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HomeMarketGlimmers of Change Emerge on List of Top 50 Donors

Glimmers of Change Emerge on List of Top 50 Donors

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The Chronicle of Philanthropy’s annual list of the top 50 donors—with 
Bill Gates,

Elon Musk,
Michael Bloomberg
leading the ranking—reveals the makeup of the nation’s top givers is still dominated by older men who made their money in finance, tech, and real estate, and whose giving is dominated by donations to universities and medical research and institutions.

In all, the top 50 donors gave US$16 billion to nonprofits, private foundations, and donor-advised funds last year. That’s down from US$35.6 billion in 2021, although that year’s total included a US$15 billion pledge by Gates to the Bill and Melinda Gates Foundation. In the height of the pandemic, in 2020, giving by the top 50 reached US$24.7 billion, according to the Chronicle. 

The annual list does show glimmers of change, however. For one thing, 26 donors on the list are new, including Boston Pops clarinetist Edward Avedisian (No. 20 on the list), whose stock trading hobby enabled him to give US$100 million to Boston University in honor of his friend, former BU president Aram Chobanian, before he died in December, the Chronicle said. 

Yes, traditional gifts to universities such as Avedisian’s were prevalent, but several donors sought to make an impact on areas of interest to them even through conventional donations. 

For example, Salesforce co-founder
Marc Benioff
and his wife, Lynne, (tied for No. 33) gave US$60 million to the University of California at Santa Barbara for ocean science, while Nvidia Corp. founder
Jen-Hsun Huang
and his wife, Lori, (No. 41) gave US$50 million to the Oregon State University Foundation for a new research center to apply artificial intelligence to climate science, the Chronicle said. 

Others such as retired employee-relations executive John Metz and his husband, Ali Khan, No. 44 on the list, focused on equity and diversity. Metz and Kahn gave US$46 million to Metz’s alma mater, Miami University of Ohio, for scholarship aid to students from low-income families. 

“We’re beginning to see increasing amounts of donors wanting their significant support to alma maters being about key impact areas in the world in addition to supporting an important and beloved institution,” says William Foster, managing partner at the Bridgespan Group. 

Also, Foster noted, university donations may be more likely to show up on a list like this because wealthy donors often give to their alma maters outside of their private foundations, which are established to deliver on specific goals. “If you write a check to the alma mater, that undermines the strategy or mission of the foundation,” he says. 

Mae Hong, a vice president at Rockefeller Philanthropy Advisors, noted the wide range of gifts on the list, with both former energy company CEO Murry Gerber and appellate lawyer David Frederick and his wife, Sophia Lynn, landing at No. 50 with Gerber and Frederick each giving US$40 million—significant donations but far less than the US$5.1 billion from Gates, in the No. 1 spot. 

Although the list was dominated by gifts to universities and medical research and institutions—aside from gifts to foundations—Hong noted a couple instances of donors farther down the list who gave large sums to small nonprofits. 

“US$1 million to a small nonprofit has so much more impact than US$100 million to Harvard [University],” she says.  

Another fact that jumped out to Hong was that Huang, a Taiwanese American, was the only person of color this year in the top 50. 

“There’s really nobody of color on the list,” Hong says. “There are people who have been immigrants and have immigrant backgrounds, but primarily it is a list dominated by whites. That is really surprising given how much attention is being paid to new and significant wealth in communities of color.”

Ranking Can Obscure Funding Choices 

In many ways the top 50 ranking doesn’t reveal the priorities of wealthy givers, although the Chronicle provides information where available on their grantmaking. Bridgespan, for instance, is finding donors are making “increasing levels of big gifts to tough social change issues” that aren’t all showing up on top donor lists, Foster says. 

That’s because the Chronicle ranks donors by gifts and pledges made in a given year to private foundations and donor-advised funds in addition to nonprofits. Donations to a private foundation or DAF, may not be distributed for years to come, and the Chronicle doesn’t include annual disbursements from these vehicles to avoid double counting, according to an article on its methodology. 

The list is a great way of measuring donor generosity, “but because it focuses on gifts to foundations, it doesn’t really capture what the money fully does,” Foster says. 

Also, because not all wealthy donors give to a DAF or foundation each year, the list may not include donors who granted large amounts from established giving vehicles into the world to help individuals and society. That fact may offer some explanation for why only 20 of the 400 wealthiest individuals listed by Forbes are on the Chronicle’s list. 

There are several reasons the publication focuses on gifts and pledges—including announcements of multi-year pledges—instead of grants, according to Maria Di Mento, senior reporter at the publication, who directs the annual Philanthropy 50 projects. 

One is that the publication is trying to capture how much new money is being injected into philanthropy in a given year. Funds that are granted out by a foundation are not necessarily new. 

There’s also no easy way to track annual grant giving. Nonprofit organizations report grants to the U.S. Treasury annually on IRS Form 990, but access to that data isn’t available until two years after the gifts are made. 

More to the point, however, is the Chronicle’s readers—the heads of nonprofits and their major gift officers—want to know who is giving new money each year and where it is going, Di Mento says. 

Donor Data Can Be Hard to Get 

And the information isn’t easy to get. It involves talking to “dozens of charities, philanthropists, and their representatives,” according to the Chronicle. 

Elon Musk, who also founded SpaceX in addition to serving as CEO of Tesla and Twitter, among other ventures, ranked No. 2 on the Chronicle of Philanthropy’s annual list of top 50 donors for the second year in a row. Musk donated Tesla stock worth about US$1.95 billion in the latter part of last year.

Getty Images

Not every wealthy donor shares what they give, either. Consider Musk, the second wealthiest person in the world as of Friday, according to Forbes. The charitable gifts made by the CEO of Tesla and Twitter were only revealed after he divulged them in a mandatory Feb. 14 filing with the Securities and Exchange Commission—a day after the Chronicle published its original list. According to the filings, Musk gave about US$1.95 billion in Tesla stock to “an unidentified charity or charities,” in seven donations from August to December, the Chronicle said. 

The charities themselves weren’t listed, but the publication noted that Musk usually gives to charity through his foundation. The organization focuses on renewable energy, space exploration, pediatric research, and the “development of safe artificial intelligence to benefit humanity.” 

The Chronicle’s list also doesn’t include gifts made last year by Mackenzie Scott, because she declined to provide the publication with the details of how much she put into her giving vehicles. The publication noted that she granted more than US$3.8 billion last year. “likely through three donor-advised funds,” named by the online magazine Puck. 

Also missing is
Melinda French Gates,
who also didn’t provide information to the Chronicle, and Ann and John Doerr, who announced a US$1.1 billion pledge from their family foundation to create a school of sustainability at Stanford University. 

“Any philanthropy 50 list is going to be idiosyncratic,” says David Campbell, professor of public administration at Binghamton University in New York. “It’s not representative of all giving.” 

But some trends are notable. One is that several donors who show up consistently on the list such as Gates, Bloomberg, John and
Laura Arnold,
and Pierre and Pam Omidyar, have specific interests and they continue to invest in them. 

Former investor John Arnold in Texas, for instance, whose Arnold Ventures  focuses on criminal justice reform, healthcare reform, higher education, and democracy, has a clear strategic vision and uses his foundation to act on it. 

Giving was likely higher from this group of donors in recent years because the pandemic and social and racial unrest put philanthropy “front and center,” Campbell says. “That forced at a national level some introspection about wealth inequality, about the challenges created by the pandemic, and that might have led to some increases in giving.” 

Last year, rising inflation and stock market drops of as much as 33% could have caused these donors to take a pause. “They had less cash or they may have had fewer tax liabilities,” he says. 

Now that inflation appears to be abating and the stock market is performing somewhat better, “we might see an upswing,” Campbell says.

Credit: marketwatch.com

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