Forbes’ Adjusted Rankings Reveal Swelling Fortunes, Meager Rates of Giving

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For the third year now, Forbes has assigned a “philanthropy score” to each of the 400 billionaires on its much-cited list of the richest people in the United States. Ranging from one to five, with five being the best, the scores paint a mixed picture of largesse among the super-rich in a time of rapid change and mounting crisis. 

It takes $2.1 billion in net worth to earn a place on the list, unchanged from last year. But while the aggregate wealth of the Forbes 400 in 2019 stood at $2.96 trillion, they’re worth $3.2 trillion this year. That record figure can be attributed to a stock market that has so far shrugged off the pandemic, giving rise to breakneck billionaire wealth generation at a pace that outstrips even last year’s heady growth rate.

Billionaire philanthropy, on the other hand, hasn’t kept up. This year, Forbes partnered with Global Citizen to rethink how it assigns philanthropy scores, judging the billionaires not by the proportion of their wealth devoted to charitable causes—as in the past—but by how much of their assets have actually made it to recipient organizations. The resulting scores aren’t flattering to America’s richest, to say the least. But the exceptions to that rule show that lackluster billionaire giving norms aren’t set in stone.

A New Scoring System

Scoring generosity by actual gifts and grants—rather than the vast sums parked in foundations, DAFs and so on—has shunted quite a few billionaires out of the philanthropy ranking’s choicest categories. In last year’s list, 29 people received a top score of five, and another 59 scored four. For our coverage of that list, John Freund observed that few billionaires scored well next to the number of ones and twos. But the Forbes 400 did better by that reckoning than by the current method. 

Only 10 billionaires (2.5% of the total) received a score of five in 2020, and 19 (4.8%) received a four. Moving down the rankings, 56 got a score of three, 120 scored two, and 127 scored one. Compare that to last year, when 106 scored three, 96 scored two, and 72 scored one. 

According to a detailed explanation, Forbes and Global Citizen arrived at the new philanthropy scores in a fairly straightforward way. Where possible, lifetime foundation grants and direct gifts by each of the billionaires were tallied up and then expressed as a percentage of current net worth plus the total of that giving. Billionaires whose lifetime giving surpassed 20% of their wealth got a score of five, those who’ve given away between 10% and 20% got a four, and so on, down to the ones, who’ve given away less than 1% of their wealth.

Distributions from donor-advised funds only factored in when Forbes could confirm them, and neither DAF contributions nor undistributed contributions to foundations counted toward the total. A full 68 billionaires didn’t get a philanthropy score because no information on their giving was available. The list contained only 38 such “N/A” scores in 2019 and 46 in 2018.

For the most part, these lower scores reflect well-known trends. As the assets of the super-rich continue to skyrocket, foundation endowments are growing and more foundations are coming onto the scene. The same is true of DAFs. But that hasn’t translated into higher levels of actual giving. According to one fairly recent study by Bridgespan, ultra-wealthy American families tend to give around 1% of their assets to charity a year, a far cry from the 11% or more it would take in annual giving to overcome stock market gains and actually spend down effectively.

Who Measures Up?

Just like last year, the most generous givers on the Forbes 400 are older—those who scored five are all age 78 or higher, with the exception of John Arnold, who is just 46. Meanwhile, only four of the 19 billionaires with a score of four are younger than 60, reflecting business leaders’ tendency to postpone ambitious giving while they’re still preoccupied with their day jobs. Also like last year, many of the list’s fours and fives hail from tech and finance, two industries that produce a lot of billionaires and maintain strong cultures of philanthropy. 

That said, the list of highest scorers looks quite different than it did last year. The new scoring metric pushed some philanthropic titans like Bill Gates and Michael Bloomberg down from five to four, an indication that even the largest giving operations haven’t kept pace with their benefactors’ escalating fortunes.

Some other notable recipients of a five score last year saw their ranking drop even further. Jim Simons descended to three, while Mark Zuckerberg went down all the way to two. Laurene Powell Jobs got a score of five last year and only received a one in 2020. Her ranking may reflect the limits of public data collection as much as it does any paucity of giving by the secretive Emerson Collective. After all, Forbes can only measure what it can see.

Warren Buffett is the wealthiest person who maintained a philanthropy score of five from 2019 into 2020. The other finance moguls who’ve distributed over 20% of their wealth to charity are George Soros, Eli Broad, Julian Robertson and John Arnold. Again, Arnold’s early exit from finance to focus on disposing his fortune distinguishes him from the others. 

Interestingly, the only tech billionaire who received a score of five is Intel co-founder Gordon Moore, who is 91 years old and has focused on giving for many years now. Like Buffett, Soros, Arnold and others at the top of this list, Moore has managed to offset the growth of his assets with philanthropic giving—something Gates, Bloomberg and Simons, for instance, haven’t been able to do. Also interesting is the fact that of the remaining four billionaires who scored a five, two of them—George Kaiser and Lynn Schusterman—derived their fortunes from oil and gas, while the other two—Amos Hostetter and Ted Turner—made it big in television and broadcasting. 

On the other side of the coin, the vast swath of billionaires who’ve given away less than 1% of their assets includes many of the world’s wealthiest figures. To begin with, there’s Jeff Bezos, whose various philanthropic commitments and a $10 billion pledge to fight climate change haven’t yet heralded a windfall for nonprofits. Elon Musk has seen his fortune explode in 2020, but large-scale philanthropy hasn’t yet emerged as one of his many projects. 

Other figures at the pinnacle of tech, like Larry Ellison, Larry Page and Sergey Brin, are also philanthropic lightweights by Forbes’ new measure, despite being familiar faces on the list of America’s richest. The same goes for the Walton family, none of whose many representatives on the Forbes 400 received a score greater than two. Of Sam Walton’s living children, both Rob and Jim Walton—both worth over $60 billion—received a score of one, while Alice Walton got a two. 

Philanthropy in Flux

As fascinating as it is, the Forbes 400 is only a snapshot in time. Positions on the list—and philanthropy scores—are liable to change as fortunes are made and lost, major giving emerges or is discovered, and people pass away. The situation is especially volatile in an uncertain political and economic climate where a financial crisis or a stock market crash may still be around the corner. And not every billionaire is profiting during the pandemic: Some whose fortunes are tied up in industries like hospitality or live entertainment are losing a lot of ground.

It’s discouraging that we still have so few big examples, but it is true that some of the Forbes 400 are stepping up their giving in ways that bode well for their philanthropy scores. Twitter’s Jack Dorsey, for instance, pledged $1 billion for COVID relief earlier this year. While only a fraction of that sum has actually reached nonprofits so far, that pledge represented 28% of Dorsey's net worth at the time. Following through would put him well on the path to a four or a five, from his current score of two. 

We’ve also devoted quite a bit of coverage to MacKenzie Scott’s debut as a major force in philanthropy. At rank 13 on the Forbes list, she already outstrips her former husband in terms of philanthropy score with a two to his one. But even if Scott keeps giving away nearly $2 billion a year, she’s unlikely to raise that philanthropy score as long as her fortune in Amazon stock continues to swell.

The reality is that unless the Forbes 400 start giving vastly more money away, they won’t be able to deliver on their Giving Pledges and other grand designs to dispose of their wealth while they’re alive. Even John Arnold, that youthful outlier in an otherwise elderly cohort of high scorers, has only managed to hold steady at a net worth of $3.3 billion, despite setting up an ambitious and expansive giving operation.

Imagine if even a handful of those ultra-rich low scorers like Bezos or the Waltons suddenly began funding like Arnold, Soros or Buffett. Imagine if a lot more of the Forbes 400 followed suit. As unlikely as that might be, it’s an exciting prospect. It’s also a scary one, given billionaire philanthropy’s power to influence public policy with no democratic oversight to speak of.