Each week, the Institute for Leadership and Entrepreneurship’s IMPACT Speaker Series brings in a speaker—typically one with close ties to the business world—to speak on business, entrepreneurship and leadership and give advice to students.
On Sept. 15, the series brought Penelope McPhee, president of the Arthur M. Blank Family Foundation, one of the largest not-for-profit family foundations in Atlanta, to speak on the topic of non-profit foundations and private philanthropy.
McPhee spoke on the topic of career philanthropy, a field that she says most students do not give much thought to. She pointed out that while many take part in philanthropy in small, discrete ways—like donations to friends collecting for a cause and helping out at volunteer events—few people go into or graduate from college thinking about philanthropy as a career.
McPhee said that her experiences were much the same. She graduated with a master’s degree in journalism from Columbia University because she believed that, as a journalist, she would be able to change the world. She didn’t come to the career of philanthropy until later in life.
She began her talk with a bit of a history lesson, by describing how in many ways, philanthropy as citizens think of it today (trusts, endowments and foundations, for example) can be traced back to Benjamin Franklin. Though he was not the first to conceptualize philanthropy, in his will, Franklin made a series of 1000 pound donations to Boston and Philadelphia, with the constraint that the cities were only allowed to spend the interest on the investment until 200 years after the initial donation.
When this deadline arrived for the city of Philadelphia in 1990, the value of the endowment was over $2 million, which the city decided to use for scholarships.
McPhee, however, said that this represents only a fraction of the value of these endowments. While the sums at the end of the waiting period were undeniably substantial, she says what is more important is that for two centuries, the interest on the endowment was used to better the community owning it.
She said that this history has evolved into the U.S. being one of the most donor friendly nations in the modern world. Organizations that meet certain criteria can apply to become non-profit organizations, meaning that neither they nor the donations made to them are taxed.
“People argue whether it’s a meaningful incentive whether these gifts are tax deductible or whether people are just naturally charitable. What we know, in answer to that, is that the US is the strongest charitable sector in the world, and has the best benefits [for donors],” McPhee said.
Current statistics indicate that the U.S. is home to 1.4 million non-profit organizations, of which about 72,000 are foundations similar to the Blank Foundation.
One of the things McPhee enjoys most about her job is that it consists mostly of her thinking about the best answer for the question, “How can I help people best?”
“You really are thinking all the time about how you can best make a difference in the world,” McPhee said.
Another way of looking at her job is figuring out how to use money so that more value comes out than what was put in.
McPhee said the problem can be described as, “How do we make it so that one plus one is more than two?”
The goal of the Blank Foundation is “to promote positive change in people’s lives and to build and enhance the communities in which they live. Our Foundation has an especially strong interest in supporting innovative endeavors leading to better circumstances for low-income youth and their families,” according to a statement on the website.
The Foundation has made more than $250 million in grants since its founding.
McPhee joined the foundation in 2004, but has been involved in philanthropy for much longer. Before she joined the Blank Foundation, she was a leader in the James L. Knight Foundation in Miami, where she founded an arts and culture program and went on to become vice president and chief program officer.
Students interested in the IMPACT Speaker Series can learn more at www.ile.gatech.edu. The program was founded in 2002, and has featured distinguished speakers like Nobel Laureate Muhammad Yunus, Vice President Al Gore and Thomas Friedman, author of the book The World is Flat.