The idea of philanthropy started in Ancient Greece. Meaning “love of humanity.” Flash forward to the present day, and it seems diluted. Unfortunately, people think of the ideas of philanthropy and charity as the same, but they’re not. The concept of charity is outdated. Yes, there are moments when it’s essential to be charitable, but I’m speaking about the broader idea of charity and the social impact and good sector.
The Problem with Traditional Charitable Philanthropy
Within the charity industry, there’s chatter about its brokenness for various reasons. One of those reasons is the power imbalance. It assumes that donors and board members have the answers and that those receiving them are passive receivers of the charity. In my view, working in social entrepreneurship for over a decade, people need more than a hand-out. They need a hand-up and the chance to build their own futures—as they want.
Traditional philanthropy can cause a significant power imbalance. When we’re speaking about systemically, it can feel good in the moment. For instance, it feels good for board members to celebrate raising their annual fundraising goal. And, it could feel good for donors to give to an appeal they find worthy. But does it allow communities to be empowered and make decisions as in trust-based philanthropy?
When my team and I established Funds2Orgs, we sought to redefine philanthropy and refocus on what it’s intended to be—doing good for humanity. As we created our partnerships with micro-entrepreneurs in developing nations, we could have informed them that we wanted them to do x, y, and z. However, we didn’t do that. We realized that people and communities need to feel empowered to make a meaningful social impact.
The Shift Toward Trust-Based Social Enterprises
MacKenzie Scott best exemplifies trust-based philanthropy. She has donated billions of dollars worldwide. However, unlike traditional philanthropy, in which the donors dictate what they want to happen, which usually involves a lot of reporting and burden, she has taken a more hands-off approach. Her idea of philanthropy has been much more equitable and trust-based than what’s existed at the billionaire-class level.
The reality is that everyone can make a social impact. If someone wants to affect change, it’s not something that needs to be overly complicated. In our social enterprise, we listen to more than 4,000 micro-enterprise partners about what they need in their communities. The broader social good can involve being thoughtful, listening, and inclusiveness to make an impact.
In my view, we have to rethink social impact. We have to trust that people and their communities know what they need. Of course, they would know—they live in those communities. They’re the experts in their lives and not traditional philanthropists. Fortunately, things are evolving, and there’s more discussion about providing people with the necessary resources so they can do things for themselves. That idea is about empowerment.
Why Create More Social Enterprise Entities
We know that people want to be part of something that’s big. That’s why setting a vision is essential in countries, communities, and even businesses. But, people also realize that the traditional charity mindset might not make systemic change. Most people recognize that we have the resources right now to eradicate poverty and ensure everyone has food. We also have the ability, if not the will, to meet the global sustainable development goals.
That’s why social enterprises can become a bridge that takes us beyond the scarcity and charity mentality. In social enterprises, companies lean into making a profit so workers can earn a good living. However, they also have the core idea of changing lives and making a social impact as a principle of their business operations. We know we’ve changed lives with our shoe drive fundraising brands because our 4,000 micro-enterprise partners tell us so.
When people and communities get empowered to come up with their own solutions, people who provide commerce and other opportunities, as we do on our team, play a much better role. In other words, relationships go from being one of power to one of mutual trust. And that’s why moving beyond charity can create lasting and impactful change in any community. People want opportunities and dignity. They want a hand-up. That’s true philanthropy.
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