Lexington, KY - Do you often find yourself in the position of asking an acquaintance for a donation to charity? Well, consider yourself in good company. The Giving Pledge, a joint effort between Bill and Melinda Gates and Warren Buffett, is targeting billionaires to pledge at least half of their money to charity. According to an August press release, 40 of America's very wealthiest have signed the pledge, including film director George Lucas, Oracle Corp. founder Larry Ellison, New York Mayor Michael Bloomberg, Ebay founder Pierre Omidyar, hotelier Barron Hilton, media executive Barry Diller and former Citigroup leader Sandy Weill, among notable others. Buffett and the Gateses have contacted 70 to 80 people so far, making their success rate approximately 50 percent - rather good results, most fundraising experts would agree.
If you recall, Buffett has committed 99 percent of his fortune to charity, and the Gateses have given more than $28 billion to their foundation, with plans to give away much more of their remaining wealth. Fortune magazine, in a June 16 article, has estimated a successful pledge drive could net a minimum of $600 billion for charity, truly changing the face of philanthropy.
While I get a kick out of hearing how Buffett and the Gateses are calling and e-mailing the ¸ber wealthy and asking them to give away their money in what must be the apogee of all fundraising campaigns, I find it even more intriguing to read the comments made by those who agree to the pledge. While much of this wealth is dynastic, a significant number of the pledgers are self-made billionaires. They've worked hard, built their businesses and invested well. It is interesting to read the thoughts of these business owners and why they plan to give back. Most acknowledge they are not the sole reason for their wealth, and it was important to them to share the wealth. Check out www.givingpledge.org for more information and a complete list of the pledgers.
In perfect timing with this campaign comes a report on What's Next For Philanthropy, created by the Monitor Institute with support by the W.K. Kellogg Foundation and the Robert Wood Johnson Foundation. The researchers seek to explain why it's so hard to change philanthropy and how funders can act bigger and adapt better. The report discusses recent shifts in data, tools and leadership that will allow emerging next practices to increase philanthropy's impact in years to come.
As the report states, "Philanthropy today takes place in a context that is radically different from the environment in which many of its current practices and behaviors were developed." Many philanthropists give away their money the same way it was done 100 years ago. Too little progress has been made, while the problems we face continue to grow. Certainly, there have been significant changes in improving operations and efficiencies, but the report stresses that the next 10 years in philanthropy will be about coordination and adaptation. Funders of the future will need to join forces with other funders, nonprofits, business and government and act bigger. Funders must get smarter more quickly by adjusting what they do to the fast pace of change today.
With the number of foundations in the United States increasing from 56,000 in 2000 to more than 75,000 in 2008 and the number of nonprofits growing from just over 800,000 to almost 1.2 million in the same period, we now have a huge number of parties working for the public good. As the report points out, between 2007 and 2008, more than eight new U.S. foundations and 160 new nonprofits were created every day.
This boom makes collaboration hard but even more imperative. With more groups competing for funds, it can be overwhelming to funders. Endowments have also taken a beating over the last two years. The damage is becoming obvious. Locally, we've seen the toll with once well-established charities being forced to close their doors. There can be many factors at play, including poor nonprofit administration, donor fatigue, government cutbacks, increased demand for services, and so on. Like it or not, funders and nonprofits are intertwined in the dance of philanthropy. Funders need to collaborate with other funders, nonprofits need to collaborate with each other and the two worlds need to get in sync.
The Giving Pledge represents a new face of philanthropy for the ultra wealthy. This isn't to discount the vast generosity of more modest individuals, but the pledge amounts in this effort are simply staggering. Buffett and the Gateses are pushing philanthropists who once gave quietly to very publicly commit to their giving. They are also convening these funders. No more is the mantra "You do your thing, and I'll do mine." Stand-alone philanthropy isn't cutting it. These guys understand leverage.
So, we watch. Will philanthropy become more transparent? Will funders begin to act bigger and adapt better as the Monitor report hopes? The answers will be eagerly awaited.
Anne E. Nash, is a Lexington attorney and is principal and owner of My Giving Advisor, LLC (www.mygivingadvisor.com).