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The new face of private philanthropy

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Ken Weeman can remember a time when he and his wife, Kathryn, wrote dozens of personal checks every year to charitable organizations they knew relatively little about. Overwhelmed by the ritual, Weeman, a former Dresdner RCM Capital partner who lives in California, stood back one day and realized that he was “clueless” about the impact of his family's giving.
Changing tack, Weeman reduced his family's portfolio of charities down to 10 carefully selected entities, 4 of which he is directly involved with today. Among them is Clínica Verde, a U.S.-based nonprofit group created in late 2007. Its mission is to build clinics aimed at improving maternal and infant health care, beginning in Nicaragua, which has one of the Hemisphere's highest rates of adolescent fertility and maternal mortality.
Weeman, who is semi-retired, is a founding board member for Clínica Verde. In this capacity, he plays an active role directing the organization's financing, which includes some $275,000 in private donations. By crunching numbers and asking questions - including “impertinent” ones about goals and budgets - Weeman came to the conclusion that “for a relatively little amount of money, we could save a lot of lives.” The charity will break ground on its first clinic in 2009, which will one day provide a medical home for about 4,000 children and prenatal care for 1,500 high-risk pregnancies per year.
Experts in charitable giving say Weeman's experience is typical and points the way to the future of individual philanthropy.
“People want to give responsibly,” said Caroline Garnham, a senior partner in the London law firm Lawrence Graham and founder and director of Family Bhive, a philanthropy Web site for ultra-high-net-worth individuals and their advisers. “What they don't want is to give money and feel they have lost all control over its outcome.”
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While Garnham expects the current U.S. financial market crisis to further solidify this attitude, she does not think it will stem the tide of giving. If anything, it could help it along. According to Garnham, her clients know they have surplus wealth that could be put to good use during tough economic times. The big question is how?
Charitable giving has been a challenging proposition at least since the days of Andrew Carnegie, who was once quoted as saying, “It is more difficult to give money away intelligently than it is to earn it in the first place.”
Given the unprecedented number of charitable organizations in the world today, the learning curve associated with philanthropic giving has never been steeper. In the United States alone, there were about 904,000 public charities registered with the Internal Revenue Service as of 2006. In Britain, as of this year, there were an estimated 180,000.
Small wonder, then, that potential donors may feel ill-equipped to navigate this new landscape - especially when they are approached in a high-pressure manner, like at a fund-raising auction. Garnham said her clients tell her they are tired of being “shamed” and “bullied” into parting with their money in haphazard fashion. “There is a lot more suspicion about money finding its way into the hands” of the persons on whose behalf it is being solicited, she  said.
Donor anxiety is a very real issue, said Katherina Rosqueta, executive director of the Center for High Impact Philanthropy, at the University of Pennsylvania. Her organization recently conducted a survey of 33 ultra-high-net-worth Americans - all of whom had the capacity to give a minimum of $1 million per year in charitable donations. While Rosqueta said the majority of the respondents expressed “a desire to use more of their wealth for philanthropy, many seemed unable to do that confidently.”
Surprisingly, perhaps, this response is coming from a group of people whose wealth in many instances was earned as opposed to inherited. “You are talking about some very successful people who had real achievements in their professional life, but none of them have been well educated or well trained in philanthropy,” Rosqueta said.
Until recently, opportunities for individual philanthropists to research the efficacy of their charitable donations were scarce. Even when they did exist, donors often avoided them, fearing that direct inquiries would result in unwanted solicitation.
Online information services like GuideStar and Charity Navigator are helping improve the transparency and accountability of charities. The two collect financial data from hundreds of thousands of charitable organizations, repackaging the data for philanthropists and their wealth advisers. They are picky about those they list. Charity Navigator evaluates only public charities - organizations given tax-exempt status under Section 501(c) (3) of the Internal Revenue Code and have filed a Form 990 with the IRS. Likewise, entities must show high-level public donor support of at least $500,000 and have at least four years of filed tax forms.