Building Millennial Philanthropy, 1% at A Time

August 24, 2011

Daniel Kaufman, founder of One Percent Foundation

Re-posted from NathanielJames.org, for all you AF fans who love innovative philanthropy.

Beginnings

In 2007, Daniel Kaufman started a conversation about philanthropic giving over dinner with his law school friends that has since blossomed into the One Percent Foundation (OPF), a national organization that engages young adults in philanthropy through giving circles and leadership development.

That first circle of friends realized that they were giving reactively, rather than strategically funding the things they cared most about. They uncovered a pattern of challenges that stopped them and their generation from doing more:

• A concern that they couldn’t afford to be philanthropists.
• Not knowing where their money would be most effectively shared.
• Doubting their potential to make an impact.

That group started their own giving circle, pooling 1% of their incomes and collectively overcoming these challenges to effective philanthropy.

“I never meant to start an organization,” Daniel admits.  Soon, the original founders moved to New York, DC, Atlanta, Los Angeles and Seattle, growing into a national giving circle. By 2009, they realized they were filling a vital niche. OPF was ready to scale.

“Millennials aren’t at the table. [They] don’t control any of the sources of funding, and the non-profit landscape represents the passions and perspectives of its funders.’ This is a critical leadership gap. Younger generations bring new ideas, energy, and are committed to improving the world they are inheriting. Traditionally, however, they have to wait in line for leadership in the boardrooms and executive offices of the philanthropic and non-profit worlds, slowing the potential for the positive change they can deliver. They are also a massive, underutilized resource. According to OPF’s research:

If every person in their 20s and 30s gave 1% of his or her income to philanthropy each year, it would translate into $16 billion in annual support for non-profit organizations. This is six times more than the Gates Foundation gave away last year.

How it works

One Percent Foundation is changing the equation. The model is relatively simple. Participants commit 1% of their earnings, as they define it. Working on quarterly grant cycles, participants nominate non-profit organizations to receive an OPF grant. In a key leadership development piece of the program, volunteers act as program officer for one cycle each, learning how to research nominated organizations and complete a due diligence process. Then, the community votes and grants are awarded. If they have less time to give, participants can jump in during the voting phase.

To date, OPF has raised almost $200,000 for organizations, giving $17,000 every grant cycle.

It almost goes without saying, but online organizing is central to this entire process. Word spreads through social media and “all the steps [participants] can take happen through our web site.”

Outcomes

Beyond giving to important causes, OPF is building individual skill sets and shared confidence in the giving community. “There’s this really powerful feedback loop where people feel they can trust the community and can change the non-profit landscape by operating through the community.”

And that change is coming from a willingness to embrace risks, an ability not generally characteristic of traditional grant makers. “[We]really take a chance on innovative ideas and good leadership. We’re funding organizations that a year or two later are getting major recognition from the establishment in the philanthropic space.”

For example, OPF was an early investor in Kiva. Similarly, they helped seed One Acre Fund, helping East African farmers grow more on their land and alleviate hunger. Last year, One Acre received a $765,000 Skoll Award for Social Entrepreneurship and is now serving 55,000 farm families.

What’s next?

OPF is ready to grow once again. They are investing in new leadership (announcements forthcoming) and they are turning growing pains into self-sustaining gains.

“Growth dims the personal sense of engagement,” that has been so important to OPF’s model. The foundation has been so successful at youth engagement because of participants’ authentic, meaningful experience with the program. Daniel doesn’t want participants ever to feel that they are getting lost in a “sea of voices.”

Instead, OPF is converting their model into a web platform where third parties can start their own one percent circles. “Now, for example, a group that has gone through Teach for America or a group of friends scattered across the country can give together.” Daniel hopes this platform will take OPF from a donor and corporate-supported entity to one that earns its revenue.

Lessons for philanthropy at large

OPF is a great example of a pattern I am uncovering in my Mapping Trends in Philanthropy project:

Young leaders + community + smart technology + high risk tolerance = innovative philanthropy.

While the dollar amounts are often on the small end of the spectrum, these new entrants act like sensitive antennas, picking up promising signals that are too small for bigger institutions to read, then amplifying them with recognition and some cash to get started. Traditional foundations would be well served to build this offering directly into their strategies by cultivating relationships with new entities working with young leaders.

Next generation giving is just beginning. I’ll let Daniel have the last word:

“We’re trying to create a movement around philanthropy and democratize giving. There has been a sense that giving circles don’t work with millennials, because they’re too independent. I think that is a statement that is being made with too broad of a brush. There are lots of ways that millennials want to connect and do big things as a community, but there’s not the infrastructure to enable it in a meaningfully way.”