Young philanthropists John and Laura Arnold The Bridgespan Group/ screenshot
It used to be that a prosperous executive, particularly one prominent in the community, would join the board of a non-profit organization after making partner, or after retirement, or would draw up a will to donate to a charity upon her death—what is euphemistically known as a “legacy donation.” The latter option has always left fundraisers in the awkward position of having to bug older donors to think about their mortality.
But that’s changing, according to Susan Wolf Ditkoff, partner and co-head of the philanthropy practice at The Bridgespan Group, a non-profit consultancy in Boston. “The old learn, earn, and return model of philanthropy is changing. It used to be that you would get an education, make your fortune, retire, then perhaps endow an institution at your death, “ she told Quartz. “Now, [people are] starting younger and earlier in their careers.”
Evidence of this trend comes through in a new Bridgespan project, “Conversations,” a free collection of video clips drawn from some 50 interviews with philanthropists like Steve Case (co-founder, former CEO and chairman of AOL) and his wife Jean; Josh Bekenstein (Managing Director of Bain Capital); and hedge fund wunderkind John Arnold (Founder, Centaurus Advisors) and his wife Laura. The videos are available at Bridgespan’s philanthropy web site, Givesmart.org.
Arnold, age 38, explained in his video why he and his wife wanted to start philanthropy while still young:
I think there’s a risk if you say we’ll start giving when we’re 60. There’s a risk we might die when we’re 55. And then, we either [would have] had to set in our wills that we gave our money to various non-profits, in one lump sum, regardless of whether that organization could handle such a grant, or we would have to have a foundation set up at our death without having an executive director selected, without having a staff selected by us personally. We thought that risk is tremendous… I think one of our market advantages is our age. We can be patient, we can make longer term investments… than someone doing this in their 60s and 70s.
Another emerging pattern, said Ditkoff, is the trend of non-wealthy people donating. Part of this has been enabled by technology. Kickstarter, a site where small-time entrepreneurs can collect donations to help them start a project, allows people to donate as little as one dollar, and more importantly, it’s cheap for the fundraiser to set up. Fees work out to 3-5% of funds collected. By contrast, setting up a non-profit foundation is costly and the paperwork—in the US, a 501(c)(3) form—takes months. “Such models didn’t exist 15 years ago and may well not exist 15 years from now,” Ditkoff says. “But for the moment, there is tremendous… innovation. The number one advice we heard from interviewees is ‘get started early, get started now.’”
- Volunteering & Philanthropy
- Society & Culture