Not Your Father’s Philanthropy
A new generation of givers is changing charity: They’re not just writing checks; they’re getting involved with local nonprofits and working toward real change
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Greg Weingast has $25,000 in his pocket when he walks into the Capital Area Food Bank in DC’s Brookland neighborhood. Not literally, but that’s what hangs in the balance.
Weingast has worked in commercial real estate since graduating from American University in 1984. He’s now an executive VP of Archstone, one of Washington’s biggest real-estate companies.
The past decade rewarded real-estate executives handsomely, including Weingast, 46. “I am blessed,” he says, “and I want to give back.”
To Weingast, giving doesn’t mean society balls. It’s kicking the tires of charities, poring over their financial statements, taking the measure of their leaders. Before he cuts a check to the food bank, he wants to know what the money will pay for. With each donation, he wants to know the return on his dollar in terms of social good.
“I feel like a mini-version of Bill Gates,” he says.
Weingast is one of a new breed of philanthropists who see themselves not as donors but as investors in social change.
“This is not your father’s philanthropy,” says Eric Kessler, founder of Arabella Philanthropic Investment Advisors in DC. “They want to attack root causes of problems. They aren’t happy to feed a few hundred people. They want their money to go toward ending hunger.”
Weingast and others like him have helped fuel a golden age for philanthropy. In the past decade, as Washington’s wealth has soared, so has its giving.
According to an analysis of IRS data done for The Washingtonian by the Center on Nonprofits and Philanthropy at the Urban Institute, individuals in this area gave away $5.3 billion in 2005, the latest year data are available. After adjusting for inflation, that’s an increase of more than half over 1997. Foundation and nonprofit leaders say more of this giving is targeted to area causes than ever before.
With the credit crisis and a downshifting economy, the next few years look to be leaner. Giving almost certainly will fall just as the numbers in need of housing, food, job training, and other services grow.
But Washington philanthropic resources are stronger than before the recession of the early 1990s, a downturn similar to today’s. At that time, individual giving trailed national averages. Few major corporations headquartered here made a big impact philanthropically, and most foundations were small.
Today, area residents give 3.3 percent of their income to charity. That ranks fourth—behind Atlanta, Dallas, and Houston and tied with Los Angeles, Phoenix, and Riverside, California—in an analysis of giving in America’s 16 biggest metro areas by the Urban Institute.
In the past 15 years, the number of foundations has almost doubled to more than 1,600, many of them established by area families. Firms such as Booz Allen, Capital One, and Lockheed Martin have become big players in area philanthropy.
Julie Rogers, head of the Meyer Foundation, says national grantmakers began to show interest in Washington about ten years ago, when DC hosted the annual conference of foundations. Kay Graham threw a party and invited Colin Powell and other powerful national figures. “We tried to make an impression that Washington is a living, breathing, city—not just a stopover,” Rogers says.
Washington philanthropy still lacks a New York– or Chicago-size roster of the superrich. But the dearth of billionaires is offset by a large concentration of millionaires. An analysis by the Boston College Center on Wealth and Philanthropy shows that 10 percent of area households have a net worth of more than $1 million—in contrast to 7 percent nationwide.
Many of Washington’s mini-moguls are younger than is typical. According to the center’s study, people ages 40 to 59 hold 57 percent of the area’s wealth. If these mini-moguls were to follow tradition, they’d give away their money late in life or when they die. But philanthropy insiders suggest that Washington’s young affluent are, like Greg Weingast, giving away some of their money now.
Many are lawyers, venture capitalists, tech-company execs, and real-estate developers who want to give back to an area that’s made them rich. They reached adulthood at a time when the culture preached the need for service through the creation of AmeriCorps and the like. Inspired by Bill Gates, a contemporary, they’re making philanthropy a part of family life.
“We’re really busting the myth that people become philanthropists later in life—when they retire or when they finish paying for Harvard, Princeton, Yale,” says Sally Rudney, executive director of the Montgomery County Community Foundation. “It’s happening now.”
Greg Weingast began his philanthropy in earnest a few years ago. He was writing checks to AU, arts groups, and others when his financial adviser suggested he could be more efficient in his giving by working with the Community Foundation for the National Capital Region.
Chartered in 1973, the foundation was troubled until the early 1990s, when Robert Linowes—a renowned lawyer and civic activist—became chair and helped it focus on the area’s most severe needs.
Since then, the organization has become the biggest workhorse in Washington philanthropy. Its assets have grown from $52 million in 1996 to more than $350 million, making it one of the nation’s largest community foundations. In 2007, it gave away $96 million—$60 million locally, more than twice the local giving of runner-up Fannie Mae.
Community foundations are a type of donor-advised fund. Donors make gifts to a fund they set up with the foundation, which handles the investment and paperwork. Donors recommend which charities to support from the fund, but the foundation makes the grants.
For some, foundation staff become philanthropic advisers. “We try to find a person’s passion and connect that person to a charity that’s about their passion,” says president Terri Freeman.
After Weingast opened a fund with the foundation, he asked staff to review financial statements of groups he wanted to support. Over time, he asked the foundation to help expand his giving beyond groups he already knew. He initially picked three issues to focus on—education, homelessness, and hunger. More recently, he’s added the environment, an interest of his wife, Alison, whom he married this fall.
Several days a year, he joins foundation staff to tour nonprofits he might support. “I look at this as though I’m investing God’s money,” says Weingast, who’s Jewish. “His blessings are the reason that I have this money, so I have to think about what he would want to do with it.”
With each group, Weingast studies its spending. How much is spent on facilities? What percentage of staff is volunteer? How much do senior staff get paid? (“I want them to make a living. But if they want private-sector wages, they need to be in the private sector.”)
On the day of his visit to the Capital Area Food Bank, Weingast is accompanied by two community-foundation officials. Each has read the food bank’s proposal for how it would use Weingast’s $25,000 to increase distribution of fresh produce to area service agencies.
Brian Smith, the food bank’s chief operating officer, leads the group on a tour of his warehouse, where 20 million pounds of donated food arrive each year, largely from retailers and wholesalers. More than 700 soup kitchens and service agencies rely on the food bank, Smith says, including big nonprofits such as Martha’s Table but also small, faith-based outfits—“the little old lady in Northern Virginia working out of the back of the church.”
Smith shows Weingast stacks of dry and canned goods that reach 24 feet high. He takes him into the freezer and talks of an innovative plan to swap surplus with food banks in Richmond and Baltimore.
The tour concludes in the food bank’s offices, where talk turns to the fresh-produce proposal. Weingast says he wants his money to make a difference. If he gives the food bank $25,000, he won’t be shy about making sure that happens. “I guarantee you,” he says, “I will follow up.”
Tech mogul Mario Morino was among the first in Washington to promote what’s called “social entrepreneurialism.” In the late 1990s, having secured his fortune through high-tech companies he created in Northern Virginia, Morino traveled the country interviewing nonprofit leaders and others in philanthropy. Many reminded him of the smart, passionate entrepreneurs he’d backed in tech start-ups.
What they lacked, Morino decided, was the money and know-how to grow. He created Venture Philanthropy Partners, a foundation funded mostly by fellow tech leaders such as Ted Leonsis, Mark Warner, and Steve Case. The group backs small groups with strong leaders and the vision to grow. Good nonprofits often can find a funder for a specific program, says Carol Thompson Cole, head of Venture Philanthropy. Rarely do they have money to invest in themselves.
One of the first organizations Venture Philanthropy backed was the Latin American Youth Center. It opened in the District in 1974 and has won national attention for its gang-prevention initiatives and work with teens. As immigration brought significant numbers of Hispanics to the suburbs, its leaders recognized they had to expand beyond the District.
“But they had 50 programs,” Cole says. “How do you move 50 programs?”
Morino’s group provided money but also helped plan the expansion. It helped recruit new leaders, find business partners in the new locales, and navigate local government bureaucracies.
“It’s high-engagement philanthropy,” Cole says. “We roll up our sleeves and work with them day to day.”
Old-line foundations are embracing similar approaches. The Mead Family Foundation for years was headed by Gilbert Mead, heir to a paper-manufacturing fortune. Mead and his wife, Jaylee, gave more than $50 million to performing-arts organizations in Washington and supported nonprofits focused on education and strengthening families.
When Gilbert Mead died last year, his daughters Betsy, 55, and Diana, 53, set out to reorient the foundation’s work and identify effective nonprofits that could grow with funding for operating costs and expanding capacity. They hired Eric Kessler and together agreed to support fewer groups but increase the size of grants to have more impact.
Like Morino, Betsy Mead wants to help nonprofits boost their capacity to change. “I have a vision and want to shake things up,” she says.
This push from social entrepreneurs comes at a time when nonprofits are doing more to demonstrate the impact of donations. Groups often prepare “gift packages” that spell out how a donation will be used, whether it’s $100 or $1 million.
Charities also are spelling out ways to measure their success. For years, nonprofits have appealed to donors’ hearts by showing society’s needs, says Chuck Bean, executive director of the Nonprofit Roundtable: “But we’ve also got to view donors as accountants with green eyeshades and show the return on their dollar.”
Nonprofit scandals—particularly the reports of excess spending at the Smithsonian and the conviction of United Way’s Bill Aramony for fraud in the 1990s—have increased donors’ demands for transparency and accountability.
Nonprofits worry that outcome-driven donors are drawn only to groups that can show a specific return on the dollar. Health-service and early-childhood-education groups can document results in dramatic fashion, Bean says. Less so an advocacy group, whose work can affect thousands but often deals in policy details.
“The idea that you can always quantify outcomes is difficult,” says Tamara Copeland, head of the Washington Regional Association of Grantmakers. With some services, she says, proper evaluations would require expensive longitudinal studies.
Terri Freeman of the Community Foundation says there’s still a place in philanthropy for “old-time charity”—giving that doesn’t yield quantifiable results. “But the pushback is causing us to think, which is good.”
Ann Luskey considers herself a traditional philanthropist. Her grandparents ran a family foundation, and after her mother died, Luskey started one in her honor, seeking advice from the Cafritz family, longtime philanthropists.
Luskey, 41, typically makes big gifts only to groups that she knows well. Recently she pledged $1 million to Food & Friends, a DC charity that provided her father with daily meals when he was dying of AIDS. She and her children volunteer in the group’s kitchen.
“The experience is incredible,” she says. “You leave feeling empowered.”
Though she works with groups to develop a plan for how her gifts will be used, she doesn’t ask for a bill of particulars. Some things you can’t measure, she says: “For me, it’s more of a feeling. It’s the people involved and the energy.”
Back at the Capital Area Food Bank, Greg Weingast is huddled with Brian Smith and his colleagues. Weingast finished the warehouse tour impressed with the operation. He’s written several small checks to the food bank over the years, and he’ll continue to give.
But he’s begun to think that his $25,000 is too small to leverage change in such a big operation. Last year, one of his major gifts went to Higher Achievement Program, an area afterschool program aimed at boosting low-income middle schoolers’ academic achievement. The nonprofit used the money to hire two part-time tutors. At the end of the year, the kids posted higher test scores and grades, and the program placed more kids in top magnet and private schools.
Weingast believes he shares in that success; his gift leveraged change. He doesn’t see that opportunity at the food bank. “They’re a great organization,” Weingast says later, “and I’ll continue to give to them. But at my giving level, I can’t do anything for them.”
Smith and his colleagues say they’ll revise the fresh-produce proposal. Weingast says he says he’d love to see that. Late for his appointment with the next nonprofit on today’s tour, he heads for the door, the $25,000 still in his pocket.
>>Want more ways to do good? Check out our full charity package.