Charitable Giving: Generous Gen-Xers

THE STORY IN PHILANTHROPY THIS HOLIDAY SEASON is becoming all too familiar. Individuals, foundations and corporations are all scaling back their giving, often leaving nonprofit beneficiaries in the lurch. Just last week, the Bill & Melinda Gates Foundation, the world's largest philanthropic concern, said it would slow its donations next year because of the hobbled economy and turbulent financial markets.

Behind the headlines, however, a surprisingly encouraging trend is taking hold: A new generation of donors is moving into place -- an energetic and highly creative crowd that eventually could reshape philanthropy.

These younger givers -- entrepreneurs, executives and latter-day members of old-money clans -- are intent on leaving a mark now, not in their 50s and 60s. Some are even dropping the p-word itself. "We don't call what we are doing philanthropy; we call it having an impact," says Peter Kellner, 39, managing partner of Uhuru Capital Management.

The new firm is about to launch a fund-of-hedge-funds that will turn over 25% of its partnership-incentive fees, or potentially as much as 5% of profits, to entrepreneurial ventures in developing markets, where it also will invest. "This is a model that combines the desire to achieve and the desire to do good," says Kellner. "Why should we artificially separate these two drives in our everyday lives?"

That attitude is typical of the new generation of givers. "They want to make it a part of the way they live as early as possible, not just something that they do with any leftover money at the end of their lives," says Peter Karoff, founder of The Philanthropy Initiative, a Boston-based philanthropic-advisory firm.

Already, these givers look to be more generous than their forebears. A survey conducted by Northern Trust, the private-banking concern, revealed that Generation-X millionaires (aged 28 to 42) gave an average of $20,000 to worthy causes in 2006, double the size of giving by their parents and grandparents. Take that, boomers.

"They aren't jaded, and they don't accept the status quo readily," says Melissa Berman, chief executive officer of Rockefeller Philanthropy Advisors, which counsels big givers. "They have new perspectives and new ideas."

Consider Kipton Cronkite. Shortly after the Sept. 11, 2001, attacks, the then 26-year-old junior banker went to see the works of 17th-century Italian painter Artemisia Gentileschi. He was struck by her powerful images of women struggling to assert themselves. "It was clear that something terrible had happened to her...and that she had turned to art to heal and exorcise that." (Gentileschi was raped by a tutor, then tortured to try to make her recant. She didn't.)

Cronkite reckoned that the pain and trauma of a post-9/11 world might lead to art as enduring as Gentileschi's. So, he took some of his money -- part of it inherited and part of it earned -- and set up an organization to help young artists get started. "They needed help building their credibility, learning how to create an exhibition or price their works effectively," Cronkite says.

He pulled together a blue-chip panel of art-world experts and had them screen artists who had submitted portfolios of their work online. The artists seen as most promising would get help from those experts to get to the stage where their work could be exhibited in a gallery.

Cronkite's Website, KiptonArt, now has 650 registered artists, and has hosted more than 30 events to bring together young artists and collectors. "Some are [now] getting representation at great galleries," Cronkite says.

Cronkite hasn't let up on his full-time job: He works on the front lines of the financial crisis as an investor-relations pro for a big bank. But KiptonArt is far more than a charitable gesture -- it is technically structured as a for-profit business. "It's about giving, about investing with a whole different set of rewards in mind."

IN CONTRAST TO GRANDPARENTS who might have defined "giving back to the community" as contributing to local churches, hospitals and schools, many younger philanthropists think the most compelling projects are overseas. "It's global; it's what is going on in Africa as well as next door, because that is their life," says Berman of Rockefeller Philanthropy Advisors.

Bryant Keil, founder of Potbelly Sandwich Works, a restaurant chain with 230 locations, is aiming in his philanthropy to succeed where diplomats have failed. He is creating something called the International Exchange of Peace, which will seek to build bridges between Arab nations in the Middle East and ordinary Americans.

At 44, Keil is a child of the Cold War who grew up believing "all Russians are evil." He adds: "I don't see how encouraging or allowing our children to grow up with [that kind of attitude about anyone] is helpful today."