Scott Belsky did not enjoy his first taste of big-time philanthropy. Not long after his graduation from Cornell, Belsky and a few friends were invited to a rubber-chicken-dinner fund-raiser in a hotel ballroom. What they saw that night really turned them off. “The whole thing was just one guy after another getting on stage, saying his name and company and how much money he’d given,“ Belsky recalls. “We walked out.“ There had to be a better way, Belsky decided, and he’s created it for himself.
Last year Belsky, 27, who lives in Manhattan with his fiancée, quit Wall Street to found a startup named Behance, which helps creative professionals maximize productivity. Belsky has also given tens of thousands of dollars to numerous causes, he says, and, more important, devotes around 20 percent of his time to working for four charities. “No one’s interested in that socialite, write-a-check thing anymore,“ he says. “My generation wants to be directly involved. That’s a far cry from worrying about having your name carved on a hospital.“
News flash: The era of the blue-haired-old-lady charity ball is dead and gone. Philanthropy today is innovative, hip, and dominated by a new class of freshly minted millionaires and millionaire wannabes, who are transforming what had been a sleepy, aristocratic backwater into a vibrant, professional sector of the economy. Today’s philanthropists wear jeans and meet over laptops at a Starbucks. They flock to exclusive, invitation-only conferences, hire philanthropy coaches, and use terms like social entrepreneur and venture philanthropy. In fact, they tend to operate like venture capitalists, identifying underserved problems and the emerging charities that are trying to solve them, then not only donating money to those charities but also offering advice and demanding results.
Belsky, for example, sits on the five-person board of his grandparents’ foundation, which allocates more than $1 million a year to various causes; he is working to develop a leadership program with City Year, a group that sends young volunteers to do yearlong service in cities such as New York City, New Orleans, and Boston; and he sits on the board of the Slingshot Fund, which collects, bundles, and distributes small contributions from young donors.
“Everybody wants to be hands-on these days,“ says Anne-Marie Fowler, who for a number of years was an adviser to philanthropies in San Francisco. “They don’t say they are giving’ money. They say they’re invested.’“
These new-philanthropy “investments“ are being made with the gobs of money that have enriched the wealthiest 10 percent of Americans since 1990, accelerating the divide between rich and poor. According to statistics cited by Robert Frank, the Wall Street Journal reporter and author of Richistan: A Journey Through the American Wealth Boom and the Lives of the New Rich, the number of U.S. households worth more than $1 million has doubled since 1995, to more than 8 million. In 2006, total charitable giving in the United States hit a whopping $295 billion, up 4 percent from 2005, setting a record for the third straight year. The number of grant-making charitable foundations has doubled since 1990, to close to 70,000.
And giving has also become something of a curious competition within the entertainment community, with A-listers such as Brad and Angelina and Bono making very public displays of activism and donating large amounts of their personal fortunes to worthy causes. The extent to which the music business has embraced giving was reflected in a new category at the MTV awards: the “quadruple threat award,“ whose nominees must “have conquered multiple worlds including music, fashion, business, acting, dance, and philanthropy.“
“The true status symbol of the rich these days is philanthropy,“ Frank says. “But with so many rich people it takes a lot more to get noticed. There’s a constant ratcheting-up of how much people are giving and constant competition over results. Anyone can give $100 million these days. The question is, What disease have you cured?’“
Philanthropy isn’t just a fad for the rich; it’s also a growing obsession among those who want to be rich. Michael Kim would like to start his own foundation when he has the funds. Still, as a partner in a venture-capital firm in San Francisco, Kim, 39, earns enough to make quite a few contributions. He currently sits on advisory committees or boards of various organizations. Joseph Miller, 24, is the executive vice president of the Society of Young Philanthropists, a Los Angeles group of people in their 20s and 30s that pools donations to create an investment portfolio for emerging charities. Kim and Miller both say they give many hours a week to charity work and so do many of their friends.
“Most of the people I know are involved,“ Kim says. “People see it as a way to have a blast, do some networking, learn new skills, and help others.“ Belsky agrees: “The younger philanthropists today see their charitable work as a way to get ahead. Philanthropy is part of our personal and career development.“
Since the 19th century, when the likes of John D. Rockefeller, Andrew Carnegie, and J.P. Morgan competed to give away their fortunes, philanthropy has been dominated by inheritors of wealth. Today there’s still plenty of inherited money, but the people driving modern philanthropy are the 21st-century robber barons: the technology gazillionaires of San Francisco and the hedge-fund wunderkinder of Wall Street. They model themselves on grand-scale givers like Bill Gates, Warren Buffett, Michael Dell, and Pierre Omidyar, the founder of eBay. The budding new philanthropists hope to run into these stars, along with Bono and Bill Clinton, at exclusive brainiac conferences, such as the TED Conference in Monterey, California.
If the new philanthropists don’t find the information they need at a conference, they can hire some of the burgeoning number of philanthropy coaches, advisers, and gurus. Merrill Lynch now has a Center for Philanthropy & Nonprofit Management, which helps people integrate giving into their financial planning. It’s a heady new world of wealth, but the bottom line is, if you aren’t giving it away, you’re a nobody. “When you make your money, the next thing you are thinking about is What’s my cause?’“ says Rob Davis, founder of Hedgefundscare, a charity that combats child abuse. “I’d venture that more than half of the people who have hedge funds have set up foundations.“
Despite the new philanthropists’ desire to change the world, there have been few big successes. But it’s not for lack of trying. Just ask Scott Belsky. “I can’t remember the last time I saw the inside of Yankee Stadium for a game,“ he says. “I’m just too busy.“