Center on Wealth and Philanthropy
Spiritual and Cultural Life in an Age of Affluence November 2008


Chronicle of Philanthropy: "Charitable Giving Might Not Melt Down, Philanthropy Scholar Predicts"

"Receiving and Giving as a Spiritual Exercise"

Suggested Reading Recap

Dear Colleagues:

Against the backdrop of a turbulent economy and ongoing turmoil on Wall Street, the Center on Wealth and Philanthropy (CWP) at Boston College and the Association of Fundraising Professionals (AFP) hosted a sell out national forum on Philanthropy in the 21st Century on the University's main campus in Chestnut Hill, Mass. on October 7-8, 2008.

I want to thank Rhonda Starr and her team at AFP for their marvelous collaboration and I look forward working with them in the future. I also want to thank all our good friends at Eaton Vance Investment Counsel particularly Anne Sternlicht, Bill Flemer and Muriel Nichols, who were our generous conference sponsors.

The program brought to campus wealth advisors, estate planners, fundraising professionals, directors of planned giving, vice presidents of development, as well as CEOs and board members of nonprofit organizations to explore the new dynamics of philanthropy, as well as the $41 trillion intergenerational transfer of wealth that CWP has projected will take place from 1998 through 2052.

Topics at the conference also included charitable motivations and supply-side changes among donors and clients across the spectrum of wealth.

Keynote speakers at the event included Anne E. Sternlicht, vice president for Eaton Vance Investment Counsel, Thomas Murphy founder of the T. B. Murphy Foundation Charitable Trust and Museum of Fine Arts/Boston Deputy Director Patricia B. Jacoby. Anne E. Sternlicht discussed the insights she has garnered from working with her clients at Eaton Vance and articulated the supply-side work being done in Philanthropy in her presentation: Finances and Philanthropy: Insights and Challenges or Six Lessons We Learned from our Clients. Pat Jacoby detailed the recent capital campaign at the Museum of Fine Arts which successfully raised over $500 million in her presentation: Building the New Museum. Tom Murphy who for the past twenty years has supported and consulted on research at The Center on Wealth and Philanthropy demonstrated the techniques of the moral biographical interview.

The prevailing turmoil in the U.S. financial markets was on the minds of the forum participants. In his presentation Senior Associate Director John Havens, a leading authority on empirical patterns of wealth, explained "a wealth recession is three successive quarters with a decrease in the real value of wealth in the US." Havens cautioned, at this point there are not a lot of definitive - or reassuring - answers for those in the philanthropic field. Nevertheless the current crisis is similar to the conditions nearly a decade ago. Havens went onto explain to the forum that, "in general, economic downturns or crises -- such as those associated with 9/11 or Hurricane Katrina -- do not so much lower the total amount of charitable giving as lower the rate of its growth for the year in which the event takes place.

Paula Wasley reported in the Chronicle of Philanthropy a terrific description of John Havens's presentation on Trends in Financial Capacity and Charitable Donations. We have enclosed a link to Paula Wasley's article, which was subsequently picked up by over fifty news outlets throughout the world. I hope you enjoy reading what John had to say. If you were unable to attend the conference I have included links to the suggested readings from the conference. In the weeks ahead we plan to have video clips available.

As always, I welcome your comments and feedback. I wish you, your family, and your friends a wonderful thanksgiving season.

Paul Schervish
Center on Wealth and Philanthropy

  • Chronicle of Philanthropy: "Charitable Giving Might Not Melt Down, Philanthropy Scholar Predicts"
  • On October 8, 2008, The Chronicle of Philanthropy published an article about information John Havens introduced at the conference. The following is the text of the article, as published:

    "Even with the steep stock-market drops of the past week, a prominent wealth researcher at Boston College says philanthropy may not suffer a financial meltdown as dire as some fund raisers fear.

    Even with the steep stock-market drops of the past week, a prominent wealth researcher at Boston College says philanthropy may not suffer a financial meltdown as dire as some fund raisers fear.

    More important, he said, unless national incomes drop sharply, the decline in giving may not last long or be significant.

    The current crisis is similar to the conditions nearly a decade ago, said Mr. Havens, at a conference on "The Supply and Demand of Philanthropy in the 21st Century," sponsored Boston College's Center on Wealth and Philanthropy, the Association of Fundraising Professionals, and the Eaton Vance Investment Council.

    In the last recession, said Mr. Havens, the United States began to see a decline in net wealth in 1999, even before the burst of the dot-com bubble precipitated the 2000 stock-market crash. The downward growth in wealth continued for three years, with aggregate household wealth declining by 15 to 20 percent from 1999 to 2002 - the largest and deepest downturn in wealth since the 1930s.

    Those variations in net worth, however, did not directly correlate with changes in philanthropic giving, Mr. Havens said.

    Average household contributions did not begin to fall until 2000, and they did not drop as much as households' net worth did. From 1999 to 2002, household donations decreased by 10 percent, while their net worths dropped by as much as 20 percent. Moreover, said Mr. Havens, once net wealth began to grow again in 2002, donations also rebounded.

    The net wealth of households began to decline in the fourth quarter of 2007, said Mr. Havens. Based on the previous recession, Mr. Havens predicted a lag of up to a year before donations decline - -in part because most high-net worth donors plan their charitable contributions a year in advance - and the decline in aggregate donations may not be significant.

    But Mr. Havens' prediction, he warned, assumed there would be no big drops in income. If household incomes decline sharply, the impact on giving would probably be more severe and prolonged, said Mr. Havens. However, he added, household income levels have historically tended to remain more stable than net wealth."

  • "Receiving and Giving as a Spiritual Exercise"
  • As part of an annual lecture sponsored by the Lake Institute on Faith & Giving, Professor Paul Schervish offers what Patrick Rooney calls an "examination of the inner life of receiving and giving as spiritual exercise."

    Click the link below to download the full text (PDF) of the article entitled, "Receiving and Giving as a Spiritual Exercise: The Spirituality of Care in Soul, Relationship, and Community."

  • Suggested Reading Recap
  • The following are suggested background reading regarding topics covered at the conference:

    1) "Today's Wealth Holder and Tomorrow's Giving: The New Dynamics of Wealth and Philanthropy." Paul G. Schervish. Journal of Gift Planning. Vol. 9, no. 3. 3rd Quarter 2005. Pp. 15-37. Increasing numbers of individuals are approaching, achieving, or even exceeding their financial goals at younger and younger ages. A level of affluence that had been rare has come to characterize large groups and even whole cultures. In the context of an ongoing intergenerational transfer of wealth, the author examines demographic and spiritual trends that are motivating wealth holders to allocate an ever-greater portion of their financial resources to charity. Download Paper (PDF).

    2) "Why The Wealthy Give: Factors Which Mobilize Philanthropy Among High Net-Worth Individuals." Paul G. Schervish. The Routledge Companion to Nonprofit Marketing. Published Winter 2008. This article outlines the motivations of high net-worth individuals for philanthropy. Download Paper (PDF).

    3) "How do People Leave Bequests: Family or Philanthropic Organizations?" Paul G. Schervish and John J. Havens. In Alicia Munnell and Annika Sunden, (eds.), Death and Dollars, forthcoming Brookings Press. This paper presents an alternative paradigm to economic models of transfers, one which we have developed from our extensive ethnographic and survey research on charitable giving and which we call the identification theory. Download Paper (PDF).

    4) "The Modern Medici: Patterns, Motivations, and Giving Strategies of the Wealthy." Paul G. Schervish. This paper addresses three aspects of the relationship between wealth and philanthropy. Download Paper (PDF).

    5) "The Moral Biography of Wealth: Philosophical Reflections on the Foundation of Philanthropy." Paul G. Schervish. Published in Nonprofit and Voluntary Sector Quarterly. Volume 35, No. 3, pp. 466-492. September 2006. Places the notion of a moral biography of wealth in historical context and suggests how advancement professionals can deepen their own moral biography by working to deepen the moral biography of their donors. Download Paper (PDF).

    6) "The Sense and Sensibility of Philanthropy as a Moral Citizenship of Care." Paul G. Schervish, (2005) Good Intentions: Moral Obstacles and Opportunities, David H. Smith (editor) Indiana University Press. The leading question of this paper is how to understand the moral dimensions of philanthropy as a spiritual sense and sensibility. The purpose is to elaborate a modestly integrated analysis of several aspects of philanthropy that make it a morally oriented behavior in the lives of donors. Download Paper (PDF).


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