Overcoming fears in philanthropy.
Philanthropy is as much about courage as it is about compassion. Many well-intentioned philanthropists and foundations are hampered not by a lack of resources but by a prevalence of fear. In the world of giving, where the potential to enact meaningful change is vast, fear can manifest in multiple ways, each limiting the scope and impact of philanthropic efforts. Understanding, confronting, and overcoming fears in philanthropy is essential to transforming philanthropy from a cautious endeavor to one that truly changes the world.
As a strategic philanthropy advisor to ultra-high-net-worth donors and foundation leaders, part of my role involves fostering bold leadership in philanthropy to help my clients identify and surmount their fears. Here are four of the most common:
1. Fear of Wasting Resources
A prevalent concern among philanthropists is the fear of squandering resources, which often fosters a scarcity mentality. This fear typically leads to overly conservative funding practices, where the emphasis is on minimizing expenditure rather than maximizing impact. Examples of this include limited or absent budgets for professional development, technology upgrades, or organizational infrastructure, and reluctance to cover necessary overhead costs or invest in adequate staffing.
Ironically, this cautious approach can lead to significant financial waste. For instance, during the initial years of the COVID-19 pandemic, one community foundation invested over $300,000 in strategic planning over two years. A substantial portion of this budget was allocated to extensive data collection efforts, not trusting the abundant knowledge and insights already possessed by staff, board, and key grantees. The foundation's leadership was driven by a fear of misallocating grant funds without a flawless strategic plan, resulting in not only financial losses but also a diversion of staff time away from impactful activities and direct strategy implementation.
2. Fear of Taking a Stand
Another significant fear is that of taking a stand on controversial issues. Philanthropists and foundations often hesitate to align publicly with specific causes due to fear of backlash or alienation. This is particularly prevalent in community foundations, which, by nature, serve diverse constituencies and therefore often adopt a cautious approach to avoid offending any group. The result can be a philanthropy that is diluted and less effective than it could be if it were more boldly aligned with specific transformative goals. This is where overcoming fear in philanthropy becomes crucial, as taking a stand, despite potential backlash, can lead to significant social impact and demonstrate true leadership in the field.
3. Fear of Failure
The fear of failure is often the most debilitating. It prevents philanthropists from experimenting with innovative solutions and can keep new initiatives from ever getting off the ground. This fear typically leads to a perpetual cycle of planning and reassessment, where the overwhelming desire to mitigate any risks results in complete inaction.
For example, the reluctance to invest in an unproven but potentially revolutionary program can suppress innovation, especially in areas that desperately require fresh ideas. One health foundation pulled back from funding a promising but unconventional approach to mental health due to apprehensions about the new methodology's unproven track record. This decision meant missing out on the chance be at the forefront of potential breakthroughs in the field.
Promoting bold leadership in philanthropy is crucial to fostering an environment where failure is not seen as a setback, but as an essential part of the innovation process.
4. Fear of Not Being a Good Steward
The responsibility of managing and disbursing funds effectively can also lead to an excessive caution that verges on fear. Many philanthropists worry about not being good stewards of the resources entrusted to them. They fear making critical investments in themselves, such as retaining an advisor to help them create a succession plan or hiring an executive assistant to support an overworked executive director. This fear can also lead to making safer, smaller grants or imposing stringent conditions on grantees that can stifle rather than enable their work. The drive to oversee and micromanage can hinder the very causes they aim to support, as seen in cases where funders require excessive documentation and reporting from their grantees.
Overcoming Fear in Philanthropy
These are not the only fears funders face. In fact, fear is so prevalent in philanthropy I wrote an entire chapter about it in my book, Delusional Altruism. To overcome these fears in philanthropy, donors and leaders of foundations, corporate giving programs, and family offices must adopt an abundance mindset. This involves recognizing that investing in their capacity, as well as that of their grantees, is not wasteful but essential for achieving impactful outcomes. It requires trust in the expertise of others – especially those you are seeking to help - and the courage to fund initiatives that might challenge the status quo or introduce new ways of thinking.
Funders should also embrace failure as a part of the learning process. Rather than a sign of mismanagement or waste, unsuccessful projects should be viewed as valuable lessons that pave the way for more effective strategies. Similarly, taking bold stands on critical issues can define a philanthropist’s legacy and drive substantial progress in areas that are often overlooked or underfunded due to their controversial nature.
Embracing Bold Leadership
As a funder, you wield considerable power to effect change. I encourage you to examine the fears that may be constraining your ability to make a real difference. Are you holding back because you’re afraid of wasting resources, failing, or losing control? Or are you courageous enough to invest in high-risk, high-reward opportunities that could potentially transform the landscape of your cause?
Let us demonstrate bold leadership in philanthropy in our pursuit of change. By confronting and overcoming our fears in philanthropy, we can unlock the full potential of our charitable giving and lead the way to a better, more equitable world. Embrace the possibilities that come with bold, fearless giving, and watch as the seeds of change flourish into lasting impact.
