Entrepreneurial Philanthropy GC 2007

Transcription

1 Entrepreneurial Philanthropy GC 2007

2 Record Giving in 2006 Charitable giving totals $260 billion/year in the U.S. Giving by foundations hit $40+ billion in 2006 setting a record (vs. $36.4 billion in 2005) Wealthy Americans committed $7 billion in 2006 (vs. $4.3 billion in 2005) 70,000+ foundations in the U.S. twice as many as in the 1990s 75%+ increase over a decade Source: WSJ July 8, 2006; NYT, April 3, 2007

3 Philanthropic Giving* As a Percent of GDP, Percent of GDP *Cash and other material gifts U.S. Canada Netherlands France Britain Sweden Germany Japan Italy Source: The Economist

4 Cumulative Growth in Giving Percent Change in Constant Dollars 250 Community Foundations Independent Foundations* 200 Corporate Foundations* 150 * includes private foundations Source: The Foundation Center

5 Number of U.S. Foundations Source: The Foundation Center Thousands 32,401 40,140 56, ,095

6 Giving by U.S. Foundations US$ Billions Source: The Foundation Center

7 Foundation Giving Percentage of Grant Dollars by Destination 2005 Public Affairs/Society Benefit 11.2% Int'l Affairs, Dev. & Peace 3.6% Science & Technology 3.1% Social Sciences 1.2% Religion 2.5% Other 0.1% Arts and Culture 12.5% Education 24.0% Source: The Foundation Center Human Services 14.8% Health 20.8% Environment and Animals 6.3%

8 U.S. Foundations Top 10 Ranked by Assets 2005 Rank Foundation Bill & Melinda Gates Foundation Ford Foundation J. Paul Getty Trust The Robert Wood Johnson Foundation Lilly Endowment, Inc. W.K. Kellogg Foundation The William and Flora Hewlett Foundation The David and Lucile Packard Foundation The Andrew W. Mellon Foundation John D. & Catherine T. MacArthur Foundation Assets ($B) Source: The Foundation Center

9 U.S. Foundations Top 10 Ranked by Total Giving 2005 Rank Foundation Bill & Melinda Gates Foundation Bristol-Meyers Squibb Patient Assistance Fund Merck Patient Assistance Program Ford Foundation GSK Patient Access Programs Foundation Lilly Endowment Janssen Ortho Patient Assistance Foundation Robert Wood Johnson Foundation William and Flora Hewlett Foundation Annenberg Foundation $M 1, Source: The Foundation Center

10 European Foundations Top 10 Ranked by Assets 2005/2006 Rank Foundation Country Assets ($B) 1 The Wellcome Trust UK Fondazione Monte dei Paschi di Siena Italy Fondazione Cariplo Italy Compagnia di San Paolo Italy The Church Commissioners for England UK Fondazione Cariverona Italy Fondazione Cassa di Risparmio di Torino Italy Garfield Weston Foundation UK Robert Bosch Stiftung Germany Dietmar Hopp Stiftung Germany 5.8 Source: Watson Wyatt, March 5, 2007

11 Top 5 U.S. Individual Donors 2006 Rank Donor Amount ($B) Warren Buffett Herbert and Marion Sandler Bernard Osher Jim Joseph David Rockefeller Source: The Chronicle of Philanthropy

12 Entrepreneurial Philanthropy What is it? Financial Leverage Accountability/ Measurable Results Donor Engagement Systemic Issues Business/Strategic Approach More Than Money

13 Philanthropy in 2007 Giving sooner with focus and strings Donors giving during their lifetimes Giving with strings Targeted giving 65% of people with $30+ million plan to donate more of their wealth during their lifetimes than in their estates America s wealthy prefer spending money now and faster, while retaining control and demanding more accountability (vs. giving via estates) Large donors are giving to targeted charities vs. spreading the wealth Source: Boston College, Center of Wealth and Philanthropy

14 Active Proxy Voting for Maximum Impact Proxy voting can strengthen a philanthropic mission by supporting goals aligned with the foundation s work/values Foundations are increasingly voting their proxies in this manner Still, over 60% of foundations delegate proxy voting to investment managers Proxy Voting Foundation Mission/ Values Source: WSJ, January 19, 2007, Rockefeller Philanthropy Advisors, As You Sow Foundation

15 Active Proxy Voting for Maximum Returns (for Maximum Results) Proxy voting can also be used to protect shareholder value and the value of foundation endowments Most foundations maintain firewalls between investments and grants Allows them to focus on core expertise Endowment Investors Grant Decision Makers

16 Philanthropic Toolbox Grant making Debt Public Equity Alternative Assets Unrestricted gifts Restricted gifts Venture philanthropy PRIs Loans Revolving Credit Bonds Loan Guarantees Positive/negative screens Best-in-Class screens Proxy voting Shareholder engagement Analysis includes add l criteria Targeted Private Equity Targeted Real Estate Commodities Direct Investing Venture Funds Fund-of-Funds Buy-out Funds Source: Adapted from Diana Propper de Callejon, Expansion Capital

17 Mission Related Investing Aligning Spending with Mission Example: F.B. Heron Foundation Mission: help people and communities to help themselves Mission related investments: Commercial real estate fund for inner city retail and office properties Market rate insured deposits with community development banks and credit unions Low interest loans Source: F.B. Heron Foundation

18 Patience is a Virtue Anticipated Transfer of Wealth Has Yet to Materialize Boston College predicted in 1999 that $41+ trillion would come from WWII and baby-boomer bequests $128 billion was bequeathed to charities from 1998 to 2004 just 7.5% of the estimated total for Factors include greater lifetime giving, market shifts, crisis donations and a drop in household wealth Source: The Chronicle of Philanthropy

19 The Charity Gap with Individuals Philanthropic Aspirations vs. Charitable Giving Majority of givers believe most of their donations help the less fortunate Less than one-third the $250 billion in individual donations targeted the needy in % provided necessities (food, water) 23% went to healthcare, education/training Only 8% of U.S. individual donations support global causes Source: WSJ, April 4, 2007

20 Strength in Numbers Individuals Give More than Organizations Donations by individuals are more than four times that of foundation and corporate philanthropic efforts combined Less than 10,000 families contribute more than 20% of all donations Source: WSJ, April 4, 2007

21 Three Ways for a Country to Build Human Capital Import people with skills Improve health and quality of life so that people are more productive Increase education and practical skills

22 Human capital is required for increased productivity. It has two key components: Education Health

23 Building Human Capital (Non-Profit Organizations) Milken Family Foundation (1982) Strengthening Education (National Educator Awards) Advancing Medical Research The Milken Institute (1991) Develops policy recommendations and holds conferences on economics, capital markets, human capital and demographic issues. Prostate Cancer Foundation (1993) Seeks controls and cures for prostate cancer through research awards, consortia, recruiting scientists, public awareness/policy initiatives. FasterCures (2003) Focused on faster cures and improved treatment outcomes for the most deadly and debilitating diseases.

24 20 th Year

25 An organization dedicated to shortening the time to find cures and better treatments for the most deadly and debilitating diseases.

26 The Redstone Acceleration & Innovation Network Cystic Fibrosis Foundation Cure Autism Now Prostate Cancer Foundation Myelin Repair Foundation Michael J. Fox Foundation Parkinson s Action Network Susan G. Komen Breast Cancer Foundation Multiple Myeloma Research Foundation ALS Therapy & Development Foundation Institute for One World Health Lance Armstrong Foundation Accelerated Cure Foundation Pacific Vascular Research Foundation Alliance for Aging Research Children s Neurobiological Solutions Foundation Dr. Susan Love Research Foundation The Epilepsy Project The National Neurofibromatosis Foundation Foundation for Fighting Blindness National Alliance for Autism Research JDRF Alpha-1 Foundation Huntington s Disease Research Foundation Autism Speaks ABC 2 International AIDS Vaccine Initiative