While the fourth quarter is usually when donors do most of their charitable giving, the last quarter of 2010 merits special attention. Several factors have changed the way donors and advisors have approached philanthropy in the last two years-the down economy, for one thing, as well as the estate tax debacle and government cutbacks at federal and state levels. Warren Buffett and Bill Gates have meanwhile launched a giving pledge that puts pressure on high-net-worth individuals to give more.

Amid the economic downturn, it's probably not surprising that statistics from the Giving USA Foundation show a drop of 3.6% in charitable giving in 2009 from 2008. The Center on Wealth and Philanthropy at Boston College predicts that individual giving for 2010 will rise slightly to between $222 billion and $227 billion, from the $217.3 billion given in 2009 (an uptick that can be attributed to the outpouring of support for Haiti following its earthquake early in the year), but despite this increase, general giving is down from previous years, the center also affirms.

In response to reduced resources, donors are becoming more actively involved in "giving while living"-spending down their philanthropic dollars during their lifetimes rather than after, according to Betsy Brill, president and philanthropy advisor at Strategic Philanthropy Ltd. in Chicago.

Donors "are looking at it from a different perspective," says Brill, whose clients are primarily advisors to high-net-worth individuals and families as well as closely held and family-owned businesses. "The question is: When do you have the greatest impact [with your giving]? Before you die or later?"

Several foundations are trying to turn donors' attention to the philosophy of "giving while living." The Atlantic Philanthropies, a multibillion dollar foundation, recently released a report that profiles 11 philanthropists giving generously during their lifetimes. The Aspen Institute has released a similar report, "Time Is of the Essence," which advises philanthropists to be strategic when choosing how they give-whether it's by spending down their endowments while alive or setting up a model that gives in perpetuity.

"What they found," says Brill, "is that while the majority of foundations and trusts do not have any language in their bylaws regarding life span, the spend-out option is becoming increasingly attractive to donors who have become more concerned with their ability to exert control over the investing and spending of their foundation assets due to the economic crisis."

Today, there are more vehicles available and different ways to use them for philanthropic investments, Brill notes. "You can change your entire vehicle. You can create a foundation that gives money in perpetuity, or you can adopt a charitable lead or charitable remainder trust, which tend to be time-limited vehicles."

The Buffett-Gates Giving Pledge
Also spurring the wealthy to give while living is the Buffett-Gates Giving Pledge, in which 40 billionaires have pledged to give at least 50% of their assets to charity either during their lives or as part of their legacy. Many in the field are calling this pledge the game changer that will shape philanthropy in the U.S. for years to come.

The question is whether the campaign will encourage not only the wealthy but also ordinary people to step up.

"Certainly the pledge will contribute to people wanting to have more of an impact of their wealth distribution in their lifetimes, and demanding an accountability for it," says Stacey Haefele, president and CEO of HNW Inc., a marketing firm in New York that focuses on wealth management for the high-net-worth sector.