A Life Devoted to Teaching Others How to Give, From the Grassroots Up

By DOMENICA MARCHETTI

Tracy Gary made her first donation when she was 14, using $100 her mother had given her to set up a charitable giving account.

She has been hooked on philanthropy ever since. Now 49, Ms. Gary — whose mother

is a member of the Pillsbury family and whose paternal grandfather invented the dial telephone — has given away $2-million of her inherited wealth and income.

But Ms. Gary does much more than give. She has devoted her career to teaching other donors, as well as family foundations and financial-services companies, how to give wisely and how to become active in philanthropy beyond writing checks to charities.

She has started 14 nonprofit organizations, many of which teach wealthy people, primarily women, how to manage their finances and invest in socially responsible companies, and how to become well-informed donors.

Her newest effort, Changemakers, provides financial and other types of assistance to so-called community-based philanthropies — local funds that support grassroots charities, particularly groups that focus on racial and ethnic minorities, gays and lesbians, or the environment.

Changemakers’ major goal is to connect community foundations and other grant makers, as well as individual donors, with such local funds, which Ms. Gary says often fall beyond the radar screen of large grant-making organizations.

“What I’m trying to do is to make sure that philanthropy is democratized,” Ms. Gary says, “that it’s not just a function of wealthy people who remain isolated from the real needs of the community.”

She adds: “Philanthropy must be a combination of a donor’s passion and community need. Otherwise, we’re contributing to growing the gap between the rich and the disenfranchised.”

Informed Choices

The need for donor education has never been greater, Ms. Gary says. The much-anticipated transfer of trillions of dollars from the post-World War II generation to its baby-boom children is already starting to take place, she says. What’s more, the expanding economy has produced a new crop of wealthy donors, many of them young people in their 20’s and 30’s who have had little experience with giving.

“Many of them are just simply overwhelmed by their new position and new responsibilities,” Ms. Gary says. Even those people who have set up family foundations to conduct their philanthropy lack the administrative support needed to help them make informed choices as donors.

“Huge numbers of family foundations don’t have paid staff,” Ms. Gary says. “We have to learn to staff ourselves well, to take seriously the amount of work that philanthropy takes.”

This is especially important, she says, because the nonprofit world itself has seen unparalleled growth.

More than 700,000 organizations hold charity status, according to the Internal Revenue Service, and that figure doesn’t include the churches, synagogues, and other religious organizations that many donors want to support.

“The average donor has no idea of all the choices there are, and how to go about educating themselves about how to make giving decisions,” Ms. Gary says.

Inheriting a Fortune

Twenty-eight years ago, Ms. Gary herself was in a similar position. At age 21, when she was a college senior, she inherited a $1.3-million trust fund from her parents.

Although she had grown up in a family that participated regularly in volunteerism and community service, Ms. Gary says that deciding how to use her trust money was a learning experience that changed her life.

As a college student opposed to the Vietnam War, Ms. Gary says, she was dismayed to learn that a large portion of her trust-fund monies were invested in defense companies that produced napalm and other war-related materials. Gradually, she took control of her trust fund and reinvested the money in companies that she felt reflected her progressive social values. She made the decision to give away the bulk of her fortune — $1-million, as well as at least 70 percent of her annual income as a philanthropy consultant.

She then began collecting information on and visiting as many charities as time would allow to help her decide which ones she should support.

Over the years, Ms. Gary estimates, she has visited more than 350 charities in California, where she lives, and has attended dozens of conferences on issues that interest her as a donor.

At age 27, she started her first nonprofit organization, Resourceful Women, to teach women about managing their money and their philanthropy.

“I felt I had a moral obligation to give back what I had learned in the form of donor education,” she says.

In the past 25 years, Ms. Gary has conducted hundreds of workshops for wealthy individuals and families, philanthropic advisers, and financial organizations, imparting to them the lessons she has learned from her own experiences as a donor. Two years ago, she and a colleague wrote a workbook, Inspired Philanthropy: Creating a Giving Plan, to help wealthy donors become more thoughtful and strategic in their giving.

Her workshops are peppered with basic statistical information, such as what percentage of their annual income people in various tax brackets give to charity, as well as which types of charities are the biggest beneficiaries. Even such basic figures can be eye-opening, she says.

“Part of informing donors is saying, ‘This is what the rest of the country is funding,’” Ms. Gary says. “People cannot believe where they are in the socioeconomic spectrum — that an after-tax income of $140,000 and assets worth $650,000 places them in the top 5 percent of Americans in terms of wealth.” She adds, “Then they’re surprised to learn that they’ve been giving as though they were only in the top 20 or 30 percent.”

Ms. Gary says she also counsels donors to think carefully about what their philanthropic interests are, and then to craft a philanthropic mission statement, answering the question, “What do I want to do with my giving and my time, and why?” Such a statement, preferably short, almost always helps donors focus their giving priorities.

And, she encourages donors to compare their giving interests and priorities with the needs of their communities.

That, she says, is especially important in the wake of the overhaul of the nation’s welfare system when the federal government is relying more on charities to provide social services. Ms. Gary says she is also concerned that large foundations with burgeoning assets may be focusing more on distributing large grants to big nonprofit organizations, leaving small grassroots groups at a serious disadvantage.

It is this enduring concern for grassroots philanthropy that prompted Ms. Gary to start Changemakers two years ago. The group, a public foundation, plans to raise $20-million, mostly from individuals, by 2010 for its various programs. So far, the organization has raised $1.3-million, including a $10,000 cash donation and $25,000 in in-kind services from Ms. Gary.

Among its activities, the group early next year will begin issuing grants to local funds that support grassroots groups. The grants, ranging in size from $10,000 to $70,000, will be used to help the funds improve their fund-raising and grant-making skills.

“We’re slim organizations in need of lots of development help,” says Jack Beckford, program officer at the Fund for Southern Communities, in Atlanta, which distributes small grants to charities working in rural areas of Georgia, North Carolina, and South Carolina. “For an organization to say, ‘We’re going to give you money to build yourselves up to be more effective over time,’ that’s something that a lot of us really need.”

Changemakers is also providing $20,000 grants to entice more community foundations to offer programs that inform donors about the work of local grassroots groups.

Community foundations have traditionally provided a link between donors and local charities. But in recent years, Ms. Gary says, many community funds have focused their energies and expertise on providing administrative, rather than educational, services to their donors.

“By and large, very few community foundations have established donor-education programs,” she says. “If their goal is to grow philanthropy, and to offer services that help donors make better decisions, they have a moral obligation to do the best job they can.”

Changemakers will also spend $2-million in the next decade to study the field of donor education and produce materials — including Web sites and CD-ROM’s — that donors and their financial advisers can use to make more-informed philanthropic choices.

The reason for her commitment to donor education is simple, says Ms. Gary.

“I’m worried. As we have this enormous transfer of wealth and the creation of new wealth, the reality is, if all that money goes into private family foundations or community foundations, we have the obligation to ensure that the donors to those institutions do not become isolated from the needs of the public and the community.”

She adds: “I believe that the future of humanity depends on this kind of carefulness.”