In addition to the evolving and expanding roles and practices of individual philanthropists, foundations, and corporations described in the previous chapter, very significant additions to the philanthropic landscape have appeared since 1990 that increasingly play beneficial roles in improving philanthropy and enabling it to become more effective and efficient. This chapter explores the ones that I think are most important.
Tax-exempt donor-advised funds—long offered by community foundations but since 1991 a frequent offering of some for-profit financial service institutions—have become major vehicles for charitable giving. I have mentioned these funds in earlier contexts but they deserve a closer look. They are essentially intermediary mechanisms that hold funds or securities for some period of time for individuals who desire to devote financial resources to one or more tax-exempt operating charities but who have not yet selected the recipients. By transferring assets to a donor-advised fund, individuals part with the ability to use such funds for anything other than IRS-certified tax-exempt entities but reserve the right to advise the fund administrator as to the specific charities that are to receive the funds. By relinquishing legal ownership of the funds, the donor receives a tax deduction in the year in which the gift is given, notwithstanding the fact that it may be several years before the funds are designated to a specific operating charity. When Fidelity Investments persuaded the Internal Revenue Service in 1991 to recognize its Fidelity Investments Charitable Gift Fund as a 501(c)(3) public charity, a major new national vehicle to facilitate optimally tax-planned charitable giving by individuals was born.1
It was a community foundation, The New York Community Trust, that in 1931 pioneered the establishment of donor-advised funds, and by 1991 most other community foundations had begun offering them. Some had grown dramatically from contributions to these funds. Consequently, community foundations vigorously protested the extension of public charity status to the charitable gift funds of for-profit entities. For perhaps a decade after the IRS opened the door for for-profit financial institutions to create and be custodians of such national funds, the community foundations fought the battle but ultimately gave up, and some of them began forming joint ventures with commercial firms.
In 2014 and 2015, however, criticism from scholars and others began to mount. Some community foundations began urging Congress and the Internal Revenue Service to reconsider the current regulations that treat commercial firms hosting donor-advised funds the same as community foundation hosts.2 The critics argued that, because community foundations are public charities by law, and because they provide donors with professional guidance regarding the making of grants to nonprofits from the donor-advised funds, they are entitled to more favorable payout regulations than are the national commercial firms. This was no small matter: by 2015, some of the largest for-profit financial investment-managing institutions had followed Fidelity’s lead by creating their own donor-advised funds. Examples include the Schwab Charitable Fund, the Vanguard Charitable Endowment Program, and the Goldman Sachs Philanthropy Fund, although Fidelity has far more assets than any of the others. The debate over the merits of this competition between community foundations and investment firms continues, though the growth of these funds in the commercial marketplace seems unlikely to be reversed.
The fact that a large proportion of the gifts to donor-advised funds occurs each year during December underscores the degree to which such funds have come to be a critical component of many individuals’ annual income tax planning and charitable gift-making. Individuals highly value the convenience of making tax-deductible annual gifts when they have surplus cash or publicly traded securities available for philanthropic purposes but have not identified, or don’t have the time to identify, the ultimate recipients of such philanthropy. One consequence of such year-end calculations is to create a rush in December of deposits to donor-advised funds and of gifts from such funds to charities.3
As of the end of 2015, the total value of all donor-advised funds in community foundations, federations, and for-profit corporations in the United States was $78.64 billion. Of that amount, about one-sixth was in the Fidelity Charitable Gift Fund, whose assets were $13.2 billion, and it alone hosted 66,829 giving accounts. In calendar year 2015, Fidelity’s fund made 733,000 grants to about 106,000 operating charities totaling more than $3.1 billion.4 The cumulative value of charitable contributions given through Fidelity since the fund’s inception in 1991 has ballooned to $18 billion. The amount given in 2014 alone was $2.2 billion.5 For comparison purposes, as of the same date, the total assets in all US private foundations were about $700 billion. It is significant that the year-to-year growth of donor-advised funds from 2013 to 2014 was 23.9 percent, of course on a much smaller base figure than foundations, while the growth in assets in private foundations was a mere 3 percent.6 It is also worth noting that, throughout the first eight years that systematic figures on donor-advised funds were collected, the annual payout rate has been consistently higher than 20 percent of assets in those accounts.7
Some observers of the philanthropic scene have criticized the fact that donor-advised funds are not subject to any minimum annual payout requirement like the one imposed on private foundations, which must pay out 5 percent of their asset value annually. Such critics argue that it is not wise public policy to allow a deduction for gifts that benefit donors instantly and that earn management profits for the funds’ host institutions but that may take years to benefit the ultimate intended beneficiaries—nonprofit organizations and the individuals they serve.8 The data cited in the preceding paragraph suggest that such a potential requirement may not be needed if donor-advised funds continue voluntarily to pay out 20 percent or more of their asset value every year. Nonetheless, critics say that those figures are aggregates, meaning that some funds pay out more than that, and others may pay out nothing.9
In my considered judgment, the criticism of Fidelity and other national hosts of donor-advised funds is the result of renewed effort by a combination of ideology-grounded, self-interested organizations motivated by envy-based resentment of the rapidly growing success of the commercial entrants into the field. Clearly those new players have identified among potential clients a widespread desire for national reach, a higher quality of service befitting a large financial institution, and greater flexibility for the tax planning of their philanthropic giving than they find available from their local community foundations.
Let me stress, however, that many community foundations are in fact providing a level of service for their donor-advised funds that is comparable to, or perhaps even superior to, that of national financial institutions. Furthermore, they are also offering experienced professional guidance about the charitable needs in their communities, which the national, commercial hosts are not. The recent success of the national hosts suggests, however, that a large portion of Americans wishing to make some or all of their charitable giving via donor-advised funds does not feel the need for such substantive guidance and find the convenience of national scope of giving an advantage that community foundations do not offer competitively. Most community foundations will accommodate fund-holders’ desire to make grants from their funds outside the local or regional areas, but of course the community foundations do not usually have any substantive knowledge about the needs of the nonlocal geographies where such grant recipients are located.
One final point worth noting is that, for calendar year 2014, the average size of donor-advised funds at community foundations was double the average size of such funds housed at the national hosts—$420,155 versus $256,626—which suggests that donors use their local community foundations for their longer-term giving and for their support of local causes and needs, whereas donors using the national hosts may be more transaction focused. It is also likely that some donors prefer the national donor-advised fund hosts, sensing that they provide more anonymity to donors than the local community foundations, which typically have boards and distributions committees made up of a number of local residents. The national hosts, however, can ensure no exposure of donors to others.10
Along with the rise of donor-advised funds and the increased focus on metrics, over the past quarter-century there has been a marked growth in the number of institutions and organizations focused on improving the functioning of foundations and nonprofit organizations. Some of them develop and provide expertise to individual philanthropists, families, foundations, and nonprofits in hopes of increasing the effectiveness of charitable gifts to organizational recipients. Others seek to fill niches in the organizational infrastructure supporting nonprofits and philanthropy to facilitate the improved functioning of the kinds of organizations each seeks to serve. The expanding availability and quality of these services, combined with the fact that more and more donors, especially wealthier ones, are pursuing more reliable prospective as well as retrospective knowledge about the impact their philanthropy can possibly have suggests a deepening concern among donors for knowledge, strategy, and evidence of impact. If so, that is an important trend for the field, one that may well contribute to significantly greater achievements for philanthropy in the future. Following is a description of the major players as of the writing of this book. Some of them have been mentioned earlier, but each is worth considering in more detail.
In 1993, John Whitehead, formerly co-CEO of Goldman Sachs, made a multimillion-dollar gift to Harvard Business School (HBS) to found an entirely new kind of entity in the world of business schools, the Social Enterprise Initiative. Its mission was to enable students and faculty members to bring to bear on the problems of society and their solutions the rigorous intellectual and analytical capital that business schools had developed in the 20th century. That Initiative quickly attracted the involvement of more than a dozen HBS faculty members and proved so enticing to Harvard MBA students that the Social Enterprise Club almost instantly became the largest of the dues-requiring student clubs at HBS. The Initiative gradually inspired other American business schools either to create similar programs, as Duke University, for example, has done, or to strengthen existing programs that focus on solutions to social problems, as Northwestern and Yale have done. Over the past 25 years, the intellectual capital generated by HBS through the Social Enterprise Initiative has steadily enriched public policy discourse on a wide range of subjects, including how to achieve greater social impact, with a particular focus on nonprofit organizations and philanthropy. The Initiative’s existence has contributed substantially to a new body of research on the strengths and weaknesses of nonprofit practices, including many HBS cases on individual nonprofit organizations and on major corporate social responsibility initiatives, as well as influential books on venture philanthropy and social entrepreneurship.
For several years after commencing grantmaking, the David and Lucile Packard Foundation was a pioneer, under the leadership of its program officer Barbara Kibbe, in providing support for the strengthening of the organizational effectiveness with which their grantees made their decisions, implemented their strategies, and sought to achieve their substantive program goals. By 1997, several foundations were coming to the recognition that organizational skills of high quality were indispensable to their grantees’ impact. As a result, they, together with Packard, established Grantmakers for Effective Organizations (GEO), originally as an affinity group of the Council on Foundations and later as an independent nonprofit organization in its own right. The Packard Foundation quickly realized that the training it had been providing to its own grantees was needed by all nonprofits and therefore widened its focus by supporting the expansion of the new GEO. That organization now has a dues-paying membership of over 500 grantmakers and is the leading advocate for individual foundation financial support for the training of grantmakers in all aspects of organizational effectiveness. GEO runs a variety of research, training, and outreach programs that serve all foundations, whether GEO members or not; publishes some excellent how-to-do-it reports; and offers many webinars on those subjects. As the focus of many foundations has broadened to include emphases on clarifying strategy in their fields of interest, measuring outcomes, and other process goals now thought to contribute to a foundation’s impact, GEO has become ever more influential in raising the standard of both foundation and grantee organizational effectiveness.
New Profit, Inc. is an ingenious social venture capital investment bank-cum-management consultancy that was founded by Vanessa Kirsch in Boston in 1999. She envisioned the raising of a large pool of financial resources supplied by individual philanthropists, foundations, and corporations that would be regranted to promising or already high-performing start-up nonprofits to enable them to achieve greater scale and sustainability. Kirsch invited the Monitor Group, a strategy consultancy, to partner with her organization to provide strategic consulting advice to its grantees. Among New Profit’s early grantees were such successful social enterprises as Kickstarter, Right to Play, Citizen Schools, and Jumpstart. In 2012, the Monitor Group was acquired by Deloitte, which committed its much greater resources and depth of expertise to New Profit (the consultancy is now called Monitor Deloitte). Two years later, New Profit became a founding investor in the Massachusetts Juvenile Justice Pay for Success Initiative, and New Profit’s America Forward arm helped achieve the July 2014 passage by Congress of the Workforce Innovation and Opportunity Act, “which provides funding for social innovation through its landmark Pay for Success and other provisions.” Since 2007, New Profit has provided $120 million and 35,000 senior staff hours to the organizations it supports, and it estimates that those organizations have touched some 10 million lives through their work.11
The Foundation Center was created in 1956 as an intermediary between foundations and the public; it collected the foundations’ annual reports and published periodic volumes with information on the purposes of grants made by those foundations. With the onset of the Internet and the corresponding capacity to create searchable digital databases, the center gradually expanded the range and detail of information collected and digitized the repository, enabling widespread access by the public. Starting in 2008, with the appointment of a new president, Brad Smith, the center began to establish partnerships with various organizations to undertake new initiatives in research, publishing of reports, and educational offerings in many aspects of philanthropy and fundraising, making it an active participant as well as a catalyst in countless forms of outreach to nonprofit organizations, foundations, and the public. The Foundation Center has become one of the major creators of information for and about philanthropic initiatives broadly conceived. It has devised a stronger analytic capacity to apply to the data it receives, resulting in a steady stream of well-designed, imaginatively visualized print and digital publications. In recent years, it has also created, merged with, or adopted a growing number of initiatives, such as Philanthropy News Digest, GrantCraft, IssueLab, and Glasspockets. In anticipation of the adoption by the United Nations of the 2030 Agenda for Sustainable Development Goals, the Foundation Center, in partnership with the United Nations Development Program and Rockefeller Philanthropy Advisors, created the SDG Philanthropy Platform in September 2015, the first activity of which was to organize a conference at the Ford Foundation entitled “Philanthropy Engaged: Implementing and Achieving the Post-2015 Agenda.”12 That kind of forward thinking characterizes today’s Foundation Center.13
The National Center for Family Philanthropy was founded in 1997 by Virginia Esposito, a long-time staff member of the Council on Foundations, with the goal of helping family foundations, which constitute by far the largest proportion of private foundations in the United States, to be ever more effective in achieving the impact to which their trustees and staff aspire. Since then, the NCFP has become the primary advocacy organization on behalf of the value of family philanthropy. It has published more than 50 books and issued briefs and articles on such matters as various forms of governance of family foundations and different ways of bringing new generations of children and grandchildren into their families’ philanthropic endeavors. In addition, the NCFP periodically conducts research to determine best practices for family foundations and organizes conferences, seminars, and webinars to disseminate that information to family foundation trustees, family members, and staff. All told, as of 2016 the NCFP had organized more than 750 workshops, created a searchable database on family giving, and devised peer learning networks to help guide families in making their way through intrafamily decision-making challenges and leadership transitions. The fact that the NCFP is now supported entirely by families and family foundations is credible testimony to the value its primary beneficiaries place on the services it provides.
With the founding of The Center for Effective Philanthropy by Harvard professor Michael Porter and Mark Kramer of the Foundation Strategy Group (now FSG) in 2001, and their recruitment of Phil Buchanan as the Center’s Chief Executive, America’s foundations came to be blessed with the capacity, for the very first time, to learn how their grantees perceived their performance. During the past 15 years, the Center, under Buchanan’s visionary and dynamic leadership, has become an energetic force for greater foundation accountability. The mechanism that enabled that change in accountability to occur was Buchanan’s vision, with a significant contribution of ideas by his associate Kevin Bolduc and the Center’s Board Chair Phil Guidice, which they named the “Grantee Perception Report.”
The Grantee Perception Reports grow out of confidential surveys of an individual foundations grantees and measure how well the grantees believe to the foundations are doing in supporting and working with grantees. It is no exaggeration to describe these Grantee Perception Reports as having revolutionized the relationships between those who make grants and those who seek and receive them. For the first time, foundation trustees now have a way of obtaining independent views of how well their executives and program officers are doing, and many surprises have emerged from those surveys. Before the founding of The Center for Effective Philanthropy (CEP), the Robert Wood Johnson Foundation, for example, had conducted its own “customer” surveys for many years without obtaining any significantly critical comments about the performance of its program officers. Trustees and management were therefore shocked by the first Grantee Perception Report (GPR) it received from the CEP, which revealed that, in the opinion of the foundation’s grantees, its communication with them left a great deal to be desired, euphemistically speaking. In fact, the president of the Robert Wood Johnson Foundation was so stunned that she wrote a letter to every grantee to apologize for the foundation’s shortcomings in relating to them.
When the GPR on The Kresge Foundation revealed that about three-quarters of its grantees felt that the foundation did not have a very good idea of what the grantee organizations were all about, the foundation did not hesitate to post the findings on its website, which, of course, shook up the foundation’s trustees. Many other foundations have now made a habit of having a GPR done on them every few years and then including the report on their website, whether positive or negative.
The consequence of this increasing transparency is that foundations, which have heretofore rarely admitted that their performance leaves anything to be desired, have at long last been emboldened by the GPR to be more forthcoming about how well or badly they are actually doing their jobs.
Moreover, because many foundations now choose to commission Grantee Perception Reports, the Center has accumulated a great deal of information on the standards of foundation–grantee relations across the field. This enables it to provide to individual grantmakers precise data comparing a specific foundation’s performance with that of others. Therefore, the GPRs are not only useful in uncovering shortcomings by any fixed standard but are perhaps even more helpful in enabling individual foundations to assess their accomplishments against those of other foundations. The data obtained by the GPRs are sufficiently granular that a foundation can learn the quality of performance by individual members of its program staff. That, too, is a major lever for foundations to use in improving their performance. As the CEP has acquired more information on the strengths, weaknesses, and effectiveness of foundations, it has become a frequent source of carefully researched, well-written, hard-hitting, objective reports on how and what foundations are doing. Phil Buchanan writes op-ed pieces regularly, speaks often, and even does TED-like talks aimed at correcting public misunderstandings of nonprofits and philanthropies.
Like so many of the organizations discussed in this chapter, The Philanthropic Initiative (TPI) was founded in Boston, in this instance in 1989 by the remarkable Peter Karoff, a philanthropic advisor who moonlighted by publishing poetry. He launched TPI as a for-profit organization but quickly realized that philanthropic consulting alone, however valuable it might be, could not generate financial profits. Therefore, with the aid of The Rockefeller Foundation, he converted the organization into a nonprofit consulting firm and obtained 501(c)(3) status from the Internal Revenue Service. According to an article on the Fidelity Charitable Gift Fund website, TPI was the first such organization to be created.14 Others listed as of this writing include the aforementioned Rockefeller Philanthropy Advisors, Arabella Advisors, Charities Aid Foundation of America (CAF America), Cascade Philanthropy Advisors, Entrepreneurs Foundation, Excellence in Giving, Growth Strategy Inc., Paragon Philanthropy, Philanthropy Advisors, Philanthropy Directions International, Strategic Philanthropy, and The Chambers Group.15 At one time in TPI’s history, it was advising individuals, foundations, and corporations on their annual charitable giving in the total amount of about $100 million a year. Some years later, Karoff went into semiretirement and in 2012 the organization became an independent operating unit of The Boston Foundation, discussed in Chapter 2. But the fact that so many other organizations followed TPI’s example testifies not only to the foresight that Peter Karoff clearly had but also to his skill in running that firm so effectively for so many years. Karoff died, alas, March 9, 2017.
In Chapter 1, I briefly told the story of the founding of The Bridgespan Group in 2000 by Tom Tierney of Bain & Company and Harvard Business School professor Jeff Bradach and how it has since become the gold standard of philanthropic strategy consulting. It serves many of the largest foundations in the country, wealthy individuals contemplating philanthropic initiatives, and operating charities that are seeking to improve their functioning. Bridgespan was created as a nonprofit affiliate of Bain & Company, with a separate board of directors and with 501(c)(3) certification from the Internal Revenue Service. Headquartered in Boston, it then added offices in San Francisco and New York and, as of 2015, one in Mumbai, India, its only office outside the United States. In addition to providing consulting services, Bridgespan has developed a robust research-based program with the goal of providing to the civic sector field as a whole, as well as to the general public, empirical data amassed through its individual consulting engagements. That information is widely and continuously disseminated by means of articles in various journals, including especially the Stanford Social Innovation Review, a lively website (www.bridgespan.org), and vigorous outreach to both print and digital media. Bridgespan also hosts the Nonprofit Job Board, which posts employment opportunities in nonprofit organizations.
FSG, also founded in 2000, was created as the Foundation Strategy Group, a for-profit partnership between Harvard Business School professor Michael Porter and Mark Kramer, an experienced philanthropic advisor. Starting with a focus on advising foundations on how to develop and implement strategies to achieve greater impact in their grantmaking, FSG broadened its mission to include partnerships aimed at improving both philanthropy and nonprofit organizations. It has worked with the Council on Foundations, the Clinton Global Initiative, The Rockefeller Foundation, the Aspen Institute Forum for Community Solutions, Grantmakers for Effective Organization, and the United Way Worldwide, among others. In 2006, FSG converted to nonprofit status with 501(c)(3) certification by the Internal Revenue Service. Beginning with an office in Boston, it steadily added offices in Geneva, Switzerland, San Francisco, Seattle, and, in 2015, in Mumbai, India. Porter and Kramer have frequently published widely read and highly regarded articles in both The Harvard Business Review and the Stanford Social Innovation Review. According to its website, FSG now has more than 150 staff members.
In March of 2015, McKinsey & Company announced the creation of a new nonprofit affiliate, which focuses on solving difficult social problems worldwide. The firm allocated $70 million from its own funds for this initiative, which also received support of $15 million from the US Agency for International Development (USAID) and $3.2 million from Walmart. In addition, McKinsey assigned 25 of its consultants to work on projects with the Social Initiative and designated 10 of its partners to provide advice. To lead the initiative, it appointed Helene Gayle, formerly CEO of CARE, Inc. In January 2016, the Social Initiative announced its first major program, Generation, which was tasked with training and placing in jobs one million unemployed young people from five countries over five years.16 That McKinsey decided to undertake this initiative, following the lead of Bain & Company in founding Bridgespan, is another major step forward in increasing the worldwide infrastructure of public problem-solving.17
Rockefeller Philanthropy Advisors (RPA) was founded in 2002 by the investment management firm Rockefeller & Company as a nonprofit organization with 501(c)(3) certification by the Internal Revenue Service for the purpose of offering philanthropic advisory assistance to individuals, families, foundations, and corporations. Its primary service is to advise those seeking to achieve impact through their philanthropic giving on how to do so, but it also operates a charitable giving fund through which, according to its website, individuals and organizations “can make gifts outside the United States, participate in funding consortia and operate nonprofit initiatives.”18 It also offers “program, administrative, and management services for foundations and trusts.”19 It currently “manages or advises on more than $200 million in annual giving by its clients” and has “facilitated more than $3 billion in grantmaking to nearly 70 countries.”20 Among those who follow charitable giving advisory services, RPA is widely regarded as one of the very best organizations because of the depth of experience of its professional staff, led by CEO Melissa Berman.
Social media and the Internet have the potential to bring about radical changes in the world of philanthropy, from the nature of volunteering and the ease of making donations to the facilitation and scaling of new events to raise those funds. The fact that the technology exists and has been adopted widely by Americans does not alone, however, translate into a predictor of philanthropic benefit. Simply because there is a new way to give does not mean that there exists a new level of will, which is prerequisite to any kind of charitable act.
Facebook is a good example. It now has a Social Good Team, which is developing a variety of ways in which the one billion people worldwide who use the site daily can donate to the nonprofits of their choice. In 2013, when Facebook originally piloted the “Give Now” button, prospective donors could make their gifts directly on the nonprofits’ Facebook pages. While easy enough for the givers, the recipient charities quickly realized that they were being deprived of important information—the donors’ e-mail addresses—because in making the gifts through an organization’s Facebook page, those e-mail addresses remained with Facebook.
Implementation is everything. In August 2015, the company announced that it would initiate a “Donate Now” button on some nonprofit organizations’ Facebook pages, which, when clicked, would redirect the user to the particular nonprofit’s web page, where a contribution could then be made. What seemed easy in fact required three transaction steps: from inclination through search to completion.21
The simple existence of so many Facebook members does not necessarily translate into many charitable contributions at all. In fact, at least at present, the specialists in online fundraising tell us that “only one percent of all online fundraising is attributed to social media.”22 It is clearly premature to conclude, on the basis of the information now available, therefore, that social media have much promise any time soon of adding much gold to American philanthropy.
Nonetheless, I choose not to believe that the present lack of interest among Facebook members or other Internet users dooms the possibility that social media-facilitated generosity will increase in the future. PayPal, for example, reported that the charitable donations it processed to nonprofit organizations in 2014, $212 million, were 50 percent higher than in 2013.23 Network for Good, which facilitates charitable giving by individuals to any nonprofit registered with the Internal Revenue Service, publishes a periodic Digital Giving Index. Its 2014 figures show a 9 percent increase over 2013 in online giving through Network for Good’s giving platform, for a 2014 total of $233 million distributed to 45,000 nonprofits, 55 percent of which came through the giving pages of the nonprofits themselves.24 The Nonprofit Quarterly reported that the M+R Strategic Services Benchmark Study, which surveyed the online experience of 84 nonprofits, reported a 14 percent overall increase over 2013 in online giving to those organizations.25 Finally, the fundraising-software company Blackbaud reported that online charitable giving in 2014 to the 3,724 nonprofits in its survey grew 8.9 percent over 2013, for a total of $2 billion in donations. For those nonprofit organizations surveyed, Blackbaud’s data showed that only 6.7 percent of their income had come from online donations in 2014.26
In analyzing these growth figures, it is essential to keep in mind that giving to the US nonprofit sector in 2014 from living individuals—obviously the only donors who use online giving—was $258.5 billion and that the increase in their giving from 2013 to 2014 was 5.7 percent.27 Measured in dollars, that is a year-to-year increase from 2013 of $18 billion in individual contributions alone, which puts into context how tiny today’s amount of online individual giving is, even when using the highest figures for it as reported above.
Regardless of how much money is donated online, social media might turn out to have a beneficial effect on how much time users donate to charity. It is heartening to know that a substantial portion of Americans give generously of their time: 62.6 million adults, about a quarter of all Americans, “donated” 7.7 billion hours to nonprofit organizations in 2013, or 32.5 hours per individual during that year.28 The research also tells us that volunteering has spillovers among charitable contributions. According to the Corporation for National and Community Service, “Nearly eight in 10 (79.2 percent) volunteers donated to charity, compared to four in 10 (40.4 percent) of non-volunteers.”29 To the extent that volunteers use social media to help attract other volunteers, then, that would likely increase both the number of those volunteering and the amount of funds given to charity.
Whatever the statistics indicate, something is clearly afoot that was not even imaginable in 1990. Indiegogo, which declares itself “the Largest Global Crowdfunding & Fundraising Source Online,”30 announced on October 21, 2015, the launching of a site that nonprofits can use to solicit funds without cost. According to an article in The Chronicle of Philanthropy, “The new website, Generosity by Indiegogo, will also house individuals’ personal crowdfunding campaigns for needs like medical and education expenses, replacing the company’s earlier offshoot site for personal crowdfunding, Indiegogo Life.”31 GoFundMe, a pioneer of online crowdfunding that launched in 2010, had raised $3 billion from more than 25 million donors by the end of 2016.32 Many other organizations devoted to facilitating online giving and finding volunteering opportunities continue to be founded and are flourishing. Universal Giving, founded about 2006, invites individuals to “donate and volunteer with vetted opportunities all across the world.” It promises that “100% goes to the cause.”33
Other organizations are relying on the rapid utilization of social media on mobile phones and apps to connect potential donors and recipients from around the globe. An excellent example of this is Kiva, which authors Roger Martin and Sally Osberg described this way:
[A] global microfinance organization, a spiritual descendant of [the pioneer microcredit institution] Grameen Bank with a technology-enabled twist. Rather than acting as a bank that [makes] loans… Kiva channels funds to micro-entrepreneurs through crowdsourcing, matching lenders with as little as $25 to lend to small business-builders around the world. Using field partners to vet potential entrepreneurs and micro-finance organizations to distribute and monitor the funds in their relevant geographies, Kiva focuses on providing an online marketplace through which lenders and borrowers can match themselves up.34
Another organization working in this vein is GiveDirectly, which “sends money directly to the extreme poor” abroad.35 On our shores, social media have been the principal reason that “Giving Tuesday” exists. That is a day similar to the American Thanksgiving Day but intended to encourage Americans not only to give thanks but “to give back.” Its website explains that “We have a day for giving thanks. We have two for getting deals. Now, we have #GivingTuesday, a global day dedicated to giving back.”36 On that day in 2015, 699,000 donors made 1.08 million online gifts averaging $108. Twitter had 1.3 million tweets mentioning #GivingTuesday during that day, which was an increase of 86 percent over the number of 2014 tweets.37 Without social media, a “Giving Tuesday” would be, if not unimaginable, much less effective in attracting ever-increasing amounts of support, especially but not only from small givers. In total, online giving in 2015 rose above $205 million, coming from almost one million donors, with the money going to almost 31,000 nonprofit organizations.38
The Ice Bucket Challenge (IBC) is another example of how social media can be harnessed to raise hundreds of millions of dollars for charity. This endeavor first reached viral status in July 2014 when Pete Frates and Pat Quinn, both of whom had been diagnosed with ALS (amyotrophic lateral sclerosis, also called Lou Gehrig’s disease), encouraged Internet users to post videos in which they douse themselves with ice water as a way of challenging others to contribute money to research on the causes and treatment of that disease.39 In the year since Frates and Quinn took IBC viral, it is said to have raised $250 million for a variety of charities and has attracted celebrity IBCers such as Taylor Swift, Justin Timberlake, Lady Gaga, and Robert Downey Jr.40 James Surowiecki, writing in The New Yorker, expressed optimism about the potential of such initiatives as IBC. He writes as follows: “That, really, was the true accomplishment of the [ice bucket] challenge; it took tools—the selfie, the hashtag, the like button—that have typically been used for private amusement or corporate profit and turned them to the public good. The campaign’s critics implied that, had people not been dumping freezing water over their heads, they would have been working to end malaria instead. But it’s far more likely that they would have been watching cat videos or, now, playing Pokemon Go. The problem isn’t that the Ice Bucket Challenge was a charity fad. It’s that it was a charity fad that no one has figured out how to duplicate.”41
The Internet and the social media that depend on it have facilitated countless new kinds of fundraising initiatives, including bike rides, often cosponsored with corporate donors, benefiting such illnesses as multiple sclerosis. The National Multiple Sclerosis Society has raised more than $1 billion for research since Bike MS was founded in 1980.42 Other such events include the American Diabetes Association’s Tour de Cure, which orchestrates regional, national, and local single-and multiple-day bike rides all over the United States; Juvenile Diabetes Research Foundation’s JDRF Rides to Cure Juvenile Diabetes; the Arthritis Foundation’s multiple-day rides; and Cystic Fibrosis’s Cycle for Life, which organizes single-day rides with multiple mileage options.43 All of these are promoted prominently on the Internet, and most have benefited mightily from the mobilizing force of social media.
Thanks to the Internet, blogs, and the countless websites of organizations and publications that deal with or depend on philanthropic dollars, the profile of thinking of all shades of opinion regarding the strengths, weaknesses, challenges, and uses of philanthropy in the United States has been raised. More than a dozen influential publications cover the nonprofit and philanthropic sector online, and many more devote a sizable share of their coverage to the civic sector. Some web-based organizations, such as Inside Philanthropy and the Charity Defense Council, are dedicated to activist roles as “watchdogs” of philanthropy and operating nonprofit organizations. They and others are also generating expanded media attention to philanthropies and nonprofits.44
Individuals looking for guidance on their philanthropic choices can also obtain information online from specialized organizations, such as The Life You Can Save. Founded and vigorously supported by Princeton scholar Peter Singer, it identifies what he regards as the most effective charities fighting against extreme poverty the world over. Professor Singer urges everyone to give 1 percent of their annual income to charity and encourages donors to identify the charity or charities that most appeal to them and that score highly on impact measures.45 The following charities, listed on the website, met Singer’s criteria in 2016:
• Against Malaria Foundation
• Development Media International
• Evidence Action
• Fistula Foundation
• Fred Hollows Foundation
• GiveDirectly
• Global Alliance for Improved Nutrition
• Innovations for Poverty Action
• Iodine Global Network
• One Acre Fund
• Oxfam International
• Population Services International
• Possible
• Project Healthy Children
• Schistosomiasis Control Initiative
• Seva Foundation
The Internet and social media have also facilitated the establishment of a growing number of nonprofits that are pushing the boundaries of medical research. For example, Cure Alzheimer’s Fund, founded by Jeff and Jacqui Morby, Henry McCance, and others, has given $34 million for cutting-edge basic genetic research aimed at curing this disease. The directors have committed to paying the organization’s overhead so that all of the money raised can go to research.46 The Prostate Cancer Foundation was established by Michael Milken in 1993 to speed up research on the causes of prostate cancer and to stimulate improvement in treating it. The foundation supports a network of prostate cancer biomedical scientists and physicians who specialize in prostate cancer and who agree, in exchange for such support, to meet regularly and update the other researchers on their progress. Based on the success of the Prostate Cancer Foundation in speeding up the pace of discovery about prostate cancer and its treatment, Milken next launched FasterCures, which “is dedicated to accelerating progress against all life-threatening diseases.”47
In summary, some things in philanthropy and the civic sector remain very much the same as in 1990, but much else that has happened since then has dramatically transformed the landscape of philanthropy in America. The American public has continued, year in and year out, to manifest its generosity by steadily increasing its charitable contributions for countless worthy causes and nonprofit organizations. But in the past quarter-century, the vehicles created or significantly strengthened to put that money to work have been enabling those contributions of wealth and time to achieve their intended results in much more effective ways than anyone in 1990 could possibly have envisioned. American philanthropy has moved from a silo, in which it did things in what now seem distinctly quaint and old-fashioned ways, into an era in which virtually all that it does seems to be state-of-the-art by the standards of business and most other institutions in 21st-century America.
The consequence is that both donors and recipients of charitable dollars in this century are now much more able to achieve results more intelligently, more purposefully, more creatively, more knowledgeably, and more effectively. While there is much more that should be done to strengthen American philanthropy’s infrastructure, what has already been accomplished gives promise of succeeding in transforming the future even more. Americans are now able to put their charitable dollars to work with greater confidence of bringing about their money’s worth of good than ever before. The primary question that now faces donors is how to do justice evenhandedly to both present and future needs of American society and America’s civic sector at the same time, and it is to that question that this book now turns.