OPPORTUNITIES AND CHALLENGES

The New Feasibility of Black Philanthropy

Nearly 30 years of NBUF charitable fund-raising and grant making in Black American communities have poured a solid foundation for a broader scale of operations. Two major developments have occurred to strengthen the feasibility of developing greater NBUF capacity. Black Americans have a higher concentration of wealth and surplus income, and NBUF’s viability and maturity have been established through its institutional experience and expertise.
Black Americans now comprise the largest buying power group at $572.1 billion per year, representing two out of every three dollars spent by minorities, according to a recent report by the University of Georgia’s Selig Center for Economic Growth.

Further, the report found that Black American households with annual incomes of more than $100,000 increased from 2.3 percent in 1990 to 2.7 percent in 1996. A recent White House Council of Economic Advisors (CEA) report found that 75 percent of whites make charitable contributions, compared to 52 percent of Black Americans.

After taking into account that Black Americans generally have significantly lower incomes, however, the CEA found that Black Americans are more likely than whites to give to charities. Moreover, a younger generation of Black American millionaires, particularly in the fields of sports, new technology, and entertainment, are more focused than the older generation on wealth accumulation and what Fortune magazine called “The New Black Power”---ownership, money, and clout.

This generation has little confidence in government to solve the problems of Black America and looks to the leverage of wealth instead. The growth in the number of young Black American entrepreneurs in the dot.com industry along with young entertainers and athletes has produced a newly emerging Black American business class with wealth and assets.

Despite the long and rich tradition of charitable giving among Black Americans, the majority of these new assets are currently exhausted on consumer spending and personal investments. A restoration of philanthropic values must be introduced to a young Black American wealthy and affluent class, and systematic models and channels for philanthropic giving must be created for both traditional and new generations of Black American philanthropists. A new brand of giving must be made available with the old brand.

What is essential at this point in time is an intensive public awareness campaign to inform Black Americans of the diverse and financially savvy mechanisms available for charitable and philanthropic giving. The campaign, A Trust for the Future, is a critical part of NBUF’s expansion strategy. Priority emphasis will be placed on raising black public awareness of the giving models available to redirect potential philanthropic resources to the formidable social and economic challenges in the Black American community. The core message of this campaign will not only appeal to the tradition of Black American giving, but also to the practical benefits that these new giving models offer to both donors and recipients.

Re-Kindling the Tradition

The tradition of Black American philanthropy has been long and sustaining since the days of free burial societies, schools, and black churches in the 1800s. NBUF’s years of experience with black employees in payroll deduction campaigns confirms the sustainability of this philanthropic values system and tradition. Indeed, in a 1999 Kellogg Foundation report, Mary-Frances Winters of The Winters Group, Inc., summarized her findings from interviews of 30 Black American donors and advisors as follows:

_ Black Americans have a long history and rich tradition of giving, in part, because of their specific exclusion and separation from the majority culture
_ There is an element of mistrust of majority institutions
_ Giving follows customary traditions especially associated with the church
_ Civil rights and other social rights groups have a reputation, accountability, and continuing attraction for many Black Americans
_ There are growing interests in endowments, but continuing tension relative to immediate needs. However, the growing rate of affluence among Black Americans suggest significant potential for planned giving
_ Black United Funds have tremendous reach and potential through workplace giving and responsive program support
_ The power of celebrity offers important role models and messages from highly visible Black Americans to their community

A New Tool Box

To take advantage of these new opportunities, NBUF requires restructuring and an expanded mission, departing from operating as a national fund-raising federation to a network of Community Foundations. This strategic change is intended to accommodate more diverse ways of Black American charitable and philanthropic giving and to maximize the impact of such giving. NBUF will move beyond relying exclusively on payroll deductions and “pass-through grants” to the creation of the following mechanisms:

• Endowment Funds with a focus on fields of interests (e.g., environmental justice, children’s health, education, etc.)
  
  
• Donor-advised Funds (which require on-going, interactive contact and communications with the donor)
  
  
• Designated funds (i.e., for specific organizations)
  
  
• Unrestricted Funds (general contributions)
  
  
• Non-permanent Funds (pass-through grants)
  
  
• Individual Development Accounts (individual Savings Accounts matched by donor sources)
  
  
• Estate Planning (e.g., Wills and Bequests)
  
  
• Insurance Policies