Philanthropy: Transfer of Wealth
Philanthropy: Venture Philanthropy
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90.3 WBHM | Birmingham -- Philanthropy is going through a renaissance that rivals the days of Carnegie and Rockefeller.

“Philanthropy is everywhere," says Kay Sprinkal Grace. And she should know. She's the author of the book “High Impact Philanthropy.”

“Philanthropy is on the front page of the NY Times. It’s on the cover of Time Magazine. Where did we used to have to look for stories on philanthropy? Society pages, the local community columns. I think that we’ve come to a real golden moment in philanthropy where the community awareness is very heightened.”

Thanks in no small part to headline-making wealthy philanthropists who are giving big sums of money to charities and shaking things up, in the process. These so-called “venture philanthropists” aren’t content to just write a check and then out of the way. Peter B. LewisThey want a say in how charities run their operations.

“I want to do the best I can to make sure my money is well used.”

Peter B. Lewis is chairman of the Progressive Insurance Corporation and a prolific philanthropist.

“Each case where I haven’t been involved it has been – and I’ve just had more joy from it when I give to something that I’m interested in and I can influence it. The reality of philanthropy is that people tell you whatever you want to hear until you write the check and then you generally find out they meant almost none of it.”

Again, Kay Sprinkal Grace.

“Those who create wealth ideas in companies are looking for opportunities to create, not observe. These are not the people who watch things happen. These are the people who make things happen. I’m a 33 year old gazillionaire, where’s your business plan? I want to know what your vision is. I want to know what your goals are. I want to know where you’re going and I want to know how you’re going to get there.”

But this push by donors and board members to take a more active role in how charities operate is sometimes troubling to non-profit managers. Sandy Killion is with the Community Foundation of Greater Birmingham.

Sandy Killion

“They shouldn’t be coming in the office every day hanging around doing staff work.”

Brooke Taylor, who has run non-profit children’s theater groups, takes it a step further. She worries that more engaged donors might try to push an agenda that could pull a non-profit off mission.

“I think a lot of people, with money, you know it’s kind of something that they can hold over someone’s head and I want to steer clear of compromising what we stand for. But I mean, the simple fact of the matter is if we don’t have those positive fundraising experiences the doors of ACT would have to close… which is really sad.”

But some non-profit managers, especially those working with meager budgets, say they’d take their chances with pushy donors. Donald Basham used to run the Huntsville Rescue Mission on 58-hundred dollars a month. That covered mortgage on the property, utilities, food for 35 homeless men and Basham’s salary when he took one. Fundraising was a constant struggle.

“Here’s it’s sort of like the slaves in Egypt when they were building the pyramids. A thousand of them pulling one stone at a time. You basically work every possibly entity you can to find any kind of food or financial help you can from any source, so it’s constantly word of mouth… well, if you can’t find help who do you know that might can. And so it’s 9,000 phone calls to accomplish one thing.”

It’s these kinds of non-profits – those that live hand to mouth – that critics say could fall victim to venture philanthropists with hidden agendas. Huge gifts by philanthropists like Bill Gates and Ted Turner are prompting questions about the motivations of donors. Foundations spend big money on public policy research… sponsoring news projects. They are a powerful force in setting the social agenda.

Philanthropy Roundtable

One former official with the Philanthropy Roundtable, an association of donors in Washington DC, imagines a fellow named Dr. Evil Donor – an extremely wealthy philanthropist who uses his money and clout to impose his ideology on impoverished or developing countries. Subjects like biotech, narcotics legalization and other emerging topics, he says, could lead to the potential serious mischief by rich people who were never elected to anything by anyone. And it’s not just the 3rd world that’s at risk and the risk isn’t just hypothetical. Philanthropists are increasingly embracing the ballot box as a means of social change by sponsoring citizens initiatives. In California, a trio of wealthy philanthropists pushed through a initiative that rolls back the drug laws… it requires drug treatment instead of jail time for non-violent offenders. Larry Brown was Executive Director of the California District Attorneys’ Association when the measure took effect in 2001.

“The simple fact of the matter is that we were outspent by the proponents of Proposition 36, ten to one. The Yes on 36 campaign was bankrolled almost entirely by three out of state millionaires whose mission is to weaken the drug laws across the country. On one day alone those three contributors each wrote a check for over $380-thousand to bankroll the campaign.”

“I don’t even know what it is. What was it?”

Peter Lewis of the Progressive Corporation when asked why he supported the measure.

“I’m sort of a more strategic financier in that area and I don’t pay attention to the details. I know what we’re trying to do and what we’re trying to do is foster the passage of initiatives that reduce the penalties for drug use. Alright! That’s what we’re trying to do. I don’t pay attention to the details of which initiative, where.”

Not what Larry Brown would want to hear.

“It certainly should be disturbing to Californians that their public policy has been influenced so significantly by persons who do not live in our state and these are persons who radically altered our drug laws and now literally do not have to live with the consequences.”

Peg Hall

University of Florida professor Peg Hall teaches a graduate-level class on fundraising.

“I don’t like it when people say well it’s their money they should be able to decide where it goes. Well wait a minute! It’s not their money!”

Hall argues that if donors couldn’t contribute to just any cause that strikes their fancy, they’d end up paying more taxes on their income and then congress and state legislatures would decide what causes need funding.

“I understand their position. It’s a reasonable thing to say. I couldn’t care less!”

Philanthropist Peter Lewis.

“What we’re supporting is in my view as good for the country and the populace as anything we could support.”

Peg Hall says this kind of attitude just reinforces the image of philanthropists as elitists.

“We’re going to help the poor people and we’re going to help them while sit in our multi-million dollar building in Manhattan. And that annoys people and it annoys congressional people and it annoys us as taxpayers.”

Congress and the courts have been turning a more critical eye on the role foundations and philanthropists –- especially venture philanthropists -- play in shaping public opinion. And there’s evidence the general public may be paying attention as well. A new survey from Harris Interactive finds that people trust non-profits, philanthropic and advocacy groups more than for-profit companies -- but not by much. When asked if they believed various groups would give them objective information on the environment, poverty and human rights, 3 percent of respondents said they trust for-profit companies and just 15 percent said they trust non-profit organizations. The remaining 82 percent say their level of confidence depends on the issue and the organization.

~Tanya Ott, February 26, 2004