First Principles

Picture a nonprofit entrepreneur who has discovered a new and meaningful way of addressing a pressing social need or emerging cultural opportunity in the world. The model has not yet gained momentum but if successful could have a cascading impact across the millions of lives affected by the issue at hand. Without visionary funding partners, this solution will stagnate as a side project and fail to deliver its promise of restoration. 

These founders and their ventures need entrepreneurial, imaginative donors who bring their own theses and ambition to their giving decisions, and expect the same from the leaders and ventures they back; who approach risk as a welcome element of innovation; who trust a founder’s calling and encourage them to pursue bold objectives; who see clearly the patterns of exploitation in the nonprofit sector and actively work to counteract them; who deploy capital to build ventures, not buy outcomes; who value the sacrifice and expertise of the leader and demonstrate care and patience; and who wisely steward their influence on the organizations they fund.

This person—a redemptive philanthropist—is a beacon of health within the social sector and capable of advancing great flourishing into the world.

The act of giving is as old as human society, and giving traditions span every major culture. Ancient Egyptians and Greeks gave gifts to commemorate feasts and appease the gods. Giving’s role in Jewish life was built into the Mosaic Law through the practice of gleaning, where landowners were directed to leave a portion of their harvest for the “poor and the stranger.” In Indigenous American culture, giving elevated the status of the giver as a public role model for their tribes.

A shift began in the 16th century, when some of society’s most pressing challenges expanded beyond the limited capacity of personal charity and state action, and as wealth began to be concentrated in relatively few private hands. A new kind of entrepreneur launched socially-focused ventures, funded by a growing number of imaginative, ultra-wealthy benefactors. 

In 1552, in the Ottoman Empire, Roxelana, the wife of Sultan Suleiman, used endowment funding to open the Haseki Sultan Imaret charitable complex in Jerusalem, which supported orphans, widows, and the poor. During this period, John Harvard and Elihu Yale left their estates to establish the first seminaries (later to become universities) in America. The first Jewish orphanage was established in Amsterdam in 1648 using only gifted funds, making it one of the first philanthropic orphanages in history, and the Westminster Hospital was founded by Christians in 1720, establishing the first charitable hospital in England.

Fast forward to the last fifty years. During that time, philanthropic giving has grown from a small portion of the American public to nearly 68% of adults, averaging over 4% of total annual household income. Today, tax-advantaged generosity sustains an entire economic sector across a vast array of issues; there are over 550,000 active nonprofit organizations in the US alone whose operations are fueled by nearly $500 billion in giving annually. 

This sector plays a unique and important role in our society: its ventures solve problems that are inadequately addressed within the bounds of individual influence, government programs, and the marketplace; and it activates people’s hearts toward a more just, interdependent, and beautiful world. 

Social action has become pervasive in American culture. Giving campaigns are everywhere, from social media to local school fundraisers to radio and podcast shows to the checkout register at any major retail store. Branded social movements have mobilized the masses toward cultural changes that heighten social awareness and even become ways of identifying ourselves. And as these movements become more ubiquitous, their rhetoric ratchets up, such that claims of “radical transformation” and “changing the world” are now so commonplace as to barely register in our collective imagination.

This cause overload has increased the social expectations on institutions, brands, and public figures—as in the corporate world, with 90% of companies now seeking to reposition their brands through socially responsible strategies, campaigns, and partnerships; and in popular culture, where celebrities are expected to engage in public activism. 

Indeed, social action is now a presumed dimension of individual and institutional identities. It is no longer a thing you might do; it’s part of who you are.

Meanwhile, the social sector has undergone a shift in how it defines its own success. New technologies, methodologies, and research have emerged to assess and measure social impact, and the upgrade in evaluation tools has resulted in higher expectations of a venture’s performance, as well as its ability to replicate and scale. When a program can be measured, success is better defined, decisions can be more fact-based, and funds can be better deployed. 

Now that we are better at measuring social change, we expect nonprofits to accomplish more of it, more swiftly. The growth of social enterprise and impact investing alongside venture philanthropy has elevated a mindset defined by return on investment, pathways to scale, and speed of execution. Once a nonprofit’s solution to a problem emerges, the primary barrier to growth is often financial: more funding equals faster scale and greater impact. 

This focus on measurability and speed is natural and expected, as many philanthropists are active in the investment world where rate of return is the key factor in capital allocation. Likewise, the growing ability to demonstrate efficiency and quantify impact is of great benefit to the nonprofit leader who desires to build trust with funders and make effective programmatic decisions. 

For the entrepreneurial philanthropist, these trends are mostly good news, offering wider choice and greater effectiveness for their stewardship of capital toward cultural renewal. Yet they also lay two traps for well-meaning givers to unwittingly exploit nonprofit leaders and thwart the very goals they are each pursuing. 

TWO TRAPS FOR WELL-MEANING GIVERS: LOW-STAKES PARTICIPATION AND A SPIRIT OF MAXIMIZATION.

Low-stakes participation in restoration

Anyone can now reap the benefits of giving (tax advantages, personal satisfaction, social capital, and a sense of influence) with very low non-financial cost. For philanthropists allocating significant amounts, the temptation is to deploy capital in a way that builds their authority with minimal vulnerability and risk. 

Many invest almost exclusively in nonprofits and models that are either proven (yielding predictably-scaled outcomes) or modest (yielding unsustainable outcomes)—with limited capital behind promising innovation in their chosen areas of need. The resulting practices—including restricted granting, single-year funding, exhaustive application processes, and confirmation bias in portfolio selection—minimize risk and maximize control for the giver. Yet they can hamper nonprofit teams and stunt progress against the cause. 

Similarly, when philanthropists invest without proximity to the nonprofit’s team, work, or beneficiaries, they cannot build the trust and understanding necessary to be effective funders. Instead, they can become a burden to the venture, treated more as a problematic constituency to “manage” instead of a truly mutual partner. Nonprofit leaders often spend disproportionate time navigating donors’ uninformed and misdirected expectations, and too little time driving outcomes. 

In all this, the nonprofit misses out on access to the experience, story, and vision of the giver in ways that would advance its mission. And the giver is robbed of the true joy that God offers through faithful risk-taking, proximity to the underserved, and the experience of spending themselves on mission with others.

A spirit of maximization

The quantification of nonprofit performance offers the social sector both a benefit and a trap. Measurement and evaluation tools have helped nonprofit leaders innovate, and the rate-of-return mindset has infused nonprofits with a needed dose of efficiency and urgency. 

But these investing-style disciplines have also wrought a growing spirit of maximization in the social sector. Nonprofit givers and leaders alike expect to achieve programmatic outcomes, organizational growth, and public awareness at unrealistic speeds. Innovation and vision in programming suffers as givers expect premature evidence of impact. Program models that promise rapid scale are more likely to be funded and launched at the expense of more effective, sustainable ones that rely on capacity building and interdependence. When nonprofits do reach scale, they are urged to generate cheaper and faster impact at a rate that can outpace their ability to bless and serve people along the way. Outcomes reporting swells with overstated claims of impact on wildly optimistic numbers of people.

As a result, the social sector is plagued with team burnout, high turnover rates, and a crippling shortage of talent—often with no discernible gain in long-term impact. And what God intends to be an invitation to join His work through relationships of mutuality and mission, the spirit of maximization reduces to a mere machine for external outcomes.

PHILANTHROPISTS CAN OFFER THREE ESSENTIAL GIFTS TO THE NONPROFIT: RISK, HUMILITY, AND PATIENCE.

Philanthropy is indeed a craft, and the greater the capacity of the giver, the greater the skill, temperament, and effort needed to do it well. As they move from understanding program and financial models to developing relationships with staff to deploying capital to assessing performance, wise philanthropists avoid these traps. This requires an uncommon union of high expectations and high trust, which offers immeasurable blessing to nonprofit ventures, their leaders, and the givers themselves.

At Praxis, we are fortunate to experience this kind of work regularly, as we witness capital stewards in our community embodying the qualities of redemptive philanthropy in the way they engage with leaders and team members, and choose which missions to support.

Here we suggest three gifts the philanthropist can offer alongside their other resources in the building of redemptive ventures.

The Gift of Risk

As we have suggested, most philanthropy is risk-averse. In and throughout the philanthropic world, perhaps most often in Christian and other faith-driven communities, stewarding financial resources is often synonymous with preservation—as if hedging against the downside of a “failed” gift is better stewardship than avoiding a truly catalytic one. 

But no matter how funders come into the role of steward, all capital is God’s to use as he intends. The preservation of capital in the practice of giving can become an idol with the power to rob the giver and the nonprofit organization the joy of joining God in the vulnerability of his renewing work. Put simply, redemptive giving requires risk.

When givers adopt a risk-sharing posture, nonprofit organizations are blessed with the kind of funding partner necessary to pursue the most ambitious of missional goals and the most innovative models and programs. Nonprofits are so often shackled by the narrative that their success rests primarily on their effectiveness at preserving funds, managing cash flow, and demonstrating operational efficiency. When nonprofit leaders partner instead with risk-forward funders who value “being early” as a virtue, an imagination for missional possibility is unleashed. The team’s dominant perspective shifts from caution to boldness and from scarcity to abundance, resulting in greater inspiration, motivation, and the capacity to attract higher-caliber talent. In this way, redemptive philanthropists actually tilt the system toward moonshot-spirited opportunities in areas of brokenness.

Of course, giving to the point of risk presents challenges to the capital allocator. Responsible for financial stewardship, funders exist within their own ecosystem of family members, staff, boards of directors, and funding partners. As such, they are under significant pressure to consider the benefits of funding the status quo or compromising on grantee selection, gift amounts, and terms. And with all risk comes the greater chance of disappointment and loss. The redemptive philanthropist steps toward meaningful risks, and in doing so, expands their need for reliance on God. This reliance is rooted in the trust that all redemptive outcomes depend on God’s power and will, not ours.

The Gift of Humility

Much has been said about the complexity of power dynamics between those with significant financial and cultural capital and those who rely on that capital. Redemptive philanthropists upend these dynamics through genuinely humble partnership with nonprofit leaders—born not of guilt, agenda, or false modesty, but of gratitude, care, and a desire for excellence in their craft.

For the redemptive philanthropist, the power differential between themselves and God is the starting point. God generously grants the abilities and opportunities that place givers in a position of responsibility to steward his resources generously. In light of that first humility, the second should flow naturally: to do this work well, givers must commit themselves to listen, to learn, to trust.

The most important move in this process, for most philanthropists, is to draw near. Excellent funding practices include careful application review, financial management, and researching performance, issues, and trends. It is tempting to do this work at arm’s length, avoiding proximity—the attentive engagement (in relationship as well as geography) with nonprofit leaders and the communities they serve. 

When a funder draws close to those they support, they learn the nuances and complexities of the issues on the ground. They develop a rightful and balanced compassion for all those in the nonprofit’s ecosystem: staff, program participants, and community leaders. This compassion drives actions of non-financial care and encouragement, beginning with prayer. The resulting combination of trust and insight also leads to healthier accountability, as the redemptive giver earns the right to ask tougher questions of the leader and encourage the organization to stay the course of its mission. 

This humble posture—as listener, learner, partner—shifts the power dynamic between one steward and another. It powerfully signals trust in the team’s expertise, insight, and commitment. This trust leads to transparency about goals and limitations, which is life-giving for nonprofit entrepreneurs and mission-critical for their ventures. 

Finally, the gift of humility transforms the giver. It increases their generosity and Christlikeness by opening them to deeper experiences of empathy, interdependence, and joy in shared mission. 

The Gift of Patience

A significant philanthropic gift today is often tethered to a specific program with a defined timeline, promising clear outcomes—many of which are likely to be manufactured by the nonprofit in the desperate, shortsighted hope of receiving the gift. And the possibility of a second gift is determined by the nonprofit’s unlikely ability to deliver on these initial promises. When a gift is made and the clock starts ticking on its expectations of missional delivery, the result inside the nonprofit is often a sense of panic—not derived primarily from the need or mission itself, but rather from the terms of the gift. 

The solution is not to abandon discipline and excellence in nonprofit work—in fact these are essential and more necessary than ever—but to break the “race to the bottom” cycle of mutually-assured unrealistic expectations. 

Social sector ventures already face the constant challenges of anxiety, urgency, and scarcity. If the belief that a social problem can be eradicated in short order with the right burst of effort, then long hours, minimal pay, burnout, and turnover will be the inevitable result—and the likelihood of meaningful or lasting impact will be dim indeed. This lethal dynamic of chasing impatient funding hurts every party in the system—funders, nonprofits, and beneficiaries—and is the single most likely driver of long-term mission drift. 

The redemptive philanthropist is, by contrast, patient: “not controlling events, not anxious or in a hurry, and never using force to achieve their ends” (The Patient Ferment of the Early Church, Alan Kreider). 

Patient giving requires us to acknowledge that the world’s needs are driven by deeply-rooted forces of sin. There are no silver bullets. The restoration of the imago dei and the advancement of truth and beauty are achieved only by deep solutions delivered over long time horizons. This view defies the tempting myth that mercy, justice, and healing can be realized in months instead of years and decades. 

When nonprofit leaders have permission from their funders to design solutions for the root causes of a problem, extend programs incrementally to their next stages of impact, follow traction with scale funding, and establish healthy, sustainable workplaces, they can move the needle in their sector by way of what Eugene Peterson, borrowing from Nietzsche, called “a long obedience in the same direction.” 

As we apply these ideas to the practices of redemptive philanthropy, let’s explore the definition of the term “redemptive” through a tool called the Redemptive Frame.

Defining Redemptive

The Christian account is that God created humanity in his image—so even though we are more frail and proud than we are willing to admit, we are more loved and worthy than we can imagine.

Our shared cultural work—to bear God’s image in the world by creating and cultivating with the resources he gave us—is distorted by our selfishness, and cannot be put fully right through human efforts alone.

Yet putting the world right—bringing about personal, spiritual, social, cultural, and environmental healing and restoration—is part of God’s loving and glorious purpose in the world he created. As people loved through grace, we are called to love God and neighbor by joining him in that work.

Redemption is an economic term that means to buy back something (or someone) to restore it to its rightful place. It is also used to describe Jesus’ act of sacrificing his life so that we can be ultimately restored to a right relationship with God and his creation. 

Wherever there is loss, brokenness, unfairness, waste, or harm—and someone willingly enters into the situation by bearing a cost or taking a risk, to help the person, resource, or system to be restored—that’s redemptive action. And redemptive action at any scale usually requires creation or innovation, such as a new product, expression, model, or norm.

We respond to the redemptive, in stories and especially in real life, because we know that the world is broken; because we long to participate in its healing, even in the smallest ways; and because we sense that sacrificial love is the world’s most powerful force.

So this core pattern—creative restoration through sacrifice—not only describes Jesus’ ultimate redemptive work to save the world but also our daily redemptive work to serve the world. It gives shape to our mission as those who have been written into the greater story of his purposes through no merit of our own.

We believe we are to follow the redemptive pattern of creative restoration through sacrifice in our life and work.

A Redemptive Imagination for Philantropy

The gifts of risk, humility, and patience—offered abundantly alongside other forms of capital—have a profound impact on founders, ventures, and beneficiaries. When these gifts are present, givers and nonprofits step together into the proper authority (capacity for meaningful action) and vulnerability (exposure to meaningful risk) that are necessary for all human flourishing. These gifts also break the grip of maximization and guard against the temptation to use money to exercise power at a distance.

With givers and leaders alike actively pursuing the redemptive way, we can anticipate the emergence of a new storyline within the social sector. This sector will set a new standard of imagination, justice, and blessing to our culture. Nonprofits will pursue moonshot innovations alongside compounding improvements in proven programs as they help restore the image of God in people and his creative intent for places across the glob.

Incited by redemptive philanthropy, nonprofit work itself can be restored to greater stability and dignity, even as it grows in excellence and impact. Givers will be transformed along the way, experiencing the joy that comes from drawing physically and spiritually close to those in need, supporting in prayer and relationship the nonprofit leaders they fund, submitting themselves to a life of learning, and growing in radical dependence on God as they steward his money and mission.

All the principles and mindsets described here take concrete shape in the actual daily practices of philanthropy: meeting with leaders, collaborating with partners, working on gifts, and assessing impact. We offer practical suggestions for redemptive giving practices in the six areas that follow. Through these practices, we believe that redemptive philanthropists can not only bring glory to God and blessing to the world through their work, but can also be themselves transformed in the journey.