Monthly Archives: January 2013

Generation X and Y equals philanthropic power

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When it comes to philanthropy, Gen X and Gen Y/Millennial donors are keenly interested in personal values, measurable impact, and hands-on engagement, a new report from the Johnson Center for Philanthropy at Grand Valley State University and 21/64, a nonprofit consulting practice specializing in next-gen and multi-generational strategic philanthropy, finds.

Based on a national online survey of and interviews with young philanthropists, the report, Next Gen Donors: Respecting Legacy, Revolutionizing Philanthropy found that a relatively small group of Gen Xers (born between 1964 and 1980) and Gen Y/Millennials (born between 1981 and 2000) will inherit more than $40 trillion over the coming decades. And while they are not necessarily more charitably inclined than their parents or grandparents, the sheer volume of funds, foundations, and other types of giving by high-net-worth families is expanding to unprecedented levels, putting them in a position to wield more philanthropic power than any previous generation in American history.

The report also found that next-gen donors seem to be driven by values rather than “valuables”; that they see philanthropic “strategy” as the major distinguishing factor between themselves and previous generations and intend to change how philanthropic decisions and due diligence are conducted; that they want to develop close, hands-on relationships with the organizations or causes they support; and that, as engaged as they already are, they are still figuring out what kind of donors they want to be.

The report highlights the “practical wisdom” and insights of next-gen donors with respect to their hunger for engagement, new ways of learning, and making a difference sooner rather than later.

[Foundation Center]

Why invest in women?

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Why do so many non-profit ventures focus on girls and women as the primary agents of change?   

  • Firstly, women and girls represent roughly half of the world’s population.
  • Secondly, women are the most marginalized, the most dominated and exploited, and without outside influence often doomed by cultural mores to remain subordinated. Those with no voice are often overlooked, and rarely given voice or power.
  • Girls across the globe do not enjoy basic human rights: freedom from violence, to education, to inherit or own land, to decide when and whether to marry or bear children, or, the right to self-determination.
  • One in three women around the globe will be beaten, raped, or otherwise abused in her lifetime. The daily threat of violence is both a cause and a consequence of a world greatly out of balance.
  • Many argue that the most undervalued and untapped forces on the planet are adolescent girls living in poverty.
  • And girls are the mothers of the next generation, and the quality of these girls’ lives will literally determine the course of their children’s lives and our collective future.

Addressing the complexities of treating disease in developing countries

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Non-pharma and pharmaceutical company employees alike have wondered: “Why don’t we just give away medicines and drugs that can save so many lives in the developing world?

Allan Pamba worked at a clinic in Kenya in the early years after HIV/AIDs was recognized and had become a big problem. He became frustrated that he was seeing patients (from teenager years through the elderly) who did not have antiretroviral drugs to help treat the HIV.

Pamba, now a director in GlaxoSmithKline’s Developing Countries Market Access Unit, relates, “Through the years, in conversations with health policy officials in countries, I learned that they have refused donations when they are not sure it’s going to last. They would say, ‘If you give this to me free today, do I have to buy it from someone else or at a higher price when your company has a bad year’.”

Pamba says problems sometimes can be solved by looking at them from a different angle or by providing information. For example, he referred to an arrangement GSK has with cell phone maker Vodafone: When women give birth at a clinic, they leave behind their phone number so they are sent text messages reminding them to get vaccines for their children.

“There are half a billion handsets in Africa,” Pamba said of the spread of cell phone use. “Some people don’t have enough food, but they have a cell phone.”

International giving by Millennials

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The Credit Suisse/Forbes Insight Report notes that global giving has a generational slant.

For millennials, youth in their 20s and younger, they were born into an era of globalization and the distinction between local and global has increasingly blurred.  This generation of global citizens and digital natives is apt to look at opportunities for giving outside the U.S. as much or even more often than within the U.S.

They are fully aware of the interrelationship between nations and their travels, real and digitally, provide a significant education about issues related to resource scarcity, global health and poverty.

They also want to get the greatest “bang for their buck” and as a result, are more apt to research and seek out ways to be most effective in bringing about social change on a global scale.

[From WealthManagement article by Betsy Brill and Michael Donovan]

Non-cash currency aids community revitalization

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What do palm trees, chestnuts, and kisses have in common? They’re all denominations of bank-issued alternative currencies that are a key community development tool in some of Brazil’s toughest neighborhoods.

Throughout the U.S., there are also community development-oriented “social currencies.” Examples of this alternative form of legal tender include “Ithaca Dollars” in Upstate New York and “Berkshares” in Western Massachusetts, alternative, non-cash currencies facilitating the exchange of local goods and services and are often connected with “buy local” campaigns and barter systems.

A network of community development banks in the United States has been quietly working to reinvest capital in poor communities in Brazil through microfinance, real estate projects and individual asset development. Community banking emerged in Brazil just fifteen years ago with the establishment of the Fortaleza-based Banco Palmas. Today, there are approximately 100 such banks in the country. Through coordinated micro-financing, technical assistance for small businesses, community facility investment and social currency systems, Brazil’s community banks are assisting some of the nation’s most notoriously dangerous and economically impoverished communities.

For example, Banco Verde Vida (Green Life Bank) of Vila Velha accepts wheelbarrows of recyclable rubbish twice a week from neighborhood residents. It pays these vendors with “moeda verde,” an alternative currency that can be spent at local businesses or, for food and cleaning materials, at a bank-owned store. The initiative has led to cleaner neighborhood streets, new small business development and improved incomes for residents.

In the nearby San Benedito neighborhood of Vitoria, a former bricklayer borrowed money twice from his local Banco Bem, first to build and then to enlarge his business. As was once the norm for U.S banks, Banco Bem’s small business lending is often character-based. According to bank manager Leonora Mol, “The neighbors decide who should get the loans. We ask them a very simple question: if this money were yours, would you lend it to this person?” Now, many of the bricklayer’s customers pay for his products with “bems,” an alternative currency also issued by the bank.

The “developed” world has already successfully borrowed key community development concepts, such as microfinance and appropriate technology, from the dynamic “developing” world. Now, with cash an increasingly scarce resource here in the U.S., it makes sense to look beyond our borders to see how cash and non-cash tools are integrated to make the impacts more than the sum of their parts.

Source: BBC News

Growing trend of Asian-American philanthropy

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An opinion held by Ms. Yoon, a former news correspondent for Fox who was born in South Korea and moved to the United States when she was 6: “In some ways for immigrants, the better off you become, the more disconnected you become from your community needs.” The community is now redefining its “idea of success,” Yoon explained. “We grew up with this idea that success is the more distance you can create between yourself and the pack. But it’s really about how much of the pack you can bring along.”

Lulu C. Wang, a money manager and philanthropist in New York, and her husband, Anthony Wang, established themselves in the vanguard of the new wave of Asian-American philanthropy when they donated $25 million to Wellesley College, her alma mater, in 2000.

Dien S. Yuen, a philanthropy consultant focusing on Asian-American giving, predicted that the surge in philanthropic activity among Asians is “only a beginning.”  Ms. Yuen adds, “I think in the next three or four years, there’s going to be huge growth, because philanthropy has become mainstream.”

“A lot of donors, when they first come through the door, don’t even know they can do all these things,” said Ms. Yuen. “They don’t even know they can get a tax deduction for giving a gift overseas.”

[New York Times]

The growth of Asian-American philanthropy

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Members of a new class of affluent Asian-Americans, many of whom have benefited from booms in finance and technology, are making their mark on philanthropy in the United States. They are donating large sums to groups focused on their own diasporas or their homelands.

The growth in philanthropy by Asian-Americans parallels a surge in the Asian population in the United States. From 2000 to 2010, according to the Census Bureau, the number of people who identified themselves as partly or wholly Asian grew by nearly 46 percent, more than four times the growth rate of the overall population, making Asian-Americans the fastest growing racial group in the nation.

Pradeep Kashyap, vice-chairman of the American India Foundation, one of the largest and most successful of the new Asian philanthropies, is an immigrant and former senior executive at Citibank. He described this shift as “the journey of becoming American. … They see their mainstream American peers giving and they say, ‘I’m going to do that.’ ”

Asian cultures have a strong tradition of philanthropy in the broadest sense, though it has usually involved donations to relatives, neighbors, churches and business associations. Many Asian immigrants have not immediately embraced the Western-style practice of giving to large philanthropic institutions, organizers said.

[New York Times]

 

A rise of philanthropy in emerging economies

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There are increases in philanthropy documented in emerging economies outside the U.S. where wealth is rapidly growing.

In India, for example, which is one of the fastest growing economies in the world, the average contribution to charity among high net worth individuals grew to 3 percent of their total income in 2011, up from 2.3 percent in 2010, according to Bain & Co’s India Philanthropy Report 2012 and more than half of those surveyed expect to boost their donations again in 2012.

The recently released Report by Credit Suisse and Forbes Insight entitled Next Generation Philanthropy noted a burgeoning culture of giving in both Latin America—where average annual wealth growth is expected to average 12.1 percent for the next five years—and in Asia, where the population of ultra-high net worth individuals is expected to exceed the U.S. by 2025.

[Excerpted from WealthManagement article, by Betsy Brill and Michael Donovan]

International giving on the rise

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One of the most notable trends in philanthropy, according to the 2012 Giving USA Study of charitable giving, is that international giving has steadily grown despite a tumultuous economy.  For the past two years, 2009-2011, international giving has experienced a 15.2 percent growth, the largest increase across all of the subsectors the Study tracks and reports.

The growth in international giving can be attributed to many things: increasing digital access to global information, a growing number of international giving networks, and a heightened awareness of the interrelationships of global communities.

The Hudson Institute’s 2012 Index of Global  Philanthropy and Remittances shows that despite the recession, U.S. giving to developing countries actually increased to $37.5 billion in 2009, outpacing official U.S. government aid by almost $9 million.

[Excerpted from WealthManagement article, by Betsy Brill and Michael Donovan]

Making an impact even with a little

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You don’t need a fortune to be a philanthropist. For example, you can:

Start a charitable fund. A number of community foundations let you funnel as little as $1,000 a year into donor-advised funds, and let you choose the recipient. You contribute cash, stocks or other property — and take a tax deduction for your contribution each year — until you reach a certain threshold, typically $5,000 or $10,000.

Give to a classroom. What better way to spend your charitable dollars than to help teachers help kids? At DonorsChoose.org, you get your pick of teacher-proposed projects. DonorsChoose makes the purchase and sends it to the teacher.

Volunteer on vacation. Use your next vacation to give something back.

Or you can be an angel for as little as $100: Upstart allows you to give money to entrepreneurial college graduates. You can invest in $100 increments in one “upstart” or as many as you choose. You’ll receive a modest portion of the company’s income — up to an annual rate of return of 14.99 percent — for 10 years.  You can also contribute to projects through Kickstarter, which focuses more on creative individuals who want to raise money to produce films, music and art.