ICYMI: As Philanthropy Ends a Challenging Year, Historic Lessons Show a Path Forward for an Increasingly Complex Field
"The end of 2022 has brought the kind of news that gives philanthropy a bad rap. Most notably, the collapse of cryptocurrency giant FTX amid charges of fraud against its founder, Sam Bankman-Fried, led to a loss of millions of dollars in expected donations and questions about the much-heralded effective-altruism giving approach, for which Bankman-Fried served as a bankroller and poster boy," said Leslie Lenkowsky for The Chronicle of Philanthropy. "The FTX saga capped off a year of continuing challenges in the nonprofit world. High inflation cut into nonprofit budgets and endowments while also increasing operating costs. When estimates are reported, giving in 2022 measured in real dollars is likely to show little growth, or even a decline — one of the few times that’s happened outside of a recessionary year."
"The past three decades have also seen the growth of a variety of organizations providing services to philanthropy, including this publication, which launched in 1988. Hundreds of colleges and universities started programs to prepare students for careers in nonprofits and increase public understanding of the field. That may partly explain why more attention has been given to measuring and evaluating the results of philanthropic efforts."
"Effective altruism has also emerged in the past 30 years as an outgrowth of many donors’ understandable interest in knowing their gifts are used as well as possible. As the Johnson Center’s report points out, that has led to increased investment in research and evaluation. But advocates of effective altruism call for a more rigorous approach than philanthropy has traditionally used — one that could lead donors to bypass giving to nearby groups and those focused on present-day challenges in favor of faraway organizations and problems likely to occur in the distant future."
"Not surprisingly, many wonder how philanthropic that really is, and Bankman-Fried’s fall from grace has underscored their concern."
"Similarly, controversies over issues such as philanthropy’s involvement in politics and the outsized influence of big donors grow out of changes during the past three decades that have made philanthropy’s role in society less straightforward. As the Johnson Center’s report shows, these changes have greatly improved philanthropy, but also present new problems for which solutions will be both necessary and challenging. The coming year is as good a time as any to start addressing them."