Trends - Philanthropy

Hans Bool

Once there was a man who discovered - what now is called the 80-20-rule – a rule that shows the unequal distribution of many phenomena in life. This rule is used in business to show how you can increase your sales by “only” focussing on a small amount of your clients (the 20% who generate 80% of your company’s turnover).

This rule that was found by examining the distribution of land by Italian proprietors. Apparently, 80% of the land was owned by only 20% of the owners. The 80-20-rule is applicable in many other areas, like the one describing the unequal distribution of wealth and poverty. The Wealthy countries in the world are contributing to solve this problem by reserving about 1% of the GNP to developing countries. Yet even more interesting is a trend that seems to have been triggered by one leading (and private) initiative. There seems to be a philanthropy-trend where private initiatives are donating lump sums or even a percentage of their wealth to a foundation that is to redistribute the money to fight to poverty in the world.

Bill & Melinda Gates foundation was created in 2000 – “the power of philanthropy;” to help reduce inequities in the United States and around the world. More recently, Warren Buffet joined this initiative where he dedicates a percentage of his wealth to similar initiatives.

Now, six years later, philanthropy is big business as a British channel (4) starts a reality show where millionaires are to donate a sum of money (£50,000) to the poor. The would-be philanthropists are forced to live undercover for ten days “on the equivalent of state benefit or doing a menial job for the minimum wage in some of the most deprived areas of Britain.”

And ...

At the end of the period, during which they are expected to get out and about in the community under the guise of appearing in a TV show that swaps the rural poor for the city poor, they decide which individuals deserve their money. (http://media.guardian.co.uk/site/story/0,,1928028,00.html)
Both initiatives can’t be more polarized: The Gates foundation is a low-profile project with some information and publicity on the net. The reality show is a full fledged commercial project: jumping on the philanthropy trend bandwagon.

Important to know -- like in any (other) commercial campaign -- is the conversion rate. What initiative is most beneficial (on the long term). And how many of these initiatives will follow, because there is still enough to “equalize”.

© 2006 Hans Bool
Hans Bool is the founder of Astor White a traditional management consulting company that offers online management tools. Have a look at some of our free management tools
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