“Intelligence is the ability to adapt to change.”
— Stephen Hawking
As the world becomes increasingly all-encompassing through interconnectedness, information accessibility and technological advances, so has the landscape of philanthropy changed.
Long gone are the days when major philanthropists gathered informally around a table and doled out money to charities in need. Philanthropists are now banding together in collaborative funding efforts and taking a more active role in wanting to know how and where their dollars are being spent.
“Is the change good or bad, I don’t know …,” said Tom Parker, president of the Hutton Parker Foundation. “When I started this foundation 25 years ago, the Foundation Roundtable used to all get together to try to solve community problems — people like Leslie Ridley-Tree, Michael Towbes, Palmer Jackson … we were a tight-knit group. We were able to sit around a table and make decisions.”
That is no longer the case.
“Today, there are very few foundations left in Santa Barbara County in which the donor is still engaged,” Parker told Noozhawk. “Now it’s almost all staff … which, in some ways, is great — the foundations are much more sophisticated in their approach, more organized.
“But we used to be able to make decisions quicker. When you have a staff and larger boards, everything takes longer.”
Philanthropy at a local level seems to be mirroring national trends. According to an Inside Philanthropy article, “Philanthropy Forecast 2018: Trends and Issues to Watch”, founder and editor David Callahan wrote, “When I first started following philanthropy over 20 years ago, it was a pretty sleepy sector. The big legacy foundations were the dominant players.”
“But the pace of change started to accelerate in the early 2000s as a billionaire class minted by the second Gilded Age turned to large-scale giving,” he said. ”And, in just the past few years, things have speeded up sharply, with a host of new mega-givers embarking on ambitious philanthropy.”
Ron Gallo, president and CEO of the Santa Barbara Foundation, added his thoughts about the wave of philanthropic change.
“This is a whole new world of philanthropy and it is very exciting … but it is change,” he said. “And, with change comes fear and disruption.”
Geoff Green, CEO of the Santa Barbara City College Foundation, addressed the transition.
“There will be a new generation of philanthropists in Santa Barbara County,” he said. “The torch has yet to be fully passed.”
Despite the shift in philanthropic paradigm, contributions keep growing — and in a big way. The UCSB Economic Forecast Project announced in its 2017 Santa Barbara Community Indicators Project that, nearly 20 years ago, just over $400 million was given in Santa Barbara County. In 2014, it was more than $1 billion.
“Individual donors are the major funders …” Green said. “According to Giving USA numbers, 75 percent of the $400 billion in private giving in the U.S. was given by individuals. Foundations and corporate giving represent smaller pieces.
“It’s not the super wealthy who are carrying it, either. More people in the U.S. are philanthropic than are voters or volunteers. Seven or eight out of every 10 households give to charity … A mark of our society that is uniquely American is philanthropy.”
As the baby boomers age out of fund raising, Generation X and millennials are beginning to take over.
Gallo noted that Generation X and millennials “have many more tools at their disposal for giving.”
The social tools with which millennials engage include the Internet, social media, GoFundMe campaigns, Kickstarter crowdfunding and Day of Giving, also known as #GivingTuesday.
“These tools have an immediacy about them,” Gallo said. “They are not bureaucratic. People can give in a short time frame and have a great impact.
“Millennials are not as likely to give to a large institution, and they want to know what their donation means … They want to be involved.”
Green concurred.
“There is a generational shift to be sure,” he said. “Younger donors want to be more involved, older donors less so. Peer-to-peer and mobile support is happening.
“Donors of all types are starting to engage more … They want some evidence that their gift is making an impact or difference. There is more emphasis on data and demonstrable impact.”
When asked who the next rising stars are in the Santa Barbara County nonprofit sector, Parker indicated that it was more like a constellation.
“They are philanthropists who are doing it with their own dollars,” he said. “Not at a million-dollar level, but at a much smaller level, collectively and with their friends. When you start working together as a group, it is a much more sustainable model.”
So, the “tide” is shifting to Generation X and millennials who want to work with their peers, want to be active in the nonprofit organization, and want to work with greater numbers of donors to make an impact. It appears to be a promising, sustainable and donation-producing shift.
Yet, there is still one change that could undercut increased donations — the new tax law. According to Callahan’s article, “It’s been estimated that the new tax law will reduce charitable giving by as much as $20 billion a year.”
Green is wary of the impacts.
“The tax law is certainly something to be watched,” he said. “It will be the first time we’ve had a test of people’s true impetus to give. Taking away some of the tax benefits is the first way to test that.
“The slow elimination of the estate tax is a bad thing for nonprofits … We won’t know the impact of that for years. Studies have shown that $13 billion to $20 billion could be potentially removed from the nonprofit structure.”
Along with navigating the changes in philanthropy that tax legislation brings, the South Coast has had to confront the daunting challenge of catastrophic disasters: the Thomas Fire and the deadly Jan. 9 flash flooding and debris flows in Montecito.
Both events clobbered the community. The loss of lives, the loss of homes and property, and the many mandatory evacuations had and continue to have serious economic and psychological impacts.
A silver lining is that the community disaster effort to support survivors, victims and first responders was spectacular. The star-studded One805 Kick Ash Bash gathered 3,000 people at Bella Vista Ranch & Polo Club in Summerland in February. It raised $1.7 million.
Jack Johnson and Friends held a sold-out benefit concert at the Santa Barbara Bowl that raised more than $200,000 for the United Way Thomas Fire & Flood Fund in March.
The Santa Barbara Bucket Brigade organized by Abe Powell brought in an army of volunteers with shovels in hand to dig out homes, yards and trees.
The outpouring of community funding and community relief was astonishing. Parker said.
“Ten foundations gave $10,000 … And, then things just started taking off and people started throwing money into disaster relief,” he said. “The next thing I knew, nearly $2 million had been donated.
“Corporations like Yardi Systems and Sonos really stood up. That’s a difference in fund raising that I’ve never seen before.”
The foundations also banded together to do their part to help the community, including helping nonprofit organizations that were economically affected by the disasters.
“Fund raising is a little bit trickier now (because of the disasters),” Parker said. “The Hutton Parker Foundation has stepped in by providing a ‘stop gap’ one-page application for funding, which lets nonprofits apply for necessary funds to keep their nonprofits operating during the difficult months of the disaster.
“We have given nearly $650,000 a month to help nonprofits during this time.”
As the philanthropic waves crest and change, intelligent and creative solutions are surfacing from foundation and future philanthropic leaders in the community.
“New frameworks are definitely starting to emerge,” Green said. “We’re at it right now. There is really a robust conversation going on in the community.”
— Noozhawk contributing writer Nancy Shobe can be contacted at shobebiz@gmail.com, or follow her on Twitter: @shobebiz. Follow Noozhawk on Twitter: @noozhawk. Connect with Noozhawk on Facebook.