What Crowdfunding Means For Philanthropy

Lazar Finker—Crowdfunding and Philanthropy

Whether it’s for medical expenses or to produce an aspiring artist’s new album, the impact of crowdfunding cannot be ignored. The “traditional” avenues of philanthropy—soliciting donations and support through a nonprofit—seem far less effective when individuals can easily set up a page on a site such as GoFundMe and immediately reach an audience. Nonprofits have worked to not only help individuals but the causes of issues that affect them as well, whereas crowdfunding gives interested donors an avenue directly to an individual.

 

It’s certainly noteworthy, but to what extent will these new platforms change existing charitable efforts?

 

I believe that, rather than supplanting traditional philanthropy, crowdfunding fills a distinct niche that can coexist alongside nonprofits. It’s not hard to see why crowdfunding is popular. For decades, nonprofits have struggled to reach potential donors and make them inclined to donate, with initiatives that have sometimes come across as tone-deaf or condescending. Overall, it’s not just about selling the idea of a noble cause, but about the stories that make the cause worth contributing to.

 

Humanizing the people that benefit from philanthropy has become especially important in recent years, something that crowdfunding platforms do well. Nothing is more authentic than an individual personally coming forward to tell their story and request assistance. Add in the power of social media and an instant audience in the form of online connections, and we have a formula that has already raised billions of dollars.

 

With nonprofits, missions don’t always include provisions for individual support. These initiatives are highly impactful, but leave some people seeking other options. Crowdfunding turns this on its head, giving the beneficiaries the oversight over where the money goes and changes the narrative about what donations can accomplish. However, nonprofits aren’t experiencing fewer donations; the numbers have more or less stayed the same. This is a pain point for many of these organizations given that the industry as a whole has not made significant gains in recent years, despite a recent surge of funding.

 

The question of impact also characterizes the differences between these two approaches. Donors, particularly younger donors, display a desire to see the immediate impact that their funds make. This is far more pronounced with crowdfunding, particularly when donation goals can illustrate the collective accomplishments of donors. Savvy nonprofits will take note of these changes and find ways to demonstrate the value of a contribution to their audience.

 

Crowdfunding has also called into question whether these donations should be considered tax deductible. Some people believe that this makes donating more appealing, as any funds will not be filtered through a charity’s ecosystem before being put to use. Others believe that the lack of rules around crowdfunding opens the door for fraud.

 

Whatever the case, the instant support network created by crowdfunding provides a new type of philanthropy, one centered around grassroots movements and the notion that people should give back to their neighbors. This coming at a time when nonprofits try to reinvent themselves indicates that, perhaps, these organizations should focus on their stories—as well as providing transparency about where their funds go. There’s still a place for nonprofits, but this dichotomy of giving may only become more pronounced as time goes on.

 

Passing on Philanthropy: Teaching the Next Generating to Care

Passing On Philanthropy_Lazar Finker

Today, being aware of the world around us and finding ways to help other people is easier than ever, but many people remain oblivious to ways they can participate in philanthropy throughout their lives. To truly pass on the values of philanthropy, we need to teach youth to care for others from a young age. The more young people are exposed to philanthropy and the importance of helping others, the more likely it is that these values will be instilled in them and remain present throughout their lives.

Make it a normal part of life

If you want youth to truly value philanthropy, you need to make it something they recognize as part of their lives. Parents should have a conversation with kids when they’re young and explain what philanthropy is, then begin getting them involved with simple opportunities where they can begin experiencing what it means to give back. Take used clothes to a charity, donate food, or have them save up some money to give to a charity of their choosing. It is up to parents to find child-friendly opportunities, but the foundation is out there. Showing kids the little ways they can be philanthropic will help them make giving a habit.

Teach lessons about philanthropy

After explaining philanthropy and sharing ways to participate in it, give deeper explanations to your children and teach them lessons about the different issues that nonprofit organizations help to address. Explain that there are people in the world who need help with lots of different issues and that it falls to these organizations to help them out, which can be done in various ways. Teach them to be thankful that your family is in a position to be philanthropic and educate them on different events and causes they can focus their philanthropy on.

Set a positive example

If you want your child to understand philanthropy, you need to get them involved. The best way to accomplish this goal is by taking them with you to volunteer or do something philanthropic. Make these activities a regular part of their young lives and they will soon be the norm to them. As they see you being philanthropic in daily activities, they’ll feel inspired to do the same and consider philanthropy a part of family life rather than an activity only done on occasion.

Let them take the lead

Once you feel that your child is old enough to make good decisions or volunteer on their own, let them take the lead. Ask them where they’d like to volunteer and what they feel passionate about, then either encourage their interests and take them to volunteer for that organization or even go with them and make it a family event. If your child thinks of new ways to work on their philanthropic pursuits, support their ideas and work with them to accomplish this goal.

Home for the Holidays—Finker-Frenkel Legacy Foundation Gives Back to Children’s Home

Home For the Holidays—Lazar Finker

Recently, a contribution from the Finker-Frenkel Legacy Foundation was able to fund a Hanukkah party for the Beit Chaya children’s home in Moscow! Raissa and I are happy to continue to support the Solomon Jewish Community Center and see the impact that our donations have made. See the full presentation here.

Beit-Chaya3 Lazar Finker

Beit-Chaya4 Lazar Finker Beit-Chaya2 Lazar Finker Beit-Chaya1 Lazar Finker

Philanthropy in 2016—A Look Back, and a Look Forward

Lazar Finker Talks Philanthropy in 2016Another year has come and gone, and with the new year comes more chances to give back and help those in need. Technology, always improving and changing the landscape of our nation, has altered philanthropic efforts a great deal. Additionally, increased social awareness has driven the millennial generation to contribute to causes that they are passionate about.

With recent political turmoil and deaths of beloved celebrities, it can be easy to condemn 2016 as a subpar year. However, the philanthropy sector paints a very different picture, demonstrating that, for all of the unrest, the number of caring souls willing to make a difference is always growing.

The growth of e-commerce platforms has made donating easier and more productive than ever. Those looking to make charitable contributions are not only able to easily find an outlet, but are more capable than ever of ensuring that their money directly funds a cause that they care about. Additionally, the volume of information available online has led to greater scrutiny in charity, as sites such as Charity Navigator have promoted transparency in nonprofit organizations in a way that has never been seen before.

Perhaps one of the more surprising statistics to see when reviewing this year’s philanthropy efforts is the amount contributed by individuals and households rather than larger foundations. These donations make up a majority (around 70%) of giving for the year, and goes a long way in demonstrating the change that micro-donations can make. Growth in personal incomes has enabled more and more families to give back as much as possible.

Another notable trend is the rise of wealthy millennials are increasingly concerned with balancing work with personal values. Mark Zuckerberg, notable for choosing to donate 90% of his wealth to charity, is the wealthiest millennial on the planet, but in many ways exemplifies the attitude of the generation: determined to make a difference. Often derided as “special snowflakes,” we must understand that millennials may very well be paving the way for a new kind of collective philanthropy.

Still, even though 2016 was a good year to give, it behooves us as a country to look ahead to what we can accomplish in 2017. After the ball has dropped in Times Square, what can we expect next?

Well, so far, projections are looking positive, with an improved GDP cited as reasons for individuals and organizations to give more on all levels of society. New management tactics have served nonprofit organizations well, and now, they’ll have to find new ways to grow to avoid stagnation.

Collaborative efforts between multiple nonprofits are one way for charitable organizations to improve in 2017. Overlapping support networks can broaden the horizons of existing charities while hammering home the message that nobody undertakes a philanthropic effort alone.

An increased adoption rate of technology, both among individuals and organizations, can assist in bolstering peer-to-peer giving, which has become increasingly popular as of late. Giving can now be done at the push of a button, and the connectivity of technology can spur us to imitate peers that have already donated.

The philanthropy sector, having already undergone moderate growth in the past decade, continues to stabilize and improve incrementally. 2016 is a notable year for the diversification of the tools that organizations can use to promote their causes and spread awareness to the rest of the world.

Growth Through Giving—A Look At Prominent Philanthropists

Growth Through Giving

Throughout history, there have always been patricians and plebeians, the fortunate and the unfortunate, the wealthy and the poor. Fortunately, in light of the radical monetary differences inherent in this fiscal stratification, there have also always been charitable, philanthropic, and altruistic efforts to balance the spectrum and help tip the scales toward equality. While not all may be so generous, there are many individuals at the pinnacle of net worth who are willing to lend a hand to those who need a hand; and they deserve to be acknowledged for their charity. Listed below are some of the wealthiest and most altruistic members of society who put the “human” back in “humanity”:

George Lucas:

The mastermind of the Star Wars franchise has developed not just a cult-like following through his vast imagination, but also a fortune to match it. In 2012, the Walt Disney Company offered Lucas the enormous sum of $4 billion for his stake in LucasFilm. He took it, but he isn’t keeping it.

Instead, the world-renowned filmmaker opted to sign the Giving Pledge, an initiative spearheaded by Bill Gates, that urges the wealthiest men and women in the world to donate the majority of their net worth to philanthropic organizations/efforts. While it is not yet known what specific charities will receive Lucas’ Giving Pledge generosity, it is clear they will be tacked onto an already extensive list of beneficiaries including, but not limited to, the George Lucas Educational Foundation and the Martin Luther King, Jr. Memorial.

Indeed, Lucas’ primary interest is in education, having invested in project-based school systems that emphasize creative learning, and creating Edutopia, a website dedicated to reforming K-12 education.

“As humans, our greatest tool for survival is our ability to think and to adapt — as educators, storytellers, and communicators our responsibility is to continue to do so,” said Lucas.

His charity places the Star Wars creator in the ranks of the few individuals in the world to donate over $1 billion to altruistic causes.

David Geffen

Possibly not as well-known as Lucas, unless you’re familiar with the classic rock industry, David Geffen is a talent agent responsible for an abundance of world-famous musicians and the names they made for themselves. The Eagles, John Lennon, Aerosmith, and Guns N’ Roses all blossomed under Geffen’s guidance, leading and contributing to his incredible $6.9 billion net worth. Geffen has made a lifelong commitment to fiscal altruism as evidenced by his numerous sizable contributions to a multitude of charities. In 2002, his generosity included a $200 million donation to the UCLA School of Medicine, followed by a $100 million donation in 2012.

Geffen also blessed Avery Fisher Hall in NYC with a $100 million donation to put towards renovations. It should be noted that, at this point in time, a large portion of his fortune has not been donated, with possible plans for the money and his vast collection contemporary art currently unknown. In the meantime, Geffen continues to support a myriad of causes, such as health, education, LGBT equality, and, of course, the arts.

Paul Allen

Steve Jobs had Steve Wozniak. Bill Gates has Paul Allen. A co-founder of Microsoft alongside Gates, Allen has since gained an astounding $17.5 billion net worth. Yet, like Gates, he refuses to hoard his cash, giving an amazing $1.8 billion to philanthropic causes over the years. Two years ago, Allen was dubbed “Philanthropist of the Year” by Inside Philanthropy for his $100 million contribution to containing Ebola and frequently ranks in lists of top philanthropists. Beyond that, he has donated $2.6 million to ocean conservation, focusing on research to prevent the destruction of coral reefs.

With a focus on community and sustaining the environment, Allen is truly an exemplary model citizen who we should all strive to emulate.

As we build our careers, our professional networks, and our fiscal resources, we need to remember to give back to the communities that enabled our development. The above men did, and I hope to follow in their footsteps as much as possible.