December 6, 2012

The New Breed of Philanthropist: Younger, Innovative, and Involved

By: The Bridgespan Group
Between now and the end of the year—the height of the Giving Season—donors all over the world are considering how they can direct their charitable giving to best help those in need. Yet for some donors, philanthropy is not relegated to a season of the year, or even, as was traditionally common, a late-in-life venture. Indeed, more and more business leaders are beginning serious philanthropic efforts at a younger age and in a deeply engaged way. Some choose to work on social issues alongside their high-powered private-sector careers, and some simply leave the traditional for-profit world at the height of their careers to dedicate themselves full-time to creating social change. Many in this latter category choose to do so through new business models that focus not only on creating social good but on profitability as well. The advice from this new breed of philanthropists is clear: Start your philanthropy today. The earlier you begin, the more time you’ve allowed yourself to learn, and perhaps, most importantly, to take big risks and make mistakes.

The benefits of early philanthropy

Starting philanthropy early has been important for John Arnold, one of our interviewees in Conversations with Remarkable Givers, our free video series that features more than 60 remarkable philanthropists and foundation leaders who share an inside view of their philanthropic journeys. Both Arnold and his wife, Laura, left prestigious careers—he left hedge fund management earlier this year, she is an attorney and a former oil company executive—to devote themselves full-time to their broad-based philanthropy while still in their 30s. Among the reasons for doing so, he says that beginning philanthropy early allows a philanthropist to see the effects their giving dollars have earlier on. "We get pleasure out of seeing the benefit that our money can get for society," he says. In addition, beginning philanthropy earlier in life enables the Arnolds to have a longer-term vision around philanthropic investments, some of which have been risky and some of which fail.

Video: Laura and John Arnold discuss getting an early start in philanthropy.

On that note, the greatest benefit of starting early, says Laura, is the extended period of learning it affords. “The earlier you can get started, the more time you have to get it right,” she says. “As we continue this exercise and as we execute in our strategy, we’ll have the luxury of time to understand what’s worked, what hasn’t worked, what we need to tweak, what we’ve been successful at and how we can replicate it.”

The Arnolds are not alone in this view. As the marketing person who helped bring AOL into millions of homes and who transitioned into philanthropy full-time as the CEO of the Case Foundation, Jean Case has a similar take. Her words to those who want to wait until “later” or until retirement to get involved with philanthropy? “You lose leverage if you wait,” she says. “Being part of an active ongoing career, having a network of people and resources that you can tap [into], and even just having the prism of an active professional life that you bring to it, can really add leverage to the philanthropic endeavors you'll undertake." New views on how to create social impact Both Jean and husband, Steve Case, shifted seriously into philanthropy in their 30s. Steve, who was the cofounder and CEO of AOL, says that getting involved with philanthropy and focusing on creating social change "a little earlier and doing it in a more integrated way gives you the ability to have a broader impact.” For Steve, that broad impact is a blend of nonprofit and for profit work. He is Chairman of the Case Foundation and Startup America Partnership, but most of his energy on people and ideas that can change the world funnels through his work as CEO of Revolution, a socially conscious investment firm that focuses on disruptive technologies such as Zipcar. Both Steve and Jean would like to see more bridges between the for-profit and nonprofit sector. "That's one of the reasons why we're interested in this emerging impact investing space," he says. "It feels to us like there might be an opportunity there to bring these worlds together."

Video: Jean and Steve Case discuss building bridges between the business and nonprofit world.

That innovative mindset, which believes philanthropy exists beyond the classic definition strictly encased within the nonprofit venture, is another trait shared by many in this new breed of philanthropists. Pierre Omidyar, best known to many as the founder and chairman of eBay, has been deeply engaged with philanthropy along with wife, Pam, since the late '90s when he was in his 30s. Through his Omidyar Network, which he and Pam established in 2004 on the heels of previous philanthropic ventures, he invests in both nonprofits and for-profits, believing that both can achieve social impact and do good in the world. "A few years after eBay’s IPO, as I stepped away from the business operations and I was thinking a lot more about how to make the world better and philanthropy, I realized that actually business has a role to make the world better," he says. "Business can be a force for social good." Instead of thinking of philanthropy as "giving back," as if with business you are "taking away," philanthropists should think about creating value, he says. "Everything we do, whether it’s in the business environment, or in a nonprofit, or as a philanthropist, we should be trying to make the world better."

Video: Pierre Omidyar takes issue with the phrase "giving back."  

Tom Steyer, who founded global investment firm Farallon Capital Management and is leaving the company at the end of this year to devote himself full-time to creating social change, also believes business can be a force for good. Through community development bank One PacificCoast Bank, which he founded with his wife, Katherine Taylor, he brings money into disadvantaged areas of California. "Capital in the community is like water in a desert," he says. "It helps things grow. And when you’re really short of capital, then a lot of good ideas and a lot of hardworking entrepreneurs can’t reach fulfillment and, conversely if there’s a lot of money around, then a lot more things can get built, a lot more businesses can get started." Though the intent was to make the bank profitable, Steyer is clear that the profits do not come back to benefit it creators. Instead, the bank's profits are funneled into their nonprofit One PacificCoast Foundation. "I don’t really consider [what I do] philanthropy," says Steyer. Instead, he thrills at the challenge of overcoming obstacles to accomplish the things he thinks are important. "Who wouldn’t want to do that?" he asks.

Video: Tom Steyer discusses his motivation to get important things done.

Deeply involved

Each of these philanthropists started young and are nothing like a "check-writing philanthropist," happy just to merely sign their name to a check to support a cause. This fact is reflected in their deep engagement, their willingness to work on the front lines of philanthropy—often in new ways—in order to aggressively give away their money and play a central role in determining the most effective way to do so. In fact, all have signed the Giving Pledge in a promise to commit the majority of their wealth to philanthropy. For Melinda Gates, such a pledge was long in the making. As early as 1994 when she married Bill Gates, she—along with Bill—had already envisioned and committed to giving away "all the money." Though she had been a successful businesswoman, playing a key role in developing many of Microsoft's multimedia products, Melinda has been a powerhouse in the philanthropic community, working through the Bill and Melinda Gates Foundation to improve global health, fight hunger and poverty worldwide, and improve U.S. education. "Philanthropy’s had a profound impact on my life and on Bill’s life in a way that I don’t think either of us would have predicted," she says. And though she devoted herself to philanthropy at an early age, society's big problems are so great there will always be more to do—more that can be done by philanthropists willing to start now. "At the end of my life, will I feel great about having worked on these causes? You bet. And will we have effected all the change we wanted to? Absolutely no way," she says. "I know that there’ll be work that I wish that I could go on and do for 30 or 40 more years, but I know for me, this is my life’s purpose and I absolutely loved it."

Video: Melinda Gates discusses finding her life's purpose.

Watch videos from Mario Morino, Ray Chambers, and Connie Duckworth, who also left their traditional corporate jobs to focus work full-time on creating social change.

This post is part of our series focusing on Conversations with Remarkable Givers, our collection of one to three-minute video clips drawn from over 50 original and private interviews with philanthropists and foundation leaders. Our initial launch features more than 400 videos, which will evolve into a library of over 1,000 videos, as we take a deeper look at each donor over the coming months.

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