Although people of all means have always given to charity, the moniker ‘philanthropist’ has typically been conferred upon wealthy industrialists, whether their fortunes were made in oil and steel (Rockefeller and Carnegie) or software and finance (Gates and Buffett).

Today, however, philanthropy has gone mainstream. Brad Pitt, Angelina Jolie and Bono have made refugees, human rights and debt relief causes célèbres. And if executives at NBC have their way, philanthropy may be coming soon to a television station near you. Among the prime-time shows slated for winter 2009 is ‘The Philanthropist’, the hero of which will be ‘the world’s first vigilante philanthropist – a renegade billionaire who uses his wealth, connections, and power to help people in need…Instead of spending $25,000 a plate at a fundraiser, he’s dodging bullets in Third World countries to hand-deliver vaccines.’ Next role for George Clooney?

While celebrities can bring money and star power to a problem, the vast majority of individual donors never make the back page, let alone the front page. Yet they do make a difference. $10,000 can have a profound impact on a village-level irrigation project. $50,000 can underwrite microfinance loans for an entire neighbourhood in an African township. Packaged with other donations in a giving circle, $100,000 can provide growth capital to a local manufacturer of low-cost vaccines in the developing world. Donors with $1 million to $5 million can scale up differently.

The key is finding the best fit for each donor. This means being clear about the donor’s passion, the extent of his or her resources, and the level of involvement the donor wishes to have. But it also means recognizing that business and philanthropy require different skill sets. Good donors can adapt their entrepreneurial and business skills to their philanthropic work, but building a successful business and creating an effective health education project in the developing world are qualitatively different endeavours. Here are some tips for wise individual giving.

What individual donors have to offer

One person – or even a tightly knit family – can accomplish quite a lot by believing in a bold idea, drawing together social, financial and professional resources, and committing to a vision. But donors need to start out with a clear understanding of the issues, a capacity to listen to the people who will benefit from their donation, a willingness to collaborate for maximum impact, a reliance on strategic thinking and planning, and perseverance. In short, a commitment to responding in ways that will increase the chances of lasting change.

What are some advantages the individual donor has over large foundations? For starters, individual donors are often more nimble than large foundations. Decision-making and action can occur with speed and quickly address an unmet need. For example, Jeff Horowitz had long been interested in carbon trading as a solution to global warming, but when he saw a shortage of policies aimed at reducing emissions from deforestation and degradation (REDD), he set aside his position as a partner in San Francisco’s KMD Architects to start Avoided Deforestation Partners, an international non-profit that promotes market-driven policies to protect and enhance forest ecosystems. Horowitz now devotes his time to talking up REDD to policymakers and corporate leaders, many of whom he knows from his previous career.

Likewise, individuals and families can take risks that larger organizations may shy away from, like experimenting with new technologies or supporting unproven ideas. In 1991, when Martin Fisher and Nick Moon founded the organization that would become KickStart, a Kenyan non-profit that develops, manufactures and distributes innovative technologies like micro-irrigation pumps, building materials and manufacturing tools, they put up their own savings and ploughed in profits they had from a contract to build pit latrines for Somali refugee camps. This early investment allowed KickStart to fine tune its model and positioned the organization for rapid growth. Today, KickStart works throughout Sub-Saharan Africa, and its distribution network reaches even the remotest areas in the region.

Because of their independence, individual donors often bring new ideas and fresh strategies to problems or areas written off by others. Education and job training, for example, are persistent concerns for many philanthropists, yet many find it difficult to bridge the political, economic and social barriers that keep people mired in poverty. And nowhere are these barriers higher than regions where chronic unemployment has created a cycle of frustration, despair and anger. In 2004, Ron Bruder developed the Education for Employment Foundation, which creates job opportunities for unemployed young people in Muslim-majority countries by providing world-class professional and technical training that leads directly to career-building jobs. Through partnerships with business, education and government, EFE gives young people the tools and training they need to thrive in a business environment – and follows that up with a strong mentoring programme to ensure long-term success.

Individual donors also make ideal conveners and relationship brokers. When Uday Khemka wanted to focus donors’ attention on how to avoid climate change and its potential threats to the world’s poorest people, the Indian businessman brought donors and climate change experts from around the world together in a series of meetings to explore a variety of climate change mitigation initiatives in an informal, action-oriented setting. The result? The Climate Change Philanthropy Action Network, a group of individual philanthropists and foundations committed to sharing best practice and coordinating strategies and plans of action around climate change.

What makes a good individual donor?

So what makes a good individual donor? The same thing that makes a good institutional donor: above all, a willingness to listen to people on the ground. In the end, the impact of a donor’s work depends on the willingness of local people to carry it forward. It is one thing for a donor to fund AIDS research, but another thing entirely to set up an AIDS clinic. Consider even a short list of the potential challenges: a lack of transportation to get to the clinic; a lack of running water for cleaning and sterilization; cultural taboos against people with AIDS; and local sexual practices that spread the virus.

A donor’s effectiveness goes up dramatically if his or her approach to giving is consistent with local culture and values. Even with the best of intentions, donors who do not take the time to study the terrain and gather information can blunder by ignoring the cultural context or forging ahead without consultation. Humility and patience will go a long way towards helping them achieve their goals. When donor Ann Lurie saw a gap in medical care in rural Kenya, for instance, she funded a mobile clinic to provide diagnosis, treatment, prevention, and health education to underserved communities. Local partners help maintain the mobile unit and contributed to construction of a free-standing clinic as well.

Good donors also look for leverage through partnerships, alliances and collaboration. As Betsy Brill, president and founder of Strategic Philanthropy Ltd, notes, ‘working in isolation is not an effective recipe for success. Leveraging existing knowledge, know-how and relationships with other donors can support achieving desired outcomes. Listening, following one’s intuition and being surrounded by professional philanthropic resources will go a long way to ensuring effective social investment.’

Fortunately, resources for individual donors have grown dramatically in the past decade. Donor networks like the Global Philanthropy Forum and Synergos’s Global Philanthropists’ Circle offer opportunities for networking and collaboration, while organizations like the Asia Foundation provide conduits for giving to support governance, law and civil society, women’s empowerment, economic development, and international relations. For donors looking for more market-oriented solutions, non-profit venture funds such as the Acumen Fund are using entrepreneurial approaches to solve the problems of global poverty. (See p36 for more on resources for donors.)

Getting started: tips for new donors

Donors new to philanthropy need not reinvent the wheel when getting started, but they do need to find an approach that fits their talents, resources, and interests. Donors with an interest in international issues and challenges, but leery of the transaction costs, perceived risks or distance associated with global giving, can connect with local groups engaged in international activities. The Chicago Community Trust, for example, is funding the creation of a searchable online database listing local non-profit groups with ongoing global projects to which donors might contribute (www.globalchicago.org). A donor can support a favourite local cultural institution that has projects overseas, and give globally by giving locally. Engagement with a group in the donor’s home town provides the donor with easy access to experts who are working in the field.

Researching strategies and best practices with the help of a donor network or giving circle is also a good place to start. Intermediary organizations – groups that raise funds on behalf of a wide range of small organizations, usually aligned around a theme or region – are one of the most practical and effective ways for an individual donor to have an immediate impact. The Global Fund for Women, Global Greengrants Fund, Global Fund for Children, Mama Cash and other intermediaries have created networks of grantees and programmes built on expertise. (See p32 for more on intermediaries.)

A relatively modest donation can have a large impact when channelled through such intermediaries. Just knowing what strategic resources exist on the ground in a field or geographic area can add value to the individual donor’s philanthropic efforts.

For any donor, getting the most ‘bang for the buck’ is an important consideration – and collaboration has a strong multiplier effect. As Chairman of GITI Tire, one of Asia’s leading tyre manufacturers, Enki Tan was able to leverage GITI’s presence in Asia to support the work of Conservation International (CI), where he is a board member. Last December, GITI donated $1 million for CI projects in northern Sumatra (Indonesia) and the mountains of south-west China. Moreover, this past September, Tan and his wife, Cherie Nursalim, organized The Blue Auction, a black-tie charity auction to benefit CI’s marine conservation work. Hosted by Prince Albert II at Monaco’s Oceanographic Museum, Christie’s auctioned off naming rights to ten new marine life species recently discovered off the coasts of the Bird’s Head Seascape in Indonesia’s Papua province The auction raised $2.5 million, including GITI’s $480,000 bid. In both cases, it was about more than money. It was about using personal and professional relationships to advance work. (See p40 for an interview with Cherie Nursalim.)

Donors wishing to take a more hands-on approach to philanthropy will likely need to invest more time and resources in planning. When a donor chooses to start a foundation, for example, even the most mundane tasks, such as designing a grant application or creating board policies, can become time-consuming and distracting. Donor associations and donor advisers can help design an effective strategy. Peers and advisers can streamline the planning process and help build the infrastructure needed to give effectively. Donors who choose to start organizations to actually do the work face another set of challenges: incorporating as a non-profit, assembling a team, building local infrastructure, and raising money.

Scaling up: improving the effectiveness of individual giving

For experienced individual donors, the perennial challenge is scaling up. One strategy – particularly for an individual or family foundation with deep pockets – is to expand a successful programme. For example, individual donors were instrumental in helping to bring Partners in Health, a network of community health outposts originally established in Haiti, to villages in Rwanda and Lesotho. Paul Farmer, Partners in Health’s founder, notes that individuals are more flexible and turn around money more quickly than other sources. From a donor’s perspective, funding the expansion of a proven approach saves time and resources.

Conversely, a smaller donor might partner with a larger organization to ensure that smaller communities are not overlooked. In 1993, Rodrigo Baggio, then a young information technology teacher in Rio de Janeiro’s private schools, wanted to get young people from different classes talking to each other on electronic bulletin boards. After launching his project, he quickly realized that poor kids weren’t participating because they didn’t have access to computers. So he retooled his idea, and two years later founded the Committee for Democracy in Information Technology (CDI), a non-profit that uses technology and community-based schools as the foundations for debate, reflection and citizen engagement. Ten CDI schools were launched within the first year, and the organization had an annual growth rate of 70 per cent until 2002. Now, six years later, CDI has 840 schools in 20 Brazilian states and ten countries throughout Latin America.

Partnership can be most effective when individual donors work with corporations or governments, both of which bring resources that far surpass those of any individual. Working with Dow Chemical, among other partners, Jin Zidell launched the Blue Planet Run Foundation in 2002 to raise funds and awareness around the issue of clean, safe drinking water for all. This past year, Zidell launched a 95-day-long round-the-world relay to support the foundation. Since then, one donor’s vision has inspired thousands of contributions and raised over $1 million to bring water to remote areas around the world.

Conclusion

Individual donors who do their homework, find collaborative opportunities, and correctly match their strengths with appropriate philanthropic vehicles have made and will make a tremendous difference to solving the world’s problems. Donors should be encouraged to seek support, strengthen support groups, and leverage all of their diverse resources – not simply their chequebooks. In 1999, when John Wood left his position as Microsoft’s director of business development for China to start Room to Read, he dedicated his money, his talents and his rolodex to the goal of helping 10 million children in the developing world get an education by developing schools, libraries and other educational infrastructure. In just eight years, Wood has taken Room to Read from a first-year start-up that brought 3,000 books to a Nepalese village on the back of a yak to an organization that has built 440 schools and over 5,000 bilingual libraries and reached over 1.7 million children throughout Asia and Africa.

As Sir Winston Churchill said, ‘What is the use of living, if it be not to strive for noble causes and to make this muddled world a better place for those who will live in it after we are gone?’

Guest editors for the Alliance special feature ‘Individual giving: making it count’:
Peggy Dulany is Chair of The Synergos Institute, which she founded in 1987 to facilitate relationships between grassroots leaders and political or business leaders. Email pdulany@synergos.org
Adele Simmons is President of the Global Philanthropy Partnership, a Synergos board member, and founder of the Chicago Global Donors Network. She was formerly President of the John D & Catherine T MacArthur Foundation. Email adelesimmons@mindspring.com
Rory Tolentino is Chief Executive of the Asia Pacific Philanthropy Consortium. Email roryappc@pldtdsl.net