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In purely financial terms, last year was a dismal one for megagifts. The donors on the Philanthropy 50, The Chronicle’s annual list of the most-generous people in America, gave a total of $4.1-billion to charity in 2009, less than in all but one year since the newspaper began tracking the biggest philanthropists in 2000. The median gift was $41.4-million, meaning that half of those on the list gave more and half gave less. That figure compared with $69.3-million in 2008 and $74.7-million in 2007.
But while the recession is dissuading some of the country’s wealthiest people from donating, it is spurring others to get more creative in their giving. Gifts for new buildings were few last year, while donations to solve environmental and social problems, ameliorate the recession’s toll, and encourage charities to work together and in new ways, were more common.
“There’s no question that the downturn has been a catalyst for encouraging people to think differently,” says Bruce Boyd, managing director of Arabella Philanthropic Investment Advisors, which counsels wealthy individuals on their giving. “This is driving a period of experimentation by nonprofits and by donors that will serve us well over the next number of years.”
George Soros (No. 6 on the Philanthropy 50), the billionaire hedge-fund manager, was among the big donors who sought to use their largess to prevent future economic crises.
Mr. Soros, that rare investor who made money last year despite the financial chaos, committed a total of $150-million, a third of which went to establish the Institute for New Economic Thinking at Central European University, in Budapest. The institute’s first conference, in April, will examine why economic theories failed to predict the global recession.
Another donor on the list blamed ethics—or the lack thereof—for helping to fuel the financial chaos. Raymond A. Rich (No. 12), a businessman from Iowa who got his start at General Electric during the Great Depression, gave a mansion and cash totaling $75-million to create a leadership institute at Marist College, in New York’s Hudson Valley. The center will teach students the qualities that make an effective executive.
Mr. Rich, who died last year, had long been frustrated with what he perceived as the flexible morals of some corporate executives. “He saw leadership at corporations really disintegrating over the years,” says Claire Carlson, Mr. Rich’s longtime companion. The economic crisis, she says, “was a confirmation of that.”
To the Rescue
Other philanthropists were moved to help alleviate suffering wrought by the recession.
Pierre Omidyar, founder of the online auction service eBay, and his wife, Pam Omidyar (No. 10), dedicated $50-million of the $92-million they gave last year to the community foundation in their home state of Hawaii. Part of the money will be used to help people make it through the economic downturn by securing access to government resources, credit counseling, and advice on preventing home foreclosures.
Louise Nippert (No. 5), the widow of an heir to the Procter & Gamble fortune, pledged $85-million to save three arts organizations from the bloodletting they faced because of dwindling ticket sales and corporate support.
Mrs. Nippert, a trained singer, created an endowment that will support the symphony, ballet, and opera in her hometown of Cincinnati. The money comes with incentives for the ballet and opera to enlist the symphony to play at their performances, something Mrs. Nippert hopes will help the struggling arts groups cut costs and thrive.
“She saw it as a unique time to make an impact,” says Carter Randolph, executive vice president of Mrs. Nippert’s Greenacres Foundation, which received an additional $100-million last year from the philanthropist for its work with children and the environment.
Other institutions, too, found white knights to save them from the recession.
The former Citigroup chairman Sanford I. Weill, and his wife, Joan H. Weill (No. 35), came to the rescue of Cornell University. The couple had pledged $300-million to the university and to the Weill Cornell Medical College in 2007, with the intention of paying it off upon their deaths.
But then university officials, faced with a shrunken endowment that threatened to put plans for a new medical building on hold, approached the Weills asking if they could give sooner. The couple agreed to give $170-million last year. “You can’t build things just on pledges,” says Mr. Weill, who along with his wife pledged another $26-million last year to education, health, and arts groups. “We’d lost a lot of money in the catastrophe we went through in the markets, but like a lot of people, we had money left. We wanted to concentrate on what we had left and hopefully set an example.”
Saving the Globe
It’s not just the recession that has created a sense of urgency among donors. The looming problem of climate change prompted an outpouring of gifts from people on The Chronicle’s list.
One of five such donations came from Mr. Soros, to create a think tank that will push politicians to fight global warming. The other four gifts will help establish centers at universities to develop clean energy and other research to protect the environment.
Henry P. Conn, who along with his wife, Rebecca L. Conn (No. 45), pledged $20-million for a center on environment and energy at the University of Louisville—says the United States has fallen behind other countries in renewable-energy research. He likens it to “a Sputnik moment.”
“Every time the price of oil would spike, people would go to work on different forms of renewable energy, and when it dropped, everyone would stop,” says Mr. Conn, a graduate of the university and a retired management consultant who now writes about energy issues. “We need the latest science regardless of what the price of oil is.”
Philanthropy experts say that the recession, along with the examples of donors like Bill and Melinda F. Gates (No. 3) and Eli and Edythe L. Broad (No. 7), has prompted smarter giving. Philanthropists are more likely now to invest in ways that advance their mission, work with governments, and support advocacy, says Mr. Boyd of Arabella.
“It has brought a greater seriousness,” agrees Mario Morino, chairman of Venture Philanthropy Partners, which gives money to help high-achieving charities succeed. “People have less, and they want to make sure whatever they’re doing is having an impact.”
At the same time, some charities that haven’t typically won big gifts from the super rich are getting better at asking for them.
Habitat for Humanity International has just begun a $3.9-billion campaign that will seek more gifts on the scale of the $100-million pledge the charity received last summer from J. Ronald and Frances Terwilliger (No. 8).
“One of the challenges we’ve had is that we’ve done things in $100,000 increments because a house, on average in the U.S., costs $100,000, so getting people to add one or two or three zeroes on the end of that has been difficult,” says Mark Crozet, senior vice president of resource development at the charity in Americus, Ga. “But as we’ve shifted to a model that’s more holistic, the scale of our work has increased dramatically, as has our ability to use larger blocks of funding.”
For example, the majority of the money from Mr. Terwilliger, a real-estate mogul and Habitat’s board chair, and his wife, will create a fund enabling the organization to lend money to help poor people in Africa, Asia, Central America, and Eastern Europe repair their houses.
Other donors on The Chronicle’s list that are supporting less well-known, established charities include Michael R. Bloomberg (No. 4), the mayor of New York. Last year he pledged $125-million to help six charities develop a plan to cut down on traffic accidents in developing countries. Part of that money—Mr. Bloomberg’s office would not say how much—was paid in 2009. Over all, the mayor gave $254-million to more than 1,300 charities last year.
They are also doing it through foundations: Stanley F. Druckenmiller, founder of Duquesne Capital Management, and his wife, Fiona B. Druckenmiller, also an investor, gave $705-million to their foundation devoted to supporting medical research, education, and the antipoverty work of charities such as Harlem Children’s Zone.
But while innovative philanthropy may be on the rise, the number of wealthy people making big gifts has shrunk. A donor needed to part with just $16.2-million in 2009 to qualify for The Chronicle’s list. In 2008 that number was $30.5-million; and in 2007 it was $39-million.
Fund raisers, philanthropists, and experts say the economic turmoil paralyzed many donors but that their discomfort has eased slightly with the gradual rise of the stock market.
Some donors now have a little more spare time to devote to philanthropy, too.
Mark W. and Stacey Miller Yusko (No. 28) had initially intended to make their $35-million pledge to the University of Notre Dame, in Indiana, in 2008. But then the Dow plummeted, and Mr. Yusko had to focus on his investment firm, Morgan Creek Capital Management, in Chapel Hill, N.C. The gift, to create a merit-scholarship program, was announced last August.
But donors and fund raisers alike warn that big giving won’t rebound to where it was for at least a few more years, if it ever does.
“People are still skeptical of this recovery,” says Mr. Broad, who, with his wife, pledged $105.2-million to their foundations last year. “It will be several years before confidence returns.”
While the recession has fueled speculation that wealthy people will put off giving until after their deaths, The Chronicle’s list suggests that instead the number of active living donors continues to grow.
Mr. Yusko, 46, is one such donor. A graduate of Notre Dame, he has been inspired in his philanthropy by Julian H. Robertson Jr. (No. 14), a prominent hedge-fund manager who was an early investor in Mr. Yusko’s firm.
Mr. Robertson had years ago created a merit-scholarship program at Duke University and the University of North Carolina at Chapel Hill. Mr. Yusko spoke with officials at Notre Dame, where he once worked managing the university’s endowment, about adopting a similar program.
The Yuskos are helping to shape the program and plan, with their children, to assist in selecting the scholars.
“Sometimes institutions just want you to give a gift and go away,” says Mr. Yusko.
“Notre Dame understood that we wanted to give a program and that we wanted to be intimately involved in the program, and they loved that.”
The Philanthropy 50, The Chronicle’s survey of America’s largest donors, was compiled by Maria Di Mento, with assistance from Heather Joslyn, Caroline Preston, Joan Waynick, Ian Wilhelm, and Grant Williams.
|4||Are under age 50|
|9||Are 90 or older|
|75||Median age of living donors on the list|