BC Studies 'New Breed' of Givers

BC Studies 'New Breed' of Givers

High-tech philanthropy follows different path, SWRI researchers say

By Patricia Delaney
Associate Director of Public Affairs

High-tech executives are putting their own twist to the traditional relationship between wealth and philanthropy, according to Boston College researchers, and may force charities to rethink their soliciting strategies as a result.

The recently published report by the Social Welfare Research Institute found this new group of potential benefactors often uses criteria - including market awareness and capacity for expansion - in allocating their financial support that may be a challenge to many non-profits' traditional operating philosophy .

Though they may employ different giving strategies, the high-tech donors also indicated a strong willingness to share the fruits of their good fortune with those in need, and to pursue a long-time commitment to philanthropy.

SWRI's study is the first-ever qualitative, interview-intensive report providing in-depth analysis of how high-tech donors view their wealth and their giving. Its authors say the findings offer important new information about the long-range implications of high-tech philanthropists' involvement in the nonprofit sector.

"High-tech givers have been labeled as a 'new breed' of donors intensely interested in 'venture philanthropy' - applying lessons learned in business such as strategic thinking, focus on measurement, accountability, return on investment and the like - to ensure the charities they support are effective in producing outcomes," said SWRI Director Prof. Paul Schervish (Sociology), who conducted the study in the first quarter of 2001 with SWRI Associate Director John Havens and Mary O'Herlihy, a professional researcher at the institute.

Social Welfare Research Institute Director Paul Schervish (right) and Associate Director John Havens. (File photo)

"This study was an effort to dig deeper, to pinpoint their motivations and the relationship between their business success and their charitable work, to see whether their views on giving really represented a 'new' philanthropy, and to address the overall prospects of their future giving."

For the study, SWRI interviewed 28 high-tech executives involved in philanthropy, and two co-participating spouses. The family net worth of participants ranged from $1 million to $1.15 billion, with an average of $159 million. Respondents ranged in age from 26 to 57 and were spread geographically throughout the United States.

Donors cited a strong desire to "give back," repeatedly testifying that their vast amount of wealth, the speed with which it was amassed and the assistance they received from others to succeed represent good fortune or blessing, not just their own merit. Despite the current economic climate, all respondents said they intended to be involved with charity throughout their lives and look forward to the day when they can unleash their financial resources toward the common good.

But as the BC researchers found, these executives insist on philanthropy that is market-conscious and knowledge-based, focusing on comprehensive processes that address an entire issue and use technology to meet needs. Ideas and knowledge, not funding, are the most important assets a charity can have, according to the respondents, who place the highest priority on human intellectual capital.

As with their businesses, high-tech donors consider growth in scale of an enterprise to be the primary indicator of success. They wondered why, if a nonprofit is doing such important work, it would not try to expand its impact and become a model for other organizations, through developing innovative ideas or cloning successful programs.

The emphasis on ideas and knowledge over funding and on growth and expansion represent potential areas of conflict between high-tech philanthropists and nonprofit organizations, according to Paulette Maehara, CFRE, president and CEO of the Association of Fundraising Professionals, the study's sponsor.

"But many respondents in the study want to provide managerial expertise and long-term funding so charities are able to work free of traditional constraints," she added.

Participants in the study manifested a range of other attitudes and beliefs concerning philanthropy that have been influenced by their experience in the high-tech industry: an insistence on research and "due diligence" for the start of any new venture; strategic thinking that combines a global view and a broad systems approach; strong belief in the centrality to success of teamwork, partnering and collaboration rather than competition.

They also displayed an idealistic and optimistic belief in the capacity of the individual to make a difference, especially on an intellectual level, which comes from seeing the revolutionary effect that their problem-solving approach has had in business.

 

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