By Taylor Moffitt of Halydean
Here is a description of a model of charitable giving developed by Erl Morrell-Stinson. Erl has promulgated the development of hospitals, churches, has helped to support orphanages, and numerous other projects. He helped promote racial equality in South Africa during apartheid, and is a modern philosopher who has influenced numerous organizations.
The Morrell-Stinson model of philanthropy has several precepts:
- Preliminary test. The charitable foundation receives a grant application, and then provides an assignment to the applicant. The applicant must complete the assignment successfully to proceed. A representative example of an assignment could be “Gather a petition of 100 supporters,” or “Recruit your board of directors and organize.” The purpose of the preliminary assignment is to serve as a qualifier. It will help to weed-out applicants who do not take action.
- Equity. The initial grant provided is incomplete, and requires that the applicant must have “some skin in the game.” In commercial banking, lenders require that the applicant has personal commitment to their projects in the form of hard equity. Applicants must have adequate equity in their projects as well to help ensure success.
- Sustainability. The initial grant is only for items which are economically sustainable in nature. For example, 1,000 mango trees were given to Tom Stamman’s orphanage in Honduras. Today, the trees are producing healthy food for the children, as well as financial support for the orphanage. The orphanage already owned the land, and demonstrated equity in the project.
- Progressive growth. Grants are to be given in small amounts that grow, based upon the stewardship of the applicant.
- Non-fiduciary nature. The Morrell-Stinson model of philanthropy does not award cash. Instead, the foundation buys the assets directly, and the assets are given to the applicant. In this way, the applicant never has a fiduciary role or even the opportunity to misallocate grant funds.
- Safety of principal. Everyone has heard the old adage about the goose that laid golden eggs. A relief NGO acting in Haiti was trying to create economic benefit for locals and constructed a chicken barn, and supplied young chickens to lay eggs. This was a great idea, but the locals ate all of the chickens before any eggs could be laid. Safety of principal must be considered in every context.
Fictitious case study. An applicant wants $100,000 cash per year for economic development of an impoverished area. The applicant chose from a list of available projects, and requests 500 beehives to sell chemical-free locally grown honey at farmers’ markets. The applicant was given a preliminary test, and completed a course on beekeeping, and secured permission to place bee hives on 10 different parcels of land. The applicant contributed equity to the project, by raising $1000 to purchase beekeeping equipment. The foundation provided 2 beehives and 2 packages of bees the first year. The second year, if the colonies are successful, the foundation provides 8 more beehives, and six packages of bees. The applicant splits the previous colonies and now has 10 full beehives. The second year, this can be repeated to bring the colony up to 50, then up to 250 in the third year, and the project will be able to self-fund thereafter.
Other examples may include solar panels, perennial vegetables (such as rhubarb, asparagus, chives, horseradish, or rosemary), grape vines, fruit and nut trees, chickens (depending on the location), water desalinization, and any number of additional possibilities.
This model allows applicants to experience economic growth for themselves, and creates a “survival of the fittest” environment which fosters good decision-making. In a changing global economy, charitable NGOs are facing new challenges. New strategies are needed by charitable foundations to respond to these changes. The Morrell-Stinson model of philanthropy may have an important place in the future.
Taylor Moffitt of Halydean 