New Study Details Giving Habits, Preferences of High-Tech Millionaires

By ELIZABETH SCHWINN

The slowdown of the economy won’t deter donors who made their fortunes in the high-tech economy from continuing to give, according to a new study released by the Association of Fundraising Professionals.

The association commissioned Boston College’s Social Welfare Research Institute to conduct the study to determine the giving habits and goals of high-technology executives. Scholars interviewed 28 donors whose net worth averaged $159-million and whose total giving to charity last year ranged from $500 to $65-million; two spouses of those executives were also interviewed.

To be included, donors had to have made the bulk of their fortunes through ownership of a high-technology company or a high-ranking job at one.

In the interviews, conducted in the first three months of 2001, the donors all said they planned to give at the same pace they gave in the past, even though the stock market was faltering and causing problems for their industry.

The survey also found that, while those donors operate in some ways that are very different from big givers of the past, they also have much in common with major contributors of years past. The donors said they gave to charities with which they were not personally involved and did not demand that charities prove themselves before receiving money — contrary to the image portrayed in the press of many high-technology donors who only want to finance groups they start and who demand quick results from their donations.

Some of the donors even said they gave to organizations they considered ineffective. For example, one gave money to an environmental group even though he believed the group had spent far too much on its Web site. “Even though I see it sometimes does some bad things, at least people got excited about doing it,” the donor said.

A $50,000 Study

Robert B. Pamplin Jr., a Portland, Ore., textile millionaire and philanthropist, provided $50,000 for the study because he said he wanted to find out why high-tech millionaires didn’t seem to be giving as much to charity as did earlier generations of people who made their money in other industries.

Mr. Pamplin said the study results show that one reason seems to be that high-tech donors often don’t live in the same cities where they grew up, and, as a result, they tend not to be very connected to their communities or interested in supporting local social-welfare programs.

The donors also tend to be relatively young, and are either unmarried, recently married, or have small children, and generally don’t participate in religious activities — all factors that usually affect giving patterns. But he says nonprofit groups have an opportunity to turn high-tech executives into donors if they approach them in new ways.

For example, the study found that such people are more likely to be motivated to give by arguments that the money will be used effectively than by pleas that giving is the right thing to do, he says.

The survey also found that high-technology donors:

• Are interested in charities that approach an issue comprehensively, rather than just tackling segments of it. For example, one donor wants to help refugees change their lives “instead of just going over there and giving them a few dollars so they can buy food.” Sixteen of the donors had supported some form of comprehensive program, researchers said.
• Like to see new approaches to solving problems. All of the donors surveyed said they viewed established charities as hampered by outdated perceptions about the needs of their clients or by organizational constraints.
• Place a high premium on ideas and knowledge. That has caused misunderstandings with some nonprofit professionals, who may not appreciate that a new idea — such as a new kind of computer or Web site — can mean the difference between success and failure in the business world, the researchers said. At the same time, the researchers found that charities may also need to do more to help such donors understand why some ideas may not actually pan out when applied to charitable social-service work.
• Expect nonprofit organizations to grow aggressively and expand their most successful programs. Such donors may wonder why, if a charity is doing important work, it does not try to expand and become a model for other organizations, the researchers found. By the same token, high-technology donors tend to be receptive to appeals made by new charities that are seeking to imitate the successes of an existing nonprofit organization.

An executive summary of the survey, “Agent-Animated Wealth and Philanthropy: The Dynamics of Accumulation and Allocation Among High-Tech Donors,” is available on the association’s Web site at http://www.nsfre.org.

To order a copy of the complete report, contact Michael Nilsen, Public Affairs Manager, Association of Fundraising Professionals, 1101 King Street, Suite 700, Alexandria, Va. 22314; (800) 666-3863.