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The Wealth Gap is Becoming a Giving Gap

Johnson Center Oct 1, 2019
This article is deemed a must-read by one or more of our expert collaborators.
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The Wealth Gap is Becoming a Giving Gap Giving Compass
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Giving in the U.S. has long correlated with the up and down pattern of the nation’s economy. But what about an economy in which the most glaring “trend” is not an overall rise or fall, but a growing gap between those at the top and bottom? As wealth and income become increasingly unequal in this country, will patterns in giving follow this dramatic economic bifurcation?

The answer, it seems, is yes. Recent research shows that while total giving is on the rise, the number of households that give is declining (Rooney, 2018). This means fewer people are giving a bigger slice of the charitable pie. And considering the rapidly increasing economic inequality in America today, we all need to pay more attention to the growing disparity in giving power.

The level of economic inequality in the U.S. (and increasingly, around the world) is now as high or higher than during the fabled “Gilded Age” of the late 19th and early 20th centuries. In fact, one report claimed that the three richest Americans — Jeff Bezos, Bill Gates, and Warren Buffett — are now worth more than the entire bottom half of the U.S. combined (160 million people) (Collins and Hoxie, 2015). Of course, it was during that previous Gilded Age that elite philanthropy — by the likes of Andrew Carnegie and John D. Rockefeller — emerged as a major source of, and influence on American giving.

Many observers are now saying we are entering a “new Golden Age of Giving” to match our new Gilded Age of wealth. And it looks as if this new Golden Age will, like before, be dominated by the wealthiest of donors.


Philanthropy is a complex topic, and others found these selections from the Impact Giving archive from Giving Compass to be good resources.

  • This article is deemed a must-read by one or more of our expert collaborators.
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    Listening – and Learning from Lived Experiences

    Want to be the change you wish to see in the world? Deep listening is the key. The voices of those enduring a challenging situation – whether those situations are economic, health, or climate-related to name a few – are often overlooked when policymakers or donors are devising potential solutions. Too often, they aren’t heard at all. Of course, it’s important to review data and trends research, but if and when that kind of research is available, it doesn’t always present the whole picture. The good news is that taking care to understand the lived experiences of those who endure entrenched problems is happening more and more, and it’s offering philanthropists an opportunity to glean insights that would help achieve the impact they seek. Last year, the Center for Strategic Philanthropy, in partnership with the Depression and Bipolar Support Alliance collaborated to develop a first-of-its-kind community survey to understand the perspectives of people living with depression and bipolar disorder, and to use these insights to guide research and drug development efforts. More than six thousand people responded. It’s not often that the medical research community gets to hear from those who will ultimately and hopefully benefit from research, and it could be argued that it shows. Currently, diagnosis and treatment of depression and/or bipolar disorder can feel haphazard at best. As one respondent put it, “... trial and error of creating the right cocktail of drugs should not be commonplace.” More than half of the respondents reported that they experience symptoms of both depression and bipolar -- and that symptoms began in childhood. This speaks to a massive unmet need, and an opportunity for philanthropists to step in and fund research to bolster the ability to diagnose specific conditions, and use precision health approaches to effectively treat individual patients. Listening and learning from communities is at the heart of place-based philanthropic strategies as well, an approach that’s increasingly taking hold. A number of nonprofits and foundations stand out for their work to listen to communities as they seek to implement transformative change. For example, the poverty-fighting nonprofit Robin Hood places community voice at the center of its Mobility Labs. The initiative engages with community members to co-design interventions, pilot them, and determine whether they can be broadly adopted. As Robin Hood CEO Wes Moore said at the Milken Institute Global Conference this year, “A phone company would not create a phone ... without having a user test group. We want to create and try to help and build solutions by working with communities -- to identify ... the biggest challenges and the breakdowns, so we can build up the structural elements that create better solutions.” Robin Hood’s approach for involving the target population in social change work in a way that prioritizes their perspective and compensates them for their time is the new gold-standard for constituency listening. The trend is gaining momentum, and the growing popularity of human-centered design practices within the sector underscores that philanthropists are increasingly recognizing that those closest to the problem are the ones closest to the solution. These steps can help funders learn from those with lived experience: Solicit feedback on your feedback mechanism. Advisory groups comprised of your target audience will ensure you are creating the best possible feedback tool. Community members can fine tune the feedback platform and the language to ensure you’re asking the right questions and that the language is clear and understandable. It’s also important to ensure listening tools are widely available so that as many constituents as possible can be heard. Partner with an issue-area leader when entering a new space. Include community leaders and/or experts in the space when possible, and also be sure to include lived experiences. People experiencing entrenched challenges know what the problems are, and the solutions that will actually work. Truly focus on listening to the communities you wish to serve. Listen and follow. Constituents lament that communities often participate in focus groups only to feel that donors have disregarded their feedback and proceed along their original path. Listen frequently, learn continually, and take feedback seriously. It’s encouraging that listening to communities to guide philanthropic programming is increasingly considered a “best practice” in strategic giving. Top-down approaches to philanthropic programming of all kinds, while not necessarily destined to fail, are potentially unlikely to have the impact they could have. It’s imperative that before research priorities are defined, or strategies are decided, feedback loops are built into all stages of philanthropic giving. Deep listening provides a fuller picture, and findings can (and ideally should) steer donors on to better funding and programming paths. _______ Original contribution by Melissa Stevens, Executive Director, Milken Institute Center for Strategic Philanthropy.


We can see this in the attention — both positive and negative — paid to the biggest donors on the national stage. We closely scrutinize the efforts of the biggest foundation in the history of the world — the Bill and Melinda Gates Foundation — while anxiously awaiting clues from the man who replaced Gates as the world’s richest individual, Jeff Bezos, about how he will disperse his philanthropic largesse.

New books like Rob Reich’s Just Giving (2018), and Anand Giridharadas’ Winners Take All (2018) critique the power of mega-donors and call for a renewed democratization of giving, one where lower- and middle-income donors have a voice and a collective influence on charitable causes and outcomes. Simultaneously, many worry that new federal tax policies will exacerbate this giving gap even further, because the law eliminates the charitable deduction incentive for as many as 21 million, mostly middle-income taxpayers (Gleckman, 2018).

So what does this mean for the future of the philanthropic sector? For one thing, nonprofits will need to prioritize major gift fundraising even more than before, while also navigating even more treacherous waters in sustaining relationships with their biggest donors (whether they be foundations, individuals, or corporations). The increased power that major donors have in an unequal giving landscape is one of the chief concerns raised by the democratic critiques of mega-giving.

At the Johnson Center, we expect this new Golden Age will also require even more intensive and thoughtful efforts to provide high quality donor education, especially to those elites who are just beginning their philanthropic journeys. The effectiveness and vitality of philanthropy in an increasingly unequal world will require donors who understand and value that goal – and who approach their outsized giving role seriously, humbly, and with great care for all involved.

By Michael Moody, Frey Foundation Chair for Family Philanthropy, Dorothy A. Johnson Center for Philanthropy. 

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