During an election year soaked in populism, some of America’s biggest philanthropists bestowed an unusually large chunk of their charity on colleges and universities, including several elite institutions.
Collectively, the donors in the Chronicle’s survey of the most generous donors of 2016 gave away $5.6 billion. Higher education received 48 percent of that — the highest share in at least the last five years of the Philanthropy 50, The Chronicle’s annual ranking of America’s most generous donors. The previous high during those five years was 34 percent, in 2013.
Many of the gifts from 2016’s biggest donors (the list includes 51 individual and families because of ties) were directed to colleges with considerable wealth. For every $5 of their charitable giving, $1 went to a college with an endowment of more than $3 billion.
Altogether, at least 28 of the Philanthropy 50 donors made gifts to colleges and universities, benefiting 20 institutions. (Both numbers could be higher; some donors don’t identify the charities to which they give.)
Stanford collected $550 million in Philanthropy 50 contributions, the most of any university. Its $22 billion endowment is the fourth largest among the nation’s colleges, according to the Council for Aid to Education.
The University of Southern California ($4.6 billion endowment) netted three gifts totaling $280 million. Four donors to the University of Chicago ($7 billion endowment) made eight-figure gifts totaling $133 million.
New Scrutiny of Big Gifts
Gifts to elite colleges could face scrutiny this year from the White House and Congress. In one of his few comments during the presidential campaign about higher education, Donald Trump threatened the tax-exempt status of universities with “multibillion dollar endowments” and said these institutions should lower costs and increase student aid.
“Instead these universities use the money to pay their administrators, to put donors’ names on their buildings, or just store the money, keep it, and invest it,” he said in a September speech.
The administration has not announced any plan on college endowments. But U.S. Rep. Tom Reed, a New York Republican and co-chair of President Trump’s transition team, is assembling a wide-ranging proposal that might include putting limits on the charitable tax deduction for gifts to colleges with large endowments.
Any such move would likely be characterized by critics as government intrusion into an individual’s private choice of charities to support. Colleges, in particular, would mount fierce opposition, predicts Alexander Holt, a higher-education policy analyst at New America, a left-leaning think tank.
The Chronicle of Philanthropy’s annual ranking of America’s biggest donors, with details about their gifts and favorite causes. Plus: Read about Sheryl Sandberg, Roxanne Quimby, Robert Smith, and others changing the face of philanthropy.
Still, he adds, in today’s political climate the idea could win bipartisan support. “It is just so in keeping with populist sentiment.”
‘Top-Heavy Philanthropy’
Recent years have seen a small but growing chorus of criticism of big philanthropists. The liberal Institute of Policy Studies recently warned of an increasingly “top-heavy philanthropy” in which universities and the arts feast on megagifts while social-change groups and others starve.
Nike co-founder Phil Knight faced brickbats last year for the $400 million he and his wife, Penny, gave Stanford to fund scholarships for 100 top graduate students.
Mr. Holt, who studies college economics, compares the Stanford program to the Rhodes Scholarship and suggests that Mr. Knight could achieve greater good by donating dollars elsewhere. “This is hardly the most efficient allocation of capital for the higher-education system,” he says.
Within philanthropy, such criticism is often seen as healthy but misguided.
“I understand the backlash when a billionaire gives a $100 million donation to Harvard or Stanford,” philanthropist and former hedge-fund manager John Arnold told The Chronicle in a recent interview. “People wonder whether that is the best use of funds. But does anyone think that is a worse outcome for society than bequeathing those funds to one’s heirs?”
Higher-education giving has been concentrated among top-tier universities for many years, says Ann Kaplan, director of the Council for Aid to Education’s annual survey on giving to colleges. In 2016, the 20 institutions that topped the council’s survey collected 27 percent of the total raised by more than 800 colleges — about the same share as in 2011.
Ms. Kaplan says big colleges and universities just naturally attract big gifts: “They have much, much bigger needs, and bigger cases for support.”
Robert Kissane, chairman of consulting firm CCS Fundraising, says philanthropists increasingly want to back advances in health and the sciences, which leads them to fund research centers at big, well-endowed universities. Nearly $1 billion of the $2.7 billion donated to higher education by the Philanthropy 50 this year was earmarked for research.
“A lot of big money is going into biomedical research,” says Mr. Kissane. “There have been so many spectacular breakthroughs in biomedicine, and there’s a clear case that can be made for philanthropic support.”
