posted June 26, 2006 08:56 PM            

By ROSE PALAZZOLO

June 26, 2006 — The rich don't give their money away like they used to.

Unlike their predecessors, today's multimillionaires don't wait until retirement to donate much of their vast wealth, and they are much more involved in how their money is put to good use.

Since the dot-com and tech boom of the late 1990s, philanthropy has become a younger industry. With this younger demographic has come a whole different culture of philanthropy, according to experts.

"What has happened in the last 10 years or so since the dot-com boom is you have young entrepreneurs who have created a lot of wealth and created foundations and philanthropies at a much younger age and they have gotten much more involved in their foundations," said Todd Cohen, editor of the Philanthropy Journal.

Partly because it is no simple task to figure out how to spend $1 billion, many of today's megadonors are not content to simply write the checks.

"The biggest thing that holds people back from deciding how to give their wealth is that they worry about what the money will be used for if they donate it to an organization," said Peter Karoff, chairman and founder of the Philanthropic Initiative.

While industry titans like J.D. Rockefeller and Henry Ford created charitable foundations at the ends of their careers, Cohen says that Bill Gates and other baby boomers and even Generation X-ers who made their fortunes young have started foundations at a much younger age.

This trend has also been affected by a skepticism born out of the 1970s and 1980s when high-profile institutions were in the news for not spending their money as they had pledged to, Karoff said.

"Some people feel they are stewards of their money," Karoff said. "It's what Andrew Carnegie meant when he said, 'A rich man who dies is a bad person.'"

Carnegie, called in his era the "Richest Man in the World," started several philanthropic institutes of his own.

He also wrote "The Gospel of Wealth," an essay about the perils of allowing large sums to be passed on to persons or organizations ill-equipped mentally or emotionally to cope with them.

"The biggest thing that holds people back from donating their money is worrying that the money will be used properly," Karoff said.

Between 1990 and 2001, the number of philanthropic foundations in the United States nearly doubled, growing from 32,401 to 61,810, according to Forbes magazine.

There are greater numbers of "megarich" Americans than ever before, says Forbes — more than 2,500 households with a net worth exceeding $100 million and more than 270 billionaires.

In 2003, Business Week tracked 50 philanthropists who had each given or pledged at least $95 million in the previous five years — a combined total of more than $47 billion.

These philanthropists, like other high wealth individuals today, are more likely to be self-made, most commonly through entrepreneurial interests, small-business ownership, investments or earned income.

"Younger people like Gates are getting involved on a much higher level, and they are not just interested in making a gift to a university and getting their name on a building," Karoff said. "They want to see their money work and see that it goes to the places they intend."

Pierre Omidyar, founder of eBay, made a similar decision.

He launched the Omidyar Network in 2004 with his wife, Pam, after leaving the corporate world.

The group funds for-profits and non-profits that "promote equal access to information, tools and opportunities; connections around shared interests; and a sense of ownership for participants."

Warren Buffett has decided to donate $37 billion to several foundations headed by his children. Five-sixths of that money will go to The Bill & Melinda Gates Foundation — specializing in the search for cures for diseases plaguing impoverished nations — because of Gates' personal involvement.

Buffett's money came with a significant catch — the celebrated investment guru said he wanted all his money to be distributed in the year it was donated — not added to the foundation's assets for future giving.

Buffett's first annual donation to Gates is expected to be about $1.5 billion. Since the foundation gave away $1.36 billion in 2005, Buffett's commitment would effectively double its spending.

Buffett's gift is "really significant," not just for its size but for its potential to encourage other giving, said Diana Aviv, president and CEO of Independent Sector, a non-profit coalition of about 550 charities, foundations and corporate giving programs that includes The Gates Foundation.

"I'm sure there are lots of young, wealthy individuals who have made their fortunes and who are watching this very carefully," she told The Associated Press. "These business leaders are icons."

Putting their name behind their philanthropic institutions puts pressure on these millionaires to act responsibly.

Foundations like the Soros and Ford Foundations make the namesakes personally responsible to where the money goes, Karoff said.

"Part of why this kind of philanthropy is happening is because of what is not in the culture," Karoff said.

"Our unbridled consumerism and the hubris of the American culture is what has really motivated some people to take the time and use their money carefully," he said. "It is potentially terrific [but] it is all very new. These resources have not been around long enough to really know how effective they are."

posted June 26, 2006 09:04 PM            

IDS, Education Top Priority List For New Funds

By DAN HARRIS

June 26, 2006 — As Warren Buffett signs away most of his fortune, the Bill and Melinda Gates Foundation finds its resources soaring to $60 billion, nearly doubling its opportunities to help the common good.

But what can the foundation do with that much cash? For starters, treat each of the 40 million people worldwide infected with HIV/AIDS. They can also cut world hunger in half and fund vaccinations that could save 6 million kids a year.

"When you look at the amount of resources that are now going to be in the Gates Foundation, we could be looking at literally tens of millions of lives saved over the next decade," said Dr. Nils Daulaire of the Global Health Council.

These hopeful prospects are fallout of billionaire Warren Buffett's announcement that he will donate 85 percent of his fortune (about $37 billion) to the Gates Foundation, a charity-based organization led by Microsoft CEO Bill Gates.

Dreaming of AIDS Vaccine

The Gates Foundation may soon be spending $3 billion a year, dwarfing efforts led by UNICEF, the World Health Organization and the Red Cross.

Some of that money may push their dream of providing a first-class education for every American child.

"Can that be done in our lifetime? I'll be optimistic and say, 'Absolutely,'" Bill Gates said today at a press conference in New York.

It could also fuel an end to AIDS.

"I think we dream in our lifetime about an AIDS Vaccine," Melinda Gates, Bill's wife, said.

Both of these are goals that Buffett seems to be subscribing to almost without a question. He'll be a trustee in the foundation, but indicated today that he will continue to focus on what he does best: Investing his money for profit.

"I've got some people where I say, 'You can give it away better than I can,' so I'm turning it over to you and you can do a better job of giving it away than I would," Buffett said.

But the impact of today's announcement may go well beyond all the money that Gates and Buffett are giving away.

A spokeswoman for the Chronicle of Philanthropy, Stacy Palmer, said this type of partnership serve as a call to action for other potential donors.

"When they see people like Buffett and Gates, that might make them change their attitude and be more giving," Palmer said.

posted June 27, 2006 04:00 AM              

I like how you swing between the light and the dark...good and evil....