial aid. This idea, is trying to tell us that if 10 percent of society’s GDP went towards charitable causes, society would be equitable, and maybe even capable of eliminating the problems it deals with.

Ten percent, however, is not the figure our charitable causes are receiving. The US, the world leader in proportional charity given annually, has been stuck at about 2% of GDP given annually towards charitable causes and organizations, for the past 40 years! The US poverty level, being 12%, has also not changed in 40 years. We can see a direct connection between the lack of growth in charity, and the inability of the world’s problems to be dealt with or even improved.

Israel, which was second in the world in proportional charity given annually in 2008, dropped by almost 50% in one year and was giving only 0.8% of its GDP by 2009. Since the 1970’s, only 144 U.S.charities have surpassed 50 million dollars of annual revenue, while 46,136 for-profit organizations have reached this goal in the same time period. If there is so much growth in the economy, why isn’t the amount of charity given growing also?

I recently watched a riveting lecture given online, by a philanthropic entrepreneur named Dan Pollotta, titled “The Way We Think About Charity is Dead Wrong.” Pollotta charismatically provoked in me all the aforementioned questions. He claimed that the lack of growth in the non-profit sector is due to a number of errors found in society relating to the way we perceive charities, their roles, and the way to handle them. We want to see our charity money going straight into the needy’s pockets, as opposed to having our charity money invested strategically into advertising and fundraising, which could bring in more charity money in the long run. Our brightest minds and greatest thinkers stay away from the non-profit sector when coming out of university, since it is far more noble and convenient to make more money in the for-profit sector, and donate it to an organization, than to go into managing a charity and helping it grow and succeed.

Society loves innovation and risk from businesses and companies, but is appalled by the thought of risky and innovative steps taken by charities, since it could compromise the money they give from going directly towards the cause. Charities are also simply not given the same time or patience that investments are given. People need to see a social change from their donation, much quicker than they need to see a profitable return on their investments. All of these points do not attest to the ill will of society in regards to philanthropy, but rather show a good-willed, counterproductive attitude towards it. The impatience and lack in strategic planning shown towards charities handicap them, and have resulted in little to no growth in non-profit organizations over the past 40 years.

In order to take money away from the for-profit sector, and give it to the non-profit sector, society does not need to be more generous but rather more intelligent when it comes to their generosity. Charities have to be given the same strategic care businesses are given. Donations need to be put into advertising and fundraising, innovation and risks must be taken, and the brightest minds must apply themselves to making these changes happen. If we took just one percent more of the GDP away from the for-profit sector and applied it to the non-profit sector, America would have 150 billion more dollars annually to tackle its social challenges, cure it’s diseases, and improve its education.

Maimonides, the 12th century Jewish commentator and rabbi, organized the different levels of charitable giving according to Talmudic description. The lowest level of giving, according to Maimonides is giving charity begrudgingly, while the highest level is enabling the recipient of the donation to become self-reliant. I think the Talmud’s analysis of charity (which can be seen as a guide to charitable giving too), is not only trying to tell us what the most rewarding form of philanthropy is, but is also trying to teach the most productive method of charitable giving. By giving charity begrudgingly, we ensure that our giving is not done strategically, nor is it patient or thoughtful. When we transfer our money from our pockets’ to those of the needy with resentment, we surely are not sitting down and figuring out how to make sure this money is used in the most strategic and lucrative way.

The highest form of giving, enabling the recipient to be self-reliant, is the wisest form of giving, since it allows the cause or the recipient to eventually be self-sustaining. In order for this to happen, our giving must be approached strategically, patiently and thoughtfully. This is exactly how Dan Pollotta envisions charitable giving, and how he thinks we will achieve growth in the non-profit sector, and hopefully, solve our issues one day.

There is a firm agreement on the methodology of charitable giving between the innovative Wester world, and classic Jewish thought. As we surely would not blindly throw our hard earned money at a stock or piece of real estate and expect it to reap financial growth, we should not blindly throw our money into the hands of the needy and sick and expect them to get better or break the poverty line.

The success of our problem-solving attempts depends on the strategic intentions, and innovative thought put into our good deeds. True goodness lies not only in the choice to do good, but in the effort that follows that choice too.

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About the Author
Eli Friedman lives in Tel Mond, Israel, studies at Yeshivat Ma'ale Gilboa and is pursuing a degree in Philosophy and History at Herzog College. He will soon be proudly serving his is country in the IDF. He is interested in Jewish and world thought, culture, and the development of society and mankind.
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