New effort aims to make it easy for big donors to give to small charities advancing social change
After failing to persuade Congress to force the wealthy to give more to charity during the pandemic, a group of wealthy donors are trying another tactic to entice their peers to give big: directing them to three pooled funds that focus on causes in need.
The group, called Crisis Charitable Commitment, calls its campaign “Big Bet Bundles.” Its goal is to raise a total of $42 million for three funds:
- The Black Liberation Pooled Fund managed by Solidaire Network, which provides multi-year general operational support to black-led organizations working for racial justice.
- Healthy Democracy Fund run by Tides Foundation, which aims to create a more representative democracy by building power among underrepresented groups of people and advocating for electoral changes that expand the vote.
- Tax the ultra-rich now! Education Fund, managed by Amalgamated Foundation, which will create a public education campaign on wealth inequality and support groups advocating for more progressive tax policy.
The three funds were chosen because they meet important needs and to find a way to get more money for small charities rather than the wealthy colleges, hospitals and other institutions that often receive funding. huge donations from millionaires and billionaires, says Alan Davis. , chairman of the Leonard and Sophie Davis Fund and chairman of the group. But the goal of the campaign is to generate more donations from the ultra-rich.
Quoting billionaire Elon Musk, who once said on Twitter that being an effective philanthropist is difficultDavis suggested the mega-rich just need a little guidance on where to donate.
“Even with all the advisers there, they just have a hard time understanding,” he says.
Drafting of legislation
Since its inception two years ago, the Crisis Charitable Commitment has attracted pledges from 105 individuals and organizations who said they would increase their giving, resulting in $690 million in donations and grants, according to Davis. In addition to initiating the pledge, Davis has been a strong supporter of increasing the minimum annual charitable distribution for private foundations and imposing rules on donor-advised funds to ensure that funds circulate regularly and quickly to active charities.
An attempt to double the minimum annual disbursement rate for foundations to 10% and institute a 10% disbursement rate for donor-advised funds on an emergency basis for three years failed in Congress last year. . Davis says he is part of a group, including the Institute for Policy Studies, that is preparing a bill that could be proposed by the end of the year that would not only institute more payment requirements high, but would concentrate tax incentives on middle-income donors.
Given Congress’s reluctance to increase disbursement rates during the pandemic crisis, Davis and the Crisis Charitable Commitment will focus in the meantime on promoting ways for donors to increase their giving by choice.
“The voluntary approach won’t get you as far as the obligation, obviously,” he says. “But our mission is to get people to give more, and if that means highlighting where to give and how to give, sobeit.”
As a group, the type of donors Davis wants to appeal to give about 1.2% of their wealth each year, according to a 2018 study by Bridgespan that tracked giving among people worth at minus $500 million. Although the advisory group has not conducted a formal study since then, Bridgespan partner Alison Powell says philanthropic giving among the super-rich has not kept pace with rising wealth in recent years. years.
Amid the disruption of the pandemic, the number of people with more than $30 million in assets reached 611,000 globally last year, an increase of more than 9%, according to Knight’s annual report. Frank on Wealth. Powell fears the recent stock market turmoil will cause donors to hold onto their money more tightly.
The use of mutual funds has increased in recent years, according to a separate Bridgespan report that tracked more than $2 billion contributed by collaborations with donors last year. Wealthy donors have joined forces in a number of efforts, including the Audacious Project, Blue Meridian Partners, a spin-off fund from the Edna McConnell Clark Foundation, and Lever of Change, which was formerly a MacArthur Foundation program.
Powell said these efforts and the recent creation of the Crisis Charitable Commitment Big Bets pack would increase the volume of money going to movement groups rather than large institutions like hospitals and universities. Often, she says, people don’t think social justice groups can absorb large philanthropic donations.
“Sometimes when people think about giving to social change, they have a lower dollar amount in mind,” she said.
The Crisis Charitable Commitment will not handle donations made to any of the three funds it promotes. Davis said he hopes publicizing the funds’ work will encourage donors to give more, but the group will not track donations made as a result of the pledge’s efforts.
Davis said he wants to help donors become more confident about their donations because smaller organizations will be properly vetted by pooled fund organizers, who have working relationships with grantees.
The Big Bet Bundles effort appeals to Faith Cordell, a philanthropic services adviser at the Tides Foundation, where, she said, they have a saying that donors should “get out of their assets.”
“Money shouldn’t just sit in big pots and wait.” she says. “We should be doing all we can right now to drive social change with big donations.”