Posted on January 4, 2007

print  e-mail

2007: Preview of the Year Ahead

The effects of Warren Buffett's historic multi-billion dollar gift to the Bill & Melinda Gates Foundation are likely to ripple through the philanthropic and charitable sectors for years to come. What kind of impact will the foundation be able to achieve with an annual grantmaking budget of $3 billion — as large as the grantmaking budgets of the next nine or ten largest private foundations combined? How will the foundation measure that impact? And to whom will it be accountable? While these questions are unlikely to be answered in 2007, answers will emerge over time and are likely to lead to other, equally provocative questions as the foundation ramps up its activities.

What we can say with some assurance is that the era of the mega-gift has just begun. With the knowledge-based economy generating unprecedented wealth for growing numbers of Americans and the huge baby-boomer cohort beginning to move into retirement, nine- , ten- , and even eleven-figure gifts are likely to become commonplace — and the philanthropic pie should grow accordingly. From our vantage point, nothing short of a catastrophic terrorist attack or a regional war in the Middle East is likely to derail the growing affluence — and generosity — of Americans, and the coming years will indeed be remembered as a new golden age of philanthropy.

At the same time, how the explosive growth of philanthropic resources in this country is managed will be a concern for everyone. Will those resources end up in the endowments of already wealthy institutions, reinforcing and perhaps exacerbating existing social and economic disparities? Or will they be shared more broadly among less advantaged organizations and members of society? Will foundations and the broader philanthropic sector move aggressively to address climate change, our dependence on foreign oil, and the spread of radical Islam — huge challenges with no single, clearly defined constituency? Or will philanthropy's growing interest in policy solutions to these and other problems draw the attention, and perhaps wrath, of Congress, resulting in more regulations and restrictions on foundations and nonprofits?

Time will tell.

Of course, many of these same questions will be asked in other countries by individuals whose names may not be known to us today but could become as familiar as Bill Gates's name is to the average person on the street in Shanghai or Sao Paolo. Globalization has its critics, but as the eye-opening example of China and India makes abundantly clear, it is spreading unprecedented wealth to every corner of the globe — and transforming philanthropy into an international force, with implications for donors and recipients alike.

Last but not least, it is increasingly clear to us that the generation of Americans now in their teens and twenties, the so-called Millennial Generation, is the best educated, technologically savvy, and socially conscious cohort of young people in U.S. history. Accordingly, it is inconceivable to us that they will not want to become more involved with philanthropy as they come of age. So let's open our arms, and organizations, to them in 2007. They are the future.

Happy New Year to all!

— The Editors

Council on Foundations Calls on Treasury to Withdraw Anti-Terrorism Financing Guidelines (12/19/06)

Buoyant Market Fuels Hopes of Year-End Gifts for Nonprofits (11/30/06)

Nonprofit Leaders Weigh Impact of Election (11/15/06)

Educators Ponder Leadership Change at Gates Foundation (11/07/06)

Council on Foundations Calls for 'Revolutionary Philanthropy' (9/20/06)

Foundation World Debates Merits of Perpetuity (8/10/06)

Buffett Gift Puts Spotlight on Sector (7/18/06)

Speculation Grows Over Who Will Receive Remaining Buffett Fortune (7/06/06)

Buffett Takes Swipe at Estate Tax Repeal (6/28/06)

Bill Gates to Expand Role at Foundation (6/19/06)