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Philanthropy 101

Black Ink Magazine

April 2, 2007


Trent Stamp is the president of Charity Navigator (charitynavigator.org), a nonprofit that pulls back the curtain on philanthropy by evaluating charities’ financial health and publishing the findings. He takes Black Ink inside the highly competitive world of deep-pocket giving.

Q: What trends are you seeing in giving?

A: There's a huge movement toward researching charities in an attempt to measure which ones are effective. Rapidly disappearing are the days when a benevolent-sounding name and some tragic photographs were enough to sway a donor. Younger givers want data.

Q: Is there an underbelly to the philanthropic world?

A: There are a ton of people who are telemarketing and sending you junk mail with no interest in actually running legitimate organizations—they only want to fleece donors. Some groups raise millions of dollars and don’t spend any of it on charitable purposes, using the money instead to pay telemarketers, direct-mail firms, and excessive administrative salaries. And they're not even breaking the law.

Q: Any statistics about goody bags at galas leading to larger gifts?

A: Most high-end donors are starting to get turned off by the goody bags; these days they're insisting that the charities spend less on courting donors and more on good works. One variation of this is the virtual gala, where organizations invite people to a high-end party that isn't actually happening. They send out invitations that describe what the event would have looked like, telling their supporters that they can skip the ceremony and all the nonsense associated with it and simply make a contribution. Such nonevents are more popular than you'd think, showing that donors are more than willing to just stay home if the charity will spend their contributions wisely.

Q: Let’s say I want to establish a foundation to give away my zillions. What pitfalls should I avoid?

A: Why do you need a foundation? Warren Buffett didn't; he gave his money to Bill Gates to give away. Another foundation is yet another layer of administrative and bureaucratic costs between your money and the causes you seek to serve. You've made your zillions by being smart. Don't get dumb now. Your legacy will survive without your name on a foundation door. Find someone smarter than you who knows a lot more about philanthropy and let him or her distribute your money. If your intent is to save the world—not to create a stuffy bureaucratic testament to your last name—don't try to reinvent the wheel.


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