Money Well Spent (2nd Edition) Forum

Paul Brest and Hal Harvey Respond

Editors’ Note: HistPhil‘s forum on Paul Brest and Hal Harvey’s Money Well Spent (2008, 2018) has included contributions from Lily Geismer, David Hammack, Erica Kohl-Arenas, Tiffany Willoughby-Herard and HistPhil co-editor Maribel Morey. As suggested in the opening essay to this forum, these scholars have engaged critically and historically with the book, both as a cultural artifact in the practice of philanthropy and as a symbol of contemporary intellectual trends in the field. Here, Paul Brest and Hal Harvey respond to these various readings of their work.

First of all, our heartfelt thanks to editors of HistPhil—Stan Katz, Ben Soskis, and especially Maribel Morey, who initiated the series—for so generously publishing our post and soliciting the thoughtful comments, to which we now respond.

We begin by addressing Maribel Morey’s and Lily Geismer’s responses which, for want of a better word, are concerned with methodology. We then turn to Erica Kohl-Arenas’s and Tiffany Willoughby-Herard’s comments, which focus on the social dynamics of philanthropy. We end with a note on David Hammack’s post.

Maribel Morey laments MWS’s value agnosticism or neutrality about philanthropists’ definitions of problems and their goals—especially when they are anti-democratic. But just like the military strategies set out by great tacticians like Sun Tzu and Carl von Clausewitz, philanthropic strategies are inherently value-neutral and can be used for good causes as well as bad. This is true of most other practical frameworks and tools. For example, behavioral economics and social psychology can be deployed to help individuals engage in pro-social behavior or to induce them to purchase unhealthy products; data analytics have huge potential to improve lives, but also to subvert democracy.

The important questions that Maribel raises lie in the domains of political and moral philosophy. They are addressed, for example, by philosophers of effective altruism like Peter Singer and William MacAskill. Deciding what goals to seek necessarily precedes crafting a strategy to achieve them, which is the central topic of our book.

A perusal of Charity Navigator or GuideStar, or even of books by David Callahan and Rob Reich that are highly critical of contemporary plutocratic philanthropy, indicates that the vast majority of philanthropists and the organizations they support have socially-valuable goals. Money Well Spent is intended to help them pursue these goals more effectively, including avoiding unintended harms.  While it’s annoying to think that some people might use our book for evil purposes we can’t think of a plausible or legitimate way to deny them access.

Lily Geismer raises fascinating questions about the relationship between strategic philanthropy and markets or, more broadly (neo)liberal thought.

Strategic philanthropy is premised on two rather different lines of thought and practice. The first is the pursuit of clearly defined goals through evidence-informed strategies. These concepts are orthogonal to markets and liberalism and, indeed, antecede them by centuries. The second is that, whatever one’s goals, one should choose strategies that are likely to achieve them for the lowest cost per outcome. Cost-benefit analysis is an outgrowth of neoclassical economics and its philosophical cousin, utilitarianism.

With these background observations, we want to make two points about the effective pursuit of evidence-informed strategies. First, the principles or frameworks just mentioned apply not only to philanthropy, but equally to the work of nonprofit organizations (however they are funded) and government agencies that provide services to improve people’s wellbeing. To test this assertion, a reader might consider under what circumstances he or she believes that nonprofits and government agencies should not be goal-oriented, evidence driven, and effective.

Second, and related, even though cost-effectiveness has its origins in market-oriented liberal thought, it is no less important in non-market situations. Imagine a socialist communitarian society with no private property whatsoever, so that social programs are run exclusively by government agencies. Once again, under what circumstances should those agencies not be goal-oriented, evidence driven, and effective?

While the simplest examples involve the delivery of social services―for example, to reduce homelessness or opioid addiction or improve educational outcomes―these points apply equally to highly risky strategies such as developing vaccines or mitigating climate change. In these cases, the relevant analytic framework is expected utility analysis, an extension of cost-benefit analysis that takes account of the probability of success. Expected utility theory arises out of game theory, which itself is embedded in neoliberal thought. But our point is that the value of this analytic framework is independent of its origins.

Of course significant changes in a market economy could produce great changes in the landscape of philanthropy. For example, if today’s huge wealth disparities were significantly diminished, the influence of plutocrats would be reduced and the determination of philanthropic goals democratized. But whoever determines and pays for achieving social goals in that more egalitarian world, we would hope they would be addressed as strategically or effectively as possible.

Erica Kohl-Arenas raises challenging questions about the role of philanthropy in addressing the huge social and economic disparities present in the US and throughout the world, which have devastating consequences for health, education, housing, and the quality of life more generally. A philanthropist (or anyone else, for that matter) might view the problem and its solutions as involving fundamental social justice at one end of a continuum, and individual or community wellbeing at the other end.

Erica argues that wealthy philanthropists feel much more comfortable supporting individualistic interventions, because serious efforts to remedy social injustice threaten the very system that has allowed them to accumulate and maintain their wealth. (In this respect, her argument parallels Anand Giridharadas’s recent book, Winners Take All: The Elite Charade of Changing the World.) And she suggests that Money Well Spent is focused on guiding philanthropists on individualistic but not social justice outcomes. We don’t think so.

Part 4 of the book describes three of philanthropy’s basic “tools of the trade”: promoting knowledge, improving individual lives, and influencing policy makers and businesses. The third of these, which includes supporting social and political movements, is most immediately relevant to fundamental social change.

Policy and systems reform through legislation or judicial decision making are major pathways for social change in the United States. Getting controversial legislation adopted typically calls for a combination of grassroots movement building and grasstops advocacy. In the book, we use a case study of the enactment of Obamacare (as chronicled by Ben Soskis) to illustrate the process. We also note how judicial advocacy played a major role in the civil rights, women’s rights, and marriage equality movements. We believe that, short of revolution, improving social justice depends on legislative and judicial decisions in areas such as individual rights, taxation, welfare, and employment.

As illustrated by our example of Tim Gill’s use of 501(c)(4) organizations and PACs to attain LGBTQ rights, we believe that the path to social justice may involve pure politics even more than conventional philanthropy through 501(c)(3) organizations. It is noteworthy that some wealthy liberal philanthropists, including Michael Bloomberg, George Soros, and Tom Steyer have increasingly turned to politics to achieve social goals. Although we can’t predict how far they and their progressive peers are willing to press for reducing wealth inequalities, their fortunes are so vast that it is at least plausible that they feel less vulnerable to wealth redistribution than members of the professoriate, Erica and Paul included, who contribute to HistPhil.

(The book’s chapter on advocacy also includes a section on pressuring businesses to behave well. Contrary to the Erica’s suggestion that we “desire to avoid confrontation” with businesses, the point of this section, including the case study of the campaign for cage-free eggs, is that a clever philanthropic strategist will use whatever combination of carrots and sticks it takes to influence corporate behavior.)

Should philanthropists who are concerned with social justice only seek large-scale social change, or should they also try to improve the lives of individuals whose plights―whether homelessness, opioid addiction, poor educations, or imprisonment―are created or exacerbated by social injustice? We haven’t come across the Leninist argument that “worse is better” because it will hasten political mobilization by the oppressed. Rather Erica, like Anand Giridharadas, suggests that philanthropists will delude themselves that they’ve done enough to solve the problem and not pursue more unsettling strategies. But how should a philanthropist deal with the fact that individual interventions can aid people who are in misery today, while world-changing strategies are likely to take decades or longer to succeed, and tend to have a high failure rate?

In our view, the allocation of philanthropic resources between relatively non-risky individual interventions and systems-changing risky strategies should be informed by the concept of expected utility, which takes into account risk and potential reward. Our own bias, implicit in the discussion of the cubes in Chapter 7, leans toward the risky. But we must acknowledge that some very thoughtful social scientists and philosophers―not particularly wealthy people so far as we know―have argued that scaling individual interventions has the greater net social value.

In their modern classic, Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty, the economists Abhijit Banerjee and Esther Duflo argue strenuously for the benefits of scaling individual interventions over systems reform in developing countries.

Along the same lines, GiveWell, a charity-rating organization premised on the radical redistributive philosophy of Effective Altruism, only rates direct aid organizations, explaining:

We believe there have been many efforts to find and address the root causes of poverty, and that they haven’t generated strong conclusions or successful programs. Root-causes-based approaches are, in our view, the kind of speculative and long-term undertakings that are best suited to highly engaged donors. We also believe that direct aid, such as distributing malaria-preventing bed nets or providing pills to treat intestinal parasites, can empower individuals to make differences in their own communities. These individuals may be better positioned to understand and address many problems than we are.

We are not congenitally both/and types. But we imagine that the quest for social justice calls for a combination of scaling successful individual service delivery strategies and policy- and systems-level change; and that businesses, encouraged by pressure from consumers, employees, investors, and legislators, will play a role as well. Absent unforeseeable changes in today’s partisan politics, we imagine that progress is more likely to involve an accretion of small policy wins―for example, boosts in minimum wages or reduction in incarceration―rather than massive systems change.

Tiffany Willoughby-Herard extends Erica Kohl-Arenas’s critique. She is opposed to rich white philanthropists determining strategies to aid poor communities of color and, indeed, opposed to outsiders’ use of social science, which inevitably involves “surveillance,” to determine what interventions work and don’t work. Listening to beneficiaries’ voices is not even partly on the right path. Rather than “listening” to their voices, philanthropists should cede power to their communities. In some places, she implies that conventional “predictive” social science has no role to play in achieving social justice; the appropriate alternative is movement building.

How can one apply Tiffany’s thoughts and observations to today’s actual world, in which wealth is radically unequally distributed?

One approach, embraced by some social justice funders, is for rich white philanthropists to give unrestricted funds to community groups. There are inevitable problems in deciding who constitutes and speaks for the “community.” But if philanthropists cannot entirely abdicate the power to choose, they can significantly reduce it.

Let’s suppose that philanthropists have delegated decision making to a community group, which decides that it is a priority to reduce drug addiction or recidivism among their members. Money Well Spent argues for pursuing evidence-informed interventions for achieving these goals. We’re not sure of Tiffany’s view about this.

Finally, consider Blue Meridian Partners. This multi-million dollar “partnership of philanthropists which seeks to transform the life trajectories of America’s children and youth living in poverty by scaling the most promising solutions” relies entirely on the sort of social science that Tiffany decries. But its grantees, such as Harlem Children’s Zone and Nurse-Family Partnership, have well-documented positive outcomes. Assuming that a rich white philanthropist does not wish to donate to community groups—at least not exclusively—is it valuable, legitimate, or just a form of domination to give to Blue Meridian?

We’re not sure how to respond to David Hammack’s comments. He writes: “Money Well Spent placed its greatest emphasis on the will of the individual donor, and made the donor personally responsible for making a very large difference in human affairs and for developing a ‘theory of change’ to achieve that outcome.  To accomplish these daunting tasks, the book insists, the donor should rely not on associations, institutions, or expertise, but on an independently developed ‘philanthropic strategy.’ … [The book argues] that a donor should insist grantees adopt the donor’s understandings, theories, and ways of measuring activities and impact.  Considered from another perspective, this was to insist that grantees subordinate their thinking to that of their richest donors.”

In fact, beginning with the philanthropic vignettes in the first chapter and continuing throughout the book, the large majority of our examples in both the first and second editions  involve grants to associations and institutions. We devote much of Chapter 9 to arguing for a presumption of general operating support to organizations and for donors’ paying full overhead. We explicitly urge donors to collaborate with other actors in the field (Chapter 11) and to give great deference to organizations’ expertise and strategies (Chapter 8). Though we believe that evidence-informed strategies improve the likelihood of impact, the very first page states that “the history of efforts to improve people’s lives … demonstrates how difficult it is to actually make a difference.” (We call out the failures of two heroic top-down educational strategies by the Gates Foundation and Mark Zuckerberg.)

If we had written the book that Hammack describes, we would agree with the gist of his criticisms. But even granting lots of leeway for interpretation, he seems to be reviewing a different book than ours.

-Paul Brest and Hal Harvey

Paul Brest is Former Dean and Professor Emeritus at Stanford Law School, a Lecturer at the Stanford Graduate School of Business, Co-Director of the Stanford Center on Philanthropy and Civil Society, and Co-Director of the Stanford Law and Policy Lab. He was President of the William and Flora Hewlett Foundation from 2000-2012.

Hal Harvey is the CEO of Energy Innovation, a San Francisco-based energy and environmental policy firm. Previously, he was founder and CEO of ClimateWorks Foundation, a network of foundations that promote polices to reduce the threat of climate change; Environment Program Director at the William and Flora Hewlett Foundation; and founder and President of the Energy Foundation, a philanthropy supporting policy solutions that advance renewable energy and energy efficiency.

2 thoughts on “Paul Brest and Hal Harvey Respond

  1. As a lucky graduate of The Philanthropy Workshop (cited in MWS as one of the few donor education programs devoted to teaching individuals about strategic philanthropy) but not quite wealthy enough to afford staff or consultants, I was delighted that Brest and Harvey decided to update their 2008 edition. We need educational tools!

    Last year, individual donors gave $286 billion to charitable causes, representing 70% of total giving (Giving USA 2018). The majority have assets under $15 million and give less than $20,000 annually. They believe that giving can change society for the better (87% of a US Trust study) and care about the impact of their gifts (85% of a GivingCompass study), yet 2/3rd of donors spend less than two hours a year – five minutes a week – researching their giving. Why?

    “The vast majority of donors feel overwhelmed by the giving process, so they default to less effective giving habits” (Camber Collective); they cannot cope with the “firehose” of information (Hewlett); free or low-cost earning materials are often over-general and dull; examples from peer philanthropists are rarely used (nothing antagonizes a “smaller donor” more than continually citing case studies from large-staffed foundations); and too few community foundations (the most obvious drivers of democratizing philanthropy) offer quality donor education for all. Most importantly, their advisors (who offer philanthropic advisory services only to ultra-high-net worth clients) do not consider it commercially viable to develop “off the shelf” donor education products. In fact, most advisors have not recognized that guiding their clients in philanthropic decisions (beyond tax and legal issues) is a powerful customer relations tool. Even the “Chartered Advisor in Philanthropy” certification does not cover strategic giving practices.

    It would appear urgent, therefore, to focus on the potential these vast numbers of donors and the huge amounts of dollars, volunteer hours and professional skills they represent. Of course, there is plenty of wise giving going on, and “honored obligations,” ad-hoc, emotionally driven gifts, all have a role to play in our societies. But versions of MWS specifically targeted to the “Main Street” donor, presented in a compelling and engaging manner (online courses, experiential learning opportunities, relevant case studies) is much needed.

    Sylvia Brown is a Public Voices Fellow at the OpEd Project. Following a 30-year career in international development, she founded Uplifting Journeys, “Bootcamps for Smarter Donors,” and now is developing a virtual version of her experiential curriculum to promote thoughtful and effective giving practices for all donors, not just those of ultra-high net worth.

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