Boom Time for Entrepreneurs Generates Golden Age of Philanthropy
After Tony Paquin sold his $10-million computer-consulting company, he faced the enviable problem of what to do with his newfound wealth: Buy a yacht? Travel abroad?
He decided to run for Congress.
“Most people can’t run for Congress because they have to work,” the 41-year-old entrepreneur says. “I had the opportunity and some freedom, and I was willing to take the risk.”
Paquin spent more than $100,000 and quit work for 16 months to challenge Rep. Helen Chenoweth in last year’s Republican primary for Idaho’s 1st Congressional District.
His longshot campaign fizzled, but he has no regrets. His foray into public service landed him in good company among America’s newly wealthy. While the booming economy has made getting and spending more popular than ever, it also has bred a vigorous strain of hands-on, results-oriented philanthropy and public service that reflects its entrepreneurial sources.
Americans contributed $174.5 billion last year to charity, an 11% increase over 1997, according to Giving USA, an annual report on philanthropy.
High-stakes giving no longer is dominated by the society matron writing checks to a well-heeled foundation. The new philanthropist is as likely to be a 30-something Internet millionaire setting up his or her own foundation, retiring early to help build schools in Chile or running for political office.
Leading the way is Microsoft founder Bill Gates and his wife, Melinda, who last month increased the assets of their Seattle foundation to $17.1 billion, making it the nation’s largest foundation.
Their largess has inspired other high-tech high rollers in Seattle and Silicon Valley, where having one’s own charitable foundation is as big a status symbol as a Lexus in the driveway.
Personal involvement is a key part of the new giving.
“People need to do more than just write a check,” says Erin Hemmings, program associate for Social Venture Partners.
The Seattle foundation, created in 1997 by software magnate Paul Brainerd, is a model of “venture philanthropy,” a new, businesslike approach to giving. Each of the group’s 193 partners pledges at least $5,000 a year and is expected to volunteer with one of the organizations receiving money. The group has distributed $670,000 this year to Seattle-area projects for children and education.
“The idea is that you don’t only give them money; you give them your Rolodex and resources, and you help them build,” Hemmings says.
Also contributing to philanthropy’s growth are baby boomers inheriting savings from thrifty parents of the World War II generation. Wall Street’s steady growth has turned modest inheritances into golden eggs.
Twelve years ago, Allen Hancock of Eugene, Ore., inherited $400,000 and invested it in stocks and bonds. Now he has more than $1 million.
Hancock, 33, uses the money to bankroll a life of charity. He lives in a house co-owned by several people. He owns a car but usually rides his bicycle. His annual living expenses come to about $15,000, and he gives away $10,000 a year.
He volunteered full-time for four years with a conservation group. Now he works 35 hours a week helping to publish “More Than Money,” a quarterly journal offering guidance to rich people who have found that buying things doesn’t guarantee happiness.
“I would rather have money than not have money, no doubt about that,” Hancock says. “But you have to get over the stereotype that it’s a bed of roses. There’s a lot of responsibility to having money. There are issues about relationships with friends, with work, between donors and grantees.”
A growing number of “wealth counselors” stand ready to help the overwrought rich sort it all out. For $650, the would-be philanthropist can attend a weekend Grace of Money workshop run by Jessie H. O’Neill, 49, of Milwaukee.
She inherited more than $5 million and now is dedicated to helping others find fulfillment through giving.
“We’re a fairly addictive society,” O’Neill says. “If we can find something that makes us feel good, whether it’s drugs or alcohol or food or sex, we’re going to do it again. Philanthropy is a positive way to get that joy response. Once people experience it, they want to keep doing it.”
In Idaho, Tony Paquin appreciates the addictive side of giving-- and how one can do well by doing good. His failed political bid inspired him and his brother, Gary, to start Netivation.com, an Internet-based company serving political campaigns.
The company went public in July, making Paquin worth $10 million on paper in addition to his $200,000-plus annual salary. Paquin, recently separated from his wife, now lives with Kelly McCarthy, Netivation’s officer for mergers and acquisitions.
They live in a 4,000-square-foot home with a Toyota Land Cruiser parked out front. But they could afford even more opulent digs if they weren’t giving away nearly 25% of their net incomes.
Paquin talks of starting a foundation for children. McCarthy, 29, who has taken in five foster children over six years, practices “high-touch” giving. One day this summer, she passed a homeless family in Post Falls. On impulse, she bought them a meal at Taco Bell and gave them a little cash.
“Well, maybe more than a little,” she allows. “Actually, $300. That was the limit at the ATM.”
If making money is satisfying, Paquin said, giving it away is intoxicating.
“If you have that generous spirit, you feel better,” he says. “It gives you energy. The stinginess, where you’re trying to hold on to what you have, is what will ultimately fail you.”
