“The desire for human betterment,” observed grants economist Kenneth Boulding, “is part of the genetic potential of the human species.” It is thus remarkable, if we take at face value the centrality to the human experience of giving as a means of pursuing human betterment, that we remain mostly in the dark about the philanthropic arts.

On the one hand, giving seems like a desirable and necessary action that helps us to express our care for one another and to integrate us into families and communities. On the other hand, giving can be fraught with difficulty as we seek to give things of appropriate value and with appropriate motivations at the right time and in the right manner—that is, giving that does no harm to the recipient by diminishing his standing, dignity, or capacity for freedom and responsibility.

We also discover in the early generations of the Israelites the principles of giving that have continued to inspire and inform Western practices since. God’s act of creation and donation of dominion on earth to mankind was arguably the first act of philanthropy. Man’s recognition of the gift and his response of gratitude for life itself—a gratitude that slipped from Adam’s hands, but seems to have been present in Abel’s offering—establishes the first foundation of good giving. Abraham’s gratitude for victory in battle inspired his gifts to Melchizedek, king and high priest of Salem, and established precedent for the tithe. Furthermore, not only gratitude but hope that restoration is possible also inspires giving. As Jacob prepared to meet Esau, for example, he sent ahead of him gifts in hopes that they could purchase peace between the brothers. And finally, the desire to pass on our legacy, to bequeath to others what grace and wisdom we may glean in our days on earth, also inspires good gifts: In his last days, Jacob bestowed final blessings on his sons, “giving each the blessing appropriate to him.”

The difficult art of giving well is clearly one of the oldest human endeavors. It has been, alongside exchange, one of the chief ways by which human beings have expanded, enriched, and integrated the societies in which they live, be it the family, the tribe, or what Friedrich Hayek called the “extended order of human cooperation,” where evolved rules and institutions rather than raw instinct and constructive reason help to coordinate human interactions. Nevertheless, while we have developed robust theories and institutions to enhance our activities in the marketplace and in our political assemblies, we largely continue to practice giving without the benefit of fully understanding why we do it or how it is done well. We have many good intentions, but we do not quite know how to determine whether our gifts produce the benefits we hope for them.

 

It is into this confusion that Peter Frumkin offers his recent book, Strategic Giving: The Art and Science of Philanthropy. Frumkin undertakes an ambitious task, offering both a primer on contemporary trends and developments in philanthropy as well as what he calls a “major re-thinking of its underlying logic.” In the first few chapters, he leads the reader on a well-informed tour of the vocabulary of philanthropy, the purposes and mechanics of giving, the role of philanthropy in the public sphere, the critical problems facing modern philanthropy, and a short history of philanthropy’s professionalization.

Throughout this tour, Frumkin demonstrates a firm command of the details of the terrain, but in his effort to justify the legitimacy of private philanthropic action in a pluralist, democratic society, he seems to flatten out the more sublime heights and terrible depths of the philanthropic landscape. Frumkin’s analysis nods to, but does not quite celebrate, the elevation of humanity through giving; recognizes, but does not quite bemoan, that the good intentions of modern philanthropy too often generate significant moral hazard.

For Frumkin, the most pressing challenge facing philanthropy today is reconciling the instrumental and the expressive dimensions of giving. Philanthropy is instrumental, he explains, when it is viewed primarily as a means of achieving important public purposes, no matter by whom these public purposes are defined. Philanthropy is expressive, on the other hand, when it serves primarily to help donors realize their private values and commitments. Instrumental philanthropy focuses primarily on outputs and outcomes; expressive philanthropy on donor satisfaction and self-actualization.

In order to construct a new “logic” for philanthropy, Frumkin maps out a four-quadrant grid that categorizes philanthropic value creation in shades of higher and lower expressive content and higher and lower instrumental content. Highly expressive philanthropy, with low instrumental purpose, generates primarily private values, while highly instrumental philanthropy, with low expressive intent, generates primarily public values. Philanthropy that is fairly routine, embodying neither highly expressive nor instrumental content, Frumkin likens to traditional charitable value creation. It is the fourth quadrant of value creation, embracing both highly instrumental hopes and highly expressive motivations, in which Frumkin is most interested, for this is the realm that generates what he calls strategic philanthropic value. This, in effect, is the prize awaiting the philanthropist who manages to practice genuinely strategic giving.

In creating a handbook for the aspiring strategic philanthropist, Frumkin constructs a five-point prism through which the donor is urged to consider the value that he seeks to produce: The logic behind the gift; the vehicle for giving; the time frame guiding giving; as well as how his own style, personality, and passion might be expressed through giving. The work of the strategic philanthropist entails gazing through each side of this prism until the proper alignment and coherence can be achieved. While Frumkin thus aptly brings us through a solid exposition of many of the important considerations bound up in giving, the potentially kaleidoscopic views of this strategic approach may leave many donors feeling a bit dizzy, and less rather than more equipped to aspire to the commanding heights of strategic giving.

At the end of what is truly a tour de force of identification, classification, and analysis, one emerges from the book with the feeling that “strategic giving” does not in the end really help to clarify the fundamental confusions facing modern philanthropy. To see why, we will have to examine with a more critical eye a central assumption of Frumkin’s book, which is that a fundamental role of philanthropy is to somehow bridge two distinct spheres of human existence, the private and the public.

 

In his defense of the legitimacy of philanthropy, Frumkin seems to try to hold out the possibility that philanthropy can act as an institution independent of government, one in which alternative visions of the good life would exist and from which each donor might participate in the life of the community as a proponent of those values. His continued reliance on the distinction between private values and public values, and between private intent and public benefit, however, burdens his defense with a conceptual framework unable, in the end, to sustain the most robust view of giving as an essential and fundamentally non-political social institution.

From the start, dissatisfaction arises with this sincerely contrived but unfortunate locution. In modifying “philanthropy” with the adverb “strategic,” Frumkin launches his endeavor with an essential misalignment. Among the Greeks, the strategos was the leader of the army. The term thus comes down through the centuries to us as one primarily embodying the use of power conferred by the polis itself. The importation of an essentially military term into our thinking on philanthropy seems to draw us steadily into the necessity of addressing social problems with civic passions inflamed by what William James called “the moral equivalent of war.” This doesn’t resolve the dilemma about philanthropy as power play but rather unhappily fuses philanthropy with political power. This view of philanthropy as another mode of political action has been the predominant approach to big-money philanthropy for much of the past century. Social reformers from at least the time of the Reformation have often sought to inflame near-militant passions for their chosen reforms, but it was the advent of scientific philanthropy at the turn of the century that institutionalized this militarization of reform. The new foundations joined forces with the new social sciences and sought to develop tools and techniques of social engineering for application to the problem of social control—the desire to marshal order in the teeming melting pots that arose with widespread industrialization and urbanization. At the heart of this scientific philanthropy was the desire to attack the “root causes” of social problems. And where did philanthropists and social engineers turn for assistance in these endeavors? To government itself, which could command the resources to fuel the engines of social reform. Modern scientific philanthropy thus largely subordinated itself into a research and development arm of the government, applying private resources to identify the means of solving social problems and then, assuming that enlargement was the next desirable step, working to enact these scientifically demonstrated programs as public policy.

The modern welfare state, forged by an alliance of social scientists and progressive politicians, grew with little heed for either the moral hazard it fostered by transmuting charity into entitlements or the seeds of self-destruction it sowed by enervating the charitable and entrepreneurial spirit of the free people it sought to secure in their health, education, and welfare. We consequently find ourselves today in an era in which government action is typically the first line of attack for any public problem, and philanthropists ironically find themselves trying to defend a small sphere of influence in the public space for some semblance of independent action.

The solution to this ghettoization of philanthropy is not so much a better balancing of expressive private values and instrumental public ends but rather a re-conception of the very meanings of private and public. The most promising approach would seem to not be in the construction of complex philanthropic strategies that Frumkin offers, but more simply in bringing an “economic way of thinking” to philanthropy itself.

In his introduction to this approach, economist Paul Heyne drew upon the work of the Austrian school of economics and set forth one fundamental proposition:

Now, it sounds a bit odd to our modern ears to try to include the activity of giving within a framework of understanding that speaks of people making decisions in terms of benefits and costs to themselves. Yet that is because we have uncritically absorbed the Kantian view that our regard for others (altruism) can only be moral when there is no scent of self-interest about it. In fact, however, what the economic way of thinking urges us to consider is that all human activity entails social cooperation, and that learning to understand the various modes of human action that contribute to social cooperation is key to understanding how we strive for and achieve our views of human betterment. Seen in this way, it is not only plausible, but actually necessary, to see generosity and giving as essentially non-political institutions that help foster social cooperation and thus generate the very possibility of recognizing “public” concerns in the first place.

In the economic way of thinking, the values of individuals are not held to be exclusively private and separate from public values construed by more representative or democratic bodies. Rather it is recognized that even the pursuit of supposedly private values will have public consequences. The alignment of private values and public benefits that Frumkin seeks through deliberate philanthropic strategy in fact is taking place all the time through the spontaneous adjustment and re-adjustment that takes place as individuals pursue their goals and refine their values.

While we indeed desire that philanthropists be reflective and informed as they set about making gifts, it is harsh to tell them that they can achieve their calling only by deploying a complex strategy of social coordination. Political philosopher Michael Oakeshott reminds us that “nothing we do is unconnected with the life of our society, no activity is private in the sense of being without its place or context in the corporate social life.” It is only when we assume otherwise and insist that political coercion is a necessary partner of all action that we find ourselves needing to carve out a language of private action.

The greatest defense needed by modern philanthropy is a defense of it as a mode of human action independent of (and ultimately complementary to) political action. We should embrace the desire for human betterment and the human action of giving as a fundamental part of being human. In doing so, we can worry less about legitimizing philanthropy and instead embrace it as a fundamental coordinating institution of society that in fact preceded the establishment of democratic governments, modern states, not-for-profit organizations, philanthropic professionals, and mission statements. Philanthropy finds its legitimacy in the human condition itself, in which we each receive life and, upon receiving it in gratitude and abundance, find ourselves drawn to share the blessings we have received with others. Once we recognize the true foundation of philanthropic legitimacy in the role giving plays in extending and enriching our spheres of social cooperation we can begin to apply the economic way of thinking to improve the likelihood of achieving the benefits we seek while avoiding harm.

 

In the twenty-first century the intentional use of giving toward human betterment seems to be coming into its own, to the point that our present age might be described as an age of philanthropy. Time magazine’s Persons of the Year for 2005, for instance, were Bill and Melinda Gates and the rock musician Bono. Their recognition came not for the economic prosperity spawned by Microsoft software or for Bono’s music, but rather for their efforts to improve conditions of health and welfare in Africa. Likewise, the 2006 Nobel Peace Prize was awarded not to a senior statesman or religious leader, but to Muhammad Yunus, the founder of Grameen Bank, who by making microfinance work to improve the condition of Third World impoverished people has pioneered one of the hottest new arenas of philanthropic activity.

Lenoer T. Ealy is president of Thinkitecture, Inc., and series editor of Conversations on Philanthropy, a publication of the Project for New Philanthropy Studies at Donors Trust. She recently edited, with Robert Englo, Liberty and Learning: Milton Friedman's Voucher Idea at Fifty (Cato, 2006).