Skip to main content

Secondary navigation:

2001 High-Tech Study

center on wealth and philanthropy

NEW REPORT: FIRST-EVER IN-DEPTH LOOK AT TODAY'S "HIGH-TECH MILLIONAIRES"

Boston College Study Reveals Attitudes Toward Wealth and Charitable Giving

CHESTNUT HILL, MA (5-9-01) -- A new study reveals that wealthy high-tech executives are putting their own twist to the traditional relationship between wealth and philanthropy. The report by the Boston College Social Welfare Research Institute shows that the criteria these individuals use in allocating their support may be at odds with the way in which many non-profits are accustomed to functioning, and that some charities may have to change their approach when soliciting the young, high-tech millionaire who's recently made a fortune fast.

The 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 findings offer important new information about the long-range implications of high-tech philanthropists' involvement in the nonprofit sector.

The study was conducted by Dr. Paul Schervish, Mary O'Herlihy and John Havens of the Boston College Social Welfare Research Institute in the first quarter of 2001. It was sponsored by the Association of Fundraising Professionals and funded by Dr. Robert Pamplin, Jr. of Portland, Oregon.

"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 Schervish. "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."

Among the key findings:

  • They insist on philanthropy that is market-conscious and knowledge-based. This outlook has three major tenets:
    • Charities must be attentive to the marketplace, 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. They place the highest priority on human intellectual capital;
    • Charities must focus on growth of scale either through developing innovative ideas or cloning successful programs and expanding their impact. As with their businesses, high-tech donors consider that growth in scale of an enterprise is the primary indicator of success. They wonder why, if a nonprofit is doing such important work, should it not try to expand its impact and become a model for other organizations?

     

  • Other attititudes specific to the high-tech industry which they bring to philanthropy include:
    • 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;
    • 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;
    • fundamental belief in the development and application of human capital as the basis for solving society's problems;
    • conviction that innovation, a reassessment of circumstances, and constant change are crucial to progress.

     

  • Despite the current economic climate, all respondents indicated the intent not only to be involved with charity now, but throughout their lives as well. They appreciate how much wealth they will control, expect to pass on [to heirs] only a relatively small amount, and are anticipating the day when they can unleash their financial resources toward the common good.
  • High Tech Donors cite a strong desire to "give back." Respondents repeatedly testified 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. Many high-tech donors talk about "giving back" -- gratitude for what life has given them, especially in a short amount of time, and the motivation to help others who have not been similarly blessed.

The study's findings point to several areas, such as emphasizing ideas and knowledge over funding and stressing growth and expansion, that have the potential for conflict between high-tech philanthropists and nonprofit organizations. For many charities, putting ideas and knowledge ahead of funding, or looking to aggressively expand operations are foreign concepts, said Paulette Maehara, CFRE, president and CEO of the Association of Fundraising Professionals. "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."

The findings are based on confidential personal interviews with 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 were spread throughout the U.S. and ranged in age from 26 to 57. Twenty-one held a minimum of a bachelor's degree, and a majority of respondents (25) were White.

The Boston College Social Welfare Research Institute is a multidisciplinary research center that specializes in the study of spirituality, wealth, philanthropy and other aspects of cultural life in an age of affluence. Founded in 1970, SWRI is a recognized authority on the relation between economic wherewithal and philanthropy.

The Association of Fundraising Professionals represents nearly 25,000 members in 159 chapters throughout the United States, Canada and Mexico, working to advance philanthropy through advocacy, research, education, and certification programs. AFP was formerly the National Society of Fund Raising Executives.