In Tough Times, It’s Time to Step Up

Susan Carey Dempsey.

When Ted Turner made an historic announcement of a billion dollar pledge to the United Nations a decade ago, he wished out loud that lists of most generous donors would become as competitive as lists of the World’s Richest.

While there’s some understandable overlap between the two, the distinction of being generous in the extreme has taken hold. A hopeful sign for philanthropy is that those who are making the biggest mark in the field are using their recognition to encourage others to follow suit.

And it couldn’t come at a better time. With markets gyrating, companies disappearing, and wealth vanishing down the Madoff rabbit-hole, some nonprofits are holding their breath, others cutting staff and postponing building plans, still others closing their doors. And in this perfect storm, while the working poor lose jobs and health insurance, and vital social services are needed more than ever, philanthropy must be strengthened.

That’s the message cited by two of the mega-givers in the news this week: Mayor Michael Bloomberg , it was announced, was the most generous living donor in the US this year. And Bill Gates chose this Monday to release his first annual letter on Philanthropy, summing up his goals, achievements and even disappointments in the philanthropy of the Bill and Melinda Gates Foundation , to which he now devotes all his time. He also spent some time reflecting on the role foundations are especially suited to play in creating positive change:

“Foundations provide something unique when they work on behalf of the poor, who have no market power, or when they work in areas like health or education, where the market doesn’t naturally work toward the right goals and where the innovation requires long-term investments. These investments are high-risk and high-reward. But the reward isn’t measured by financial gain, it’s measured by the number of lives saved or people lifted out of poverty.”

Just today, the Gateses announced a new commitment at the World Economic Forum in Davos. Making their own Foundation’s commitment of $34 million to the Global Network for Neglected Tropical Diseases to help control and greatly reduce the burden of the most prevalent neglected diseases that affect the world’s poorest populations by 2020, they highlighted the numerous partners who had joined with them in this effort, including philanthropic family foundations, pharmaceutical corporations and international organizations. Further, they urged governments not to ignore the importance of foreign aid in the stressful economic climate. Indeed, said Melinda Gates, “there is little else during this global economic crisis that provides such a significant return on investment while also reducing suffering and saving lives. For approximately 50 cents per person per year, we can treat seven of the most common neglected tropical diseases.”

In his letter on Philanthropy, Bill Gates similarly said this is no time for foundations to shrink from responsibility.

“I am impressed by individuals who continue to give generously even in these difficult times. I believe that the wealthy have a responsibility to invest in addressing inequity. This is especially true when the constraints on others are so great. Otherwise, we will come out of the economic downturn in a world that is even more unequal, with greater inequities in health and education, and fewer opportunities for people to improve their lives. There is no reason to accept that, when we know how to make huge gains over the long term.”

His letter also stated that the Gates Foundation gave out $3.3 billion in 2008. “In 2009, ” he continued, “instead of reducing this amount, we are choosing to increase it to $3.8 billion, which is about 7 percent of our assets.

Although spending at this level will reduce the assets more quickly, the goal of our foundation is to make investments whose payback to society is very high rather than to pay out the minimum to make the endowment last as long as possible.”

That philosophy is consistent with that cited by Mayor Michael Bloomberg this week, in commenting on his position at the top of the list compiled by the Chronicle of Philanthropy. According to The New York Times, he’s stated that the best measure of a philanthropist is that the check to the undertaker bounced.

As we’ve written in this space before, a laudable commitment to “giving while living” has been made in recent years by donors like Chuck Feeney, whose Atlantic Philanthropy has stated its intention to spend down its assets.

A keen observer of the philanthropic scene, Mario Morino, commented in this space recently on the important ways foundations can contribute to better public awareness and understanding of important social issues: “Foundations can put money on the table to foster greater collaboration between public policy organizations that don’t often see eye to eye, such as Brookings and the American Enterprise Institute, the Center for American Progress and the Manhattan Institute. These institutions can do more to work together to establish the basic facts upon which moderates from both parties can act.” Further, he said, ” Foundations and nonprofit organizations can work together to strengthen independent, nonpartisan reporting.”

One point Bill Gates made about the ways people can approach philanthropy is that they should decide on a cause, then try to learn as much as they can about it, then commit to doing something. Here at onPhilanthropy, we’ll do our best to keep the philanthropic sector informed about what the most critical needs are, what’s working, and how best to use scarce resources to meet important challenges on our planet. I remain optimistic that there will be an eventual upturn, but when it comes, I want us all to be able to say that we lived up to the best that’s in us.