For the last few decades, Americans' charitable giving has hovered around 2% of pretax income. Anne and Christopher Ellinger of Arlington, Mass., have upped the ante with an invitation to what could be considered "extreme philanthropy" — pushing that percentage up to 50. In 2003, they established a foundation called Bolder Giving to inspire people to realize their full giving potential. Today, more than 88 people have joined the organization's 50% League and given away half of their financial assets, or half of their income or business profits for at least three years. Many of them have shared their stories online at www.boldergiving.org.

Before you dismiss the idea out of hand, try this handy tool on the website: The Ellingers invite you to type in your annual income and hit "show me the money." If you type in $100,000, a modest sum for the average financial planning client, you discover that you are the 39,615,049th richest person in the world (or in the top 0.66% by income). Giving away 50% of your earnings would still put you in the top 0.98% by income—hardly a poverty case by global standards. Global concerns tend to be a common motivation among the members of the 50% League, particularly global poverty and climate change.

John Hunting received stock in Steelcase, his father's firm (then called Metal Office Co.), a manufacturer of office furniture, when he was six years old. The company went public in 1998 and Hunting gave away his $130 million windfall to environmental causes, much of it to his own environmental foundation, the Beldon Fund. This fund, which will sunset in 2009, makes grants to organizations that focus on securing public and policymaker commitments to environmental protection at the local, state and federal level. Says Hunting, "I believe it is immoral to hoard money when global warming is on the verge of destroying the ecosystems we depend on. The time to give is now."

Others have been moved by Third World poverty. Tom White, another League member, made his fortune in a family construction business, J. F. White, and has since given away all of his company stock (about $200 million in today's dollars). He gave a good chunk to Paul Farmer's Partners In Health (PIH), an international charity that provides direct healthcare services to the sick in poverty-stricken countries like Haiti and Peru, and undertakes research and advocacy activities on their behalf. White had met Farmer back in 1983 when Farmer, now a professor of medical anthropology at Harvard, was still in medical school.

When asked why he gave it all away, White says, "I have two gifts from God: the gift of compassion, and the gift of making money. I just put them together so they are hand in hand. Some people think that God makes people rich because they are nice guys and that poor people must have done something wrong. That's a bunch of bull."

While the 50% League includes celebrity donors like Robert F. Kennedy Jr. and Doris Buffett Bryant, many of the members are neither famous nor wealthy. One member, Richard Semmler, a math professor at a community college, gives away 50% of his salary and hopes to reach a cumulative philanthropic goal of $1 million before he dies.

The Planner's Role

Surprisingly, Ellinger, who describes himself as "temperamentally cautious," is a big fan of financial planners and an opponent of impulsive giving. When he inherited $550,000 more than 27 years ago, he sought the advice of financial planners to help him provide for his own needs and then donated more than half of his inheritance to charity. The decision was completely his, but he adds, "there is a fiduciary issue when philanthropic advisors work with people to give away large sums. That is why each philanthropic plan needs a financial plan and estate plan to go along with it. That said, however, most financial planners are overly conservative in broaching the subject of philanthropy with their high-net-worth clients."

This convergence of financial planning and philanthropy continues today. As Elliinger says, "We encourage prospective donors to work with financial professionals who are not only high in technical competence and personal integrity, but who also understand and support the idea of fulfilling one's giving potential." He adds that one place to find professional advisors dedicated to philanthropic planning is the International Association of Advisors in Philanthropy (www.advisorsinphilanthropy.org).

In order to build a critical mass of people who publicly model a culture of giving, the Ellingers and their staff offer individually designed programs for prospective Leaguers, which last three to 12 months. The programs include one-on-one coaching with Bolder Giving staff, sessions with sympathetic financial professionals and meetings with peer mentors who have taken the leap. These coaches, financial advisors and mentors help the client create a custom lifetime financial plan, a legacy or estate plan and a long-term giving plan.

Other members of the 50% League echo Ellinger's combination of financial planning with philanthropy. They may be extreme, but they're not self-destructive. Take, for instance, Tracy Gary of Northern California. In 1972, then 21-year-old Gary started inheriting $1 million from a trust. One of her family's trust officers at U. S. Trust helped her develop her own team of values-based financial advisors. With a philanthropic and financial plan firmly in place, by age 35 she had already donated over $1 million to numerous causes, including libraries, community centers and the first battered women's shelter in California.

Like Ellinger, Gary was both careful and bold. "I wanted to be secure so I could afford to be a philanthropist," she says. "I had grown up in a very wealthy family. My mother, a stockbroker back in World War II, was related to the Pillsburys and my paternal great-grandfather invented the dial telephone."

Today, at age 56, she has the security of a home worth $3 million (she paid $100,000 in the early 1970s), but has no financial assets other than a small emergency money market fund. She continues to give away 40% of the $75,000 to $100,000 she earns from running Inspired Legacies, a Houston nonprofit dedicated to bringing donors, financial advisors and nonprofits to the same table. Apparently, they all need help learning to trust one another. "Affluent donors complain that they feel objectified by their advisors and don't feel in charge of their own money," Gary says. "Advisors complain that their clients drag their feet and don't follow through on documentation and paperwork. And nonprofits feel misunderstood by their donors and are wary of financial advisors."

For Gary, bringing these three stakeholders together creates a synergy that benefits all parties. In fact, research from the 6,000 clients she has consulted with has convinced her, "When philanthropic advisors work with clients to define values, they tend to complete the documentation financial planners are asking for in half the time they ordinarily do," she says. "Philanthropy makes clients more engaged and less passive in their own financial planning process."

Generosity Pays

Phil Cubeta, chief of staff of the Nautilus Group, a service of New York Life Insurance in Dallas, who has worked with Gary and the Ellingers, concurs that philanthropy can be both personally fulfilling and good for business. "Advisors who are passionate about philanthropy, and who are engaged in civic work, do indeed become known for it. Referrals follow as a matter of course," he observes. "But the advisor has to be doing it from the heart. With those advisors who really don't care, it shows."

Cubeta's group has worked with many clients who have given away 50% or more of their estate in order to zero out their estate tax, or because they are worried about the potential negative effect on their children of inheriting too much money. For married couples these issues begin to show with a $5 million estate and almost always come up with $25 million or more. As Cubeta points out, "Generally, philanthropy is a way for advisors to prospect upward."

For planners interested in philanthropic planning, Cubeta recommends they investigate the Chartered Advisor in Philanthropy (CAP) credential that is offered by the American College. The program provides a broad-based understanding of philanthropic tools and techniques, with an emphasis on tax.

Robert Thompson, of Sage Financial Design in Simsbury, Conn., echoes that recommendation. He sees a pent-up demand for philanthropic consulting. "In groups like NAPFA, I'm seeing more and more interest in charitable giving. I can tell you that philanthropy is good for my business. Thirty percent to 40% of my firm's total financial planning business is devoted to charitable planning. We tell our clients up front that we believe in philanthropy."

Principal and Principles

League member Carol Newell, of British Columbia, inherited over $25 million in her thirties whereupon she donated $17 million to her Endswell Foundation, which she founded to promote a sustainable environment, and put the remainder into Venture Partners, a venture capital firm providing seed money to companies in British Columbia that promote a sustainable environment. To date, Renewal Partners has invested (with loans and equity positions) in over 70 companies in organic foods, green consumer products, new media and the social screening investment industry.

Says Newell, "So many of us are hemmed in by traditional rules about money: You should always maximize profits; you should never touch the principal; you should never talk openly about money, or do business with friends, nor mix business with charitable concerns. As soon as I started breaking those rules, I started having a much bigger impact. If we're willing to ditch the limited precepts we learned, those of us with significant capital can have the greatest legacy imaginable: to dramatically accelerate innovations in sustainability and social justice."

She is currently mixing it up by employing a triadic model to address the climate crisis in her home province: first, focusing on one region for maximum impact; second, using philanthropic dollars to address the climate crisis; and third, using business capital to address the crisis.

According to Newell, "Financial capital is growing exponentially within a finite natural environment that is headed toward collapse. Financial planners have the opportunity to show people how to invest capital in companies that promote healthy environmental systems. We are all raised not to kill the golden goose, which is defined as our principal. But the way our principal is being used is killing the planet. Ultimately, the golden goose is not financial capital, it's the planet itself. We've misidentified the golden goose."

Gary adds, "A personal sense of abundance as a person comes from giving. My upbringing taught me that wealth can be a very isolating and narcissistic experience. Narcissism is the absence of empathy and philanthropy is best teacher of empathy. Philanthropy propels us into relationships with others, into community. I'm convinced that financial planners meet many more clients and will be happier and healthier if they're engaged in philanthropy. Every financial planner should be on two to three nonprofit boards."

Diane Dana, Bolder Giving's program manager, concludes, "The point of the 50% League is to inspire people. While [the Ellingers] have no illusion that everyone can or even should give away 50% of their financial assets, they have discovered how effective the idea is in shaking up and shocking people into giving more generously."

Sidebars:

PHILANTHROPY TOP 5

Compiled by the National Philanthropic Trust

Largest Gifts to Charity, 2006

• Warren Buffett (Pledge of $43.5 billion to Bill and Melinda Gates Foundation and others)
• Herman & Marion Sandler ($1.3 billion to the Sandler Family Supporting Foundation)
• Bernard & Barbro Osher ($723.2 million to the Bernard Osher Foundation)
• Jim Joseph ($500 million bequest to Jim Joseph Foundation)
• Hector Guy & Doris Di Stefano ($264 million to American Humane Association and others)

Source: The Chronicle of Philanthropy, Feb. 22, 2007

Most Popular Causes Americans Give to

• Religious/Faith-based ($88.3 billion)
• Education ($33.8 billion)
• Health ($22 billion)
• Human Services ($19.2 billion)
• Arts, Culture and Humanities ($14 billion)

Source: Giving USA 2006

Largest Corporate Grantmakers

• Wal-Mart Foundation ($154.5 million)
• Aventis Pharmaceutical Health Care Foundation ($114.7 million)
• Bank of America Foundation ($80.7 million)
• Ford Motor Company Fund ($77.9 million)
• The Wells Fargo Foundation ($65 million)

Source: Foundation Center, as of Nov. 30, 2006. Based on total amount given

Largest Nonprofit Organizations

• United Way of America ($4 billion)
• Salvation Army ($3.6 billion)
• AmeriCares Foundation ($1.3 billion)
• American Red Cross ($1.3 billion)
• American Cancer Society ($929.6 million)

Source: The Chronicle of Philanthropy, Oct. 23, 2006. Based on total income

PHILANTHROPY TOP 5

Compiled by the National Philanthropic Trust

Most Generous States

(by total amount given)

• * California ($18.4 billion)
• * New York ($12.4 billion)
• * Texas ($8.3 billion)
• * Florida ($7.4 billion)
• * Illinois ($6.2 billion)

Source: The Nonprofit Almanac, published by Independent Sector and the National Center for Charitable Statistics

Most Generous States

(indexed by socioeconomic factors)

• New York (Score: 1.96)
• District of Columbia (Score: 1.84)
• Utah (Score: 1.56)
• California (Score: 1.40)
• Connecticut (Score: 1.33)

Source: Center on Wealth and Philanthropy. Sponsored by the Boston Foundation, which factors states' cost of living and tax burden to determine each state's capacity for giving, and creates an index of the population's overall generosity.

Most Trusted Charities

• American Red Cross
• AARP
• The Nature Conservancy
• U.S. Chamber of Commerce
• Brookings Institution

Source: Harris Interactive, 2006

Top 5 Reasons Why People Give

• Because they are asked, or presented a giving opportunity
• Compassion for those in need
• Personally believe in the cause
• Affected by the cause
• To give back to their community

The above is based on an analysis of research in the field of philanthropy that includes Indiana University's Center on Philanthropy, Independent Sector, University of Pittsburgh, among others.