In 2006 Warren Buffet made his Philanthropic Pledge, the decision to leave 99% of his wealth to charity during his lifetime or at his death. Bill and Melinda Gates have made a similar commitment (95% to charity). Together with Buffet, the Gateses are challenging their billionaire friends to make “The Giving Pledge,” a commitment to give at least half of their total assets to charity.

Instead of asking, “How much do we really need to give,” the question becomes, “How much do we really need to keep?” 

What Buffet and the Gateses have done (and what they are challenging others to do) is to look at wealth and philanthropy from the opposite direction—from a perspective that focuses on the limit and extent of their own needs rather than the incalculable needs of society. In other words, instead of asking, “How much do we really need to give,” the question becomes, “How much do we really need to keep?” That subtle change in wording represents the most radical change in perceptions about wealth, inheritance, and legacy. It’s a philanthropic paradigm shift, turning obligation and purpose of wealth on its head. Some might say that it’s putting high philanthropy back on its feet.

So far, 116 billionaires have made the pledge. Buffet comments: “My guess is that way over half of our members are going to give a lot more than 50 percent.”

INSPIRATION FOR THE FIRST BILLION
The challenge and inspiration to give generously comes from many places. The Buffet-Gates challenge comes from three of the wealthiest individuals on the planet. On the other extreme, when Ted Turner announced his $1 billion pledge back in 1995, he said that he was inspired to do so by Oseola McCarty, a washwoman from Hattiesburg, Mississippi.

NOTE: Many have written about Oseola McCarty over the last few years, but no one tells the story better than Walt Walker. Here’s a link his blog about her legacy created though generous giving entitled What Could a Washwoman Do?

Here is a brief account of how Ms. McCarty was herself challenged. Throughout her life Oseola McCarty saved her money and by age 87 had accumulated $200,000 in a passbook savings account at Trustmark National Bank in Hattiesburg. In 1995 she met with Paul Laughlin, the bank’s assistant vice president and trust officer. Oseola had no children, only a fifth-grade education, and struggled to understand concepts like “charitable remainder trust.” So, Mr. Laughlin wrote the names of her five beneficiaries on slips of paper and then placed 10 dimes on the table in front of her. Each dime represented 10 percent of her assets. He then asked Oseola to “divvy up” the coins.

After slowly setting aside coins for her cousins and church, Ms. McCarty put aside six coins for the University of Southern Mississippi. These coins represented what would become a scholarship fund for African American nurses, the unfulfilled dream of Ms. McCarty’s youth. Oseola McCarty’s bequest of $150,000 to the university represented the largest gift ever by an African American and came to be known as simply “The Gift.”

In 2015, Ted Turner is scheduled to make the last payment on this $1 billion pledge.

HOW MUCH DO YOU NEED?
I had to laugh out loud the first time I heard about divvying up the 10 dimes. I’ve been asking those same questions for 25 years.

1) How much will you and your spouse need to live on for the rest of your lives?

2) How much do you want to leave your children?

3) Would you prefer to contribute to society though the Internal Revenue Service or directly to charities?

Instead of spreading out dimes across the table, we “divvy up” assets using boxes and percentages. See a fuller explanation at The Big Question.

Thompson & Associates’ client organizations have seen amazing results from those three basic questions—receiving gifts from net worth as a result of a great awakening regarding the meaning and purpose of wealth. In other words, those three questions help people think about philanthropy in terms of the limit and extent of what they need to keep for themselves rather than simply how much they need to give. That’s the philanthropic paradigm shift.

FIVE TAKEAWAYS FOR FUNDRAISERS 

1. The great philanthropic mistake many fundraisers make is assuming such a great philanthropic awakening is only possible for the very wealthy. In our ongoing work with organization-sponsored estate planning, we continually ask those three questions and continually see donors awaken to the reality of their ability to give beyond their own needs. And none of those donors were billionaires. Not only that, there are lots of donors with moderate incomes or assets who decided early on to approach giving by asking, “How much do we need to keep for ourselves?”

2. It’s hard for fundraisers, who themselves have not experienced a similar philanthropic paradigm shift, to imagine donors being that generous. Early in my career, Sheryl and I barely had two dimes to rub together. My perceptions were so deeply scripted in a “scarcity mentality,” that it was very hard for me to believe that people would be willing to give on that level. For me, however, experience was the best tutor. I also had some great mentors who helped expand my thinking about giving. Very generous givers are the very best fundraisers—maybe the only fundraisers able to maximize the giving potential among major donors.

3. Not everyone accepts the challenge. Many years ago I worked with a lady who had lived modestly and happened to be an incessant coupon clipper. She had also accumulated a $14.2 million estate. Like the early-me, she was deeply scripted in a scarcity mentality. Living through the Great Depression had a lot to do with her fears of running out of money.

Very generous givers are the very best fundraisers—maybe the only fundraisers able to maximize the giving potential among major donors.

When I asked the first question about how much she needed to live on for the rest of her life (she was then in her nineties), her immediate and definitive answer was, “All of it!” We never got around to the questions about children, taxes, or charity. That was her first answer and, ultimately, her final decision. Shortly after that meeting, she died. Half the money was “contributed” to the Internal Revenue Service. Most of the rest was consumed by legal fees as her family fought over the money. Nothing went to charity. See Maslov and the Need to Give.

Buffet himself admits that not all of his billionaire friends are willing to make the pledge. He jokes about one day writing a book on how they could get by on a mere $500 million. Like the Buffet-Gates pledge, my three little questions don’t do much without preexisting charitable intent.

4. Inspiring donors to think in terms of radical philanthropy requires more than simply repeating the three questions. That’s often the last element of inspiration that creates a tipping point toward a philanthropic awakening. Mentoring donors and inspiring extraordinary philanthropy requires fundraisers to be donor-centered. Focusing on donor needs as the highest priority is not as easy as it sounds, primarily due to pressure to meet organizational needs. See The Greatest Fundraiser of All.

5. The greatest case for generous giving is often the testimony of others. The largest single gift I ever secured for an organization was a man who had little to no giving history to any organization but was inspired by the story of a donor’s generous contribution. Watching that reluctant giver load $12 million of negotiable securities into my briefcase as a gift to the university made me realize the power of a donor testimony. See The Power of Story

University of Southern Mississippi executives asked Ms. McCarty if they could tell other potential donors about “The Gift.” Her testimony inspired over 600 donors to add $350,000 to the fund.

Eddie Thompson, Ed.D.

Copyright 2014, R. Edward Thompson