Perceived Inconsistency in New Philanthropy

Drivers of Inconsistency in Old Versus New Philanthropy

In most corporate and organizational communication literature, consistency is identified as an asset of coherence—the glue that holds the identity of an organization and its brand together and distinguishes it from other organizations (Hatch & Schultz, 2003; van Riel, 1995). Correspondingly, inconsistency is regarded as a lack of coherence and tightness. In this essay, however, I understand inconsistency as a perceived clash between what is considered to be an appropriate and inappropriate lender identity in a philanthropic organization. Consistency and inconsistency are not understood as mutually exclusive, but as relational concepts between fundamental—here ethical—motivations approached from a frame perspective. Identified as “schemata of interpretation” (Goffman, 1974, p. 21), frames are “interpretive principles of organizing and assigning meaning that are outcomes, or products, of social construction” (Cornelissen & Werner, 2014, p. 197). Positioning groups of philanthropists in one frame of ethics thus points to the existence of other and adverse frames of ethics, from which these groups are discursively excluded. Accordingly, inconsistency is addressed here as a discursive strategy articulated in the framing of issues that may influence the identity of an organization and its constituents.

Charity is a key construct in philanthropy. In classical philanthropy, charity is defined as “beneficence to those in need” (Stride & Lee, 2007, p. 110). Charity is considered a virtue, the fundamental driver and most genuine act of caring for others out of compassion and love, without expecting anything in return (Dees, 2012). The mission of charities is therefore grounded in a culture and expectation of human care as the overall nonnegotiable and fundamental ethical value that drives and legitimizes their existence (Stride, 2006). For the same reason, charities are believed to have a strong sense of coherence and meaningfulness that binds people together in a common purpose (Jenkinson, Sain, & Bishop, 2005). However, with the recent emergence of new philanthropy, the virtue framing of charity is under pressure. New hybrids of organizations appear, blending charity and business and bringing forward a venture-oriented philanthropy. Venture philanthropy is driven by strategic performance management of small businesses adopted from for-profit frontrunners of innovation and social entrepreneurship (Dees, 2012). Bridging charity and business management practices through the production of return on investment is considered as compromising for the presumed purity of the charity culture (Stride, 2006). As a result, a clash of ideas and expectations about what constitutes a charity in its purest sense has emerged, producing perceptions of inconsistency between two ethical frames articulated as philanthropy as charity versus philanthropy as investment, respectively. The driver of these perceptions is the resistance of traditional philanthropists to see charity and business going hand in hand. Their main argument is that “charity is about ‘giving,’ and it is not authentic if there are expectations and calculations involved” (Dees, 2012, p. 323). Adopting performance management tools from for-profits such as marketing, R&D, and information systems are thus rejected as extravagance (Dees, 2012), over-commercialization, misappropriateness, and even immorality in philanthropy (Ritchie, Swami, & Weinberg, 1999). A discursive articulation of inconsistency between ethical positions is thus installed on the basis of the disturbance to the value systems originally connected to charities. KIVA is a case in point for illustrating the emergence of this type of inconsistency.

. . . and in the KIVA Community

KIVA is a digital, nonprofit microlender founded in 2005. Its mission is “to connect people through lending to alleviate poverty,” and its vision that “all people hold the power to create opportunity for themselves and others.” ¹ Through peer-to-peer crowdfunded loans, KIVA enables entrepreneurs to access capital to start up small entrepreneurial businesses in their local communities. Entrepreneurs are supposed to pay back their loans, while lenders are expected to use repayments to fund new loans. KIVA is thus an example of a hybrid between a nonprofit and for-profit venture. The tension that arises from the organization’s activities is reflected in organizational goals and values becoming subject to discursive negotiations and disputes among constituents of KIVA (lenders, field partners, and volunteers). They reflect the above-mentioned conflicts in terms of what KIVA is believed to stand for and how it is expected to accomplish its mission. In other words, instances of perceived inconsistency occur as a result of constructed oppositions around the nonprofit/for-profit complex and, more particularly, in the framing of philanthropy as charity versus philanthropy as investment.

An important example of how discursive inconsistency is articulated can be seen in debates about KIVA’s decision to grant loans to borrowers in the United States in the aftermath of the financial crisis. On one hand, a group of regular lenders opposes the blessing of what they see as relatively wealthy American citizens with loans compared with authentically impoverished third world borrowers: “To think that we are asking lenders from the US and around the world to even consider lending to the US is a shameful, disgraceful decision.” ² On the other hand, supporters of loans to Americans ³ accuse opponents ⁴ of being driven by “an act of vanity and self-important ‘altruism’” and of using the KIVA brand as an act of ‘self-promotion’ and ‘broadcasting’ rather than helping those in need, when lending. ⁵ KIVA lenders thereby start to insult each other on the motives and drivers for why they have joined KIVA.

In this debate, an opposition between a for-profit culture based on marketing, performance, and expected outcome, and a nonprofit culture based on charity as a pure act of giving is constructed among KIVA lenders. Inconsistency is articulated in the reinterpretation of the for-profit discourse, symbolized through a “marketization” of the individual (Goffman, 1956), who is framed as self-positioning, ego-driven, and (implicitly) opposed to authentic and altruistic positioning. Inconsistency is thus discursively articulated by contrasting two philanthropic frames: (a) altruism based on virtue and the urge to do good and (b) egoism based on self-promotion and self-interest as a desired outcome.

The discussions by KIVA lenders provide insights into how inconsistency is constructed and anchored in competing frames of ethics, which are left out in the open with no interference from KIVA management in the debate. The discursive positioning of the two ethics as inconsistent, however, is not absolute. Donors and supporters of charity may be driven by multiple and coexisting motives, including altruistic as well as egoistic motives (Bekkers & Wiepking, 2011). The coexistence of apparent opposite motives is embedded in recent approaches to ethics, including the ‘ethics of care’, where the distinction between self- and ‘other caring’ is diluted (Knudsen & Nielsen, 2013).

Concluding Remarks

Articulations of inconsistency in philanthropy are nothing new. Clashes between duty and virtue ethics, altruism, and egoism have long been subject to discussion. What is new is the introduction of a venture culture suggested by new upcoming hybrid organizations in philanthropy, and the clash of ideas and expectations about how to bridge charity and business. While inconsistency is traditionally regarded as lack of tightness and organizational coherence and as something to be controlled and managed, inconsistency is a daily reality for many nonprofit organizations, where conflicting demands and norms are the rule rather than the exception (Brunsson, 2003; Wæraas, 2008). Openness is thus practiced as an opportunity for identification and socialization among members, enabling them to resolve conflicts and tensions between their individual identity needs and the collective interest of the organization (Cheney, Christensen & Dailey, 2013). The approach, increasingly undertaken in the context of new philanthropy, can contribute to processes of negotiating and (re)defining charity mission, values, goals, strategies, and practices. Consequently, in such organizations, where divergence and dissent are common practices, inconsistency among members may not be regarded as “hurdles,” but as means of revitalizing rather than paralyzing the organization.