‘Inc’: Demands of Today’s Donors

Today’s donors are not only demanding more information about nonprofit groups, writes Inc magazine (May); they’re also “evaluating more mechanisms for giving.” The magazine notes that people of moderate means — not just the very wealthy — are considering whether to start foundations, donor-advised funds, or giving circles, and whether to donate stock they hold in their own companies.

“There’s been an explosion of models,” Joe Breiteneicher, president of the Philanthropic Initiative, a nonprofit group that encourages giving, told the magazine. “This world is unlike anything I’ve ever seen. Diversity and pluralism have come to philanthropy.”

The “new models,” says the magazine, “are a response to growing demand, but they may also help create demand. Many sprang from the minds of entrepreneurs seeking to improve the nonprofit sector (and who also knew a growth industry when they saw one).”

Among the newest approaches: Foundation Source, which the magazine describes as a “foundation in a box.” Customers must put in at least $100,000, and the company promises to start a foundation in less than 24 hours for $2,500.

Other approaches that are attracting more and more donors, the magazine notes, are groups like Social Venture Partners, which was started in Seattle and has spread across the country. Through Social Venture Partners, donors pool their resources to give money and business advice to charities. The group has grown so popular that it recently hired a director to run SVP International, which will coordinate the work done by its affiliates, the magazine says.

While the array of available approaches has caused donors to become more involved, it’s not clear that their efforts will make a noticeable difference. “I’ve watched these new models come in over the past three to four years, and there’s been an evolution,” Page Snow, of the Pew Charitable Trusts, told the magazine. “A lot of my friends in venture philanthropy who were talking about eradicating poverty are realizing that it’s hard to get results even in one neighborhood. Philanthropy is a humbling business.”

The article is available at http://www.inc.com.