Indiana University      Research & Creative Activity      January 2000 Volume XXII Number 3

Shaping the Future of Philanthropy

by Gene Tempel and JoAnn Campbell

It was only supposed to last one semester, but Noriko Kuwahara’s service-learning project for the Environment and Life class she was taking at Indiana University East took on a life of its own.

Gene Tempel, Executive Director, Indiana University Center on Philanthropy, and Professor of Philanthropic Studies and Higher Education, Indiana University–Purdue University Indianapolis, and JoAnn Campbell, Community Service Associate, Indiana University, and Director, Office of Community Partnerships in Service-Learning, Indiana University Bloomington

To share some of her cultural heritage, Kuwahara raised money to plant cherry trees on the Richmond campus. More than 200 people attended the dedication in April 1997, and the project remains alive with two more annual plantings and related cultural activities. The interest culminated in Globalfest, a citywide multicultural day involving local schools, churches, and city government. What started as a biology assignment has become an annual event.

Kuwahara’s project, and the daily actions of many people at Indiana University, across the nation and around the world, are a reflection of philanthropic values. But defining philanthropy is difficult. Philanthropy’s linguistic roots are in "the love of humanity." All cultures have traditions of people helping each other through formal and informal structures. Today, philanthropy is popularly taken to mean voluntary association and voluntary giving of time, money, and resources to benefit others or society without regard for personal gain. But that does not begin to encompass the full scope of philanthropy, or to probe its complicated underlying motivations that range from altruism to self-interest, and the ways in which each of us, including the donor, benefits from philanthropy.

Society is focusing more attention on philanthropy, volunteerism, and service learning than ever before. The relatively new pursuit of philanthropic studies as an area of teaching and research, the recent, rapid growth of the independent sector (nonprofit, charitable, civic, and philanthropic organizations), scandals and a demand for greater accountability, devolution of government services, and fear of the decline of civil society, all have put the spotlight on the "third sector."

Although more than twenty-five years have passed since the federally appointed Filer Commission’s pioneering research defined the scope of the nonprofit sector, it remains the least understood of the three primary sectors of American public life–government, private business, and the independent sector.

Understanding philanthropy and its traditions is key to understanding and maintaining our democracy and developing engaged citizens. Alexis de Tocqueville noted early Americans’ propensity to identify a need and band together to meet it. That tradition still exists, but as a society we must examine, critique, teach, and reinforce it in succeeding generations if we are to continue to reap the benefits of civil society.

Public policy and philanthropy also are increasingly intertwined. More must be known about the nonprofit sector if policymakers are to formulate effective responses to issues such as devolution of federal services through local governments to local charities. Suggestions by two leading presidential candidates to deliver services via faith-based groups, tax policy as an incentive for charitable giving, and regulation of nonprofit organizations all require additional knowledge and understanding of philanthropy.

Philanthropy has a significant economic impact as well. In recent years the independent sector has experienced unprecedented growth. The number of charitable nonprofit organizations doubled between 1977 and 1992. From 1977 to 1994, annual growth in income of the sector was 4.3 percent, compared to 2.1 percent each for business and government. Employment growth outpaced the other two sectors by an equal rate. Without greater knowledge of the nonprofit sector, we cannot fully understand the economy or the division of labor among societal institutions.

Research and information about philanthropy and nonprofit organizations is also vital to the success of those organizations themselves and the roles they play in society. Insight into motivations for charitable behavior, trends, statistics, and new and best practices helps nonprofit organizations understand their volunteers, donors, and constituents. Increased understanding strengthens relationships and improves the organization’s management.

Indiana University is leading the way to greater insight into philanthropy and the nonprofit sector. To increase awareness and understanding of philanthropy in the United States and internationally, and to develop the next generation of scholars and practitioners, the Indiana University Center on Philanthropy funds and engages in basic and applied research, teaching, training of current and future nonprofit leaders, and public service initiatives. Established in Indianapolis in 1987 with the support and funding of the Indiana University—Purdue University Indianapolis leadership, the center has fostered and nurtured philanthropic studies throughout the IU system. It also has played a role in many other philanthropic initiatives across the IU system and the state, such as Indiana Campus Compact and service-learning programs, and is funding research on the impact of these programs.

The center’s teaching programs incorporate its research and provide students with a full understanding of the historical, sociological, economic, and ethical contexts of philanthropy and nonprofit management. The center is unique in its liberal arts-based, interdisciplinary approach, with more than sixty faculty members representing more than twenty academic disciplines and teaching eighty-five philanthropic studies courses. Graduates are thus well prepared for both further study and practical application in day-to-day nonprofit operations. While most courses are taught at IUPUI and in Bloomington, the center has strong working relationships with faculty on all eight IU campuses.

The Center on Philanthropy is grounded in the principle that scholarship informs practice and that practitioners can assist researchers in gaining knowledge about philanthropy and nonprofit organizations. More than 25,000 fund raisers on every continent except Antarctica have learned professional, ethical fund-raising practices through The Fund Raising School, the only university-based fund-raising training program of its kind. The center’s research supports its curriculum.

A hallmark of the center is its commitment to funding research by IU faculty, by practitioners, and by faculty and students at other universities. The center is one of the few to fund research and dissertations outside its own university. The center offers grants to explore all aspects of philanthropy, as well as for research into Indiana philanthropic and nonprofit issues. The Archives Program Fellowship funds research in any discipline in the unique philanthropy collection of the Ruth Lilly Special Collections and Archives. Special research funding is available exclusively for IU faculty members wishing to explore aspects of philanthropy.

The center also collaborates with non-academic organizations to contribute to research in the field. Plans are under way now, for example, for a collaborative study with the Center for Non-Profits and Philanthropy at The Urban Institute in Washington, D.C. The project will examine cost accounting and reporting procedures among nonprofit organizations to document current practices, reveal misleading or inaccurate procedures, and perhaps lead to improved reporting. Current practices make comparisons of administrative and fund-raising expenses difficult and disadvantage groups that fully and accurately report their costs.

Philanthropy has become a serious area for university research, and many philanthropic organizations are supporting research that will help guide the future of the sector. The center has received major funding from the Lilly Endowment Inc., the W. K. Kellogg Foundation, and approximately thirty other funders totaling more than $46 million for scholarly examination of philanthropy and for institutionalizing the center’s teaching and outreach activities.

To help the next generation understand the role philanthropy plays in society, the center has launched and nurtured several initiatives for undergraduates. In 1999, the center offered the first-in-the-nation Summer Institute on Philanthropy and Voluntary Service. Such efforts help students comprehend their place in the philanthropic tradition and contribute to their development as involved citizens throughout their lives.

Initiatives such as IU’s service-learning programs outlined in this issue foster understanding and transmission of national and local philanthropic and democratic traditions from generation to generation. As a pedagogical method, service learning furthers students’ critical thinking, improves mastery of academic material, and connects theory and practice. It also strengthens students’ sense of social and ethical responsibility, deepens their understanding of the context of social issues, and encourages them to participate in the community beyond campus. Service learning also can make faculty and student research more rigorous and more responsive to public concerns. Finally, service learning reinvigorates the university’s commitment to using its resources for the public good.

Community engagement contributes to all aspects of the university’s mission. At IU, opportunities for direct community involvement are growing. Faculty and staff have always served on nonprofit boards and volunteered in community and religious organizations, while student groups, sororities, and fraternities have devoted philanthropic funds to local concerns. Community engagement conceived within a framework of citizenship, however, invites a more reciprocal exchange of time, talent, and knowledge.

Thoughtful exploration, hands-on involvement, and a commitment to academic freedom and a diversity of viewpoints are at the heart of each of IU’s philanthropy and service programs. The field of philanthropic studies is still in its infancy. We are only now beginning to develop the theories that explain the existence of the nonprofit sector and the complex motivations and impacts of philanthropic behavior. Clearly, all aspects of philanthropy, which is so deeply connected to personal, academic, and civic life, deserve full and open debate as we explore this new, multidisciplinary field.