to anti-lynching and the civil rights movement, most causes were funded covertly by black dollars. “We can begin to trace organized black philanthropy to the 18th century with the development of mutual aid societies,” says Rodney Jackson, president and CEO of the National Center for Black Philanthropy Inc. in Washington, D.C. “These were early efforts out of our communities to take care of social, educational, and economic needs that were not being taken care of by the general society.”
Throughout the 19th century, institutionalized black philanthropy was expressed primarily through black churches, which were among the earliest grant makers, raising funds to build schools and provide scholarships. “It was philanthropy for and by African Americans that helped establish historical black colleges and universities,” adds Jackson. “Black fraternities and sororities are also a part of this heritage.”
The traditions of African Americans giving to churches, social organizations, and educational institutions are very much alive today. According to data from the U.S. Department of Commerce, Chicago-based research firm Target Market News found that in 2004, African Americans made $11.4 billion in contributions. Of that amount, $7.2 billion went to churches and faith-based organizations and $4.2 billion went to charities, education, politics, and other causes.
GIVING AS PART OF A STRATEGIC PLAN
African American households no doubt are generous givers. But they tend to “give small amounts of money to various charities in cash or checks, usually in reaction to friends, relatives, and neighbors with the best sales pitch,” explains Erica Hunt, president of the Twenty-First Century Foundation. “We do so much social and reactive giving that we have very little left from our discretionary income for intentional or planned giving.” The New York-based foundation was created in 1971. It now raises money from black donors to support community change.
Planned giving is done in a way that maximizes financial and tax benefits for both the donor and the charity (e.g., bequests through wills, charitable trusts, and donor-advised funds), says Kharmia DeLemos Powell, a financial adviser and partner with The Barth/Wolf Wealth Management Group at Merrill Lynch’s Global Private Client Group. “It also helps create community self-sufficiency by reducing the reliance many organizations have on receiving government and corporate grants, and it enables you to leave a legacy for future generations.”
Lester’s Birmingham Change Fund has about 22 members, many of them twentysomething engineers and corporate professionals, while the 18-member Next Generation of African American Philanthropists Fund in North Carolina primarily comprises entrepreneurs in their mid- to late 30s. NGAAP completed its first grant cycle in January, awarding $11,500 to seven local grass-roots organizations. The Birmingham group, which has $30,000 in funds, awarded its first grant in July. Similar in structure to investment clubs, members of giving circles pool their money, meet on a regular basis, and vote on what to do with their funds. But instead of investing in securities, they make charitable donations and sponsor grants and scholarships for institutions or individuals.
From coast to coast, giving circles have become all the rage. In the last four