The term “philanthropist” tends to conjure images of society’s elite who bequeath a portion of their tremendous wealth to large institutions such as hospitals, universities, and museums. However, current trends in charitable giving indicate that a growing number of philanthropists are ordinary people who share an extraordinary desire to “give back” and to “make a difference.”

Instead of inherited assets, these new philanthropists are likely to bring their own earned income to their favorite causes and to give generously while still living. Another trend is to support human services and community based organizations rather than the larger, more prominent charities. In addition, this new generation of donors is demonstrating more personal involvement by also contributing their time, energy, and expertise.

Likewise, the new philanthropists tend to be more results oriented. They carefully scrutinize their charities because they want to know how their dollars will be used. They expect measurable results from their philanthropic “investments,” and are also willing to donate their skills to improve such areas as management, accounting, and fund-raising.

The new philanthropists are also choosing non-traditional channels for giving. For example, giving circles operate somewhat like investment clubs in that members pool their money. The pooled funds help members have a greater impact on the causes they support and more say in how those funds are used. Members of giving circles typically contribute a predetermined amount each year and vote on how to dole out the pooled funds. In contrast, traditional foundations build up endowments and donate the interest.

Another tool favored by the new philanthropists is the “donor-advised” fund. Like giving circles, they are inexpensive to set up and allow for a great deal of creativity. But unlike giving circles, this type of fund can be set up by an individual and is somewhat akin to running one’s own philanthropic foundation.

In short, philanthropy today has a new vitality and a new “hands-on” orientation. These individuals have discovered that their life satisfaction has multiplied through charitable giving.


Reprinted by permission of Money Quotient, NP 

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