A great article from Jessica Bearman and Sarah Deming, Bearman Consulting
For many funders, the idea that philanthropy is changing holds no surprise. Family philanthropy, corporate philanthropy, and community philanthropy already reflect changing demographics as younger donors join family boards; women and people of color lead philanthropic organizations; and donors of all types direct their personal wealth toward public good. To paraphrase cartoonist Walt Kelly’s Pogo: We have met the new philanthropist, and she is us.
At the same time, emerging voices in philanthropy still struggle to be heard. Existing grantmakers and established donors can seize the opportunity to amplify their impact by learning from these new giving styles, motivations, and passions.
All types of people from all walks of life have given generously throughout time—but, for many, an affiliation with mainstream philanthropy is a new development. Who are today’s nontraditional philanthropists, and what makes them different?
Increasingly, women, younger donors, and diverse racial and ethnic groups are claiming their spots at the table as significant givers, drawing on longstanding traditions and forging new ones. At the same time, philanthropy is no longer just for the affluent; people at all levels of wealth are pooling their resources to achieve more impact with their giving.
Says Kelly Brown, director of D5, a 5-year effort to bring new voices to the philanthropic table, “An important part of philanthropy’s efforts to advance diversity, equity, and inclusion is to recognize the diversity within philanthropy itself. From peers and colleagues who are major donors to our shared causes to small giving circles in communities around the country, learning from and embracing the many ways all communities give can only strengthen our shared commitment to advancing the common good.”
Women’s Influence Is Growing
Women have always been influential philanthropists, both on their own and as part of a couple or family. Because women commonly outlive their husbands—women over 65 are three times more likely to be widowed than men of the same age, according to the U.S. Census Bureau—they often are left with ultimate control of family money. As women achieve greater professional and earning parity with men, their power as individual philanthropists also increases.
“Women behave differently from men in their philanthropic giving,” says Debra Mensch, director of the Women’s Philanthropy Institute. “We cannot assume that what works for men will be applicable to women.”
- Women focus on particular issues. Studies find that gifts from male/female couples are more likely to support education, health, and religious organizations when the wife is responsible for the decision.
- Women give more—nearly twice as much—when they give independently from their husbands. They are more likely to give larger amounts to fewer organizations.
- Women volunteer in greater numbers than men, and they give to organizations with which they have engaged directly.
- Women give relationally. Women are often drawn to giving structures such as giving circles or other forms of collective giving that allow them to give collaboratively.
Next Generation Donors Have Much to Give
Over the next few decades, The Wall Street Journal estimates that $30 trillion will pass into millennial hands, making these donors (born between 1980 and 1996) a mighty philanthropic force. Although they may not be wealthy now, they are establishing giving habits that will shape the future of U.S. giving.
- Giving comes naturally. In 2013, according to The 2014 Millennial Impact Report, 83% of millennials gave a financial gift to a philanthropic cause. Millennials are steeped in the Internet and transact much of their business online, including giving.
- Millennials are eager to see their contributions achieve tangible results. They favor socially conscious, globally minded charities and are concerned with civil rights, responsible business practices, and environmental protection.
- Millennials have expanded the definition of what it means to be engaged with an organization or a cause. In addition to time, talent, and treasure, they also contribute voice—advocating and educating about causes—and network—capitalizing on personal and professional connections to create change. Like older donors, millennials are more likely to give—and give more—when they are connected to an organization.
- Millennials use varied strategies, assets, information, and tools to achieve impact. According to 21/64, an initiative focused on next generation donors, “If making an impact requires taking risks on start-up organizations, boundary-blurring hybrids, or nontraditional vehicles, they are prepared to take those risks. If it requires impact investing, microloans, or collaborative giving circles alongside institutional grantmaking, they are ready for that—even excited.”
Communities of Color Give Back—and Forward
Communities of color have intensified their giving in recent years. According to Cultures of Giving, a report by the W.K. Kellogg Foundation, 63% of Latino households now make charitable donations. Nearly two-thirds of African American households donate to organizations and causes, to the tune of $11 billion each year, giving away a 25% greater share of their income annually than white donors. Asian American households also give away a larger percentage of their income per year than whites.
- African Americans give more of their discretionary income to charity than any other racial or ethnic group. Women are at the heart of that giving, both in money and time.
- A new wave of affluent Asian Americans has been exploring institutional philanthropy, a concept that runs counter to the traditional Asian practice of giving directly to family members or local groups or businesses. “Not one Asian language has a word for ‘philanthropy’ in the way that it’s practiced in the United States,” says Peggy Saika, executive director of Asian Americans/Pacific Islanders in Philanthropy. “We’re trying to build not just the practice of philanthropy in different communities but also the consciousness of it.”
- Many Latino donors contribute to the communities they have left, greatly enhancing community resources in their hometowns. For example, organized “hometown associations” send more than $9.3 billion each year to support schools, health facilities, and community infrastructure in Mexico.
- Although Native Americans have the highest poverty rates in the United States (25.7%), they have great potential for philanthropic giving and a long tradition of it, which is only now being recognized. Over the past 20 years, many Native American communities have been forming partnerships with other Native communities and non-Native organizations to achieve self-sufficiency and leverage human and financial capital.
Everyday Givers Have Extraordinary Impact
Most U.S. charitable giving comes from individuals—nearly 72% of all U.S. giving, or more than $241 billion in 2013. Many are everyday givers who give in modest sums by responding to requests, volunteering, writing checks, or clicking “Donate Now.” In 2013 alone, Kickstarter donors pledged $480 million, or three times the budget of the National Endowment for the Arts.
Meanwhile, giving circles and other shared giving vehicles are also growing exponentially, engaging donors in learning and giving journeys. Giving circles were originally seen as appealing particularly to women because they are social and collaborative. They are now recognized as a powerful form of philanthropy for any community of donors, and have grown in popularity within communities of color and other identity-based groups.
- As you look for collaborators in your funding efforts, how might you appeal to diverse philanthropists?
- As you consider adding new members to your board and leadership, how can you bring new voices and perspectives to your work?
- How can you take full advantage of the perspectives and passions of individuals already affiliated with your giving?
- How might you mentor—and learn from—younger philanthropists?
- Are there ways to seed the growth of new philanthropy, philanthropy education, or community support for emerging donors in your region?
Keep in mind: The brief snapshots here touch only the tip of the iceberg in understanding and appreciating the rich and varied motivations, strategies, passions, and concerns of these diverse donors.