The role of charitable giving and philanthropy in the impact investing space is a frequent topic of conversation. Let’s Talk About Giving was the sixth event in the “Conversation for Investing with our Values” series hosted by Pique Ventures. On December 5th, Bonnie welcomed co-host Alli Riese from TIDES Canada and 14 conversationalists at the Hollyhock Room in Flack Block.
Why We Give
We opened with a round of introductions and I posed the question “what would motivate you to give to a particular cause, charity or not-for-profit organization?” Some of us give to charities that we actively support (whether it is our own organizations or ones for which we are Board members). Some of us give to everything and anything, if asked. I tend to support charities and projects led by my friends – I trust them and believe in the work that they are doing. At various times of my life, I have also volunteered with national organizations such as the Arthritis Society, as well as with smaller local organizations. Some of us also donate our expertise and professional time on a pro bono basis to purposeful organizations. I highlighted that wealth managers often help their clients allocate wealth to investment and philanthropic purposes, but how often do we all make our investing and giving decisions in such an organized and orderly way?
It makes me wonder – to what extent are our giving decisions like shopping decisions – quick, immediate, and sometimes impulsive? Or when are they like investing decisions – strategic, with the long-term in mind, and forward-looking?
It was interesting that the discussion about giving extended beyond the concept of gifts of money. We engaged in a lengthy conversation about volunteerism and gifts of time and expertise. How we value people’s time is a cloudy debate and there were different perspectives in the room. Some people expect no external valuation per se, that their choice to apply their time towards a cause results in intrinsic rewards. In that case, neither payment nor external valuation were motivating factors.
Are there innovative tools to value activities?
There is a balance to be struck between working with volunteers versus receiving money to keep the lights on or to pay for expertise that is not available on a volunteer basis. In many cases, not-for-profits and charities need to decide whether they strategically want to work with volunteers, especially when it comes to skilled versus unskilled volunteers and opportunities. Volunteering in a café run by a not-for-profit had lower barriers to entry compared to reviewing investment opportunities on a pro bono basis with a impact investing fund. Habitat for Humanity Greater Vancouver regularly relies upon volunteers with construction and housebuilding skills and provides the training for volunteers to help build homes at their Burnaby site.
The contrast between volunteering time and making a financial donation was highlighted. The feedback and response from volunteering comes from hands-on experience with the not-for-profit organization or charity. As a volunteer, you can build trust with the organization, develop a relationship, and see the direct results of your contribution. These factors can affect your decision to continue volunteering your time or not. Whereas, by writing a cheque, donors often need to see annual reports, telling the story and demonstrating measured results. Such information may indicate how donations are used. Trust between donors and the organizations they support must still be built in some way (see our previous conversation in this series about trust).
Giving financial resources can range from giving money directly to people in need on the streets (cash grants) to spontaneous giving to charities and causes to strategic philanthropy.
Could this more strategic approach to philanthropy, where the donor believes they “have to get impact from this since there is less of it going around”, be driven by scarcity? Or it could simply be the application of business-like techniques of decision-making and direction to their giving strategy.
A civil society is made up a number of different actors.
An observation that the reduction of government funding and grants in Canada has prompted charities and not-for-profits to be more strategic in their fundraising and how they engage with donors. The more prominent role of government as a funder (as in Canada historically) was compared to the environment in the US, where private donors and foundations are more significant. I, myself, am an advocate for government, not-for-profits, and business working together, with an attitude of investing in solutions rather than buying remedies. Government plays an important role of overseeing the needs of its broad citizenry, whereas private donors can choose to serve their own interests rather than broad interests. Although it certainly depends upon the donor and their values.
We have a high-level of engagement in making decisions about our groceries, why not the same level of granularity with our investment choices?
I am of the view that there is a role for philanthropy and giving, alongside impact investing. The global economy is in transition. Philanthropy and charitable giving can be a leverage point for purposeful, socially and environmentally conscious approaches to serving communities that must compete against powerful, yet unsustainable business practices that provide short-term gratification. The point is that we are bombarded with choice, information, and marketing when it comes to purchasing decisions. Yet, when it comes to investing decisions – be it impact investing or giving strategically – the opportunities are more opaque or left to “the experts”.
A more integrated approach to investing is an opportunity for all of us to be empowered as investors and be changemakers.