More of America’s billionaires are starting to give away their fortunes even before they reach middle age, according to a new Chronicle study.
Among the five top philanthropists last year, three were couples under 40. The youngest was Mark Zuckerberg, the Facebook co-founder, who is 28, and his 27-year-old wife, Priscilla Chan.
Drawn to the possibility of influencing social issues for decades to come, the young and super-rich are turning philanthropy into a newlywed activity instead of a deathbed one.
“Young entrepreneurs are hard-wired for philanthropy,” says Eric Kessler, a principal at Arabella Advisors, a group that guides donors. “Our parents started and ran successful companies and said, I’ll sell this business and become a philanthropist. This generation is saying, I’m starting a business so I can be a philanthropist now.”
But even with $1.1-billion in new gifts from billionaires under 40, megaphilanthropy last year remained below levels seen before 2007’s economic shock.
The top 50 donors on The Chronicle’s list committed a total of $7.4-billion to charity in 2012. The median gift was $49.6-million, down significantly from 2007’s high of $74.7-million.
Most of the money went to big, elite institutions. Seventy-two percent of the dollars pledged supported higher education, arts and culture, hospitals, and private foundations.
The top donor on the list, Warren Buffett, gave $3.1-billion to the foundations of his three children. He was followed by Mr. Zuckerberg and Ms. Chan, who committed $498.8-million to the Silicon Valley Community Foundation.
Next was thirty-something couple John and Laura Arnold, who gave $423.4-million to their foundation and other groups. Mr. Arnold started a hedge fund.
Paul Allen, of Microsoft, was No. 4 on the list for his support of the Allen Institute for Brain Science, followed by Sergey Brin, of Google, and Anne Wojcicki, both in their 30s, who gave to the Michael J. Fox Foundation as well as to their own philanthropy.
Wealthy donors’ support of institutions that have a record of securing big gifts have helped those groups weather the recession.
Take Mount Sinai School of Medicine, which received a $150-million pledge from the financier Carl Icahn (No. 8 on The Chronicle’s list) in November.
The school decided three years ago to extend its $1-billion capital campaign another year, through 2013. But by December 2012, it had already raised $200-million more than its goal.
“Our fears were never manifested in any significant way,” says Mark Kostegan, senior vice president for development.
But there were signs, too, that some big donors are increasingly trying to support local issues and give to groups to which their names aren’t attached.
For example, community foundations won eight gifts from top donors last year, for a total of more than $1-billion. That was more than in The Chronicle’s previous 10 lists put together. (See below.)
Concerns about state budget crises also prompted some of 2012’s biggest gifts. With government-supported institutions losing state money, more donors seem to be trying to find ways to fill the gaps.
The rising cost of state college tuition motivated Jonathan and Karin Fielding (tied for No. 21) to give $50-million to the University of California at Los Angeles School of Public Health, they said in an e-mail to The Chronicle. Mr. Fielding is director of the Los Angeles County Department of Public Health and an investor.
Jeff Henley, chairman of Oracle (tied for No. 21), said falling state support to the University of California at Santa Barbara helped inspire his $50-million gift to the institution.
“The UC system will continue to need more and more private money,” he told The Chronicle. “We’re all going to have to play a bigger role.”
Wooing the Wealthy
Nonprofit institutions will also have to step up if they’re to succeed in wooing today’s wealthy donors, say fundraisers, affluent people, and wealth advisers.
Philanthropists today are choosier about where they give and demand a plan for achieving long-term results, says Melissa Berman, president of Rockefeller Philanthropy Advisors.
A few years ago, a donor supporting college scholarships might have inquired about how many recipients graduated as a result of his or her gift, she says.
Today, donors want to know how their scholarship recipients are faring years after the students head into the professional world.
Gifts to alma maters aren’t automatic anymore, either, says Ms. Berman. She says she has worked with donors who’ve walked away from their alma maters because the universities didn’t lay out a clear and ambitious plan for a donation’s potential impact.
Inspired by Expertise
At the same time, wealthy people are making more gifts to institutions from which they didn’t graduate—assuming the nonprofit can find a way to inspire the donor.
Mortimer Zuckerman’s $200-million commitment to Columbia University, which landed him at No. 6 on the Philanthropy 50, is one such example.
Mr. Zuckerman, a real-estate and publishing mogul, lives in Manhattan but holds degrees from McGill and Harvard universities, not the New York institution.
He told The Chronicle that the economy hasn’t been a factor in his philanthropic decisions.
“I’ve been looking for more than a decade for areas where I can make a difference,” he said.
He found that in Columbia’s plan for a new institute to research neurological disorders.
Mr. Zuckerman’s friend Joel Klein, the former New York City schools chancellor, introduced the publisher to Eric Kandel, a Columbia neuroscience professor, at a dinner party just over a year ago.
“There are some people you meet and you think, This man really knows what he’s talking about and he’s got a strategic view of his field,” says Mr. Zuckerman. “This is the way I feel every time I have a conversation with Henry Kissinger.”
Fascinated, Mr. Zuckerman asked to meet with Dr. Kandel at his office. After a few hours of talk, he was sold. The donor made his pledge in mid-December.
A Walk in the Park
Other gifts from donors on The Chronicle’s list took much longer to cultivate—but were similarly motivated by an institution’s ability to inspire.
John Paulson, financier and No. 15 on the Philanthropy 50, started giving money to the Central Park Conservancy 20 years ago. His apartment abuts the park.
Douglas Blonsky, president of the institution, met Mr. Paulson at a cocktail party a half-decade ago. The two kept in touch. One day, over breakfast, Mr. Paulson said he’d like to take a walk through the park’s North Woods.
Not too long after, off they went, spending about an hour-and-a-half walking down every path in the area. That walk three years ago began a series of conversations that resulted in Mr. Paulson proposing a gift of $100-million.
“I never mentioned a dollar figure whatsoever,” says Mr. Blonsky.
Richard Driehaus’s $30-million pledge to DePaul University, his alma mater, took even longer to cultivate: 30 years. That’s how long ago a DePaul dean first approached Mr. Driehaus to support the institution in a big way, says the Chicago financier, No. 38 on The Chronicle’s list.
Mr. Driehaus, who was then around 40, knew he wanted to make a big gift to the university but believed he’d have more money to give if he waited. When DePaul’s president, the Rev. Dennis Holtschneider, came calling last year, Mr. Driehaus was ready.
He had given smaller sums to the university’s business school for years, including an annual $18,000 prize for a “virtual stock-market” competition.
Sitting in the lavish “French room” of Mr. Driehaus’s offices, Father Holtschneider proposed $30-million to name the business school.
“I wasn’t shocked,” says Mr. Driehaus. “I said, Let’s talk about it.” The university announced his gift six months later.
Mr. Driehaus, who also runs a foundation that supports architecture, economic advancement, and other causes, says he’s drawn to innovative nonprofits that aren’t stuck in a business-as-usual mind-set. And he steers away from groups that are “so busy executing that they don’t think if there’s a better way of getting the job done,” he says.
The Oregon Health & Science University tried to think in new ways when it strategized for winning a new gift from Phil Knight, the Nike chairman.
Phil and Penelope Knight (No. 12) gave the university $100-million in 2006 for a cancer center. In 2011, Mr. Knight’s staff reached out to the university to say the donors might be interested in making another big gift.
In April of last year, eight professors, the university’s president, and a dean presented Mr. Knight with a plan for a new cardiovascular center to advance research and care of heart disease.
“They were given 50 minutes and told no PowerPoint,” says Constance French, the foundation’s interim president.
Mr. Knight and his staff pronounced the presentation a “15” on a scale of 1 to 10, says Ms. French, and spent the summer figuring out the exact shape of his gift. In September, Mr. Knight told the university’s president he planned to donate $125-million.
“In general, people give because of a belief in the mission and in the leadership,” says Ms. French. The hardest thing, she says, is sparking a relationship with someone who could turn into a megadonor.
Once that relationship begins, patience is of the essence, says Oracle’s Mr. Henley. “Pushing people too fast doesn’t always work,” he says. “It takes time to cultivate donors.”
The University of California at Santa Barbara got in touch with him many years ago, he says, but it wasn’t until he moved back to the Santa Barbara area, around 2000, that he became more involved in university life.
He paid for a gate at the institution and a chair in economics, his college major. But engineering, he says, turned out to be his true philanthropic passion. Mr. Henley came to believe, he says, that the lack of laboratory space at the university was holding back innovation and economic development.
Roughly half of his $50-million gift will help create a new building for the university’s Institute for Engineering, and the rest will support the engineering school.
Mr. Henley says he doesn’t think concerns about the economy are stopping the super-rich from giving: “You reach a time when you want to start doing things in your lifetime that will have an impact you can see rather than let trustees spend your money when you’re dead.”
Still, he says, January’s federal tax-rate increase for affluent individuals will mean even the megarich have less to give.
“It will put some pressure on nonprofits, in my opinion,” he said. “Not huge pressure, but there will be less money.”
Sarah Frostenson contributed to this article.