Since 2000, many wealthy people have embraced philanthropy. And some — like Bill and Melinda Gates and Michael Bloomberg — have done so on a very large scale, with grand ambitions. This is the subject of my new book, The Givers, and as I’ve traveled around promoting it, a question I often hear is: What’s different about these new givers, if anything?
It’s a good question, and one not easy to answer in simple terms. That’s because today’s new donors are quite heterogeneous in their backgrounds, thinking and approaches. Yes, some of the top new donors are young billionaire types from the tech industry, but plenty of others hail from sectors like real estate, energy and retail. Over two dozen members of the Giving Pledge are from finance. Most of the pledgers are older, which is true of leading philanthropists — and the super-wealthy — overall. The average age of billionaires on the Forbes 400 list is 65, and for all the talk of early giving, large-scale philanthropy still tends to happen late in life, as business leaders turn from making fortunes to disposing of them.
Many of these older mega-donors are giving in traditional ways. Last year, for example, gifts of over $10 million to colleges and universities hit a record high, showing that alma maters remain a favorite cause of the wealthy these days, despite much talk in the philanthrosphere of “disruption” and “systemic change.” Indeed, some of the very biggest gifts of recent years — by John Paulson, Phil Knight, Chuck Feeney, and Sandy Weill — have gone to universities. Other headline making nine-figure gifts have gone to cultural institutions and hospitals.
Younger donors, like Mark Zuckerberg and Priscilla Chan or Laura and John Arnold have drawn attention by tackling ambitious challenges — such as curing all diseases or reforming the criminal justice system. And to be sure, an ethos of “change, not charity” is embraced by many of the new donors, especially from Silicon Valley. In particular, the ideas of effective altruism have increasing sway in some precincts of philanthropy, a trend exemplified by the giving of Facebook co-founder Dustin Moskovitz and Cari Tuna. Nevertheless, much large-scale giving — if not most — still aims to strengthen long-established institutions, from Harvard to Lincoln Center to the LACMA.
In any case, today’s new crop of donors hardly invented the ethos of “change, not charity.” Two of the founders of modern philanthropy, John D. Rockefeller and Andrew Carnegie, had huge ambitions to remake key systems in U.S. society. Rockefeller sought to bring about sweeping changes in public health and medicine, as well as education in the South. Carnegie aimed to modernize the teaching profession and, even more grandiosely, dreamed of ending the scourge of war. He also brought public libraries to scale as a key institution in local communities. Julius Rosenwald’s vast effort to build schools for blacks stands on par with today’s charter school movement. Olivia Sage, Edward Filene and Robert Brookings aimed to harness social science research to public policy in new ways. The list could go on.
Strikingly, some of today’s biggest donors have embraced largely the same goals as early giants of philanthropy. Bill and Melinda Gates have followed in Rockefeller’s footsteps with their focus on health and education. Jim and Marilyn Simons are building a foundation to support science that is looking increasingly similar to the Howard Hughes Medical Institute. Alice Walton’s outsized arts philanthropy has a trajectory very similar to Paul Getty’s. Nicolas Berggruen’s $1 billion think tank brings to mind the Institute for Advanced Study, founded by philanthropists in 1930. The comparisons could go on, conjuring the adage that the “more things change, the more they stay the same.”
All that said, American philanthropy really is undergoing seismic changes right now, and much is, indeed, “new.”
The biggest shift in the past 20 years is that the prime movers in philanthropy are no longer legacy foundations, as was true during the second half of the 20th century. When I first started paying close attention to philanthropy in the mid-1990s, it was a world dominated by endowed institutions created by industrialists who had long ago passed from the scene.
Today, the most important players in philanthropy are living donors. That’s not to say that legacy foundations don’t remain hugely influential and, in plenty of cases, quite creative and dynamic (despite what you might hear from dismissive tech types like Sean Parker). But their importance in relative terms has steadily diminished, as new mega-givers have arrived on the scene. In a growing array of fields — such as K-12 education, scientific research, criminal justice reform and environmental conservation — money from living donors plays a dominant role. This shift is likely to accelerate in coming years.
And while it’s true that the hard-charging living donors of today are often similar to mega-givers from earlier times, they do tend to operate differently from legacy foundations — taking more risks, placing bigger bets, and moving with more urgency. (Although, again, it’s important not over-generalize on this score.) And even if the majority of newer donors do give mainly to established causes, the ranks of those philanthropists who are instead focused on systemic change has lately exploded. Disruptive philanthropy may be over a century old, but it’s now practiced on a scale never seen before in U.S. society. This trend, too, is likely to accelerate — especially as more philanthropy emerges from a tech sector filled with restless innovators. Of the $2.5 trillion in assets held by the Forbes 400, as much as a quarter of that wealth is the hands of tech billionaires. Some, like Jeff Bezos and the Google co-founders, have yet to put philanthropy at the top of their to-do list. When this happens, the face of large-scale giving in America will likely be further transformed.
Finally, the mechanisms by which donors give away money are also changing. The past 15 years has seen the rise of a large new infrastructure of funding intermediaries and consulting firms. Donor-advised funds, which barely registered on the philanthropy scene 15 years ago, now rank among the largest grantmaking institutions in the U.S. The LLC is becoming more popular as a giving vehicle, in part because it offers more versatility for pulling all the levers of change, including impact investing. That so many emerging donors are keen to find for-profit ways to solve problems is another example of the big changes afoot in philanthropy.
Summing up, a cliché that springs to mind about philanthropy today is that it’s “the same, but different." The most ambitious and creative of the new donors aren’t any more ambitious or creative than Rockefeller, Carnegie and Rosenewald. But there are many more such mega-givers operating in a more sophisticated environment that’s been enriched by a century of learning. And their arrival on the scene in recent years marks a big break from the golden age of institutional philanthropy in the 20th century.
One thing is certain: There’s never been a more exciting time in American philanthropy than right now.