Within a few years of starting Inside Philanthropy, after writing many articles about how foundations needed to change, I had a sobering epiphany: These places weren’t going to change.
Most legacy grantmakers, I realized, were never going to substantially increase payout or mainly give multi-year general support or drop their siloed approaches to funding. Nor would they ever align the bulk of their investments — the “other 95%” — with their missions. There were just too many incentives for business as usual and too little pressure to do things differently.
This was a discouraging realization. But around the same time, I had another thought: the sclerosis of legacy foundations didn’t much matter. Why? Because living donors were increasingly driving the action in philanthropy.
With each passing year, fabled institutions like Rockefeller, Carnegie and Ford are becoming smaller players in relative terms as a long list of billionaires ramp up their giving. That trend was just starting to accelerate a decade ago, and it’s only picked up steam since, with the emergence of new megadonors like MacKenzie Scott, Michael Bloomberg, and Steve and Connie Ballmer. More giant fortunes are likely to come online for philanthropy over the next decade. Meanwhile, an ever-growing cohort of second- and third-tier billionaire fortunes now rival the endowments of all but the biggest legacy foundations.
This changing of the guard, I realized, created a big opening to shift the norms around large-scale grantmaking. Instead of trying to teach old dogs new tricks, those of us pushing for a more dynamic sector could invest our hopes in givers just getting going. That optimism has proven well founded. Ideas that are a hard sell to legacy foundations — like shoveling out general support in big chunks — have been embraced by some of the newcomers, like Scott.
I’m unspooling this backstory to offer context about the current moment. While calls abound lately for foundations to substantially increase payout, most of these institutions are unlikely to be very responsive. But billionaire donors are another story. These people have both the money and the freedom to give more — a lot more.
Consider Dustin Moskovitz and Cari Tuna, two top philanthropists with a fortune of over $11 billion at their disposal. That sum is far greater than when they signed the Giving Pledge in 2010, saying they planned to give with “urgency.” The couple have been exemplary mega-donors ever since — save for the fact that their wealth has risen so much faster than their giving.
This doesn’t look great. Tuna has often stressed the payoffs of frontloading philanthropic giving. Money spent today to buy malaria nets or vaccinate a child delivers a lot more bang for the buck than money spent tomorrow, she told me when I interviewed her for my book, “The Givers.” “The good we do compounds over time.”
It’s hard to argue with that logic, but why would anyone who believes this let their wealth compound so quickly? It’s not like Moskovitz and Tuna can plead uncertainty about the impact of more giving, as so many rich people do. They’re big backers of GiveWell, the effective altruist group that offers piles of evidence showing exactly how more giving can save lives. (In case you’re wondering, GiveWell says that it costs just several thousand dollars to save a life.) Assuming Moskovitz and Tuna believe their own philanthropic experts, they must know that opting to preserve their stock investments means that people will die who could be saved if they gave more.
That sounds harsh. But a key point of effective altruism is that we must face the moral consequences of the choices we make, as opposed to evading the truth with falsifiable rationalizations.
In any case, I don’t mean to single out Moskovitz and Tuna — who, as I said, have been standout philanthropists. Michael Bloomberg is another data-driven giver who’s touted “giving while living” and also knows how much additional good he could do with more grantmaking, especially for global health. Still, Bloomberg has never managed to get money out the door fast enough to offset his rapidly growing wealth. He’s now more than five times richer than when he signed the Giving Pledge.
A powerful point that people like Bloomberg and Bill Gates have made to their fellow billionaires about global health is that it’s a buyer’s market for impact — there are many opportunities for highly cost-effective giving if you know where to look. This is even more true today, in the wake of U.S. global aid cuts. As preventable deaths rise thanks to these cuts, donors have clear options to help stem the carnage. Last month, we published a guest post by one of the leaders of Project Resource Optimization, which makes it super easy for philanthropists to help salvage the most cost-effective USAID projects that have been defunded.
It’s too early to say how billionaires are stepping up to meet the current crisis (beyond Gates’ big announcement), since many operate quietly. What we do know is that it’s easy for them to give more if they so choose. Unlike foundation presidents, they can decide over dinner to turn up the dial. There’s no need to bring around a risk-averse board or fight with their chief investment officer.
The new living megadonors have shaken up the sector over the past decade in good ways. Now we’ll see if they’re able to swiftly allocate major new resources to meet urgent needs, demonstrating once again that they can go where legacy foundations won’t.
