2 examples of different approaches to purpose-built philanthropy
One of the fascinating things about philanthropy is its variety. Every philanthropist’s approach is unique based on a number of variables, including resources, talent, interests, and intentions. Some philanthropists follow complex strategies, others may be laser-focused on a single charity or solution.
Many philanthropists want to make an impact, no matter their level of wealth. This could mean devoting time, talent, and treasure to a cherished cause. It could also involve various charitable vehicles or selected investments that yield financial returns as well as achieve an altruistic goal. The philanthropist’s purpose shapes the overall strategy to achieve the desired impacts and/or returns. We call this purpose-built philanthropy.
Let’s look at the activities of two well-known philanthropists: Tiger Woods and Bill Gates.
Golf icon Tiger Woods founded the Tiger Woods Foundation 20 years ago, initially to introduce golf to inner city kids. In 2006, the foundation expanded its purpose to become a hub for STEM education and ultimately serve millions of underprivileged children per year, as Fast Company reported. Woods remains a major donor to the foundation, but sponsorships and grants also sustain it.
Bill Gates, the world’s richest man according to Forbes, has a well-known global foundation that aims to alleviate world poverty, among other goals. But recent news shed light on another purpose in his philanthropic portfolio: investing in clean energy. Last month he launched a more than $1 billion fund with other investors and entrepreneurs who “are willing to wait a longer time for returns than other funds,” he wrote in his blog.
The examples show that every donor can adapt his or her giving to a model that is personally appropriate. The vehicles and strategies toward fulfilling a philanthropist’s goals may include:
- Gifts, bequests, grants
- Donor-advised funds, charitable trusts, foundations
- Funding circles and other collaborative strategies/approaches
- Traditional and non-traditional investments
- SRI (socially responsible investing), impact, green bonds, microfinance
While the Tiger Woods example focuses on the value of traditional philanthropy, Bill Gates’s activity shows how a collaborative approach and purpose investments can help an individual pursue his or her objectives.
To get a better idea of how purpose investing and charitable giving may fit together, this infographic depicts a wide variety of options. This glossary of terms may also help you understand purpose-built philanthropy.
Tiger Woods and Bill Gates are establishing lasting legacies while accomplishing very different purposes. That’s the beauty of purpose-built philanthropy, and it’s exactly what the professionals in our Family Wealth Advisors group work to achieve for clients.
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