THE BILLIONAIRES HOW THEY GIVE THEIR MONEY AWAY Some do good for the worst of reasons, but many are motivated by a genuine desire to leave a better world behind them.
By Alan Farnham REPORTER ASSOCIATE Wilton Woods

(FORTUNE Magazine) – BROTHER, can you spare a billion? Since the time of the Medici, great philanthropists have answered ''Sure,'' and spared it or its equivalent. Not content merely to pile up assets, they have sought through good works to gain renown and, perhaps, preferred seating in the hereafter. In the U.S. alone, their quest has showered the public with universities (Duke, Stanford, Johns Hopkins), hospitals (Peter Bent Brigham, Sloan-Kettering), prizes (Pulitzer), concert halls (Carnegie), scholarships (Guggenheim), and museums (Frick). Against so prodigal a backdrop, how do today's rich measure up? On an inflation-adjusted basis, not too well. Some of today's most generous gifts look pretty paltry compared with the benefactions of yesteryear. Consider industrialist Henry Rowan's recent present of $100 million to Glassboro State College in New Jersey. Generous? Most certainly. But nowhere near as impressive as James Duke's $80 million to Duke University nearly 70 years ago: Adjusted for inflation, it's worth $645 million today. Even computer billionaire David Packard's $2 billion to medical research seems small next to the $350 million Andrew Carnegie had spent by 1919 to build 2,600 public libraries (and do other good works). Its equivalent today: $4.6 billion. After a decade in which the rich succeeded in making themselves only richer, it would be wonderful to say that they had also become more generous. Unfortunately, they did not. Though total U.S. giving from foundations, bequests, individuals, and corporations more than doubled during the 1980s, the share given by the rich, as a class, declined. Of the $125 billion raised for charity in the U.S. last year, 83% -- some $103 billion -- came from individuals. This amount worked out to be 2.13% of their pretax income. The American Association of Fund-Raising Counsel, a trade association for fund raisers, sponsored a study of the giving habits of people with annual incomes of $1 million or more. During the 1980s, membership in this club swelled 14-fold, but the club's collective giving grew only fivefold. Result: By decade's end, the annual giving of the average member had fallen 60%, to $83,900. That worries experts on philanthropy, who hope the decline is only a temporary aberration. As philanthropy consultant Waldemar Nielsen, author of The Golden Donors, points out, the people who made their fortunes in the 1980s are, by definition, the new rich. And they don't have the same attitude toward philanthropy as do older, longer-established Samaritans. They hang on to their money, reinvesting it in their businesses. When they do give it away, they're likely to do so at the end of their careers. If history is any guide, the checkbooks will open -- eventually. While no country has a patent on generosity, philanthropy as practiced in the U.S. is unique. In Asia and in Europe, money for good works comes mainly from those institutional Medici, corporations. In Middle Eastern cultures, giving noncash gifts -- hospitality, for instance -- is the highest form of magnanimity. Only in America have so many individuals given so much private cash for public good. There are a number of reasons: a benign tax code, a fluid society that allows first-generation rich folks to buy their way into the establishment, a belief that one can purchase immortality, and a genuine desire to do good. The wealthy in other nations are affected by these attitudes too, but not to the extent that they are in the U.S. NOWHERE are the tax man and the philanthropist friendlier. Robert Daniels, a San Francisco tax lawyer, lays out the basics: ''The IRS lets you deduct charitable contributions from taxable income. Depending on your bracket, you can save up to 31%. If you give $1 million, say, you can save $310,000. That means, after federal taxes, the gift cost you $690,000. When you give stock, you can deduct its full current value: If you bought stock for $1 that's now worth $1 million, you deduct $1 million.'' Swiss billionaire Jean-Claude Mimran observes, without rancor, that his donations are not afforded such generous tax treatment in Switzerland -- or in most of Europe. But that hasn't stopped him from giving to an orphanage in Tel Aviv and to many other causes. Snorts German billionaire Johannes Mann: ''Of course there are more donors in the U.S. than in Germany. We pay more taxes than you do!''

As a vehicle for promoting social ambitions and for putting the patina of age on some raw, new fortunes, philanthropy can't be beat. Thomas Hoving, former director of New York's Metropolitan Museum of Art, says that's why the rich give to well-established charities that need their money less, and not to fledgling or little-known enterprises where the bucks might do more good. ''Your gift has more social impact at the Met,'' Hoving says. ''With the right gift, maybe you can even get yourself elected to the board.'' Last autumn Robert Maxwell announced to the stunned faculty and students of the Polytechnic University of New York (endowment: $13 million) that he, as the new owner of New York's ''hometown paper,'' the Daily News, would be giving them $10 million. Cap'n Bob having died at sea a week before the pledge came due, the school never saw a dime. Says the university's philosophic spokeswoman: ''We have to consider what else he gave us. He was famous. He put us on the map.''

Like the rest of us, rich people would like to live forever. The only difference is, they have the means to achieve it -- at least in some fashion. To celebrate his roots, Toichi Takenaka, whose family has been in the construction business since 1610, has given $96 million to establish a Takenaka Museum of Carpenter's Tools in Osaka. Immortality doesn't guarantee that your wishes will be respected after you die, unfortunately. When a donor turns over responsibility for his good works to professional managers, he runs the risk that, in time, their tastes and prejudices will supplant his own. Even a name chiseled in stone doesn't always stay chiseled. Earlier this year students at Dartmouth voted to recommend that Cutter Hall, named in honor of donor Victor M. Cutter, class of '03, be renamed the El Hajj Malik El Shabazz Temple, in honor of black radical Malcolm X. As a result, the Cutter family considered taking its name off a scholarship, and after much campus hullabaloo, Cutter Hall remains Cutter Hall. Leland Stanford was not so lucky. After his death, the widow of the former governor of California, builder of the Central Pacific Railroad, and founder of Stanford University had this legend carved into the face of the Stanford University chapel: erected to the glory of GOD and in loving memory of MY HUSBAND LELAND STANFORD. The devout objected that this seemed to give the governor top billing lengthwise: Stanford 23, God 3. After Mrs. Stanford's death, the university's trustees moved the inscription to the chapel's interior, where it is harder to see. THOUGH PAUL MELLON reckons he has given away more than $600 million in his lifetime -- he's 85 and the money came from banking -- his two museums, the East Wing of the National Gallery and the Yale University Center for British Art, do not bear his name. He thinks that putting one's moniker on a gallery only discourages other collectors from giving it their art. Since billionaires can't be sure of controlling their beneficences from the grave, they've learned to do what they can while they're still alive. Recipients of Ross Perot's philanthropy can tell you that, sometimes, the only thing worse than not getting Perot's money is getting it. He doesn't like to give without strings attached, and he isn't shy about yanking them when the money isn't used to his satisfaction. But Perot has also given more money than he was asked for. In 1987 the Dallas Symphony, which had already tapped him for $10 million, was well along building a concert hall when architect I. M. Pei decided he wanted a few improvements, including 11 onyx lighting fixtures at $50,000 each. (When a previous Pei project, Dallas's city hall, had gone over budget, locals took to calling him ''U. Will Pay.'') The symphony board reported the concert hall's extra costs to Mr. Perot and held its collective breath, emitting nary a tweet while he reviewed the changes. He decided the lamps and other additions were ''worldclass'' and kicked in an additional $2 million. Dallas received a civic jewel, its luster marred only by the proximity of a dumpy drive-in bank next door. Observes docent Ilse Enteman acidly: ''It's one of the few banks in Texas that didn't fail.'' Of all the reasons rich people give their money away, one is, in a cynical world, often misunderstood: the simple desire to do good. Says Brazilian billionaire Olacyr Francisco de Moraes: ''Obviously, what motivates a businessman is profits. But what gives us comfort and -- why not say it? -- makes us proud, is to see that our business activities are making a contribution to the economic and social development of the country.'' He owns Itamarati Group, a conglomerate in agriculture, construction, mining, banking, and real estate. De Moraes is proudest of the social aid programs he has created for employees at four of the company's locations. Each has its own free hospital and doctor, dentists, pharmacy, school, and recreation and sports center. In staff salaries alone, each center costs about $200,000 a month. Turkish industrialist Sakip Sabanci, 59, travels the world at his own expense as an unofficial ambassador for Turkish culture. His talks to student groups at home and abroad, he says, have brought him unexpected rewards: ''During a conference at one of the universities in Istanbul, a young and pretty girl asked me what would I do if I had only another four months to live. I knew she was expecting an answer like: 'I would enjoy life going around with beautiful women.' So I said, 'No, I would not do that, but I would try hard to leave something behind for my country.' Very impressed, she stood up, came, and kissed me.'' Checkbook philanthropy takes attention from the fact that, in ways both significant and small, givers give more than money. Microsoft co-founder Bill Gates, a Harvard dropout, donated $12 million to his hometown University of Washington in 1991 to start a department of molecular biotechnology. But he did more. He personally recruited professor Leroy Hood, a leading researcher, to head it. Gates felt Hood's leadership -- as much as the money -- was essential to the department's success. Of his first foray in philanthropy, Gates says, ''What I discovered is that you've got to put in the same amount of work, and exercise the same degree of judgment, in giving money away as you do in making it.'' On a lesser scale, Anne Cox Chambers, owner of Atlanta's Cox Enterprises (which owns newspapers and cable TV systems), raises money for a French humane society every summer by selling odds and ends from a booth at a flea market in L'Isle-sur-la-Sorgue. ''The staid French ladies,'' she says, ''are shocked -- Mme. Chambers, selling in a booth!'' OF THE MANY CAUSES to which billionaires give, saving the environment is starting to become a favorite. So far, Edward Bass, whose fortune comes from Texas oil, LBOs, and investments, has sunk $150 million into Biosphere 2, a self-contained habitat in Arizona's Sonoran Desert, intended as a model for, say, space stations. Strictly speaking, his contributions are not philanthropy, since Bass hopes someday to license the technology that makes the system work. But does it work? Its eight occupants were supposed to stay sealed inside, strictly self-sufficient for two years. But when one cut off the tip of her finger last November and was removed to a local hospital for stitches, she returned lugging a big sack of maps, books, spare computer chips, and other supplies. Switzerland's Stephan Schmidheiny, whose holdings include a watch company and a winery, has been called the Green Industrialist. Two years ago he gave $10 million to found the Business Council for Sustainable Development, which promotes cooperation between business and environmental leaders. At Rio's Earth Summit, he addressed the assembly on behalf of some 48 environmentally minded corporations worldwide. Whatever giving does to improve the world, it sure makes the givers feel better. Says Olacyr de Moraes: ''I do it, basically, for satisfaction.'' Champion philanthropist Walter Annenberg, who has donated $1 billion worth of paintings to New York's Metropolitan Museum, agrees: ''It gives me a good feeling.'' The reason so much of Paul Mellon's charity has taken the form of buying paintings for museums is ''purely selfish,'' he says. ''Bunny ((Mrs. Mellon)) and I love pictures.'' Doesn't it bother him that all that money might be better spent on medical research or saving the environment? No. He figures he has that covered because much of his inheritance is in the hands of the Andrew W. Mellon Foundation, whose professional, independent managers can do with it whatever they think best. Who says money can't buy happiness?