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The seven donors who gave the most last year all made large contributions to help those harmed by the pandemic and its economic impact. Many of those donors, along with others among the Chronicle’s Philanthropy 50 ranking of the Americans who gave the most, also gave generously to community-based organizations, often led by people of color.
MacKenzie Scott (No. 2 on the Philanthropy 50), a novelist and former wife of Amazon founder Jeff Bezos (No. 1), gave $5.7 billion in 2020, working closely with consultants and community leaders to identify 512 organizations for seven- and eight-figure gifts. Jack Dorsey (No. 5), co-founder of Twitter, put $1.1 billion into donor-advised funds and by the end of the year had distributed roughly a third of it, giving $330 million to more than 100 charities to help people recover from the pandemic and to groups focused on racial equity.
The financier Charles Schwab and his wife, Helen (No. 24), gave $65 million to address homelessness in San Francisco. Netflix co-founder Reed Hastings and wife, Patty Quillin (No. 14), gave $120 million for financial aid for Black students at historically Black colleges and universities. Michael Jordan, the basketball great, (No. 31) pledged $50 million to racial and social-justice groups.
“When I look at the events of the last year, there was an awakening for the philanthropic sector,” says Nick Tedesco, president of the National Center for Family Philanthropy. “Donors supported community-led efforts of recovery and resiliency, particularly those led by people of color. There was also an intentional move by many donors to cede power and advance equity.”
Jeff Bezos topped the list, with $10.2 billion in giving — the vast majority of which came before the pandemic, with his $10 billion gift to create the Bezos Earth Fund. The fund made grants totaling at least $790 million in 2020, including $100 million apiece to five environmental organizations. Bezos also gave $100 million to Feeding America and $50 million to a pandemic-relief effort in Washington State.
After Scott at No. 2, the remaining top seven were:
The list of big donations to combat homelessness in the Bay Area reads like a spreadsheet of major gifts at Stanford.
Fundraising experts say they think the trend toward broader giving is likely to persist.
“I don’t think this approach is just a 12-month moment that started with Covid and continued following George Floyd and is going to recede,” says Melissa Berman, the president of Rockefeller Philanthropy Advisors. “I think there has been change building among private donors, as well as institutional funders, to rethink top-down philanthropy and to think about applying an equity lens.”
The $1-billion-plus of giving by each of the top five on the Philanthropy 50 matches 2019’s record. In the years prior to that, no more than three donors per year had given $1 billion or more.
Seventeen donors — nearly a third of the Philanthropy 50 — made their fortunes in technology this year, and 20 of the donors on the list live in California.
Joe Gebbia (No. 47), the 39-year-old co-founder of Airbnb, has seen his net worth shoot up to around $12 billion following his company’s initial public offering in December. In 2020, he gave $25 million to two San Francisco charities that tackle homelessness and help people who have suffered economically because of the pandemic.
“I’ve been incredibly fortunate and believe that comes with the responsibility of giving back,” Gebbia says. “Where will I take it? The sky is the limit. I am still formulating my thesis for giving. What I can say is that it will be in pursuit of a better future for others.”
At a time when tech billionaires’ wealth is compounding, and many working people are still suffering from the pandemic’s fallout, philanthropic expectations have never been higher. San Francisco public-school officials floated a plan in January to raise $2 billion from billionaire philanthropists to help the district improve education and recover from the pandemic. David Beasley, executive director of the United Nations World Food Program, highlighted the disparate impact of the pandemic in a January interview on the PBS NewsHour when he called for the rich to step up.
“During the pandemic, billionaires made $5.2 billion in increased wealth per day,” he said. “All we are asking for is $5 billion to avert famine around the world. I don’t think that’s too much to ask.”
Elon Musk, whose $180 billion fortune puts him neck-and-neck with Bezos for richest person in the world, is not on the Philanthropy 50. In January, Musk turned to Twitter for philanthropic advice, calling productive giving “way harder than it seems.” Musk has faced criticism for his meager lifetime donations, estimated in a recent Vox article at just 0.05 percent of his current net worth.
“It’s unconscionable for someone like that to not give in a meaningful way,” says Phil Buchanan, president of the Center for Effective Philanthropy. “We should all be putting pressure on these folks to get on with their philanthropy.”
Simple applications and few reporting requirements can make it difficult for charities to build lasting ties with donors.
Sharna Goldseker, a consultant who focuses on next-generation philanthropy, says the more positive trend emanating from Silicon Valley is a radical simplification of the giving process. Instead of spending a year or more developing a strategy and identifying and conducting due diligence on the nonprofits expected to carry it out, this year many big donors, including Scott and Dorsey, provided unrestricted funds to nonprofits quickly through a simple application process or no application process at all.
“You have many new philanthropists who have made their wealth by disrupting traditional models,” Goldseker says. “Because that approach has been successful for them, they’re applying some of those same approaches to philanthropy. They’re trusting their partners on the ground to communicate what they need, and they’re funding with less strings attached, less reporting requirements, and less hoops to jump through.”
As donors channel their donations toward small and medium-size organizations, charities and causes that have long been on the outside looking in are suddenly flush. The list of recent eight-figure gifts to combat homelessness in the Bay Area is starting to read like a spreadsheet of major gifts at Stanford University.
Cisco, $50 million in 2018. Salesforce CEO Mark Benioff, $30 million in 2019. The Schwabs, $65 million in 2020. Gebbia, $25 million in 2020.
The $65 million Schwab gift to Tipping Point Community, a charity that seeks to reduce poverty in the Bay Area, will go toward multiple projects to provide permanent supportive housing.
“We can no longer make the excuse that we don’t have the resources,” says Sam Cobbs, the charity’s chief executive.
Cobbs says he is aware of one midsize racial-justice organization — he declines to name it — that has received so many donations in the past six months that it is “sitting on $70 million of unallocated budget.”
Robert Smith’s new nonprofit illustrates the burgeoning interest in organizations working toward racial equity. Smith (No. 28), the founder of a private-equity firm, gave $50 million to create the Student Freedom Initiative, which will help reduce student-loan debt among STEM students at historically Black colleges and universities.
The idea for the nonprofit came from Smith’s experience in 2019, when he was also on the Philanthropy 50 for committing $34 million to Morehouse College to pay off the debt of every one of that year’s graduates. Smith, the wealthiest Black person in America according to Forbes, reached a federal tax-evasion settlement last year that will require him to pay $140 million, but that hasn’t slowed other donors and corporations from seeking to join his new venture.
TAKEAWAYS
The Student Freedom Initiative is expected to announce several additional gifts worth a few hundred million dollars in the coming months, helping it expand to offer internships and mentoring to students and capacity-building assistance to the HBCUs with which it works.
“I meet with Robert on this every week,” says Keith Shoates, the group’s executive director. “He is in this for the long haul with his time, effort, and dollars.”
The new billionaire giving style means some charity executives are waking up one morning to learn they have millions more at their disposal. Several recipients of gifts from MacKenzie Scott have described her contribution as their largest ever — and nearly as many have reported overlooking the initial email about the gift, thinking it was spam.
Whether this kind of giving continues may depend on how effectively these transformative gifts are used. For decades, fundraising experts explained the relentless giving to the biggest and best-endowed colleges and universities as almost inevitable — they have been around forever, they will be around forever, they have the capacity to put the gift to good use, and they have investment gurus who can ensure endowed gifts keep growing in value.
The unstated corollary? Hand a $20 million gift to a community organization that has never received a gift that size and it might all be frittered away.
Alison Powell, a partner and philanthropy adviser at the Bridgespan Group, which is advising MacKenzie Scott on her giving, doesn’t see that as likely.
“I would question the presumption that these organizations are more risky than traditional institutions,” Powell says. “What is the downside risk of giving to an organization that’s doing really hard work within a community? There’s really very little risk that the money won’t do some good.”
Charities that end up with more money than they can spend right away, she says, can borrow from the university playbook. Put some aside in a reserve or endowment and create a spending policy that helps cover salaries or technology upgrades. “There’s no reason that smaller organizations can’t do the same thing,” she says.
As the biggest donors give in new ways — in many cases forgoing the highly staffed foundations that have long been the norm among the ultrarich — fundraisers may be wondering how their approach should change. Cobbs, who previously led First Place for Youth, a charity that helps young people transition out of foster care, compares the current situation to his experience when he helped that Oakland-based organization expand to Silicon Valley.
The people with fortunes in Silicon Valley were philanthropic, he says, but many were young and still focused on their businesses. It was a struggle to get on their radar.
“You almost had to run into somebody out on the street to get their attention,” Cobbs says. “This is a little bit the same way.”
The new vogue of simplified applications, large unrestricted gifts, and fewer reporting requirements may seem like a charity’s wish list fulfilled, but it has downsides. Some charities that have received gifts from Jeff Bezos’s Day One Fund say the gifts came out of the blue — and the interaction ended there, stymieing any efforts by the charities to build a relationship that might lead to future gifts from the fund.
Bill Stanczykiewicz, director of the Fund Raising School at the Indiana University Lilly Family School of Philanthropy, says that with 90,000 private foundations looking to make grants, smart charities will continue to emphasize fundraising basics — identifying prospective donors, cultivating relationships, and submitting proposals. If an unanticipated windfall shows up, credit the charity’s operating results, not the fundraisers, he says.
“Most of the recipients of the MacKenzie Scott gifts would say we didn’t seek them out,” Stanczykiewicz says. “The big takeaway is that if you run quality programs and remain faithful to your mission, there are times when people might notice and surprise you with a gift.”
If small and midsize charities were the notable winners in 2020, does that make large universities the losers? Hardly. Colleges and universities received $2.2 billion from Philanthropy 50 donors in 2020 — far more than any other category aside from foundations and donor-advised funds, which received $4 billion.
At the very high end of the giving spectrum, however, universities may be seeing some impact. Colleges and universities received seven gifts worth $100 million or more in 2020 from donors — some anonymous — and from individuals’ foundations, down from 10 in 2019, according to the Chronicle’s online database of gifts announced by individuals or their foundations.
“As more money continues to come into philanthropy, large organizations and institutions will continue to flourish,” says Berman, the president of Rockefeller Philanthropy Advisors. “But I am also optimistic that community-led organizations will be able to get a bigger share of the dollars.”
Benjamin Soskis, a research associate in the Center on Nonprofits and Philanthropy at the Urban Institute, says the most striking change with this year’s Philanthropy 50 list is that it presents a plurality of options for giving — which means that any large gifts to already well-heeled universities will come with an implicit critique.
“There’s a big difference between a hypothetical ‘Why didn’t you give to an HBCU instead of Harvard?’ and today’s list, where you can point to donors who actually did that.”
