The Future of Philanthropy

Back in 2006, philanthropist sisters Swanee Hunt and Helen LaKelly Hunt struck up a partnership with the Women's Funding Network, an umbrella group for over 145 organizations that fund "women's solutions" globally. Together, they decided that they would strive to raise $150 million in three years for women's funds across the world. It felt like a real stretch, an outlandish number even for a group of women known for giving generously and having far reaching networks of like-minded philanthropists.

Little did they know that the economy was on its way to tanking and they were about to be in competition with the most highly fundraised presidential election in history. But despite it all, Women Moving Millions -- as they would dub their unreasonable campaign -- managed to exceed its initial goal. One hundred women and men committed at least $1 million to one or more of the 145 members of the Women's Funding Network, bringing the total raised to $176,170,506.

Women Moving Millions is the most dramatic recent example of the way in which women are asserting their philanthropic power at unprecedented levels and in unprecedented numbers. And it's not just women who are shifting the giving paradigm. A new generation of wealthy, progressive youth are reinventing philanthropy to reflect their faith in the grassroots. The future of philanthropy has arrived. And it's very different: less male, less old, and less top-down and strings-attached than ever before.

Many of those who pledged $1 million for Women Moving Millions had never given at such a high level, indicating a new boldness among women donors. (There are fewer women philanthropists than men, and they tend to be more conservative with their money.) The participants in Women Moving Millions are committed to giving money directly to other women, who, research says, are more likely to invest in their own communities and families. Chris Grumm, the president and chief executive officer of the Women's Funding Network, explains, "An estimated 80 percent of grants made by women's foundations flow to women and girls with low or no income. Our work is showing that women-led solutions are the savviest way for donors to propel lasting community and social change."

In a similar way, the young and wealthy are also deepening and complicating what it means to "give back" -- a concept many of their father and grandfathers defined simply as charity. Since tax-exempt status was created by Congress as part of the Revenue Act of 1913, rich men -- Rockefeller, Carnegie, and a whole host of lesser-known wealthy patriarchs -- have been shoring up their excess wealth in foundations, happy for the social kudos and the tax haven. But some of their progeny are not content with the status quo of family philanthropy.

Resource Generation, a national group, organizes progressive young people with financial wealth. At annual conferences and events throughout the year, they work to come to terms with their own economic status, reflect on the financial system that keeps wealth so inequitably distributed, and brainstorm new ways of being part of the social justice movement. They've just launched an initiative to organize young people of color with wealth.

These cutting-edge young philanthropists are systemic thinkers -- many of them critical of capitalism itself -- and deeply influenced by The Revolution Will Not Be Funded, a book on the failings of the current nonprofit system. The book's co-editors, representatives of INCITE! Women of Color Against Violence, essentially argue that the funding application and auditing processes have created a quagmire for nonprofits; they spend all their time writing grant applications and filling out paperwork rather than serving their constituencies. And furthermore, there are ample examples of foundations funding a nonprofit to fix a "problem" that the foundation, itself, has contributed to creating in the first place. (See Naomi Klein's forceful takedown of the Ford Foundation in The Shock Doctrine.) The editors dub this the "nonprofit industrial complex."

Young philanthropists are trying to avoid some of these pitfalls by giving with fewer strings attached -- believing strongly that those giving direct service to their own communities or the leaders of grassroots movements know best how to use their money most efficiently. This approach also allows the funders and the funded to respond quickly, without the slowing side effects of a lot of bureaucracy. Take the Gulf South Allied Funders (GSAF), a project that grew out of Resource Generation's community, as an example. Struck by the intensity and immediacy of the needs in New Orleans after Hurricane Katrina, a group of young people decided to raise $1 million a year for three years among their wealthy networks and find a foundation to distribute it that already knew the grassroots organizations doing work in the area. They reached their goal and, after much research, partnered with the Twenty-First Century Foundation, a 38-year-old foundation focused on black communities.

Tyrone Boucher, part of the Resource Generation community and the co-editor of the blog Enough, writes: "The logic behind GSAF's founding was that, as radical people with various types of access to wealth, it would be useful for us to strategically direct whatever resources we could towards people of color-led, on-the-ground rebuilding efforts. We wanted to send money to grassroots organizations, and wanted to avoid the racist and paternalistic power dynamics common in traditional forms of philanthropy, especially when grantmaking is directed by wealthy white donors."

Though many foundations and private donors pay lip service to the idea that nonprofits should keep their operation costs low, they simultaneously demand a tremendous amount of paperwork both to apply for funding and prove that the funding was used wisely. This kind of documentation has become a specialized skill, usually done by college-educated professionals. And of course, even making connections with funders -- private or foundation-based -- is time and resource-consuming, not to mention fraught with class bias. A Princeton grad like Wendy Kopp, founder of Teach for America, for example, inherently has much more access to funders than a teacher who was born, raised, and continues to work in Baltimore; even if the latter educator had a bright idea for intervening in the failing public school system, Kopp's the one with access by virtue of her background.

While the radical young people of Resource Generation and the donors of Women Moving Millions could have a lively debate about some of the ways in which their philosophies on philanthropy depart, they also have a lot in common.

They are showing the old, white men who have long set the standard in the philanthropic world that there are other -- authentically altruistic and deeply effective--ways of donating money. These cutting-edge funders see themselves not just as philanthropists but as social justice advocates. And most importantly, they don't merely want to make the world a little more comfortable for those less fortunate; they want to disrupt the systems by which fortunes are made.

As the new philanthropists' numbers continue to grow, and their attitude toward giving spreads, the entire philanthropic world will be changed. Funding will make its way more fluidly down to the leaders on the ground -- often women, often people of color. Bureaucracy -- all that paperwork and the nonprofit consultants that go with it -- will be minimized. And we can all get down to the immediate goals of alleviating suffering, increasing economic security, and fighting injustice.

Sounds a whole lot more inspiring than another black-tie fundraiser, doesn't it?