Game Changers in Philanthropy Susan Raymond, Ph.D. Executive Vice - - PowerPoint PPT Presentation

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Susan Raymond, Ph.D. Executive Vice President September 23, 2014

Game Changers in Philanthropy

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“It has long been our observation that, for any organizations whose external environment is changing faster than it is changing internally, the end is in sight. It is only a question of time.”

Jack Welch Letter to Shareholders GE Annual Report 2001

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Objectives

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• Examine game changers in four dimensions

– Wealth – NextGen attitudes – Fundamentally changed nonprofit definitions – Globalization

• Discuss why game change is

– Good for the game and – Good for the players

Wealth

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10 20 30 40 % U.S. Pop % S&E Prof % Lead Inventors

Foreign‐Born Innovation

5 10 15 20 25 30

All native born All foreign born Asia Middle East South America Europe

% Households in Top Income Quintile

10 20 30 40

% Immigrant‐Founded Companies

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Of these founders, 52% originally came to the U.S. to study.

Wealth and Diversity

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• Married households of immigrants

from Europe/Canada and Asia approach or exceed the median and mean levels of wealth of the average U.S. household.

• In technology‐intense economies

such as central New Jersey and Silicon Valley, median incomes of immigrants from Asia are higher than those of U.S.‐born workers.

• The rate of increase in the number
• f foreign born workers earning

$100,000 or more has exceeded U.S.‐native workers in all regions of

• rigin.

Wealth is increasingly to be found in diverse households.

Source: Foreign Labor Certification Data Center 6

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Indeed, in the top quintile of incomes, the highest median income, and the most robust growth is in Asian American households.

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50000 100000 150000 200000 250000 White Black Hispanic Asian

2012 Fifth Quintile Real Median Income

‐8 ‐6 ‐4 ‐2 2 4 6 8

White Black Hispanic Asian

Percent Change in Real Median Income of Fifth Quintile by Ethnicity

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Ethnic Composition of Adults in the U.S.

‐30% ‐10% 10% 30% 50% Total Hispanic Total American Indian, Eskimo, and Aleut Total Asian and Pacific Islander Total Black Total White

% Change in 40‐44 Year Old Population from 2001‐2025

‐40% ‐20% 0% 20% 40% 60% 80% Total Hispanic Total American Indian, Eskimo, and Aleut Total Asian and Pacific Islander Total Black Total White

% Change in 45‐49 Year Old Population from 2001‐2025

‐30% ‐10% 10% 30% 50% 70% 90% Total Hispanic Total American Indian, Eskimo, and Aleut Total Asian and Pacific Islander Total Black Total White

% Change in 50‐54 Year Old Population from 2001‐2025

0% 40% 80% 120% 160% 200% Total Hispanic Total American Indian, Eskimo, and Aleut Total Asian and Pacific Islander Total Black Total White

% Change in 55‐59 Year Old Population from 2001‐2025

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Minorities Give

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White 63% Hispanic 14% Black 11% Asian 5% Other 7% Percent of Total Contributions to Philanthropy in the U.S. by Race, 2012

10 20 30 40 50 60 70

Older Generations Younger Generations

Hispanics Where Hispanics are Giving: Older vs. Younger Generations

Organizations Serving Own Ethic Community General Education Programs

The reality of a changing adult ethnic makeup is not necessarily declining philanthropy, but philanthropy that will need to be more aggressive about leadership inclusion.

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Wealth is increasingly being accumulated by women driven in part by the last two decades of higher education trends

Male 57% Female 43% % Of Top Wealth Holders with Gross Assets of $1.5 Million or More (2004)

1.2 million women $4.6 trillion in wealth 41% of wealth value

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Percentage of Married Household Where Wives’ Income Exceeds that of Husbands

Wives 4%

1970

Wives 22%

2007

Wives 38%

2011

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In married households, the combination of education and the effects of recession unemployment patterns means that wives’ incomes often exceed those of husbands

Next Gen: Today’s Young Wealth and Tomorrow’s Young

Today’s Wealth

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• Earned vs. inherited

– In 1985, 59% of billionaires in Forbes 400 inherited their wealth. In 2011, 69% had earned it. – Average age of CEO 52.9, two years younger than 4 years ago

• Age and wealth

– Only 8% of the wealthy under the age

• f 50 inherited their wealth.

– 81% of multi‐millionaires have been wealthy for less than 20 years

10 20 30 40 50 60 70 80 1985 2011 % Fortune 400 Who Earned Their Wealth

Wealth and Age

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• Brazil: high tech CEOs are mostly in their 40s
• India: average age of a CEO is 47‐50
• China: CEOs of largest 500 companies are under 45

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10 20 30 40 50 60 70 80 90

What are your giving priorities?

NextGen Family 10 20 30 40 50 60 70 80 90

Causes that Move Young Adults to Action

Millennials: Age affects cause

15 Source: #NextGenDonors Source: TBWA/Changing Our World, 2009

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There is a Growing Endangerment of Trust Generationally

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% Baby Boomers Millenials

Can most people be trusted?

In 2012, $1.1 billion in new major gifts came from billionaires under the age of 40.

Tomorrow’s Wealth

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Distribution of Births 1910, 1970 and 2012

54% 15% 23% 7%1%

Distribution of Births 2012

Non‐Hispanic White Non‐Hispanic Black Hispanic Asian Native American

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44% 17% 8% 28% 3%

Urban Ethnic Distribution 2010

White Non‐Hispanic Black Asian Hispanic Native American Other/Combined

78% 8% 1% 9% 2% 2%

Rural & Small Town Ethnic Distribution 2010

White Non‐Hispanic Black Asian Hispanic Native American Other/Combined

Overall, urban populations are much more diverse than rural

HAC 2012

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Nevertheless, non‐metro populations are becoming more diverse

HAC 2012

Eleven states have a third or more of their non‐ metropolitan populations non‐White:

• Alaska
• Arizona
• Georgia
• Hawaii
• Louisiana
• Mississippi
• New Jersey
• New

Mexico

• North

Carolina

• South

Carolina

• Texas

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As a result, the demographic diversity of children in rural areas is growing.

‐10% ‐11.6% 45.1% 19.8%

‐20 ‐10 10 20 30 40 50

White Black Hispanic Asian

Percent Change in Non‐Metro County Children by Ethnicity, 2000‐2010

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Upstate New York and Demographic Change

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Percent Upstate Metropolitan and Micropolitan Statistical Areas with increase in White Population NONE; all losses Hispanic Population ALL but one (Malone) Asian Population ALL but two (Glens Falls, Seneca) Black Non‐Hispanic Population ALL but four ( Malone, Ogdensburg, Oneonta, Watertown)

Changing Definitions

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Traditional Philanthropy…….

Foundation Donations Grants Nonprofit

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Things that move with/through nonprofits

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But this is a permeable boundary

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A new chessboard with new dimensions, a new surface, new pieces and new rules

A New Chessboard for Engagement

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The old chessboard two players, donors and nonprofits, focused on doing good by using charitable giving and volunteering with clear roles in the process.

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New Wealth and New Expectations

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• Investment not Charity – What is the long term gain

from my short term support?

• Impact, Impact, Impact – How will you FIX what is

wrong? And how will you measure it so that I know?

• Engagement – How can you use what is between my

ears as well as what is between the covers of my wallet?

• Sustainability – How will the good you do go forward

when I stop giving you money to do it?

• Accountability – Report not on my money, but
• n the financial performance of the organization.

Global Learning

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By 2030 – Middle income countries = 43% of global GDP compared to 15% today. – Asia Pacific = 59% of middle class consumption, compared to 10% in North America and 20% in Europe. By 2050 – Middle income individuals = 40% of global incomes, compared with 30% today.

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2009 2020 2030

China % Population

Rich Middle Class Poor

The Rise of the Global Middle class: The opportunity to learn is growing.

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Kharas and Gertz, Brookings

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Internationally‐Based Education Institutions: Sharing of Experience is borderless

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North America Europe Australia Asia The Rest of the South

In Summary

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Adapting to Change is Difficult. Not Adapting is Fatal.

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Why this is all good

• New leadership
• New resources based on

new approaches

• New alignment with a

changing nation

• New opportunities to learn

and create

And maybe, just maybe, better, more lasting solutions.

Thank You

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