I am not a Philanthropist!

I am not a Philanthropist! from Gena Rotstein

 

I am not a Philanthropist! – CAGP 2016

 

Title Slide: Good morning! It's always nice to be presenting at the Banff Centre, where we are surrounded by beauty and the natural wonder of the Bow Valley.  It is fitting that we should be talking about the rising generation and social capital legacy planning in this geographic location; heart of the Bow Valley where we have a confluence of natural wonders, the history of political strategies around Treaty 7 First Nations and the global footprint of international and domestic tourism.

Slide #2: We are meeting on sacred land of the Blackfoot, Sarcee, and the Stoney-Nakoda nations, who all still hold a strong presence after tens of thousands of years.  Where cultures, people and traditions have moved along the rapids of this mighty Bow River as explorers paddled their canoes, shared their stories, their goods and their technologies and where we see how new communities established themselves and organized their social systems. 

As part of that social system organizing we see the remnants of legacies, the values and wealth, that was transitioned between generations.  These histories are written on the cave walls, in the archeological finds and the oral traditions passed down.

As my friend and colleague, Jerry McGrath, from the Peter Lougheed Leadership Institute shared with me and group of families a few weeks ago at a family philanthropy retreat held in this very building; we come to Sleeping Buffalo Mountain to gain new insights and learn, but it not a place where we stay.  We take our new-found knowledge and connections back to our communities that we come from.

It is from this place that I share these stories with you, so that you can take them home and when you are meeting with your major donors, or thinking about how best to engage the next generation, you will see how they are stories of values and social legacies that are being passed down from grand-parent to parent to child and in some cases, back up the chain again.

By better understanding the next two generations of donors you will be on the leading edge of resource planning and development.  From how they make and save money to how they make consumer spending decisions, over the next little while we take a deep dive into the generations that have the strongest future buying power resulting from an intergenerational wealth transfer and self-made income.

Slide #3: A bit about myself before I get started.  I am a GenXer.  Raised in Calgary, had a Gap year at 17 to travel to Europe and the Middle East and spent the first part of my career in Toronto, Boston, Rhode Island, Ohio and the NJ/NYC area.  I am a first generation Canadian on my father’s side and third generation Canadian on my mother’s side.  My family were part of the first Jewish settlers in Alberta and I grew up in a family business and part of a broader family enterprise system.  After several years working for other organizations around North America, I returned to Calgary in 2002 to start my company, Dexterity Consulting. I set a huge goal – to positively influence $1Billion in charitable giving by driving strategic philanthropic decision making and social capital management.  I believe to hit this target we need to harness the power of data, so I launched a tech platform and incorporated Dexterity Ventures in 2010.  But our society is bifurcated, and everything I wanted to do in order to hit this $1Billlion target requires me to have a registered charity as part of the executional plan.  So in 2012 Place2Give Foundation was born.  In 2015 we got charitable status in the US we now provide X-border giving services similar to Tides Foundation but for an online market, typically comprised of GenXers and GenYers.  Also in 2015, DVI received its BCorp status and as of the end of 2015 we have helped facilitate approximately $7.5Million new dollars into social enterprises, traditional charities and social impact funds.

But this just outlines my timeline.  It doesn’t explain or describe my orienting story.  And we all have an orienting story.  It is what shapes how we see the world, make decisions, choose our mates, raise our children and pass down our words of wisdom. 

Slide #4: There’s a story shared about a Jewish mother to a young bride early on in her life.  It’s not my Jewish mother-daughter story, but it very well could have been…

The daughter calls the mother saying she is making brisket for the first time for a holiday dinner.  Only Jewish people would take the toughest cut of meat and make it the centre piece of a holiday meal.  It never looks like the golden dressed turkey placed on a platter in the middle of the table.  Let’s face it, brisket is a dark brown slab of meat, sliced and then covered in its cooking sauces, what North Americans would call gravy the French would call Au Jus and we call it schmaltz.  It is perhaps because this is such a tough cut of meat that we make it our centrepiece, we take pride in our brisket because it truly is a labour of love as there really are only extremes with this cut of meat – tough and dry or soft and moist… anything in between means it  is still raw. 

But I digress, so this bride calls her mom and asks about how best to make the brisket.  The mom instructs her to cut off the ends of the roast before putting it in the roasting pan and proceeds to give her the rest of the directions.  The young woman, does as she is instructed and the roast turns out beautifully.  As the family gathers around the holiday table, the daughter turns to the mom and asks why did she need to cut off the ends of the brisket, the mom replies, “Because that is how my mother did it.”  So the daughter leans across to her bubbie, her mother’s mother and says, “Bubbie, why do you cut the ends off of the brisket before you put it in the roasting pan?”  The grandmother responds, “I never had a large enough pan, so in order to get the roast to fit, I had to cut off the ends.” 

It is these stories that shape our behaviours.  Why we cut off ends of briskets, why we have rituals for certain things. 

My father is a pharmacist by trade, a botanist by hobby and a mad scientist as his latent super power.  I don’t know too many people that grew up with a botany/chemistry lab in her basement, but I did. 

Passover is just around the corner and this is my favourite Jewish holiday, not only because we have brisket, but because it is the time that my dad brings the science out of the lab in the basement and into the dining room as part of explaining the ten plagues that were rained down on the Egyptians as the Israelites fled slavery during the time of the Pharaohs.  My father takes an ancient text that has little meaning and applies science and inquiry to modernize and make the ceremony relevant to a family that is all but atheist if not agnostic in our view of religion.  My father did this with me and my sisters, and our cousins and now he does it with his grandchildren.  They are learning Jewish values, lines of inquiry, history, the importance of family, fundamentals of science and physics all the while actively participating in the shaping of their own orienting stories.

Evert generation has their own external orienting story.  The next two generations are no exception.

Over the past while there has been much thought and research given to how the Rising Generation is influencing the marketplace.  As Mike and the Mechanics say in their song, "The Living Years,"

Slide #5:

Every generation

Blames the one before

And all of their frustrations

Come beating on your door

I know that I'm a prisoner
To all my father held so dear
I know that I'm a hostage
To all his hopes and fears
I just wish I could have told him in the living years

The role of the trusted advisor and the role of a major gifts officer when it comes to executing a legacy isn’t that different.  It is our jobs to ensure that each generation hears each other and that the legacy that is being passed down, whether it is your great grandmother’s silver candlesticks, a donation to a charity, pearls of wisdom and family history or actual wealth transfers, our role is to help the next generation not feel like they have been imprisoned by the commitments of their parents, and also to facilitate meaningful conversation and dialogue such that the older generation understands where the next generation is coming from.

Slide #6:

“The events and conditions each of us experiences during our formative years determines who we are and how we see the world.”

Slide #7 - 12: Who are we talking about when we talk about the Next Generation and the Rising Generation?

In each of these generations there have been defining moments ultimately shaping world views and orienting stories. 

Consider the influences that affected your generation.  Here are just a few...

Each one of these affects our orienting story and as a result how we operate in the world.  So much is changing so fast!  In almost 17% of Canadian households, women are the primary breadwinners according to research published by TD Private Banking.  15% of privately held companies are managed by women.  The start-up community of 20-somethings is growing in every major city.  We need to start thinking differently about how we define community, engage each other and meet the demands of our citizens, both those that resource our solutions and those that draw upon those resources.

The generations that I am going to focus on are GenX through iGen.  We start with GenX because they are parents to both Millennials and iGens so it is their world view that is directly influencing the social perceptions of their children.

Slide #13: In an essay entitled The Many posted on the C2Montreal conference website we are now in the Age of the Many.  How we learn, how we work, how we create, how we live is being influenced by this generation that is breaking the mold in so many ways.

Challenge #1 - This brings me to the first challenge that major gift officers face when working with this generation – how wealth is being created.

This rising generation recognizes that their assets not only include tangible wealth but also networks and knowledge.  As this essay points out, “Our future employees won’t keep turning up on your doorstep at 24, bright-eyed and bushy-tailed, keen for lifetime employment and a game of climb-the-corporate-ladder. The end of glorious retirement funds has affected the younger generation’s willingness to sign up for life, or even for a decade. Why should they, when instead they can hop from one job to the next, accumulating knowledge, experience and valuable contacts along the way?”

Slide #14: Did you know that “Freelancer” is on its way to becoming the most common job description in North America? And in our workforce we have young kids entering while still very healthy seniors, 65+ are still working.  It is an unprecedented demographic shift that is having huge economic and psychological impacts on our communities.

Research commissioned by the Freelancers Union in partnership with ODesk published a report in 2014 of a survey of over 5,000 individuals who identify as Freelancers.  While this is US based data, the same trends are reflected in Canada – that of Millenials turning to the Freelancer lifestyle because it affords them a more flexible and creative career path than the traditional model.

Slide #15: Richard Florida, preeminent sociologist and economist and author of several books around the Creative Class, Economic Resets and Director of the Martin Prosperity Institute at the Rotman School of Business at the University of Toronto highlights the very shift that we are seeing in this type of new economy.  An economy where ideas are the extractible resources and where the workers are the artists, designers and non-traditional professionals.

The Freelancer style of an intermittent, project-based work force, means that people are coming and going from revenue and wealth creation to spending down their capital in every shorter cycles.  For the financial advisors they have the complicated task of helping their older generation clients manage and possibly still grow their wealth for longer, while at the same time keep enough liquidity in the portfolios for the younger generation to have access to capital when they opt out of the workforce for an extended period of time.

From the non-profit perspective, this freelancer approach to volunteerism is just as strong.  This generation is donating their time in episodic ways where they can touch, feel, see and know that what they have done has made a difference.  They don’t want to make long-term commitments to boards or committees, but will happily provide their knowledge, their networks and their creative solutions to a project knowing that there is an end date.

Slide #16: In the traditional model Generation 1 would create the wealth, Generation 2 would inherit the wealth and likely spend it down, and if Generation 3 was lucky they might inherit the remaining wealth only to rebuild what was lost in the previous generation.  The shirt-sleeves to shirt-sleeves model.  The role of the advisor was to preserve wealth and social capital was only discussed when Maslow’s Heirarchy was fully satisfied.

As we see in this slide, it doesn’t matter to the Rising Generation where in the system he or she enters, as the business models reflect the new corporate values which filter over to how relationships are defined. 18 to 35 year olds don’t look at wealth creation the same way.  They see their world as a system; how they work, play, learn, live and build communities doesn’t stop when the work-day ends or the school day is over.  In large part this is because technology makes it easier to connect, but also because the types of problems that they are inheriting are so complex.  Or as Horst Rittle would say, they are Wicked Problems.

Uber is all the rage, but recent studies have shown that Uber drivers are not all that well paid and as an Uber rider, the question becomes, am I feeding into a system that keeps people at a certain economic level?  The counter argument to this is that drivers – both private and taxi, can opt in to the service and riders can opt in to paying the surge prices or not. 

The sharing economy that Uber is a part of, or Car2Go, or SpokeFly or Air BnB is creating a new business system, which means that our wealth management strategies need to change.  But beyond that, it also means that the values that are being imparted from one generation to the next are being internalized differently.

This new system, as described by C2 is “rare and powerful: a many-to-many platform. An ecosystem where many hands and many minds join forces to do the important creative work that will drive our business world forward.”

Slide #17: Just think about the telephone.  I have five nephews and a niece who live all over the world.  When I left home at 17 and moved to Israel, it was the first time I was ever away from home for any extended period of time, I would call home daily, collect!  Think about when the last time you actually called an operator to connect you to someone?  Now when I call my family it is in the age of the Jetsons, thanks to Skype.  In fact, my four year nephew doesn’t understand when I call his mom, my sister, on the phone and he can’t see me.  For his entire life, phone conversations have been face-to-face, albeit through a screen intermediary.  I showed my seven year old nephew an old rotary phone and he knew it was a phone, but couldn’t understand why anyone would want something plugged into a wall with wires and cables.  This is the generation that is inheriting our wealth and shaping our communities.  Unlike previous generations who asked questions more about themselves – how will this benefit me and my family, they see a situation in the context of a system and are asking why… what is the purpose? How will this benefit the collective?  What is the ripple effect? 

Slide #18: Just like our communication technologies have changed, so too how we get things to market as evolved.  Agile development, lean start-ups, rapid prototyping, the introduction of 3D printers, and YouTube solutions means that anyone can be an entrepreneur, make their solution and get to market a lot faster.  It also means that solutions can be shared in an open marketplace thereby lowering the cost of entering the market.   Think of it as social capital resiliency. 

Slide #19: Leading to our second challenge – the desire to finance solutions, not fund problems.

Slide #20: When you build a brick house, each layer is built such that the cracks of the brick below are mortared into the centre of the brick above so as to not have a weak seam.  The same thing is happening with our new businesses and solutions.  People are sharing how they got there so that others can build on top of what was created before.  The transfer of knowledge is not limited to only those with expertise… the whole world is the marketplace and our need for certain types of specialists is decreasing.

As philanthropists, this generation is not satisfied with the statement – “This is how it has always been done.”  They want to take the knowledge from before, see how the organization fits into the system in which the agency has identified, whether that is at a systemic level of poverty reduction or at the presenting problem of homelessness.  The NextGen and Rising Gen donors are looking at an agency’s social capital resiliency and are not interested in funding organizations to be built for forever. Rather they want them to be designed in such a way that they can transition out once the problem has been solved.  In other words, they want the charities to transfer their knowledge up the chain and see themselves within the larger system because as donors they are not just giving to one organization in their area of interest, but multiple agencies that are layered on top of each other.

Another example of this is what being said by a few people on twitter around the Syrian refugee crisis.  In Canada we committed to bringing in 25,000 Syrian refugees to a country that has 30,000 chronically homeless people every night.  If we can house 25,000 refugees in short order, how is that we can’t come up with a viable solution for the 30,000 chronically homeless?  This younger generation is looking at this very issue and asking questions of their community leaders, their government bodies, the non-profit organizations that are supposedly addressing both sides of this question and they are saying, in the systems of housing, immigration, employment, mental health we should be able to solve this problem just as rapidly as we are able to absorb an influx of highly dependent refugees.

Of course there is more to this story than what I have shared in this brief example and if we had more time we could dissect this case study further.  Suffice it to say, if you are in one of those systems that I just mentioned, you are in a unique position to engage in meaningful relationship building with this generation.

Slide #21: How do you manage this generation’s wealth when at their core they are using social capital to drive their decision making as opposed to previous generations that were using wealth creation and Maslow’s Hierarchy for decision making?  The third challenge facing advisors that have a ripple effect on major gift officers and planning around engaging this generation.

Slide #22: For the first time in a long time, the philanthropy conversation isn’t just about helping the other, it is about changing a system.  Philos – Love and Anthropy – Mankind started out as just that, taking care of the other person because it was a means of survival.  As we evolved taking care of each other became more altruistic.  With the rise and power and subsequently the institutionalization of organized religion tithing was part of the social norm.  From there it was adopted into our political system by way of socialized democracy policies and integrated within our taxation, justice and legal systems.  So by the time we reach 2016 traditional charity, which was originally intended purely out of the idea of caring for another person has evolved into a transactional experience where we get tax credits and incentives to give, and community service is used an alternative punishment for petty crimes.  Pretty much counter to the original intention.  This hypocrisy isn’t lost on this younger generation.  So much so, that supporting community, building businesses that have social change at their core, and developing investment strategies that have a strong Social ROI as well as a financial ROI is not just a nice to have, but a must have.

Slide #23: Patti Dolan, an investment advisor at Raymond James calls it financial planning for SPACE - Sharing philanthropy, acting collectively and empathetically.

I call it planning for What Most Needs Doing.  We know that if we keep our social vision in our sites we will actually achieve everything else that we need along the way.  In essence it is turning the Maslow Hierarchy on its head.

Slide #24: If we have wealth being created differently, spending habits and investment strategies being done differently, it only make sense that giving money away needs to be adapted as well.  This is the forth challenge.

Slide #25: I was recently at a presentation by Zita Cobb from Fogo Island and the founder of the Shorefast Foundation.  She talks about Humanistic Globalization – the creation of a global network around intensely local places.  In her case Fogo Island.  In other communities there are other types of Place Making activities going on. 

In Calgary, one of my client’s is a community art project called Water for Riley.  It uses a collective impact model addressing environmental issues and place-making theory involving ACAD and SAIT students, Hillhurst-Sunnyside Community Association, Hillhurst Elementary School the Kensington BRZ and its business members, and citizens surrounding Riley Park.  These organizations are, for the first time in 100 years, working together to build a functional piece of art that is also a water fountain.  We estimate approximately 90,000 Calgarians access Riley Park annually, generating several hundreds of tonnes of plastic bottle waste that ends up in the bushes and our city’s waste system.  One of the social returns that is being measured by this project is a long-term waste reduction around plastic water bottles ending up in the garbage and the bushes of the park.  Another metric that we are using is how these organizations are going to work together in the future.  We have already seen a positive outcome in this regard as one institutional leader commented that she now knows who to connect with at the other agency for a future project.  Breaking down barriers is a social ROI that has economic benefits through joint ventures and future partnerships. 

Water for Riley is an example of a non-traditional approach to philanthropy; this group of citizens have created a network of artists, designers, architects, community activists, educational institutions, government bodies like the municipal Parks and Rec as well as the Heritage department and Water and Utilities to leave an indelible mark on their community.  The way traditional philanthropy presented itself was in the initial seed funding coming from a group of private Babyboomer and GenX donors (50’s to 70’s) along with the Calgary Foundation to support the efforts of the ACAD and SAIT students.  The engagement of the students and the community agencies is where we see the Rising Generation integrating their giving of time, talent, treasures and ties – al done through the lens of the collective.

Slide #26: In 2013 a comprehensive study on Next Gen and Rising Gen philanthropists was conducted by the Johnson Centre in partnership with 21/64 an organization that spun out of the Bronfman Foundation looking at how best to engage the next generation of philanthropists.

The focus of this study was on high-net-worth and ultra-high-net-worth families.  One of the most telling points is the overall size of the GenY and now Millenium demographics.

(Point to slide)

30% of this generation comes from families that ive over $1Million annually and 10% of these individuals are in families whose net worth is over $100Miillion.

Slide #27: North America is facing its largest inter-generational wealth transfer in its history.  It is estimated that $52Trillion will be transferred from one generation to the next by 2052. $40T will end up in the hands of the Rising Generation and various studies including those from from Boston College and other from NYU state that approximately $36T will end up in charities by 2062… but not if we keep doing the business of philanthropy the same way.  This has been termed the Golden Age of Philanthropy simply because of the size of the market.

Slide #28: Overall this is a demographic that is driven by values not valuables as is reinforced by the SPACE model of investing.  It is a group that asks the impact question before it asks any other question of a charity and then they follow-up with the, “how do you know and why is this so?”  It is a group that is at the formative years of developing their philanthropic identity and they recognize that what they bring to the table is more than the financial wealth that their parents have created.  In fact they see their ties, at this point in time in their lives, as their most valuable asset.

So what does it mean to be driven by values and not valuables?

• Values they often say they have learned from parents and grandparents.
• They fund many of the same causes that their families support and use many of the same methods their families use, but are interested in exploring new tools as well.
• Most of all, they are ready to be donors – and all that the term entails – right now.

The Impact First approach means:

• They see philanthropic “strategy” as the major distinguishing factor between themselves and previous generations.
• They see previous generations as more motivated by a desire for recognition or social requirements, while they see themselves as focused on impact, first and foremost.
• They want impact they can see, and they want to know that their own involvement has contributed to that impact.
• They want to use any necessary strategies, assets, and tools – new or old – for greater impact.

(Slide #29 hidden)

Slide #30: They are a relationship driven demographic.  Even though casual observation indicates they have loose ties to each other, in fact what they have are deep connections and ways of seeing how people are inter-woven with each other and their organizations.  A few years ago I took a snapshot of my own LinkedIn profile.  Each colour represents a different industry and each dot represents a unique person.  The larger the dot or the darker the line, the stronger connection I have to that individual.  LinkedIn has since taken down this free tool, but when it was up, it was quite valuable in mapping out the Linkages and Interests of people that could be cultivated, in your cases, for a major gift and who should do the “Ask.”

To reinforce the importance of the relationships:

• They want to develop close ties with the organizations or causes they support in order to solve problems together.
• They havegrown up volunteering, and they still want to offer their time, but in meaningful ways because they see their volunteer engagement as an extension of themselves.
• Peer networks are where they learn about, and share information on, causes and experiences that are important to them. They believe that collaborating with peers makes them all better donors, and extends their impact.
• They want to give their full range of assets – their treasure, of course, but also their time, their talents, and even their ties, encouraging others to give.
• They also look at the organizations they get involved with as a reflection of their own personal brand.  A brand that is managed very publicly through various social media sites like Instagram.

As a generation that is just forming their philanthropic identity it behooves us, as experts in our respective fields, to help these individuals figure this out.  It isn’t about promoting one charity over another, rather it is about giving them the tools and resources to make informed decisions, explore, test and try out different ways of “doing” philanthropy.

Slide #31: When working with a client as an individual, family or a family-business we start by exploring what the social vision is and how philanthropy sits in that vision.  When taking a deeper dive I have them rate on a scale from 1 to 10 how they see themselves responding to these five statements.

READ HORSE

From here we start exploring types of organizations, for profit and non-profit that will help them realize their social vision.  Just like when evaluating a business investment, we take a similar approach to evaluating a charity – we look at the leadership, the types of programs and their successes as well as how they measure this, the opportunities for volunteering, the larger marketplace and environment in which the agency operates, how communication happens and decisions are made.  It is not until we go through all of this that we then look at the financial and fundraising question as we want it in context of the whole organization and the sandbox in which it operates.

Slide #32 – Hidden

Slide #33: As you can imagine this leads us to the next challenge around how charities collect information, understand and articulate how they are positioned in the market, what their value proposition is, and how they report back to the donor.  To put it succinctly, there is no standardized reporting mechanism between similar organizations so it is up to the donor alongside the recipient organizations to come up with a reporting metric.  This means that the agencies at the table have to work together and agree upon who is where along the continuum of care and at what point their organization provides the right solution to the problem.

Slide #34: When we compare areas of concern, as expected, issues around religion, health and arts and culture are lower, in some cases significantly lower than their parents and grandparents.  As the population ages we will likely see an upsurge in health-related priorities and interest in arts and culture.  On the flip-side to this, these individuals are already hyper engaged in their community as their school, work, and personal life are all blended together.

Slide #35: An example of how this generation approaches the business of philanthropy, I would like to share a case study about a social enterprise D-Rev that was started in the United States and registered as a 501c(3) which in Canada translates to a registered charity.  The two founders saw an issue around infant mortality rates in India resulting from Jaundice and the causal relationship with lack of access to proper, affordable technology.  D-Rev received seed funding from the Mulago Foundation; an organization that spends its money to drive forward the most promising ideas in health, development, and conservation in poor countries. The foundation is unabashedly obsessed with impact: designing for it, measuring it, investing in it, and taking it to scale.  I was first made aware of the D-Rev story and the Mulago Foundation at the SOCAP conference in 2008 where they were featured in a keynote address by Managing Director, Kevin Starr.

The founders of D-Rev realized that children in rural India were dying from jaundice because the UV lamps were not adjustable to the height of the bed and were also difficult to transport.  They resigned the lamps to make them more durable and adjustable and began taking them out to hospitals and clinics in rural India.  They call the product Brilliance. D-Rev owns the research, design, and development of their products and then partners with industry leaders to manufacture and scale for maximum impact.  They don’t think small and set up their business to impact millions of people.  The team is made up of individuals in their early to mid-thirties.  To date, Brilliance has helped over 56,000 babies and has been recognized by a number of organizations including Fast Company’s Most Innovative Companies list.

Slide #36: So how are people hearing about these projects learning and engaging in the opportunities?  “Unlike in past eras, social sector organizations are now in direct control of a mass media communication medium,  more powerful than any that proceeded it,” this means that charities have a mouth piece that is so loud, that when used properly it can result in huge net returns. 

Slide #37: This brings me to our first solution – Harnessing the power of technology.

Slide #38: Think about how you engage with the media.  Everyone can create their own content, tweet it out, get it picked up by media outlet and shift a conversation.  Massive movements like the Arab Spring or what we recently saw with the Syrian Refugee Crisis all started with an action caught on camera and posted to social media that garnered global resonance.

Just out of curiosity how many of you participated in the Ice-bucket challenge by way of creating a video?  What about sharing a video of a friend dumping ice-water on their head?  Did any of you contribute to a friend’s crazy antics when it came to this campaign?  So a good number of you have actively engaged, contributed, networked or otherwise amplified a cause.

Slide #39: 91% of Rising Gen philanthropists go online FIRST before they do anything else when it comes to learning about a charity.   This mirrors the growth of online giving and in-the-moment transactions and retail philanthropy.

Slide #40: In the moment transactions and retail philanthropy tap into the consumer mindset and then provide an online tool or mobile app to activate a transaction.  Two Calgary based examples are GoodPin and TheCardThat.Gives.  GoodPin allows companies to promote product while at the same time leverage corporate sponsorship dollars for consumer-based actions, like downloading a coupon.  The Card That Gives is a physical GIVE card that allows the recipient to redirect the face-value of the card to any charity in Canada and for companies to brand the card as part of their corporate citizenship program and give out as company swag.  In both cases there is a consumer-based decision that is driving the in-the-moment action.

Slide #41: From understanding how the next generation uses tech and is engaging in the retail philanthropy phenomenon you can now access the second solution - Mapping out the System.

In 2013 Forbes magazine published an article about the next generation of donors.  One of their interviews was with Mary Gileti, a young philanthropist, charity board member and director on her family’s foundation board,  “[My family's foundation is moving] into the mission related investing and impact investing space. I think my generation doesn’t think you need to sacrifice positive social impact for earning return on investment. Those two things don’t just coexist together but are actually inherently aligned, and that is ideally the way the world should work, that I should be adding both social value and financial value to me and everyone else.”

A friend, social change agent and a next gen trustee of the Russell Family Foundation, Zac Russell shared in the same Forbes article, “I think that implementation of impact investing is not a matter of if, but when. On the issues we care about, we want to use our full ability to leverage the change we want to see and, in a lot of ways, expect.”

Slide #42: I recently started working with a young woman who inherited some wealth and has decided to start a private foundation focusing on gender issues for school-aged children.  Over the past year we have been developing a business plan that includes her asset management investment strategy, her legacy objectives, her social impact measurements and of course her granting and funding process.  We didn’t start with what she wanted to do.  We started with why she wanted to do it.  More and more I am engaging in these types of conversations with younger philanthropists.  They say they want to really understand why they are going to do something before they even start exploring how and what.  This is not how previous generations handled their social capital.  This means that for charities there is a longer sales cycle.  It also means that there will be more fulsome discussions and organizations will really need to know how they fit into the broader marketplace.

Slide #43: In the case of this client, her passion is around gender identity issues.  So we mapped out all the possible players that influence the discussions, policies, decisions, actions and community.  Some of these might be charities and non-profits, others may be businesses or equity placement opportunities, yet others might be government agencies.  Until we understood all the moving parts we couldn’t create a plan because we wanted to make sure that whatever ended up in her portfolio weren’t going be in conflict with each other.

So this is what we learned:

According to Stats Canada 2015 research, 1.7% of Canadians aged 18 to 59 reported in 2014 that they consider themselves to be homosexual (gay or lesbian).  And 1.3% identify themselves as bisexual.  We don’t have any stats on those that identify as Transgender in Canada.  According to a US study by the Williams Institute, 3.5% of Americans identify as Transgendered.

To illustrate for you the types of marketplace questions that the next generation donor is asking, one of the lines of inquiry we followed was “What organizations in Canada support the LGBT community?”  For a population of less than 2% we determined that according to the CRA there are over 15,000 organizations across Canada with specific programs and services directed at the LGBT community.  Of the 90,000 charities in Canada 16% of them have programs and services directed that this demographic.  So the next question is how is a population of 50,000 maximizing on the services of 15,000 agencies?  Are these organizations meeting a demand that is presenting in their market, or simply responding to media and social trends?

How do we know what most needs doing for this demographic?

What do these numbers tell us? The Rising Generation philanthropist wants to know the business case behind the numbers.  She wants to know that if X number of LGBT youth are feeling disenfranchised, how can she help reduce that number?  What agencies does she have to connect with, programs she needs to volunteer in, people she needs to bring together in order for her to realize whatever that X-Factor is. She is not going to be satisfied with generalities.  She is going to want to know that her direct involvement has shifted the conversation, impacted more than an individual life, and that agencies are working together to move the needle instead of competing for her attention and all that comes with it. 

Slide #44: Again, this generation sees things as a whole system.  Michael Kramer, from FSG Consulting calls this approach – collective impact, I call it creating a portfolio for social change.  At the end of the process, we will have developed a portfolio of blended value where their charitable investments, consumer purchases, wealth management and growth strategies and life choices are all aligned and in-sync.  Where impact is being measured along a continuum and we are able to standardize the types of data we are collecting.

Slide #45: What we do with all of this data leads to my next solution creating New Funding Models.

The current economic climate matched with the environmental crisis and human migration patterns are all being brought down at the feet of this generation. 

Slide #46: We are heading for a revolution that is changing how we do business resulting in shifts in how money is being spent, success is being measured and personal net-worth and value are being redefined.

This revolution will allow for unique funding models to emerge.  Consider the 1% fund.  A unique fund within a community foundation designed to encourage start-up entrepreneurs to invest 1% of their unvalued equity at the early stage of their company such that when they become successful, that 1% donation of securities is worth something significant. If the company isn’t successful, there’s no major loss, and the community foundation has engaged a young philanthropist early on so that when they do their next company, they already have it in their minds that they will be setting aside some securities for the local community foundation.

Slide #47: In addition to new funding models, we need to redefine the role and expectations of the major gifts officer within a charity and remove the “turf-ism” associated between agencies operating in the same sandbox.

This new job description is my proposed fourth solution – being a mentor and a guide to the next generation of philanthropists.

Slide #48: This Golden Age of philanthropy also means that organizations are in the unique position to be mentors and guides.  As a major gifts officer the support you can offer Family Foundations is quite significant.  One area that you can provide guidance is at the table of a youth council where sibling partnerships and cousin consortiums are coming together to shape and influence their family philanthropy.  This is not an invitation for you to create a case for support to pitch to their council.  It is an opportunity for you to mentor, teach guide and provide resources beyond your agency.  Steve Meyers from the Weizmann Institute is one of the best examples of modeling this behaviour.  Even though his paycheque is covered by the Weizmann Institute he meets regularly with his family donors to help them with other funding needs and recently published a book about his efforts in building sustainable systems of family philanthropy.

Slide #49:  The last solution I would like to propose is around portfolio diversification and recognizing that this generation does not stop the social change conversation at a charity’s doorstep.

Slide #50: Philanthropy is no longer just about giving money to a charity.  This is a generation that is looking at creating systemic change.  In order to do so, they see their social change portfolio as being a combination of investments, volunteering, advocacy, and giving.  One could argue, that philanthropy in this generation does not adequately reflect what they mean when they say they are giving back.  It can be in the form of micro-lending, or only investing in companies that have women in the C-Suites or who hold positions of influence on the board of the company.  We need to make it super easy for these individuals to understand how your organization fits within in their solution space.  From your perspective, you might be an agency that is addressing domestic violence, but to this Rising Generation of social investors, you might be the missing link for their portfolio.  They might see you as the agency that can help them address their critical social issue.  As I mentioned, they use their social vision as the touchstone for all of their major decisions.  So in this example, the presenting problem might be a lack of reporting on domestic violence, but the underlying systemic issue that the philanthropist identified is inadequate training for First Responders.  So they might be creating a portfolio of domestic violence related agencies, and see your organization as the piece to addressing how we train first responders to incidents of domestic violence.  It is important to note, she might already have the agency dealing with the counseling services and the shelter issues and she is looking for an organization to compliment what she already has in her portfolio. 

Slide #51: She will have determined that the agencies she has picked for these investments are best suited to work together to achieve her social vision.  She is going to have metrics against which success will be measured.  These will be based in research, both academic and market-based.  They will be standardized across her portfolio.  She will turn to various reporting mechanisms to gather this data.  She will work with the organizations to who will likely be her primary source of information for validation.  She will want to know what worked, what didn’t, what was learned, and what will be changed if anything.

Slide #52: So to summarize there are five challenges and five complementary solutions. 

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We are at a tipping point, the Golden Age of Philanthropy.  Where time, talent, treasures and ties are all being used to leverage social change through dialogue, investigation, experimentation, financial modeling, policy drafting, and needle pushing.  Demographics are shifting away from the stereotypical old white guy way of cheque writing and the colonial approach to international development and localized volunteering.  Agencies need to be nimble, responsive and engaged in order to really capitalize on the trillions of dollars entering the philanthropic market.  This can be daunting, but if you listen closely, out of the mouths of babes will come your direction.

Slide #53: Thank you all for your time today and thank you to the organizations and researchers who have provided some of the information I shared with you this morning.

Slide #54: I am happy to answer any questions you may have.