The Giving Billionaires: Inside America’s Wealthiest Donations

HomeEducationThe Giving Billionaires: Inside America's Wealthiest Donations
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Every year, Forbes magazine releases a list of America’s biggest givers. And in 2023, these 25 individuals or pairs made the list. It includes people like Google co-founder Sergey Brin… and Mark Zuckerberg and his wife, Priscilla Chan. These are the piles of money Forbes reported each of them has given away.

Collectively, a whopping $196 billion of lifetime giving. That’s bigger than the GDP of most countries. This giant pile of money has done a lot of good… but it’s hiding a more complicated and problematic story of billionaire philanthropy in America. We’ll show you how. The Forbes list ranks the biggest givers by how much they’ve given over a lifetime.

Biggest to smallest. And they only measure dollars given to charitable recipients. That means it excludes money parked in a foundation. We’ll get back to that. And money pledged, but not paid out.

You’ll see here that Warren Buffett and Bill and Melinda French Gates are standouts. This chart we’re making measures the giver’s current net worth. Adding their philanthropic giving to that we came up with the percentage of their net worth they’ve given away.

So Forbes puts Buffett’s current net worth at $106 billion… and he’s given away $51.5 billion in his life… which puts him at 33%. Bill and Melinda French Gates who are divorced but still do philanthropic work together… have a collective net worth of $109 billion… and have given $38.4 billion away.

Most of this group’s donations go to poverty and public health around the world and education in the US. And together, Buffett and the Gates’s created the Giving Pledge. A promise by the world’s wealthiest individuals and families to dedicate a majority of their wealth to charitable causes. That’s over 50%.

They’re almost there, but not quite. These 13 givers have signed it, too including Facebook co-founder Dustin Moskovitz and his wife, Carrie Tuna…. Jeff Bezos’s ex-wife, Mackenzie Scott and Michael Bloomberg.

The other signatories fall around here. Only two of them have made it over the 50% line. The banker — T. Denny Sanford — has given 53% of his net worth away. And Duty-Free Shoppers founder Chuck Feeney… almost every last penny of his fortune.

George Soros hasn’t signed the Giving Pledge but he belongs here, too. He’s given 73% of his wealth away. The eBay founder and his wife go here and everyone else on the Forbes list falls roughly in this area.

Over the course of their lives, they’ve given 12% or less of their net worth away. In the least flattering zone of the chart the highest net worth but the lowest proportion of it given away… is Jeff Bezos.

The founder of Amazon is the richest person on this chart. His $117 billion net worth dwarfs his $2.7 billion philanthropic giving. It’s only 2.3% of his wealth over his lifetime

For context that’s about as much as what Americans, on average consistently only give as a proportion of their disposable income per year: About 2%. Bezos’s money has gone to various causes like fighting climate change, and education… he even gave $100 million directly to Dolly Parton. Bezos’s philanthropic reputation at this point is kind of that he doesn’t have one.

It’s kind of hazy is what a lot of experts have told me. That’s Whizy Kim senior reporter for Vox, who covers billionaires. A lot of people speculate that that’s one of the reasons he’s made this recent announcement of “I’m eventually going to give my net worth away.”

There was a lot of pushback, a lot of speculation around “Hey Jeff, why aren’t you more involved in philanthropy?” This chart helps us see who the real standout givers are… those who give most of their wealth away and those who hold onto their enormous fortunes.

Even if a certain individual is very generous. If overall, this class of people just keeps amassing more and more money we’ve got to look at ourselves and ask “Okay, what are we doing wrong here and how do we reverse this?”

All this money creates what the Institute for Policy Studies has called top-heavy philanthropy: Where individual wealthy donors make up a large portion of charitable giving. Since 2011, mega gifts of $1 million or more from single donors have been growing.

If you are a relatively small institution… that receives funding from a very large philanthropist… they take their money away, you are in trouble. This chart breaks down charitable tax deductions by household income level since the early 90s.

Nonprofits used to rely on the broad support of the population. In 1993, 77% of charitable deductions were taken by households making less than $200,000. Today, that chart has almost flipped: Households making more than $1 million were taking the most charitable deductions.

So just a handful of people are deciding what merits philanthropic money and how these causes should be solved. Ultra-wealthy donors tend to give to different causes than the rest of us.

An analysis of the Chronicle of Philanthropy’s top 50 donors shows that they give to education more than the causes non-wealthy donors give to: Like health… a lot to religion, the environment, and international affairs.

That could mean a billionaire giving $500 million to his alma mater for a new building on campus… or another giving $750 million in one single donation to charter schools in 20 US cities.

A relatively small amount of money can have a great impact on a specific school district or a single charter school. The top 50 donors are also more likely to give through a private foundation. Most of the people on the Forbes list have had their own private foundations or they give to them.

Here’s how they work. Donors make large charitable gifts to a foundation in the form of cash, assets, or stocks. In return, they get huge tax benefits immediately. But the foundation only has to give money to actual charities at a rate of 5% a year.

That means money can stockpile in here donors reap the tax benefits… while charities may only get a trickle over time. The Forbes list only counts the money that foundations have already given to charity.

Not the money parked here. Meanwhile, this money continues to enrich donors. There’s another way billionaires donate that the Forbes list doesn’t count at all. Donor-advised funds are more secretive by design.

These are charitable savings accounts that allow the donor to be anonymous and offer even bigger upfront tax benefits. More importantly, they have no reporting or payout requirements… so it’s difficult to tell whether the money is going somewhere good or just lowering the donor’s tax bill.

Donor advice funds have been rising in popularity… meaning collectively they are housing billions of dollars yet to be paid out to charities. As of 2020, that figure was $160 billion.

And the huge multibillion-dollar endowments of foundations mean they have a lot of power. Like the Gates Foundation. In terms of global public health… the Gates Foundation does get a lot of credit… for their work in improving vaccine access for preventable diseases for very young children.

Since they’ve been doing their work in child mortality rates like infant mortality under 5 has gone down a lot. Their foundation is also the largest private donor to the World Health Organization.

This tells you a lot about just how much agenda-setting power they have. And what kinds of public health problems to prioritize. The biggest criticism is that it’s undemocratic.

Former Enron executive John Arnold and his wife, Laura have been advocating for reform of donor-advised funds. By lobbying Congress to require them to distribute funds within 15 years… or for donors to only get a tax deduction upon distribution to charities.

Others advocate increasing the payout requirements at foundations from 5% annually to 10%. These types of reforms are small fixes to the system. But if our country didn’t have such dramatic wealth inequality… we wouldn’t have to rely on the charitable whims of these billionaires, to begin with.

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