By Ryan Turner
OMBWatch
From the NPTalk Discussion List, May 9, 2001

We located two items of interest in the May 8 edition of Philanthropy News Digest*, produced and distributed by the Foundation Center. The first was regarding a new study from the Association of Fundraising Professionals (AFP), formerly the National Society of Fund Raising Executives (NSFRE), regarding the attitudes of high-technology donors towards philanthropy. The study, "Agent-Animated Wealth and Philanthropy: The Dynamics of Accumulation and Allocation Among High-Tech Donors" was released on May 3rd and conducted by Dr. Paul Schervish, Dr. Mary O'Herlihy and Dr. John Havens of the Boston College Social Welfare Research Institute. For the sake of brevity, just call it the AFP 2001 High Tech Donors Study -- after all, AFP does so.

Much of the conventional wisdom around high-tech philanthropy and corporate giving in general, has centered on something called "venture philanthropy" -- the notion that corporate thinking can and should be applied to produce performance outcomes by which contributions, or "investments," in charity can be gauged.

Nonprofits, especially those already benefiting from high-tech contributions, are also dependent upon the length and level of donor commitments. The study attempts to shed light on donor expectations for their support and also attempted to discuss the reasons why these donors are interested in giving to charity, compared to how they give to charity, and the issues that both determine and underlie their giving.

From January to March 2001, some 30 high-tech philanthropists (including spouses and confidantes) were interviewed in-depth. The 30 included 20 men and 10 women with an average of $159 million in net worth and a median age of 42. Twenty-one participants identified themselves as holding at least a bachelor's degree. The majority of the participants live in either California or Washington state, with six on the East Coast, four in the South, one in the Midwest, and one in Canada.

Some interesting items emerge from the analysis. It turns out, for starters, that this "new breed" of philanthropist, perceived not to follow traditional thinking of donors, actually considers his/her giving similar to that of traditional corporate executive giving. They also tend not to rely only on issues they care about to guide their giving. The real kicker was that only half said they donate directly to political causes, and even then, only when it was tied directly to a personal interest. Most said that they did not feel that change could be best achieved through political giving.

Many said that their belief in an organization's demonstrated or potential effectiveness was just as important. This last point stands out because the study links the lack of connections donors may have to the social issues of the communities in which they conduct their business, especially if those donors are younger. Thus, their giving actually represents their first significant investment in social or community issues. As to why they might not give money at all, they state that they have not met their personal financial goals, cannot invest any capital in outside efforts, or simply are still trying to figure out where their resources could be best applied.

This same pool, however, also expected the recipients of their giving to focus on paying attention and being responsive to the needs of the audiences they serve first -- instead of the internal organizational constraints that hamper service delivery to those audiences. This speaks to why managerial expertise and investments in training are as likely to be donated as funding for knowledge management and information technology capacity, and the potential to grow and replicate successful practices. It also suggests a basis for donors' heightened interest in education, arts and humanities, research, children, and why socially-responsible partnerships addressing policy needs are visible on high-tech donor lists.

Though they could be labeled as optimistic idealists with an emphasis on accountability, flexibility, and willingness to experiment and be innovative in their application of philanthropy, the donors also draw a line between guiding and running efforts in which they are invested. This stands out because the study addresses how given their resources, donors are just as likely to start new efforts to address issues, as much as they are willing to investigate what groups are worthy recipients of their funds. The donors themselves acknowledge that their direct involvement in projects, versus simply direct investment, can have both positive results (new thinking and new partnership opportunities) and negative effects (funding projects based simply on their attractiveness and not their value to the community, preempting the views of other stakeholders).

As a side note, 25 of the 30 survey participants were White, one was Black/African American, one was Jewish, and one reported no ethnic affiliation -- an interesting commentary when compared with the recent report, "Engaging Diverse Communities for and Through Philanthropy," from the Forum of Regional Associations of Grantmakers.

The report points out that, while the perception of minorities as not active in philanthropic efforts is changing, people of color are still not as engaged as they could be by foundations and other philanthropic institutions. The report lays out general principles and practices around giving by African American, Latino, Asian American, and Native American donors, and ways both communities and community-focused entities can engage diverse donor interests, with examples on how this is already being done.

The report, however, is not available online, so you will need to pay US$15.00 to:

Publications
The Forum of Regional Associations of Grantmakers
1828 L Street, NW, Suite 300
Washington, DC 20036

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