Online Extra: African American Giving Comes of Age

The black community's large amount of philanthropy isn't new. But new wealth, education, and strategy are creating more impact

When New York financier Alphonse Fletcher pledged $50 million to educational reform and fellowships on the 50th anniversary of the Supreme Court's Brown v. Board of Education decision in May, he was just putting a face to the facts: A new kind of African American philanthropy is on the rise.

The African American community has a long history of civic-minded charitable giving, with churches at the core. But now, community and private foundations are stepping up efforts to harness the $11.2 billion that blacks donate each year so that this money can have an even greater impact.

The issue, says Clint Mabie, director of donor services at The Chicago Community Trust, which has recently adopted an African American Legacy Initiative, is that there has never been an organized, overarching effort to mobilize the African American community nationwide. "You look at the Jewish community, and other groups that have done philanthropy as a community…there was nothing in the African American community that said 'we can do this as a community.' Giving has been segmented by where you live geographically, by your church, by your college."


  "In some ways, nonprofits and philanthropy, in general, are late to discover what some consumer organizations have long known -- which is that communities of color have money," says Erica Hunt, executive director of the Twenty-First Century Foundation, which has given grants to more than 350 national African-American-affiliated groups since its creation in 1971.

The foundation's newest challenge: To educate the community about what constitutes philanthropy -- and how such giving can be used strategically. Since receiving funding for this mission a few years ago, the Twenty-first Century Foundation has built a donor-education staff and added an outreach program that has so far connected with more than 6,000 people.

"We want to make our philanthropy visible to ourselves -- as black people we're often not even aware that our giving is philanthropic," says Hunt. "We often think of ourselves as being supplicants, but in fact, there's a lot of giving going on in our community."


  The African American community doesn't just participate in philanthropy -- according to recent studies, it trumps other major racial and ethnic groups in its generosity. A 2003 study reported in the Chronicle of Philanthropy that African Americans who give to charity donate 25% more of their discretionary income than whites. And a study of affluent people of color making donations in the New York region, released in October, found that African Americans gave more money annually than either Latino or Asian Americans, according to the Coalition for New Philanthropy.

In response to increasing wealth within the African American community, churches -- which receive more than two-thirds of all African American charitable dollars -- are creating more sophisticated giving programs, with some even establishing nonprofit arms. In the past, says Hunt, most churches haven't made strategic use of the various philanthropic resources available to them, which include a full spectrum of volunteering, skill-sharing and other in-kind gifts as well as dollars. "A few churches now are learning to play the whole keyboard," she says.

Emmett Carson, president and CEO of the Minneapolis Foundation, says churches are taking their philanthropy in a new direction, using new endowments to fund programs that are less advocacy-oriented than those in the past. "Civil-rights advocacy is still important, but it's not the driver" it used to be, he says, due to diminished racism and discrimination.


  Still, working within the black community remains at the forefront of most philanthropists' minds, from Oprah Winfrey (see BW, 11/29/04, "A Talk with Oprah Winfrey") to actor Bill Cosby, who recently agreed to donate the proceeds from 10 stand-up comedy performances to the planned National Slavery Museum in Fredericksburg, Va. That gift -- valued at about $1 million -- will help generate up to $20 million for the $200 million project, says capital-campaign manager Moira Kavanagh Crosby.

But it's not just celebrities who are making a big impact. The Twenty-First Century Foundation's Hunt points to African American business owners with advanced degrees as leaders in the field. "These are independently minded people who understand the significance of investing in the black community," she says.

Take Chicago investment guru John Rogers, who founded Ariel Capital Management in 1983 and built it into a $3.5 million firm. In 1996, he spearheaded something quite different: Ariel Community School, where 407 students in grades K-8 are schooled in reading, writing, and not merely arithmetic, but investment.

Every first-grade class at Rogers' school receives $20,000 in cash. The firm manages the money until the 6th grade, at which point the students take over. They pick stocks, create a board of investors, and get advice on the ins and outs of money management from Ariel analysts.


  "As I got a chance to see the world, I realized how our community still isn't participating in the broad economic system of our country," says Rogers. "We're not engaged enough." He and his wife pay about $250,000 out of pocket each year to help run the school -- about a third of its annual operating budget. The largest chunk comes from Rogers' firm.

Rogers says part of the problem is that many of today's more affluent African Americans represent the first generation of wealth in their families, and they aren't comfortable in the stock market. He hopes his school will play a small role in helping to change that situation and that it will inspire other financial institutions to partner with schools.

Rogers acknowledges that his own parents, who met at the University of Chicago Law School, were wary of stepping into the world of organized philanthropy. "When I talked to them about philanthropy, it was like, 'Wow, this is something that's new for them,'" he says.


  Warming people who are the first or second generation of wealth holders to the idea of making planned gifts can be a challenge, but the Minneapolis Foundation's Carson says education on estate planning is a crucial part of bringing the African American community up to speed.

"I tell them, 'If you spend a lifetime accumulating wealth, you should spend a couple of hours thinking about what will happen to it when you're gone,'" he says. "People new to wealth aren't new to being charitable, but they're new to the reality of having to protect their assets after death."

By Lauren Gard

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