How “Trickle-up Charity” Can Save the World
Today’s mega-rich philanthropists — Warren Buffet, Bill and Melinda Gates, Mark Zuckerberg — are putting billions towards advancing our world and solving some of its most pressing problems.
But while huge sums benefit countless people, the facts show that the giant hole of need is actually growing faster than it can be filled. Relatively speaking, to quote Melinda Gates, the billionaires’ “pocket of money is quite small.” Sure, philanthropists are doing their part to “save the world,” but it’s only becoming more obvious that more money is needed.
The question is, from whom?
While we’ve all been taught that those with enormous wealth hold the power to “save the world,” giving trends in the United States suggest a different solution — one that might surprise you.
Statistically, the wealthiest Americans give an average of 1.3% of their income to charitable causes. The middle class gives on average of 3% of their income to help others. The poorest Americans — households earning less than $20,000 — give away the greatest percentage of their income: up to 4.5%, to charity. Could it be? Is it so? How surprising! The less one earns the more they give!
Now, before we try to hit rich people over the head and demand that they match the poor in percentage-of-income given, we must also consider this undeniable truth: more money doesn’t always mean more impact. And it certainly doesn’t always mean the smartest impact.
In 2010, Facebook founder Mark Zuckerberg pledged a staggering $100 million to revamp the Newark, New Jersey public school system. But this noble effort saw millions of dollars squandered on outside consultants, analysts and “experts,” each of whom was paid an average of a thousand dollars a day. As Vivian Cox Fraser, president of the Urban League of Essex County, observed to the New Yorker, “Everybody’s getting paid, but Raheem still can’t read.”
Zuckerberg has since acknowledged that he and then-Mayor Cory Booker moved too quickly to do too much, superimposing their own ideas of improvement on a system that really needed different solutions.
Apparently, the age-old adage “money doesn’t solve problems” is even true for altruistic billionaires hell-bent on improving the world.
Besides, the world’s wealthiest lack strong motivators to give more. A wealthy person will often give to earn good PR, gain entry into the “scene,” or earn the very title of “philanthropist.” But they can earn that applause with a mega-donation that doesn’t make any dent in their net worth. This leaves little incentive to give away more than one percent of their income.
And while individual philanthropists are making a huge positive difference in our world, many thousands more are giving well below 1%. And they are not particularly driven to increase that number.
So, where should we turn? How do we create a system of great giving with great impact?
The answer must isolate no one, and empower even the poorest people. It must drive the needy to have more input into how they are helped, which will in turn make nonprofits more accountable for how they use their money. And yes, it must reward major donors for giving more so that resources finally catch up to the actual need.
The answer is something we’ve all watched emerge over the past years, but are only now starting to see the role it’s going to play in the bigger picture. It’s something we’ve perhaps all taken part of, but have perhaps failed to engage in with the kind of deep mindfulness and intention that will really solve problems and change the world.
The answer is crowdfunding.
Propelled by platforms such as GoFundMe, Indiegogo and Razoo, the Internet has revolutionized charitable giving. A decade ago, a small donor could not witness the impact of his small contribution. Today for the first time, we are witnessing what I like to call “people power”: millions of dollars raised by millions of people,every day.
Consider the presidential campaigns of Senators Barack Obama in 2008 and Bernie Sanders in 2016. Both went from being political underdogs to raising the largest number of individual donations with the smallest average amounts in history.
In 2014 alone, online giving grew by 14%, proving that one does not have to be rich — or the CEO of a major corporation — to make a difference. As it turns out, the seemingly “sweet” concept touted to us since Kindergarten — that our small acts can indeed make a huge impact — is not only very real, but now becoming a trend that is the new paradigm for making a difference, for changing the world.
Amazingly, crowdfunding is having a massive impact on major philanthropy too. With small givers empowered to give more to causes they benefit from, they ultimately inspire large givers to step up their giving too. The philanthropists are inspired to respond to an army of “tiny givers.” The crowdfunding platform Charidy (of which I am COO) has used matching donor campaigns to raise over 110 million dollars from over 150,000 individual donors in the last 2.5 years.
Let’s call this Trickle-Up Charity — a revolution in charitable giving driven by the poorest people in society. For the first time, $18 donors have the same decision-making privileges as foundations and philanthropists.
Sure, it’s counterintuitive. Most of us thought it would happen the other way around:that the little people would go where the big boys go. Yet, when Zuckerberg announced that he and his wife would give an estimated $45 billion to charity during their lifetimes, the internet’s applause was thunderous for only a fleeting moment. As much as we admire the gesture, we know it’s barely a dent for them. It doesn’t exactly motivate those of us living check-to-check to increase our giving.
It’s the poorest people who have the power to inspire, inform and influence those with the major giving power. How? By example. When we incrementally nudge our giving upward, the wealthier do too.
At Charidy we see this phenomenon in action every day, as philanthropists commit $50,000 or $750,000 (the largest commitment to date) to match the enthusiasm of tens of thousands of $50 and $100 donors.
Collectively, we can raise our giving incrementally, increasing charitable resources astronomically year by year. If we currently give $400 billion to charity, imagine what we can accomplish with $500 billion, $700 billion, a trillion dollars!
And here’s the kicker: increased giving helps the giver as much as the recipient.
More and more research shows that giving money away is the greatest cause of happiness and satisfaction in people. On the most simple level, nothing is more gratifying than making someone else’s day. So all the more so when your small contribution is so clearly advancing a bigger, perhaps more global, cause you care about.
Even though poverty is still prevalent throughout the world, research shows that the poorest people are not naturally the saddest, the richest are not the gladdest, and the persecuted are not the maddest. In each case, it is the way in which each person uses assets or challenges that determines his or her happiness. The mere act of giving generates gratitude and satisfaction in the giver.
Our status quo is not working. The wealthiest Americans are simply not giving enough and not inspiring their peers to give more. Through the growing trend of crowdfunding, the lowest income households are solving real problems today and inspiring greater charity all the way up the wealth chain. What they lack in quantity, the poor make up for in the quality of their giving choices.
So think of the Trickle-Up Challenge as a gratifying way to find out what moves you and gives you a sense of purpose in life, outside your career and family. Take comfort in knowing that your seemingly small contributions are the new world order for giving. That you are even inspiring billionaires. I invite you to join me and get on board with the Trickle-Up Challenge. If you give 3% of your income to charity now, how about raising that number to 4% or 5% this year? Find charitable causes you care about and reputable charities to invest in.
When we hear the “crowdfunding call” and participate in its deeper “from the bottom up” message, we will create an inspiring environment where more people are giving more, and giving more often. Only in this way can we can all consider ourselves to be on the side of world progress — not just watching billionaires do the right thing. Together we will look back at the growth, healing and advancement within our communities — and the world at large — and be amazed how all it took was the small yet inspiring contributions from me and you.