Philanthropy: The Secret Key to Lasting Wealth and Achievement

Last week I started a series of articles based on the work of George McCully speaking to the paradigm shift occurring in the philanthropic world. As George writes in his book, "... paradigm shifts are irreversible changes in fundamental structures and strategies, some of the basic outlines of the future paradigm, or aspects of the old paradigm that will probably disappear... " And he further explains, "Causation in history is the coincidence of mutually conducive conditions".

In order to understand that is happening, and how things are being re-aligned and restructured, let's look at the following table.

20th Century 21st Century

Technology

Printing, mail, telephone

Computerized databases, the cloud, the Internet, social media

Economy

Traditional, steady growth, generally stable, corporate economy

High technology, global economy, rapid expanse new wealth, super global corporations

Institutions

Private foundations lead, community foundations, large dominating charities, professional associations, National Taxonomy of Exempt Entities (not donor centered)

Donor-advised funds, private foundations multiply, focus to whole philanthropic community, barriers dissolve, virtual philanthropic community develops

People

Professionalization makes philanthropy highly technical

New and emerging donors explore unconventional ways of giving and volunteering

Practices

Industrialized fundraising - telemarketing, direct mail and competitive grant-making

Donor education, venture philanthropy, giving circles, e-philanthropy, collaboration, advisors

Rhetoric

Moral obligation "giving away", "giving back", "nonprofits", "needy", "disadvantaged".

Constructive appeal "Donor investors", "social change", "make a difference". Classical concept of philanthropy arises.

Results

< 2% GDP and AGI, only 25% itemizers of charitable deductions, < 20% of taxable estates make charitable bequests, 5% largest charities get 80% of the grant dollars, 80% of the smallest charities get 5% of the grant dollars

Aiming higher and too soon to tell what the paradigm shift will produce.

Note: the above table is this author's interpretation of key points found on page 69 of Philanthropy Reconsidered: Private Initiatives - Public Good - Quality of Life

By reviewing the above and for those in the industry and who support to the philanthropic sector, it is easy to acknowledge that computerization and the Internet have revolutionized every aspect of our civilization, including charitable work. Earlier this year, $11,000 was donated to charity in a single tweet via Twitter.

Globalization is breaking down barriers not only in people's ability to communicate with anyone around the world, but also to be able to support any initiative they want. A good example of this is Kiva, which provides microloans to businesses around the world.

Donor-advised funds and private foundations continue to grow, and as I too have written about in the past, the lines are continually being blurred between "non-profits" and "for-profits" as more and more companies align their business models to benefit society and not only their investors. Could there be a day where most charities simply cease to exist?

Innovation and experimentation continue in an unrelenting and never before seen pace. Technology, the economy, institutions, etc are all playing a part in the perfect storm of mutually conducive conditions that are changing what we all understood of charity through the 20th Century. And, although we know it is evolving, most of us do not have a full picture of what the face of philanthropy will look like 5, 10 or 15 years from now. This provides each one of us as people who work in the field of social purpose or support the industry as donors (or consumers) with an opportunity to help chart the course into the future.