Money Well Spent
A Strategic Plan for Smart Philanthropy, Second Edition
Paul Brest and Hal Harvey



People choose to engage in philanthropy for any number of reasons: to solve pressing social problems, to act on religious or philosophical dictates, to aid the less fortunate, to instill altruistic values in their children, to achieve recognition, or to give meaning to their lives.1

Regardless of motive, most philanthropists want to use their money to best effect. Yet the history of efforts to improve people’s lives—from reducing drug addiction and high school dropout rates, to protecting ecosystems, to ameliorating global disease and poverty—demonstrates how difficult it is to actually make a difference.

There are three basic requirements for having real impact as a philanthropist: motivation, money, and a winning strategy. You need to bring the first two to the table; this book serves up the third. Strategy matters in philanthropy just as it does in investing, running businesses, and conducting wars. While a good strategy cannot ensure success, it improves the odds—and its absence virtually assures failure.

Effective grantmaking requires strategies based on clear goals, sound evidence, diligent care in selecting which organizations to fund, and provisions for assessing the results—good or bad. Whether you are giving away $100,000 or $1 billion a year, your funds are not unlimited, and a good strategy can multiply their impact many times over.

Our goal is to help you make the world a better place according to your own lights. We do not presume to tell you either how much to give or what passions to pursue.2 Those are personal choices. Philanthropic goals are as diverse as individuals’ conceptions of what is good for society. You may wish to promote the arts, religion, education, health, or world peace; protect the environment; or support the search for extraterrestrial life. You may want to stimulate social change, preserve the status quo, or return to halcyon days. While your choice of goals—commissioning symphonies or supporting the destitute—can be debated from a moral point of view, such issues are outside the scope of this book.

Like a car repair manual, a guide to strategic philanthropy is essentially value neutral. The manual can be used equally to fine-tune an ambulance or the getaway car for a bank heist. By (almost) the same token, our book is useful for the pursuit of a wide variety of philanthropic goals, and some people, ourselves included, will regard certain of these goals as wrongheaded or even loathsome. When philanthropy addresses some of the hot-button issues that divide the citizens of our pluralistic society, it is inevitable that one person’s ambulance is another’s getaway car. Indeed, even when goals, such as poverty alleviation or improved education, are widely shared, there may be differences about the appropriate ways to achieve them—for example, voluntary private action versus government spending and policy regulations.

The book arises out of our belief that philanthropy can make a great difference in the world but that much of its potential is not realized. To put it bluntly, hundreds of millions of philanthropic dollars are squandered through donations to organizations that have no impact whatsoever. This is a guide for how to make a difference. It is intended to do for philanthropists what the best books on business strategy do for business entrepreneurs and executives. We wish to provide readers with the concepts necessary to design a strategy to achieve their charitable goals and to assess the strategies of organizations that seek their support. Our fundamental premise is that, as important as the sheer number of dollars devoted to philanthropy may be, intelligent planning, systematic implementation, and continual feedback are even more crucial.

Part 1 consists of a single chapter that makes the case for strategic philanthropy, using contemporary examples of successful and failed philanthropic projects.

Part 2 takes the reader through the steps of developing and evaluating a philanthropic strategy. Its five chapters offer a framework that is essential for achieving results. This is the most technical and “academic” portion of the book. But if you have time to read only one part of the book, we recommend this one.

Part 3 applies the framework from Part 2 to the actual practice of grantmaking. It begins with determining the scope of your interests and continues with vetting applicants and considering appropriate forms of philanthropic funding, including impact investing.

The three chapters of Part 4 take a deep dive into major ways of achieving one’s philanthropic objectives: promoting knowledge, providing goods and services, and influencing government policies and business practices.

Part 5 covers two constitutive aspects of engaging in philanthropy: the choice of structures—checkbooks, donor-advised funds, and the like—and your spending plan—ranging from giving all your philanthropic capital away in your lifetime or sooner to creating a perpetual foundation.

The book ends with a short Afterword that addresses some concerns about the consequences of philanthropy, strategic or otherwise.

We should disclose at the outset that strategic philanthropy demands serious focus, time, energy, and consultation. As individual philanthropists come to see what’s required to make a real difference, they often conclude that high-impact philanthropy is not a one-person, part-time operation. It usually requires at least some professional staff. That’s why most of our examples are drawn from staffed foundations.

If, as you read the following pages, you decide that you cannot or do not want to do it on your own, and lack the resources or interest to establish a staffed foundation, there are other good options. For example, you can place your assets in a trusted private foundation (as Warren Buffett did), in a strategically oriented community foundation, or in one of the increasing number of funds that manage portfolios of grants. You can mirror grants from a foundation that has a powerful strategy. Or you can become a sustaining supporter of a very-well-managed nonprofit group that has its own strategic focus and discipline.

This book is intended not only for those who amass or inherit the fortunes that make large-scale philanthropy possible but also for the many others who counsel them and help spend their money, including the staff and boards of foundations, the myriad nonprofit organizations that seek philanthropic support, and the increasing number of professionals who advise wealthy clients on philanthropy. It is also designed as a textbook for the increasing number of university courses on philanthropy.

Although we value knowledge for its own sake, this book is written with an instrumental purpose: to improve the effectiveness of your philanthropy with the ultimate goal of making the world a better place. Our theory of change is that this book will help readers who are already strategically oriented become even better and will whet others’ appetites. Doubtless, this is a speculative and somewhat optimistic belief. After all, for every thousand books written with the hope of making a difference in people’s lives, let alone society at large, at most one or two succeed. But we think of our effort in terms of expected return: the probability of impact may not be high, but its potential magnitude is. In any event, writing the book has been a labor of love and voyage of discovery for both of us.


1. See Peter Frumkin, Strategic Giving: The Art and Science of Philanthropy (Chicago: University of Chicago Press, 2006).

2. Peter Singer, “What Should a Billionaire Give—and What Should You?,” New York Times Magazine, December 17, 2006.