American charities tap new wells of philanthropy

Organizations target minorities and the newly wealthy in an effort toexpand pool of donors.

Emeral Crosby has more authority than riches as a high school principal in a low-income neighborhood of Detroit.

But he's already a small-scale philanthropist, having endowed a small scholarship at Arkansas Baptist College in Little Rock, as well as a Detroit tennis program aimed at developing young African-American talent.

"Somebody has to pass something along," says Mr. Crosby of his civic giving.

Meet a model of the new philanthropist. While traditional sources continue to provide most of the fuel for gamut of foundations, funds, and charitable institutions, a push is on to tap new givers.

Particularly in demand are members of minority communities that are just beginning to generate modest wealth, as well as young, newly wealthy groups such as the techno-millionaires of the Northwest.

This new push has been building for several years, but has been given a major boost in recent weeks with the formation of a coalition of organizations around the country involved in organized philanthropy.

Called the National Initiative to Promote the Growth of Philanthropy, the five-year program will spend $10 million identifying and recruiting largely nontraditional donors.

"We need to find a language that will engage these folks," says Albert Ruesga, director of the new initiative, based in Washington.

Propelling the initiative is a perception throughout the non-profit world that while American giving remains the envy of the world, it is not keeping up with rising social need.

Often cited as a prime cause for the need for more private charity is the federal government's gradual retrenchment from social programs since the 1980s.

Giving's golden moment?

At the same time, philanthropists see a golden moment of opportunity.

Some experts predict a $10 trillion transfer of wealth as baby boomers edge into retirement in coming decades, and the nation's foundations and charitable organizations would like to see a share of that wealth devoted to community causes.

In addition, the economic expansion of the 1990s, the longest ever during peacetime, should also enable the nation to be more generous with private donations, say advocates of increased giving.

The United States devoted the equivalent of about 1.8 percent of its gross domestic product to giving of all kinds in 1997, according to the American Association of Fundraising Councils.

That's down slightly from about 2.1 percent in the late 1960s, but the number has bounced around enough over that time span that no clear-cut trend is evident.

Still, "if you ask anyone at a nonprofit, they'll tell you the need is clearly growing," says Maria Groen, project director of the Northwest Giving Project.

Brand new, the project will focus on generating philanthropy among several groups, including the newly wealthy in the technology sector around Seattle, where Microsoft Corp. is headquartered.

Step one for the Northwest Giving Project will be to identify what groups are "underrepresented" in terms of regional philanthropy and then attempt to increase their giving.

It will also attempt to help foundations better understand the newly emerging forms of philanthropy that may be more attractive to groups like the techno-millionaires.

Many of them prefer a more entrepreneurial, hands-on approach than is common among traditional foundations.

Encouraging minorities to give

Down in south Florida, there is a drive to encourage more giving from the rapidly expanding Hispanic population.

"We have the most affluent Hispanic community in the nation," says Joanne Bander of the Donors Forum in Miami, "and we need a broader commitment to bigger organizations of the community."

According to Ms. Bander, south Florida's Hispanics have a tradition of "direct charity" to family members and the church, a typical pattern for "first-generation givers," she says.

The Donors Forum is attempting to encourage more Hispanic business owners, for instance, to create funds and foundations that will bolster community institutions as well.

Some analysts of the philanthropic field say increased giving is not solely a function of encouraging donors, but also a matter of changing the nature of the foundations themselves.

Often perceived as homes for the ultra-wealthy and rooted in a culture that is predominantly white and male, these institutions need to overhaul themselves before they can expect more broad-based support for their efforts, say critics.

Indeed, one of the fastest growing types of foundations is the so-called community foundation, which tends to have a more localized focus.

And one of their newest vehicles for philanthropy is the donor-advised fund. It allows relatively small-scale donors to set up funds in their own name, for amounts as little as $10,000, and to have an ongoing say in how the earnings from that fund are invested.

Starting small

Crosby of Detroit started his career as a philanthropist by simply sending money after graduation to the teachers and staff of Arkansas Baptist College who helped pay his way through the school. Eventually, he set up an annual scholarship of $4,000, which recently was established as a trust so it will outlive its sponsor.

"Those women at the college who helped me let me know I had to do something for someone else," says Crosby. But ultimately, says the principal, giving has to come from within. "I've just really done it for myself," he admits.