Are We In a New
Golden Age of Giving?
An Outpouring of Charitable Giving Is
Redefining Generosity
Paul Edwards
- In January 2004, Joan Kroc, the widow
of hamburger king Ray Kroc, bequeathed $1.5 billon to The Salvation Army to
build and operate more than two dozen community centers throughout the
country.
- In June 2006, Warren Buffett, the
world's second wealthiest man, announced he would give away 85 percent of his
wealth to five foundations, a cumulative gift estimated to be worth more than
$43 billion. That same year, 21 U.S. donors made charitable gifts of $100
million or more.
- China-born Li Ka Shing, Asia's
wealthiest businessman, announces in March 2007 he will contribute $100 million
to the Lee Kuan Yew School of Public Policy in the National University of
Singapore.
- All U.S. donors contributed slightly
more than $295 billion last year, up from $283 billion in 2005 (To comprehend
that amount of money, imagine receiving a check for $808 million every day
for an entire year.).
- The Evangelical Council for Financial
Accountability reported that donations to its 1,200 members increased to $8.6
billion, a rise of nearly 23 percent. Out of the one million-plus registered
tax-exempt charities, more than 90 Christian organizations, which raised a
minimum of $37 million in private support, made the Chronicle of Philanthropy's
annual list of 400 largest U.S. nonprofits.
Something
extraordinary—call it an unprecedented, immediate and yet seismic phenomenon—is
happening before our eyes. Its cachet is the color of money, yet all the
dollars we're talking about may be just a prelude to a new day of unimagined
possibility for Christian ministries.
Dawn has
broken on a new golden age of giving.
Whether it's
a legion of volunteers rebuilding houses for victims of Hurricane Katrina, or
the Tata family of India, which donates between 8 to 14 percent of the annual
net profits from its holding company, Tata Sons Ltd., to a variety of causes,
including science, medicine, social services, rural welfare, performing arts,
education and the needs of children, an outpouring of charitable giving is
redefining generosity.
What kind of
money are we talking about? Where is it coming from? And what might such
emerging generosity mean to grateful recipients and equally deserving Christian
ministries, large and small, hoping to match their passion and purpose with
donors?
A rich history lesson
You have to
go back a century to appreciate what distinguishes today's second golden age of
giving from the first.
From 1890 to
1920, robber barons and steel magnates embodied the fortune of the industrial
revolution. The Kellogg family of Battle Creek, Michigan, made its money
through cereal, and built a legacy of hospitals. Andrew Carnegie forged his
massive wealth out of steel, and then populated American cities and towns with
thousands of free public libraries. John D. Rockefeller founded Standard Oil to
feed America's growing need for gasoline and gave his money away for education
and art—as did Henry Ford, Leland Stanford, and the Vanderbilts. They spurred
each other to do what government shouldn't do and companies can't do.
A century
later, the flower has opened again. Giving is flourishing. Why now? There is no
single explanation. Picture the new giving not as a single geyser (a gusher of
money from a single source), but rather as a bountiful river delta, where
abundant sources and ministry opportunities have come together. Three sizeable
"tributaries" have contributed to this current reality.
New wealth
Merrill
Lynch's annual survey of millionaires last year reported there were 8.5 million
millionaires worldwide, with almost 3 million of them living in North America
[i]. The IRS reported two years ago that 11,000 U.S. individuals have annual
incomes of $10 million or greater [ii].
This
extraordinary rise in wealth becomes especially meaningful because of the
number of individuals who are deciding to give it away. Wealthy individuals,
from Ted Turner and Sir Richard Branson to Oprah and the kids of Sam Walton,
have decided that a sign of a well-lived life is to give away a large portion
of your wealth. It used to be that a $5 million gift would put you in list of
the nation's top 100 donors. Today, you have to multiply your $5 million times
five to make the annual list.
And lest you
think it's the super-rich who are writing the mega checks, think again:
approximately 65 percent of households with incomes less than $100,000 give to
charity, according to the annual report by the Giving USA Foundation at Indiana
University's Center on Philanthropy.
So where do
Christian ministries and faith-based organizations figure in all of this? An
Associated Press story in June reported that of the nearly $300 billion
Americans donated to charitable causes last year, "nearly a third of the
money—$96.82 billion—goes to religious organizations. The second-largest slice,
$40.98 billion or 13.9 percent, goes to education, including gifts to colleges,
universities and libraries." These times are spurring many organizations
to take steps of faith and plan large fundraising campaigns. Last year, both
Liberty University and Heifer International unveiled multi-year campaigns to
raise $1 billion.
New scale of visible giving
Large-scale
giving in the post-World War II period up until the 1990s was driven by the
hands of mostly dead donors. The world of giving was associated with huge,
impersonal, and largely invisible private foundations spawned by their early
19th and early 20th century benefactors. Yet, with the trailing edge of the
post-World War II generation and the Boomers have come entrepreneurs accustomed
to participating in the implementation of "great new ideas," which
increasingly means donor involvement in giving.
New hands-on
mega donors like George Soros, Ted Turner and Bill Gates are reshaping the
public image and expanding the realm of innovative possibilities for giving.
They've also created a model for other newly engaged donors, who are
increasingly interested in preserving their place in the process by seeking
ways to give in a thoughtful, directed fashion.
The sheer
amount of charitable dollars is one thing. The increased percentage of giving
among the wealthy is equally eye-opening. Warren Buffett and Bill Gates each
have personal wealth greater than the individual annual GDPs of 120 countries!
The degree to which they're giving away their respective fortunes runs counter
to an age-old myth: We used to believe that as the richest millionaires (and
billionaires) became richer, their percentage of giving would decline.
Not true.
Fresh research conducted by the IRS and sponsored by San Francisco-based New
Tithing Group suggests America's top wage earners give away on average 15 to 23
percent of their annual incomes. That compares with only 1.5 percent for
Americans earning under $100,000.
New global nature of giving
This brings
us to a third major reason behind today's generosity. Whether it was John D.
Rockefeller's oil, J.P. Morgan's financial empire, Henry Ford's Model Ts, or
Cornelius Vanderbilt's trains, the new money of a century ago came in quickly
on the backs of new technology.
With his
software success and succeeding charitable foundation, Bill Gates has echoed
the past, with one glaring exception. The first golden age families chose to
invest in storied institutions like education, the arts and sciences. Today's
new donors are deciding their giving doesn't necessarily need to support the
safety net of institutions, but rather be the vanguard for creating new
initiatives.
Witness:
- The Gates Foundation has launched its
Grand Challenge to eradicate 20 preventable childhood diseases in the poorest
nations of the world in the next 20 years. Grand total: $100 billion.
- In 2005, billionaire industrialist Li
Ka Shing announced a HK $1 billion (US $128 million) donation to the Faculty of
Medicine, University of Hong Kong. Most of us haven't heard of Paul
Tudor Jones, the notable hedge fund manager, and his foundation literally named
Robin Hood—a band of hedge fund managers, executives and celebrities—whose goal
is to fight poverty in New York City by taking lots of money from the rich,
applying precise financial metrics toward the donations, and making giving
"cool." Robin Hood has distributed over $525 million since inception
through a myriad of programs focused on survival, early childhood and youth,
education, jobs and economic security.
- Former President Bill Clinton hosts
the annual Clinton Global Initiative (CGI) in New York, where some 1,000
influential leaders attend to bring together strategic ideas and funding. In
two years, the CGI initiative raised over $2.5 billion in pledges for
everything from preservation of the Tierra del Fuego ecosystem, to the Mexican
state of Tabasco, promising $9 million to distribute to 15,000 poor women
conducting small business.
In short,
the new global nature of giving comes at a time when faith-based endeavors can
act in faith to achieve things they've never done.
What it means for you
What can the
new golden age of giving mean for faith-based organizations, churches and
parachurch ministries? What can a Christian organization, with an already
overworked development staff of one, do to align its needs with the most likely
funding sources, be they major donors, foundations, or corporations? Given the
unprecedented opportunities to seek and secure financial support, perhaps the
better question is, what can ministries, particularly smaller to medium groups,
afford not to do?
A few
prudent suggestions:
- Get in
the flow of knowledge. The new golden age of giving is rich with
information about individual donors, funding strategies, giving trends,
conferences, case studies, research and biblical perspectives. The more you
know, the more you can grow. Simply put, knowledgeable leaders and their teams
are constantly moving one step closer to understanding the heart of an
individual donor (or the requirements of a foundation) that can help their
cause. Do you have the discipline and desire to do the same?
Friendly
reminder: For obedient Christians, gaining knowledge is not optional.
Solomon wrote, "Let the wise listen and add to their learning, and let the
discerning get guidance" (Proverbs 1:5)—and he didn't even have the luxury
of the Internet. You do. A wealth of knowledge about giving is waiting at
essential web sites like:
Generous
Giving
www.generousgiving.com
The Center
for Philanthropy at Indiana University
www.philanthropy.iupui.edu/
The
Chronicle of Philanthropy
www.philanthropy.com
The
Nonprofit Times
http://www.nptimes.com/
Philanthropy
Magazine
http://www.philanthropymagazine.com/
First Fruit
Foundation
http://www.firstfruit.org/news-resources/guiding_trends
The Charity
Channel
http://charitychannel.com/
- Don't
be ignorant. What you don't know will hurt you. Did you know that 45 states
require that you be registered to raise funds? Reality check: The new golden
age of giving has arrived with new layers of accountability, as most states'
Attorneys General increasingly seek to protect the public from misguided
"Christian" fundraisers, who are anything but. Also, the Federal
Government is circulating a new Form 990 for annual accountability and has proposed
new regulations on reporting unrelated business income, even for small
organizations.
- Dare to
ask the hard questions. It never hurts to ask a few hard questions—and then
go after the answers. In my experience, each of these questions deserves a
careful answer and an intentional response: Am I growing in my knowledge and
expertise? Do I have a working understanding of the key distinctives to
successful grant writing, direct response, cause-related marketing or major
gifts? Are you actively making time to understand your donors—to better know
how their visions and dreams match those of your ministry?
Do you have
on your schedule a conference, a book, an article, audio tape or DVD that can
increase your knowledge and effectiveness in fundraising or perhaps a new endeavor
that needs that extra little something to get launched?
Do you have
the courage to admit where you're deficient in your development efforts, so you
can identify the people whose experience and expertise can transform your
fundraising efforts?
The giving heart of God
A new day of
Christian giving has arrived for ministries which are rediscovering the
generous heart of God. In a recent address at the University of Pennsylvania, I
referenced one of history's most successful capital campaigns, a case study
spelled out in the Bible.
It took one
night to raise the money to build Solomon's Temple. The Old Testament book of
Chronicles records how King David hosted the first recorded major donor dinner,
an evening in the palace with the gathered heads of families and tribes. The
after-dinner speech cast the compelling vision for a gold-clad temple with all
the trimmings, and David ended his pitch that night with the announcement of
his own lead gift and a challenge match. The estimate of money raised in that night
of fundraising—$400 million [iii].
The heart of
giving beats at the heart of God's being. God's nature, as Trinity, lives and
breathes 24/7, 365. He gives to Himself—Father to Son, Son to Spirit, Spirit to
Father, the essence of continually giving and receiving and giving back.
As donors
mirror this spiritual generosity, as they continue to help make it possible for
grateful ministries to advance the Kingdom, all of us can see that God's
life-transforming work in individuals, people groups and, dare we dream,
nations—the ultimate outcomes of today's new giving—are worth far more than
gold.
Paul Edwards
is president of Paul Edwards Consulting. He is regarded as one of the nation's
most effective and motivating trainers of staff and boards in the area of
fundraising. You may contact him at ahithophel_pve@msn.com.
[i] Merrill
Lynch/Capgemini Survey, March 2006
[ii] New
Tithing Group Study, as reported in the New York Times 1/6/2006
[iii] 1 Chronicles 28:1-29:10 and the
Expositors Commentary, Vol. 4, p. 441
