Powering Up, Philanthropically

Albert Keith Whitaker

Introduction

What can faculty members and college and university administrators do to advance their programs’ or schools’ missions through philanthropy? This paper will address that question within the general context of philanthropy in this country; it will touch on some empowering principles, and finally discuss their application.

A Golden Age of Philanthropy

We have entered in this country what my Boston College colleague Paul Schervish calls a “golden age of philanthropy.” From 1998 through 2052 we expect $41 trillion of wealth to transfer through estates. This is a modest estimate. It assumes a starting point of wealth in the country ($32 trillion) lower than other published reports. It also assumes a real growth rate of only an average 2% annually. Historical growth for the last 50 years in the USA has averaged well over 3%. At 3% growth, the wealth transfer would amount to $73 trillion [1].

This transfer flows in four ways. Professional fees will consume about 4% or $1.6 trillion. Estate taxes may (at 1998 rates) consume another 21% or $8.5 trillion. Bequests to heirs fill the largest bucket: 60% or $24.5 trillion. And charitable bequests we calculate at 15% or about $6 trillion.

To bring all these numbers closer to home, in Greater Boston alone, we predict $1.25 trillion to transfer from 2006 to 2056, and of that amount, $172 billion to go to charity [2].

It is critical to recognize that all these are moderate projections. One of the ways that we moderate them is by assuming that lifetime giving will continue as is, with most giving taking place at death. I do not think this assumption will hold true. In recent years we have seen a shift toward lifetime giving, for at least several reasons. First, more and more wealth-holders have discovered, through their abundance and financial planning, that they can meet their current and projected needs and still have a surplus; increasingly they give out of that sense of financial security [3]. Second, more and more wealth-holders are concerned about the effects of amassed, inherited wealth on their children or grandchildren. This concern has prompted wealth-holders to limit bequests to heirs, even when a reduction in estate taxes would allow more to reach their children and grand-children. This limitation has led to increased bequest giving to charities, and likely to increased lifetime giving as well [4]. Finally, as the 2005 Allianz Life Survey reveals, boomers and elders in this country are ten times as interested in living and preserving a legacy, through transmitting their values, than in transmitting material wealth. Many of these wealth-holders have turned to lifetime giving, including giving with their children and grandchildren, in order to share those values.

Just to put some numbers on this phenomenon, we expect wealth-holders in Greater Boston to make $187 billion in lifetime gifts between 2006 and 2056. When combined with our prediction concerning charitable bequests, the 50-year charitable transfer in Greater Boston alone could reach $360 billion.

This combination of material resources and spiritual trends leads us to believe strongly that we are indeed in a golden age of philanthropy.

Principles

What does all this mean to faculty and administrators who wish to harness philanthropic resources on behalf of a traditional academic agenda? I would like to offer a few principles of thought and action for your consideration and discussion.

Recognize Why People Give

Many people look cynically at philanthropy and say it is just a game of rich people taking advantage of the tax laws for their own or their family’s gain.

There is no doubt that tax advantages help some forms of charity. But for almost all philanthropists, especially major donors, philanthropy is far from simply a technical exercise or a tax dodge. To put it simply, our research has found that there are three principle parts to philanthropic motivation: association, identification, and hyperagency. The first simply means that people tend to give within social networks, to groups that they participate in, and to causes that those whom they are close to care about. The second gets at the sense of identification between a donor and a recipient. This identification may involve compassion, but it also may involve more cognitive connections. Hyperagency indicates a common desire among philanthropists not only to be “hands on” but also to change the conditions under which recipients live and thrive. Not every donor will be moved by association, identification, and hyperagency. But categorizing donor motivation in these ways can help you think through how to approach prospective donors and achieve results [5].

Honor the Power of Ideas

It seems unlikely that this audience will need me to emphasize this point. But I have found that when those of us who love ideas step outside of the classroom and into business or business-like relationships, we sometimes give ideas short-shrift. It is almost as though we feel the need to apologize for this queer academic taste. This is a mistake. A critical element of donor identification to traditional academic programs, for example, comes through ideas. Donors may not identify with the school or even the method of instruction, but they may closely identify with a book, a character, or an idea itself. This identification offers a great opportunity for educating donors and getting them involved, for example, through advisory boards, executive education programs, events centered around a reading, “meet the author” events, and the like.

Donors Need You

The previous two principles lead directly to this one. Most people assume that philanthropists enjoy the perverted version of the golden rule: “Them’s that has the gold rules.” Approaching donors in this way turns into a self-fulfilling prophecy: sycophancy breeds or attracts arrogance.

Instead, approach donors not from a position of scarcity but of abundance. As Aristotle observes in Ethics IX, benefactors need those they benefit even more than the recipients need the givers. For the benefactor “lives” or is “at work” in the recipient, and not the other way around [6]. Put simply, donors are the needy ones. You have what they want: a sense of identity with something meaningful, purposeful, and worthy of a legacy.

This observation should not cause recipients to put on airs or superiority, which is no more attractive in academicians than in philanthropists. It goes hand-in-hand with the obvious (but perhaps uncomfortable) reflection that academic programs need donors. I can say from my work with donors that they generally hate it when people in the non-profit world act as though they are “above” need or as if money is a dirty, vulgar topic. Self-made wealth-holders, who comprise about 80% of wealth-holders in this country, particularly dislike such airs. Be honest with yourself, your administrators, and your donors that your ideas need support, that your programs would not run without money, and that, in the free market of ideas, you think that is a good thing, not something to be ashamed of.

Be Persistent

Though perhaps the greatest intellectual among our founders, Benjamin Franklin was not above fundraising, and he did it well [7]. He followed some simple rules. Make three lists: the first of those you are sure will support your project, the second of those who might, and the third of those you are sure would not. Ask people on the first list first, and line up some successes. Then go to the folks on the second list and mention to them the folks on the first list who are supporting you. Then try to hit the hold-outs on the first list one more time, armed with the names of your supporters. Finally, try out the folks on the third list too, because you never know: you might have been wrong.

This may sound like a lot of work, and it is. It could appear a dangerous distraction from scholarship and teaching. My own experience is that the very process of raising funds or support for a project is a great learning process in itself. It forces you to be clear in your goals and your own ideas. It encourages feedback from others that may change your mind. And, as Franklin knew, we are often wrong about others. I have met many delightful correspondents and future friends simply by asking politely for something.

Think Globally, Act Locally

There are just a handful of “conservative” foundations in this country. You all know who they are, and you would all like them to give you grants. This is not going to happen. You must begin by casting a wider net. There are around 90,000 private foundations in the USA, close to 70,000 of which are family foundations. Get to know the organizations that serve these funders, including the Association for Small Foundations, the Foundation Center, and the Philanthropy Roundtable. These groups are almost always looking for thoughtful presenters and writers in the field of higher education.

Remember too that while everyone likes to talk about foundations, foundation grants make up only a small percentage of total giving in the USA. Individual donors are more responsive, quicker—and legion. Do not be afraid to follow up personal leads to individual donors within your own community. Calling up a friend of a friend about your new program will seem an imposition if it is just about money. But what you have to offer is more than about money. It is about ideas, character, and education.

Be Collaborative

But how do you get at such donors, besides working your personal network of friends or family members? The tried and true method is to go to the people who serve these folks: attorneys, accountants, life insurance specialists, and wealth managers.

You may think that you have nothing to offer these professionals. Again, this assumption is incorrect. These fields are becoming ever more focused on the human and familial aspects of wealth. If your research touches upon psychology, philosophy, or sociology, you may have direct benefits to offer the practitioner. Even more likely, your work may be of interest to these professionals’ clients through, for example, an educational forum or white paper. Such offerings have to speak in laymen’s terms. They also have to be non-political. But if you are willing to share your thoughts in such ways, you may find a ready avenue to high- or ultra-high-net-worth readers and listeners. Finally, do not discount the interest that these highly trained, intellectual professionals may have simply in spending 30 min talking with you about your work. Most of the work they do is far beneath their intellectual capacity. My experience is that many of the best practitioners in these fields jump at the chance to talk about thoughtful, non-work subjects. You may need to do a little bit of research first to identify which professionals in your area show the most interest in philanthropy and higher education. But their bios are generally available on the web, and it is not too hard to tell who is just a technician and who wants to connect with his or her clients as a human being. These are the people to target.

There is an additional benefit to you from forging these relationships now. Some day, when you do have a significant donor interested in funding your program, it is likely that the donor (particularly if it is an individual) will ask you “How do we go about doing this?” If you know no professionals in the field, then the default answer is probably, “Let’s talk to our development office.” I think we all see the problems with this response. Your development office should not be your enemy—not at all. But you should never assume that their interests simply harmonize with your own or with your donor’s. A much better response would be to offer to your donor two or three names of professionals you trust to help with structuring the transfer. Such a referral shows that you are objective and want to do what is best for the donor. It also shows that you have thought ahead and are serious about making the gift work. And it shows that you are connected in the world of philanthropy.

Practices

I would like to draw a few additional practical conclusions from the principles I have outlined above:

  • Make philanthropy part of your plans for every week, month, and year. Sometimes money comes to us through luck. But as Aristotle points out, wise people are luckier than others.

  • Create summaries, brochures, or other “collateral” describing your work in a succinct and attractive form. You will then have these materials to deploy when meeting with a professional contact or prospective donor. Also be able to tell others about who you are, what you do, and why it matters in less than 2 min. This is not dumbing down your work. It is opening doors for deeper conversations.

  • Manage your contacts. This does not mean producing a comprehensive database for mining. But you would be amazed at how many people you know and who they know.

  • Take some time, even just once a year, to touch your contacts with an update on your work and the challenges you are facing. Most of them will be glad that you have kept them in mind and may respond with helpful leads or ideas.

  • In conversations with prospective donors, remember that they are people and this is not just about money. This is a big challenge for those of us who are natural professors, but you need to listen. Let them tell you what they love and what they would like to do. Work with their aspirations, not against them.

  • Take the time to meet with one professional with access to prospective donors once a month or at least once every two months, even if just for 15 or 30 min to tell your story and why it may matter to the people he or she advises. If a meeting goes well, ask who else among that advisor’s friends you might call upon. Never forget, if presented in the right way, how interesting you and your work may be to these folks.

It bears repeating that we are living in a golden age of philanthropy in this country, which offers unparalleled opportunities for innovative academic programs. The key is that the people who care about these programs must own the challenge of marshalling support for them. Luckily, you are also the people most qualified to marshal that support. Do not abdicate that position of strength.

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