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Darrow ZeidensteinVice President, Resource DevelopmentRice University
AFP PresentationAustin, TexasMay 15, 2010
In 2006, Warren Buffet gifts $31B In 2006, Herbert and Marion Sandler gift
$1.3B In 2006, Woodruff Foundation gifts $261.5M
to Emory University January 2007: Philanthropy News Digest
Declares “New Golden Age of Philanthropy” PND: “Many of the mega gifts were made to
universities , often as part of the multi-billion-dollar campaigns.”
2006-2007 marked the peak of the most recent “golden age” of philanthropy
Mega gifts were fueled by extreme economic conditions (excessive leverage)
These conditions no longer exist Time to re-think philanthropy from
efficiency-based metrics to effectiveness-based ones
Retrenchment of the public sector in education, arts, and other sectors
The rapid accumulation of wealth (5% of national income went to the top .01%--3rd time in US history) Global capital flows Unprecedented levels of leverage Relatively low top marginal tax rates
In short, the same drivers that drove early 20th century “Robber Baron” philanthropy
0 5,000 10,000 15,000 20,000 25,000
2000-2007*
1990s
1980s
1970s
1960s
1950s
*most recent data availbale (6.30.07)
Decade Change in GDP(in Billions)
Decade Change in Debt(in Billions)
05,00010,00015,00020,00025,000
Source: Ned Davis Research
*Most recent data available (6.30.07)
Source: Ned Davis Research, 1/14/09
(E500)
60-Year Mean = 155.4%
135
150
165
180
195
210
225
135
150
165
180
195
210
225
1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005
Total Domestic Nonfinancial Debt as a % of GDP
In recessions of one year or less: average of 1 percent drop overall
In multi-year recession, 2.7% on average
2008, giving declined 5.7% (adjusted for inflation)--$6B overall
This is an average, reflecting second-half tailspin in the economy
2000 2001 2002 2003 2004 2005 2006 2007 2008 Total
Arts / Culture 36 38 31 32 32 46 66 71 48 400
Environmental 8 15 10 8 11 24 21 17 23 137
Foundation 17 8 10 5 10 10 22 13 13 108
Government 4 6 3 3 8 7 7 4 42
Higher Education 284 288 214 180 210 283 311 393 331 2494
Health 31 41 28 44 50 76 92 79 82 523
Human Services 13 72 23 8 12 54 17 19 25 243
International 14 15 10 12 7 18 21 18 20 135
Public Service 32 50 32 29 20 37 23 38 60 321
Religious 3 1 1 4 3 2 5 5 9 33
Unknown 5 4 8 2 15 4 38
Various 1 3 4
Grand Total 447 538 367 325 360 574 589 660 618 4,478 ‘09=468
Rethinking our values
De-acceleration, if not overall decline, in $5M+ gifts
On the donor-side: Rise of public sector Increased tax rates Period of uncertainty
On the receiving-side: less leverage = less willingness to take risk
The end of “philanthrocapitalism” and related “movements” within philanthropy (e.g., venture capitalism)?
Rising importance of development as a managed enterprise—MORE IMPORTANT TO BE GOOD THAN LUCKY
Stabilization of job market, but still plenty active
“Efficiency is doing things right; effectiveness is doing the right things.” Peter Drucker
Our profession has become dominated by the for-profit metrics of efficiency Cost-per-dollar raised ROI Dollars raised per FTE
The donor experience (“satisfaction”): Donor loyalty (attrition rates) Life-time giving growth rates Average gift size over time
Gifts that give vs Gifts that take Not all priorities are equal % of strategic priorities fully funded
QUESTIONS OR
COMMENTS?