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Philanthropy is evolving

 

November 2014

 

Philanthropy is no longer just for the super-rich, the expression and hence definition of philanthropy is rapidly changing.
We identify and look at four archetypes of philanthropists.

 

 

 

 

 

The expression of philanthropy and hence the definition of ‘philanthropist’ is changing rapidly. New archetypes that did not exist a century ago are emerging and being embraced.

In our increasingly technological world, change is seen as the new normal. However, in more traditional areas of society, such as philanthropy where little changed for almost a century, the pace of change is now accelerating.

For around a hundred years the term ‘philanthropist’ has had a commonly accepted meaning: a wealthy person, frequently male, sometimes a couple, occasionally a woman, who created the legacy of a charitable foundation in a will as a result of wealth accumulated in their lifetime. However, today the expression of philanthropy and the definition of ‘philanthropist’ is changing rapidly. New archetypes or models that didn’t exist a century ago are emerging and being embraced.

We have identified 4 archetypes of philanthropy that we believe co-exist comfortably. By understanding these archetypes, those new to philanthropy can see the range of choices that are available to them which can help them consciously shape their personal approach and legacy. 

Archetype - original model, prototype, typical specimen, primordial mental image inherited by all; recurrent symbol or motif.

Concise Oxford Dictionary, 1982

Archetype 1:

Traditional Philanthropist [pre-1900 - present]

A traditional philanthropist is someone who generates and accumulates wealth in their lifetime and creates an eponymous charitable foundation in a will. Alfred Felton exemplifies the traditional philanthropist.  Felton was a childless bachelor who having amassed his fortune in Victoria’s gold mining boom in the late 19th Century decided to leave it to the community via a charitable foundation in 1904.

Half of the foundation’s income is directed to purchasing art for the National Gallery of Victoria, while the other half stipulates giving with a focus on women and children.

Fast-forward 110 years and the art purchased by only half of this perpetual foundation’s annual income is valued conservatively at $2.5 billion dollars. Arguably the other half of the funds has had a similar impact in social and human terms.

The traditional philanthropist is a wealth generator and accumulator, who dies without actively engaging in philanthropic activity during their lifetime.

Archetype 2:

Contemporary Philanthropist [late 1990s - present]

This philanthropic archetype is frequently a couple who have accumulated an abundance of wealth greater than their needs. They establish a charitable foundation and use it to contribute to society through social solutions.  The archetype is exemplified by Bill and Melinda Gates, and their eponymous foundation.

Contemporary philanthropists structure and operate their foundation in a way that reflects their individual character and values: problem solvers operate problem solving foundations; conventionalists operate supportive and nurturing foundations and innovators operate innovative foundations. They select causes and approaches that resonate with their own core values, which don’t necessarily align to the industry in which they made their fortune. A cure for malaria and a global immunization program against polio seem on the surface remote from developing a personal-computer software company, until you appreciate that research and problem solving are the hallmarks of the Gates’ foundation.

Contemporary philanthropists are wealth generators, wealth accumulators and wealth distributors.  At or near retirement they engage in a breadth of philanthropic activity. They use the charitable foundation structure to its greatest advantage, and upon their death are likely to allocate further funds to their foundation from their estate.  Notably for this archetype, giving often makes them happier and more fulfilled because philanthropy is part of their journey of self-actualisation.

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Archetype 3:

Persona Philanthropists [late 1985 - present]

While generating and accumulating wealth, persona philanthropists may be simultaneously seizing opportunities to execute their philanthropy. That is, they use their business, reputation, and personal brand to enact a philanthropy that is not always focused on money but on one of the other important facets of giving: time, skills or influence.

Sir Bob Geldof’s work mobilising the public to give to famine relief in Africa was an early example of the persona philanthropist.  Jamie Oliver is a more recent example.  

Both use their personal brands to promote causes and solve issues about which they are passionate. In Oliver’s case these relate to his own industry: good nutrition, healthy, economical eating, and the joy of food.  Oliver has leveraged his personal brand to the point that there is little distinction between his day job and his philanthropy. His campaign to change school lunches in the United Kingdom cannot easily be defined as philanthropy or as business. the boundaries between the two endeavours being fluid.

The persona philanthropist is a wealth generator, who simultaneously blends growing their wealth with philanthropic expression. Philanthropy is integral to their journey of self-actualisation.  Depending on their success and need, a charitable foundation may or may not be created. Indeed, money may not even change hands. 

 

Archetype 4:

Emerging Philanthropists [1990 - present] 

This is someone who well before they start a business considers how the business can make a positive contribution to society, and additionally, if for-profit, how part of that business’s revenue and other resources will be directed toward causes that align with the values of the business. 

This notion is touched on in the work of Umair Haque who coined the term ‘thick value’ in his book “The New Capital Manifesto” (2009). Haque refers to the value created as authentic, sustainable and not based on someone else’s loss so that you can gain. The ‘thick’ element is the depth and/or height of the value created for society, rather than for personal consumption.  The thick value concept, coupled with the general desire of Millennials to do good, has the potential to shape a new paradigm. Where this approach presently exists, the term ‘philanthropist’ is rarely used, as philanthropy is often narrowly defined as the distribution of wealth to charity, even though its broader definition is ‘love of mankind’ or ‘practical benevolence’.

Emerging philanthropists simultaneously generate personal wealth and greater social value and are unlikely to use the term philanthropist. Their money flows to social causes at the outset of their wealth generation, and throughout their lives. After that, more traditional forms of philanthropy may be taken up. Self-actualisation leads to adoption of this type of philanthropy.

The four archetypes of philanthropy exist simultaneously in our social landscape, and we benefit from the diversity. The archetypes are not alternates, they are models. There is much to admire in each one:  

  • Traditionalists are admirable for their far-reaching vision and giving in perpetuity approach;
  • Contemporary philanthropists are admirable for their determination and focus;
  • Persona philanthropist must be admired for the passion, the exposed personal vulnerability and visible flaws of a character journey.
  • Emerging philanthropists are admirable because they recognise the ecosystem, and our ultimate reliance on one another. They have grasped the notion that every business whether it be for-profit or not-for-profit contributes to society and that it is in the creator’s power and skill set to design a way for the positive impact to powerfully outweigh the negative, and to strive to make this value thick. The notion is a powerful one. 

As can be seen from the differences in life stage, motivation, duration and level of wealth of the four archetypes, a single common definition of a philanthropist no longer exists. As the highly visible Persona philanthropists, and the highly altruistic Emerging philanthropists multiply, over time we may need to coin a new term, replacing ‘philanthropist’, which will be inclusive of all archetypes and reflective of what we truly value, and of how diverse and thick our society has grown. 

 

To discuss what this insight could mean for you, talk to your ANZ Private Banker directly, or contact us below.

As the highly visible Persona and Emerging philanthropists multiply, over time we may need to coin a new term

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