This Illinois-Based Tech Billionaire Is Moving Big Sums With a Unique Faith-Based Approach

My colleague Sue-Lynn Moses and I recently took a deep dive into how major donors carry out their giving through their private foundations. Our analysis of Candid data from 2017 to 2019 confirmed what we had long suspected — that wealthy donors often use private foundations as pass-through entities to shovel large amounts of money out the door on a “pay-as-you-go” basis.

While the piece name-dropped familiar suspects like Bill Gates, Michael Bloomberg and the Omidyars, we discovered that these behaviors also applied to donors with relatively smaller fortunes. Consider the philanthropic profile of billionaire Steven Sarowitz, founder of the Highland Park, Illinois-based Wayfarer Foundation, which supports spiritually rooted and justice-oriented nonprofits.

Sarowitz derives his wealth from the Schaumburg, Illinois-based online payroll firm Paylocity, which he started in 1997 and where he currently serves as chair; he is also the CEO of international payroll provider Blue Marble and director of U.K. payroll provider Payescape. In 2015, he and his wife Jessica launched the Julian Grace Foundation, seeding it with $20 million in liquidated Paylocity stock. The foundation makes unrestricted grants in the fields of education, immigration and human rights, and environmental protection.

By 2019, Sarowitz held 28% of Paylocity stock and Forbes pegged his real-time net worth at $1.2 billion. That same year, Crain’s Chicago Business noted that “the city’s newest billionaire” and his wife Jessica “plan to give $1 billion to charity during their lifetimes and shutter the family foundation the Julian Grace Foundation when they die.” Foreshadowing the establishment of the Wayfarer Foundation two years later, Crain’s noted that the couple planned to support “causes that fight racism, sexism, nationalism and religious prejudice.” Four years after that article, Sarowitz’s real-time net worth stands $2.6 billion.

A foundation guided by Sarowitz’s Baháʼí faith

In 2014, Sarowitz converted to the Baha’i faith. Founded in the Middle East in the 19th century, the belief system espouses the essential worth of all religions and the unity of all people. “One of the teachings of the Baháʼí faith is that wealth has to be used for the good of the world,” he told Crain’s.

In 2021, Sarowitz started the Wayfarer Foundation as a “Baha’i-inspired organization with the mission to ‘advance humankind spiritually toward a future peaceful world civilization,’” with Sarowitz serving as the board president.

The foundation supports “three broad areas of society transformation” — promoting Baha’i-specific organizations and activities, promoting civil public discourse, and developing “spiritually rooted organizations that respond to the needs of their communities.”

One can imagine the foundation’s mission as a Venn diagram, with one circle representing funders’ growing urge to foster religious understanding and civic pluralism, and the other exhibiting a deep commitment to small and historically undercapitalized organizations. The foundation’s 2021 Annual Report picks up on this theme. “We believe that material and spiritual prosperity belongs to every community and our universal participation helps reveal a path to peace,” it states. “We aspire to listen deeply to what grassroots organizations need and provide the support they envision.”

Grantmaking snapshot

As noted, the foundation is a “pay-as-you-go” operation. According to its first Form 990 for the fiscal year ending December 2021, it received $4.7 million in incoming contributions from Sarowitz — its only contributor — and disbursed $4.2 million in grants. The foundation had $334,000 in reserves, but that figure does not take into account the Sarowitzes’ presumed contribution for 2022.

The foundation’s 2021 annual report shows it funded 50 organizations, with 21% of total grant dollars flowing to those promoting “racial justice and unity,” followed by empowerment (18%), universal education (16%) and the arts (11%). Eighty percent of dollars went to organizations with BIPOC executive directors and 80% of grantees worked with communities that were at least 50% BIPOC.

First-time grantees receive one-year, $15,000-$50,000 “Get to Know You” grants. The foundation occasionally provides multi-year grants to longer-term partners. Larger grants included $375,000 in general operating support to Partners in Racial Justice and $270,000 for the Patricia Locke Foundation’s Indigenous Culture and Virtue Education and Preservation.

The foundation stresses that organizations do not need to be Baha’i-inspired to receive support. Fifty-eight percent of grantees had practices that aligned broadly with the foundation’s values, while 42% were specifically Baha’i-inspired. “We only ask that our Partners engage spirituality with an open heart and mind,” its site reads. The foundation engages with organizations on an invite-only basis.

Looking ahead

While conducting research for this piece, I quickly discovered that Sarowitz keeps a relatively low public profile (emails to the foundation for additional information or comment were not returned). That said, I did stumble upon a news item in which he succinctly laid out his Baha’i-inspired philanthropic vision.

In 2021, the University of Haifa in Israel announced it received a $50,000 personal donation earmarked for its Laboratory for Religious Studies, which promotes inter-religious dialogue. The laboratory’s mission clearly resonated with Sarowitz. “Each of the world’s major religions is a beautiful and distinct chapter in a single, eternal Faith of God,” he said. “It is important to study religions to go beyond tolerance and co-existence to arrive at a place of unity and love.”

It also isn’t much of a stretch to say that Sarowitz, who is in his late 50s, embodies an emerging crop of tech megadonors who earned their fortunes in places not named Silicon Valley and New York, and have only scratched the surface of their philanthropic ambitions. Assuming the couple keeps its pledge to donate $1 billion, they’ll only make a dent in their fortune, since Sarowitz’s $2.6 billion net worth could balloon to $18 billion in 20 years if it generates a 10% annual rate of return. (Warren Buffett wasn’t lying when he said, “My life has been a product of compound interest.”)

As far as the Wayfarer Foundation itself is concerned, the big question moving forward is whether Sarowitz’s 2022 contributions matched or exceeded the $4.7 million he gave in 2021. I’m inclined to put my money on the latter option, if only because Sarowitz’s net worth jumped from $2.6 billion to $2.8 billion between 2021 and 2022.

It’s also important to remember that the Sarowitzes’ giving portfolio includes the couple’s own checkbook — Crain’s cited a a gift of about $10 million to build the nonprofit Chicago Center for Arts & Technology. Meanwhile, they also contributed $16 million and $20 million in the form of Paylocity shares to the Julian Grace Foundation in calendar years 2018 and 2019, respectively. They did not contribute the following year, and it disbursed $9 million, more than twice as much in grants compared to the previous two years.

Whether this turns out to be a one-year blip or suggests that the Sarowitzes have plans to shift more funding to the Wayfarer Foundation — which launched the following year — remains to be seen. Either way, this is a philanthropic couple to watch in coming years.

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