Philanthropy & Relationships, by Jim Hodge

If Philanthropy Is About Relationships, Why Do Metrics Measure Only Money?

This is a reprint of James M. Hodge's March 2012 Thomas H. Lake Lecture at the Center of Philanthropy at Indiana University. You can read the original here.

The Material to Spiritual Transformation of Philanthropy

If it is a truism that “what we focus upon we become,” then perhaps we need both a vastly wider aperture as well as a more relevantly focused system of metrics for philanthropy. If we only focus on money, we will not only raise less money, but also we will devalue the noble role that philanthropy can play in well-examined lives.

Chasing Meaning Rather Than Money

When our work is primarily directed toward raising money, we chase money rather than meaning in philanthropy. We become less aspirational for our institutions and less inspirational to our benefactors.

There is another way. I contend there is a higher path for our work and that the creation of a relationship-based system of mentoring, coaching, and leading the philanthropic process will result in philanthropy well beyond our present levels, and indeed beyond our highest hopes. A focus on shared value systems, on the good that can come from combining visionary nonprofits and committed philanthropists, will propel philanthropy to new levels, resulting in a greatly expanded third sector in our economy. Philanthropy is more about openings rather than about closings. It is about mutual aspirations of what is important and valuable to society. Gifts of significance are not so much about money as they are about meaning. We have much to learn from America’s most successful entrepreneurs in this regard. The truly successful, hypo-manic serial entrepreneurs all sing the same melody about their energetic and euphoric foci on their work. It rarely involves the word money.

The Not-About-the-Money Mantra

From the Edisons to the Disneys to the unsung successful entrepreneurs in each of our communities, the same motivational mantra is spoken: It is not about money. It is, however, about inventing, about a contagious idea, about entering a market first, about building an elegant widget, about changing peoples’ mindsets. Money is just a way of keeping score. Edison perhaps said it best when he exclaimed, “After I have completed an invention,” remarked Edison, upon another occasion, “I seem to lose interest in it. One might think that the money value of an invention constitutes its reward to the man who loves his work. But, speaking for myself, I can honestly say this is not so. Life was never more full of joy to me, than when, a poor boy, I began to think out improvements in telegraphy, and to experiment with the cheapest and crudest appliances. But now that I have all the appliances I need, and am my own master, I continue to find my greatest pleasure, and so my reward, in the work that precedes what the world calls success.” Purportedly, when asked why he continued to invent since he was so rich, Edison remarked that people didn’t understand his motivations. He didn’t invent to make money; money allowed him to pursue his passion of inventing.

If we accept this as true, then our pursuit of money will never inspire gifts of significance. Indeed, such a pursuit creates a sense within potential benefactors of being considered merely for their financial resources and not the plethora of talents and abilities benefactors can bring to an inspiring nonprofit organization. It is about the difference philanthropy can make in lives and communities and the world, and never about money. Most entrepreneurs I have come to know well and happily, as Bank of America and the Center on Philanthropy studies have shown, are significantly more philanthropic than others who are salaried or make their money in non-entrepreneurial ventures. They describe their passions more like Mihaly Csikszentmihalyi’s famous psychological studies and writings on Flow. When these contagious souls are in “flow” in their work endeavors, entrepreneurs describe their mental state as ferociously focused, single-mindedly immersed in a world of new ideas or better processes or novel markets. These are the souls swimming in Marborgne and Kim’s Blue Oceans and dancing in Chris Anderson’s Long Tails as described in these popular business books. Money never comes to mind except as the fuel that enables them to accomplish their visions. Thomas Edison once said, his goal was to make light bulbs so inexpensive that only the rich could afford to burn candles. So if these great visionaries in business, and now we recognize great exemplars in philanthropy, see money only as a fuel for joy and passion, then why should we fellow travelers in philanthropy not adopt a similar stance toward our work?

Money applied to philanthropic ends is a medium to serve others, to do purposeful work, to empower people to help themselves, to make an impact, and to improve the lots of others and the very health of our planet. Our philanthropic focus, therefore, must be on ideas and ideals and the power that they can have not only on the improved lives of those served but also on the quality of lives of philanthropists and those who work in the nonprofit world. For as Bob Payton once powerfully inquired, “Do we live for philanthropy, or do we live off of philanthropy? Do we have an occupation in philanthropy or do you pursue a passion for philanthropy?”

We indeed become that which we direct our attention to in life. Let us change the picture and start focusing far more attention on relationships with philanthropists and those with a philanthropic nature, rather than merely on money: on qualitative rather than quantitative metrics. Let us bring the relationship aspect of our profession to the foreground rather than assuming it is always the backdrop of our work.

The Better Angels of Our Natures

But how do we take idealism into action through philanthropy? How do we explore the “moral dimensions of philanthropy,” as Paul Schervish contends is the true purpose aspect of our work? Seen as a spiritual exercise, philanthropists create their own moral biographies, according to Schervish. But are professionals in philanthropy trained to be “moral biographers,” asking crucial questions and entering into dialogues that significantly shift philanthropic conversations from money to meaning? Schervish has observed that “most wealth holders will benefit from engaging in what I call extended archaeological conversations with trusted advisors, including development officers.” Attending to benefactors’ needs to create moral biographies requires building genuine relationships based on trust. This is the genesis of relationship-based metrics.

Such metrics do not replace setting financial targets for our work, but they bring out the “better angels of our natures,” as Lincoln once said, and alter the focus of our work. The currency of our profession is in the enduring good we do together with benefactors, not in the amount of money we raise from benefactors.

By altering our stance toward benefactors, we avoid potential philanthropists thinking, “Do you love me, or do you love my money?” A more powerful reflection might be, “Think of the walk we can take together to make lives and communities better.” When we focus on ever-deepening relationships as outcomes, we open our apertures, we changes lives and find better ways to “dilute the misery of the world,” as Karl Menninger suggested was the purpose of life.

The Money-to-Meaning Power of Philanthropy

When we only set financial goals, we miss the power that moral questions respectfully, purposefully directed, can mean in the lives of benefactors. We live only in a financial exchange relationship until we can redirect our work on toward the transformative effects that benefactors can have on individuals and communities. As Carl Jung said, “The least of things with a meaning is worth more in life than the greatest of things without it.” This is the money-to-meaning transformational power of philanthropy. To discover this meaning, our work must be benefactor-centric, values-based, and inquiry-driven. Our principal task then becomes identifying core values of individuals who may have a philanthropic nature, conversing about what brings purpose and joy to their lives, and examining their views of the social responsibilities of wealth. These mindful conversations allow benefactors to consider the meaning of their lives, the difference they can and should make in their communities and the world, and ultimately the legacy they will leave behind. It is a long, purposeful walk we take with benefactors inquiring about meaning-building through philanthropy and a contemplative view of their lives’ real purpose.

One of the most frequent, constantly asked questions I get from the inquiries of young professionals in philanthropy is, “How can I tell if a potential benefactor has a philanthropic nature?” This is a very important question that is rarely addressed at conferences or in institutional continuing education programs. When we practice benefactor-centric philanthropy, we discover an individual’s core values, motivational makeup, and personal strivings. This is never accomplished by asking them for money, but rather by asking them questions of significance about their lives, their aspirations, and their hopes for the future.

The Spirit Behind the Technique

How to discern a philanthropic nature will be an important skill set to teach professionals in our field. People who are evaluating their lives based upon their core values will not settle for less from professionals in philanthropy. Benefactors expect that we recognize, respect, and reinforce their deepest values played out through their gifts. As John Gardner observed, “If you have some respect for people as they are, you can be more effective in helping them become better than they are.”

Exploring core values requires the highest professional ethics and a stance toward benefactors that mirrors what Martin Buber, the great Jewish philosopher, called “I-thou,” the authentic existence, rather than “I-it” relationships. “I-it” relationships objectify people, making them tools for our own benefit. We see them as a source of money rather than being in relationships with them and exploring the potential of doing good together in the world. An “I-thou” relationship with benefactors necessitates seeing individuals as ends in and of themselves (their values and their partnership) rather than seeing them as a means to an end (their money). Buber’s work contends that “human lives find meaning in that “I-thou” relationship.” Viktor Frankl perhaps expressed it in another way when he said, “It is not so much a matter of technique that is important but the spirit behind the technique that matters.” The spirit of our work in philanthropy requires being in genuine relationships with fellow travelers who have the potential to improve the world. This is the material-to-spiritual shift in our work, and when practiced, the reward is working with more engaged philanthropists and far more joy and fulfillment throughout our careers.

Tom Morris repeatedly expressed this important shift in ethical stance toward people and the remarkable results that ensue when he said, “It is by imagination that we cross over the differences between ourselves and other beings and thus learn compassion, forbearance, mercy, forgiveness, sympathy, and love—the virtues without which neither we nor the world can survive.”

When we have established an I-thou relationship with benefactors, our work becomes infused with powerful stories of our organization and benefactors at their its best, stories that illustrate our institutional impact on those whom we serve and celebrate powerful exemplars in philanthropy. We inquire of benefactors: “What are your passions? What drives you to achieve? When do you feel you are at your authentic best for yourself and for others? What can you do with your resources that would bring meaning to your life?”

Over time we discover if an individual’s passions about their vocations or avocations can be grafted to your organizational mission. In truly transformative philanthropy, these passions grafted to your organization can evolve into full-blown passion transplants where benefactors adopt your organizational mission as the most meaningful work of their lives.

As Tom Morris further observed, “People are inspired over the long haul by a sense of nobility in who they are and what they are doing. If you can convey a sense of nobility to people around you, you can unlock their deepest potential.”

Expressed similarly by William Irvine in his book On Desire, “Every man, however hopeless his pretentions may appear to all but himself, has some projects by which he hopes to rise to reputation; some art by which he imagines that the nature of the world will be attractive.” About a famous Minnesotan, Charles Lindberg, F. Scott Fitzgerald said, “Something bright and alien flashed across the sky, a young Minnesotan who seemed to have nothing to do with his generation did a heroic thing and for a moment people set down their glasses in country clubs and speakeasies and thought of their old best dreams.”

Refining the Way We Direct Our Attention

It is meaning we seek, and it is meaning we must address in philanthropic dialogues. Once the spirit behind their work is engrained in professionals, we must equip them with skills to tell important stories, to engage in illustrating our organizations’ missions in powerful metaphors. To finish the sentence which begins, “Isn’t it amazing . . .” with examples of the good our organizations have accomplished. To complete another sentence, “Can you imagine . . .” with examples of how together an effective nonprofit and an inspired benefactor can change a life, a community, and indeed, the world.

When in an “I-thou” relationship with benefactors, the use of appreciative inquiry becomes a natural extension of our philosophy. Instead of talking about the “needs of nonprofits” or the challenges and problems that face one’s organization, a shift in the nature of the questions we use is essential. Nonprofit institutions which speak consistently and insistently of their “needs” become, in fact, “needy” and uninspiring. Instead, specific training in appreciative inquiry developed by David Cooperrider and followers, talks of individuals’ and institutions’ highest hopes and aspirations. Lynn Twist, author of The Soul of Money, expressed it well when she observed, “If we can, we must shift our frame of reference from one of ‘problem solving’ to one that seeks to identify the resources available in any collection of people who are inspiring, mobilizing, and sustaining positive change. What you appreciate, the way you direct your attention determines the quality of your life.”

Appreciative inquiry is all about co-creating an idealized future for ourselves and for our communities. What Kind of World Do You Want? is not only the title of a wonderful book by Jim Lord and Pam McAllister but also the essential question behind all appreciative philanthropy. Can you envision our world at its best? Is achieving these aspirations not a noble and spiritual purpose for our lives?

Through observation and inquiry, we examine whether individuals have a propensity toward accumulating in their lives. If they have a high material value orientation, a habit of buying things rather than a more spiritual orientation of creating meaning, we can discern their philanthropic nature, or lack thereof. Newcomers to our profession should be taught, coached, and mentored in storytelling techniques and in questioning skills that can unlock philanthropic nature and maximize philanthropic potential. Self-assessment instruments can be created to determine whether development officers are enhancing relationship equity with potential benefactors as well as the relationship quotients between benefactors and institutions and their missions. Lickert Scale (LS) questions can be employed to determine donor attitude as we assess the evolving relationships between development officers and benefactors. With this system we can further assess how development officers are shaping important relationships between benefactors and their institutions.

Questions can be taught and observational skills developed to determine whether individuals are primarily ego-centric and self-absorbed, or other-centric and generative. Understanding and teaching Eric Erikson’s stages of adult development can help in the assessment of individuals inclined toward hoarding from those who are philanthropic and inclined to sharing. Are potential philanthropic partners accumulators, amassing fortunes like Monopoly properties with a winner-take-all mentality? Or are they more like some other souls described in the book Driven, who have a strong propensity toward caring and sharing?

Master key questions that center on an individual’s spirituality, intellectual curiosity, decision making, learning, and societal styles can be articulated and taught. How to earn trust, to respectfully ask ever–deepening questions concerning core values can be modeled and practiced. Appreciative inquiry workshops abound, and Franklin Covey classes on trust building can be explored.

It is true that highly skilled and experienced professionals in philanthropy have developed and honed their relationship-building skills. They have an armamentarium of thoughtful questions to ask benefactors, and are skillful at knowing when sufficient trust is established with benefactors to ask significant and deeply personal questions. But veterans and newcomers alike should have a structured system of examining what they know and what they do not know about individuals with whom they work. Simple Lickert Scale questions can be developed that help monitor and chart the relationship metrics of our encounters, engagements, and experiences with benefactors. Such a series of weighted questions can determine how skilled a development officer is at creating and strengthening relationships with benefactors.

Two master key questions of importance are as follows:

First, what is my relationship equity with this benefactor? How do I resonate with this benefactor and what is our level of mutual trust?
Second, what is the institutional relationship quotient with this benefactor? Am I strengthening the ties between this potential benefactor and our organization, our leaders and our mission?

By asking what we know and what we have yet to discern about a potential benefactor, we begin to see what respectful questions and crucial conversations we need to have to better understand what project might resonate with this person philanthropically. Is it an inspiring initiative that can bring meaning to the benefactor’s life? Is it the right time, the right scale, and the right project for this individual? Is it a project that can grow and develop further, and one that will engage the benefactor over his or her lifetime?

All individuals go through ages and stages of adult development, so beautifully articulated by Erik and Joan Erikson. The Eriksons contend that later in one’s adult life as they age, they can either ripen or spoil, either reach integrity, and generativity and be self-actualized or become more and more self-absorbed and stagnant. By observing benefactors’ actions over a period of years and by probing values, one can be sensitive about emotional events occurring in a benefactor’s life. What triggers and shifts are occurring in their lives that are emotional moments appropriate for favorable philanthropic dialogues or moments graciously to give benefactors space and time to deal with the trials and tribulations of life. Schervish again encourages us by saying that when “a process of discernment is carried out with no hidden agendas and with the purpose of helping wealth holders uncover their true aspirations, a deeper commitment to philanthropy ensues.” Assessing a benefactor’s significant emotional events and key indicators of shifts in thinking is essential when exploring gifts of significance. Do benefactors easily discuss death and dying, estate planning, and ultimate legacies? How do they define as a family when “enough is enough” and what they perceive as the social responsibility of their wealth?

These are not new concepts but a deliberate system of relationship-based evaluations which enable managers to determine if development officers are truly affecting the lives of benefactors and if they have the skills to engage others in questions of significance. Our work requires a purposeful shift to authentic, everdeepening relationships and not solely requests for money and dollar-based metrics. What might make up a philanthropic nature, a potential to be generous? What roles do compassion, empathy, and gratitude play in the philanthropic personality? How might we deliberately assess these characteristics through stories, parables, metaphors, and questions?

Discussing recent disasters that afflict the world might reveal levels of empathy and compassion in potential benefactors. Determining if a person’s empathy is based on feelings—“This is tragic and we feel compelled to help”—or whether empathy is more of a learned feeling, more grounded in learned behaviors as in “Our parents always taught us, ‘To whom much is given, much is required,’” and it is the obligation of wealth to be generative and to help others. Knowing the predominant form of empathic response may shape how we engage potential benefactors in experiences that are mission impactful.

Gilmore and Pine, in the book Authenticity, teach us that, “Today participating in meaningful experiences represents the largest unmet needs of Americans, more precious than economic capital: religion, country, art, and family and education, these are the resources that are literally priceless, from which we draw distinctions regarding our purposes in life.”

An outline of the philosophy behind appreciative philanthropy and a potential outline for teaching relationship-based metrics are illustrated in Table I. A system of relationship-based metrics would also be important to the continued energy and passion of development officers. Rather than a practice or orientation of “scheming for money,” development officers would both dream of and aspire to a world of possibilities with benefactors. Through an appreciative-inquiry approach, both benefactors and development officers generate energy between them, resulting in better co-created futures for our organizations and the people whom we serve. Burnout would be reduced, job hopping would lessen, and the nobility of our work would be palpable and efficacious. In such a system we would become more like moral trainers, as Michael O’Neil once described our work in philanthropy, or “agents of change,” as Sheldon Garber viewed our profession at its best.

The Path Is Made by Walking

If we raise our sights and refocus our energies, we will find remarkable results that are impactful and patently obvious to philanthropists. They will fund new models of doing our work and efforts to assess the replicability and scalability of those models. They will, as the newly engaged philanthropists demonstrate, bring all of their resources to bear on solving significant societal issues. Those resources will include their business acumen, talents in raising capital, insights and experiences in the marketplace, financial resources, and more importantly, their commitment. They will be compelled to join us in improving people and the planet. They will know when to apply capital and when a project should be halted if it is ineffectual or inefficient. We will stop all notions of pursuing benefactors for their purse strings rather than inspiring them for their heartstrings. A relationship-based model of metrics is not only possible, it is essential to the work we do in the long haul, and it will transform managers of solely dollar-based metrics into mentors and coaches for transformational philanthropy.

Again, Lynn Twist implores us to, “Renew our sense of a noble calling, not to settle into mediocrity, but to strive for our own personal form of greatness. If we could come to appreciate the meaning of life as a creative striving with love, we would be preparing ourselves to take on a new outlook toward the phenomenon of change.” A change in the spirit of our work in philanthropy and a change in what we teach, coach, and measure in our profession, the strategies, the techniques, the details, the methods, and the metrics, for a qualitative relationship-based model of philanthropy will ensue from such dialogues and will attract and retain the best in our philanthropic profession. We owe it to ourselves and our benefactors to further explore the why for giving instead of merely the how or what, to examine the core values of potential benefactors and how they intersect and overlap with our institutional missions. For in the end, philanthropy has little or nothing to do with money and everything to do with meaning and purpose in a well-examined life.

The great Spanish poet Antonio Machado said, Traveler, your footprints, Are the path and nothing more; Traveler, there is no path, The path is made by walking. So I ask you today, shall we begin a new path?

James M. Hodge

Following a 29 year career in philanthropic leadership at Mayo Clinic, Jim is now the Associate Vice Chancellor at the University of Colorado, Anschutz Medical Center in Denver Colorado. Prior to his time at Mayo Clinic, Jim was the Director of Development, Associate Vice President of Bowling Green State University in Bowling Green, Ohio. His 29 years of fund-raising experience include specific emphasis on planned giving. While at Bowling Green, Jim was a faculty member of the College Student Personnel Program and taught classes in fund raising. For more than 7 years he has been a guest lecturer at the Center on Philanthropy, served on the editorial board for New Directions for Philanthropic Fundraising, and has written articles focusing on planned giving and major gifts. The most recent focus of his numerous speaking engagements is on Values-Based Philanthropy and Transforming Philanthropy. He presently serves on the Bowling Green State University Foundation Board of Directors and previously has served on the Bowling Green State University Alumni Association Board of Directors.

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