Positivity and Grifting
My apologies for the delay.*
It is apparently conference season for the institutional right, so a few cautious words for observers and donors, along with a few updates from me.
One explicit piece of fundraising “tech” I have been taught several times is: “don’t be negative.” I have been taught this by directors of development at major institutions, in nonpartisan and in conservative donor development bootcamps, and in real life, so it seems to be a well-known maxim.
Specifically, the claim is that mega donors respond better to the always sunny. If you are a conservative think tank and are pro family, and you have a competitor, you don’t say they are bad, even if they are. You say, “they are great and doing valuable work, but our niche is a bit different.” Negativity turns off mega donors.
I’ll short cut the thinking, but what does this tell us about these donors?
(1) they are buying community, not projects
(2) they are unfazed or insensitive to failure
(3) they are not goal or project driven; they are relationship driven
If this is you, you should be concerned. I have written about the “ROI trap” before, and I firmly believe that philanthropy should be philanthropic, and less concerned about price or ROI. But that doesn’t mean it shouldn’t be goal-driven, and that doesn’t mean that it shouldn’t demand accountability. Obviously, there is a sliding scale. For certain functions, you can count on outside accountability.
Soup kitchens are an example: it is extremely hard to grift a soup kitchen, precisely because it is so easy. You can embezzle money, or make sweetheart contracts, and that’s about it. Locals volunteering will quickly pick up if an organization is honest, and you as a donor can drop in any time to the operation.
But it’s very easy to grift a think tank or an “outreach” organization. I have been asked a few times to help stand up nonprofits, and honestly, it’s extremely easy (same with running for public office). Anyone can fill out forms, put together some papers, and ask for money (and get money!). My own reticence to make a big splash or run an organization is precisely because the strategy is hard. From a metric perspective, an organization with a multi-million dollar (and growing!) endowment might look successful. I know that during the 2020 election, while I was working for the White House, many people (some of them excellent people!) were raising a lot of money they now are sitting on. Money sitting in a capital well is wasted, even if it’s on a 990.
In development finance, places like the World Bank often think about “capital absorption.” The United States is almost a capital forest. You can pour gallons of capital and it will be soaked right up. Real estate is expensive. You can always spend more on a website. But there are marginal ecosystems, perhaps in third world nations, where additional capital simply cannot be spent, for many reasons. There might be too small a population, with little or no infrastructure: this is a capital desert. Or perhaps the population works a certain way, and cannot be swayed easily: this could be a marginal environment like the peak of a mountain. Dumping a pile of fertilizer above the tree line isn’t going to create a lush forest.
The nascent populist right is like this. At this point, we need evolution and growth and time, not necessarily capital infusions. In fact, many places awash in cash (and I’ve spoken with some big ones) need to be spending more money, and putting downward pressure on salaries and project outlays, but building out entry-level positions and scope.
This is particularly true given the correct view among many on the right that we need decentralization. With all due respect to Charlie Kirk and orgs I’ve spoken with, centralization and capital inflows are a recipe for disaster, for organizations that will have board and succession crises in the years to come, and which will have major scandals (and I don’t mean Heartland— I mean more like Chronicles in the 80s).
The Reagan Revolution was built on the backs of a nationwide growth in small entrepreneurs in the policy and nonprofit worlds. I’m very unsure if we have the cultural “joiner” mentality that the Greatest Generation had, but we need to enable ground-up growth. Top-down growth like on the populist tech front has been good—there are good people hitting the right notes. But we need a thousand flowers to bloom.
So, back to the beginning. If I’m a donor to Charlie Kirk, I don’t necessarily stop. But I ask him what he’s doing to cede control and enable the next generation of leaders. When does he plan on retiring or moving on? Who could take over today? If he has concerns about Big Techs bigness, does that raise any questions about his own organization? If he’s so positive, are there any smaller groups that he likes that do what he does, but in a particular state or issue area, which is out of his brand and control?
When I’m looking to fund a new venture, I would ask questions about board structure, and plans. What happens if you (the guy asking for money) get captured? What checks will you put on yourself? Can you give me examples of cautionary tales from other groups? These are simple questions that are not negative, but which assess downside risk. The right complains all the time about capture, and the Ford Foundation is surely a cautionary tale. But exploding grants a la Olin are not a sure fire fix.
There is no substitute for continued pressure, even arbitrary pressure. Withholding a years funding does not ruin a relationship, especially if it is advertised up front. In nature, withholding resources enables species to adapt and evolve, something that we need right now on the right.
* I have been out of pocket for a while with my kids, as I have gotten used to taking summers to spend a lot of time with the family. That, and keeping the lights on, does occupy the time!