What Philanthropy’s Paradigm Shift Means for Higher Ed Fundraising

By George McCully

This is an unprecedented era of human history, in which simultaneous transformations of every technically advanced field are being driven by the powerful technological revolution in information and communications. Technically, these transformative changes are “paradigm shifts”—a distinct kind of historical change in which the governing model of a mature field is superseded by a radically new model—a New Paradigm, with new technology, economics, institutions, demographics, methodologies, vocabulary, ideas and values.

Both philanthropy and higher education today are in paradigm shifts. Philanthropy’s, which began in the 1990s, in an already strengthening field, is further advanced. Higher education’s transformation began later, but in a field that was weakening—having been gradually destabilized over several decades.

Higher education was undermined by its failing business model—skyrocketing costs, tighter public and private revenue streams, excessively increasing reliance on exploited adjunct faculty, burdensome student and young-alumni debt and, in response, increasing demand for short-term, concrete, accountability in results for graduates—and this, in difficult and rapidly changing job markets. Recently and suddenly, the whole structure is being dramatically challenged domestically and globally by the substantive, procedural, economic and transformative power of online, distant training, education and MOOCs. Where all this will end, in what New Paradigm, is not at all clear; what is clear is that the Old Paradigm of the 20th century is toast, and that higher education will need more philanthropy.

Philanthropy, for its part, since the mid-90s has been driven out of its Old Paradigm by the IT revolution and the globalizing economy, putting huge new wealth in younger hands, who have rejected the late 20th century’s customs, especially their moralistic negativity (“giving back” to “nonprofits” etc.). Instead, the new wealth creators have developed a positive, investment culture—gaining personal fulfillment for themselves and their families through value-intensive philanthropic investments in trying to make the world a better place by measurable impacts.

The fastest-growing constituency in philanthropy today is in the hundreds of thousands of new donor-advised funds (DAFs), hosted by national financial services firms since the late ’90s. With the accession to great wealth by the so-called “1%” and media interest in celebrity philanthropy, mega-grants have become chic; online social-networks have fostered new ways of ordinary giving and fundraising. The outlines, at least, of a New Paradigm for philanthropy are becoming visible. It is fairly clear that charitable giving will become much more common and increase significantly; the challenge we are addressing here is how best to make that work for higher education.

Suggestions for fundraising in higher education

Online giving. Online giving grew by 13% in 2014 and is here to stay. Internet technology itself is constantly innovating at an accelerating pace, which means that development offices need to staff up in technology and plan on continuing innovation as a persistent feature of the fundraising environment. Social networks should be assiduously developed for all interest groups to build and enhance alumni spirit and institutional fealty. By far, the fastest-growing professional constituency in philanthropy today and foreseeably, is the Nonprofit Technology Entrepreneurs Network (NTEN). Founded in 2000 and now with 9,000 dues-paying members and 50,000 participants annually in its multiplying programs, the NTEN will be a cornerstone of the New Paradigm.

Donor-Advised Funds. There are about 84,000 private foundations nationwide; they will continue to operate with increased cost-effectiveness, owing to increasingly available “Big Data” online to support more strategic grantmaking. There are, however, hundreds of thousands of donor-advised funds (DAFs), which are rapidly multiplying. Under this system, donors make annual tax-deducted charitable contributions to their own DAFs, hosted by public charities—community foundations and charitable extensions of national financial services firms (Fidelity, Schwab, Vanguard, et al.). The donors then, at their leisure, recommend disbursements from their own funds. This means that fundraisers can develop solicitations to donors who have already committed the dollars discussed to philanthropy, so the only question is where those funds will be allocated. From the fundraising perspective this is like approaching private and corporate foundations, though much more personal, which is good. Automatic periodic disbursements may be scheduled. Widgets are now available for instantaneous one-click grantmaking from hand-held devices.

Fidelity has established (and others will follow) a registry for charities, so that when a gift is made electronically, the funds are automatically transferred into the accounts of the charities. This frictionless, instantaneous, grantmaking will almost certainly be extended to debit cards of personal checking accounts. This means that colleges and universities should energetically develop, with innovative techniques and regular communications, online fundraising initiatives for spontaneous, impulsive giving. Systems should be established to identify all alumni who have DAFs and to institute social networks that will engage them.

Colleges and Universities as Philanthropic Communities

Higher education has always needed more philanthropy. Today’s paradigm shifts in both endeavors not only strengthen that case, but combine, to significantly increase that support.

There is a concerted movement in philanthropy today across a wide range of constituencies and activities to revive the original and long-traditional humanistic culture of philanthropy for the New Paradigm. Recent research has shown that culture to be quintessentially American as well, having strongly influenced our Founders in the Revolution and Constitution periods, and persisted well into the 19th century with the anti-slavery and the early women’s suffrage movements. We now know that etymologically and historically, philanthropy, the humanities and liberal education have been considered throughout most of their history, in principle, one and the same.

Higher education has been connecting today’s strong student interest in civic engagement with the humanities and liberal education. What is advocated here is the next step—to connect those explicitly with the traditional Classical concept of “philanthropy”—in effect, to reconnect “private initiatives for public good” (modern philanthropy), with its deep roots in the “love of what it is to be human” (philanthropía, humanitas). This, done gracefully, would develop and intensify a culture of philanthropy throughout the institutional community—undergraduates, alumni, faculty and administration—promoting philanthropy as continuing liberal education: progressive self-definition through the identification and exercise of values in private initiatives for public good, starting with admission and extending throughout the students’ lives as alumni.

With that conceptualization, a philanthropic lifestyle is an excellent indicator of the success of undergraduate liberal education (far superior, obviously, to salaries in early jobs). Consciousness, habits and values of philanthropy, nurtured in undergraduate years, may be monitored as measures of liberal education’s successful fulfillment in postgraduate adult life. Alumni reunions could include philanthropic “check-ups” to reinforce continuing development as philanthropists. Development officers (whose titles should be renamed in explicitly philanthropic terms) should be involved as expert philanthropic coaches and consultants—a faculty for alumni philanthropy in general, not tied exclusively to the alma mater. This would transform alumni relations into partnerships in philanthropic self-development, and over time would build philanthropic support of the institution in an entirely different order of magnitude.

George McCully is founder and CEO of the Catalogue for Philanthropy.


The Unity of Philanthropy, the Humanities and Liberal Education

The word “philanthropy” was coined 2500 years ago in Prometheus Bound. In the myth told there, the earliest proto-human creatures had no culture and so lived in darkness, in caves, in constant fear for their lives. Zeus decided to destroy them, but the Titan Prometheus empowered and saved them with two gifts: fire, symbolizing culture or civilization—language, tools, arts, science, and philosophy; and “blind hope” or optimism. The two were mutually reinforcing—with fire, humans could be optimistic; with optimism they would put their fire to good uses. The new coinage was not a noun (the gifts), nor a verb (the giving), but an adjective, describing Prometheus—his philanthropos tropos, or “humanity-loving character” or motivation in becoming a donor/benefactor in what we today call a “private initiative, for public good.”

The anthropos—humanity—that Prometheus “loved” was not the creatures themselves, for they were not yet fully human; they had no language, culture, nor distinct identities. What he “loved” (cherished, cultivated, nourished) was the uniquely human potential that he gave them—setting them apart from all other animals with the power and inclination to develop and define themselves using their culture. The “humanity” that Prometheus “loved” was what essentially it is to be human.

This was an educational idea. The first recorded use of the new word as noun came a half-century later in the Euthyphro, an early Platonic dialogue, in which Socrates says that “pouring out“ his ideas at no charge to his listeners, was his philanthropía. The dictionary of the Platonic Academy later defined “philanthropía” as “A state of well-educated habits stemming from love of humanity. A state of being productive of benefit to humans.”

The Greek word for a culture that was educational was paedeia; compare our word “encyclopedia” (enkyklos paideia or “universal learning”). The Romans translated both philanthropía and paideia into Latin with a single word: humanitas. The studia humanitatis (“studies of humanity”), i.e., the humanities as originally and until recently conceived, provided the core and essential purpose of liberal education—studies which are self-developing, which make us more fully humane. A later example of this philanthropic synthesis was the famous “Oration on the Dignity of Man” by the 15th-century Florentine Renaissance humanist Pico della Mirandola, which adapted the Promethean myth into Christian terms; God, in creating the world, saved mankind for last, only to find that He had run out of particular features—fangs, claws, etc.—so instead He gave to mankind the ability to define himself through education, to complete his own creation through self-development: humanistic education.

The word and concept of “philanthropy” entered the English language with Sir Francis Bacon’s “Essay on Goodness” (1608), which he defined as “the affecting of the weal of men, what the Grecians call philanthropía.” Henry Cockeram, in his first English Dictionary (1623) did a Ciceronian U-turn by citing “philanthropie” as a synonym for “humanitie.” The Classical concept came to America with the English colonists, informed the plethora of “voluntary associations” that built the Colonies and created the Revolution, the philanthropic culture of the Founders, the ratification of the Constitution which Hamilton said “added the inducements of philanthropy to those of patriotism”, and continued into the mid-19th century in the anti-slavery and early women’s suffrage movements. Then the symbiotic relationship of Classical philanthropy with Classical studies and liberal education began to disintegrate, and in the 20th century, the rise of the social sciences filled the vacuums. That is the Old Paradigm in philanthropy, now being replaced.


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