Lowe, the chairman of the Lyman Lumber Company, is used
to making money in business. His current goal, however,
is to get other Minnesota
millionaires to give a minimum of one percent of their
net worth every year to the nonprofits of their choice.
So far, over a hundred individuals and couples have answered
his call to join the One Percent Club, Minnesota's
newest innovation in philanthropy.
hit upon the idea of promoting a "higher standard of giving"
while reading Claude Rosenberg's book
Wealthy and Wise.
In the book, Rosenberg, the founder of RCM Capital Management,
reviewed the giving statistics for the nation's top income
group, ran some numerical tests, and came to the startling
conclusion that the top 20 percent of wealth-holders in
this country could easily afford to give over $100 billion
dollars more a year without sacrificing their financial
security or their current standard of living. Indeed,
he argued that their fortunes would continue to grow even
at this higher level of giving.
claim--that wealthy people could afford to dramatically
increase their giving--intrigued Lowe. Picking up paper
and a pencil, he started to take a close look at his own
financial situation by applying Rosenberg's
logic and formulas to his income, assets, and current
giving. He discovered that he did have a large, untapped
giving potential. The trick was to look at the rising
value of his "investment assets" from year to year, and
not just look at his annual income, as encouraged by conventional
by the results of this personal financial analysis, Lowe
then imitated Rosenberg's research on 1991 federal tax
returns and analyzed the 1995 tax returns of Minnesota's
wealthiest individuals. He discovered that Minnesota's
28,000 richest citizens donate an average of 0.6 percent
of their net worth each year, rather than the two to three
percent encouraged by Rosenberg. Lowe then figured out
that if these people gave even one percent of their assets
annually they could increase giving in Minnesota by $280
million dollars a year--or "five times the annual budget
of the Minneapolis United Way."
fleshed out the idea of the One Percent Club with his
friend Joe Selvaggio, a retired community organizer from
Minneapolis who now serves as the group's volunteer staff
member. Explaining his own motivation to help organize
high net worth individuals seeking to promote more generous
giving among their peers, Selvaggio notes, "If the wealthy
of Minnesota succeed, we might be able to serve as a model
for the entire nation. We wouldn't be flashy like Ted
Turner, but we could really have an impact."
to the Club's literature, giving away one percent of net
worth annually means that you would only need 11 years,
instead of 10, to nearly double your assets--assuming
a modest seven-percent, after-tax return rate for income-producing
assets. Selvaggio is thus quick to point out that giving
one percent of net worth is the group's minimum standard.
While valuing the commitment of all the Club's members,
Selvaggio points with special pride to members who are
giving two to five percent of their net worth a year,
and to some, like Kenneth and Judy Dayton, who have decided
to accumulate no more wealth and who annually give away
all of the appreciation in their assets. "These people,"
observes Selvaggio, "have become passionate about making
a real difference."
member Tom Warth is a good example of this growing passion.
As a young immigrant from England,
Warth started a mail-order book business out of his Minneapolis
attic in 1965. "I never much thought about giving in the
early years of my business," says Warth. "I thought giving
people jobs and a share of the profits was enough." Later,
after being challenged by some business friends who were
members of the philanthropic Keystone Club, Warth began
to give five percent of his profits to charity. This "peer-pressured"
giving soon grew into a deep personal mission.
learned it was great fun to give, and became hooked,"
notes Warth. Asked about just one of his giving pleasures,
Warth points to his support of a project that has sent
four million books to literature-starved libraries in
sixteen African countries. Warth, who is now 62 years
old and semi-retired, now gives five percent of his personal
net worth every year. He wants to give even more as he
Andrew Carnegie's famous line that "the man who dies rich
dies disgraced," Warth says, "I'm trying to get rid of
it all before I die." Warth does not seem too worried
about disgrace, however. As he explains, "It just feels
so damn good getting good stuff done, and my money can
do that. What pleasure can it give me after I'm dead?"
Warth, working with the One Percent Club gives him the
additional satisfaction of helping others realize their
giving potential. Phrases like "leverage," "multiplier
effect," and "more bang for the buck" pepper his discussion
of the Club's work. "I know I run the risk of being called
a braggart or a big head by publicly discussing my giving
and pushing the One Percent movement," says Warth, "but
giving secretly only does so much good; inspiring others
to give is absolutely essential."
- anonymous author
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