Philanthropy has evolved significantly from its noblesse oblige origins, through federated giving, to the competitive venture philanthropy model which now predominates. In those approaches charities set agendas and funders respond with philanthropic support. More recently, funders have begun to take the lead on agenda-setting, embracing an activist ethos – backed up by financial firepower.

Philanthro-activism recognizes that social issues are rarely discrete problems but rather the results of complex systems failing those in need. So it follows that funding individual organizations, often pitting those with similar foci against each other for limited funds, is a particularly unhelpful way to create systemic change.

Instead, philanthro-activists see deficiencies in systems and try to remedy them, not just by supporting causes, but by transforming the entire system. They embrace the role of public advocate to grow awareness and prioritize the issue. And they look to effect widespread change rather than just attempt to ameliorate an immediate problem. By setting the agenda, and then defining the terms for success, activist funders make philanthropy proactive rather than reactive.

"Running a foundation is usually passive in the fact you fund others to create change, but I began to see that you could use a foundation as a platform for social change.” recounts Jay Ruderman, President of the Ruderman Family Foundation.

This kind of philanthropy marks a deliberate shift to prioritize capacity over program. When the goal of philanthropic strategy is to bring together multiple nonprofits and funders as a team, the overhead myth is exposed as the red herring it is. In reality, “overhead” equals capacity to execute programs. Creating capacity – in organizations and their leadership – is a better long-term investment than generating disparate program outputs.

Nonprofit leaders are often focused on optimizing the performance of their own organization rather than examining the systems in which they operate.

Read the full article about activist philanthropy by Joshua Avedon at eJewish Philanthropy.