Entrepreneurial philanthropists — including successful business owners who are used to being in charge, doing more with less, and seeing immediate results — are changing the face of charitable giving in America, Fortune Small Business magazine reports.
While Fortune 500 corporations may write bigger checks, the new philanthropists, once they've achieved business success, are bringing a hands-on approach to a range of social problems and not waiting until they retire to get started. According to data from the Internal Revenue Service, 68 percent of private foundations, once the purview of rich industrialists, have less than $1 million in assets.
Typical of the new breed of philanthropists is Tom Pirelli, who a decade ago sold the medical software company he founded for $250 million in stock to devote his time and capital to helping the needy. Athough he established a foundation, Pirelli soon found writing checks to be "incredibly unsatisfying." So he applied the skills that had served him as a business owner and got his hands dirty launching, running, and benchmarking his own projects. He funded and ran robotics programs in the Chicago public schools, outfitted a voice-controlled home for a quadriplegic veteran wounded in Iraq, and, in December, oversaw construction of the first of what he hopes will be a million modular homes built by his Arial Foundation for poor and low-income families.
Like Pirelli, many of the new breed of philanthropists focus their efforts close to home, responding directly to needs they see around them. At the same time, these new philanthropists increasingly are directing their energies to helping the poor in developing countries, especially as their companies expand into the global marketplace.
"Capital offers tremendous leverage if you think about philanthropy as a business and expect a social return on investment," said Dan Schley, founder of Foundation Source in Fairfield, Connecticut. "It's a mentality that suits entrepreneurs."