HappyRant

US sets charitable giving record

Americans and American culture are too often either over-idealized or over-demonized. The reality is that there are both positive and negative aspects.

Here's one of the big positive ones. Americans are givers. 

Americans gave nearly $300 billion to charitable causes last year, setting a new record and besting the 2005 total that had been boosted by a surge in aid to victims of hurricanes Katrina, Rita and Wilma and the Asian tsunami.

Donors contributed an estimated $295.02 billion in 2006, a 1 percent increase when adjusted for inflation, up from $283.05 billion in 2005. Excluding donations for disaster relief, the total rose 3.2 percent, inflation-adjusted, according to an annual report released Monday by the Giving USA Foundation at Indiana University's Center on Philanthropy.

And the lion's share of that comes from individual donors...

"What people find especially interesting about this, and it's true year after year, that such a high percentage comes from individual donors," Giving USA Chairman Richard Jolly said.

Individuals gave a combined 75.6 percent of the total. With bequests, that rises to 83.4 percent.

And it's not just the rich philanthropists who are getting in on the act...

About 65 percent of households with incomes less than $100,000 give to charity, the report showed.

"It tells you something about American culture that is unlike any other country," said Claire Gaudiani, a professor at NYU's Heyman Center for Philanthropy and author of "The Greater Good: How Philanthropy Drives the American Economy and Can Save Capitalism." Gaudiani said the willingness of Americans to give cuts across income levels, and their investments go to developing ideas, inventions and people to the benefit of the overall economy.

How does that compare to other countries?

Gaudiani said Americans give twice as much as the next most charitable country, according to a November 2006 comparison done by the Charities Aid Foundation. In philanthropic giving as a percentage of gross domestic product, the U.S. ranked first at 1.7 percent. No. 2 Britain gave 0.73 percent, while France, with a 0.14 percent rate, trailed such countries as South Africa, Singapore, Turkey and Germany.

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Neuroeconomics shines light on why it feels good to give

It's no secret that it feels good to give. Now scientists are zeroing in on why it feels good.

That good feeling you get by writing a check to your favorite charity could be your brain patting itself on the back.

Reporting in today's issue of the journal Science, a team of economists and psychologists at the University of Oregon have found that donating money to charity activates regions of the brain associated with pleasure.

The study represents a major advance in the young field of neuroeconomics, a collaboration between economists and psychologists to determine how the brain directs the way people handle money.

Economic models would suggest "only Bill Gates or Warren Buffett should be making contributions, and everyone else should just free-ride," said one of the authors, economics professor William T. Harbaugh. "But that doesn't happen; there's high participation, where even low-income people are giving away a portion of their income."

The apparent reason is that giving to others produces a "warm glow." As Harbaugh described it, "people feel good knowing that they're a charitable giver."

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Banking for change: Community-minded banking

When you think of the banking industry, a social agenda to make the world a better place isn't typically the first thing that comes to mind. But for Chicago-based Shorebank, it's an integral part of the reason they exist. Today it's a thriving, if fairly small, financial institution, but as this article describes, when it was founded in 1974 expectations were anything but high.

Opening a bank aimed at improving the quality of life in poor urban areas was supposed to be a grand notion doomed for failure.

The demise of ShoreBank, which promotes everything from redevelopment to minority businesses to environmentally responsible lending, was so predictable that a university professor came running to document its beginnings for a case study on business failure.

...Thirty-four years later, the stories are about its trailblazing success.

The bank has managed to thrive in both the financial and social good arenas.

Despite its altruistic slogan -- "Let's change the world" -- this is no charity organization. The Chicago-based banking company reported net income of $5.3 million last year even after tending to its varied missions.

But its biggest impact has been in what it calls community-minded investing, not profitability.

Founded in 1974, the bank was built on an idea far before its time.

ShoreBank was founded on the '60s-era idealism of Ron Grzywinski, Houghton, Milton Davis and James Fletcher (the latter two now deceased), who together ran one of the nation's first minority small business loan programs. Intent on finding ways to reverse the decline of inner-city Chicago neighborhoods, they zeroed in on redlining -- banks' then-routine denial of credit and services to customers in poorer areas.

The four young bankers raised $800,000 in capital and obtained a $2.4 million loan to buy the failing South Shore National Bank in 1973, using it as a model for their then-novel idea that private bank capital could be used to achieve social purposes.

Last year, banking for the poor hit the mainstream awareness as Muhammad Yunus and Grameen Bank received the Nobel Peace Prize. The insights of Shorebank's founders were woven into Yunus' success.

Through its far-flung business, it can even claim a supporting role in the work honored by last year's Nobel Peace Prize. Grzywinski and Houghton, on 18 trips to Bangladesh over 10 years, advised winner Muhammad Yunus on how to start and manage his Grameen Bank for the poor specializing in very small loans called microcredits.

"They have shown that you can both promote economic opportunity in low-income communities and be a profitable, financially sustainable institution," said Andrea Levere, president of Corporate for Enterprise Development, a Washington, D.C., nonprofit that promotes economic development.

Co-founder Grywinski regrets that there haven't been more companies copying their success.

While he has no problems with ShoreBank remaining "really tiny minnows" in the banking world, Grzywinski, 71, expressed disappointment that its experience had not sparked a "broad revolution" in community development banking.

 "It does seem as though a bank company holding model is a very good model to deal with things like neighborhood development, environmental conservation, et cetera," he said in an interview. "So we would like to see a lot of other people do it."

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Paul Hawken & Blessed Unrest

Looking around at what's happening in the world, it's tempting to throw up your hands in despair. So much of what we're exposed to in the major media focuses on doom and gloom. 

But every once in a while a voice comes along that offers a perspective of hope and possibility. Last week I was in San Francisco at the BALLE conference (Business Alliance for Local Living Economies), and I had the good fortune to hear one of those voices, Paul Hawken.

Hawken, who recently wrote the book Blessed Unrest: How the Largest Movement in the World Came into Being and Why No One Saw It Coming, maintains that, contrary to the major media perspective that everything is going to hell and there's nothing we can do about it, there is a massive, decentralized, ad hoc movement underway.

He describes it as an immune system response. In this article, adapted from Blessed Unrest, he writes:

Historically, social movements have arisen primarily because of injustice, inequalities, and corruption. Those woes remain legion, but a new condition exists that has no precedent: the planet has a life-threatening disease that is marked by massive ecological degradation and rapid climate change. It crossed my mind that perhaps I was seeing something organic, if not biologic. Rather than a movement in the conventional sense, is it a collective response to threat? Is it splintered for reasons that are innate to its purpose?

He describes the "movement" further...

The movement can’t be divided because it is atomized—small pieces loosely joined. It forms, gathers, and dissipates quickly. Many inside and out dismiss it as powerless, but it has been known to bring down governments, companies, and leaders through witnessing, informing, and massing.

The movement has three basic roots: the environmental and social justice movements, and indigenous cultures’ resistance to globalization—all of which are intertwining. It arises spontaneously from different economic sectors, cultures, regions, and cohorts, resulting in a global, classless, diverse, and embedded movement, spreading worldwide without exception. In a world grown too complex for constrictive ideologies, the very word movement may be too small, for it is the largest coming together of citizens in history.

This paragraph struck a chord for me...

The promise of this unnamed movement is to offer solutions to what appear to be insoluble dilemmas: poverty, global climate change, terrorism, ecological degradation, polarization of income, loss of culture. It is not burdened with a syndrome of trying to save the world; it is trying to remake the world.

Hawken's message was inspiring and hopeful. Everybody I talked to about it came away feeling a renewed sense of possibility. That the individual work we all are doing isn't just pissing in the wind, but part of a cumulative effort that can make a difference.

Perhaps my friend I attended the conference with said it best when she said, "I'm a T-cell." She didn't need to change the world - she just needed to keep focusing her efforts on her corner of it, and others would be doing the same.

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