Source: The Chronicle of Philanthropy by Holly Hall
The Robin Hood Foundation gives teenagers $25 worth of food stamps—a week’s supply for a single person in New York—and challenges them to buy their own food for the week. The eye-opening exercise is part of a seven-day summer camp the foundation started for children of its donors.
Robin Hood, an antipoverty group that relies heavily on the wealthy for donations, started the camp and two other youth programs as a way to stand out in the competition for big gifts by catering to a growing concern among its supporters.
Today’s donors increasingly want “to be sure their children have a balanced world view and learn the importance of giving back to those less fortunate,” says Patricia Smith, the charity’s marketing and communications director.
While Robin Hood’s youth programs are an ambitious way to court the rich, charities nationwide say they must work much harder now to meet the needs of wealthy donors.
While nonprofits had already faced growing demands for personal involvement from baby boomers and their children, the bad economy has exacerbated their demands for control, says Philip Purcell, vice president for planned giving at Ball State University Foundation.
“The mantra of boomer giving is ‘I love you, but I don’t trust you.’ Donors are well-meaning, but their philanthropy is not unrestricted.”
Donors are also looking well beyond traditional gifts, experts say. Here are some ways to deal with the demands and changing interests of the affluent:
Pursue for-profit ideas and recruit entrepreneurs. A growing number of affluent donors are investing in business opportunities that produce a financial return while doing good, notes David Wills, president of the National Christian Foundation, which offers donor-advised funds.
Over the next decade, Mr. Wills predicts, it will become common for wealthy people to talk about their philanthropy in terms of two pools of money: a fund or other entity that makes outright grants, and investments that earn both a social and a financial return.
To take advantage of this trend, says Mr. Wills, charity leaders must stay on top of new techniques for financing good works, such as social-impact bonds or low-profit businesses that primarily serve a social purpose, he says.
Social-impact bonds, for instance, give people a financial return for investing in charitable projects that produce socially desirable results.
Charities that thrive in this environment will be those that find “financially sustainable ways to accomplish their mission,” says Mr. Wills.
As a first step, he advises charities to recruit more entrepreneurs and people with business skills to their boards.