All hail the nouveau riche donors

by Stephen Tall on August 5, 2010

Two articles in the Financial Times have my fundraiser’s eye in the last day. In reverse chronological order, from today’s paper:

US rich pledge half of fortunes to charity: More than 30 US billionaires have pledged to give at least half of their fortunes to charity as part of a campaign spearheaded by Warren Buffett, the investor, and Bill Gates, the Microsoft founder.

And then this article by Luke Johnson in yesterday’s edition:

Charity needs a touch of business: Is a charitable foundation the new private jet? In recent times I have noticed among successful entrepreneurs a reordering of their priorities: once they have done well, they seem to emphasise more than ever how much time and money they give to good causes. …

About three-quarters of private wealth is now in the hands of the self-made, whereas a couple of decades ago they only owned a quarter. I sense they are happier giving it away than those who have inherited.

This is all too true. Of course there are those who have inherited wealth who are generous givers – look at the Rothschilds, for example (though each generation has also earned its own money, too) – but all too often those who have inherited their wealth do not feel it is theirs to give away. They view themselves as its custodians and protectors, whose job is to hand it on, undiminished, to the next generation.

All too often fundraising institutions get incredibly excited at finding a titled lord or lady on their call-list of prospects; but all too often find it very difficult to encourage them to part with any cash.

The most generous donors I have met have all been largely or wholly self-made. Not only do they feel that this is their money to dispose of as they choose (with, or sometimes without, the consent of their loved ones), but they also feel an extra sense of gratitude for the life chances they have had, and want to give something back. That is certainly my experience in the case of educational institutions.

For those from a more privileged background – and, as I say, it’s never good to generalise – there is perhaps not the same sense that their life chances were transformed compared with, say, the state school student from a modest background who got into Oxford.

There is talk sometimes of the UK adopting the equivalent of the USA’s controversial ‘legacy preference system’, giving the nod to the kids of alumni partly in the hope of encouraging donations. I’ve always been against the notion. First, because how can universities tell government not to socially engineer admissions if universities themselves choose to?

And, secondly, because the best long-term fundraising strategy is to promote the only kind of elitism universities should promote: meritocratic excellence. Not only will those students who got the break they never expected prove to be the most generous donors, but non-alumni are for more likely to support an institution which they see living by its principles in pursuit of the highest possible standards.