As wealthy baby boomers are getting ready to retire, the Greater Kansas City Community Foundation is among the many nonprofit organizations seeking to get them thinking about how to channel their money and other assets into philanthropy.
The foundation, which ranks No. 394 on the Philanthropy 400 list of the charities that raise the most from private sources, has started a “reboot camp” for donors who are about to step away from their careers. The goal is to give people a place to discuss ways to give.
The foundation is also seeking to help boomers get everybody in the family thinking about giving, even teenagers.
This month, the foundation started a group for teenagers, their parents, and other relatives who will meet on four Sundays for presentations and site visits to local charities. At the end of the four-week program, the teenagers—whose families donate a minimum of $500—will make a collective grant of $10,000 to one charity they agree to support. “We like small gatherings that are meaningful for people looking at giving for their stage of life,” says Debbie Wilkerson, the community foundation’s president. “We do this as opposed to trying to turn donors to our view.”
Younger Donors Too
Other charities are also benefiting from a giving surge by people in their 50s and 60s, especially those seeking to get their children to become strong donors.
“Boomers are particularly active because they want to prefund retirement giving or get their family involved” in philanthropy, says Amy Danforth, president of Fidelity Charitable (No. 2), which attracted nearly $3.7-billion in 2013, almost a 12-percent rise.
Not all the big gifts are coming from older people though. Young wealthy technology entrepreneurs have also been giving generously.
One of the biggest beneficiaries was the Silicon Valley Community Foundation, which this month announced a new gift of $500-million worth of stock from Nicholas and Jill Woodman, founders of the GoPro high-tech camera company, on top of another nearly $1-billion stock donation from Facebook co-founder Mark Zuckerberg and his wife, Priscilla Chan, last year.
The nearly $1.4-billion the community fund raised from private sources last year places it at No. 8 in the rankings for the second year in a row.
“We have been successful with younger tech donors because they want more partnership today,” says Emmett Carson, president of the Silicon Valley fund. “No longer can charities say, ‘Give me the money and go away,’ " he says. Today’s donors, he adds “are partners with emotional skin in the game, active thought partners, raising challenging questions and more willing to take risk.” The staggering sums pouring into community funds and organizations like Fidelity are attracting attention—and criticism from lawmakers and others.
Some members of Congress are annoyed that donors get an immediate tax deduction for creating a donor-advised fund but face no requirement to give away the money quickly.
Unlike private foundations, donors to advised funds face no requirement to give a minimum amount every year, or at any point in their lives.
Rep. Dave Camp, Republican of Michigan, proposed in a draft tax-overhaul measure this year that donors be required to distribute the money within five years or be charged a penalty tax on money not distributed more quickly than that.
The proposal is expected to get serious consideration if the next Congress can agree to work on such an ambitious piece of legislation.
Easier Giving
Perhaps in response to greater scrutiny of their operations, Fidelity and other donor-advised funds have been working to make it easier for donors to make grants—and help nonprofits get a share of the money.
The website of the Bank of America Charitable Gift Fund (No. 120), for example, now produces grant-making forms that are filled in with key details, making it simpler for donors to make repeat gifts to the same organizations.
Fidelity reported a burst of giving after introducing a new iPhone application at the end of 2012. Using the free app, donors can direct grants from their smartphones on the spot, such as at a charitable event or when they learn about emergency appeals for aid. So far this year, donors have used iPhones to make 1,800 grants to charities totaling $4-million.
Shortly after the app was introduced, a donor used it to make a single $500,000 donation.
“We called the donor to make sure it wasn’t a mistake,” says Ms. Danforth, Fidelity’s president. “Now we are looking to get onto other mobile devices.”
Another new feature for charities is DAF Direct, an online feature charities can put on their websites.
By clicking the button on a charity’s site, people with donor-advised funds at Schwab Charitable (No. 4), Fidelity, or the Kansas City fund can quickly make a grant online. After the Pan-Mass Challenge, a bike race that supports the Dana-Farber Cancer Institute, added DAF Direct to its website, the event raised $1.65-million from January to August this year, just from Fidelity donors. Two of every five Fidelity grants to the Pan-Mass Challenge were made with DAF Direct.
This story has been corrected from an earlier version that implied that Fidelity Charitable’s DAF Direct app was launched in January 2014.
