Challenging times are often an opportunity to restructure and rethink a broken system. Just as the nonprofit sector needs to “reset” how they operate and how they raise money given the economic crisis and the crumbling social safety net, philanthropy, too, needs to take a step back and reset. And there are some encouraging signs this month that that is exactly what is happening. It seems that some philanthropists are taking unprecedented steps to rethink how they operate.
First, there was a secret meeting on May 5th of the wealthiest philanthropists, people like the David Rockefeller, Sr., Oprah Winfrey, Warren Buffett, Ted Turner, George Soros, Bill Gates, among others, in New York. Gates, Buffett and Rockefeller called the meeting in response to the recession and the “urgent need to plan for the future.” Meeting details are sketchy, but such a meeting is unprecedented in our lifetime. It is, however, reminiscent of similar meetings close to a century ago in a similarly challenging time in American history. At the turn of the last century, J.P. Morgan hosted gatherings of philanthropists to discuss how private citizens could stop the economic panic.
Apparently this month’s meeting of philanthropists lasted 5 hours and allowed each philanthropist 15 minutes to discuss how they were directing their philanthropy given the global economic crisis. The philanthropists claim that they are not hatching any big plans, but they do want to meet again. It is fascinating to wonder what could come out of such ongoing discussions among people with so much wealth and such a desire for impact and change in the world.
Another sign of a beginning sea change in the philanthropic community is a growing desire among family foundations to spend their corpus, instead of preserving it in perpetuity, which is the norm. The thought among some philanthropists is that the current problems facing the world are so challenging that their money should be spent now to adequately address the situation. For example, the Beldon Fund, a foundation focused on the environment, is closing this year after having spent its endowment over the past 10 years. Philanthropists John Hunting endowed the foundation with $100 million from the sale of Steelcase stock in 1998. He decided to grant the entire amount within 10 years to build a national consensus to achieve and sustain a healthy planet. Currently “limited-life” foundations make up about 10% of active family foundations, but this percentage has been growing since a 2004. The current economic climate has increased conversations among family foundations around this topic, so the percentage may continue to increase.
Add to that a growing desire among the leading philanthropists to do more, on a larger scale, and you could see some pretty interesting changes to the philanthropic scene, which could mean a significantly larger amount of capital available to organizations working towards solutions.