The science of smart giving

Goal: Organizers of a new program in Baltimore want wealthier African-Americans to embrace setting up foundations and trusts.

January 10, 2001|By Alice Lukens | Alice Lukens,SUN STAFF

Every Sunday growing up, Lea A. Gilmore would watch her parents tithe, putting money in the silver collection plate at Mount Hope Baptist Church in Northwest Baltimore. When someone in the congregation was sick, they would donate money for medicine, and when someone headed off to college, they would donate money for books.

But they didn't draw attention to their generosity, she says - and they certainly didn't call it philanthropy. The gifts, doled out in small amounts over time, went unrecognized outside the church. That's the way it has been, says Gilmore, for many African-American families for years.

Now Gilmore, program director at the Association of Baltimore Area Grantmakers, is working with Associated Black Charities to put a spotlight on black philanthropy and to encourage more strategic giving.

Program organizers want middle-class and upper-middle-class blacks to move beyond church donations - by far the largest target of giving - to start foundations, take advantage of tax incentives and form trusts, just as many of their white counterparts have done for years.

"I think that the African-American community is extremely philanthropic," says Donna Jones Stanley, executive director of Associated Black Charities. "We just need to find ways to make sure we are getting the best from everybody."

Baltimore's African-American Philanthropy Initiative is one of several that have sprung up across the nation in recent years. Similar programs exist in Detroit and Philadelphia, says Rodney M. Jackson, president and chief executive officer of the National Center for Black Philanthropy in Washington. The center was formed about a year ago, in part to sponsor national and regional conferences.

Historically, Jackson says, blacks have been generous to others, even though they did not have much money to share. Before the Civil War, blacks helped slaves and formed the famous Underground Railroad. During the civil rights movement, they donated time and money to the cause of equality, and they have always given to churches and fraternal organizations.

"Philanthropy has been a big part of the black community for at least 200 years, but what is changing now is the structure and emphasis of philanthropy," he says. "People are becoming more aware of their increasing capacity to give and are becoming more strategic in their giving. They are thinking of how they can have the most impact and how they can take advantage of tax advantages."

One prominent example of such philanthropy is James H. Gilliam Jr., who recently gave $1.5 million to Morgan State University, the largest gift in the school's history. Gilliam, a native of Baltimore and a 1967 graduate of Morgan State, lives in Wilmington, Del.

Blacks give a slightly lower percentage of their income to charity than whites do, according to statistics from the Independent Sector in Washington, a coalition of nonprofits that encourages philanthropy and volunteering. In 1998, for example, whites gave away 2.2 percent of their income, while blacks gave away 1.8 percent. A higher proportion of whites also donate money: 74.5 percent compared to 51.9 percent in 1998.

Independent Sector statistics also show that families who donate their money are more likely to volunteer.

Now that black income levels are rising, the philanthropic community sees a large, untapped potential. During the 1990s, blacks' buying power increased about 87 percent, according to statistics from Target Market News, a Chicago-based research firm that monitors African-American consumer trends.

Total black earned income rose from $263 billion in 1990 to $491 billion in 1999, the latest figures available. In 1999, blacks gave more than half their donated dollars to churches: $4.8 billion out of $7.3 billion in total donations. The next largest category, charities, received $338 million.

Organizers of Baltimore's African-American Philanthropy Initiative hope to tap into that growing buying power. They are developing an "African-American Giving Tool Kit," due out this month, to pass out to potential donors in the state. It will include a history of black philanthropy in Maryland, financial planning information and lists of local and national resources on black philanthropy.

A conference on African-American philanthropy is being planned for this year, as is a speaker's series. And there's a biweekly electronic newsletter, the "E-Newsletter on African-American Philanthropy," which alerts readers to trends and helpful Internet sites. Started last summer, it has more than 600 subscribers.

The Baltimore giving initiative is part of a three-year project started with a $375,000 grant from the Forum of Regional Associations of Grantmakers.

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