February 26, 1999

The new philanthropy

The new philanthropists

They're young. They're successful. And they have money and time to give away. Just don't expect to see them in black ties and ball gowns any time soon. They'd rather roll up their sleeves and make sure their donations start working. Fast.

With super-techies like Bill Gates of Microsoft fame and Michael Dell of Dell Computer Corporation setting up private multimillion-dollar foundations, charity balls, United Way rallies and pain-staking review processes are out. Executives want new ways to tackle social ills, and frequently it means applying their business acumen to their volunteer projects to get things rolling quickly.

"It's a realization of need and awareness as to how charities function," says Daria Luciw, a University of Alberta alumna (BA '80) and local fundraising consultant with the DL Group. "And the one thing that I think has come across, in terms of awareness, is an understanding among donors, at all levels, as to how those donations are collected."

Call it the new philanthropy. Gone are the days of writing a big, fat cheque to a charity and then standing back. This generation of donors wants tangible benefits immediately.

"They want their money going purely into making things happen," adds Luciw. "The more you can make things happen, the more you can leave a legacy and the more you can influence improvements in the community."

Jennifer Welsh, a partner and consultant with d-Code, a research firm based in Toronto, has looked at the attitudes of what she calls the "Nexus" generation, people 18-35 - younger than Boomers, but older than the Echo boomers. She's co-author of Chips & Pop - d-coding the nexus generation. Welsh says this generation is skeptical of large, faceless institutions, which makes them reluctant to give. But, at the same time, there's a real desire to belong and feel their impact in society.

"There's an ironic tension that exists with this generation. They're the first to feel the effects of globalization but they're extremely attracted to the idea of community. If you ask them if they're optimistic about the future of Canada, they're unlikely to say yes. But if you ask them if they're optimistic about their local community, they will probably say yes," explains Welsh.

More important, there's a recognition in this information age, adds Welsh, that the path from school, to career, to retirement, plus whatever you do outside of work, is changing. "In the Industrial Age model, you went to school, worked for 30 years, retired then gave back to the community. It's not necessarily happening in that order anymore," says Welsh. People change careers and are constantly upgrading, learning at different points in their lives. "They're not waiting until retirement to give back." And when they do, they tend to give to causes and social issues rather than institutions.

Take Sam Kolias, for example. The 37-year-old president of multi-million dollar property company, Boardwalk Equities Inc., says his charitable passions are with the homeless and the poor. He and his brother set up their own foundation last year.

"I call it 'soul food,'" explains Kolias on why he gives. "You can have all the earthly food and treasures. You are dead without 'soul food.'"

Kolias says the changing nature of philanthropy is in keeping with general attitude changes towards belt-tightening on conspicuous consumption.

"Giving is as unique to someone as their fingerprint. Current day norms may influence the way people give. Some economic times are very conspicuous with their consumption; others are not," says Kolias, citing the early '80s as a period of conspicuous consumption. "Today, people are generally less conspicuous about their consumption and perhaps it is influencing the way they are giving."

"The reality, particularly with young business owners," says d-code's Welsh, "is it has to make good business sense as well. There has to be a connection to business success."

The younger generations view the voluntary sector as a great way to gain skills. "There's a melding together of altruism and self-interest - which has probably always been there - but now it's very up front," says Welsh. "You can choose to lament that, and say, 'Gee, whatever happened to the days when we all did this out of pure altruism.' Or, you can say, 'This is a real opportunity to leverage the fact that people do want to participate in this sector."

And they're not the only ones. The "me generation", a.k.a. the Baby Boomers, has matured with a keen interest, and commitment, in philanthropy. Raised as idealists, they put others ahead of themselves. This is how they seek personal fulfillment. And while they may not all be multimillionaires, they do have money to give.

In her book Global Demographics, Fundraising for a New World, Dr. Judith Nichols writes: "Boomers will account for 40 per cent of the developed world's spending power by the turn of the century. Household income for the 35-50 age group will leap 90 per cent. That's in comparison to a 50 per cent growth projected of the public as a whole."

But just like their younger counterparts, Boomers prefer basic causes related to social needs, want to see instant results in their immediate community, and, because they're cynical of fund-raising tactics, need to be convinced to give.

For today's young corporate citizens, Welsh says the whole language around philanthropy needs to change.

"We have to start talking about it in business terms, using the rationale of building a better workforce and philanthropy playing an educational role."

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