If you’re sitting in your office as the executive director or chief fundraiser of a nonprofit organization, I wonder what you’re thinking of the philanthropic landscape these days?

I believe in an assertive posture when it comes to charity and philanthropy. We know that at this point in time, we have all the resources we need to eradicate poverty once and for all. We also know that because of incredible advances in technology and science, we stand at a moment in time when the world has only started to reckon with the momentous changes that lie ahead in medicine, education, employment, and for society.

The Billionaire as King or Queen of Philanthropy

I can’t help but wonder, however, what professionals think about the fact that billionaires are now dominating our philanthropy. In case you haven’t had a chance to see what’s happening in the industry, there have been people who’ve been sounding the alarm that billionaires have become the all-powerful arbiters of philanthropy.

If you take a look in the media and in the industry, you see that there is push-back rising against the likes of Zuckerberg, Gates, and pretty much all of Silicon Valley philanthropy. Critics contend that philanthropy that has the outsized influence of billionaires harms it in the following ways[1]:

  • Compounds disparity in the access to funding
  • Dictates which ideas get attention
  • Consolidates power in the hands of a few billionaires
  • Hypes radical transparency, while ensuring the secrecy of billionaires
  • Pushes philanthropy to be only another investment vehicle.

While I’m not sure that as a philanthropist I’m alarmed at this point, I do suggest that there seems to be some cause for pause and reflection.

The Changes in Philanthropic Giving Patterns

The Institute for Policy Studies published a report recently, which is called, “Gilded Giving: Top Heavy Philanthropy In An Age of Extreme Inequality,” and you can obtain a free copy by clicking here. If you’re interested in the sector, I consider it a must-read so you can get a sense of which way the wind is blowing.

The following are key findings from the report:

  • Charitable contributions from donors at the top of the income and wealth ladder have increased significantly over the past decade. From 2003 to 2013, itemized charitable contributions from people making $500,000 or more—roughly the top one percent of income earners in the United States—increased by 57 percent. And itemized contributions from people making $10 million or more increased by almost double that rate—104 percent—over the same period.
  • The number of private grant-making foundations has shown similar dramatic growth. The number of grant-making foundations in the United States has doubled since 1993, from 43,956 to 67,736 in 2004, and to 86,726 in 2014. Between 2004 and 2014, the number of foundations increased 28 percent, and the amount of assets held in those foundations increased 35 percent.
  • Over the past ten years, charitable giving deductions from lower income donors have declined significantly, at almost the same rate that contributions from higher income donors have increased. While itemized charitable deductions from donors making $100,000 or more increased by 40 percent, itemized charitable deductions from donors making less than $100,000 declined by 34 percent.
  • The number of donors giving at typical donation levels has been steadily declining. According to one estimate, low-dollar and midrange donors to national public charities have declined by as much as 25 percent over the ten years from 2005 to 2015. These are the people who have traditionally made up the vast majority of donor files and lists for most national nonprofits since their inception.
  • The rate of decline in small-dollar donors correlates strongly with indicators of overall economic security in the United States, such as wages, employment, and homeownership rates. This correlation indicates that donor declines are likely due, in large part, to changing economic conditions.

I’m not so much concerned by the increase in giving by the top earners. What troubles me is the decline in giving by the general population. This is where we have to dig deeper to understand what’s happening.

 

Author of “Not Your Father’s Charity: Grip & Rip Leadership for Social Impact” (Free Digital Download)

 

© 2016 Wayne Elsey and Not Your Father’s Charity. All Rights Reserved.

[1] “Silicon Valley’s Latest Innovation: Free Market Philanthropy,” Natasha Tiku, BuzzFeed, November 25, 2016, https://www.buzzfeed.com/nitashatiku/tech-moguls-found-a-winner-with-free-market-philanthropy?utm_term=.kaQZDE585e#.rbq2Ydkjke