The new philanthropy
08 April, 2016
I've always had warm fuzzy thoughts about people described as philanthropists. You can't be a bad person if you choose to give to promote the welfare of others.
The definition of philanthropy is varied. Some think of it as any charitable action — from donations to volunteering for an hour — while others think it is the preserve of the very rich, who support charities on a grand scale by donating millions of dollars.
Whatever the scale, most agree philanthropy involves giving something to improve humanity, without a profit motive.
Philanthropy has evolved over the years. It is something more people are choosing to be involved with and it is becoming sophisticated as people think carefully about how they give. The recent crowd-funding exercise that "saved the beach" at Awaroa inlet illustrates how philanthropy has morphed from its somewhat highbrow state of yesteryear.
In researching the current state of philanthropy, I was struck by several aspects. The first made me feel particularly warm — we New Zealanders are right up there as philanthropists.
Charities Aid Foundation publishes the World Giving Index which monitors the scope and nature of giving around the world. The index collates data from 145 countries where participants are asked three questions:
Have you done any of the following in the past month —
- Helped a stranger, or someone you didn't know who needed help?
- Donated money to a charity?
- Volunteered your time to an organisation?
In the 2015 World Giving Index, New Zealand was ranked third with 65 per cent of New Zealand participants helping a stranger, 73 per cent donating money and 45 per cent volunteering time in the month prior to interview.
Just as philanthropy used to be largely the domain of the wealthy, it also tended to be more prevalent in older age groups. Today young people are just as likely to give money to charitable causes.
The under-40s are also seeking different things from their giving. They hold more types of socially-conscious investments and increasingly make decisions on ethical grounds.
Handing money to charitable organisations is no longer sufficient for many young philanthropists. Now they want more options, including making investments in organisations, projects or funds which offer measurable impact. Instead of just saying "I want to give", young people are asking "how can I make the biggest difference?"
The area of most interest for me is the effect of our ageing population on the future of philanthropy and, by association, on society.
A longevity expert recently described the rapid ageing of the American population as a bonus that could have an amazing impact on charities and non-profit organisations, for the benefit of society as a whole.
He noted Americans aged 65 and over are responsible for 42 per cent of the US$350 billion in charitable contributions made each year and supplied 45 per cent of volunteer hours to charities and non-profit organisations.
Retirees are the biggest givers in the nation and "if future retirees contributed their time at the same rate as today's, they would account for 58 billion volunteer hours, valued at US$1.4 trillion, over the next 20 years".
Add to that an expected US$6.6 trillion in charitable contributions over the next two decades and retirees would be responsible for an $8 trillion charitable infusion, positioning philanthropy as a significant contributor to human wellbeing.
Philanthropy is becoming a global growth industry. What a wonderful thought that, in virtually every country and in all age brackets, more money and more consideration is being given to the betterment of humankind.