Who’s Up Next? How the Next Wave of Megadonors Will Give

Joe Gebbia, a co-founder of Airbnb, looks for one primary thing when he decides what charities to support: the founder. He’s drawn to people who have the creativity, imagination, and tenacity to start and sustain an organization. One of his business mentors always said ideas may change, but the founder remains.

About seven years ago, he met Malala Yousafzai, the Pakistani advocate for girls’ education, at a Giving Pledge event. Gebbia, who has pledged to donate the majority of his wealth, was taken with the Nobel Peace Prize winner, who was shot when she was just 15 years old for her advocacy and turned that violent attack into an international effort to boost education for girls.

“Malala is one of the most inspiring people I’ve ever met. She’s somebody who turned tragedy into a global movement,” Gebbia says. “When you hear the phrase, ‘Every girl deserves access to free, quality education,’ it’s hard to argue against that. It sits on a moral shelf, and I feel like it’s one of those things that is worth supporting.” In 2022, he pledged to give the Malala Fund $25 million over five years.

David Exodus, Courtesy of the UN

Gebbia chairs Airbnb.org, which pays the site’s hosts to open their short-term rentals to refugees, but he has no personal foundation. When it comes to his own giving, he simply writes checks to the organizations he wants to support. Just as he did with Airbnb, he believes in starting small, trying things, learning from mistakes, and growing only when necessary. “You never start a company by hiring 100 people and building a lot of infrastructure,” he says.

Gebbia, 42, who appeared on the 2020 and 2022 Philanthropy 50 lists, is part of a new guard of megadonors reshaping philanthropy. These philanthropists in their 40s, 50s, and 60s are likely to dominate the next 20 to 30 years of major giving. And they’re different from their predecessors.

To be sure, the list skews older — the median age of the donors in the ranking is 72 — and the older generations still contribute far more in megagifts than younger ones, the Chronicle’s new Philanthropy 50 rankings show.

Former New York Mayor Michael Bloomberg tops the list with $3 billion in contributions to charity last year. Other members of the old guard follow close behind. Nike founder Phil Knight and his wife, Penny, are at No. 2 with $1.2 billion in giving, and investor Warren Buffett is at No. 4 with contributions totaling $893.3 million.

But giving by younger donors points to an impending shift in philanthropy. Many in the next generation of high-profile donors are less interested in giving huge donations to big institutions like universities and hospitals. Causes including the environment, social justice, and scientific research drive their giving: They want to create tangible change in the world.

The next generation is hands-on with their giving. Robert Hale, who founded and runs a telecommunications company, and his wife, Karen, who have appeared on three previous Philanthropy 50 rankings, worked on their giving on an almost daily basis in 2022, when they gave away $1 million a week to nonprofits they selected.

Some are deeply analytical, like John and Laura Arnold (No. 5). John, who ran his own hedge fund, and Laura, a lawyer, look for policy areas, such as criminal justice and health care, that have been largely ignored and where big breakthroughs are possible — even if they take a decade or more.

Wendy Schmidt and her husband, former Google CEO Eric, (No. 7) hope to change broken systems, especially when it comes to environmental problems like climate change. They‘re betting on the transformative efforts that can sometimes come from small projects. Wendy Schmidt points to efforts they support to map the bottom of the ocean, which remains largely unknown and may unlock a world of important discoveries.

The Philanthropy 50

Michael Bloomberg gave $3 billion to charity last year to take the top spot in the Chronicle’s 24th annual ranking of America’s biggest donors. Read more:

• Meet Jon and Mindy Gray
• MacKenzie Scott: Look for a More Active Year After a Quiet 2023
• What Do Donor Revolts Mean for Fundraising?
• Michael Bloomberg Tops the List of America’s Biggest Donors in 2023
• How the Philanthropy 50 Was Compiled
• Top Donors: Where They Live, Where They Give, and More
• Top Donors’ Giving to and From Their Foundations and DAFs
• Which ‘Forbes 400' and ‘Giving Pledge’ Billionaires Gave Big
• Philanthropy 50

Scientific research is a draw for many in the next generation of big donors. Google co-founder Sergey Brin (No. 34) is likely the biggest supporter of Parkinson’s disease research. Facebook founder Mark Zuckerberg and his pediatrician wife, Priscilla Chan (No. 28), have been particularly focused on biomedical research in recent years and have launched the Chan Zuckerberg Biohub Network to bring together scientists to research complex challenges that might otherwise be neglected.

Many young donors’ vehicles for giving vary. They’re not wedded to having a traditional foundation. Some use donor-advised funds or a limited-liability company. They might use a 501(c)(4) to include political donations as part of a bigger strategy. Others, like Gebbia, just write checks.

“Younger people coming into wealth that are under 50, the majority of them are not interested in big institutional philanthropy. They don’t even like the word philanthropist,” says Renee Kaplan, CEO of Forward Global, which advises wealthy individuals on their giving. “They consider themselves change agents, social entrepreneurs, or community partners.”

Less Interest in Naming Rights

Gifts to colleges and universities are a mainstay of America’s wealthiest donors. Last year two of the top three causes supported by donors on the Philanthropy 50 were financial aid and higher education. Gifts to colleges and universities, at $1.4 billion, were surpassed on this year’s list only by gifts to foundations and donor-advised funds, which totaled $5.1 billion.

Baby boomers, who are 59 to 77 years old, and the silent generation, who are 78 to 96, were profoundly influenced by higher education, says Joanne Florino, a fellow at the Philanthropy Roundtable. Baby boomers were the first generation to go to college in significant numbers and as the generation matured, their rate of college attendance climbed quickly. In 1950, just 6 percent of Americans had a bachelor’s or advanced degree. By 1985, when the youngest boomers were completing college, that number was nearly 20 percent. The donor class saw financial gains throughout their careers due, in large part, to opportunities created by their education. Boomers and members of the silent generation — for whom higher education was rare — were happy to give back, Florino says.

Many have given generously to their alma maters. Michael Bloomberg, who is 82, has given a total of $3.5 billion to the Johns Hopkins University. Last year, James Simons, who is 85, and his wife, Marilyn, gave $500 million through the Simons Foundation to the State University of New York at Stony Brook, where James once chaired the mathematics department.

Donors who grew up in an era when going to college was more common — by 1995, more than a quarter of all Americans had undergraduate or graduate degrees — may not have found the experience as exceptional or as influential. Many of them have been more focused on evidence-based philanthropy and the impact of their giving, Florino says.

Young donors often question their wealth, says Stephanie Ellis-Smith, CEO of the philanthropic advisory firm Phila Engaged Giving. “We’re seeing a lot more folks thinking that we jumped the shark with this,” she says. “How could anyone have $131 billion [roughly the amount of Warren Buffett’s estimated wealth]? What does that even mean? And how did this happen?”

Giving among the wealthy of all generations is not as robust as it could be, Kaplan says. Only 23 individuals and couples that are in this year’s Philanthropy 50 appear in the Forbes 400 list of wealthiest Americans. Yet even those donors, the minority who are giving at the highest levels, as a group contributed less than 1 percent of their estimated total wealth, though some individuals donated more than that. “We still see the majority of wealth holders on the sideline,” Kaplan says. “More resources need to be unlocked.”

The emerging megadonors are less interested in having their name chiseled in granite at their alma mater than they are in solving important societal issues, says Carla Willis, a managing principal at Washburn & McGoldrick who advises universities on fundraising. Willis says that to win them over, fundraisers need to show them that they can advance their goals by supporting medical, scientific, or policy research at universities. That way, she says, “they see themselves as not giving to the institution but really giving through the institution and having an impact on solving some of these issues.”

The Schmidts have supported research at universities, Wendy says, but it must help to advance an issue they are trying to address. “We do support institutions, research institutions, universities, and certain programs in them,” Schmidt says. “But for the most part, our philanthropy has to do with funding communities, funding people who are at the roots of the problem, helping them to solve the problems because they know them best.”

One example of small-scale, meaningful work she points to is the Schmidt Family Foundation’s support of small hydropower plants in the Democratic Republic of the Congo. People who live around Virunga National Park used to spend lots of time gathering firewood for fuel because they lacked electricity. Schmidt says the project was successful: The resulting energy created economic opportunities for people who live near the park.

Virunga National Park

Karen and Robert Hale have made large donations to universities and hospitals, including $65 million to Connecticut College, but Robert also has concerns about giving to higher education. “It’s probably unlikely that we would give a big institution an open-ended check,” he says. He believes that higher education needs to be more accessible to people from different economic backgrounds — it is simply too expensive for most people to afford. He says roughly $40 million of the couple’s gift to Connecticut College was for scholarships.

“Sometimes I wonder whether they need a new gym, whether they need a new science center when the one they built 20 years ago is probably just fine,” he says. “But we believe what they need is diversity in the student body. Racial diversity and socioeconomic diversity.”

Taking On Systems

Newer megadonors are creative about the vehicles they use to give money, says Kaplan at Forward Global. She encourages donors to begin by thinking about what their values are and what kind of outcomes they want to achieve with their philanthropy. Those factors will dictate whether they use a traditional foundation, a 501(c)(4) for political advocacy, a donor-advised fund, impact investing — or a combination of approaches.

It’s not unusual for donors to make grants, impact investments, and commercial investments to achieve results, says Jennifer Kitt, president of Climate Leadership Initiative, which advises donors on how to support climate-related causes. “Many of the experienced climate donors are prioritizing using all the pockets. They’re giving with philanthropy. They’re making investments. Sometimes it’s catalytic. They’re not expecting a market return. Sometimes it’s impact investing,” she says. “It’s form following function.”

John and Laura Arnold started their foundation nearly 15 years ago. But their work has changed significantly since then. The couple started out giving to education. It’s an area with lots of opportunity and decades of research to learn from, which Laura Arnold says appealed to them. But the couple quickly learned that educational failings had more to do with issues like homelessness, the criminal-justice system, and holes in the social safety net than issues in the classroom.

“It became very clear to us that if we really wanted to address injustice as manifested in the educational system, we needed to really think about the systemic issues that led to that dysfunction outside of the educational system,” she says.

As the couple dug into larger social issues, they decided that pushing for big policy change would be more effective than funding one-off programs. They looked for systems that were ripe for change, that had been neglected by philanthropy, and whose ideas for improvements could be tested to develop a strong pool of evidence that would provide a map for change. Another requirement: clear opportunities to forge bipartisan agreements. Otherwise, any solutions would just face partisan gridlock. This analytical approach has led the Arnolds to focus on many issues — the website for Arnold Ventures lists 35 causes they support, primarily related to criminal justice, health care, democracy, journalism, housing, infrastructure, and higher education.

The Arnolds are devoted to their philanthropy full-time. They founded Arnold Ventures in 2010 as a limited-liability company, not a nonprofit. It has a staff of 130 that helps the couple carry out their vision. They use this structure to help them approach issues from multiple angles. In addition to Arnold Ventures, the couple has other, separate organizations to carry out various types of work. They have a traditional foundation — the Laura and John Arnold Foundation, with about $3.5 billion in assets — as well as a donor-advised fund. The couple also conducts political-advocacy work through Action Now Inc., a 501(c)(4) organization, since much of their efforts revolve around policy change. The Arnolds say that by employing all of their staff through the LLC, they can legally coordinate efforts between their advocacy and charity work, which they couldn’t before.

The Arnolds take a long-term view of their efforts. They are both just 50 years old and are already philanthropy veterans.

“Sometimes you may not achieve the policy objective that you are aspiring to in a certain legislative session. But does that mean you fail? Maybe not. Maybe you’ve elevated the conversation, and maybe the policy will come in the following year or the year after that,” Laura Arnold says. “The ultimate goal is to change the conversation and improve people’s lives. There’s lots and lots of ways of getting there.”

Brisk Timelines

Many of the causes next-wave philanthropists are drawn to — climate change and social-justice issues, in particular — require urgent attention. As a result, some donors are speeding up their giving, sometimes with the goal of doing most or all of their giving during their lifetimes.

The Bezos Earth Fund, started by Amazon founder Jeff Bezos (No. 33) in 2020, has a 10-year timeline to distribute all of its $10 billion. The Waverley Street Foundation, funded by Laurene Powell Jobs, will give all of its $3.5 billion in assets by 2035. Ellis-Smith of Phila Engaged Giving works with one couple who, rather than having an executor of their estate, chose to spend all of their fortune on charities, political-advocacy groups and candidates, and individuals while they are alive. The couple put together a funding committee that decides how to distribute the money to advocate for social justice.

Of course, today’s donors didn’t invent the idea. Many have been influenced by Charles Feeney, an important advocate of “giving while living,” who died in October. Feeney, who made his fortune co-founding a chain of airport duty-free stores, lived modestly and gave away $8 billion over his lifetime. His foundation, Atlantic Philanthropies, shuttered in 2020 after it had disbursed all of its funds.

John Arnold has concerns about the effectiveness of foundations that seek to last forever. If a donor is too specific about the mission, then the foundation may have a hard time making relevant grants as issues change over time. But if the donor is too vague, the money could be used in ways the founder never envisioned. He says legacy foundations can also be more risk-adverse than those with living donors, who may be more willing to take chances.

“We want to give strong direction on where the money went,” says John Arnold . “The way to maximize that is to do it while we are living, while we are intricately involved in the decision-making process.”

The More the Merrier

Collaboration is a core value for many of the emerging megadonors. They focus on results more than trumpeting their good deeds.

The Schmidts, through their Schmidt Family Foundation and its affiliated 11^th Hour Project, are often early funders; working with others helps move new projects forward. The philanthropists have worked to stop fracking with the Park Foundation in New York and with Liberty Hill Foundation in California. They have partnered with other big grant makers like the Hewlett Foundation, Ford Foundation, and ClimateWorks Foundation on environmental projects. Wendy Schmidt says not everything has to be a huge project that scales up. Small projects are OK. Helping meet the needs of a community can also have real value.

(The Hewlett and Ford foundations are financial supporters of the Chronicle of Philanthropy.)

“We’re all connected. That’s a fundamental insight,” she says. “Every scale is important.”

Some big donors are shifting from a focus on themselves to a focus on the communities they hope to aid, says Nick Tedesco, CEO of the National Center for Family Philanthropy. Rather than start a foundation, more young donors are participating in donor collaboratives, which allow people to give more quickly than if they had to set up and staff a foundation.

“We’re moving from an era that historically has centered the donor and the expertise of an institution to a place that centers the expertise of community,” Tedesco says. “You can have leaner infrastructure that has a much more collaborative approach with community honoring their skills, their expertise.”

Part of the movement to a less egocentric way of giving is because of a gender shift in philanthropy, Kaplan says. While this year’s Philanthropy 50 list features few women on their own, and they are rare in nearly every year, Kaplan says that she has seen an increase in the number of wealthy women who are giving large sums of money, but below the level of donors on the Philanthropy 50. She says her clients used to be about 60 percent men. Now they are 67 percent women. This generation of women are much more likely to be business leaders themselves. In general, she says, these women are much more collaborative and excited to be working in teams with others.

And, of course, some of the biggest names in philanthropy are women. MacKenzie Scott and Laurene Powell Jobs have motivated many to give and to do so in new ways, says Kitt, of the Climate Leadership Initiative. “MacKenzie Scott is very inspiring to many people, and with very good reason,” Kitt says. “She is taking very seriously her commitments to give it all away.”

Donors like the Arnolds, the Schmidts, the Hales, and others are driven to pursue change in different causes than previous generations of donors, and they’re finding new ways to give. But when it’s all said and done, the reasons they give are not all that different from those of the philanthropists who came before them.

“If you do well in life, you have responsibility to give back,” Gebbia says. “Now I get to do that, but at a scale that is bigger than my wildest dreams.”

Kay Dervishi contributed to this article.