A new way of giving

Please donít call me a philanthropist; I am just trying to be useful,î said one of the individuals Charles Handy interviewed for his new book The New Philanthropists. The book comprises a series of interviews with what Handy has identified as ëentrepreneurial philanthropistsí, ëcatalytic philanthropistsí or ësocial entrepreneursí – entrepreneurs and City folk who have made fortunes at a relatively young age and have turned their energy and money-making talents to helping social causes.

The list includes Sir Tom Hunter, the Scottish retail tycoon, who has invested more than 100m in charitable causes; Irish property developer Niall Mellon, who is building houses in the townships of South Africa with planeloads of Irish volunteers; eBay founder Jeff Skoll, who is sponsoring and underwriting major Hollywood films that raise issues of social justice or moral concern; and Gordon Roddick, joint founder of Body Shop, who invests in a range of social businesses, including The Big Issue and Freeplay

As Handy writes at the beginning of his book, ìGenerosity is fashionable again.î But what characterises ëthe new philanthropistsí is their determination to be deeply involved in the causes they choose to support, rather than just writing a cheque.

ì[They] want to be in the driving seat, because thatís where they belong and, being by nature entrepreneurs...they like to fill gaps and meet needs neglected by others,î he states.

They are also distinguished by their ability to ìkick-start an enterprise without going beggingî – an approach he dubs ìvolunteering with leverage.î They expect a return too. ìWe donít just put money in and hope,î says Hunter.

Exemplars of new philanthropy include people like Bill Gates, whose $31 billion foundation is the largest in history, and Google founders Sergey Brin and Larry Page, who hope the impact of their philanthropic arm will one day eclipse that of Google itself by ìambitiously applying innovation and significant resources to the largest of the worldís problems.î In the UK Jamie Oliver has captured the publicís imagination with his restaurant Fifteen, whose profits are ploughed back into helping disadvantaged young people.

But Handy wanted to find out whether such high-profile individuals were the visible signs of something wider and bigger. ìWere there others like them, below the radar of media attention?î he writes. The answer was a resounding yes. ìWe went looking for them and found more than we expected.î

The new philanthropists spot a particular need, often by accident, and mobilise their own and othersí talents and energy to fill it, but they ensure their ventures are self-sustaining.

What they have in common is ìpassion, permanence and partnership,î claims Handy. The passion is often triggered by some event. For example, Hunter was only 37 when he took the phone call one morning offering to buy his business for a sum that would take care of all his future financial needs. He then set about deciding how he wanted to use the rest of his life.

Finding himself on the front page of The Times one day as the result of a charitable initiative he was involved in made venture capitalist-turned educational philanthropist Sir Peter Lampl realise just how much difference one person can make. And former banker David Charters resolved to change his life after suddenly realising that he had lost his family as a result of his total absorption in his work. He set up the Beacon Fellowship Charitable Trust, which celebrates and encourages philanthropy.

The new philanthropists also look at their philanthropic projects in a businesslike way. They see their interventions as an initial investment of money, time and energy, but are clear that they ultimately have to be capable of standing on their own. For example, the top two storeys of the seven-storey breast cancer clinic in Khartoum set up by telecoms multi-millionaire Mo Ibrahim will be let out as luxurious office suites, the income from which will support the clinic in future years.

Sustainability depends on partnership of one sort of another. For example, Niall Mellon could not hope to make more than a small dent in South Africaís housing problem without the help and involvement of the local municipalities and the national government, who had to fund and prepare the infrastructure on the sites, validate the leases and subsidise the prices of the houses he built. The volunteers whom he flies out from Ireland are also partners in that they all raise money to pay for their own fares and accommodation and contribute to the cost of the houses.

ìPartnership creates involvement, which builds commitment and long-term sustainability,î says Handy.

But if the traditional charitable sector can learn from the new philanthropists, then so can the business world.

ìBusinessís unhealthy obsession with sales, profits and shareholders does it no favours,î he says. ìBy contrast, money is almost an embarrassment to the new philanthropists – it is a by-product of what they do.î

While he thinks new philanthropy can never be more than a niche sector, he believes its greatest potential impact could be to change the perception of business from being a largely selfish occupation to one that benefits society. If its values infect the rest of the corporate sector, it could redeem capitalism within the next decade or two, he predicts.

ìThe activities of the new philanthropists will never relieve the government of its responsibilities in any major way, but they give a point to wealth creation and help answer the lingering question about the role of business and capitalism,î he says. ìIn so doing, they give their employees a reason to get out of bed in the morning.î

The new philanthropists get a buzz out of what they do, but they are not driven by a desire for status. Their motivation is summed up in the words of one interviewee: ìThe chance to do this makes the whole business of making money worthwhile.î

Readers can buy The New Philanthropists (RRP 20) for the special price of 17 plus free UK p&p. To order please call 01206 255 800 and quote the reference 'Handy'.

Previously published in The Business Review, Impact Executives.