Article 3 in a Series of 6
In the January 2007 issue, Steve Bannister provided an overview of five key trends that will affect people and businesses in the year ahead. These trends were: Global Greening, The Flow of Philanthropy, Connecting the World, Information vs. Knowledge, and The Power of Design.
In this issue, Steve analyzes the altruistic activity of philanthropy and its effect in the workplace yesterday, today and tomorrow.
Philanthropy today has become quite fashionable among big businesses and wealthy individuals. It seems that everyone is anxious to give a helping hand and there appears to be no sign of this trend slowing down. So what is it that makes philanthropy so popular now compared to even 10 years ago? Needless to say, philanthropy is not a new concept; as long as there has been human suffering, there have always been people to help.
The Roots of Philanthropy
Wikipedia defines philanthropy as, “…any altruistic activity which is intended to promote good or improve human quality of life.” This includes the donation of money, goods, time, or effort in support of a cause. Philanthropy in North America has strong roots in the religious beliefs of the early settlers to help one’s neighbour. As people banded together and created communities, philanthropy was fostered through the principles of civic participation.
As villages turned into cities, people lost the personal contact they once had with each other and a more “modern” view of philanthropy took hold in the 19th century. This usually involved elderly rich men giving their money to some well-loved local charity. Picture a stereotypical aging multi-millionaire (maybe someone like Scrooge from “A Christmas Carol”) becoming ill and finally realizing that life wasn’t all about just making money. To right all of the wrongs he may have committed as he climbed his way to the top of the corporate ladder, he donates a sizable amount of money to a charity or organization which has always been near and dear to his heart (such as libraries, museums, and universities). End of story.
The process of a wealthy individual giving a large sum of money to one charity remained quite popular until the early years of the 20th century. These years gave rise to the creation of organized philanthropic foundations led by the likes of Andrew Carnegie (steel), John D. Rockefeller (oil), and Margaret Olivia Sage (widower of Russell Sage; financier and politician). These foundations continue to make a positive impact on society today.
Since then, many non-profit organizations have benefited from the generous donations of rich individuals and large corporations. Consider media mogul, Ted Turner, who, in 1998, donated one billion dollars to the UN Foundation which “works to promote a more peaceful, prosperous, and just world through support of the United Nations and its Charter.” As with almost all charitable donations to foundations up to and including this time, money is donated, plans are discussed as to what to do with the money and the foundation sets about implementing the plans.
One Couple Opens the Flood Gates
Then, in the early 90s, the richest man in the world was having the time of his life. Bill Gates was deeply engrossed in his work, completely on top of his game and loving every minute of it. When reporters pressed Gates about his plans for philanthropy, his response was to tell them he would think about it when (or probably if) he retired.
Fortunately, there were two people who possessed some influence on Gates: his long time girlfriend, Melinda French (who was then a manager at Microsoft) and his mother, Mary. When Gates became engaged to French, Mary, who was dying from breast cancer, wrote a letter to Melinda. The letter stressed the great opportunities the two would have to improve the world.
In 2000, Bill and Melinda donated $20 billion to start the Bill & Melinda Gates Foundation (www.gatesfoundation.org) whose main function is to solve some of the world’s most difficult problems in global health and development.
There are two simple values that lie at the core of the Foundation’s work: 1) all lives—no matter where they are being led—have equal value and 2) to whom much has been given, much is expected. Gates’ long time bridge partner and fellow billionaire, Warren Buffett, was so impressed by Bill and Melinda’s organized, hands-on approach to philanthropy that he recently decided to donate the bulk of his $44 billion fortune to the Foundation.
Beyond the Cutting of the Ribbon
How has philanthropy changed in the new millennium? For starters, the Beyond th amount of money given away is staggering. Andrew Carnegie, John D. Rockefeller Senior and Junior gave huge sums of money away in their day (approximately $20 billion in current dollars over a span of about 70 years), but this is still less than half of what Buffett has committed to donate on his own.
Philanthropy today is also welcoming newer, younger faces. The aging wealthy Baby Boomers who are considering their legacy are joined by Generation X-ers who have either acquired wealth at a young age or who are inheriting family wealth. Both generations are looking to put their wealth towards projects aligned with their values.
All those Generation X-ers who are saying “no” to inheriting a trust and “yes” to creating a foundation are now in need of assistance. Researchers at Boston College estimate that the total intergenerational transfer of wealth could be $41 trillion through to 2052 and there will be a huge demand for banks to organize this transfer and eventual dissemination of wealth.
Once they set up their foundations, today’s philanthropists are no longer content to give some money away and then sit back and give a speech or cut a ribbon now and then. Bill and Melinda Gates are prime examples of how today’s givers are far more interested in getting involved with both local and global problems. As well as funding great strategies, they may also contribute their own strategic ideas. Further involvement is characterized by their efforts to set specific targets and to access any potential impact. This involves becoming highly engaged with partners and sharing results with other philanthropists.
The Master Motivator
Philanthropy in the new millennium has blurred the lines between not-for-profits, politics and businesses. Bill Gates and Warren Buffett may have the money but there is no denying that former president Bill Clinton is the master motivator. The Clinton Foundation (www.clintonfoundation.org) is not a foundation in the traditional sense because it has no money of its own… but what it does have is Bill Clinton.
Today, Clinton’s influence with global decision-makers is as powerful or perhaps more powerful than during his presidential years. His Foundation uses this influence to take a practical, get-it-done-now approach to philanthropy. Clinton’s interests (including HIV/AIDS, urban empowerment, global warming and childhood obesity) are the driving force of his Foundation. Once an area is targeted where the Foundation can make a positive impact, the next step is to partner up with other people and organizations that have the same goals. After a plan is finalized, the Foundation quickly goes into “Philanthropic SWAT Mode” by lining up donors, scheduling press conferences and enlisti
ng the help of gov
ernments and non-governmental offices (NGOs). As the foundation’s CEO Bruce Lindsey (a friend of Clinton’s since Arkansas) so aptly put it, “If a decision needs to be made, we make it. If we can help, we help now, not tomorrow.”
How Can Business Benefit?
So what is the payoff for businesses if they choose to partake in philanthropy? Wharton finance professor Vinay B. Nair looked at whether being charitable helps a company’s financial picture. It seems that the answer was yes … and no.
Nair’s findings revealed an emerging theme of corporate social responsibility (CSR) from a vast majority of businesses. The results of a recent survey of 135 executives and 65 investors (conducted by the Economist) revealed that 85% of respondents found the CSR of a company to be a “central” or “important” consideration in investment decisions (almost double the 44% from a similar survey five years before).
However, Nair stipulates that the true benefits of corporate philanthropy occur with large corporations that are in advertising-intense industries whereby products are less distinguishable from one another (e.g. banks, oil, and pharmaceuticals). People are naturally skeptical of these companies because of high-profile scandals such as Enron and others. As a result, the trust factor plays a much more important role in consumer decisions with large corporations. In order to establish a trusting, long-lasting relationship with its customers, big business must consistently participate in corporate philanthropy.
Helping Right Here and Right Now
While Nair’s findings centered more on big business, there are many opportunities for smaller businesses to benefit from philanthropy by making use of Employee-Supported Volunteering (ESV). ESV occurs at the local level on the frontlines of philanthropy. Volunteer Canada defines Employee-Supported Volunteering as “a continuum of employer support for employee volunteer activities.” The ways in which employees might volunteer are limited only by their imagination. The most common forms of employer support for employee volunteering are the use of workplace facilities, time off from work, and a change in work hours to accommodate volunteering.
Studies have shown that ESV benefits everyone involved. Firstly, it benefits the community in various ways. The employee-volunteers benefit from ESV by improving specific skills, (e.g. leadership or communication skills) and boosting morale and motivation. This then develops a stronger company loyalty, which produces a higher rate of productivity, improved retention and enhanced consumer relations. The community also views the company as more socially responsible and this inevitably leads to higher consumer loyalty and greater investor confidence.
Employee-Supported Volunteering is indeed becoming a global trend. Unfortunately, Canada is lagging behind other countries (including the U.S., United Kingdom, and many other European countries) in our participation in ESV. It is vital that organizations and individuals learn from current philanthropists and do our part to make this world a better place to live.
Places to go, Things to do
Some informative Canadian websites about philanthropy.
“Founded in 1995, Canadian Business for Social Responsibility (CBSR) is a business-led, non-profit CSR consultancy and peer-to-peer learning organization that provides its members with candid counsel and customized advisory services as they formulate powerful business decisions that improve performance and contribute to a better world.”
“The Canadian Council for International Cooperation is a coalition of Canadian voluntary sector organizations working globally to achieve sustainable human development.”
“Canada’s supersite for the nonprofit sector—3000 pages of news, jobs, information and resources for executives, staffers, donors, and volunteers.”
“The Values Added Web site helps Canadians learn more about the diversity, reach and
impact of charities and nonprofits in Canada.”
“Philanthropic Foundations Canada is a national membership organization for Canada’s independent, grantmaking foundations.”
“Canada’s site for information on volunteering.”
“Habitat for Humanity Canada is a national, non-profit, faith-based organization working for a world where everyone has a safe and decent place to live.”
www.yipcanada.org Youth in Philanthropy Canada
“Young people who care about their communities are increasingly getting involved in philanthropy. Anybody can be a philanthropist, why not us? By forming youth advisory committees (YACs) within our local community foundations, we come together to raise money, build endowment funds and make grants to local youth projects.”
Help is Just a Click Away
Here are some websites to encourage “philanthropic clicking.” Typically search engines, these sites will donate to a charitable cause when you use their services.
Steve Bannister is a passionate forward-thinker who uses high-energy customized programs to empower people and organizations to get results. Please contact Steve via his website at www.sbannister.com.