Leadership, Transformational and Historic Giving – Know the Distinctions

The terms “leadership giving” and “transformational giving” have been around for a long time, and like most terminology in our industry, they mean different things to different people and organizations. The term “historic giving” is one that is used in reference to setting a record over previous years. But I use it in relation to the kind of philanthropic boldness, risk and vision that will, in fact, have historic consequences.

For instance, I credit Ted Turner’s $1 billion gift in 1997, which launched the United Nations Foundation, as historic philanthropy. Not only was a $1 billion gift unprecedented at the time, but it served to usher in the new age of big philanthropy. He set the bar and invited (some say shamed) others to follow his lead…and they did.

Another example of historic philanthropy is when Eli and Edythe Broad gave a $100 million founding gift to create The Broad Institute of MIT and Harvard. The following year, they gave another $100 million, and in 2009, they gave another $400 million to create an endowment to make the institute permanent. The Broad Institute is now the leading genomic medicine institute, a technology which is at the center of the future of biomedical research, cancer treatment, diagnostics and so much more.

A final example of historic philanthropy is from Lee Iacocca. Most people are not familiar with Mr. Iacocca’s philanthropy and his foundation. They have supported a researcher at Massachusetts General Hospital, Denise Faustman, whom I believe will cure type 1 diabetes and several other autoimmune diseases. What is different about this example is that Iacocca has supported this research and current clinical trial against the ire of the diabetes research community and big pharma. The research community realizes their work is increasingly off target because of Faustman’s counter-dogma and successful line of research, and because there is no money to be made. The drug that will prevail is off patent and inexpensive. I have worked with Mr. Iacocca and had the pleasure to complement him on his “historic philanthropy”. He was at first taken aback…and then he smiled and thanked me.

Transformational giving is a two-way street. It may be transformative to the donor, no matter the size of gift, and/or it transforms the institution, allowing it to accomplish things it otherwise could not do.

Such gifts might range from the $20 mm contributed to Mercy Ships from the Gross Family Foundation to build a new hospital ship to serve needy people in West Africa; or the $100 mm given to Memorial Sloan-Kettering Cancer Center by Mortimer B. Zuckerman from his charitable trust toward Memorial Sloan-Kettering’s new cancer research facility; or the $2.5 mm from the Yawkee Foundation to enable Special Olympics of Massachusetts build their new headquarters building.

Finally, a leadership gift can an annual gift or a pace-setting campaign lead gift. We have worked with organizations where an annual “leadership” gift can be $500 or start at $25,000.

Words have power… power to frame a donor’s thinking, illuminate their philanthropic aspirations and set an organization on course for thinking bigger and having the confidence to be bold.

Your takes:

1. Try and establish in your organization the definitions for leadership, transformational and historic giving, so everyone can talk about them with consistency.

2. Use these words in conversations with donors when they will have personal and economic meaning.

HAPPY NEW YEAR!