A client recently asked for advice on how to think about a consistent giving strategy — they work with many non-profit clients, who of course fundraise, have galas, and all the other modes of raising money.
Since the summer of 2020, I’ve been seeing more businesses with regular giving lines in their budgets, but just as many with ad hoc giving and redistribution. We’ve seen spikes in publicly announced giving, but ultimately riding a public wave and embedding redistribution as an operational policy are different things. The query prompted my to write out my thoughts around giving within a small business (part 1), and some strategies and ways to come up with a consistent system (that’ll be part 2).
Businesses are set up to generate more resources than individuals. Part of the opportunity in stewarding any kind of business is that if your model is working decently, then you have enough to make choices about where to direct abundant resources.
- Pay yourself and your employees abundantly
- Invest in growth, say, by buying equipment
- Provide robust benefits
- Save it for a rainy day
- Give it away!
You get the idea.
There’s a few ways to think about giving, and the strategies are slightly different depending on which ‘giving mode’ you’re inhabiting.
Giving as Marketing.
Non-profits host galas, which come with pricy tickets and have programs with ads in them. If you work with non-profits, I tend to think of these kinds of expenses— tickets, tables, program ads, or annual giving — as business development and marketing expenses. In a bookkeeping sense, we actually put that account line in the marketing bucket.
There’s an expectation of reciprocity here that can feel a little circular— they pay you, you give them back the money as a donation— but I don’t think that’s weird, that’s how a localized economy works. Showing up at a gala is part of being in community and relationship; and ads in programs are probably not symbolic if you work with non-profits regularly. That’s good advertising spend and yes, this is the kind of giving where you may want to pay attention to ROI.
These kinds of expenses get a hard budget line: which events are you likely to get invitations to? What’s the ticket cost? How do these types of expenses fit into your overall budget?
It’s worth adding that the expectations are going to vary depending on your context: what kinds of non-profits you work with, the community you work in and general expectations and norms of philanthropy. Are we talking NYC, $100K a table benefits with celebrity arm candy or something smaller?
A Brief Note on Giving as Tax Break, aka Philanthropy
Or, why is there an economy of fancy $10,000 per head galas?
The 1917 tax act added a deduction for gifts to charitable organizations to go with a significant increase in tax rates connected to WW1. The Rockefeller’s and Carnegie’s were already giving their fortunes away, so it wasn’t so much to encourage giving, as much as the government wanted to ensure that philanthropists did not lop off their contributions in the face of higher taxes (lest the government then have to cover the shortfall either in funding charities, or picking up the social safety nets that charities were weaving).
Since then, there has been a correlation between giving and taxes, and a marked downturn in percentages of giving since Reagan decided to pad the wealthiest’s wealth with more wealth via lower tax rates. Philanthropy has often been used as a tool for the elite to direct policy and exercise power (The Bill & Melinda Gates Foundation is a great example of foundation money directing global priorities), and so it’s worth noting that philanthropy can very much be another way to leverage money as power.
Winner Takes All is probably the best book describing this whole dynamic.
Giving as Community-Driven Redistribution
I want to propose a more expansive way to think about a strategy for giving, which is to frame out how businesses allocate resources in general and approach the opportunity for redistribution of resources outward.
Even if your business exists out in the relative abstraction of the internet, you still exist in relationship to other people, businesses, and unless you’ve moved to a remote island and have all your needs met via drop shipments from drones, you live in a community (and even then, you’ll have non-human neighbors).
Businesses are part of economies, which in a basic sense are ecosystems of needs meeting. Mutual Aid is the term for giving based in solidarity, instead of charity. Where charity money flows uni-directionally, within a network of mutual aid, reciprocity is the expectation.
Particularly in our U.S. context, where so many basic needs are not taken care of, there’s an opportunity for our businesses to contribute to a community of care. And while I don’t think small business can or should be expected to recreate our missing social safety nets, I do think they can take part in weaving a new social fabric, even by creating a regular practice and strategy for redistribution.
Our current economic norms prioritize the sovereignty of money over people. One way to counteract this norm is to use money as a way to build resilient connections with the people with whom you are in proximity, and ultimately to create a resilient network of care.
One of the ways to practice abundance is to keep resources flowing. I used to work on a CSA farm, and would find myself with gluts of produce over the course of the season: Watermelons make great gifts. Hoarded watermelons make great fermented, moldy sludge.
We don’t give in order to feel better about ourselves, or to avoid paying taxes. We give because aligning with our values, if our values point to creating a better possible world, is a key practice for rooting in care and community.
We can calibrate towards the moral imperative ( ie, tithing or Tzedakah ), or towards where resources can be useful in the world in alignment with our values (or reparations, land taxes, local investment, etc…). Once you’ve taken care of all the people inside your business, how can you use the business as a way to channel resources for positive change outside the business?
Resourceful is Fruitful
The phrase resourceful is fruitful is from Alexis P Morgan, who also writes:
“Being resourceful is about appreciating the bounty around you and being able to identify it, and that doesn’t mean analyzing the world in terms of profit and productivity, but rather relationships and interbeing.”
Approaching your business as a space to practice connection and resource distribution shifts the paradigm. Rather than maximizing profits we become stewards of resources. Organizing a business around community care and sound resource management changes shifts the strategy and lens through which we make choices, and I think ultimately will lead to stronger businesses where we’re not striving for individual survival.
I’ll end on one of my core guiding questions:
What would each of us build if the goal was to care for everybody?
In part 2 I’ll get into the nitty gritty of how to design a strategy for giving and redistribution.
Don’t want to miss it? I send out articles like this via our email newsletter.