Today’s top philanthropists are giving more than they have in recent years, due to a boost in fortunes, the quest by wealthy Americans to shelter income from higher taxes, and the growing interest in legacy-building.
Facebook CEO and cofounder Mark Zuckerberg and his wife, Priscilla Chan, top the list of the Chronicle of Philanthropy’s list of the 50 most generous donors of 2013, released Monday. The couple has directed nearly $1 billion to their Silicon Valley Community Foundation, which has emerged in recent years to become one of the biggest foundations in the country.
That gift represents about 13 percent of the $7.7 billion the top 50 donors gave last year, a total that is a 4 percent increase from the previous year. The majority of the giving is from living donors, who collectively donated $6.2 billion, the Chronicle says.
“In general, people who make their own money are most likely to give it away more than people who inherited it or earned it through investment-related activity,” says Leslie Lenkowsky, a professor of philanthropy and public works at Indiana University in Bloomington. “What’s playing out now is [that] the entrepreneurs of the 1990s are reaching a point in their lives where their businesses are in very good shape, and they’re looking toward other things in their lives and giving is an important part of it.”
Mr. Zuckerberg and Ms. Chan are unique because, despite their generosity, they are a minority among their philanthropic peers due to their youth: They are both under age 30, a record for the list. The median age of donors in 2013 was 72.5.
Professor Lenkowsky says it’s too early to determine if the Zuckerberg and Chan gift suggests an upswing among young donors, but he says billionaires like Warren Buffett and Bill Gates have successfully challenged the very wealthy to increase philanthropic giving, which will likely motivate young entrepreneurs as their own investments grow in coming years.
Emerging entrepreneurs have a different pattern of giving than that of more seasoned donors. Instead of writing checks directed at specific institutions or activities, the new generation of philanthropists is helping to pioneer venture philanthropy, a strategy that creates investment funds that are distributed by a professional staff and that is focused more on measurable results.
“They are creating funds, but are investing in businesses that are trying to address social problems, so the financial rate of return is lower than in more conventional investments, but there is also a social rate of return. They like to create what is called ‘a blended value’ of the two,” says Lenkowsky.
The Silicon Valley Community Foundation, created by Zuckerberg and Chan, is another new model for giving, Lenkowsky says. Facebook shares fund the foundation; last year the couple donated 18 million shares, worth about $992.2 million, which is equal to the number of shares they donated in 2012.
“It’s not a gift, it’s like having a bank account, but with one exception: Once you put money in the bank, you can only take it out to give to charity,” Lenkowsky says. “So he’s moved it from one account to another, but we don’t know how the money from that donor-advised fund will be spent.”
To date, the fund has distributed money to schools systems in Newark, N.J., and Boston, and to a community health clinic for low-income families in East Palo Alto, Calif.
Where the money goes is determined by the donor board, and the foundation is mum about what activities are of special interest. “It’s like being a lottery winner,” foundation executive Mari Ellen Reynolds Loijens told the Chronicle of Philanthropy.
Below Zuckerberg and Chan on the list is the estate of George Mitchell, an oil and gas executive who died in July. His gift to the Cynthia and George Mitchell Foundation totaled $750 million and supports Texas-based nonprofit groups that work in clean energy and natural-gas sustainability.
Third on the list are Phil and Penelope Knight, who donated $500 million to the Oregon Health and Science University Foundation, which provides funding for cancer research. Mr. Knight is the cofounder and chairman of Nike. The couple added a stipulation that to keep the gift, the university must raise an additional $500 million over the next two years.
Former New York City Mayor Michael Bloomberg was the list’s fourth biggest donor, contributing $452 million mainly to arts, education, environment, and public-health nonprofits.
The top recipients of gifts in 2013 were colleges, foundations, and hospitals, which typically received $1 million or more from the top donors. At the bottom were causes for children and youths, the environment, religion, and public broadcasting.