Is giving away money actually hard work?

If you’ve never worked in major philanthropy, you might find it hard to believe that giving away money “well” is a challenge.

Recently, I collected over 100 responses from various philanthropists on the challenges they’re facing with managing their giving. I began this project with trepidation, largely due to my own preconceived notions about it. I interviewed donors, reviewed data from private philanthropic groups, and analyzed summaries. Then, I used AI to help synthesize the information. ChatGPT sanitized it a bit more than I would have liked (there’s a LOT there) but it’s a start.

We can’t begin to build something better until we begin to listen. Here’s an attempt.

Major Challenges

1. Difficulty in Finding Qualified Charities:

• Sending Letters of Inquiry (LOIs) to uninterested foundations is time-consuming.
• Open LOIs are expensive for both charities and philanthropists.

2. Tracking and Impact Monitoring:

• Philanthropists struggle with tracking gifts, pledges, and assessing the impact of their contributions.

3. Transactional Feelings:

• Donors often feel like ATMs, with charities constantly requesting funds without building genuine relationships.

4. Communication Gaps:

• Charities and philanthropists don’t know what to expect from each other, leading to misunderstandings and disappointment.

5. Workload and Time Commitment:

• Both donors and charities desire transformational connections, but the effort required can be overwhelming.

6. Overhead Costs:

• Ongoing tension regarding the appropriate level of overhead costs, with public scrutiny affecting perceptions.

7. Power Dynamics:

• Donors sometimes use their financial contributions for personal gain, which can be disempowering and directive for fundraisers.

8. Collaboration Challenges:

• While desirable, collaboration often increases workload and costs and can make organizations feel controlled.

9. Barriers to Meaningful Connection:

• Geographical, linguistic, and denominational differences pose challenges to connecting meaningfully.

10. Personality and Interaction Difficulties:

• Shy and introverted fundraisers and donors find the philanthropic space challenging.

11. Dependence Concerns:

• Donors worry about charities becoming overly reliant on their contributions.

12. Duplication of Efforts:

• Tension arises when donors are asked to fund organizations perceived as duplicating the work of others.

13. Fear and Resource Scarcity:

• Charities fear a scarcity of available funds, while donors fear wasting resources on less impactful projects.

We can’t begin to build better systems — to reimagine philanthropy, proxies, or shortcuts to building trust — if we can’t begin to hear one another. Really hear.