- Posted June 13, 2014 by
Philanthropy Reconsidered: The Paradigm Shift
In my conversations, electronic communication and in reading his book, I have become very interested in his thought-leadership, as he has well articulated what I believe to be happening based on my own experience and years in the field. And, the shift is so monumental that I think it is very important for me to add my voice to his on the matter. Therefore, I will be writing a series of posts on the need to reconsider philanthropy, relying on George’s work and my own study.
Based on George’s academic research, “The word and concept of “philanthropy” originated on line 11 of Aeschylus’ Prometheus Bound…”, which he describes in his book and in a Wikipedia article on philanthropy. The very essence of philanthropy means, “private institutions for public good, focusing on quality of life”.
I have spent 20 years in the field and those who have long-term, historical views of the industry believe there are many disruptive changes happening in the social purpose field. Technology has played an incredible force in the industry as communication with donors and constituents has become a 24/7/365 endeavor. Technology has also brought down international borders and people in the United States or a country in Europe can easily support and keep in touch with a charity in Bangladesh. With those abilities, governments are contemplating how it all impacts their laws and taxation.
As I have written in the past, Millennials are also very different from the generation that preceded them, and like the Baby Boomers, they are making incredible impact in the world and society as a whole. Being the first generation to be brought up fully with technology, they are the generation that is shepherding the leading edge of the information age by inventing it or using and embracing it in ways that previous generations simply do not. And, by 2025, just eleven years from now, they will be 75% of the total workforce.
Mark Zuckerberg and Facebook, Lena Dunham and entertainment, David Karp and Tumblr, Kevin Systrom and Instagram, Alexandra Wang and the fashion world at Balenciaga, Sandra Fluke and Mala Yousafzai and their respective roles in activism, Pete Cashmore and Mashable, and the list goes on…these are all globally influential Millennials, but if you personally or work with Millennials, you know they are creative, innovative, distrustful of the status quo and caring of the broader social good. Work and charity are not mutually exclusive concepts. Hence, the leading business schools in the country, such as Yale, Stanford, Wharton and Columbia all have social enterprise programs.
And, with all of this, leading companies have become aware of these trends and are working to fully align their business models with solid social responsibility.
Thus, there is a significant paradigm shift occurring, and with that, George and I have been conversing about focusing on not the estimated 1.2 to 1.5 million non-profit organizations in the United States, which are designated as non-profits purely as an IRS tax designation. But rather, we would like to start to have a broader public discussion – on a global scale – about philanthropic and charitable organizations – based on the definitions more deeply articulated in his book, which George estimates to be 10% of the approximately 1.5 million non-profits in the United States.
In his own words to me, “We estimate that there are only about 200-300,000 active charities in the U.S. (based on the Massachusetts ratio of 1:10)—not 1-2 million as imagined from confusing “philanthropy” with “nonprofits.” Independent data supports us: The largest charities dataset is Fidelity’s—180,000 charities, funded since 1991 by their 100,000 donors. The top four donor-advised funds’ charities data, from 55 corporate years combined, raise the total to only 215,000 (with duplications), supported by 150,000 donors. These donors nationwide are not choosing from 1-2 million charities. The national donor-advised funds firms as a group are growing at six times the rate of all charities—av. 26% annually. Fidelity is the second largest charity in the U.S., rapidly overtaking United Way as No. 1….”
I look forward to continuing to “peel the onion” on this very important topic.
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Posted: June 13, 2014
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