Opinion
February 08, 2015

Watchdog vs. Self-Promotion: Why Donor Lists Matter


Andrew Carnegie and John D. Rockefeller

The release of The Chronicle’s annual "Philanthropy 50," an index of the previous year’s most generous donors, marks the culmination of one of the season’s defining rites: the compiling of the end-of-year list. At the calendar’s summit, we’ve gained a vista that invites this sort of reflection. So we look back and note favorites, tally the most and the least, rank the best and worst. What sort of perspective on the philanthropic sector does this particular list signify?

For some—not the least the donors themselves—it will be an invitation to celebrate: Those are, after all, a lot of zeros. Others might find in it cause for concern, a sign of the continued ascendancy of big philanthropy over small-scale giving. For still others, the list will reveal important trends—the causes attracting the most dollars, the geographical regions that could use a little more attention.

Yet beyond the content of the Philanthropy 50, it is worth considering the significance of the form.

Like a donor-advised fund or a TED talk on social enterprise, the philanthropy list is an artifact that captures something essential about our present moment. The list sits at the juncture of two powerful forces now shaping the sector: the interest of the public in philanthropic accountability and the impulse of major benefactors toward self-promotion. In combination, they can make the philanthropy list not only an instrument of reflection but a tool for shaping what lies ahead.

Big givers have received public recognition for millennia.

In the ancient Greco-Roman world, for instance, the system of euergetism called on leading citizens to compete with each other for social honor through the granting of private gifts to support civic projects.

The great public baths and theaters of Roman cities were the product of this large-scale giving, and the benefactors were often memorialized through inscriptions placed in central locations—the philanthropy lists, one might say, of antiquity.

But the rise of Christianity and the forging of an alternative charitable tradition challenged this classical system.

First, Christian giving focused less on public works than on the poor and on the institutions that served them, which offered fewer opportunities for public acknowledgment. It also gave much less emphasis on the amount given as the mark of a gift’s worth than to the intent of the giver.

Finally, Christianity placed a premium on discreet giving; charity was construed as an essentially private act, the business of the benefactor, the beneficiary, and a superintending divinity. As the evangelist Matthew declared, charitable givers should not "sound a trumpet" before them "so that they may be honored by men."

There are no philanthropy lists in the Gospels.

Early Americans inherited both these traditions of Christian charity and classical philanthropy.

And in part because the former constrained the latter, for at least a century, Americans had little opportunity or interest in developing anything like the modern-day philanthropy list.

For most of the 18th and 19th centuries, philanthropy was largely a religious affair, confined to denominational circles. Though individual denominations would at times note their most generous benefactors, there was no attempt to collect information on gifts across denominational boundaries.

In fact, Americans had not yet developed an understanding of philanthropists as a class of individuals united largely by a penchant for giving away large sums of money. In the 19th century, an individual on a "philanthropy list" would have just as likely been an impecunious reformer ministering to the sick or an ardent abolitionist than a wealthy merchant who had donated his fortune to a local college.

If philanthropy was defined as a vocation of the heart more than of the checkbook, this was because of the relative slimness of the checkbooks back then. Even the wealthiest Americans just didn’t have the sort of excess wealth that could be channeled to large-scale projects and institutions.

All this changed in the final decades of the 19th century with the rise of Gilded Age industrial and financial fortunes.

There were 100 millionaires in the United States in the 1870s. In 1892, the New York Tribune counted 4,047; by 1916, their ranks had swelled to 40,000.

Many of these phenomenally wealthy Americans had begun to give away large chunks of their fortunes, seeding our educational and cultural landscape with parks, libraries, museums, and educational institutions. And, not surprisingly, the public started paying attention.

In 1893, George Hagar, a staff member of Appleton’s Annual Cyclopedia, began to assemble figures on the charitable gifts and bequests of more than $5,000 made that year. (He excluded gifts to churches and missionary organizations.)
Mr. Hagar considered the "result of the first year’s quest" to be "such a grand tribute to the humanity of the American men and women"—he tallied $29-million in contributions—that he continued his annual catalog for another decade. These were the first modern philanthropy lists.

But with this sort of attention came certain expectations about the responsibilities of wealth and the public’s right to police them.

In 1892, for instance, the New York Tribune published a list of 4,047 men and women reputed to be millionaires, arranging the names by city and state. A few months after the list was published, a New York reformist journal suggested sifting through the names to identity those who gave generously while exposing those who did not. The journal made a start by attempting to determine which cities spawned the most (Baltimore) and least generous (Boston) class of wealthy citizens.

Some benefactors adapted to this new scrutiny better than others.

Andrew Carnegie, for example, courted public recognition assiduously (one humorist quipped that every time the Scots-born steelmaker made a donation, it sounded like a waiter falling down the stairs with a tray of dishes). Others preferred to preserve the tradition of discreet giving.

John D. Rockefeller, a devout Baptist, was particularly resistant to opening up his philanthropy to public view. He repeatedly refused requests by the press to release lists of his gifts. Such publicity, he feared, would violate the terms of Christian giving—and would open his office up to torrents of solicitations from men and women hoping to cash in on his generosity.

But even the stubborn Mr. Rockefeller ultimately bowed to public pressure.

So though he found the act "very distasteful," he eventually handed over a giving list to one of his business associates, who then passed its contents on to interested journalists. (Mr. Rockefeller insisted that the actual printed copy be immediately destroyed.).

The demand for this sort of personal exposure was intense.

The Gilded Age millionaires had emerged as one of the prime preoccupations of a nascent industry of celebrity journalism, and their lavish giving made good copy. Newspapers often printed indexes of the richest Americans’ largest gifts on the front page, like baseball box scores. And they did their best to play up the competition in giving between the nation’s wealthiest citizens, Mr. Rockefeller and Mr. Carnegie. Cartoonists depicted the industrialists as runners in a race with coins spilling from their pockets—and, of course, with a crowd watching. The implication was clear: Philanthropy had become a spectator sport.

Mr. Rockefeller’s advisers appreciated that by playing to that crowd, they could burnish the Standard Oil magnate’s public image, while alleviating some of the public’s anxieties about the place of big philanthropy in a democracy. They helped forge a grand bargain around two understandings of the word ‘publicity’ in the Progressive era. Even before the association most common today of institutional self-promotion, there was another that suggested transparency and accountability.

Big philanthropy would publicize its achievements as a way to legitimize its place in American society. So when, in 1916, a Detroit newspaper criticized the newly formed Rockefeller Foundation for "flaunting" its generosity and publishing a list of the gifts it had made the year before, the staff had a ready answer. Such publicity, the foundation’s secretary wrote to the paper, opened the institution up to the "free criticism" of the public, which was the only way to ensure that well-designed programs were continued and badly designed ones terminated. Philanthropy would have to trumpet its achievements to be held accountable; this is the underlying logic of the philanthropy list.

For the next century, that logic remained intact, though honored with varying degrees of enthusiasm.

Only a handful of major foundations issued annual reports before the 1960s, and it was not until the Tax Reform Act of 1969 that they were required to do so by law. As late as 1972, a leader in the field could comment, "because of the long-time myth that philanthropy is a personal and private thing many foundations grew up practicing silence rather than communication."

That belief reigned more powerfully in the realm of individual donations, rendering it even more difficult to extract accurate information. To the extent that philanthropy lists existed, they were the privileged possession of a small priesthood of professional fundraisers, who cobbled them together from press reports and personal contacts.

It wasn’t until the final decade of this last century that the myth was shaken and that the American philanthropy list could begin its second golden—and Gilded—age.

Like the first one, this was prompted by an enormous creation and concentration of personal wealth.

There are many ways to conduct an accounting of the nation’s wealthiest individuals, and a cottage industry has developed to do just that. But whatever standards are used, it’s clear that the ranks of the megarich have grown fantastically over the last several decades.

To cite just one measure of their growth, according to the economic historian J. Bradford DeLong, there were only 13 individuals who could be considered "billionaires" in 1968 (defined as those whose wealth was greater than the annual output of 20,000 average American workers), whereas there were 132 individuals who fit that description when Mr. DeLong conducted his research in the mid-1990s. And according to a recent report by Oxfam, the number of actual billionaires worldwide has doubled since the financial crisis of the last decade, to nearly 1,700.

For this new class of superrich, philanthropy has become a key marker of status. As Fortune magazine announced at the inauguration of its first philanthropy list in 1996.

"Nowadays, giving money away is trendy—almost as sexy as making it."

At the high-altitude convocations of the global elite, the lines between the entrepreneurship of the social kind and of the traditional money-making variety have been eroded by the acids of philanthrocapitalism, which have also blurred the catalogs of leading figures in each domain.

There are undercurrents of anxiety, though, that run even through Davos, bubbling up at its annual panels on the threat of global inequality.

These, in turn, have produced a renewed and public focus on the responsibilities of great wealth.
Take, for instance, the Giving Pledge, the campaign started by Bill and Melinda Gates and Warren Buffett to persuade the world’s billionaires to devote a majority of their wealth to philanthropy during their lifetimes. The pledge contains a key requirement, asking signers to compose personal testimonials about their decision to join, which are displayed on the pledge’s website. These are meant to inspire other superwealthy peers to come aboard.

But they are no doubt also directed to the restive 99 percent, proof that the pledge signers take the moral burden of billions seriously.

There is, in fact, a greater interest in large-scale philanthropy among the public these days. As in the first Gilded Age, the attention combines a mixture of amazement and apprehension. Multimillion-dollar gifts are the subject of more media attention, more academic research, more development solicitude, and more public scrutiny than ever,

All these factors have contributed to a recent renaissance in philanthropy lists. Yet the lists’ rise is most often traced to a single call to action made within an interview Ted Turner gave to Maureen Dowd, a New York Times columnist, in August 1996.
The column opened with the media mogul admitting his trepidation at recently making several $100-million donations. He hadn’t worried that the money would be spent on excessive overhead or agonized over the causes left unfunded. He was concerned that his total net worth would take a hit and that he would plummet on the Forbes 400 list of the nation’s wealthiest men and women. He liked his perch in the single digits and had hoped to stay there.

He suggested to Ms. Dowd that similar fears gripping other denizens of the Forbes list were seriously hampering American philanthropy.

"These new superrich won’t loosen up their wads because they’re afraid they’ll reduce their net worth and go down on the list."

Mr. Turner’s remedy to the tyranny of one ranking system was the promotion of another: one that spotlighted the most generous Americans (and shamed the least generous, through the awarding of an "Ebenezer Scrooge prize"). This list would align the vanity and competitive nature of the nation’s wealthiest citizens with the public good; it would capitalize on, as he later remarked, a changing "culture toward philanthropy" premised on greater public scrutiny.

Mr. Turner even claimed that Bill Gates and Warren Buffett, the two richest men in the U.S. at the time, had let him know that if there was "a list of who did the giving rather than the having," they might commit more to the former. (In that conversation, the seeds of the Giving Pledge were sown.)

Mr. Turner also thought that a philanthropy list would provide a check against the instinct of many billionaires to put off their giving until ripe old age, a pastime to occupy their retirement years.

Mr. Turner didn’t think they had that sort of time.

The nation’s wealthy, he insisted, had to endow their philanthropy with a greater sense of urgency; it was the only way to combat the growing income inequality that he believed was rotting the civic core. The fate of the nation was at stake. Without it, he warned, "we may have another French Revolution."

Mr. Turner went searching for outlets that could compile the list.

Several took up the challenge.

A few months after his interview with Ms. Dowd, Fortune released what it called "the most rigorous and comprehensive" list of the most generous Americans ever assembled, ranking the top 25 gift-givers of 1996; the next year, it expanded the list to 40, at whose summit presided Mr. Turner himself, a position he earned with a $1-billion gift to support the United Nations. A short-lived publication called The American Benefactor offered its own list in an inaugural issue, ranking the Americans who had given the most over their lifetimes. (Walter Annenberg and Paul Mellon sat at the top.) Like Fortune, American Benefactor cited Mr. Turner’s injunction as its inspiration.

It was perhaps the online magazine Slate, however, that took up Mr. Turner’s challenge most enthusiastically, publishing its first list, the Slate 60, in December 1996.

For several years, their rankings were compiled almost singlehandedly by Ann Castle, who had gained expertise in big donations—and assembled a sophisticated data set on such gifts—from her time in the fundraising trenches at several leading universities.

When Ms. Castle died in 2000, The Chronicle of Philanthropy took up responsibility for the research. (Slate eventually stopped publishing the list.) Meanwhile, other similar lists proliferated.

In 1997, Ms. Castle began compiling one for Texas Monthly based on the state’s most generous citizens.

In 1999, the Indiana University Lilly Family School of Philanthropy received a registry of million-dollar gifts that Arthur Frantzreb, a pioneering fundraising consultant, had been compiling for more than three decades. The school agreed to continue his work, creating a digital and searchable database, and in 2011, the list was made public.

Other publications have produced lists of the top women and African-American philanthropists.

And bringing the trend full circle, several years ago, Forbes introduced its own list of "America’s Top 50 Givers." Ted Turner no doubt smiled at the news (though he didn’t make the cut himself.)

What can we learn from all these inventories of megadonations?

Obvious trends emerge in terms of the biographies of the givers and the industries and businesses that generated their wealth.

And the methodological decisions that go into preparing them—should donations to foundations and donor-advised-funds be counted, or should gifts only register when they "get out the door"? How should the list treat impact investing?—implicate some of the most pressing question confronting the philanthropic sector.

Yet in another sense, the relationship between cataloging and evaluating philanthropy suggested by these lists is ambiguous. If it is difficult to measure the quantity of philanthropy in the United States, noted Jodie Allen in the introduction to the first Slate 60, judging the quality of giving is an even more difficult—and hazardous—undertaking.

"The very notion of quality as applied to acts of philanthropy is suspect," she remarked. And yet the editors couldn’t resist a little editorializing. They noted, for instance, the preponderance of giving to already well-endowed universities and hospitals and the relative lack of generosity to cash-strapped social-welfare services.

In fact, the traditional philanthropy list embodies one of the central tensions in the American philanthropic tradition.

On the one hand, it seems to champion a voluntary ethic, celebrated for its own sake. We leave it to the giver to determine the ends of his or her gift, because we value the expressive, and not just the instrumental, value of philanthropy. And also because we believe that, in the aggregate, all that individualized, idiosyncratic giving redounds to the greater public good.

On the other hand, to the extent that the philanthropy list affirms this voluntary principle, it deflects evaluation; it is agnostic on impact. And for some critics, this means it is an impediment to serious thought about philanthropy.

This, for instance, was the reaction of Arianna Huffington, who targeted "the buck-is-a-buck-is-a-buck nature of the [Slate] rankings."

Why, for instance, should Robert Mondavi’s $20-million gift to the American Center for Wine, Food and the Arts, in Napa (No. 36 on the 2002 list), she asked, be judged on the same terms as a $30-million donation to provide scholarships to low-income children (No. 23)?

It was time, she announced, "to start deconstructing charitable giving and stop defining it as any tax-deductible contribution to any old 501(c)(3)."

So Slate encouraged her to offer up a rival list that would revise its own, correcting for "true philanthropic spirit"—what became the "Huffington Virtue Remix."

Ms. Huffington went to work. For instance, she reduced the total gift amount of donations that seemed to her "self-aggrandizing" and designed to improve the sheltered world of the privileged. Gifts to opera houses were discounted, even though she claimed to be a devoted opera fan. She docked points for gifts that bolstered already mammoth endowments, for gifts that came attached with "naming rights," and for capital investments in buildings. On the other hand, gifts that relieved immediate suffering, helped to overcome poverty, or that encouraged self-sufficiency received a substantial markup.

As Ms. Huffington’s revision makes clear, the philanthropy list, for all the conventionality of the traditional "buck-is-a-buck" form, is actually an unstable genre, frequently breaking down to emit new configurations representing rival perspectives and preoccupations.

The list calls forth judgments on the challenge of ranking itself.

Take, as another example, the recent philanthropy list offered by Inside Philanthropy. When the online journal released its own ranking of giving from tech donors last year, it did not simply use the dollar value of their gifts, but the percentage of their total wealth that they had committed to philanthropy.

According to Michael Gentilucci, the publication’s tech editor, the list sought to spotlight "relative generosity" as an important principle. (The short-lived Condé Nast journal Portfolio had earlier championed a similar system).

But the list also lodged an important, if implicit, complaint about the philanthropic resources sitting on the sidelines in Silicon Valley.

Perhaps the most promising potential appropriation of philanthropy lists is as an adjunct to other allied projects seeking to catalogue, itemize and analyze large-scale giving. For we are also witnessing a more general renaissance in data-driven sector-wide investigations.

For nearly two decades, for instance, we have lacked accurate information about private funding of medical and scientific research. Recently, and in the light of a surge of major gifts to the field, the National Science Foundation has begun to develop a pilot survey of nonprofits to address this deficiency. The project would not encompass individual mega-donors directly; that’s still a dark territory of philanthropy knowledge.

But it would focus on the nonprofits to which most of their gifts are directed and it could spur an effort to shine more light into that terra incognita. Compiling philanthropy lists—once again marrying the interests of donors in self-promotion with the public’s interests in accountability—based on particular research sub-fields could represent an important supplement to the NSF project.

Catalogs of grants have long been an important tool used by foundations to determine possible collaborations and to understand the landscape of what causes get support; for decades, the Foundation Center has expertly managed grant-making data and assembled these sorts of lists.

Now it’s embarked on a new project that could point to another use for philanthropy lists. With the support of several major foundations, it’s created WashFunders.org, a web portal that features "data and information for donors, policymakers, and other stakeholders interested in water, sanitation, and hygiene."

What’s novel about the effort, explains Steven Lawrence, the center’s director of research, is that it combines data on foundation grant-making with data on bilateral and multi-lateral funding. It provides a picture of an entire funding landscape. Except, that is, for individual donors.

Working with them "is on our to-do list," says Mr. Lawrence. Targeted philanthropy lists could aid in that campaign.

There are still other ways philanthropy lists are being used: as the form is exported to nations developing fledgling cultures of mega-philanthropy, it might encourage the sort of "competition in giving" that Ted Turner believes turned on the spigots in the United States (the tallies from recent China philanthropy lists have already sparked a debate about the level of giving in the country.

And, unsurprisingly, there has been pressure to put the lists in service of the central preoccupation of the philanthropic sector: impact.

In their influential book Philanthrocapitalism, for instance, Matthew Bishop and Michael Green argue that the best way to guarantee that philanthropy continues to "perform wonders" is to transform how the sector judges its funders, from a "simplistic focus on how much they give" to a "rankings based on what philanthropists actually achieve with their giving."

At least one journal, in fact, has made exactly this sort of effort.

"While rankings in other publications highlight those who give the most money," the editors of Barron’s wrote in introducing their 2009 "Best Givers" list, "we chose to focus on those who are getting the results." They used criteria such as "innovation, quality of alliances with other groups, [and] the ripple effects of their giving" that bumped the Gates Foundation down to No. 7 and opened up a spot for Brad Pitt’s pledge of $5- million to construct low-income homes in New Orleans in the wake of Hurricane Katrina.

What sort of insight such an impact-based ranking scheme provides is open to debate.

Does it encourage critical thinking about how to select a cause, as the effective altruism movement has pushed?

Would donors, or their publicists, seek to game the rankings system, much as many colleges and universities now do?

In fact, Phil Buchanan, president of the Center for Effective Philanthropy, points to the US News list as a cautionary tale about the dangers that these sorts of ranking regimes can pose to nuanced analysis.

"Rank order lists are often not that helpful in terms of generating real understanding of what’s going on," he warns. "They get people interested to see who’s No. One, but I’m more interested in useful data that can be interpreted in context."

It’s a reasonable concern. And it is one worth keeping in mind when the next list-making season falls upon us. We should remember then that if we are to rank, we should rank responsibly.

Benjamin Soskis is a fellow at the Center for Nonprofit Management, Philanthropy, and Policy at George Mason University and a historian of American philanthropy.