The Empire Strikes Back

Lindsay France/Weill Cornell Medicine

Poor New York City. About five years ago, the Facebook co-founder Mark Zuckerberg planted the flag of Silicon Valley philanthropy just across the Hudson River with his $100 million gift to Newark, N.J., schools. Ever since, the media and opinion leaders have obsessed over the “new new thing” that tech billionaires represent. Meanwhile, New York, with its black-tie galas and gilded naming opportunities, has begun to look old and frumpy, a dowager clinging to past glory.

A New York Times story last fall laid bare the tensions between the upstarts out West and the establishment back East. It found in Silicon Valley “pious disdain for Wall Street’s showy, status-seeking ways of giving.” Among the Californians quoted, Emmett Carson, head of the Silicon Valley Community Foundation, threw down the most direct challenge, saying, “West Coast philanthropy is not influenced by East Coast pronouncements.”

Lost in this cross-country rivalry is a remarkable story out of New York. Even as Silicon Valley has ascended, giving in the traditional epicenter of American philanthropy has boomed. Consider the evidence:

• From 2010 to 2012, New Yorkers made only four gifts equal to or greater than Mr. Zuckerberg’s Newark donation. But in the past three years, they have rung the nine-figure bell at least 14 times.
• Gifts of $5 million or more by Gotham-area residents totaled $4.1 billion in the past three years — up from $2.3 billion from 2010 to 2012, according to The Chronicle’s database of publicly announced gifts.
• New York charities are setting new fundraising highs. The Robin Hood Foundation and the UJA-Federation of New York each brought in record hauls from their annual galas last year. A Columbia University campaign closed in 2013 at $6.1 billion — an Ivy League record until Harvard bested it recently.
• Outside of the public eye, many philanthropists are socking away cash for doing good after relatively quiet years. Notably, Ray Dalio, who manages one of the world’s largest hedge funds, has poured more than $750 million into his family foundation in the past four years. As of 2013 (the latest year data is available), assets in New York-area foundations had nearly returned to their inflation-adjusted 2007 peak of $212 billion, according to the Foundation Center.

In short, Big Apple philanthropy is back and, for some organizations, stronger than ever, particularly when it comes to big gifts. Columbia, for instance, is averaging better than 100 gifts of $1 million each year — even more than it did in the run-up to the recession.

The president of the Robin Hood Foundation, Reynold Levy, is a Brooklyn native who’s led Lincoln Center and other major New York nonprofit institutions for decades. He says he’s never seen a time like this. Every part of the nonprofit world can point to major institutions that are financially robust and assembling big plans for growth. “You are talking to an energized, pumped-up guy,” he says.

More Than Wall Street

New York’s resurgent philanthropy obviously owes much to the improved economy and stock market, despite the 2015 dips in the major indices. Wall Street is paying healthy bonuses, and hedge funds — a reliable generator of megawealth — are opening at a faster clip than before the recession, despite punishing numbers for some brand-name firms last year. “You’ll hear about someone making a big gift, and it’s often a hedge-fund person you’ve never heard of,” says Donald Fellows, president of Marts & Lundy, a consulting firm with headquarters outside Manhattan.

Whitney Museum of American Art

Campaigns at Full Tilt

Still, there’s more to the story. Many nonprofits are reaping the benefits of an economic diversification decades in the making. Finance, insurance, and real estate remain the city’s economic linchpins, but other industries are kicking in — particularly a tech sector that has grown from a mere whisper to what some measures rank as the nation’s second largest, behind Silicon Valley.

“New York is clicking on all cylinders,” says Jonathan Bowles, executive director of the Center for an Urban Future. “Since the mid-1990s, the wealth coming in has been pretty phenomenal.”

The post-recession boom in big gifts is also a byproduct of fundraising on overdrive. In the fall, at least 16 Manhattan arts institutions were running campaigns, according to the Times. The combined ask: $3.47 billion. Manhattan-based Weill Cornell Medical College closed a $1.3 billion campaign in February 2013, then turned on a dime and completed a $312 million drive in less than two years.

Fundraisers say they’re encountering donors who are optimistic about the future regardless of whether their assets have fully recovered from the downturn. Some say the Giving Pledge is spurring donors at all wealth levels to give, not just billionaires. Of the 142 billionaires who’ve taken the pledge since its launch in 2010, 28 are from the New York area. (By contrast, 20 are from San Francisco and Silicon Valley.)

“There’s a far greater understanding in the culture of Wall Street and in the culture of successful people in New York broadly that they have a responsibility to give back,” says Mark Medin, the top development executive at the UJA-Federation of New York.

Nothing New?

Though New York philanthropy is surging, it’s not abandoning its time-honored modes of giving. “There’s still a lot of the same old philanthropy,” says one development executive who asked not to be identified. “There are three to 10 to 15 galas competing on Monday through Saturday night each week.” Younger New Yorkers want to be hands-on in their giving, the fundraiser says, “but they’re still following a lot of what mom and dad, even grandma and grandpa, taught them about philanthropy.”

Nevertheless, modernity has made some inroads. Some charity leaders say increasing numbers of New Yorkers have embraced new giving vehicles available through donor-advised funds and bank wealth-management programs. The result, they say, is an increasingly opaque system of charity. “Nonprofit leaders are really struggling; they see the changing patterns, but they don’t know how to get to the money,” says Chris Daggett, president of the New Jersey-based Geraldine R. Dodge Foundation.

Steve Mack/Wireimage/Getty Images

Interestingly, one small yet influential group of New York donors frames philanthropy in terms that echo the manifestos of the Silicon Valley set. In the late 1980s, about the time Mr. Zuckerberg was a grade schooler in suburban New York, two hedge-fund managers, Paul Tudor Jones and Julian Robertson, created foundations that preached and practiced an analytical, results-driven approach to philanthropy. Mr. Jones’s Robin Hood Foundation and Mr. Robertson’s Tiger Foundation have since functioned almost as “philanthropy finishing schools” for a generation of financiers, says Chris Addy, a partner with Bridgespan, a consultant that works with philanthropists.

Mark Lipton, a management scholar at the New School in New York, began advising some young hedge-fund managers on their philanthropy a few years ago. “They’re not by and large throwing $50 million at a hospital to get their name on it,” he says. “They’re much, much more analytic, much more focused on measuring impact,” he says. “That’s just how they’re hard-wired.”

Silicon Alley and Wall Street

To be sure, the hedge-fund kings differ from the tech moguls. Even the results-driven among them make the kinds of gifts to the arts or their alma maters that techies often disdain. And the annual Robin Hood gala — a hot ticket in New York high society — has no equivalent in Silicon Valley.

Still, tech moguls have found at least one like-minded partner on Wall Street. Hedge-fund manager William Ackman contributed $25 million to the Newark school-overhaul effort about the time that Mr. Zuckerberg signed on. More recently, he joined philanthropic ventures with LinkedIn co-founder Reid Hoffman and eBay’s Pierre Omidyar.

Hedge-fund leaders could craft similar alliances with the tech leaders building their companies — and their fortunes — in New York. Like many charities, Robin Hood is beginning to court these executives. Early meetings have featured geeky discussions of measuring impact with data, says Reynold Levy. “You can hardly breathe the air in the room, it’s so arid with all these intellectuals discussing methodological differences.”

Kevin Mazur/Getty Images

In the long run, New York’s maturing tech industry, which is centered in “Silicon Alley” in the Flatiron district, may prove the catalyst for change in the city’s philanthropy. Companies aren’t yet generating the wealth that leads to megagifts, and fundraisers say tech leaders are too busy building their empires to devote much time to good works. But New York is betting big on tech.

Under former mayor Michael Bloomberg, the city gave 12 acres on Roosevelt Island to Cornell University and Technion-Israel Institute of Technology to build an applied-sciences and engineering campus. The resulting Cornell Tech — funded in part with nine-figure gifts from Mr. Bloomberg’s foundation, Charles Feeney’s Atlantic Philanthropies, and Qualcomm’s Irwin Jacobs — opens its first buildings in 2017.

City officials estimate the campus will spin off 1,000 companies over three decades, many of them in the tech field. Who knows? New York might even produce philanthropy’s next Mark Zuckerberg.

Note: A previous version of this article said that a Columbia University campaign raised $6.1 million in 2013 instead of $6.1 billion.