Entering Golden Era Of Giving

New Rich

America is on the verge of a golden era of giving, an almost certain cascade of charity and philanthropy that will distinguish the start of the 21st century in ways comparable to the giant footprints left by the legendary givers of the early 1900s, Carnegie, Rockefeller, and Ford.

Yet the giving is being done in some radically different ways, the byproduct of growing dissatisfaction with traditional institutions and the vastly different style and personality of a newly wealthy class of Americans.

Today's world of giving, for instance, includes younger philanthropists, more women, and more who want hands-on involvement instead of just check-writing.

"The standard, old-line philanthropic stuff of just giving money to the local orchestra isn't appealing. The attitude now is, 'I created this wealth and I want to do more than just give it away,' " says Jeff Swartz, a young philanthropist involved in youth programs and chief executive of the Timberland apparel firm in New Hampshire.

"Philanthropy today is activism, not sitting on the sidelines," agrees Catherine Gund. Though she's on the board of her wealthy family's foundation, she has established her own so she can be more directly involved. Ms. Gund's new Third Wave Foundation in New York helps young women with issues ranging from health care to education.

American philanthropy is not just getting younger. Some dominant, old-time philanthropic foundations are slowly reinventing themselves, often incorporating a more entrepreneurial spirit. And there's been an explosion of so-called community foundations, which pool money from a variety of donors, give them more say in how it is spent, and concentrate their works on the community in which they exist.

Driving all this is perhaps the most important change of all: a need for ever-greater philanthropic generosity because of slackening government involvement in a range of social issues.

Baby boomers and their offspring are often chided as self-absorbed and disconnected from civic involvement. Declines in everything from voting to participation in PTA meetings reinforce that image. But a range of experts in philanthropy see countervailing signs.

"Something important is happening, based on the sheer size of the transfer of wealth that's coming to the baby-boom generation and their willingness to do something with it," says John Gardner, former Cabinet member under President Johnson, past president of the Carnegie Corp., and minence grise of the modern philanthropy world.

By some estimates, $10 trillion will be transferred from one generation to the next over the coming 30 years. That mind-boggling amount is coupled with an unprecedented bounty of new wealth recently generated by the US economy. Together, they almost predetermine strong expansion in the volume of philanthropic giving into the next century.

But it's not just the dollars. Experts sense a mood swing that is making the me-generations eager to engage in social work through giving time and money.

Peter Karoff's company, The Philanthropic Initiative in Boston, seeks to match givers with those needing help. He predicts a coming "philanthropic big bang" as Americans become "seekers of meaning in their lives, seeking to redefine their values, their spirituality."

For decades, Americans have given the equivalent of about 2 percent of the gross domestic product to philanthropy. That level of giving is envied worldwide.

Yet a general government pullback from social activism begun under President Reagan has created a rising need for private-sector generosity, according to many. "You have this increasing disparity between the very, very rich and the very, very poor," says Mr. Karoff, who looks to private philanthropy as a major force for reducing that gap.

The United States had 13 billionaires in 1982 and has nearly 200 today. With the growing number of ultrawealthy has come a tripling of private, large-scale foundations since 1981, according to the Foundation Center in Washington.

These ultrarich are the headline makers: Media magnate Ted Turner pledging $1 billion to a new foundation to support the United Nations; financier George Soros spending more than $1 billion promoting his "open society" philosophy in the US and abroad.

Mark Dowie, author of a book titled "The Philanthropic Imagination," to be published next year, says these men's gifts are examples of imaginative giving on par with legendary gifts of the past, like Andrew Carnegie's funding of more than 2,000 public libraries at the turn of the century. Still, innovativeness is the exception among today's foundation heavyweights, Mr. Dowie says.

"We still have a lot of elephants," concedes Nick Bollman, senior program director of the 60-year-old Irvine Foundation in California. But Irvine, like some other large foundations, is changing. It's added board members from the new class of self-made wealth. "The expectation of these folks is quite different. They're very results oriented," he says.

More philanthropic institutions are adopting a venture-capital approach to giving. They are funding programs longer, focusing on "social entrepreneurs" with records of success, and taking projects "to scale," big enough to sustain and have broad impact.

New Profit Inc. in Boston exemplifies that new breed. It just opened its door and hopes to raise and spend about $5 million annually on five to seven projects. President Vanessa Kirsch says the venture-capital model sees philanthropy as "an investment rather than charity."

Much of the economy's new wealth has come from the technology sector. Microsoft chairman Bill Gates was one of the top five givers in 1997. But as a percentage of his net worth he's still a relative miser. That has helped give the technology sector a reputation for stinginess. But while that stereotype appears wrong - studies show Silicon Valley companies exceed the national average for corporate giving - the sector is accumulating such enormous wealth that many of its leaders are pushing for more giving.

The Entrepreneurs' Foundation in Menlo Park, Calif., for example, was founded earlier this year by Gib Myers, a successful venture capitalist who asks technology start-ups to donate some of their stock options. He hopes that when the stocks take off, so will the foundation's assets. Myers aims for up to $200 million within five years that will invest in youth and education programs.

The boom in community foundations exemplifies the growing appeal of hands-on giving. "People want to add value to their giving. It's no longer enough just to get the sensation of giving," says Sandra Hernandez, top executive of the San Francisco Foundation, a community foundation that has grown dramatically in recent years.