February 7, 2011

Wealthiest Donors Turned Frugal in 2010: The Chronicle of Philanthropy

Uncertain tax regulations and fears of double-dip recession constrained giving

Only a handful of the billionaires who said last year they would devote half their wealth to charity made big gifts in 2010, according to The Chronicle of Philanthropy, which published its annual list of the 50 most generous donors on Sunday.

Just 17 people on The Chronicle’s annual list of the 50 most generous donors also appeared on Forbes magazine’s list of the 400 wealthiest Americans.

Over all, the donors on The Chronicle’s 2010 list—actually 54, including several ties in the rankings—committed a combined total of $3.3 billion, the smallest sum since The Chronicle began to track the biggest donors in 2000. The list measures the cumulative total each individual gives to charitable causes, not simply the biggest donations of the year.

The organization reported that nine people on the list committed more than $100 million in 2010, compared with 16 in 2007 and 18 in 2006. The median gift was $39.6 million, down from $41.4 million in 2009, $69.3 million in 2008, and $74.4 million in 2007.

The reasons for the constrained giving were not surprising: a combination of fears of the economy sliding back into recession and uncertainty about tax rules, according to donors and nonprofit officials who spoke to The Chronicle. However, they expected giving to increase in 2011, thanks to the resolution of the federal estate tax and deduction limits and fading concerns about a double-dip recession.

While nearly half of the gifts of $5 million or more made by people on the Philanthropy 50 went to colleges and universities, no big gifts to colleges came from those under 50; instead, they gave mainly to medical care, human rights, social entrepreneurship and efforts to improve public schools—suggesting a generational shift in giving, according to The Chronicle.

Hospitals and medical centers were the second most popular cause for Philanthropy 50 donors. No donations of $5 million or more went to social-service groups.

In a year of reduced giving by the country’s wealthiest people, philanthropy stalwarts topped The Chronicle’s 2010 list. Two New Yorkers were the biggest donors: George Soros, with a gift of $332 million to his Open Society Foundations, and Mayor Michael Bloomberg, who divided some $279 million among nearly 1,000 charities.

Businessman T. Denny Sanford was third on the list, committing $3 million to a handful of health and medical organizations, followed by Irwin M. Jacobs, co-founder of Qualcomm, and his wife, Joan, who committed $120 million, and real estate mogul Eli Broad and his wife Edythe, who gave $118 million to their foundations.

The Chroniclereported that Bill and Melinda Gates and Warren E. Buffett, the three biggest names in philanthropy, do not appear in the rankings because the money they gave in 2010 ($46.4 million and $1.9 billion, respectively) were to pay off pledges announced in previous years. The Chronicle’s list includes only new pledges and gifts.

The Gates-Buffett Giving Pledge, which made a big splash last year, influenced few donors. Ten of the couples and individuals on The Chronicle’s Philanthropy 50 list (13 people, including spouses) have signed the Giving Pledge. One of its goals is to prompt wealthy people to come forward as philanthropic role models, but Giving Pledge members have not embraced public giving.

Indeed, many declined to respond to The Chronicle’s requests for information on their 2010 charity, the report said.

In general, public pressure doesn’t seem to be unlocking many big gifts, The Chronicle reported. Despite the criticism that financiers have faced over big bonuses and risky practices, they showed up on the list in only slightly higher numbers than in past years.

Goldman Sachs’s head of merchant banking Richard Friedman, No. 49 on the list, told The Chronicle: “You have to decide whether it’s a priority for you or not. I don’t think you’re going to get less bad publicity.”

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