Thoughts on Philanthropy

Frank White is the editorial director in the Office of Alumni Affairs and Development at Harvard University. He teaches two program courses, MGMT E-190 Principles and Practices of Fundraising and COMM E-120 Development Communications. He credits Scott Nichols, director of alumni affairs and dean of development at Harvard Law School, for some of the information in this piece.

Frank White

How would you define philanthropy? Is it a new or an old phenomenon?

Philanthropy comes from a Greek word that means love of humanity. It has deep roots in history and religion, but is more modern than "charity." We recently had Scott Nichols, who was chief development officer at Harvard Law School for 20 years and is now vice president for development and alumni relations at Boston University, speak to the class. He pointed out that charity is taking care of people in immediate need, and all cultures have practiced it for centuries. Philanthropy tends to focus on a more strategic approach to problem solving, such as curing diseases, finding the way to prevent homelessness, etc.

Lately, we have heard much about the philanthropic efforts of business people such as Bill Gates, Warren Buffet, and Ted Turner. Why do you think this kind of interest has come about?

Everyone wants to see the world made into a better place. As personal fortunes grow, the leverage of the mega-wealthy becomes even greater in terms of the impact they can have globally. Ted Turner challenged the wealthy to stop trying to make the Forbes 400 of wealthiest individuals and try to make the Slate 60 of most generous. A lot of the wealthy have responded, and the trend is more toward philanthropy than toward making more money.

Is it true that the United States is in the lead when it comes to philanthropy?

Yes, though other countries are catching up. The United States has had a special tradition of trying to limit government involvement in people’s lives, whereas other countries have had the expectation that the government will provide key services, such as education, healthcare, and public transportation. The American tradition of a public/private mix is now taking hold elsewhere, and there is a rush to learn how to do American-style fundraising. Moreover, millionaires and billionaires are no longer primarily living in the United States. Globalization has affected wealth distribution as well. While the United States still leads in terms of having the most super-wealthy citizens, other countries also have their share. Additionally, both American philanthropists, like Bill and Melinda Gates, and philanthropists from other countries have a global perspective and tend to invest their gifts where they think the need is greatest worldwide.

We have been reading a lot lately about microfinancing. Just what is it and why do you think it has been in the news recently?

It is the idea of loaning very small amounts of money to people in the poorest countries, helping them to start businesses that can give those individuals and families a high degree of independence and self-sufficiency, even though they have limited cash flow. I think it has been in the news because the originator, Muhammad Yunus from Bangladesh, received a Nobel Prize, and because it shows how one person with vision can change the world.

Based on your experience in Harvard’s Development Office, what are some of the major reasons that people want to give?

People give for a range of reasons and each gift decision is a complex mixture of the whole set. At one level, people give because it makes them feel good. Psychologists have recently defined a new emotional state (elevation) that occurs in people when they witness or do altruistic acts. Giving lifts us beyond ourselves and helps us to transcend, even in a small way, our everyday efforts to better ourselves and our families. There is also an identification with the other, the one who receives, a caring for them that is, I think, a natural human instinct.

Many give out of religious conviction and in the United States, religious institutions receive more gifts than any other sector. Just about every major religion advocates charity, and though philanthropy is a somewhat broader concept, they are related.

Some very wealthy people give simply because they cannot spend all the money they have. Charlie Collier, senior philanthropic adviser at Harvard, has done a lot of work on the dynamics of giving by people with significant wealth. He notes that many are concerned about the impact of too much inherited wealth on their children. Rather than keeping it all in the family, they think it is really better to give most of it away, so that their children can find their own way in the world.

Some give because it provides an opportunity to transcend in another way, i.e., to have a sense of immortality. After you die, your gift lives on, as a scholarship fund, a professorship, a name on a building, or something else. Our major benefactor, John Harvard, is a great example of someone who lives on through his gift. I doubt he could have suspected that the small college he supported would grow into a great university 370 years later.

Many of today’s younger philanthropists want to have an impact on the world, and they see the organizations receiving their gifts as agents for change. They are looking primarily for leverage and results. In the medical area, many donors have had their lives touched by a disease like cancer and they want to do something about it in memory of a family member. Some very wealthy people have even launched major initiatives to find cures for diseases they have themselves.

Loyalty is another reason people give. Those of us fortunate enough to receive financial aid at Harvard know we couldn’t have attended without Harvard’s generosity. The University gave us something very special, and we want to give back.

Of course, there are less lofty reasons for giving. As I noted, competition with one’s peers often motivates giving, even among the super-wealthy. Peer pressure links up with competition to motivate people. However, as I stated earlier, I think most gifts are motivated by a combination of factors.

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