Category Archives: Executive

This Is How the New Generation of Billionaires Approaches Giving

This Is How the New Generation of Billionaires Approaches Giving

In recent years, billionaire donors have been the subject of scrutiny from the public. Much of the criticism comes from how these major donors have chosen which organizations to support in the past and the information that they have made available about these decisions.

The newest generation of billionaires seems to have listened to the criticism. They are actively changing the ways in which they give to ensure that their giving is both more effective and more in line with people’s expectations.

Young billionaires are taking a hands-on approach and embracing significantly more transparency in their giving. This is demonstrated by research coming from Wealth-X and published in its 2019 Trends in Ultra-High Net Worth Giving report. The research also showed that these young donors are more focused on giving away their wealth over the course of their careers rather than waiting until they retire.

Some of the other key ways in which young billionaires are changing how they give include:

1. Collaborating with other donors on new projects.

The traditional form of philanthropy involves donors acting alone and making grants through their independent organizations. However, younger entrepreneurs are more focused on impact than ever before. They see strategic collaboration as the best way of effecting lasting social and environmental change.

business

Some of the most effective philanthropy from the past years has been achieved through collaboration. This strategy makes it possible for donors to learn from each other and pool resources in unique ways.

Perhaps the most obvious example of philanthropic collaboration is the Giving Pledge. This agreement was started by Bill Gates and Warren Buffett, two members of the older generation. It holds individuals accountable for donating. The Giving Pledge may actually have served as inspiration for more recent collaborative giving, which is more strategic and born from shared dedication to lasting change.

2. Becoming more actively involved with organizations.

In recent years, there has been a trend toward billionaires sitting on the boards of nonprofits rather than putting their names on buildings. Philanthropy experts call this trend “co-creation.”

The trend seems to have grown out of the rising criticism of billionaires who push money toward a problem without following through on how those funds are used. Young billionaires want to understand exactly how their donations are being used to make an impact, which in turn could inform how they approach giving in the future.

One of the prime examples of this trend is REFORM Alliance, an advocacy group focused on criminal justice and founded by Meek Mill and Jay-Z. This organization has received large donations from a number of younger billionaires, several of whom have subsequently joined its board.

The group’s leadership includes Vista Equity Partners CEO Robert F. Smith and CNN host Van Jones, as well as full-time philanthropist Laura Arnold. The different points of view provided by these individuals have become a primary strength for this organization.

3. Donating less to the arts and more to education.

Regardless of the age of donors, education is a popular cause. However, among donors who are older, arts and cultural institutions are a close second. More than 65 percent of billionaires who are older have donated to the arts, compared to about 35 percent of the younger generation of donors.

In general, it seems that priorities among donors have shifted somewhat between generations. Moving forward, it will be interesting to see how the arts world reacts to reattract donors and keep themselves alive.

education

Perhaps part of the reason that younger donors have avoided supporting the arts is the connection between art donations and conservativism. This trend is best demonstrated by David Koch, who recently passed away at 79.

Koch became one of the primary patrons of the Metropolitan Museum of Art and the Lincoln Center for the Performing Arts. However, he also gave millions of dollars to conservative causes these organizations were criticized for accepting his money.

4. Focusing primarily on one philanthropic issue.

In generations past, philanthropists would often contribute to a wide range of different causes. The next generation shows a predilection for specializing in a particular type of philanthropy.

Perhaps because the newer generation started its giving at a younger age, individuals have more time to become experts in a particular field of giving. This trend may also result from a larger interest in impact giving than was present in prior generations.

Experts believe that this trend will only become more intense as people who are younger start to accumulate wealth, but its impact is already rather apparent. For example, a group of young Chinese billionaires has focused solely on the topic of climate change, which is the fifth most popular cause for philanthropists in China.

With their money combined and focused, this group can achieve much more than was previously possible. This group also demonstrates the principal of collaboration among multiple donors at once. Since all donors will choose different focuses, it is unlikely that any causes will go unfunded.

Bloomberg Philanthropies US Mayors Challenge Chooses Nine Winners

Bloomberg Philanthropies US Mayors Challenge Chooses Nine Winners

Recently, Bloomberg Philanthropies awarded nine American cities $1 million each as part of its US Mayors Challenge. This money will help leaders in these cities implement innovative solutions to some of the most pressing issues facing American urban centers, including drug use, climate change, economic opportunity, and homelessness. The nine winners were announced at the… Continue Reading

Honoring the Philanthropy of Microsoft Cofounder Paul Allen

Honoring the Philanthropy of Microsoft Cofounder Paul Allen

Following the death of prominent philanthropist David Rockefeller last year, the world of philanthropy recently lost another giant: Paul Allen. The cofounder of Microsoft Corporation, Allen made a name for himself as a philanthropist not afraid of taking risks. During a time when the majority of foundations and individual donors gave cautiously and backed only… Continue Reading

The Chan Zuckerberg Initiative: The Search for a New CIO

The Chan Zuckerberg Initiative: The Search for a New CIO

The billionaire founder of Facebook Inc. Mark Zuckerberg, along with Dr. Priscilla Chan, his wife, recently announced that they are on the hunt for a chief investment officer (CIO) who will manage more than $10 billion in philanthropic contributions through their LLC, the Chan Zuckerberg Initiative. The organization has brought on Yale University’s longtime CIO… Continue Reading

This Is What You Need to Know about Jeff Bezos’ $2 Billion Fund for Homelessness and Education

This Is What You Need to Know about Jeff Bezos’ $2 Billion Fund for Homelessness and Education

About a year ago, Jeff Bezos put out an open call for suggestions about how to direct his philanthropy. It seems like the founder of Amazon has finally made his decision.  Very recently, Jeff Bezos, the richest man on the planet, announced via Twitter that he was creating a $2-billion philanthropic venture called the Bezos… Continue Reading

This Is What You Need to Know about Strategic Philanthropy

This Is What You Need to Know about Strategic Philanthropy

The baby boomer generation continues to grow older and has already begun to pass the philanthropic choice to later generations. Estimates show that boomers will leave behind about 1 trillion dollars each year to family members and charities. This incredible amount of money funneling into charities, combined with the recent increase in large foundations funded… Continue Reading

You Need to Know about the Changes Taking Place at These Foundations

You Need to Know about the Changes Taking Place at These Foundations

Over time, grantmakers tend to evolve their strategies and adopt innovative approaches to giving. For some organizations, evolution means making small tweaks over time to shift focus areas or expand them. However, when faced with uncertain times, some organizations make more radical shifts that completely change their priorities and policies. Two major American organizations have… Continue Reading