KC CAN! In The News

Philanthropy gets a dose of the hands-on approach

By JEFFREY SPIVAKThe Kansas City Star

Date: 05/07/00

"What could it be this time?" Kevin Mallot thought when Peter Mallouk sent him e-mail about going out to lunch. The two Generation X-ers had been buddies for four years, long enough for Mallot to expect the unexpected, like being a model for a book about kissing. So there they sat at a Westport bagel shop, munching matching turkey sandwiches, when the then-29-year-old Mallouk broached his next scheme.

"I want to start a charity," he told Mallot.

Mallot swallowed his food, leaned back and laughed. After all, they were well-paid businessmen, certainly not millionaires.

Then a few minutes later, Mallot agreed to join the charity's board - and last summer they joined a burgeoning philanthropic movement.

Charity isn't just for retired folks anymore. Young professionals are pursuing philanthropy now, and they're taking a different approach to giving than old-line tycoons such as a Rockefeller or even a Kemper.

The new donors give their expertise, not just their money. They are getting directly involved with a cause, applying the same hands-on management style they brought to their professions. So instead of putting their names on a building, they want something else: Results.

Dalene Bradford of the Greater Kansas City Community Foundation and Affiliated Trusts calls this phenomenon a "new style of donor." Peter Karoff with a Boston-based philanthropic consulting firm calls it "a new kind of philanthropy." And Paul Schervish, one of the nation's foremost sociologists of the rich, calls it "a sea change in the dynamics of charitable giving."

For Mallouk and Mallot, their cause involved rounding up 11 more pals, creating a charitable fund at the community foundation and then acting like venture capitalists in picking an investment. They decided to create a child-safety program.

Now they're raising $1 million, creating a curriculum and coordinating construction themselves. Recently the group - calling itself KC CAN, for Kansas City Children's Assistance Network - gained its first sizable pledge, $100,000 from a local foundation.

Here and across the country, this new kind of philanthropy is being driven by new wealth. This is an era of initial public offerings, surging stock portfolios, business buyouts and baby-boomer inheritances. Each day, it seems, produces more instant millionaires.

Kansas City has become a hotbed for the new philanthropy. The city's community foundation has led the nation in the amount of new gifts. That is because the foundation is tailored toward the new style of donor.

Taking a chance

It was Christmastime when Peter and Veronica Mallouk had one of those unplanned husband-wife chats that turned their lives in a different direction.

They were driving along Linwood Boulevard, headed back to south Overland Park from a party. The gathering had been for New Horizons Assistance Corp., which cares for mentally disabled adults. Veronica had recruited volunteers from her job at Andersen Consulting in Overland Park to serve the food. Peter had been the deejay. It had gone well. So well that New Horizons officials had asked both to join their board.

Should they? That's what they discussed that December night in 1998. Veronica had been a volunteer as long as she could remember: March of Dimes walk-a-thons as a kid. Teaching Sunday school in college. Organizing charity events at work.

"You already do a lot," Peter told his wife.

"I want to do more," she replied.

The Mallouks asked 15 friends, such as Mallot, 27. They included an investment adviser, an architect, a teacher and some technology consultants at Andersen Consulting. Almost all agreed.

Peter Mallouk then started researching how to put together a charitable board. By chance, he was steered to the local community foundation.

The organization had spent the past few years reinventing itself. It had found a niche as a sort of middleman for donors, setting up meetings with financial advisers and with possible beneficiaries.

Donor funds rolled in. During the 1990s the number of new funds jumped sixfold, to 550. New contributions jumped tenfold. Two years ago the foundation reached $120 million - the most money received by any community foundation in the country that year. It topped that last year with $142.8 million.

The foundation doesn't track whether funds come from estates or Gen X-ers, but officials estimate that one-fifth of contributions reflect the new style of giving.

There's Kent Humphrey. He spent 18 months taking care of his wife, who had a brain tumor. After she died in 1998, he started a fund to pay for things caregivers like him didn't have time for, such as cleaning the house. Now he's promoting the concept to doctors.

There's Tom Brown. His mother, Virginia, grew up with crooked teeth, but her parents could not afford braces for her. Eventually Virginia got them, and late in life she set up a fund to pay for children's orthodontic work. Now Brown, a local attorney, screens applications and makes doctor appointments.

And there's Cynthia Gunn. The local television anchor and reporter set up a fund to pay for daylong self-help seminars. They're geared toward high school freshman girls in Kansas City to coach them about careers, health and relationships. She organizes the seminars every year.

These new donors have old reasons for giving: passion; prestige; politics; even tax breaks. But they have new causes, tipping the balance of the community foundation's grants. The percentage going to the arts has climbed, thanks to funds set aside for Science City at Union Station, while those going toward health have dipped.

Still, the average fund the community foundation manages is $500,000. Most are under $100,000. That's not much compared with what some lesser-known instant millionaires are doing elsewhere.

Nicholas Lovejoy of Seattle was the fifth employee in the door at Amazon.com and now, at age 30, he's overseeing a $2.5 million foundation with his wife.

Trish Millines Dziko, who also lives on the West Coast, quit Microsoft after eight years and founded an organization devoted to teaching African-Americans about computers.

And on and on. Philanthropic networks are popping up all over to deal with this phenomenon.

"Lots of people with modest sums are doing this," said Karoff, president of the Philanthropic Initiative in Boston. "There's a yearning on the part of donors for values and a greater sense of community.

"It's part of a search for meaning in our lives that is going on."

The right cause

Peter Mallouk and his board were searching, too. For a cause.

They had money going from paychecks toward their fund. They had a name picked out, focusing on children. But still no cause.

"We were in a panic at one point," Mallouk said.

The community foundation invited him to a meeting at Children's Mercy Hospital. Mallouk arrived and immediately received a tour. He was shown different equipment that had been donated.

After the tour Denise Dowd, medical director for the hospital's childhood safety center, made a presentation.

She recited the hospital's commitment to redesigning playground equipment, speaking at schools, creating a mock street where kids learn how to be safe. They didn't have the time or money for that mock street yet, but ... .

Hold it right there, Mallouk thought. That's it.

He took it back to his board. Members were all for it.

They pledged to build what's called Safety Street, a full-size indoor reproduction of an actual city street, with working traffic lights, cars, buses and bikes. It's based on an existing program in New York City and teaches children what to do and not do on a street.

Mallouk's board is doing all the planning: John Taylor is hatching the building plan; Mike Keegan is making fund-raising pitches; Kurt Hogan is creating a Web site; Elise Barton is developing the teaching lessons.

"Sometimes, something like the United Way is a little bit frustrating," Barton said. "You have a one-day involvement (in filling out a form), but you don't see where your money is going. The greater reward is getting to participate."

The Kansas City Health Department has donated land at 24th and Campbell streets. Safety Street is scheduled to open there in the fall of 2001.