Redefining the "bottom line"

I love this ad, which I saw in the most recent version of Yoga Journal. A great reminder of how we can redefine the "bottom line." It says:

Some of the richest people in life do not have money. What makes someone rich? Their bank account? Their savings? The bottom line? What if the bottom line was a tally of friendships made, of families gathered, of sunsets watched, of laughs shared or of communities helped? What if everyone tried to maximize that kind of bottom line? One thing is for sure. The world would be richer for it.

Giving also makes companies wealthier!

There must be something in the air! My last blog entry was about a Syracuse University economist and professor who found that giving to charity actually pushes people's income up (please see the blog entry below this one). I just saw an article in the Chronicle of Philanthropy about new research from Dover Management, a company that operates a mutual fund that invests in corporations that are committed to philanthropic giving. "Dover found that companies with a solid link between giving and operating earnings outperformed the Standard & Poor’s 500 index by 3.5 percentage points over five years. " (Wilhelm, Ian, "Companies that Give More to Charity are More Profitable, Study Finds," Chronicle of Philanthropy, October 29, 2007.)

Giving Makes you Happier... and Richer

This morning, I went to a fascinating lecture by Dr. Arthur C. Brooks, an economist and professor at Syracuse University and author of the book Who Really Cares: The Surprising Truth About Compassionate Conservatism. Dr. Brooks puts forth a amazing thesis, based not on instinct, but on hard-core economic number crunching (in fact, his findings were counter-intuitive even to him):

Giving to charity makes you richer.

Seems backwards, right? Well, not so fast...

Based on data from Harvard's 2000 Social Capital Community Benchmark Survey, people who give to charity earn significantly more money than those who don't. Dr. Brooks asserts that the data doesn't just show that giving correlates with higher income - it "pushes" income up. He said that the "Personal Return on Investment" from charitable giving is 3.75 to 1. In other words, a person who gives away $100 can expect $375 in higher earnings. It is related, in part, to his second assertion, which psychologists have been making for years.

Giving to charity makes you happier.

Most people who have given a gift to charity can attest to feeling pretty good about it. Psychologists know that giving makes you feel better, and it actually depresses stress hormones in the body (lots of experiments are out there that back this up).

So, if you are happier, your earnings go up, etc, etc.... Dr. Brooks explains his statistical work much better than I ever could in this column on the Conde Nast Portfolio.com web site.

Other interesting stats from today:

• Americans are generous. We gave nearly $295 billion in 2006, more than the GDP of all but 33 countries. And that's not just from huge charitable foundations. Around 75% of that came from private individuals. 75% of American families give to charity each year, and 50% - 60% volunteer.
• The wealthy are not necessarily the "biggest" givers. The working poor give a bigger percentage of their money away. And they also are the most "income mobile" - their income is most likely to go up (another argument for the idea that giving to charity makes you wealthier).
• A person who gives at least one gift to charity per year is 43% more likely to say that they are happy than the person who does not give at least one gift to charity per year.
• 91% of people who attend a house of worship weekly give to charity, versus 66% of people who don't.
• Living in a community where people give is as good for your health as quitting smoking.
  

One valuable takeaway - if you are feeling sad or depressed, give some money away! Volunteer! At least give it a try. Statistics show that it will make you happier, and wealthier.

Motivational Values in Giving

I just received a great resource from an organization called 21/64. Their "Motivational Values Cards" are designed to help individuals and groups clarify that values that drive their philanthropic choices. Basically, it's a deck of cards, and each card has a value on it, like leadership, integrity, personal growth, family, responsibility, tradition, or freedom. 21/64 provides the cards and some guidelines for how to use them. For example, you can arrange the cards in the stack in order of the values that are the most important to you, and then you can pick out your top five and bottom five and think about (or discuss with family or friends) why you made those choices. There are no right or wrong answers - it's just an exercise to get you thinking, discussing, and reacting. I encourage you to check out this resource!

The "Czar of Unwanted Solicitations"

I love this article from the October 4, 2007 edition of the Chronicle of Philanthropy, which tells the story of Bernard Olson, an 80 year old retiree in Florida who has waged a "one-man crusade against the envelopes that show up at his door seeking cash... As a form of protest, every January he tallies how many letters he has received during the previous year from charities, noting which organizations they are from and how much he would have to give if he met the minimum of each request... he has sent a summary of his findings to friends, the news media, and charity watchdogs." The article goes on to describe the most intense object of his derision - address labels. "Last year I received over 2,600 address labels, which would take over seven years to use if I used one each day."

Man Found Not Guilty in Homeless-Feeding Trial

I found this in the Chronicle of Philanthropy today:

"A man brought to trial for allegedly violating a city ordinance when he fed a group of homeless people in an Orlando public park has been acquitted, reports the Orlando Sentinel.

Jurors acquitted Eric Montanez of the misdemeanor charge of violating Orlando’s ban on large-group feedings in public parks, a law that some say is meant to keep homeless people away from expensive neighborhoods and tourist areas.

The prosecutor said that Mr. Montanez knew of the law but ignored it. 'This is a young man who wants to prove his point,' city prosecutor Kimberly Laskoff said in her closing arguments. 'He wants to do what he wants, where he wants, and how he wants.'

After the acquittal, Mr. Montanez went directly to 'Ladle-fest,' a three-day event to feed homeless people. He is one of the plaintiffs in a Constitutional challenge to the law filed by the American Civil Liberties Union."

Who says what's charitable?

There's been some buzz in the non-profit community this week about recent commentary in the New York Times and the Los Angeles Times that question whether or not arts institutions, for example, really are charities (and should be entitled to charitable deductions). For example, in the LA Times, Robert Reich, former Secretary of Labor under President Clinton, says:

I'm all in favor of supporting the arts and our universities, but let's face it: These aren't really charitable contributions. They're often investments in the lifestyles the wealthy already enjoy and want their children to have too. They're also investments in prestige -- especially if they result in the family name being engraved on the new wing of an art museum or symphony hall.

He goes on to note that: Charitable donations to just about any not-for-profit are deductible from income taxes. This year, for instance, the U.S. Treasury will be receiving about $40 billion less than it would if the tax code didn't allow for charitable deductions.

Mr. Reich goes on to suggest that we revise the tax code to focus charitable deductions on "real charities" - if a donation goes to help the poor, the donor gets a full deduction, and if it goes somewhere else, the donor gets half of the deduction.

Mr. Reich, where's the love?!

As someone who has helped raised millions of dollars for cultural institutions, I wholeheartedly disagree with Mr. Reich. For starters, who gets to decide what a "real charity" is? A few other talking points... oh, let's take the example of a gift to the Opera, what most people would term a "high brow" institution (full disclosure - I'm an opera fan):

• Most opera companies offer programs where school groups can come to a performance to learn about music, history, a foreign culture, etc.
• The opera is both a seeker of funds and a revenue generator for the community - in places like New York, DC, San Francisco, and other major cities, opera patrons are spending money in the city for dinners, transportation, even on hotel rooms.
• A rising tide lifts all ships - communities that have a healthy cultural life tend to have multiple institutions that provide cultural, educational programs - museums, galleries, music venues, etc. A gift to any of these cultural institutions raises the level of cultural enrichment for the entire community.
• Of course, all of this is predicated upon the notion that cultural institutions provide valuable educational services and act as a public trust... that's a whole other blog entry! I've seen it with my own two eyes, working at places like the National Building Museum and the US Holocaust Memorial Museum - children and adults alike are expanding their world views and learning valuable new skills when they visit cultural institutions.
  

Is it hard to think about giving a gift to the Opera when there are people in my community who don't have enough to eat? Absolutely. I think it's important to give to both cultural enterprises AND social services. If I have only $20 to give away, where should it go first?

Rubber Chicken - Friend or Foe?

Another day, another invitation to a "rubber chicken dinner." (they are a dime a dozen here in Washington. You go to a dinner, you eat bad chicken, you listen to a mildly interesting speaker, etc.)

I am staring at an invitation to a gala dinner being held by a local youth group - I'm on the board of the group, and I feel that I should support the event. However, I don't know many people who will be going (it's mostly for an older generation), and I can't get any of my friends to go with me. So, instead of attending, I will send in a sizable (for me) donation in order to place an ad in the Tribute Book - a book with lots of ads lauding the organization's successes.

In some ways, this makes me the ideal dinner participant! The youth group gets my money, and they don't have to buy me a meal. It's a common complaint that people have with these dinners - "Why waste money on an expensive dinner, instead of just getting people to give directly to the charity?" Well, here's why: If I had the deep pockets to buy a table of 8 or 10, maybe 4 or 5 of my guests would become so engaged by the event that they'd continue to give on their own. By bringing people to the event, I'd be growing the charity's pool of potential donors. In addition, the event might re-invigorate my excitement about this group.

As a fundraiser, I hate charity dinners - the charities spend so much money on the event that they often don't net a lot of money in donations. In addition, the cost of the monumental amount of staff time that goes into these events is rarely calculated! However, they have their place, and if they are used well (e.g. the charity does great follow up with the attendees), they can be worth it.

So... rubber chicken... friend or foe? Your thoughts?