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10,000 families in the US, Katherine Fulton reported, have assets of $100 million or more. That’s up from 7,000 just a couple years ago. Most of that money is “on the sidelines.” The poor and the middle class are far more generous in their philanthropy, proportionally, than the very wealthy.
Philanthropy across the board is in the midst of intense, potentially revolutionary, transition, she said. There’s new money, new leaders, new rules, new technology, and new needs. Where great wealth used to come mainly from inheritance and oil, now it comes from success in high technology and finance— and ideas and expectations from those business experiences inform (and sometimes over-simplify) the new philanthropy. Some of the great older institutions like the Rockefeller Foundation are radically reorganizing around new ideas and opportunities. But still the greatest amount comes from individuals, many of whom are now “giving while living” instead of handing over the task to heirs.
One major new instrument for philanthropy are the community
foundations, “the mutual funds of philanthropy, where donors can outsource their strategy.” There are 1,000 such organizations in the world, 700 of them in the US, led by innovators such as Acumen Fund, Social Venture Partners, New Profit Inc., and Women’s Funding Network.
Online giving is growing rapidly, including the development of
philanthropic marketplaces for direct, selective, fine-grain giving. Give India, for example, is a national marketspace of charity exchange. “By 2020,” Katherine predicted, “we will see a headline, OPEN SOURCE PHILANTHROPIC PORTAL TOPS $1 BILLION IN GIFTS.”
Katherine drew a matrix to classify kinds of philanthropy, with
Short-term & Responsive on the left, Long-term & Systemic on the right; Personal & Local on the bottom, Global on the top. An important trend is from the lower left to upper right, from local and short-term toward global and systemic, exemplified by Bill Gates’s move from bringing computers to American schools to bringing health to Africa.
“Philanthropy is how we make the long now personal,” she said. The trait most often missing in philanthropy, including the new philanthropy, is stamina, patience. “Instead of rewarding success with continued funding, the givers get bored and look for something new. Really effective giving requires deep contextual understanding and tolerance for ambiguity. My advice to new donors is, ‘Pick at least one difficult and complex issue and stick with it, and join with others to work on it.’”
The greatest needs require philanthropic stamina but will also reward it. She quoted Danny Hillis: “There are problems that are impossible if you think about them in two-year terms— which everyone does– but they’re easy if you think if fifty-year terms.”
Richard Rockefeller and Larry Brilliant joined Katherine on the
stage, and discussion got going that wound up lasting to 1am at dinner with the sponsors of the Seminar series. One subject was the isolation that often comes with great personal wealth. Katherine emphasized that donors have to visit up close with whatever they’re giving toward. Dr. Rockefeller supported that, describing how different his view was of Doctors Without Borders once he had worked with the physicians in the field in Peru and Nigeria. He said that
direct experience helps free you from lots of theories that are just wrong, and from philanthropy that is a projection of your own neuroses.
Questions from the audience revealed a continuing problem with the whole social sector, which is the lack of clear mechanisms of self-correction and accountability. Government has checks and balances. Business has the bottom line. But “it’s hard to speak truth to philanthropy,” Katherine said. Richard said he looked closely at a $20 million effort by the Robert Wood Johnson to evaluate its programs and was unimpressed by the result. Larry Brilliant added, “And the new philanthropy is even less accountable
than the old.”
Over dinner the subject came back to the 10,000 families with over $100 million dollars, most of it inactive. One problem is that giving really large grants is harder than small grants. Only
universities are well geared to attract and receive the multi-million dollar gifts that result in named buildings and additions to already bloated endowments. New institutions and mechanisms are needed for directing large grants in new directions.
And something generational is going on, Katherine mused. The generation of Andrew Carnegie and Richard’s great grandfather John D. Rockefeller had a strong religious tradition that inspired them to public generosity and inventiveness. Those who came of age in the 1960s and early ’70s had their experience with political activism as a driver for later philanthropy. “But I notice that many who became adults during and after Ronald Reagan seem to have no framework at all for giving.”-- by Stewart Brand