Monday, June 2, 2014

The Giving Institute's Summer Symposium

On June 17th  Giving USA Foundation will release numbers on philanthropy for 2013 and I'll post my comments then. A number of consulting firms  like The Oram Group belong to the Giving Institute whose mission is the advancement of ethical philanthropy. We first joined  in 1955, dropped  out in 1975 and rejoined  in 1992. (The Institute members were still discussing the same issues in 1992 as they were when we resigned because Harold Oram got  into a toe-to-toe with the late George Brakeley - over nothing.  Money. But I stray).

In late July Giving Institute will hold its annual "summer symposium" in Vancouver BC. (Good duty; great city). In addition to the aforementioned comments to come on Giving USA I have a few other issues for the graybeards (including me) to think about:


Paul Schervish of Boston College and his colleague John Havens have been studying and reporting  on the intergenerational wealth transfer for years. But a funny thing happened to the Rapture on the way. The economy tanked and we heard  little of the wealth transfer for several years. Now the wealth transfer is back - along with other misleading economic signals. The College's Center on Wealth and Philanthropy reports that "... estimates of the much anticipated 'wealth transfer' in this country have been a topic of conversation in the nonprofit and financial worlds for years--and the numbers are staggering. By the year 2055 some $41 trillion will change hands as Americans pass their accumulated assets from one generation to the next."

I'm not an economist but I've always found these estimates a squirrely business way too dependent on fragile economic assumptions as indeed was the case in  2007-8. We are now  in another high tech bubble. All the pumping and dumping of stock in companies with no profits, directed  by naughty high testosterone guys who should have never been allowed to leave the principal's office.

Also the banks are back in the sub-prime business. Mostly because no CEOs went to jail. This time at least a few banks will not be too big to fail.

The point is there's a difference between real wealth and paper wealth. The "great wealth transfer" doesn't make which is which clear - at least  not to me.

Takeaway: Let's have some objective evaluation. Meantime - as consultants  - let's advise our clients to concentrate on  the wealth that's already provably there.


The myth: the rich are generous.

The fact: taken as a class the rich are cheap by any measure and not giving anywhere near capacity.

For all the publicity generated  and garnered by Buffett, Gates, Zuckerberg and  others who have taken the pledge there is a much larger sub-class of one percenters with even  more aggregated wealth who've done no  such thing. Charitable giving still hunkers at plus or minus 2% of a generally gaining GDP. Of course that means a modest absolute dollar increase as the percentage enlarges  but it's  nowhere near the capacity of the wealthiest quarter. That 2% hasn't budged since records were begun. Money is pouring into donor advised funds that offer an  immediate tax deduction and safe parking forever.Foundations are sitting on half a trillion dollars or more in tax forgiven cash. Who is that helping?

The growing economic inequality of this nation is well documented. The poor and the near poor (once the middle class) are said by economists from Piketty to Krugman to be increasing in number. But for sure payrolls remain flat. Government funds have been taken away from charitable enterprises. Whether that  money will ever come back is problematic at best. Philanthropy cannot make up the $200-300 billion difference. And  philanthropy does not reach the poorest people who need it the most. It benefits the middle the most and its benefits are skewed toward charities who serve them, not that it shouldn't. Each year's list of gifts at $100 million and up go primarily to higher education and health care. The  only significant major exception I can think of was Joan Kroc's multibillion dollars to Salvation Army.

Takeaway: The rich by and large are not generous.


The reason to be a Giving Institute member should be because we can and should be seeking to advance philanthropy globally. Those of us who come from outside the US and those of us who have served charities internationally recognize that the profile of philanthropy and world demographics are changing rapidly. I was an early  incubator of Giving Tuesday whose Thomas Edison - Henry Timms - will be at the summer symposium next month. He's told me and my students that one of the major challenges for GT now is how to take it global. And that's the challenge for all of us.

Though US giving may still be the world's philanthropic driver this is not necessarily a permanent condition as the global economy increasingly displaces the purely domestic. In my view G.I. can be the deus ex machina here, get it started, and then get out of the way. My vision is  patterned on One World Alliance, a congeries of airlines who code-share, cooperate as well as compete and generally strive for  a more seamless if far from perfect travel experience.

Takeaway: The domain is available. I own it.

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