The Big Idea: Controlling the Purse Strings
The hot topic in the field of philanthropy this year has been the imminent transfer of financial power from men to women—a trend that will accelerate as the wealth creators of the baby boomer generation die and as women continue to gain ground as high earners themselves. How they choose to spend their newfound cache stands to unleash some of the most profound changes to philanthropy in decades.
By 2030, American women are expected to control most of the $30 trillion in financial assets held by baby boomers, a level approaching that of the annual GDP of the United States, according to a McKinsey report. By 2035, women will have inherited 70 percent of this unprecedented intergenerational wealth transfer, according to a report by Citibank, largely because women tend to be younger than their husbands and to live longer.
But these days, women aren’t just inheriting their money. Wealth creation is now much more equally distributed. A recent study by Altrata, a data-analysis company, found that more than half of female ultra-high-net-worth Americans are self-made. Globally, 70 percent of millennial women take the lead in financial decision-making, according to Citibank.
“As wealth creators in their own right and inheritors of family wealth, [women] are and will become the decision-makers of the future; we are already seeing this trend in the sector,” says Karen Kardos, head of philanthropic advisory at Citi Private Bank.
So what does this mean for philanthropy? Altrata found that 61 percent of women who have inherited their wealth cite philanthropy as their top interest, compared to only 35 percent of their male counterparts. For 49 percent of men, philanthropy takes second place to sports.
In terms of approach, female donors appear more likely to follow billionaire MacKenzie Scott’s example and pursue trust-based giving, says Kardos, whereby donations are offered to nonprofits to disburse as each organization sees fit, rather than with restrictions. “While not a new philanthropic approach, it focuses on trust to help empower communities to lead, thereby relinquishing the power philanthropists can wield,” she explains.
Women are also more content to wait for results, according to Dianne Chipps Bailey, a Bank of America managing director with a focus on philanthropic strategy, who says that 80 percent of women place a high priority on the lasting impact of a donation, compared to 69 percent of men. Women also prefer to spread their largesse across a wider range of causes. According to Citibank, “While [women] give more in total, the size of their individual gifts is on average smaller. Some think this dilutes the influence of women donors.” This effect is offset, however, by women’s apparent preference for collective giving, via funding circles such as the Women’s Donor Network. Women “tend to be more collaborative to generate greater impact,” says Kardos.
To the guiding principles of trust collaboration, and patience, we could add solidarity. Nonprofits that strive to improve the lives of women and girls received less than 2 percent of overall U.S. charitable giving in 2019—a typical annual amount, according to the Women’s Philanthropy Institute. Ending the chronic underfunding of women’s organizations could emerge as the most revolutionary effect of a future female-dominated philanthropy.
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Education: Abigail Seldin, Seldin/Haring-Smith Foundation
Image Credit: Moshe Zusman/Courtesy of the Seldin/Haring-Smith Foundation Abigail Seldin, 35, is an entrepreneur and a philanthropist who uses data to improve transparency and access in higher education via the foundation she set up with her husband, Whitney Haring-Smith. This year, the Seldin/ Haring-Smith Foundation will fund campus Head Start programs to support single mothers, who account for nearly 10 percent of U.S. undergraduates.
Seldin’s first innovation, in 2012, was College Abacus, a comparison tool that aggregated college data to show families individualized cost estimates. Since then, initiatives have included an app, SwiftStudent, that helps students appeal financial-aid decisions, and the Civic Mapping Initiative, which advocates for better transit links to community colleges and inspired the introduction of a bipartisan bill, the PATH to College Act, which recently passed in the House of Representatives and is likely to be reintroduced this year in the Senate.
According to Elizabeth Wong, national director of philanthropic advisory services at Foundation Source, a nonprofit management platform, Seldin’s foundation is playing “a pivotal role in reshaping how the American public thinks about the ‘typical college student.’ ”
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The Art: Ruth DeYoung Kohler II, Ruth Foundation for the Arts
Image Credit: Courtesy of Kohler Co. Archive A new mega-foundation made its grantmaking debut in 2022, with a $440 million endowment from the estate of Ruth DeYoung Kohler II. A lifelong supporter of folk and community art, DeYoung Kohler, who died in 2020, was an heir to the Kohler bathroom-fixtures fortune and ran the John Michael Kohler Arts Center—named for her grandfather—in Sheboygan, Wis., for more than 40 years.
The inaugural giving program at the Ruth Foundation for the Arts, based in Milwaukee, was informed by a collective of 50 artists, who were asked to recommend organizations that have influenced them creatively. The result was a series of grants totaling $1.25 million to 78 small nonprofit arts bodies, from a pottery studio in Philadelphia to an Asian American film festival in Seattle. Starting this year, the foundation will ramp up its spending to about $17 million annually, putting it in the major league of arts donors.
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Democracy: Pierre and Pam Omidyar
Image Credit: Michele Clement/The Forbes Collection/Getty Images Seasoned philanthropists and founding members of the Giving Pledge, Pierre and Pam Omidyar have donated over $4 billion since 2002. Last year, the eBay founder and his wife gave $266 million to organizations that support effective governance, citizen engagement, and democracy at home and abroad.
A recent focus of the Democracy Fund—which is one nonprofit among a network founded by the Omidyar Group—has been to support U.S. election officials in the proper administration of fair and robust elections that can withstand foreign interference and to reduce the politicization of the electoral system by providing professional training and a stable, neutral funding stream. Since 2014, the Democracy Fund has supported U.S. organizations that expand voting access, strengthen Congress, diminish the power of special interests, and invest in the future of independent media as a provider of trustworthy information and a forum for debate. Another of the group’s nonprofits, Luminate, provides similar support for good governance in Africa, Asia, and Latin America.
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Trailblazer: Rory Stewart, President of GiveDirectly
Image Credit: Courtesy of Rory Stewart If philanthropy’s current creed is trust, then Rory Stewart is its chief evangelist. The president of GiveDirectly, a U.S. nonprofit that pioneered the practice of unconditional cash transfers (UCTs), Stewart is an advocate for dismantling the paternalistic model of charity that he believes stems from the egotism of Western nations.
UCTs operate on the premise that aid recipients, not aid organizations, are best placed to identify their most pressing needs. Instead of bestowing laptops or bicycles on impoverished Africans, GiveDirectly sends cash to everyone in a very poor village, either as a lump sum or as smaller monthly stipends—a universal basic income, in effect. This form of direct cash transfer, usually via mobile phone, allows individuals to buy what they determine will be the most helpful and almost eliminates the demand for in-country aid workers.
“Different people have different needs—one might repair their house, one might buy a bicycle,” says Stewart, from his home in Amman, Jordan. “If you were very poor, would you want someone else deciding whether you needed clothes or food?” Donated items, he adds, often end up being sold for cash.
Stewart, 50, was once the face of paternalistic Big Aid as U.K. secretary of state for international development, with a $20 billion budget. In his new role as disrupter, he knows he must overcome the “psychological barriers to giving people cash,” including Westerners’ belief that they have a monopoly on innovation.
“People are hung up on the old idea that you shouldn’t give someone a fish—you should teach them how to fish,” says Stewart. “But what if people already know how to fish but can’t afford a fishing boat? Local people have a lot of knowledge but no access to capital.”
Stewart’s goal at GiveDirectly, which operates in nine African countries, Yemen, and the city of Chicago, is the elimination of global poverty. “That may seem overly ambitious,” says the lifelong idealist, “but we have a proof of concept that works very well indeed, and the aim is to show it can be scaled up to provide poverty relief at a macro level.”
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Medical Research: Jackie and Mike Bezos
Image Credit: Gonzalo Marroquin/Getty Images Jackie and Mike Bezos, the mother and stepfather of Amazon founder Jeff Bezos, are longtime donors to the Fred Hutchinson Cancer Center in Seattle, having given nearly $68 million in incremental donations since 2009. Last year, however, they surpassed themselves with a colossal pledge of $710.5 million, propelling the couple, who were early investors in Amazon, into the ranks of the top five U.S. donors of 2022, just behind Warren Buffett.
The donation, a personal gift independent of the couple’s Bezos Family Foundation (which supports education and childhood development), will enable the research hospital to recruit dozens of scientists, build new oncology facilities, conduct clinical trials, and expand its probes of immunotherapy treatment.
The Bezoses bestowed their munificent investment after President Joe Biden announced a “cancer moonshot,” pledging that his administration would aim to cut the death rate from cancer by at least 50 percent over the next 25 years and calling for increased private-sector funding and collaboration.
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Gun Violence Prevention: Ron Conway and the Founders of Sandy Hook Promise
Image Credit: Dia Dipasupil/Getty Images Prominent tech investor Ron Conway has described Sandy Hook Promise (SHP), a gun-violence-prevention nonprofit, as “the most important start-up in America.” He was speaking in December at an SHP benefit attended by supporters including former President Barack Obama and Disney CEO Bob Iger to mark the 10th anniversary of the Sandy Hook Elementary School shooting, which claimed the lives of 20 children and six adults.
Conway helped get SHP off the ground a decade ago by introducing a group of bereaved families to Silicon Valley investors, and his long-term involvement has assisted SHP in becoming a significant voice in the gun-control movement. The nonprofit was instrumental in bringing together Democratic and Republican lawmakers to pass the Bipartisan Safer Communities Act last year. SHP founders Mark Barden and Nicole Hockley joined President Joe Biden at the White House in July 2022 to celebrate the passage of the act, which bolsters background checks for gun purchases and increases state funding for school-safety and mental-health services.
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Ukraine: Howard Buffett
Image Credit: Omar Marques/Getty Images Ukraine is outside the remit of the usual charitable work undertaken by Howard Buffet, a philanthropist, farmer, and son of Warren Buffett. Food security and conflict mitigation in Africa and Central America are two of the primary focal points of the Howard G. Buffett Foundation. Last year, Buffett pivoted to donate nearly $150 million to help Ukraine in its defensive war against Russia—an amount he intends to double this year.
But Ukraine is not unrelated to Buffett’s main philanthropic strategy. The country is a major grain exporter, and the war has disrupted global supply chains, affecting food security worldwide. In a March interview, Buffett told fellow billionaire Richard Branson that he had visited Ukraine five times (twice meeting President Volodymyr Zelensky) and now funds Ukrainian school meals, electricity generators, medical supplies, vehicles, mine removal, farming equipment, and grain purchases for Africa. “We weren’t sure any of it would work,” Buffet explained. “But those are the kinds of risks philanthropy must take in these situations if we want to have immediate impact.”
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Climate: Yvon Chouinard, Patagonia
Image Credit: Ilya S. Savenok/Getty Images In September, Yvon Chouinard, founder of outdoor-clothing brand Patagonia, gave away his company to organizations combatting climate change. The avid rock climber, lifelong environmental activist, and reluctant billionaire considered selling the 50-year-old company, thought to be valued at around $3 billion, and donating the money to charity, “but we couldn’t be sure a new owner would maintain our values,” he said in a statement.
So Chouinard split the company stock into two vehicles: The Holdfast Collective is a nonprofit that disburses dividends from its nonvoting stock to environmental causes from Patagonia’s private for-profit business; the Patagonia Purpose Trust, overseen by family members and advisers, controls the voting stock and manages the company according to Chouinard’s socially responsible principles.
Many philanthropic donations are structured to be tax-advantageous to the benefactor. Chouinard, 84, chose the opposite path. According to an interview with The New York Times, by electing to donate their shares to a trust, the Chouinard family will pay about $17.5 million in taxes on the gift.
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