Panel, Conference Presentation
Philanthropy in Transition: Better Ways to Do Good
Milken InstituteMelissa Stevens, Silvia Bastante de Unverhau, Alexandre Mars, Pamela Norley, Fay Twersky, Ambassador Corby Crimson, Stephanie
- Scale of Wealth Transfer: An estimated $30 to $40 trillion is expected to transfer from Baby Boomers to Gen X and Millennials over the next 30–40 years, necessitating a fundamental shift in how philanthropy is conducted.
- Pace of Change: Experts characterize the current shift not as a "makeover" but as an "accelerated maturation," driven by increased wealth concentration, communication technology, millennial expectations, and new global role models.
- Generational Convergence: Unlike the past, three generations (Baby Boomers, Gen X, and Millennials) are currently engaged in philanthropy simultaneously, with Gen X driven by regret over past inaction and Millennials showing a 20x increase in interest in social sector work (from 1% six years ago to 20% of Stanford undergrads).
- Women's Leadership: Women are transitioning from passive participants to active wealth creators and donors, bringing specific intention and purpose that is accelerating the sector's evolution.
- Millennial Mindset vs. Boomers: Research indicates Millennials favor spontaneous, immediate action and network mobilization, whereas Boomers prioritize intentional strategy and long-term planning.
- Barriers to Giving: Alexander Mars identified the three primary reasons individuals withhold more giving as distrust of organizations, lack of time, and insufficient knowledge, rather than a lack of funds.
- Trust Deficit: A critical gap exists where donors do not know what social entrepreneurs do with their money, leading to a reliance on traditional, personal institutions (schools, churches, hospitals) rather than professional NGOs.
- Shift to "Listening": Faye Tversky highlighted a strategic pivot where foundations are moving from purely evidence-based strategies to "listening deeply" to beneficiaries, with beneficiaries identifying this as the top tool for increasing impact.
- Systems Change Definition: Co-Impact defines systems change as collaborative efforts involving communities, NGOs, government, and business to create step-changes affecting millions, with an emphasis on sustainability so that core change outlasts philanthropic funding.
- Collaborative Funding Models:
- Co-Impact: A pooled fund involving major philanthropists (Gates, Skoll, etc.) focusing on systems change in developing countries for education, health, and livelihoods.
- Blue Meridian Partners: A $1 billion+ fund (currently fundraising for a second tranche) established by the Edna McConnell Clark Foundation, focusing on scaling proven programs for vulnerable US youth with $60 million grants.
- Epic's Aggregation Strategy: The Epic platform aims to embed giving into daily business transactions and paychecks, targeting a goal where individuals can give at least once a day, thereby democratizing philanthropy beyond high-net-worth individuals.
- Technology in Due Diligence: Fidelity Charitable utilizes technology to vet charities for legitimacy, addressing fraud concerns, while Alexander Mars notes that AI is currently used to filter 3,600 applications down to 200 viable candidates before human review.
- Transparency vs. Impact Data: While platforms exist for financial vetting, the sector lacks transparent data on actual program impact; technology is currently used to provide basic feedback (e.g., GiveDirectly photo updates) rather than comprehensive outcome evaluation.
- Feedback Mechanisms: The "Listen for Good" tool utilizes the Net Promoter Score (NPS) on SurveyMonkey to gather beneficiary feedback, successfully implemented by the Nurse-Family Partnership to improve program retention and material distribution (shifting from binders to apps).
- Cryptocurrency Integration: Fidelity Charitable accepted $60 million in Bitcoin last year, leveraging technology to liquidate crypto assets within 30 minutes to provide tax-efficient, immediate grant-making.
- Virtual Reality (VR) Engagement: Epic is utilizing VR to allow donors to virtually visit organizations and experience beneficiary stories, aiming to bridge the gap between donors and beneficiaries without physical travel.
- Aid to Trade Shift: Ambassador Corby C. emphasized a new mindset in Africa moving from traditional aid to trade and micro-financing to support young entrepreneurs who currently lack access to funding.
- Aggregation vs. Direct Giving Debate: Panelists noted that while direct giving (e.g., GiveDirectly) empowers individuals immediately, it cannot fix complex systems like healthcare, necessitating a portfolio approach that includes both direct aid and large-scale collaborative funding.
- Impact Investing Role: Sylvia Bastante de Unverhau and Pam Norley agreed that philanthropy must act as "venture capital" to de-risk commercial investments, though they cautioned that impact investing alone cannot solve problems lacking a commercial return (e.g., hospice care).
- Advice to Philanthropists:
- Sylvia: Collaborate and recognize interconnectedness to solve systemic issues.
- Alexander: Give a sustainable percentage (e.g., 1-5%) rather than feeling pressured by the "50% pledge"; giving should be painless to become the norm.
- Pam: Nonprofits should collaborate with existing organizations rather than starting new ones and align with UN Sustainable Development Goals (SDGs).
- Faye: The "wise giver" learns from the experts and the communities they intend to help.