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Archive for July, 2014

Charitable Nation has, from time to time, showcased various wealthy individuals who are to be admired for their generosity and systematic approach to philanthropy.  (See, especially, Peter Lewis, David Geffen, Warren Buffett, John D. RockefellerChuck Feeney and Lady Gaga)  It can be both interesting and instructive to learn a bit about what makes these folks tick.

Now, the predictable response from the cynics among us is “Yeah, but did you know what a [nasty person] s/he was?”  I can’t and won’t argue that – building and maintaining a fortune is not easy and those who do so tend to have somewhat aggressive personalities.  And, in truth, the philanthropic impulses of some of the “1%” may be suspect, but I prefer to focus on the potential for good that results therefrom and give credit where credit is due.  The philanthropy of the 1% has made a big difference in this world by being impactful and long-lasting.  We can criticize the timing and/or amount of funding or the seemingly parochial views of some of the donors, but we must accept the fact that marketplace of philanthropic impulses is alive and well and made more vibrant by such generosity.

Several weeks ago, I received an e-mail from a reader directing me to a very interesting website, “The Generous Billionaires Club.” In this one website we can find information about the “Forbes Billionaires List,” “The Giving Pledge,” “Who’s Not Giving An Inheritance,” “Who’s Been Generous” and “Who’s Been Very Generous.”  (Almost makes me want to break out in song: “he’s making a list, checking it twice, gonna find out who’s naughty and nice…”)

Some interesting factoids:

  • According to the Forbes Billionaires List, 16 of the top 25 billionaires in the world are Americans but NONE of the 26 new tech billionaires are American.
  • The silver spoons in the mouths of the progeny of guys like Bill Gates, Warren Buffett, Michael Bloomberg and T. Boone Pickens may be a bit tarnished – in their parents’ estate plans, inheritances are minimized and philanthropy is maximized.  But, it’s not all bad – as Buffett has famously stated, he will give his children “enough money so they would feel they can do anything but not so much that they could do nothing.” In other words, the concept of “no” inheritance is relative.
  • Of the top 10 folks who have given away at least $1B of their net worth over time, 2 of them (James Stower and Herbert Sandler) are no longer billionaires.  Not mentioned in these statistics is Chuck Feeney, the co-founder of Duty Free Shops, who is definitely a former billionaire and whose private foundation, the Atlantic Philanthropies will have funneled $9B into charitable works by the time of it self-liquidation in 2016.

Whether you are a casual observer or an unabashed philanthropy geek, you can obviously have a lot of fun with these facts and stats.  In any case, I hope the information contained therein is instructive and inspirational for us all, regardless of the number of zeros that follow the value of our charitable giving

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I am a proud alumnus of Binghamton University, one of four major university centers in the 64 campus State University of New York (SUNY) system.  Binghamton is a young school, founded in 1946 as Triple Cities College, an extension of Syracuse University.  It became part of the SUNY system in 1950 and grew dramatically during the Rockefeller years, attaining its current status as a doctoral granting university center in 1965.  The 1970’s were tough for the University as New York State faced hard economic times and funding suffered accordingly.  Interestingly, the University never wavered – it continued to burnish its reputation as a very selective, high quality, world-class center of learning.  Over time, the financial hard times eased, but the evolution of Binghamton from a “state school” to a “state supported school” continued.  (What’s the difference, you may ask, between a “state” and a “state supported” school?  Essentially, “state supported” means less and less money each year from State sources.)  Regardless, Binghamton is today both the shining star of the SUNY system and an up-and-coming player in the international major leagues of colleges and universities.  Most important, it is a relative bargain, making high quality higher education available to a diverse population of students from all economic backgrounds.  binghamton-university-bearcats-logo

Sounds like a great success story, doesn’t it?  The problem is, because Binghamton is both young and part of a state system, its culture of philanthropy has not yet fully developed.  This issue is front and center on the agendas of both the boards of the Alumni Association and the Binghamton University Foundation – how to build and permanently sustain a culture of philanthropy within the University and alumni communities.  The question is obviously multi-faceted and complex.  Today, I wanted to spend a little time on one seemingly small but very profound step that the University itself has taken to help build that culture right at the true grass roots of the cause, the campus community and the student body.  The Student Philanthropy Committee was established earlier this year as a joint effort between the University and the student body.  The Committee functions under the auspices of the Binghamton Fund, the University’s annual giving program, and its director, Caitlyn Carlson.  Its mission is simple – to build a culture of philanthropy among students by cultivating awareness and engagement.  I recently caught up with committee co-chairs Andrew Loso, Class of 2015 and Dillon Schade, Class of 2016, to talk about what they were trying to accomplish.  It essentially boils down to the two parts of the Committee’s mission, awareness and engagement.

  • Awareness: According to Andrew and Dillon, the students today are more aware of the need for philanthropic support beyond tuition and fees than the members of my generation ever were. The committee has received little negative pushback from students, which is surprising when one considers that many, if not most of them come from modest financial backgrounds where cash is generally in short supply. The committee has gotten the word out en masse through events such as “Tag Day,” where physical assets made possible by donations were tagged throughout campus; manning a table at Spring Fling, a major, campus-wide social event; and giving a speech at the Senior Brunch. And, of course, there is nothing like the personal touch, where members of the committee use their personal connections to get the word out. The message is clear – “Join together – help ME do it!”
  • Engagement: One very simple yet concrete metric that the Committee had to work with was the Senior Challenge. Many schools have this – they encourage graduating seniors to make a modest donation equal in dollar value to their graduation year, i.e. $20.14. Simple, catchy and cheap, right? Unfortunately in fiscal year 2013 only 74 seniors (2.5%) participated. To Andrew and Dillon, this was simply unacceptable. Their goal for this year was to double participation to 150 students, which was still modest, but a step in the right direction. At 177 participants, the goal has been met and exceeded. Next year, they want to double again to 10%. Long term, they want to get to 30%, which experience at other schools has shown is about the upper limit for such a fundraiser.

Charities and nonprofits spend a lot of time and money to stay front and center in the minds of their current, former, and future donors.  It is not easy.  It is not a given.  Even if you assume that people want to give to certain causes, the fact is they have to know about the need and they have to be given an easy and nonthreatening way to contribute whatever combination of time, treasure and talent they can.  Binghamton University or [insert the name of your alma mater] cannot assume that current students see and appreciate the benefit of the education they are receiving.  They cannot assume as a given that alumni will automatically agree that paying it forward is the right thing to do.  Information, communication, and appreciation go a long way to making it all possible.  The students involved in the Student Philanthropy Committee are learning this first hand and at an early age and, in so doing, are helping the University in a small way now that will hopefully blossom over the years as giving becomes a habit – a habit begun in the undergraduate years of the college experience.

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Since the start of this blog, we have focused on the Philanthropic Continuum, that progression from “casual donor,” the person who gives when asked but without much thought, to the “serious or serial philanthropist,” where truly significant gifts and amounts are involved.  The more serious your philanthropy, the more important it is for you to treat it in the same manner that you would treat a business or investment portfolio.  Certainly, there are few Bill Gates out there whose annual giving might exceed the gross national product of a small country, but there are certainly enough philanthropists and protophilanthropists who have either adopted or should adopt a businesslike approach to their giving.  This is important whether you have a private foundation or donor advised fund or just your personal checkbook and it’s not an unreasonable approach; in fact such an approach is already in most responsible people’s DNA.  Heck, I recently spent a half hour researching the purchase of a meat thermometer and stainless steel meat skewers (its barbeque season…), the grand total of which did not top $20, including shipping, so why wouldn’t I approach my charitable giving in the same way – systematically, methodically, and rationally?

Fact:  Giving to charity is really not “giving” at all, it is “investing.”  If you don’t view it this way, then as a donor you are throwing your money away.  One’s charitable giving should be deeply connected to one’s valCaptureues and world view.  The donor should be engaged with the cause and feel a sense of ongoing connection to it.  If s/he achieves that, then the very act of giving to, no, investing in the cause brings the connection to the next level.  Tossing money down a black hole never yields results, but investing in well-conceived and competently executed solutions can be quite rewarding.

Fact:  Investing without a plan is, at best, inefficient.  Without systematic measurement toward a goal, you will never know if you have achieved anything at all. The most effective financial investors are those who are strategic in their approach to investments.  They first define their goals and then fashion a plan to meet them.  Continual measurement of progress toward the goal is implicit in the plan.  Some investors do this on their own while others hire advisors to help them.  Nonstrategic investors, on the other hand, buy a little of this stock and a little of that annuity and maybe chase some yield at their local savings bank, but in the end, the bulk of their growth can be measured more in terms of their additions to principal rather than by any real market rate of return. The same can be said for charitable giving.  Nonstrategic giving will most likely result in giving smaller amounts to a greater number of charities, many of which may not even make it to your values/world view radar screen.  Developing a philanthropic investment or business plan can help prevent that from happening.

Fact:  The business owner without a plan in place to grow his/her business is taken seriously by no one, least of all investors.  Investors will run screaming from an entrepreneur who says “invest in my idea and we will see what happens.”  Again, why would you treat your philanthropy any differently?  Don’t you want to see results?  Don’t you want to be engaged?  Wouldn’t you rather strategically connect with your cause as a player than participate passively as a bystander?

So the message is clear – make a plan!  Begin with your personal passion and identify charities that are worthy of it.  Determine how much you want to give, no, invest and over what period of time.  Consider the tax ramifications pertinent to your situation (and discussed throughout in www.charitable-nation.com) and adjust accordingly.  Develop personal relationships with the charities you support.  Learn more about the cause and become an unpaid ambassador or advocate, helping to raise awareness and ultimately more money.  Volunteer.  Find ways to use your professional skills and personal connections to help make a difference.  (Time, treasure and talent) Stay on top of the charities you support, and don’t be afraid to offer advice or criticism if and when needed but, of course, be realistic in your expectations –the size and reach of the organization and the relative size of your contributions will likely play a role in how effective you can be in an informal advisory role.  To formalize that role and perhaps increase your influence, consider taking a position on the organization’s advisory board or board of directors.

Unlike financial investing or for-profit business ownership, philanthropic investing will not result in a personal, positive rate of return.  It will, however, produce a discernible social return on investment that will be meaningful to you, but only if you take the time to define and measure it.

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We are going to take a little breather from Charitable Nation today, but will return next week with thoughts about the formation and implementation of the “Philanthropic Business Plan.”  Stay tuned!

In the meantime, let’s reflect a bit on the 4th of July, a thrillingly happy, colorful and somewhat loud event across this great land of ours.  July 4th also happens to be my big sister’s birthday and, naïve child that I was, way back when I thought all of the hoopla existed just to commemorate her birthday!

Let’s take a moment from our barbeque, beach blanket and fireworks celebrations to contemplate the bigger picture and the real reason for our celebration (aside from my sister’s birthday) – at its core, the 4th of July commemorates not only the symbolic birth of our nation but also the more important event that precipitated it all – the signing of the Declaration of Independence, one of the most radical and audacious historical documents of all time.  These days, we take its goals for granted but back then, well, let’s just say that they had not yet reached the status of “conventional wisdom.”  In fact, there was this one little inconvenient inconsistency of slavery versus freedom which, about 85 years later, came close to tearing the nation apart.  It’s hard to believe, but the grand experiment in democracy came close to not making it and it was only at a huge cost in terms of human suffering, death, and economic deprivation that the Union ended up prevailing.  Unfortunately, this struggle is not over yet.  As our history since the Civil War has shown, the parameters of the fight may have shifted but the war for equal human and civil rights continues, with both some stunning victories and distressing setbacks.  Nevertheless, despite our many faults, I believe that the good old USA still represents the world’s best chance for winning that war, and boy, am I glad we survived to fight it!

Happy Birthday, America!  238 years young today!

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