Delusional Altruism. Kris Putnam-Walkerly

idealists, you must read on.

      — Pamela Norley, President, Fidelity Charitable

Introduction

      I'd like to introduce you to three philanthropists. Just like you, they want to change the world (or their corner of it). They also share an additional characteristic—let's see if you can spot it.

The Kenya Community Development Foundation Wants to Change the World

      A group of Kenyan nonprofit professionals started this community foundation with one aim: shift power to communities. They understood transformational change is possible only when communities can take charge and find their own solutions for development.

      So they created a different model for community philanthropy.

      Their foundation supports poor and marginalized communities to uplift themselves through their own efforts. It invests in community-led initiatives to meet priority needs. It develops grassroots leadership, builds the capacity of local institutions, and changes policies to ultimately lead to durable, lasting development.

      They do this by bringing together a range of local and global donors: philanthropists with considerable wealth; middle-class Kenyans; community residents; and funders such as the Ford Foundation, Wilde Ganzen Foundation, and Comic Relief, among others. Collectively they've allocated more than $22M U.S. to community-led development projects that have benefited more than 2.2 million people.

What does that mean? It means a community dispensary that brings treatment to people's doorsteps, educational access for students threatened by wildlife on their way to school, and renewable energy to improve living standards in local villages.

Social Venture Partners India Wants to Change the World

      It wants to do this by changing India, city by city. This venture philanthropy initiative was inspired by Social Venture Partners (SVP) International and launched by a group of Indian CEOs. Since 2012, SVP India has mobilized 180 Indian business leaders, philanthropists, and citizens to raise $460,000 and offer 17,000 volunteer hours to 18 nonprofits, impacting more than 245,000 lives.

      SVP India had a goal to improve livelihoods through job creation and vocational training. But its members quickly realized it's not enough to move a few people out of poverty and into jobs by providing small grants. While they benefit from the vast experience and insights of SVP chapters worldwide, they also needed to find an “Indian way” forward that worked effectively in their cultural context.

      To tackle massive social problems in India, they needed to mobilize the entrepreneurial spirit of their members, partner with larger nonprofits, and create scalable solutions. Their ambitious new goal? To create a million sustainable jobs over the next five years.

The William and Flora Hewlett Foundation Wants to Change the World

      With a mission to advance ideas and support institutions that promote a better world, a staff of 120, and assets of $9.8 billion dollars, the Foundation awards more than $400 million annually to address climate change globally, encourage public engagement in the arts, and equip every student for a lifetime of learning, among other priorities. To give that much money away, they need to make a lot of grants in substantial amounts.

But they realize that to do so, they also need to make it easy for nonprofit organizations to apply. The Foundation, then, did something almost unheard of: They simplified their rules.

      Many of their programs allow a nonprofit to simply submit the same proposal to them that it previously submitted to another foundation—without changing a word. What's more, many organizations seeking general operating support can submit a copy of their annual report and an audited financial statement. They don't need to spend precious time writing lengthy proposals and completing cumbersome budget forms.

      And that's not all. The foundation can also make grants up to $1 million on a rolling basis with approval from the foundation's president. No waiting for additional board review.

      What characteristics do the Kenya Community Development Foundation, Social Venture Partners India, and the William and Flora Hewlett Foundation have in common? They are all philanthropists. Did you guess that additional characteristic I asked you about earlier? It's this: when it comes to changing the world, each one of them knows how to get out of their own way.

We Are All Philanthropists

      “Philanthropist” sounds highfalutin, doesn't it? So you might be surprised to learn that “philanthropist” describes most of us. Philanthropists and philanthropic organizations actively promote human welfare. They donate time, money, experience, skills, or talent to help create a better world. They possess a deep desire to solve social problems and help others.

      I bet that sounds like you.

      You are a philanthropist.

You aren't alone. About half of all Americans and 90% of high-net-worth individuals give to charity.¹ Collectively, Americans donated $427 billion in 2018.² In addition to individual giving, this includes giving through 80,144 independent and community foundations, 2,670 corporate foundations, and 3,311 operating foundations.³

In 2017 there were 463,622 donor-advised funds in the United States, representing an astonishing 60% increase from 2016. These funds held over $110 billion in assets, and donors used them to contribute $19 billion in grants to qualified charities.⁴

Similarly, about 44% of Europeans donate to charity,⁵ and the region houses more than 140,000⁶ registered public benefit foundations. The total amount of annual philanthropic contributions in Europe is estimated at $96.5 billion (87.5 euro).⁷

China represents one of the fastest growing philanthropic countries, spurred in part by having the largest number of billionaires in the world—819 of them in 2019.⁸ Chinese philanthropy has quadrupled, from $6 billion in philanthropic contributions in 2009 to $23.4 billion in 2017.⁹

These numbers will continue to grow. In fact, over the next 25 years nearly 45 million U.S. households will transfer over $68 trillion in assets to heirs and charity.¹⁰ That's right—trillion with a T. This wealth transfer isn't just happening in the United States; it's happening around the world. India (home to 119 billionaires) will experience a $128 billion (Rs 8.6 lakh crore) intergenerational wealth transfer over the next decade alone.¹¹

      The portion of these assets used for social good represent an upcoming “philanthropy boom.”

And it's not just the countries with the most billionaires who give. According to Charities Aid Foundation (CAF), the world's most generous country in 2018 was Indonesia, followed by Australia and New Zealand. In fact, the top 20 most generous countries (ranked by three aspects of giving behavior: donating money, volunteering, and helping a stranger) include Singapore, United Arab Emirates, and Sierra Leone (the United States ranked fourth).