The Changing Face of Philanthropy

One type of planned gift, the donor-advised fund, has become a darling of the philanthropic world. The donor-advised fund is similar to a private foundation, but comes without much of the red tape. Individuals make a contribution to a sponsoring organization like a community foundation, a religious institution, or a mutual fund company’s charitable foundation. The sponsor then disburses the donation based on recommendations from the donor.

People like donor-advised funds because they create a nice way to get a tax deduction for gifting an unexpected windfall—like a bonus—at the end of the year without having to make a decision right away about how to disburse the funds to nonprofits, explains Cheryl Nelson, vice president of charitable services with the Private Client Group at U.S. Bank. Donors also can involve their families in making recommendations about where to direct giving over the years, allowing them show future generations what’s important to the family.

Asking for Accountability
Another shift in the philanthropic landscape is the fact that once people make donations, many are not letting go—in a good way. It’s something both nonprofits and those who work with donors are noticing. Peterson sees donors looking more closely at nonprofits’ financial statements to learn how decisions are made. Many donors now conduct site visits or evaluate an organization’s leadership before they commit their money. “Donors want to know that the money they give is going to the people who need it,” she adds.

At Greater Twin Cities United Way, many donors are asking for—and receiving—updates about results and outcomes from their giving, reports Barb Beard, director of major gifts and planned giving. As an organization,  United Way now communicates much more frequently with donors, both individual and corporate, about strategy and how its partnerships can have the greatest impact on the community.

Changes in corporate giving
Individuals aren’t the only ones who’ve been flexing philanthropic muscle since September 11 and the trio of recent natural disasters. Corporations have also been making larger gifts to charitable organizations and redoubling their efforts to get employees involved. That’s the case at Ameriprise Financial, which had the unique opportunity to create a new corporate giving program after spinning off from American Express last year. “More and more, we are integrating our corporate giving and philanthropy into the culture of the company,” says Jennifer Jones, manager of community relations at Ameriprise Financial in Minneapolis. “We are focused on employee engagement.”

Today, Ameriprise directs its corporate giving to three areas: financial well-being, arts and culture, and employee- and advisor-driven causes. In the third area, any nonprofit that has twenty-five employees or five advisors involved as volunteers can apply for funding from Ameriprise. “We want to fund organizations where we have a significant number of employees involved,” says Jones. “We contribute to our employees’ efforts by supporting the nonprofits they care about and commit their time to.”

Wells Fargo is similarly committed to recognizing the nonprofit organizations its employees support with their  time and money. Each year, Wells Fargo receives hundreds of applications for the Volunteer Service Awards, a program that gives employees an opportunity to win up to $50,000 for a nonprofit or K-12 school where they volunteer. Gary Johnson, a Minneapolis resident and Wells Fargo team member, recently earned $50,000 for Reach for Resources, a local organization that helps people with disabilities become more independent. Wells Fargo’s support of Johnson and other volunteers who are active in the community reflects a corporate philosophy that grant-making decisions are most effective when made on a neighborhood level.