Sweet Charity: From Average Folks to Billionaires, People Find It Is Better to Give Than to Keep
It was an enormous gift in a year that has seen hefty nods to philanthropy and pledges to invest in charitable actions in both non-profit and for-profit sectors. Call it the year of giving profligately.
Richard Branson, the British entrepreneur, announced recently that he would contribute about $3 billion to be invested in developing energy sources that do not contribute to global warming.
New York Mayor Michael Bloomberg donated $10 million of his own money for a 9/11 memorial in Manhattan that will cost $700 million.
Computer entrepreneur Steve Case and his wife, Jean, promised $5 million to get clean water to sub-Saharan Africans.
The founders of Google put $1 billion in seed money into a philanthropic venture to fight poverty, disease and global warming.
Last month the Clinton Global Initiative -- a philanthropic summit that raises money to work on the global issues of poverty, religious and ethnic conflict, energy and climate change, and public health -- garnered $7.3 billion in pledges (including those of Branson and Case). Last year the summit raised commitments of $2 billion.
To say that philanthropic giving is on the rise is an understatement. Not only is giving becoming more public these days (with publications tracking the business of philanthropy), there's a new face of do-gooders. From philanthropy's whales to the everyday smelts who give at the office, those who give are becoming more invested in how their money is being used, looking for results, accountability and quick action.
Giving is up. Giving is dynamic. Giving is even chic.
"I actually believe, as someone who has been observing philanthropy in the nonprofit sector for seven years, this is a singular moment in time in the history of philanthropy," said Tom Watson, publisher of onPhilanthropy.com and chief strategist for Changing Our World Inc., a philanthropic services company. "People do follow the examples of the Gateses, the Bransons and the Googles. It has made philanthropy a media buzzword this year. It's very hot right now."
It's hot even beyond the celebrity factor that attends fund-raising and charitable efforts by the likes of Bono, Angelina Jolie and Brad Pitt, and Oprah Winfrey.
That's because money is more alluring than celebrity. This year's Forbes list of the 400 wealthiest Americans contains only billionaires - not a millionaire in the bunch. And according to a recent wealth survey conducted by the Luxury Institute, America's most affluent citizens are a generous bunch. About 31 percent of the wealthy donate to nonprofits with another 25 percent saying they will donate in their wills, according to the survey. Why do they give? They want to make a change in the world, according to the Luxury Institute.
Perhaps that's also what's driving the unprecedented level of charitable contributions, tracked by Giving USA, the yearbook of philanthropy published by the Giving USA Foundation. Americans gave $260.28 billion in 2005, a 6.1 percent rise over the previous year. Last year saw extraordinary philanthropic response to natural disasters (including Hurricane Katrina); about half of the $15 billion increase in giving over the previous year was attributable to disaster relief giving, according to Giving USA.
Connecticut, which has not fared well in some national studies of giving, is among the New England states in the bottom of a controversial annual index of charitable giving, released in November each year.
Connecticut was listed as the sixth stingiest state, according to The Generosity Index released in 2005. That index took into account both "having" and "giving" based on average adjusted gross incomes and the value of itemized charitable donations reported to the Internal Revenue Service on 2003 tax returns. (It has been criticized for not taking into account differences in taxes and cost of living in different regions of the country.)
The most striking aspect of the Giving USA report was that individual giving, always the largest single source of donations, rose by 6.4 percent in 2004 to an estimated $199 billion. Individuals account for 76.5 percent of all giving in 2005. Individual Connecticut numbers were not available.
It's not just the Buffetts and the Bransons who are reaching into their pockets, according to Giving USA, it's the average American who feel the need to give what they can.
"Americans have always been generous. In that sense, I wouldn't say it's unusual. But it's striking that Americans are so generous to nonprofit institutions and organizations on this level," said Richard T. Jolly, chairman of the Giving USA Foundation. "It tells me that when people are aware there's a need and asked to respond, especially in the case of disasters in 2005, they do."
Disasters certainly spur giving; there was a spike in charitable contributions after Sept. 11. But philanthropy has become big business because there's simply a lot more disposable income out there. And these people are looking to do things with their money above and beyond living well themselves.
"It's not that people haven't cared about starving children in India. They've always cared about starving children in India. But now giving is fueled by the rise of the new philanthropist: people who did very well in the '90s, boomers who are retiring and getting their inheritances. There's trillions of dollars to come," said Marcia Stepanek, editor in chief of Contribute magazine, a new imprint that guides wealthy donors through the complex world of philanthropy. "It's very much in vogue right now to give money away or be on someone's board. This is a real social movement. Philanthropy is a very dynamic conversation right now."
The enormous changes (and enormous money) in philanthropy is what spurred Lisa Gyselen and her husband, Garry, to start Contribute (www.contributemedia.com). The bi-monthly magazine is mailed to 65,000 households in the Greater New York metropolitan area that all make at least $250,000 and all have given at least $5,000 to charity in the past year.
"There's a lot of money and it's more than people can fathom," Lisa Gyselen said. "But there's so much confusion associated with giving: scandal, fraud. There's a tremendous wealth and a tremendous education behind [giving] but a tremendous, nebulous environment."
Contribute magazine, Gyselen said, reports on the industry of charitable contributions and the investment worthiness of charitable institutions.
Gyselen, like those who monitor the world of philanthropy, said one of the biggest changes in giving, aside from the tremendous wealth on the scene, is that givers are being more wise about where they spend their philanthropic dollars and demanding accountability and action in investments.
"Whether you're giving $5 or $5 million dollars, you want your money used wisely," she said.
Stepanek agrees: "It's not just about writing checks," she said. "What you're seeing now is real involvement, impatient new money that wants results and wants them now."
Watson said that the style of giving is changing. "There are more activist givers. They want to be more involved and see the results of their philanthropy," he said. "They believe not in just writing a check, but in their personal activism. They're joining boards, traveling, using their expertise, donating their time."
There's also a portion of today's givers who see themselves as more aligned with how they give and the face of their giving. "People are starting to define themselves as how they give," he said. "There's a generation that is taking time to stand back and say, `Wow, this is where we are; let's try to change the world again.'"
And it's just going to keep coming, experts say. Buffett's 310 billion dimes, while a hugely important gift, seem to have put a focus on the increase in philanthropy and where it's headed. Which is up, Jolly said. "We've been tracking this for 50 years and the long-term trends are clearly growth," he said. "I see no reason why that would change."
Copyright 2006, Hartford Courant