The Changing Face of Philanthropy: What for Science?

Life is a series of learning experiences. I would like to share with you what I am learning about philanthropy. I became interested in the subject because of my many volunteer efforts, including founding the Women in Science and Technology Alliance (WiSTA), the first and largest coalition of public and private institutions promoting full participation of girls and women in all aspects and levels of science and technology. Along with technology, nonprofit organizations are transforming America. Technology is the engine of economic growth and has changed the way we live and work. Philanthropy is providing entrepreneurial and collaborative strategies to help improve our communities. More importantly, an interesting juxtaposition of the two has led to a philanthropy renaissance unlike any other in our history. Today, nonprofit groups represent an important and growing force in the U.S. economy. Internal Revenue Service (IRS) data show that in 1997 there were 54,000 private and family-based foundations, compared to 22,000 in 1982. The IRS recently reported that over a 20-year period, the assets and revenues of the nonprofits increased 300 percent, nearly four times greater than the rate of growth in the U.S. economy as a whole. The rise in the number of private foundations is so rapid that the status symbol of the third millennium could be having a foundation of one's own. More significantly, the quantitative changes are coupled with emerging trends and a sea change in the way philanthropy is done, who is doing it, how funds are given and managed, and what results are expected. When it comes to giving, our national vital signs are very good indeed. More than 3.5 percent of Americans are millionaires, holding nearly $300 billion collectively, as estimated by the Foundation Center in New York. Americans--men and women--give about 2 percent of their income to charitable organizations. The top 1 percent of the wealthiest give 8 percent of their income. On the other hand, an astonishing 80 percent do not mention charities in their wills. It is exciting to watch a new breed of well-funded, activist philanthropists come of age, unique with a strong presence from women and young professionals. With their fresh perspectives, this new generation of donors is bringing new styles and standards to philanthropy. As new trends emerge, science and technology leaders must become prepared to exploit the current outpouring of good will. The new millionaires, mostly young and many women, have earned their wealth in the stock market, technology, and as venture capitalists, riding the market boom of the last two decades. While most feel like novices in the world of philanthropy and in the art of giving, they dismiss the old belief that money should age before being given away. These people are changing the face of philanthropy, literally and figuratively. It is not uncommon for the new breed of venture philanthropists to ask for a "business plan," and later demand specific results. These new donors see their wealth as "philanthropic capital" and giving as more than an act of charity--an act that requires tracking and documenting return on investment, in social change currency. By starting at an early age and because of the size of their assets, the new generation has the potential to give more of its wealth, time, and talent than any generation before. Examples of the new ways of giving abound. Sara Lee Schupf, the namesake of the Sara Lee corporation, exemplifies those who are not trained in science, but who have had enormous impact on the community. She has served as the chairman of the board of the Weizmann Institute of Science and is a member of the President's Council of the National Academy of Sciences. Among other things, Schupf has endowed the first academic chair for a woman scientist and the Weizmann's Women and Science Award, the only national award of its kind. Catherine Muther made her money in corporate America in the heart of Silicon Valley. Her belief that "one can burden one's children with wealth" led her to the decision to retire early from a top executive position at Cisco Systems to establish The Three Guineas Fund, to empower young women through education and workplace changes. The fund supports a "technology incubator" for women entrepreneurs to launch their own high-technology business. The fund takes a 2 percent equity in each business for support of community programs. Paul Brainerd, the software maven and founder of Aldus Corp., has unabashedly applied his business skills to philanthropy. For him the equivalent of a business handshake is a big hug of appreciation. Brainerd sold his company in 1994 and plowed one-third of the $130 million profits into a foundation that seeks to protect the environment of the Northwest. He also founded the Social Venture Partnership (SVP), which is funded by a group of peers and young professionals, supporting--much like a venture capital fund--public education and children. With 110 partners, the SVP has created a venture capital model to set up partnerships with community groups. A major departure from the norm is that SVP executives talk directly to applicants to gauge what they do, how they do it, and what results they have attained. Steve Kirsch, founder of the Internet search service Infoseek, created his own foundation, is funding cancer research, and is supporting research to identify all asteroids hurtling near planet Earth. If there is a way to "save the world," surely this sounds like one to me! Tina Padlodowski left the Microsoft executive suite in 1992 at a relatively young age and took her money and business skills to the world of nonprofits. She reflects the business acumen of the younger set when she says that "donors with new money are less concerned about getting their names on a building than about seeing that the service is delivered in a cost-effective way." The new philanthropists and their foundations are having an impact on the establishment. Their results-intensive approach, coupled with a projected $90 billion decline in federal funding of nonprofits in the next five years, is motivating the national foundations to examine their processes, better target their giving, and be more selective with their applicants. Increasingly, women are becoming leaders in both giving and getting major gifts. Women hold nearly half of the investment wealth in this country. Furthermore, the pattern of women supporting their husbands' choice of philanthropy is changing for several reasons: 1) Women live longer and ultimately make philanthropic decisions; 2) An ever-increasing cadre of professional women with wealth of their own stemming from business savvy, entrepreneurship, and explosive market growth are eagerly becoming leaders in philanthropy; and 3) Young millionaires, many women, are retiring early to head their own foundations. In general, women's philanthropy is different from that practiced by most men. Women are twice as likely to make small donations as are men, but fortunately they are learning to avoid the "bake sale mentality." It is believed that a majority of women who have both influence and resources frequently write checks of $100 or less to support a charitable cause or a political candidate, and not for lack of generosity. In fact, the sum of many small checks could add up to substantial giving. What women tend to do is engage in the so-called "guerrilla giving," donating to twice as many causes as men do. These women need more information, guidance, and encouragement on how to be more effective and strategic givers. There are other differences. Compared to men, women do not usually base their philanthropic activity on business connections, nor do they seek high-profile public recognition, such as a name on a building, as often as do men. A large majority of women will be satisfied to know that they are making a difference. Women often fear impoverishment and running out of money. This is reinforced as Social Security, Medicare, and related social services seem increasingly vulnerable to social, policy, and economic changes. But the scene is rapidly changing. Women are finding new ways to give. Washington Women's Fund is an example of communal giving through membership in the fund. Initial membership started at $2,000 (half directed by donor and half as a pool fund). Many have raised the ante to $10,000 or more, as they feel more comfortable in their new role as a major donor, and as they gain increasing confidence about their priorities. For the younger women and professionals, challenges include: 1) lack of time to strategically think about how they would want to share the fruits of their hard work and smarts; 2) the fluid nature and unpredictability of social nets during retirement; and 3) lack of long-term connections to service organizations where people begin to see philanthropy in action. The number of women who are leveraging their purse power, especially at a younger age, to effect positive change has greatly increased. The new trends in giving provide opportunities to further engage young Americans, especially women in all walks of life, to support science and technology research and education. Not surprisingly, women's giving is often targeted to women's concerns and causes. Areas with special appeal to women include health, environment, education, and underrepresentation and lack of recognition of women and minorities in science and technology fields. There is an urgent need to better cultivate women and understand women's styles, motivations, and priorities to help them become more fulfilled donors. How Is WiSTA Helping? What is the role of a national coalition and alliancing1 organization such as WiSTA in helping to exploit the new trends? WiSTA hopes to seize the initiative and help to promote fresh strategies and skills to attract new donors to support our mission of bringing about full and equitable participation of women in science and technology. In our educational role, we bring the various worlds and cultures together and lead the way in cultivating women and young professionals to consider our mission as their philanthropy of choice. We also facilitate linkages between women and men of all professional pursuits to rally around our issues. WiSTA is bridging the science and technology community with the general public, is establishing a dialogue on how to expand these new models, and is encouraging men and women in all walks of life and professions within and without the scientific community to direct their philanthropy in support of science and technology. In the process we are learning many new skills. For example, many donors will challenge us on how we do things and how their gifts are managed--the old argument that "this is the way we have always done it" will not wash with the new crowd. We want to spread the philosophy expressed by businessman and philanthropist Ted Forstmann: "Giving is at the core of the human condition. Therefore, no one ever gives enough." Jaleh Daie, Ph.D., is president of Women in Science and Technology Alliance (WiSTA, www.wistalliance.org) and past chairman of the Council of Scientific Society Presidents, both based in Washington, D.C. She is a biology professor at the University of Wisconsin (jdaie@facstaff.wisc.edu). This article is modified from a presentation at the 1999 annual meeting of the American Association for the Advancement of Science. it is not rocket science," The Scientist, 12[22]:13, Nov. 9, 1998.

The Changing Face of Philanthropy: What for Science?

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