Donors both large and small are carving out time from their busy schedules to learn how to give more effectively. Many relish the opportunity to meet with like-minded funders and exchange ideas, with the goal of enriching the experience of giving and maximizing the impact of their dollars. They are also getting involved in giving at an earlier age. (Think of Mark Zuckerberg and Priscilla Chan’s 2013 donation of nearly $1 billion to a donor-advised fund in Silicon Valley, earning the then 20-somethings the title “Most Generous Americans” by the Chronicle of Philanthropy.)
Deeper donor engagement is but one of four philanthropic trends highlighted last week by Melissa Berman, CEO of Rockefeller Philanthropy Advisors, at a recent breakfast on the topic of “Empowering Women and Girls: Achieving Impact Through Models of Social Change.” The event was organized by Jewish Communal Fund, the largest Jewish donor-advised fund in the country.
A second trend she identified is that funders are seeking out solutions-based approaches.
“For many years, people funded the problem and not the solution,” Berman said. Many funders would allocate their dollars based on how terrible the problem was—throwing money at the biggest issues even if there wasn’t a true fix available. Now, savvy donors are asking questions like: “What is the solution to the problem?” and requesting that nonprofit organizations show them evidence that their approach actually works.
Third, donors are increasingly interested in creating a legacy with their charitable giving. “They want to transmit their values to the next generation and create a family legacy,” Berman said.
Perhaps the most exciting trend is that there are many new ways to fund. “There is great interest in social enterprise and impact investing [investing capital in organizations with a social mission],” Berman noted. In addition, “Lots of folks are using media as a way of moving an issue forward and getting people connected to an issue.”
One example of a social-enterprise model is Digital Divide Data, a nonprofit that pioneered the “Impact Sourcing model” in which it provides employment and higher education opportunities to young women and men in emerging economies in Cambodia, Laos, and Kenya. The more than 1,000 employees have the opportunity to strengthen their skills and lift themselves and their families out of poverty. The organization brings in $6 million annually in earned revenue from the data entry and other outsourced services they provide to businesses, covering operating costs and helping the organization remain sustainable. Donations to DDD fund educational scholarships and training opportunities for employees.
“We take unskilled laborers and provide them with access to college and professional skills,” said Jeremy Hockenstein, the co-founder and CEO of DDD, who shared examples of different models of funding women and girls at the Jewish Communal Fund breakfast.
DDD measures its effectiveness not simply by highlighting the number of current and former employees but also by tracking the salaries of past employees who have since graduated college and entered the workforce. “We have seen an eight-fold increase in lifetime earnings,” he said.
How can these philanthropic trends relate to your own personal charitable giving?
“It’s worthwhile to ask yourself, ‘What are my core motivations and values,’” advises Berman. “Don’t approach charitable giving solely based on analytics. If you just use your head— and not your heart and soul—you will often end up extremely frustrated.”
It is often helpful to ask yourself the following questions:
What change do I want to see in the world?
How do I think that change will happen?
Many people, for example, want to help lift people out of poverty. There are many approaches to this issue, including providing access to capital, improving public health care, or sponsoring scholarships that provide access to higher education. “It’s important to think through which strategy really resonates with you,” she says. Find an issue you care about and an approach you want to take, and then search for organizations that are a good fit. It is also helpful to review your giving history through the lens of the cause that is most important to you.
Hockenstein and his wife recently made a spreadsheet outlining all of their giving within the past year. They then classified each gift as benefiting the rich or the poor. “We realized that 70% of our giving was helping what we considered ‘the rich,’ as we look at the distribution of income among the seven billion people on the planet,” he said. “This included our synagogue and other worthwhile causes within the Jewish community.” This exercise informed their future giving.
You can use this approach to see what percentage of your philanthropic dollars support your local Jewish community or an issue area that you have identified as a priority within your own giving. Gaining clarity about your philanthropic focus will help you allocate funds in a way that is potentially more effective and more in line with your values.
Tamar Snyder is the Associate Director of Strategic Initiatives & Communications at Jewish Communal Fund (www.jcfny.org), the largest Jewish donor-advised fund in the country. She can be reached [email protected]
By Tamar Snyder