American philanthropy isn’t what it used to be. Gone are the days when old money was doled out by bureaucrats from mahogany-paneled rooms. More people are giving out more money than ever before, at much younger ages, and to a much wider variety of causes. In the 1980s, Ronald Reagan’s call for private charity to replace government largesse was greeted with hoots of liberal derision–and an outbreak of giving. The number of private foundations rose from 22,000 in 1980 to 55,000 today. They now dole out about $23.3 billion a year, a 700 percent increase since 1980. And many are the offspring of capitalists, who bring the language of business to charity. Vanessa Kirsch (not related to Steve), president and founder of New Profit Inc., one of the new entrepreneurial charities, says, “There’s this new breed of social entrepreneurs coming out of Harvard Business School or failed dot-coms, and they’re saying, ‘I want to make big things happen’.”
Their outlook is increasingly global, in the Gates mold. The share of funding that the 1,000 largest foundations devote to international causes jumped from 11.3 percent in 1999 to 16.3 percent in 2000. And while the U.S. government is often criticized for stingy foreign aid (well under 1 percent of GNP each year), the same can’t be said of private donors, who now give away 2.1 percent of U.S. GNP each year. “No nation comes even remotely close to the U.S. on these things,” says Scott Walker of the Philanthropy Roundtable. “If you’re in Sweden or France, it’s something the government is supposed to do. If you were in England, it is the nobility. Americans don’t think it’s enough to say, ‘I gave at the office with taxes’.”
To be sure, business and philanthropy are old bedfellows in the United States. The Rockefellers, the Carnegies and the Fords set the mold. But many were what Mark Dowie, author of “American Foundations: An Investigative History,” calls “s. o.b. s”–patrons of “symphonies, operas, ballets,” and “museums and hospitals where rich people go to die.” The new foundations are more like “quasi-public trusts–progressive institutions of change,” argues Dowie.
The new movers and shakers of American charity are more likely to be flashy TV titans like Ted Turner. The story of how Turner gave away a billion is a founding legend of this class. In a cab on his way to make a speech at the United Nations, the cable titan, sick of official U.S. reluctance to pay U.N. dues, decided to pony up $1 billion himself. This shamed Washington and inspired imitators. “It is a lot more personality-oriented in this culture of new wealth,” says Ellen Dadisman, vice president of the Council on Foundations. “It’s sort of like wealth meets People magazine.”
In Silicon Valley, the new fashion is called “venture philanthropy.” According to one survey, 83 percent of valley households give to charity, compared with 69 percent nationally. But they prefer to “invest,” not “give.” And to attract “investors,” fund-raisers promise hands-on management of the nonprofits they support. They demand seats on the board, set performance goals and plan an exit strategy in case expectations aren’t met. “Traditionally, foundations have not been as invasive,” says Dadisman. “They didn’t go to the nonprofit and say, ‘How much are you paying for rent? Why are you using these old-fashioned computers?’ " It may be invasive, but if it works, it could help save the world. Even from asteroids.
