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‘Next-Gen’ Donors – How the Profile of Donors is Shifting

The current group of new donors comes from the Generation X and Millennials who are introducing disruptive new technology and strategies for philanthropy in the same way that they have introduced the new technology and companies that have made them trillions. Around $60 trillion to be precise.

The Profile of a ‘Next Gen’ Donor

Always looking for new ways to improve old systems and for innovative solutions to systemic issues, the profile of a ‘next-gen’ donor is much the same. The new power-donors are the CEOs of some of the most disruptive and innovative companies on the planet and they are using their massive monetary value to transform and innovate philanthropy by tackling some of the largest and longest-standing social challenges facing the world.
Not content to just give locally, though that is still a significant trend when it comes to donations in education in the US, the current crop of philanthropists are showing that they want to focus on evidence-based programs while introducing new experimental foundations and projects that are driven by metrics and results. This change in the profile of donors could signal the next-gen trend in the impact of large-scale giving.
The profile of a ‘next-gen’ donor is also markedly different from other traditional types of philanthropists in that they are extremely hands-on and involved in shaping the foundations and programs to which they donate. Some pundits are hailing this the ‘Impact Revolution’ in philanthropy and it will shape the profile of donors and donations for future generations. Though the profile of issue areas has not shifted for the ‘next-gen’ donors (education and basic needs still top the list across all generations) the way that donations are given is completely different. The emerging trend of charities pursuing profitability has had several detractors and critics, but it is part and parcel of the way that ‘next-gen’ donors are able to align their charitable giving with their personal values.

The Golden Age of Giving – Who is Changing the World of Philanthropy?

One of the most impactful ‘next-gen’ philanthropists are Mark Zuckerberg and Priscilla Chan <> with the development of the Chan Zuckerberg Initiative, not as a traditionally styled foundation, but as a charitable LLC. This simple innovation allows them to invest in businesses that are socially active as well as political ventures in addition to being able to make donations to traditional charitable programs and projects. Alexander Soros, while following in his father’s footsteps on the board of the Open Society Foundations, has made sure that his own philanthropy is focused on seeing the direct impact of investments in social programs on a large scale. Lukas Walton, Dustin Moskovitz, Huiyan Yang and Nathan Blecharczyk from AirBnB are just a few of the ‘next-gen’ donors that are changing the way that philanthropy operates, and their efforts will shape the course of philanthropy for future generations.
They’re determined to make an impact and address issues on a global scale and see that change in their own lifetimes.

What is ‘Evidence-Based’ Philanthropy?

Evidence-based philanthropy means that donations are made to programs and projects based on the evidence of their effectiveness. It is commonly used by large scale donors to evaluate where their funds will be beat utilized, and by policymakers and politicians to evaluate what type of programs should be implemented on both national and state level. What evidence really matters? This is a question that is hard to answer.

Observation Philanthropy?

Evidence literally means, ‘observation’, so the success of an evidence-based program could be observed by the people who implement a program at a grass root level. It could also be the observed results of randomized controlled studies that either verify or negate the success and therefore the chance of funding for programs. There are three types of evidence that can be assessed when deciding about which programs are effective:

  1.  Field Experience: This is the ‘hands-on’, practical knowledge and experience of program leaders and the people who are involved in the implementation of programs. They have the most evidence of ‘how’ to implement programs to ensure the highest levels of success.
  2. Research/Scientific Evidence: This type of evidence includes the results of randomized controlled trials (RCTs) as well as data analysis and statistics to provide evidence to show cause and effect.
  3. Informed Opinion: This is usually the opinion of stakeholders and policymakers who can provide context for scientific evidence and field experience.Each evidentiary area needs to be taken in context.

For example, an RCT may definitively prove that using a bed net helps in the prevention of malaria, but it may be the caseworker ‘on-the-ground’ that is able to show that people are using the provided bed nets for fishing nets. In this case, the evidence needs to be evaluated carefully before making any decision about the success or failure or a program. All the information and observations gathered must be examined in context and simultaneously when reporting on the relative benefits or not.

Evidence Based Philanthropy Finding Reliable Data – Bloomberg Philanthropies

Many philanthropists will only donate to evidence-based programs, but many are now taking policymakers and governmental organizations to task about their lack of initiative in understanding what works and what doesn’t. Mike Bloomberg was particularly scathing of the lack of understanding by politicians of what is happening on-the-ground. In the Blomberg Philanthropies annual report, he noted than many policymakers and politicians are bogged down by a mass of data and refuse to recognize reliable data through the quagmire. Bloomberg also announced a $42 million investment in the ‘What Works Cities’ program which is the USA’s most extensive effort yet to enhance and build on city data to help evaluate and define challenges and opportunities in key areas such as homelessness, health and educations.

This work builds on the 2017 Bloomberg Philanthropies launch of the $200 million Bloomberg American Cities Initiative which gives city councils and mayors the tools to better evaluate programs based on holistic reliable data. In 2017, Bloomberg Philanthropies invested over $702 million in 480 cities in over 120 countries around the world.

Disaster Outreach – Help When (And Where) It Is Needed Most

2017 has seen some of the world’s most devastating natural disasters. Disasters that have decimated several nations, disasters that have necessitated an urgent need for philanthropists and donors to step up immediately to provide life saving help to these areas and communities.

While the list of significant annual donors, goes up every year, these are for the most part, planned donations, decided on months in advance and structured very carefully by finance and management teams. While philanthropy is much needed, it is also a big and sometimes complex business.

What Happens When Donations Are Needed Right Now?

We know who is on the list of the biggest donors in the world, but it is often a surprise at the numbers of large donations that appear from the most unlikely sources after a natural disaster has occurred.

Hurricane Harvey – Houston Under Water

In the aftermath of one of the most devastating storms to make landfall in the USA, Hurricane Harvey wrought havoc across the Texas coastline, bringing the city of Houston to its knees. While donations poured in from around the world, there were a number of significant philanthropic donations that may not have made the headlines, made all the difference. With cleanup costs alone estimated at over $40 billion, the need is very real and very urgent.

Kieu Hoang – $5 Million to Hurricane Harvey Relief

Growing up impoverished in Vietnam and now a billionaire resident of California, Kieu Hoang immediately stepped up to become one of the largest single donors to the relief efforts in Texas. His donation was targeted to help the most vulnerable members of society, illegal immigrants, many of whom he said were too scared to find city shelters for fear of being deported. Hoang also flew to Houston and spent time in the worst hit areas of the city.

Michael Dell – $36 Million – Michael and Susan Dell Foundation 

With a target of $100 million via his foundation toward relief efforts, Michael Dell started off with a personal donation of $36 million to a specific fund ‘Rescue Texas’. The billionaire tech guru is ensuring that donations go directly to relief organizations on the ground and for ongoing efforts to rebuild the worst hit areas.

Corporate Donations to Hurricane Harvey

Corporate donors also came in strong in the aftermath of Hurricane Harvey with PepsiCo leading the way with a $1 million donation to the American Red Cross. Walmart also donated $1 million as did Amazon. The Home Depot also donated $1 million to the Red Cross for immediate need but added a donation of products to its Texas stores to help with the rebuilding and repairs.

Hurricane Irma and Hurricane Maria– Caribbean Nightmare

One of the worst hurricanes ever observed in the Atlantic, Hurricane Irma laid waste to several islands in the Caribbean before wreaking its devastation on the parts of Florida. Relief efforts were hampered by the ability of worker to access the areas affected. On the island of Barbuda, 95% of all structures were destroyed. Hurricane Maria soon followed with a direct hit to Puerto Rico, still reeling after Irma’s devastation. Some of the biggest donations to relief efforts in this region include ones from corporations like Starbucks, Lowe’s and Walmart with a $10 million donation to hurricane relief in 2017.

Disney announced a $2,5 million donation to Irma recovery programs. However, with $105 million donated over 2017 specifically to hurricane affected areas, only $17 million went to relief efforts after Irma and Maria. Donor fatigue? Only time will tell.

Individual donations to help with rebuilding have been adding up, but the largest donors to relief efforts in Puerto Rico and other nations in the Caribbean have been Richard Branson of Virgin with donations to the Red Cross, and country star Travis Tritt with an undisclosed donation for Hurricane Irma relief work. Sports teams, Miami Dolphins and Florida Panthers each donated $1 million to Irma charities.

Mexico’s Deadly Earthquake

Mexico’s Richest Man – Carlos Slim Steps Up

After the devastating earthquake that hit Mexico in September 2017, Mexico’s richest man, Carlos Slim donated $110 million to relief efforts. Nearly 210,000 individual donors also provided funds to the effort bringing the total to $130 million. Slim, worth nearly $62 billion, said the funds were earmarked for rebuilding hospitals, schools and housing.

Mark Zuckerberg pledged $1 million to the Mexican Red Cross to help with immediate rescue and rebuilding programs. Apple donated $1 million to the cause, and actress Salma Hayek donated $100,000 to UNICEF to help with relief.

From the monsoon flooding in Bangladesh, to landslides in Columbia. From terrible flooding in Sierra Leone to storm ravaged islands in the Atlantic – help is needed everywhere, and generous philanthropists are making sure that donations and fund raising for natural disasters remains high.

2017 Trends in Philanthropy – Has Charitable Giving Changed in 2017?

2017 has been an interesting year. It’s been a tough year for nonprofit organizations: Natural disasters, shifting political fluctuations, and a global economy that appears to be flirting dangerously close to a recession. All these factors, and more, have influenced donations in 2017 and seem set to affect the world of philanthropy for the next few years.

Who Benefited from Donations in 2017

There are nine major categories of recipients around the world; religion, human services, education, healthcare, arts and culture, environmental, public-society, international affairs, and giving to foundations. 2017 has seen growth across ALL sectors making it only the sixth time in over 40 years that donations have been ‘up’ across all sectors. Despite a certain amount of ‘belt-tightening’ in 2017 and uncertainty about the shifting political landscape in many countries, individual donations have seen an increase in 2017. In the United States, donations by individuals increased by 4% over 2015/16.

It is true that the political climate plays a significant role in many donors’ decisions on how to disburse their donation, it is found that it is largely economic factors that influence the overall trend of charitable giving.

The Profile of Donations in 2017

  • Individual donations grew at the highest rate in 2016 and 2017. Donations by individuals far outpaced donations by foundations and corporations.
  • Foundation donations continue to grow but at a much slower rate than previous years.
  • Bequests and donation from estates dropped significantly in 2017.
  • Corporate giving and donations showed small gains, but was influenced by weaker markets and the threat of recession

Where the Money Went in 2017

  • International affairs, public-society and the arts all saw growth in 2017. This is considered largely attributable to the increase in publicized natural disasters and the need for immediate relief in several regions of the world.
  • Sectors with the largest growth included arts and culture, the environment and healthcare
  • The sectors with the slowest growth in 2017 was education with just 3,6% growth over previous years, and religion with a 3% growth.

Millennials vs. Generation X vs. Baby Boomers – Donation Profile

Different generations have very distinct ways of donating money, as well as different trends in the types of organizations and nonprofit groups that they favor. These trends and patterns can help organizations target key audiences and invest in better ways to encourage people to donate in 2018.

One factor that is common across all three generations is the fact that more people prefer to donate money online as opposed to at fundraising events or by direct mail. 67% of millennials and 59% of Generation Xers and Baby Boomers prefer to donate money online. This means that it is imperative that nonprofits ensure that the path to donate online is seamless, secure and easy to navigate. Improving online donation paths may be the biggest trend in 2017, and it is here to stay.

  • Baby Boomers – With 19% preferring to donate via direct mail, baby boomers are also the group that is most influenced to donate by attending a fund raiser, followed by an appeal by email. Only 19% of Baby Boomers are inspired to donate to an appeal on social media.
  • Generation X – Gen Xers prefer to donate at fundraising events over direct mail and are most inclined to give following an appeal on social media (28%), fundraisers (24%), and then email (20%).
  • Millennials – This generation show the highest numbers of online giving (62%), followed by fundraising events (16%), and are the only group to have actively embraced mobile as a path to donate (9%). A millennial donor is more likely than any other generation to respond to requests on social media.

One of the biggest factors affecting donation is the personal one. Volunteering and encouraging people to actively help a nonprofit with their time and skills is the best way to ensure that donations grow. 88% of donors who volunteered at an organization also donated funds to that organization.

The Influence of Social Media on Donations in 2017

With a whopping 75% of donors noting that they stay up to date with news about their charities on social media, it’s little wonder that social networks are also a growing trend in inspiring people to donate. Facebook takes with top spot with 62% of donors inspired to give by news and appeals on Facebook, followed by Twitter (14%), Instagram (10%), YouTube (6%) and LinkedIn (3%).
Social media in 2017 is about connecting people and sharing information. Nonprofits need to ensure that they invest more in social media outreach and in keeping the channels of information open at all times.

Trends in Philanthropy in 2017

What have we seen in 2017 that has made a difference in the way that people donate money? In Europe and the United States, uncertainty and opposition to political leaders has shown an increase in ‘oppositional donations’. There is growing mistrust at the often-vague structure of some foundations and people are preferring to donate money personally to specific organizations. If you’re a small nonprofit then look for ways to attract individual donors, and ensure donors that their money is reaching the hands of people and programs who need it most.

One of the biggest trends in philanthropy in 2017 was the increase in ‘Impact Investing’. This is a way of investing in small groups, and even individuals to ensure that society is positively impacted. The Open Society Foundation, Gates Foundation, Chan Zuckerberg Initiative and the Emerson Collective all made multimillion dollar investments around the world. The tech world is leading the way as the sector with the largest number of donors. They are also the group who has come relatively recently to philanthropy. This trend looks set to rise exponentially in years to come as the tech billionaires find their feet.

Donations by women have increased in 2017, and this sector of donors looks to be the highest growing sector in philanthropy. Look at the recent donations by Sheryl Sandberg (US) and Jamie Cooper (UK) hitting well over $100 million.

There is generally quite a pessimistic view of everything that is happening in the world right now, but trends in philanthropy show that many more people are prepared to step-up and donate to ensure that the world is better for everyone. That’s the key trend that has shown up in 2017: hope + truth = more donations from more people.

Giving Big in 2017 – Who Donated the Most Money to Charity?

It’s not enough to pledge your wealth after you pass away. Putting up actual cash to help build a better world is what sets these generous donors apart. While the total dollar value of donations may have dipped in 2017, we have a rise in the numbers of philanthropists who are prepared to give big, to give back to worthwhile causes around the globe in 2017. Who will end up as 2017’s biggest donor and philanthropist?

Who Takes the Top Spot?

Philanthropists, entrepreneurs, celebrities – these are the people that have effected significant change in the world in 2017, by ensuring that funds are directed to foundations, organizations, charities and individuals who not only need them the most, but who are working, often at a grass roots level under difficult circumstances around the globe.

Michael Bloomberg – Often in the headlines for his work in politics, Michael is a committed environmental advocate and has used his position and his platform to fight climate change. The former mayor of New York City is worth over $47 billion and through his foundation, ‘Bloomberg Philanthropies’, he donates in excess of $200 million annually to environmental advocacy initiatives, medical research, education and the arts.

Bill Gates – He may be the world’s richest man, but Bill Gates is also one of the world’s biggest philanthropists. In 2017, Gates donated $4,6 billion worth of Microsoft shares to an unspecified recipient. Many believe that the recipient is the ‘Bill and Melinda Gates Foundation’ which continues to support programs that work in global healthcare, and in poverty reduction.

Sheryl Sandberg – COO of Facebook and founder of two nonprofit groups: LeanIn.org and OptionB.org, Sheryl recently donated 2590,000 Facebook shares, worth nearly $100 million, to a fund that she utilizes for charitable giving. The ‘Sheryl Sandberg and Dave Goldberg Family Foundation’ works in several diverse areas including women’s rights and overcoming grief and adversity. Sandberg regularly donates funds of over $100 million annually to her foundation and programs that seek to end childhood hunger and work to help college students from disadvantaged backgrounds.

George Soros – With a donation of £13,6 billion to his ‘Open Society Foundations’ Soros definitely tops the list of philanthropists who gave big in 2017. Open Society works in diverse regions of the world, donating funds to programs that “build vibrant and tolerant democracies”. The foundation has given away over $14billion since it was founded in 1979.

Warren Buffet – While Bill Gates may have pipped Warren Buffet with his donation, the financial entrepreneur also donated $3,2billion to the Gates Foundation in 2017. Through the ‘Buffet Foundation’, millions of dollars are donated annually to US and international organizations working in healthcare and education, specifically to provide financial support to low-income students via the Buffet scholarship.

David Sainsbury – Lord Sainsbury not only comes from a family who founded the British supermarket chain that bears his name, but from a family with a rich tradition of philanthropy and charitable giving. Sainsbury founded the ‘Gatsby Charitable Foundation’ in 1967 with a donation of £50 to the Liverpool School of Tropical Medicine. In 2017, he donated £196 million to the foundation that works in education, the arts and diverse humanitarian efforts around the world. Sainsbury often donates funds to Cambridge University for research and the advancement of science in education.

Jack Ma – The wizard of Alibaba is currently China’s most generous philanthropist with his recent donation of $2,4 billion worth of Alibaba stock to the foundation that he set up with Joe Tsai. The foundation focuses on environmental and health issues and the charitable trust is rumored to be one of the largest in Asia. This is a massive change, as traditionally, Chinese entrepreneurs tend to be on the lower end of the donor lists, but it seems that 2017 may be just the start of big philanthropy in China.

Robert Kuok Hock Nien – Staying in the east, Malaysia’s richest man and Chairman of Hong Kong-based Kerry Group is a philanthropist on a large scale. He founded the nonprofit ‘Kuok Foundation’ in 1970 and is one of the region’s largest donors to programs that focus on education and social welfare including several prestigious scholarships.

Sir Elton John – He remains deeply committed to the issue of AIDS and the ‘Elton John AIDS Foundation’ is a tireless advocate for the treatment, prevention and cure of the virus. Elton uses his celebrity to raise money for various causes and never ceases to be a leading celebrity light in the philanthropic firmament. He may not be one of the biggest donors in 2017, but Elton John is a dedicated and relentless campaigner for this cause.

Gordon Moore – Mathematics genius and the author of Moore’s law, Gordon Moore and his wife Betty are the founders of the ‘Gordon and Betty Moore Foundation’ which was started with a donation of $5 billion in 2000. The foundation focuses on education and environmental conservation in California. The couple donated $600 million to Caltech in 2001 and continue to support science-based projects at the university. In 2017, Gordon and his wife donated over $250 million alone to various programs and causes.

2017 was a tough year… everywhere. Devastating natural disasters, wars, an ever-increasing refugee crisis and political instability in many regions. That has not stopped many philanthropists from making sure that money gets into the hands of people who are working to make the world better…for everyone.