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Five Future Trends (part II):
The Changing Face of Charity
How Businesses and Individuals are Redefining Philanthropy
By Steve Bannister

Philanthropy today has become quite fashionable among big businesses and wealthy individuals. It seems that everyone is anxious to give a helping hand and there appears to be no sign of this trend slowing down. So what is it that makes philanthropy so popular now as compared to even just ten years ago? Needless to say, philanthropy is not a new concept; as long as there has been human suffering, there have always been people to help.

The Roots of Philanthropy

Wikipedia defines philanthropy as "...any altruistic activity which is intended to promote good or improve human quality of life." This includes the donation of money, goods, time, or effort in support of a charitable cause. Philanthropy in North America has strong roots in the religious beliefs of the early settlers to help ones fellow man. As people banded together and created communities, philanthropy was fostered throught the principles of civic participation.

As villages turned into cities, people lost the personal contact they once had with each other and a more modern view of philanthropy took hold in the nineteenth century. This usually involved elderly rich men giving their money to some well-loved local charity. Picture a stereotypical aging multi-millionaire (maybe someone like Scrooge from "A Christmas Carol") getting ill of health and finally realizing that life wasn't all about just making money. To right all of the wrongs he may have committed as he climbed his way to the top of the corporate ladder, he donates a sizable amount of money to a charity or organization which has always been near and dear to his heart (usually such organizations as libraries, museums, and universities). End of story.

Of course, not all rich elderly men parted with their money exactly in this mannar. Although, the process of a wealthy individual giving a large sum of money to one charity remained quite popular until the early years of the twentieth century. These years gave rise to the creation of organized philanthropic foundations lead by the likes of Andrew Carnegie (steel), John D. Rockerfeller (oil), and Margaret Olivia Sage (widower of Russell Sage; financier and politician). These foundations continue to make a positive impact on society today.

Since the early twentieth century, many non-profit organizations have benefited from the generous donations of rich individuals and large corporations. One notable generous gift came from media mogul, Ted Turner, who in 1998 donated one billion dollars to the UN Foundation which, as his website (www.tedturner.com) states, "works to promote a more peaceful, prosperous, and just world through support of the United Nations and its Charter." As with almost all charitable donations to foundations up to and including this time, money is donated, plans are discussed as to what to do with the money and the foundation sets about implementing the plans.

One Couple Opens the Flood Gates

It was the early nineties and the richest man in the world was having the time of his life. Bill Gates was deeply engrossed in his work, completely on top of his game and loving every minute of it. When reporters pressed Gates about his plans for philanthropy, his response was to tell them he would think about it when (or probably if) he retired. Gates didn't fear the backlash from public opinion and the press, nor did he fear the reprisal from government regulators who believed that Gates held a monopoly that needed to be dismantled.

Fortunately, there were two people who did possess some influence on Gates. These people included Gates' long time girlfriend, Melinda French (who was then a manager at Microsoft) and his mother, Mary. When Gates became engaged to French, his mother, who was then dying from breast cancer, wrote a letter to Melinda. The letter stressed the great opportunities the two would have to improve the world.

Gates had previously assumed that even his billions of dollars wouldn't have much of an impact on the world because the obvious problems were probably all taken care of. When he researched the matter further he realized quite the contrary. He was stunned to learn that treatable conditions, such as diarrhea, were killing millions of people every year. In 2000, Bill and Melinda donated $20 billion to start the Bill & Melinda Gates Foundation (www.gatesfoundation.org, the largest transparently operated charitable foundation in the world) whose main function is to solve some of the world's most difficult problems in global health and development. In the United States, the Foundation concentrates on expanding educational opportunities and access to information technology.

There are two simple values that lie at the core of the Foundation's work, namely, 1) all lives-no matter where they are being led-have equal value and 2) to whom much has been given, much is expected. Gates' long time bridge partner and fellow billionaire, Warren Buffett, was so impressed by Bill and Melinda's organized, hands on approach to philanthropy that he recently decided to donate the bulk of his $44 billion fortune to the Foundation.

Philanthropists New and Old

How has the philanthropy changed in the new millennium? For starters, the amount of money given away is staggering. Andrew Carnegie, John D. Rockerfeller Senior and Junior gave huge sums of money away in their day (approximately $20 billion in current dollars over a span of about 70 years), but this is still less than half of what Buffett has committed to donate.

Philanthropy today is also welcoming newer, younger faces. The aging wealthy Baby Boomers who are considering their legacy are joined by Generation X-ers who have either acquired wealth at a young age or who are inheriting family wealth. Both generations are looking to put their wealth towards projects aligned with their values. There are even websites available to assist young philanthropists in their giving (such as www.resourcegeneration.org, www.philanthropysociety.org, and www.2164.net).

All those Generation X-ers who are saying no to inheriting a trust and yes to creating a foundation are now in need of assistance and big banks are beginning to see the opportunities. Researchers at Boston College estimate that the total intergenerational transfer of wealth could be $41 trillion through to 2052 and there will be a huge demand for banks to organize this transfer and eventual dissemination of wealth. In the future, the stingy image of banks will be softened as they proceed to play a key role in giving money instead of taking money.

Once they set up their foundations, today's philanthropists are no longer content to give some money away and then sit back and give a speech or cut a ribbon now and then. Bill and Melinda Gates are prime examples of how today's givers are far more interested in getting involved with both local and global problems. As well as funding great strategies, they may also contribute their own excellent strategic ideas. Further involvement is characterrized by their efforts to set specific targets and to access any potential impact. This involves becoming highly engaged with partners, and sharing results with other philanthropists.

The Master Motivator

Philanthropy in the new millennium has blurred the lines between not-for-profits, politics and businesses. Bill Gates and Warren Buffett may have the money but there is no denying that former president Bill Clinton is the master motivator. The Clinton Foundation (http://www.clintonfoundation.org/index.htm) is not a foundation in the traditional sense because it has no money of its own...but what it does have is Bill Clinton.

Today, Clinton's influence with global decision-makers is as powerful or perhaps more powerful than during his presidential years. His Foundation uses this influence to take a practical, get-it-done-now approach to philanthropy. Clinton's interests (including HID/AIDS, urban empowerment, global warming and childhood obesity) are the driving force of his Foundation. Once an area is targeted where the Foundation can make a positive impact, the next step is to look to partner up with other people and organizations which have the same goals. After a plan is finalized, the Foundation quickly goes into "Philanthropic SWAT" Mode" by lining up donors, scheduling press conferences and enlisting the help of governments and non-governmental offices (NGOs). As the foundation's CEO Bruce Lindsey (a friend of Clinton's since Arkansas) so aptly put it, "If a decision needs to be made, we make it. If we can help, we help now, not tomorrow."

How Can Business Benefit?

So what is the payoff for businesses if they choose to partake in philanthropy? Sure, it may just be the right thing to do, but what about taking care of the bottom line? Wharton finance professor Vinay B. Nair looked at whether being charitable helps a company's financial picture. It seems that the answer was yes...and no.

Nair's findings revealed an emerging theme of corporate social responsibility (CSR) from a vast majority of businesses. The results of a recent survey of 135 executives and 65 investors (conducted by the Economist) revealed that 85% of respondents found the CSR of a company to be a "central" or "important" consideration in investment decisions (almost double the 44% from a similar survey five years before). However, Nair goes on in his report to stipulate that the true benefits of corporate philanthropy occur with large corporations that are in advertising intense industries whereby products are less distinguishable from one another (e.g. banks, oil, and pharmaceuticals). People are naturally skeptical of these companies because of high-profile scandals such as Enron and others. As a result, the trust factor plays a much more important role in consumer decisions with large corporations. In order to establish a trusting, long-lasting relationship with its customers, big business must consistently participate in corporate philanthropy.

Helping Right Here and Right Now

While Nair's findings centered more on big business, there are many opportunities for smaller businesses to benefit from philanthropy by availing of Employee-Supported Volunteering (ESV). ESV occurs at the local level on the frontlines of philanthropy. Volunteer Canada defines Employee-Supported Volunteering as; "a continuum of employer support for employee volunteer activities". The ways in which employees might volunteer are limited only by their imagination. The most common forms of employer support for employee volunteering are the use of workplace facilities, time off from work, and a change in work hours to accommodate volunteering.

Studies have shown that ESV benefits everyone involved. Firstly, it benefits the community in obvious ways. The employee volunteers also benefit from ESV by improving specific skills, (e.g. leadership or communication skills) and boosting morale and motivation. This in turn develops a stronger company loyalty which produces a higher rate of productivity, improved retention and enhanced consumer relations. The community also views the company as more socially responsible and this inevitably leads to higher consumer loyalty and greater investor confidence.

Employee-Supported Volunteering is indeed becoming a global trend. Unfortunately, Canada is lagging behind other countries (including the US, United Kingdom, and many other European countries) in their participation in ESV. It is vital that we all learn from philanthropists such as Gates and Clinton and do our part to make this world a better place to live.

Places to go, Things to do

Here is a list of informative Canadian websites about philanthropy.

Canadian Business for Social Responsibility
www.cbsr.bc.ca - (from the website) "Founded in 1995, CBSR is a business-led, non-profit CSR consultancy and peer-to-peer learning organization that provides its members with candid counsel and customized advisory services as they formulate powerful business decisions that improve performance and contribute to a better world.
Canadian Council for International Cooperation
www.ccic.ca/e/home/index.shtml - (from the website) "The Council is a coalition of Canadian voluntary sector organizations working globally to achieve sustainable human development. The Canadian Council for International Co-operation seeks to end global poverty, and to promote social justice and human dignity for all.
Charity Village
www.charityvillage.com/CV/main.asp - (from the website) "Canada's supersite for the nonprofit sector --- 3,000 pages of news, jobs, information and resources for executives, staffers, donors, and volunteers. If philanthropy and volunteerism are part of your world, this is your place."
Values Added
www.valuesadded.ca/default_e.aspx - (from the website) "The Values Added Web site helps Canadians learn more about the diversity, reach and impact of charities and nonprofits in Canada. It provides a quick overview of the sector, statistics and descriptions, and key links to leading organizations and further information."
Philanthropic Foundations Canada
www.pfc.ca/cms_en/ - (from the website) "Philanthropic Foundations Canada is a national membership organization for Canada's independent, grantmaking foundations. PFC is a registered charity. Our mission is to promote the growth and development of effective and responsible foundations and to foster a social and regulatory environment that encourages philanthropic contribution."
Volunteer Canada
www.volunteer.ca/volcan/eng/volincan/index.php - (from the website) "Welcome to volunteer.ca - Canada's site for information on volunteering. The Canadian voluntary and nonprofit sector is made up of more than 161,000 organizations, almost 12 million volunteers and 2 million paid staff. In Volunteerism in Canada find out the facts and trends, read the latest research, search the directory of organizations, find answers to your questions and more."
Habitat for Humanity Canada
www.habitat.ca/ - (from the website) "Habitat for Humanity Canada is a national, non-profit, faith-based organization working for a world where everyone has a safe and decent place to live. Our mission is to mobilize volunteers and community partners in building affordable housing and promoting homeownership as a means to breaking the cycle of poverty."
Youth in Philanthropy Canada
www.yipcanada.org/global_history_e.cfm - (fromthe website) - "Young people who care about their communities are increasingly getting involved in philanthropy. Anybody can be a philanthropist, why not us? By forming youth advisory committees (YACs) within our local community foundations, we come together to raise money, build endowment funds and make grants to local youth projects. We are in our teens and twenties, we have a lot of ideas and energy to bring to the table, and we want to make a difference - today and well into the future."

Help is Just a Click Away

Here are some websites to encourage "philanthropic clicking".

Charity Café
www.charitycafe.com - (from the website) "Charity Cafe launched in October 2000, as the world's first 'search & donate free' site. Every day we all use search engines to find the information we want online. Charity Cafe now allows web users to search the internet and make a donation to charity every time they do."
Click for the Cause
click4thecause.live.com - (from the website) "Give to ninemillion.org with every search. Each time you search here, Microsoft will contribute to ninemillion.org, a UN agency-led campaign providing education and sports programs for the nine million refugee youth around the world."
Good Search
www.goodsearch.com (from the website) - "GoodSearch is a search engine which donates 50-percent of its revenue to the charities and schools designated by its users. It's a simple and compelling concept. You use GoodSearch exactly as you would any other search engine. Because it's powered by Yahoo!, you get proven search results. The money GoodSearch donates to your cause comes from its advertisers - the users and the organizations do not spend a dime!"

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