Black Philanthropy in Times of Plenty

The Oakland Tribune ran an article from the Associated Press entitled, "New Wealth reinvigorating spirit of philanthropy."  The article focused on a man who sold his $10 million business and ran for congress, then started a philanthropic effort and found joy in giving.  It discussed how others have found not only joy in giving but also an addiction almost to the sensations associated with giving to others. 

This new movement in giving beyond one's family is the result of the booming economy that America is experiencing. And in the San Francisco/Silicon Valley Bay Area, there is more than plenty of wealth being minted daily. The Bay Area has become one of the richest areas not only in America but in the world. 

Throughout California's history there have been boom periods that have brought people to the West in search of their fortunes--from wide-open, untamed lands to instant riches in finding gold, to the fortunes of Hollywood,  to today's computer-technology  wealth. 

During the earlier years oil gold  was in the West. Now the technology industry has bred and produced millionaires and billionaires almost overnight. And those who have not made millions have made more than livable incomes so vast that they have disposal incomes that exceed their imaginations and their abilities to spend.  Initially, the newly rich spent their money on all the possessions they ever wanted or ever thought they wanted. Now the newly rich are finding a certain, yet real pleasure, in giving it to those in need.

On the other hand, however, some of the newly rich, with vast sums of wealth, are not so benevolent. They still focus on themselves through long vacations, opulent living, conspicuous consumption, other ways, and a failure to share their riches. But while they are not sharing, as such, they are starting philanthropic foundations in name only. And the purpose of their foundations is to keep the wealth, without taxation, within their control and reach and within their families.

Early in the history of philanthropic foundations, a few  rich barons recognized that these legal institutions could be set up as a viable way to protect their fortunes and keep them within their families without the strong bite of the IRS. That realization gave rise to some foundations' creation. These rich set up foundations that were family foundations and gave few serious grants to anyone beyond their favor causes and friends. Today, however, the IRS has curved such behavior and implemented a protocol that requires a certain percentage of giving outside of a particular circle, within a certain time constraint, and based on the assets of that endowment.

New to the community of philanthropy, Bill Gates has created the largest philanthropic foundation in the world--assets of $17.5 billion--and he has created it in the West, a place that has had little significant philanthropic muscle. With assets of $17.5 billion, the Gate Foundation has to make grants of approximately $800 million a year under the new IRS protocols. This is unheard of, but it is the result of the vast billions he possesses from the new technology wealth. The California Endowment was faced with a similar problem of protocol payouts when they first started  with a $2 billion endowment. 

In the case of Bill Gates, however, even after endowing his foundation with this large sum, many argue that it was still a miserly amount in relationship to his total wealth, growing daily in excess of $100 billion at this writing. But one is not under any legal obligation to give any particular percentage of his wealth away. That is quite self-determined.

Historically, the foundation empire has been in the East--New York primarily. And that empire has been significantly Jewish influenced because of the number of Jewish dollars that created and flowed into various foundations. This is noteworthy because of the small size of the Jewish community in this country. Many Jewish citizens understood the necessity of building foundations for philanthropic purposes and for other reasons as well. So they built many philanthropic institutions throughout the East and then throughout the Nation.

Philanthropic foundations are legal, tax exempt entities authorized by the US  Internal Revenue Code 501 and similar State laws  to provide philanthropic services, whether those services are the delivery of specific services, the making of grants, or a myriad of other nonprofit services they engage in toward the development of society or a segment of society. The services must be nonprofit and toward the betterment of society. 

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