Andrew Carnegie taught us that giving money away is more difficult than earning it. Jen Ford Reedy, President of the Bush Foundation in her new book Please be good at philanthropy, teaches us how we can make giving money away less difficult.

Philanthropy is simple: you give money away hoping to have a positive effect on the world. Reedy begins outlining 5 truths of philanthropic strategy based on her experiences, case studies and anecdotes.

1. You must accept that money has its own limitations. It is a hard task to change the world giving money away. You must be realistic about what change you can make with money.

2. In philanthropy, you give away money and control. Philanthropy is a rare field where your financial return is mostly zero but you can hope for some social return. Once you give money to a nonprofit, you have no control. There is “coercive philanthropy” where you can influence the work but you cannot create impact. The only philanthropic success a Foundation can get is when there is good matchmaking between a Foundation’s interest, a nonprofit’s willingness to make change and a resultant positive change in a community.

3. Foundations are the least risk-prone organizations in the world. According to Reedy, the risk to foundations are so low that they won’t get sued, they won’t lose donors and will never go out of business!

4. Foundations have so much power that the constraints that they make are mostly self-imposed! The only guardrail that they have is donor intent, nothing else. As long as they follow law, they don’t have much to worry about. With zero competition and immense resources, Foundation staff can achieve “persistent mediocrity ” especially those who cling on for decades repeating grant cycles. To be really good, you must push yourself harder. Foundations have no competition, very less public scrutiny and no timetable when to give or not to give money away. It’s easy to achieve “persistent mediocrity” with so much power and privilege.

5. The impact of a Foundation’s work in the community is so difficult to measure.

Foundations are elite institutions, a uniquely American concept mostly owned, managed and controlled by wealthy white people. There is unmatched power and privilege in this field. Since founding, they have played an integral role in paving the way for some of the greatest discoveries that have transformed America.

Reedy calls Foundations “gatekeepers of wealth.” She encourages Foundations to acknowledge inherent power dynamics and understand the lived experiences of people “not like you.” Be immersed in communities, be agile, culturally competent, and focus on community-driven solutions.

Do not be persistently mediocre needling nonprofits about late reports. Instead, go out into communities and design solutions working hand in hand with community members.

Philanthropy is a field that requires no specific credentials or performance standards. Program staff who commit to competence will do the real hard work of bringing change in communities and steward their donors wishes. Reedy’s book is an excellent primer, a mandatory guide for all program staff in Foundations.

Disclaimer

The views, thoughts, and opinions expressed in this article are my own and do not represent the opinions of any entity with which I have been, am now, or will be affiliated. Further, I make no warranty regarding the accuracy or effectiveness of my recommendations, and readers are advised to consult other advisors as well as their own judgments in making business decisions.