Billionaire pioneers in the tech industry led a near-record year of charitable giving by America’s superrich in 2017, even as the country wrestled with income equality that some say is exacerbated by the wealth amassed by these philanthropists.
The median annual giving by the 50 most generous donors last year reached $97 million — nearly double what it was in 2000, the first year The Chronicle conducted its Philanthropy 50 analysis — even after adjusting for inflation. Collectively, this group of philanthropists gave away $14.7 billion — the largest total since 2008, when the Great Recession began to strait-jacket philanthropy. It’s also the third-largest in the 18-year history of the survey.
The 2017 giving spree was fueled by huge donations from many relatively young major philanthropists who are still accumulating great wealth — and who are likely to make big gifts for years to come.
That has not been the case with previous Philanthropy 50 spikes, when multiple bequests or the largess of a single donor drove the number higher.
Three relatively young billionaire couples who built their fortunes in the technology industry topped the list, each giving away at least $1 billion. Bill Gates, 62, and his wife, Melinda, 53, claimed the Philanthropy 50 No. 1 spot for the fourth time, thanks to the $4.8 billion they donated to their foundation.
“They are the John D. Rockefellers of this generation,” says Brad Smith, president of the Foundation Center. “And they’re not done yet.”
Mark Zuckerberg and Priscilla Chan, who are both in their early 30s, gave away $2 billion in 2017 to their charitable foundation and donor-advised fund. Michael and Susan Dell, who are in their early 50s, donated $1 billion to their foundation.
Altogether, 11 figures from the tech industry made the list. Collectively, they accounted for $8.7 billion, or 60 percent, of Philanthropy 50 giving.
The numbers suggest an acceleration of the shift of big-philanthropy’s center from Wall Street to the West Coast — a shift that began when the Gateses opened their foundation in Seattle in 2000, says Rob Reich, co-director of the Center on Philanthropy and Civil Society at Stanford University.
The influence of tech leaders is greater even than what the Philanthropy 50 suggests, Mr. Reich notes, as many of them pursue social good through limited-liability corporations or for-profit ventures.
Whether the billions contributed by big donors close the income gap or answer other social issues won’t be known for years. Nearly two-thirds of Philanthropy 50 contributions went to foundations and donor-advised funds. Many of the donors who reloaded their philanthropic war chests are activists who want to drive social change. But nonprofits and philanthropy critics will watch them closely to see where the money is spent, and how fast.
Philanthropy is a source of power, Mr. Reich says. “And power deserves scrutiny, not gratitude.”
‘A Lot of Money’
The big-giving explosion was due largely to the fact that the wealthy were flush with cash in 2017. The U.S. economy was enjoying its third-largest expansion in history, and the stock market closed at a record high for the second consecutive year.
Robert Kissane, chairman of CCS Fundraising, a national consulting firm, says the strong year also reflects the fact that philanthropists simply had many opportunities to give big. A large number of institutions in higher education and the arts began major capital campaigns a few years ago as the economy regained its footing, he notes. Many reached full maturation in 2017.
The fundraising truth that capital campaigns target the wealthy is truer today than ever. The top 1 percent of campaign donors to colleges and private schools account for 79 percent of dollars raised in 2015 — up from 73 percent in 2007, according to the Council for Advancement and Support of Education.
The Inequality Problem
The surge in big gifts comes at a time when average Americans are curtailing their charity, according to a Chronicle analysis of tax data. The decline in giving since the Great Recession has raised fears that the country’s economic divide is being replicated in philanthropy, with nonprofits increasingly having to rely on the wealthy.
“A larger and larger share of the philanthropic pie is coming from fewer and fewer donors,” says Aaron Dorfman, head of the National Committee for Responsive Philanthropy.
The enormous share of Philanthropy 50 dollars going to foundations also could represent “an enormous warehousing of wealth for a century or more,” warns Chuck Collins, a scholar at the Institute for Policy Studies who began writing about issues of inequality after giving away a hefty inheritance at age 26.
The rhetoric of some major philanthropists suggests income inequality weighs heavily on them. Ray Dalio (No. 48) — head of Bridgewater Associates, the world’s largest hedge fund — called wealth disparities “our biggest economic, social, and political issue” in one of a series of interviews this fall.
Top philanthropists — whether pricked by conscience or concerned about the future — are thinking about income inequality as they make giving plans, some nonprofits report. The University of Chicago, which has received six contributions from Philanthropy 50 donors in the past two years, is seeing more supporters who want to bundle financial aid into their biggest gifts.
“They are really thinking about how they can provide opportunity more broadly and equalize the transformative impact of higher education to all potential students,” says Sharon Marine, vice president for alumni relations and development.
Big donors are responding positively as Oxfam America puts a spotlight on inequality as it fights poverty, officials say — even when the organization talks tough about changing tax structures and government policies that foster “extreme wealth.”
“Is that true of every billionaire? Of course not,” says Paul O’Brien, vice president for policy and advocacy for the organization. But many of their very wealthiest donors have upped their giving “because we’re talking about the responsibility of wealth.”
At least some of 2017’s Philanthropy 50 gifts aim to help those on the wrong side of the economic divide. Charles Butt (No. 7), the Texas billionaire owner of a grocery-store chain, committed $280 million to improving education. The gifts will, among other things, pay for scholarships for would-be teachers and create a new institute to train public-school administrators.
“We live in a time when support and funding for the nation’s public schools is declining and faith in the system is eroding,” Mr. Butt said at the time.
At No. 10 in the ranking, Roy Vagelos, former head of Merck pharmaceuticals, and his wife, Diana, earmarked $150 million of their $250 million commitment to Columbia University for scholarships to ease the debt load of medical-school students on financial aid.
“This idea of giving to young people the kind of support that allowed us to pursue our own educations at Penn, Barnard, and Columbia has been a driving force in our lives for some time,” Mr. Vagelos said in a statement at the time.
Banking heiress Agnes Gund (tied at No. 23) made perhaps the most surprising big bet for social change. She used $100 million in proceeds from the sale of a Roy Lichtenstein painting to seed a new organization working on criminal justice. She’s also rallying her fellow art collectors to sell pieces and help raise another $100 million for the group.
Though Ms. Gund has been politically active in social-justice issues, this is an unusual charitable foray for someone best known as a patron of the arts. “She really took a leap of faith,” says Melissa Berman, head of the Rockefeller Philanthropy Advisors, which with the Ford Foundation is helping Ms. Gund manage the work.
Puzzling Over Philanthropy
Last year also saw some major philanthropists publicly puzzle over how best to use their philanthropy. Mr. Gates announced his foundation’s shift after 17 years of pursuing large-scale change in public education’s structure, teaching, and curriculum to focus on supporting school networks. He cited “the two Americas” when he announced the change.
Michael and Susan Dell’s foundation, which was established in 1999, released guidelines for “a new wave of philanthropy” based on its survey of nearly 700 “social-impact entrepreneurs.” The foundation, according to the report, wants “to broaden our perspective and get better at our own work,” according to the report.
The Chronicle’s 18th annual ranking of America’s biggest donors.
Ms. Berman says many major philanthropists are pulling back and considering new approaches. Like Ms. Gund, they’re increasingly working with other donors and trying to attack social systems that lie behind poverty and other social ills. After a decade focused on expanding good ideas and programs, she says, the question now is: How do we expand but also change the system?
Newcomers to big philanthropy like Steve Ballmer and Jeff Bezos also signaled last year that they are pondering such questions and want to go slowly. In the summer, Mr. Bezos announced in a tweet that he was developing a philanthropy strategy and asked for ideas “at the intersection of urgent need and lasting impact.” In January of this year, he gave $33 million to pay for college scholarships for “dreamers,” undocumented immigrants whose parents brought them to this country as children.
Tech’s Gilded Age
The tech philanthropists on the Philanthropy 50 represent different eras of America’s tech and digital revolution. Mr. Dell and Mr. Gates might be considered “old tech”; the former is best known for his personal computers, the latter for the Windows operating systems that ran those machines.
Mr. Zuckerberg, the famed Facebook co-founder, is part of a brash new group of tech executives whose fortunes are built on internet and social-media ventures. These include eBay founder Pierre Omidyar and his wife, Pam (No. 9), Facebook executive Sheryl Sandberg (No. 25), and Salesforce.com CEO Marc Benioff and his wife, Lynne (No. 27).
The dominance of tech philanthropists is worrisome to some. Like the oil and steel barons who led gilded-age philanthropy in the 19th century, they enjoy wealth derived from an industry that’s not been kind to the middle class, says Mr. Collins of the Institute for Policy Studies. Automation and artificial intelligence are threats to wages and jobs in retail, banking, insurance, and many other industries.
Giving by all the big philanthropists could do more to end inequality if it aimed to end the tax and legal structures that allow individuals to accumulate vast fortunes, Mr. Collins adds. He would love to see billionaires bankroll, for instance, California’s nascent student-led campaign to introduce an estate tax to fund college financial aid.
“It’s one thing to say, ‘I’ll give a scholarship or endow a new building.’ It’s another thing to empower the next generation to put in place a mechanism to fund higher education based on taxes, not philanthropy.”
Correction: A previous version of this article gave an incorrect name for the National Committee for Responsive Philanthropy.
