Uncategorized · March 6, 2023 0

What We Can Learn from Mega-Philanthropists

 

Marty Levine

March 6, 2023

The Chronicle of Philanthropy recently published a “top” list I actually look forward to thinking about, its annual listing of the year’s 50th largest philanthropists (although this time around there were actually 51 donors who made the list because there was a tie for the 50th slot.) As a frequent writer about (and a critic of) modern American philanthropy, I think this list has much to tell us about the state of our nation.

Here’s a quick summary of what we can learn about these folks.  In total just 51 givers gave away $16,000,066,878. This was less than last year but still a really big number.  The largest giver, as he often has been, was Bill Gates at ($5,111,250,000. Two other donors, Elon Musk and Michael Bloomberg donated more than $1 billion. From there the amounts went from $769 million down to $40 million.

From another study, “A report on gifts given in 2022” from  Marts &Lundy, Inc., we can add some information about another group of mega-donors, those who gave at least $10 million in 2022. This adds information about another 274 donors and grows the total of large philanthropy to more than $17 billion.

The Chronicle’s list does not include  MacKenzie Scott as she chose not to participate in their data-gathering process. Had she been included the total amount of Top 50 giving would have been significantly greater.

The average gift of the top  51 donors was $314 million. Eliminating Mr. Gates’ extraordinary giving we would find that the average gift was almost $218 million.

To put these numbers in some relationship to our more normal lifestyles, these 51 donors were able to give away in one year what 156,000 people who earned the national average income would receive in that same year.  512,000 people would need to work full-time jobs paying $15/hour to, together, earn annually what these 51 people, on average, were able to give away.

That there are so many men and women who are able to make gifts of this size, seemingly without downgrading their standard of living, speaks to how much wealth is being concentrated in the hands of a small fraction of our population.

Seattle University’s Elizabeth J. Dale made an important observation about another unique quality of these 51 men and women: that they may not be typical of the elite class in our nation.  From her perspective and mine, we should not ignore that there are many very rich people who do not see philanthropy as very important. In comments reported in The Chronicles of Philanthropy, she points “out that only 20 of this year’s top 50 donors are on the Forbes list of the 400 wealthiest Americans. It’s worth paying attention to who isn’t giving on a big scale, especially in an era of such extreme wealth inequality and an effective 8.2 percent tax rate on the wealthiest Americans. It can be easier to pay a lot of attention to the perennial donors on this list like Bill Gates, Bloomberg, the Arnolds, Sergey Brin, and a few others who have consistently been among the country’s top charitable donors for years.”

In a nation where public funding for important social issues and ensuring that we have a strong social safety net, it remains politically difficult to build government programs that would address the pressing societal and human issues before us. For too many policymakers, legislators, and political influencers, Ronald Reagan remains a prophet to be followed, and his teaching that “government is not the solution…government is the problem… no one group singled out to pay a higher price.”  Or as Grover Nordquist, founder of Americans for Tax Reform, an organization that opposes all tax increases, put it in a 2001 NPR interview, “I don’t want to abolish government. I simply want to reduce it to the size where I can drag it into the bathroom and drown it in the bathtub.

From this perspective philanthropy, not fair taxation, is the way to deal with issues of poverty, housing inequity, high medical costs, education, and other components of what we all need but many cannot afford.  From this perspective, individuals are responsible for their own fate and structural inequity does not exist.

When I look at the Chronicle’s top 50 list, I see how trusting our collective fate to individual decision-making and choice leaves us to the whim, not the wisdom, of these men and women. More than 50% of the funds detailed in the Chronicle’s Top 50 list did not go to organizations that are actual, operating charitable organizations, that is organizations that actually do the immediate work of the charity. Rather these funds were “donated” to foundations and Donor Advised Funds (DAFs). By doing this, these donors are able to gain the immediate rewards of philanthropy, both a personal tax benefit and the acclaim (like being on this list) for being a charitable person. But those funds can remain “parked” for years awaiting a later decision about what to do with them. (Foundations are only required to give away to operating charities 5% of the assets annually and DAFs are not required to give away anything.) These funds can remain unused, giving no benefit to the public that supposedly benefits from charitable giving, despite the great need around us.

Consider one more piece of information given to us by the Fundraising Effectiveness Project that tells us how we are increasingly dependent on the whims of larger donors, and wealthier men and women.

While overall fundraising appeared to have increased in 2022, the number of smaller donors continues a several-year pattern of decline. Said another way, large givers donate a growing share of the nation’s charitable investment, the investment that conservatives view as preferable to taxation to address our future.

  • Numbers of Micro and Small donors (donating less than $500) have fallen much more than larger donor categories.
  • Micro (under $100) donors have dropped 13.2%
  • Small ($100 – $500) donors have dropped 7.0%
  • Numbers of Micro and Small donors (donating less than $500) have fallen much more than larger donor categories.
  • Micro donors have dropped 13.2%

 Funds from “Small” and “Micro” donors make up only 9.3% of funds raised.”

At a moment when a Republican-lead House seems hell-bent on pushing our nation to default on its obligations in order to force further reduction in government, it seems clear to me that the alternative is not Philanthropy. Yes, as I have said about Ms. Scott, there are mega-donors who give money to causes in ways that I think are wise. But that is not how we should be ensuring our world will have a future, and it is not how we should ensure that each of its citizens will have a decent life. We should not just be happy when a very wealthy person decides to make a very large gift to a cause we think is worthy. We should actually be ensuring that our federal, state, and local governments are properly funded by a fair tax system.  Governments are not perfect, but they are more representative of collective interests than can be a system of individuals acting on their own.

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