The word “Philanthropy” which is of Greek origin, literally means “love of mankind” and, in its modern sense, means private contributions for public purposes by individuals, corporations and foundations. Historically, the United States has led the way but other countries are rapidly developing vibrant philanthropic sectors; so much so that The Ireland Funds believe we are in the early stages of the greatest ever period of giving. The industry is rapidly globalizing and philanthropy is now front page news. International philanthropy is growing because donors today are more cosmopolitan in their professional lives, are thinking in global terms and are naturally interested in international issues. The actions of the likes of Warren Buffett, Bill Gates, Chuck Feeney, Sir Tom Hunter and others are trailblazing as they become the modern equivalents of Sir Andrew Carnegie and adopt his mantra of “give while you live”.

The world is moving into a new era of philanthropy that is marked by altered vocabulary, new ways of giving and new types of donors. It is all about dealing with change. The status quo is not an option. As the legendary management consultant Peter Drucker put it—“to create the future is to be the enemy of today”. This presents us all with a great opportunity because, in studies from around the world, the number one reason people act philanthropically is to bring about change, whether it be with an individual, an organization, or a society.

Worldwide, the nonprofit sector is one of the fastest growing segments of society and has become a major social and economic force. It engages 40 million people globally and spends $1.3 trillion annually—more than the GNP of all but six countries. The last quarter of a century has seen the decline of top-down, centrally controlled societies, be they Communist regimes, military dictatorships or apartheid systems. There has been an explosion of bottom-up community organizations and social entrepreneurs: creative individuals with the determination and the indomitable will to drive the innovation that society needs to tackle its worst problems. Twenty years ago this couldn’t have happened—there were too many constraints—but now this growth is being driven by the technology and communications revolution. Also, 20 years ago China, India and the Soviet Union were not part of this.

While philanthropy is making contributions to all kinds— research, money, ideas, and people at unprecedented levels—we are preparing for two decades in which the volume of philanthropy will increase five-fold and regulatory interest in philanthropy is also reaching an all time high. Those who look to philanthropy for leadership and support around the globe are also speaking out in increased numbers with greater intensity, representing tremendous opportunities. Never before have we seen a time so promising or so demanding for philanthropy.

Creating a vibrant philanthropic sector in Ireland is an exciting challenge that builds on Ireland’s tradition of generosity and volunteering. Many of the ingredients are now present, particularly the unprecedented level of wealth. The task in Ireland is to encourage givers to be more strategic, more focused and more intentional, rather than simply responding to ad hoc requests. In other words, to move from “check book charity” to engaged philanthropy. Giving away money is easy—giving away money to good effect is another thing entirely. Much money has been wasted over the years by donors who failed to watch over their donations and assess the impact of their contributions. In business, success is about rigour, creativity and realism—not wishful thinking—the same approach must be taken to philanthropy.

Set up in 1976, the mission of The Ireland Funds is to be the largest worldwide network of people of Irish ancestry and friends of Ireland dedicated to raising funds to support programs of peace and reconciliation, arts and culture, education and community development. In the last 14 years, the Funds have raised over a quarter of a billion dollars from the Irish Diaspora. In the last year, the Funds have held over 100 events in 39 cities in 11 countries, which were attended by more than 40,000 people. Over 1,500 non-profit organizations throughout Ireland have received grants from The Ireland Funds. Throughout the years the Funds have learnt that philanthropy is not about giving but about asking, and fundraising campaigns fail not through lack of giving but because of lack of asking. Also, philanthropic money is attracted by strength, excellence, success and innovation rather than weakness and desperation. Donors take a portfolio approach to giving and distribute their philanthropic “pie” to a variety of causes. There is also a realization that governments cannot do everything and can no longer afford to fund 100% of healthcare, education and the arts. However, governments are the major funders in these areas so it is key to work closely with them and develop public private philanthropic partnerships. Philanthropy, once a localized cottage industry, has now become a globalised engine for change. It is not about one country helping another—it is about individuals with resources helping those with needs.

The biggest single driver of the coming growth of philanthropic giving is the intergenerational transfer of wealth. In the U.S. it is estimated that $60 trillion will be transferred intergenerationally between now and 2050 and these funds can only go to three places—heirs, the government (i.e. taxes) and non-profits. However, as they say, there are no roof racks on a hearse and you will leave this world the same way you entered it—with nothing. There are three phases to wealth—creation, preservation and transfer, and Ireland is currently between the first two phases. One interesting aspect of discussions with high net worth individuals in Ireland is the number who say they do not want to leave all their wealth to their children. Warren Buffett had an interesting take on this when he said, “I want to give my children enough of an inheritance that they will feel they could do anything, but not so much of an inheritance that they will do nothing”. The challenge is to pass on values and a sense of purpose as much as wealth.

The last decade has seen a rethink by business of its role in the charitable sector. In the old days it was all about handing over the check. In the words of Milton Friedman “the business of business was business”. Now this has been replaced by the triple “p”— people, profit and planet. This is being driven by 3 things.

Firstly, the importance of reputation management. Secondly, the need to attract and retain talented staff who want to know what their companies are doing in this area. Finally, the emergence of conscience consumers—individuals who want to do business and buy products and services from companies and brands that reflect their own values. This is reflected in the growth of fair trade and organic products, for example.

Corporations need to decide what they stand for. This is reflected in a shift from corporate social responsibility to corporate citizenship—a set of values that determine how a company interacts with the community and society around it. Expectations on companies in this area have never been higher, while perceptions of company delivery have never been lower.

We are now seeing the emergence of a new breed of philanthropist: one who is having a dramatic impact in not just how much they are giving but in the way they are giving. They are suspicious and dismissive of the old ways of giving. They have different expectations and they find unengaged giving emotionally unsatisfactory. They are younger, often with young families, for whom they want to make the world a better place. They want organizations to accept their ideas and opinions as well as their money. Many of them are creators of wealth rather than inheritors of wealth. They want to apply to their philanthropy the techniques that made them wealthy in their business lives. They are more interested in solutions than symptoms, causes than organizations, systemic change than band-aids. They demand accountability and measurability and are impatient for results. They are willing to invest long term and understand the need to build capacity, and they are looking for scalable organizations that can handle large gifts and can grow rapidly.

Philanthropy in Ireland is now at the crossroads of opportunity and challenge and never before have we seen a time so promising or demanding. The Ireland Funds have been active in promoting philanthropy in Ireland for the last decade through conferences, publications and presentations. In the early days there was little interest, now it is difficult to keep up with the demand. As the economy slows, and wealth creation becomes more challenging, the philanthropic Euro will be harder to get.

Despite this, the next decade will see the emergence of an extensive philanthropic infrastructure in Ireland, a more benign and encouraging taxation environment, increased regulation, more media interest, investment in training and an appreciation that building capacity in non-profit organizations is critical to their effectiveness. In all these areas The Ireland Funds will play a key role, as we believe Ireland has the capacity and potential to become a world leader in this field working with organizations doing great work in Ireland and overseas. Opportunities come to pass not to pause—now is the time to take this opportunity.