It’s no secret that Marin County residents are a giving bunch.
Holiday season around here is a cavalcade of generosity, with coat drives and soup kitchens in every community. Hit any local coffee shop and you’ll see dozens of fliers on the bulletin board for fundraisers.
Heck, even national organizations have taken notice: A SmartAsset study from July 2024 found that Marin County has the highest charitable county index in California, with a score of 87.99 out of 100. This score was based on the percentage of people who donated to charity and the amount donated as a percentage of income.
In short, Marin has a philanthropic mindset that puts it at the forefront of giving, according to Janelle Cavanagh, chief philanthropy officer at the Marin Community Foundation.
“At the Community Foundation alone, we have seen a 49% increase in donations this past year,” said Cavanagh, whose foundation oversees $3.3 billion in assets. “That tells me that local people are committed to giving back to their community in a big way.”
Since Marin County is such a leader in the philanthropic world, we recently asked Cavanagh and two other local experts to offer their take on the state of the industry. Their responses offered a primer on giving, and perspective on the four biggest trends in philanthropy right now: donor-advised funds, trust-based philanthropy, generational transition and artificial intelligence (AI).
DAFs
Donor-advised funds, or DAFs, are the fastest-growing charitable giving vehicle in the United States because they are one of the easiest and most tax-advantageous ways to give to charity.
A DAF is a charitable investment account that allows individuals to contribute money, stocks or other assets to support charities. The donor receives a tax deduction for their contribution, and the funds are invested tax-free. The donor can then recommend how the funds are distributed to charities of their choice — that’s why the fund is “donor-advised.”
“Private foundations require legal work, staffing and more, while DAFs are pretty simple and straightforward,” she said. “You open it up, you get your tax advantage right away and then you can work with an advisor to figure the rest out over time.”
According to the National Philanthropic Trust, DAF assets reached $229 billion in 2022.
Cavanagh said these accounts are particularly popular among young families who have money to give but don’t necessarily want to deal with starting a private foundation.
Misti Sangani, Managing Director and Senior Philanthropic Strategist for Philanthropic Solutions at Bank of America Private Bank, said DAFs are great for bringing younger generations into philanthropy by setting them up for success. At the same time, she warned that one downside is that DAFs don’t have the same annual requirement of 5% disbursement like private foundations do.
“DAFs can be held for years without funding going to charities,” Sangani said, adding that many foundations have guidelines about how frequently DAFs must issue grants.
All about trust
While DAFs are all about the donor, trust-based philanthropy is pretty much the opposite — it posits trust in the organization itself.
Under this approach, nonprofit leaders are given greater discretion over how they use donated funds and are empowered to pivot on a plan when circumstances change. With trust to use money as they see fit, leaders and their teams also can spend less time on grant administration and more time on getting stuff done.
The results of this independence can be liberating and positive, said Pegine (pronounced peh-geen) Grayson, senior vice president and director of philanthropic services at the Whittier Trust, a wealth management and investment firm.
“We can only be effective as philanthropists if we have a working and trusting partnership with our grantees,” said Grayson, who is based in Pasadena and serves the whole Bay Area. “It’s a waste of everyone’s time to have nonprofits reapply for grants every year. If we already know them and love them, let’s fund them for three years and check in with them at the end of each year.”
Trust-based philanthropy is not entirely new; it’s one outcome of years of debate within the world of philanthropy between donors, nonprofits, activists and academics.
A recent National Philanthropic Trust article described this approach as “a partnership model between funders, nonprofit organizations, practitioners and communities that acknowledges the unique needs and capacities of all stakeholders.”
Other tenets of this approach include:
- Unrestricted grantmaking
- Donor transparency
- Donor proactivity
Generational transition
The world of philanthropy is at a bit of a crossroads right now — older generations such as Baby Boomers are aging out and passing the philanthropic batons to several different younger generations.
Insiders refer to this as the greatest wealth transfer in history; all told, $84 trillion in assets is set to change hands over the next 20 years, according to estimates by the consulting firm Cerulli Associates. The recipients, primarily members of Generation X, Millennials and Generation Z, are expected to inherit $72 trillion of that amount, with the remaining $12 trillion going to charity.
Understandably, this generational transition has major ramifications for giving and giving practices, both within Marin County and across the nation.
Grayson, from Whittier Trust, said she definitely sees a “changing of the guard,” and noted that Millennials and Gen Zers who are taking over philanthropic initiatives from their respective families are interested in collaborative funding and grantmaking, as well as impact investing.
“There’s much more interest in that generation trying to get investments aligned with a mission,” she said.
One issue that is of particular interest among Whittier Trust clients: climate change.
Cavanagh, from the Marin Community Foundation, reported similar trends. She noted that this past year donors were particularly interested in supporting nonprofits that focus on safeguarding our democracy, women’s rights, racial justice and affordable housing — issues that have not risen to the top previously.
AI and the future
Finally, artificial intelligence appears to be transforming the future of philanthropy, just like it is transforming the future of dozens of other industries around the world.
Grayson noted that at a recent conference about philanthropy, she heard the statistics that nonprofits currently report AI is helping them achieve their goals in one-third of the time, at half the cost.
“That’s a staggering statistic if it’s true,” she quipped.
So far, the biggest impact of this technology has been in research, where nonprofits and donors are turning to AI to conduct research and gather information about potential nonprofits to support. In the past, funding organizations would manage this process manually. Today, organizations can leverage AI to do the same job in a fraction of the time.
Some nonprofits also are turning to AI to help them fill out grant applications. AI can pull data from a spreadsheet or a Microsoft Word document to populate fields on grant proposals — saving time across the board.
“Many [nonprofits] spend hours and days on applications,” said Sangani, who is based in Bank of America’s Palo Alto office and covers the entire Bay Area. “If AI can make that process streamlined and pull in information from different places for grant application for you, that can save a lot of time for nonprofits and free them up to do their work on the ground.”
Still, AI is a hot-button issue because of concerns around efficacy and ethics, in addition to how uncomfortable it makes some people.
Sangani noted there is concern at Bank of America about the authenticity of data and other information that runs through AI.
At Whittier, Grayson said there is similar fear. Specifically, she noted that colleagues think the philanthropy sector should come together to play some sort of role in ensuring there are appropriate guardrails.
“So many nonprofits are harnessing AI to significantly augment the reach and extent of how we serve disadvantaged communities and how we solve big problems,” she said. “As is the case in every sector, if we’re going to use AI, we just need to make sure we’re using it for good.”
Understanding Marin’s generosity
A recent report tabbed Marin County as the most generous in the entire state.
The analysis was conducted by SmartAsset, a financial advice website. The study calculated how much people donate as a percentage of their net income, and compared that against the proportion of people in each county who make charitable donations.
SmartAsset data crunchers then used these calculations to come up with something they called a “charitable county index.” Marin’s contributions as a percentage of income came to 2.8%, and its percentage of returns itemizing charitable contributions was 23.5%.
Taken together and run through the proprietary calculations, this put the Marin’s charitable county index at 87.99, the highest in the state.
Other Bay Area counties in the top 10 were San Mateo County with an index of 74.08, Santa Clara County at 65.57, Contra Costa County at 63.25, San Francisco County at 57.24 and Alameda County at 53.85.
The study was based on Internal Revenue Service data from 2021 that was released in March 2024.
Matt Villano is a freelance writer and editor in Sonoma County. He gives annually to a local preschool, a local community foundation and the ACLU.
