The New Philanthropists -- Flush With High-Tech Success And Some Recent Inheritances, Baby Boomers Are Changing The Face Of Charity In The Northwest

The Shoalwater Bay Indian Tribe lives in poverty on a single square mile on the edge of the Pacific Ocean. It has a terrible infant-mortality rate.

Martha Kongsgaard and her husband, Peter Goldman, live in a big, old house with a view in West Seattle. They have a fabulous amount of money.

When Kongsgaard saw a somber news photo of a Shoalwater couple standing next to the grave of yet another baby, she reacted from the heart. She called the tribe and then last summer, even though five months pregnant, hopped on a float plane out of Lake Union to talk with tribal leaders and health-care officials about what she could do.

"I didn't want to sound like some person who thought they could go in and fix everything," said Kongsgaard. "On the other hand, I know funds can help."

Scott and Laurie Oki also understand the value of their money. Not just for themselves, but for others. They recently gave a $1 million challenge grant to Children's Hospital & Medical Center in Seattle.

"We are so fortunate that things happened the way they did that we want to share it," said Laurie Oki, former regional-sales vice president for Ralph Lauren Fragrances. Scott Oki, at 45, is a former Microsoft Corp. executive whose stock in the company was worth millions when he retired in 1992.

They've set up the Oki Foundation and manufacture baby blankets under the name Nanny & Webster, with all profits going to charity.

"If we can help one person, it is one person more than before," Scott Oki said. Of course, they will be helping many more.

Never before in the history of the country has there been such potential for a transformation of the philanthropic scene. And this is especially so in the Puget Sound area.

The area is part of a national trend, with vast sums changing hands through inheritance. One study, analyzing a survey of consumer finances conducted by the Survey Research Center at the University of Michigan, estimates $10 trillion will pass from the post-World War II generation to heirs over the next 20 years.

Locally, millions, even billions, of dollars of new wealth are being created by high-tech companies such as Microsoft, McCaw Cellular Communications and others.

"I do not personally think there has ever been a case in American history of the creation of that much wealth on that broad a scale," said the Rev. William Sullivan, president of Seattle University.

Exactly what all the newly wealthy plan to do with their money is discussion Topic A among charitable organizations, philanthropic groups and the individuals themselves.

"With this generation, anything's possible," said Doug Picha, executive director of the Children's Hospital Foundation. "There certainly isn't a limit on the resources, the ideas or the needs."

Altruism plus tax benefits

What moves a new generation to philanthropy, especially those who, through high-technology successes, have become rich beyond their wildest dreams?

It involves both practical and altruistic inspiration: taxes, personal motivation and role models.

The Okis point to civic leaders such as Mary Gates and Samuel Stroum as influences on their civic-mindedness. Gates "has been involved in so many community activities, it just can't help but rub off," said Oki.

But even before that, the Okis' parents were generous with their time. "If there was a seed (of philanthropy), it was planted in our families," said Laurie Oki.

The tax structure also has a major impact. In the 1970s, the creation of philanthropic foundations decreased drastically after passage of the stringent 1969 Tax Reform Act, which many in the field found "excessively punitive and burdensome," according to the Foundation Center.

That trend reversed in the late 1980s, the center's 1994 report states, and a new generation of philanthropists emerged thanks to "the rise of vast personal fortunes, increased incentives for giving as regulations relaxed and a more positive view of the role of foundations in society."

Indeed, the Okis acknowledge that although their parents' example nurtured their philanthropy, it was tax incentives that inspired them to create their foundation.

"We were facing some fairly large taxes," said Scott Oki. "We wanted to offset some of those taxes by giving money away to nonprofits."

Under today's tax laws, individuals who make a donation to an approved charity get a dollar-for-dollar tax deduction from their adjusted gross income of up to 30 percent for appreciated property (such as stock or real estate) and up to 50 percent for a cash gift.

If a person donates more than is allowed as a deduction in one year, the remainder may be deducted over the next five years.

Careful research comes first

Kongsgaard and Goldman often are mentioned as models of what philanthropy can be.

In 1980, at age 25, Goldman inherited his share of his real-estate developer father's East Coast fortune.

"For me it was quite dramatic," recalled Goldman, who is a senior deputy prosecuting attorney for King County. He grew up in an upper-middle-class New Jersey neighborhood but had a job as soon as he was able and always considered himself an "ordinary Joe."

Gradually, Goldman made peace with being rich and started to take responsibility for it. He and his wife set up the Kongsgaard-Goldman family foundation in 1988.

The tax advantages were tremendous. And, as Goldman's Jewish upbringing taught him, it was the right thing to do.

Kongsgaard grew up in a civic-minded family, too, though not with vast sums to give away. Also an attorney, she manages the family foundation and has learned to carefully research their causes.

Thus, she didn't simply hand the Shoalwaters a check. She collected information, talked with other groups trying to help the Pacific County tribe and months later did a site visit, finding the tribal members to be wonderful, open people with strong leaders.

Kongsgaard ended up giving the tribe about $9,000 for a complete health census of every member and $8,000 to a group working with the tribe. She still keeps in touch.

In total last year, their foundation gave about $600,000 in grants.

Huge gifts make headlines

Seattle ranks 10th in the nation as a good place to raise money, according to an analysis of charitable giving in the 50 largest cities by The Chronicle of Philanthropy.

But the Northwest is still not considered philanthropically rich, compared with Midwest and East Coast cities, where civic giving has a longer history. The mood about the future, however, is optimistic.

"Remember, we are a generation behind the East Coast. . . . I would say we are in an expanding stage of our philanthropic awareness and giving in the Northwest," said estate-planning attorney Bruce Flynn with the Perkins Coie law firm.

For the moment, what catches people's attention are the huge gifts some of the high-tech millionaires and other well-known philanthropists are beginning to make:

-- Microsoft Chairman Bill Gates' $12 million gift to the University of Washington to establish a department of molecular biotechnology. He is Mary Gates' son.

-- Microsoft co-founder Paul Allen's $20 million loan to backers of the Seattle Commons project and his $10 million gift to the UW for completion of the Kenneth S. Allen Library, named for his father, the late associate librarian at the UW.

-- Former Microsoft executive Ida Cole's purchase of and commitment to restore the historic Paramount Theatre in downtown Seattle.

-- A $1 million gift to the Seattle Repertory Theatre from Marsha Sloan Glazer, a patron of the arts and a daughter of Sam Stroum, former owner of Schuck's Auto Supply.

-- The Benaroya Foundation's gift of $15.8 million to the Seattle Symphony a year ago and the Bullitt sisters' recent gift of radio station KING-FM to the arts community. The sisters, Priscilla "Patsy" Collins and Harriet Bullitt, also set up the Bullitt Foundation to fund environmental programs.

No longer just a few names

If one could imagine a philanthropic web being spun around the Seattle area, it would include strands of very wealthy individuals, large and small corporations, civic leaders, social-change foundations - and rank-and-file citizens who contribute time, money and energy.

It's a much more complex picture than it used to be.

Thirty years ago, at the time of the World's Fair, the guiding lights of philanthropy could be found in a small group of civic-minded corporate CEOs and a few leading families.

Names that come to mind include Eddie Carlson, former chairman of Westin Hotels and United Airlines; Ned Skinner, president of Skinner Corporation; Jim Ellis, attorney; William Street, general manager of Frederick & Nelson, and William Allen of Boeing.

Now names like Oki, Podlodowski, Kongsgaard-Goldman, Bullitt, McCaw and Grinstein are becoming more familiar in donors' circles, and they in turn are expanding the circle.

"I think nothing succeeds like success. The more people who see their friends and peers and co-workers volunteering and giving money and committing themselves to these programs, the more they're going to get involved," said Keith Grinstein, president of Claircom Communications, a subsidiary of McCaw Cellular. He's a high-tech millionaire and the son of Gerald Grinstein, chief executive officer of Burlington Northern.

Like Keith Grinstein, Jody Allen Patton, who is the administrator of her brother Paul Allen's philanthropic foundations, wants to make things better. "Why not give it away?" she said. "Why not improve the world? Why not do something great and make a difference?"

Paul Allen, 41, the billionaire Microsoft co-founder, owns the Portland Trail Blazers basketball team and a slew of high-tech ventures.

His big-ticket gifts, including a foundation to fund the proposed Jimi Hendrix Museum at Seattle Center and his $1.25 million in donations to the Oregon Shakespeare Festival in Ashland, have garnered most of the publicity. But Patton will cite less publicized gifts when describing the reasons she, her brother and their mother, Faye Allen, choose various charitable and nonprofit organizations for his donations.

The $25,000 the Paul G. Allen Charitable Foundation gave the Crisis Clinic in King County in 1992 is one such example.

"You get an application, they tell you how many phone calls they get, and they can see all the lines are blinking, and they know there are more people out there, you say, `Well, yeah, of course I want to help you.' . . . You know you are affecting people's lives," said Patton, 36, who is the executive director of four Allen foundations, which fund human-service, arts and medical programs.

Today's donors are different

Is there a difference between the giving patterns of earlier generations and those of today? National research shows they are better educated and more idealistic than their parents, less sure of the charitable motivations of large organizations and wanting more hands-on control of where their money goes, said Sylvia Meyers, a consultant and national speaker on gift planning.

"The baby boomers are going to require that their gifts make a difference," said Jane Williams, president of the 700-member Northwest Development Officers Association and the daughter of the late Eddie Carlson. "And I think the nonprofits have to earn the trust of the baby boomers before the baby boomers will give."

This contrasts with the World War II generation, she said, which gave their trust to the nonprofits "until you lost it."

Not only will boomers and those coming on their heels be more investigative, according to philanthropy trend watchers, but their causes - such as the environment, population control, animal rights, social justice - will tend to stay in the Northwest and be more narrowly focused in order to be more effective and get to root causes of problems.

`Invest where your heart is'

Tina Podlodowski, who retired as a millionaire from Microsoft in 1992 while still in her early 30s, has become involved in A Territorial Resource, a foundation that pools the money of many donors who make decisions together to have an impact on projects in the Northwest.

Last year the foundation gave $345,000 from 200 donors to women's, children's, environmental and social-justice causes in Washington, Oregon, Idaho, Montana and Wyoming.

Podlodowski also is president of the Pride Foundation, which supports programs in the gay and lesbian community. As a one-time senior executive for Microsoft, Podlodowski was the highest ranking gay person to come out in the company and was an organizer of Gay and Lesbian Employees at Microsoft.

"That was an experience where I got cheered on by people for coming out and making a stand," she said. It taught her that she can make a difference.

The daughter of immigrants who worked for a ball-bearing company near Hartford, Conn., she never imagined she one day would be awash in money.

Having grown up in an immigrant community, she was imbued with "a real sense of taking care of your family." But she had to educate herself to handle her money responsibly and to help the local community. She has joined a variety of networks, including a support group of about 20 women who informally call themselves "Women With Wealth" or, more loosely, "Babes With Bucks." All millionaires, they are dead serious about learning from, and about, one another's philanthropic endeavors.

Podlodowski also asks organizations how they use her money. The good ones don't object, she said.

"The more people ask questions, the more they know, the more they get involved. The more they write checks." Her advice to donors: "Get educated and invest where your heart is."

All eyes are on Microsoft

Giving from the heart. That's what hasn't changed in the Northwest.

"I'm very proud of the Northwest because I think we have a genuine reputation for being very caring." said Williams, of the Northwest Development Officers Association.

"I think that was there 30 years ago, and I think that's there now. And I have no reason to believe . . . that it won't be there 30 years hence. It's part of living in the Northwest."

Not everyone thinks boomers, at least on a national scale, will follow through with terrific generosity in huge numbers, given their reputation for self-centeredness, low savings rate and need to finance their own retirement.

Indeed, the giving patterns of Microsoft and its billionaire co-founder Bill Gates are particularly scrutinized and sometimes criticized. Hardly a charitable organization around isn't wondering in what direction the potential 800-pound gorilla of philanthropy will move.

"I am encouraging of and slightly impatient with Microsoft," said Richard Mann, the former executive director of Allied Arts of Seattle. The company should be playing a leadership role in philanthropy, he said, but in his view it has been "very quiet" - although he "forgives them a bit" because Microsoft is still a relatively young company.

The Chronicle of Philanthropy tagged the computer industry in general as "high technology, low philanthropy" in a cover story last year. Microsoft received a favorable profile, though The Chronicle said the company's cash giving was $3.5 million in 1992, which the article said was only 0.5 percent of Microsoft's pretax profits of $770 million. Microsoft officials did not verify those figures.

Last year the company gave more than $17 million to charitable organizations. Of that, $3 million came from employee contributions, $5 million from corporate cash contributions and $9 million in donated Microsoft software. The company matches employee contributions dollar for dollar, up to $12,000 annually per employee.

Microsoft ranks second behind The Boeing Co. in its corporate cash contributions to the community, said Kimberly Ellwanger, Microsoft's director of corporate affairs. And that's after only seven years since its giving program was set up, she said. The company's priorities are health and human services, education, civic causes, including protection of the environment, and arts and other cultural endeavors, in that order.

To a significant degree, the company's giving is employee-driven, which some observers say makes its efforts appear less focused.

Rather than having "many sub-priorities," Microsoft could harness its philanthropic energy into several top priorities to create major "waves of change" in the community, said Constance Rice, the Seattle Community College District's vice chancellor for institutional advancement.

Gates has his own plans, too

Gates himself, who in recent years has perched at or near the top of Forbes' list of the richest people in America, has already given generously to the UW and United Way. Earlier this year, a writer for the New Yorker magazine asked Gates, 38, "How acutely do you feel a sense of social responsibility?"

He responded that giving money away, done properly, takes a lot of effort. "Therefore, when I am old and have time, I will put some effort into that." He said he expected to give away more than 90 percent of his wealth if he still had it when he retired.

Sullivan, the SU president who officiated at the recent wedding of Gates and Melinda French, doesn't think there is any question that Gates will become more heavily involved in philanthropy, given his family background. His father, William Gates, a prominent Seattle attorney, is a former president of United Way. His mother is a former UW regent and highly regarded civic leader.

"I think one of the most powerful motivators (of philanthropy) is what you'd call modeling," Sullivan said.

But the real story, he suggested, goes far beyond Bill Gates and Paul Allen to the hundreds, maybe thousands, of other young people who have become extraordinarily wealthy through their high-tech and other business ventures.

"I personally believe," Sullivan said, "that we are on the edge of a really new phenomenon in this city as far as philanthropy is concerned."

Tomorrow in The Times: It's not just millionaires shaping the area's giving scene. It's also ordinary citizens donating what may be their most valuable commodity: time.