Rich Or Poor: Who Gives The Most?

firoz patel charity

In 2015, Americans gave more than $373 billion to 1.5 million public charities, and of this amount, 71 percent had come from individual donors making direct gifts.

Who are the donors?

The Atlantic reports that in 2011, the wealthiest Americans who earn at the top 20% contributed 1.3 percent of their income, while those at the bottom 20 percent contributed 3.2 percent of their income. So it’s the poor people who give the most—not in amount, but in relation to their earnings.

The wealthy tend to support colleges and universities, arts organizations and museums, while the poor donate to religious organizations and social service charities., And the rich people who lived in rich neighborhoods gave less than the wealthy who lived in socioeconomically diverse settings. These findings support the notion that those who are closest to the problems and the people who need to be served are most empathic and motivated to donate – if not money, their time and energies. It is this fact that throws light on a philanthropic organization that is having impact in communities and countries around the world.

The Pollination Project (TPP) is an organization that awards seed money of $1000 to individuals and groups who have an idea or dream of meeting a need in those around them or of developing something they value and want to support and/or preserve. From January 1, 2013 on, TPP has awarded $1000 each day of the 365 days in a year.

The TPP fund recipients provide a rich, eye-opening pool of narrations on how that small amount catapulted them into projects, several who have since formed organizations that are winning awards from larger funding entities. There is an amazing variety of projects ranging from community development and environmental protection, to education, arts, music, dance, to protection of endangered animals, to children and adults with special needs. Poverty is alleviated, food provided, health improved, at risk youth saved, the indigenous empowered through income generation projects and prisoners assisted with education.

A number of awardees report that the grant had a life-changing effect in their lives. Grant receivers mention most often that they were empowered and motivated by the grant — that this organization believed in them and thought their ideas worthwhile. The grant and publicity through the Huffington Post TPP blog provided legitimacy and international publicity, and brought local and national support.

TPP does more than give out $1000 grants. It guides the applicant through the application process, which is to think through, organize and explain the project. Each application gets a personal touch and feedback, whether funded or not. The encouragement and support by TPP staff magnifies the effect of the monetary support it provides. As one recipient said, “It is not easy to take a creative idea and grow it into a sustainable organization. When a group like the Pollination Project believes in your vision, it is like fuel to the soul!” Other statements by recipients: “You have helped restore my faith that there are really systems of support that really work to help everyday people, who want to make extraordinary change!” “…it helped restore my hope and faith in what I am doing. It has provided me with the drive and fortitude to carry on at a time when I felt like all was lost.” ” You have made a vision a reality.”

TPP was founded by Ariel Nessel, a real estate developer, and his sister in law, Stephanie Klempner. They are joined by other Board members and staff, each of whom bring a unique background and experience, but all of whom share a passion for what they are doing. It is Ariel’s belief that “We don’t need more Mahatma Gandhi’s and Martin Luther Kings in the world. What we need is individuals–large amounts of people who are making small changes in and around their communities. I’ve seen that …individuals have that capability.”

Philanthropy During the Olympics

Olympic RingsThere has been a large amount of controversy about having the Olympic games in Rio this summer, as many believed that holding the games in a place with such poverty and inner turmoil would backfire. However, the games went on as planned. Thankfully, they have inspired some high-profile people to start philanthropic ventures that helps Rio’s less fortunate. For example, the celebrity chef Massimo Bottura has become determined to not let the massive amounts of leftover food from the Olympic games go to waste.

Bottura owns an award-winning restaurant in Modena, which is not exactly close to Rio. Nevertheless, he made the trip to the games and started repurposing leftover food from the Olympics into gourmet meals for the homeless. He got together together a team of chefs and started creating meals right away in a quickly-put-together kitchen space. All of the chefs, who have traveled from all over the world, are donating their time, just as ingredients are donated to the kitchen. They all worked to not only feed the homeless, but to change a little of how Rio regards human dignity. They wanted to exhibit social inclusion and sprinkle a little bit of hope into the lives of those who have none.

This little eatery has provided something of a refuge in Rio, whose inhabitants have been overrun by Olympic commercialization. They are made five-star meals with donated food and served in the venue. Different chefs choose the menu for each night. Interestingly enough, this is not Bottura’s first kitchen to reduce food waste and feed the less fortunate. It turns out, he has some sprinkled in other places.

About a year ago, for example, he opened one out of an abandoned theater in Milan. The one in Rio, however, was constructed in an empty lot that Bottura had to persuade the mayor to allow him to use while he was raising $250,000 for its construction. Rio was not exactly a welcoming place for these chefs, due to the aforementioned turmoil, but Bottura was somehow able to secure all of the supplies he needed for a real commercial kitchen.

This is not just a project for the Olympics, either. Bottura has leased the land that the mayor allowed him to use for 10 years, and he is determined to keep it sustainable. The benefits of his labor show every day when people enter the kitchen to dine. He meets so many inhabitants of Rio that are living on the streets, and have been for years, and rarely have enough to eat. Not only are the diners fed, but they are treated with courtesy and respect, which is a rare experience.

This form of philanthropy is perhaps one of the highest there is. I am excited to see where such a venture will lead.  

When Fintech Means Charity

TechAll companies can reach success by adhering to the needs of their customers. Businesses that put customers first by listening to feedback tend to do better than others. It so happens that, currently, customer feedback has become focused on something more. More specifically, a recent study found that almost half of consumers globally look for the social value a company adds when deciding whether or not to make a purchase. Furthermore, another survey showed that, when given the chance, almost all consumers would switch from one company to another that is more involved in philanthropy.

Fintech companies have an interesting opportunity due to the above information. Several companies are adding social value directly into their business plan from the start, however technology companies have the unique chance to use digital platforms to incorporate giving into the daily lives of normal citizens. Instead of simply letting customers purchase their products, such companies can make customers a part of their social mission. Take AirBnb, for example. A huge part of AirBnb’s mission is to promote the trusting of strangers, and the company is doing quite well.

Companies in the Fintech sphere develop their social missions to be more straightforward by simply making it easier for people to give. Charitable giving is as easy as pressing a button on a phone screen now. Businesses such as Paypal have incorporated micro-giving programs straight into their applications and websites. It does not matter how much one gives, which encourages people at all levels of income to contribute to charity.

Some companies take Paypal’s approach while others, like Humble Bundle, build the option of charity into their purchases. Customers can choose a charitable organization to support with every item they buy. With this method of giving, customers are more likely to go back to Humble Bundle for their game and book-related needs. The fact that customers can now find their own social purpose through digital platforms means that they will be looking for said purpose in every digital platform they adopt. This is something businesses have to take into account moving forward.

Social impact has become almost as important to companies as having a good product. Customers are, more and more, looking to have an impact on the world and to give to the less fortunate. Fintech companies should embrace this unique opportunity and build social value into their digital platforms. This will not only retain customers and boost business, it will also help the world.

Airbnb and Philanthropy

AirbnbEveryone knows about Mark Zuckerberg’s wealth, and that he has decided to give most of it away to charity. However, many people are not aware of how many founders of companies are following suit. One prominent example today is the founders of the popular lodging website, Airbnb. The three cofounders of this wildly successful company have pledged to give most of their wealth away to charity. They have, indeed, joined the Giving Pledge, and are some of the youngest individuals to do so.

Airbnb was founded in the year 2008 without any notion that it would make as much money as it has. The story of this company began in 2007, when two of its cofounders, Brian Chesky and Joe Gebbia, did not have enough money to pay their San Francisco rent. Instead of resigning themselves to their fate, they set up a website for their home, offering an airbed stay, breakfast included, at eighty dollars a night. They received three guests, and decided that such an experience could lead to a viable business.

So, they called on their engineering friend Nathan Blecharczyk to join them in creating Airbnb. The three started fundraising in the summer of 2008, during the presidential election. They sold candidate-specific cereal boxes and managed to raise thirty thousand dollars. In the spring of 2009, Airbnb was officially launched, after receiving funding. It has now grown to be a company worth $25 billion. The Giving Pledge they signed will ensure that almost $5 billion of their worth will go to charity, at least.

The Giving Pledge was created in the year 2010 by the great philanthropists themselves, Bill and Melinda Gates, along with Warren Buffet. They wanted to give some of the richest people in the world accountability when it came to philanthropy. Of course, the Pledge cannot necessarily force the people who sign it to donate, but it makes sure that those on the list are educated in terms of ways to give and what makes an impact.

The founders of Airbnb signed the Pledge because they want more children around the world to have opportunities to follow their passions. The founders’ hope is that their donations spur children to pursue dreams, by helping eliminate financial obstacles. Airbnb has been involved in philanthropic efforts in the past, but this is its biggest one yet.

Airbnb is a unique company in the philanthropy sphere because it already services the community by fostering sharing of space and getting to know others from around the world. It wants to ‘rid the world of strangers,’ and it is now able to do that and so much more.

Philanthropy by Entrepreneurs

Many entrepreneurs are focused on generating revenue to make a profit. When running your own business, this is the ultimate goal to stay afloat. However, those that do make a profit have a decision about where to spend that money they make. Some entrepreneurs that run profitable organizations have made a practice of donating a large sum of the profit made by their companies. They operate on the platform of making money to support those who need help. Below are some such individuals.

Beth Doane

A self-branded social entrepreneur, this woman supports a number of causes. She is a partner of the all female communications firm, Main & Rose, which builds brands for clients. This company has a pro bono program in which their team works to promote one cause a year. They will do anything from social media management, to event planning, to web design for free. Doane also is the owner of a custom apparel line, which furthers her social entrepreneurship by helping to send children to school, and to plant trees in endangered forests, around the world.

Trina Spear and Heather Hasson

These two women are the founder of the company Figs, which sells high performance scrubs for doctors and nurses. They began the company with the realization that medical wear is outdated and uncomfortable, and those working to save lives all day should be wearing the most comfortable clothing possible. Spear and Hasson set up the Threads for Threads initiative through their company which, for every pair purchased, donates one pair of scrubs to a healthcare provider who cannot afford his or her own. They have given away hundreds of thousands of pairs of scrubs, and hope their donations are cutting down on hospital-acquired infections.

Sarah Kaler

Sarah Kaler is the philanthropic founder of the organization SoulPowered, a company focused on leadership coaching and empowering women to become CEOs. She is very active in philanthropy in Africa. Kaler both invests in African charities, and has created a mentorship program for the Africa Yoga Project, to teach people to be yoga instructors, and how to financially sustain a yoga business.

Dave Heath

This entrepreneurial athlete is the founder and CEO of Bombas, a company that manufactures socks for intense athletic performance. He created the company to assist active people in performing better during their workouts, while also helping people in need. He realized that homeless shelters are requesting socks more than any other item and decided that, for every pair bought, a pair would be sent to someone who needs it. Every employee, on their first day, is required to go hand out socks to, and have conversations with, people living on the streets.

For more inspiring entrepreneurial philanthropists, check out Fox News.

Know Your Philanthropy

DonateThere are several popular forms of philanthropy that circulate around places such as schools and churches. Canned food drives and clothing drives, for example, are typically publicized by said places as ways to give. When natural disaster hits a certain region, clothing drives are generally the first response. However, while taking the time to give is admirable, not to mention it has numerous health benefits, many people donate without doing the proper research. When giving anything to a cause or an organization, philanthropists must make sure they know the precise needs of the group they are giving to.

Think about it: you have to make sure you are giving people what they truly need in order to make a difference. Unfortunately, popular donation ‘drives’ usually do not take this into account. For example, having canned food drives for Food Pantries are not the best allocation of resources. Food pantries have the ability to buy a large amount of edible goods in bulk for a cheaper, wholesale price. Therefore, the money that is spent buying cans for a food drive, if simply given to a food pantry, could stretch a lot farther.

Knowing what to give at what time is doubly difficult when facing the aftermath of a natural disaster. Usually, when a devastated region is attempting to recover, its needs change on a weekly, or even daily, basis. There have been instances in the past of too many clothes being donated after a natural disaster, such as in 2004, after India was hit by a tsunami. The more clothing sent in, the more useless clothing donations became. It got to a point where there were piles of clothing lying at the sides of roads. Resources had to be used to clean up the clothing as well as the effects of the natural disaster, which stunted overall recovery efforts.

This may make it seem as if giving money is the only way to truly make a difference, especially in the wake of a disaster, but even this form of philanthropy has its own caveats. When donating any sum of money to an organization, you must delve into the organization to ensure it will make the most use out of your money. Of course, searching for fraudulent activity in a charity is a no-brainer. However, you must also discern if the charity’s program is effective, and has made a difference in the past.

This news comes as something of a surprise to all philanthropists, myself included. Things like food drives and clothing drives bring communities together in support of a specific cause, and I worry that stopping such programs will make people feel less fulfilled when giving. Therefore, we must find a way to maximize the effectiveness of the money of philanthropists, while at the same time providing them with the community that comes with drives.

Disrupting Charity

Todd Wagner first became a billionaire when he was Mark Cuban’s business partner. The two ran the startup Broadcast.com, an audio and video platform, which sold to Yahoo in 1999. When he accumulated this money, Wagner delved into the philanthropy sphere. He wanted to make good change in this world, so he started a foundation meant to help underprivileged children. The more time he spent giving money to nonprofits that were stunted technologically, however, the less enthralled with charity he became. Instead of simply leaving the philanthropic sector, Wagner decided to disrupt it. He began three online fundraising platforms, hoping to progress philanthropy into being technologically savvy for every need in the world.

Chideo is one such platform begun by Wagner. It is a fundraising website that supports a number of different causes, and is completely driven by content. Wagner’s hope with Chideo was that it would give anyone who wanted to broadcast a cause, celebrities and nonprofits included, a platform on which to spread awareness and raise money. It is interactive, and even has a connected application that can be downloaded on mobile devices.

Wagner’s second, partner platform is Charitybuzz, which is an online auction platform that exchanges experiences for funds donated to various charities. Many celebrities have affiliated themselves with this charity website, and several of the experiences being auctioned off involve spending time with actors and singers, or obtaining tickets to concerts. From VIP passes to television shows to complete festival experiences, this website is a hotspot for people of all ages, and ensures the money goes to a good place.

The third charity platform owned by Wagner is Prizeo, which is a sweepstakes-based website. People pay for a chance to win prizes, like a day spent with a celebrity, and know that their money is going to a good cause whether they win or not. Prizeo is the best platform on which to allow influencers to expand their charitable reach.

These three websites are for-profit companies, all contained under The Charity Network umbrella company. They are the perfect conglomeration of philanthropy and pop culture. Wagner is successfully disrupting the charity sphere because he is not just focusing on people who make a certain income. The Charity Network is meant to appeal to people of all ages, including millennials. This is accomplished through his focus on celebrities that are popular amongst younger people, and low-cost ways to donate. Wagner is truly an entrepreneurial philanthropist, and it will be interesting to see where he next takes his business experience.

A Charity Problem

Charity Detox

Charitable organizations are necessary in society, as are the people that help fund them. There is no shortage of companies built to improve concerning issues in the world. One such issue is the overwhelming amount of people all over the world living in poverty. To combat this, there exist several charities geared toward helping people in such situations, providing things like food and clothing. Churches, for example, usually have feeding programs for the less fortunate. However, a recently published book suggests that these types of charities, the ones that raise money to dispense continuous handouts, are actually detrimental to society as a whole. Robert Lupton in Charity Detox argues that many charity programs are perpetuating the cycle of poverty by creating a dependency, and something needs to change.

This sounds preposterous at first. Charity programs can mean the difference between having dinner and going to bed hungry for many individuals and families. Lupton does not contest this, however, he simply believes society as a whole throws money at the poverty issue without caring about the results. Donors have a tendency to put their money into these programs, but what people living in poverty really need, Lupton says, are jobs and communities. This would require putting money toward programs such as interview training, and creating safer neighborhoods for communities to thrive.

In order to accomplish such a daunting task, Lupton writes that three main aspects of charitable organizations need to be drawn into the light. Namely, charities need to see their giving as investments and monitor their returns, they must focus on neighborhood rebuilding, and all of the people that each organization is helping must be involved in every step of the process.

Focusing on charitable giving as an investment seems cold, but Lupton has a point. Organizations that are able to make a profit from their charitable giving are more sustainable, and also have the ability to provide those living in poverty with stable jobs. This will help more individuals and families out of poverty, rather than just provide a short-term solution. Additionally, rebuilding neighborhoods is a no-brainer. Any mixed-income neighborhood is safer and helps breed more social interaction. Finally, making those living in poverty decision-makers in the revival of their neighborhoods will foster a further sense of trust and community.

When initially described, Charity Detox seems rather heartless. However, reading this book will be beneficial to anyone looking to beat poverty rather than just put bandaids on it. Lupton makes some very good points, and I think we can all learn from reading his thoughts.

Healthy Living Through Altruism

It is no secret that volunteering is good for your health, but, now, it is official: studies have shown that philanthropic efforts boost cardiovascular health. In fact, many health professionals are thinking about ‘prescribing’ it along with other preventative health measures, such as eating healthily and exercising regularly. Eric Kim, a research fellow at Harvard School of Public Health, has focused his work on philanthropic efforts and their effects on health.

Kim was inspired by results of past studies, which have shown that volunteering is linked to lower weight and lower levels of depression. He hypothesized that these results were due to to a sense of purpose in those who volunteered. When people feel like their lives extend beyond simply just living on a day-to-day basis, they tend to take better care of themselves. Kim decided to do his own research to figure out how the results of past studies could be used in the medical world.

In his work, Kim and a colleague tracked a large number of Americans over middle age, a portion of whom volunteered on a regular basis. After a couple of years, it was evident that the individuals who volunteered made time to take better care of themselves than the ones who did not. They were more likely to go to the doctor for regular checkups, for example, and spent less time in the hospital overall.

This aligns perfectly with the popular idea that one cannot take care of others if he or she does not take care of the self first. Volunteers, Kim has found, want to be able to take care of others, so it makes sense that they are more likely to take care of themselves. This decreases healthcare costs for individuals without costing the healthcare industry more money.

Overall, volunteering is good for heart health. That cannot be contested. However, it turns out that is not the entire story. Kim found that health is only truly improved if one volunteers for the right reasons. A person cannot volunteer, say, to escape from problems, or solely to improve his or her own health. Rather, there has to be altruism involved, or else it is not clear if health will be affected at all.

Philanthropic effort is not difficult, but altruism, selfless concern for others, involves some work. If such philanthropy was prescribed along with medication for cardiovascular issues, and these altruistic values instilled early in life, the healthcare industry could be turned around completely.

To read more about Kim’s work and findings, check out this article in The Atlantic.