FORTUNE's 40 Most Generous Americans
(FORTUNE Magazine) – Charity purists, beware. Anyone who thinks of Mother Teresa as the true embodiment of the virtue is hopelessly old-fashioned. Forget self-sacrifice (or Wasp noblesse oblige). Nowadays, giving money away is trendy--almost as sexy as making it. The New York Times has even published a list of what's hot and what's not, philanthropically speaking. (Women's health is in; human services is out.) And can the puritans who quietly pursue their philanthropy really maintain that conspicuous charity is a less worthy pursuit for rich folks than Range Rovers or Cohibas?
As with sport-utility vehicles and cigars, it's hard to pinpoint just when this trend took off. Clearly, Ted Turner had a lot to do with it. In the fall of 1996 he asked his fellow billionaires to focus on sharing their wealth, not just amassing it. Turner, vice chairman of Time Warner (corporate parent of FORTUNE's publisher), also appealed to the media to create a list of the largest givers in order to spark philanthropic competition. FORTUNE took the challenge, publishing a list of America's 25 Most Generous one year ago. Last September, Turner actually practiced what he preached by making a $1 billion gift to the United Nations. No Mother Teresa he, Turner was well aware of the PR mileage of such a magnanimous gesture. Still, in a year when the stock market added well over $1 trillion to the nation's wealth--and $1 billion to Turner's 11% stake in Time Warner--he set an important example.
Although few philanthropists (or anyone else, for that matter) are as outspoken, flamboyant, or generous as Turner, FORTUNE's list reveals a solid increase in philanthropy during 1997. The top 25 from 1997 gave $3.3 billion, more than double the amount of 1996's 25 most generous. We even expanded our list, now called the FORTUNE 40, to better capture the major gifts to charity. This group contributed a total of $3.5 billion to nonprofit organizations last year. Only six of last year's givers--Bill Gates, Leslie Gonda, Joan Kroc, Alfred Lerner, George Soros, and Ted Turner--found it in their hearts and wallets to repeat the feat, but that's not too surprising, since it took $12 million to make the 1997 list.
Many of last year's major contributions went to colleges or universities, continuing a trend of 20th-century philanthropy. Sixty percent of 1997's donors gave to higher education, vs. 64% in 1996. For someone seeking a safe place to plunk down an eight-figure contribution, an established school, especially an alma mater, is an obvious choice. Moreover, universities, especially during capital campaigns, offer to name buildings after big donors--all the better for those who hope to trade their altruism for intimations of immortality. Sixteen members of the FORTUNE 40 had university buildings named for them last year.
Southern Methodist University in Dallas received its largest gift ever during its 1997 capital campaign: $30 million from country-club king Robert Dedman to build the Dedman Life Sciences Building. SMU's campaign also inspired Gerald J. Ford, chairman of California Federal Bank, to give $20 million toward construction of the new Ford football stadium and sports center. "At least it will spare my children the expense of a tombstone," Ford has said.
Ford and Dedman are two of seven Texans on the FORTUNE 40 (California, with nine, was the only state that had more). Of the remainder, four gave their money largely to local institutions, while the fifth, real estate developer Raymond Nasher, established a foundation to build, own, and manage a sculpture garden that will hold his unparalleled collection of Rodins, Calders, and Henry Moores. That's obviously more complicated than donating the collection to a museum, but easier to control and, Nasher hopes, more satisfying. Several other wealthy Americans also donated collections. Mitchell Wolfson Jr., who inherited an entertainment fortune, is giving $75 million worth of memorabilia to Florida International University (see box). Bernard and Edith Lewin are donating 20th-century Mexican paintings by Diego Rivera, Frida Kahlo, and others, valued at $25 million, to the Los Angeles County Museum of Art.
Many of the country's most significant philanthropists are not well known, although the majority have been hugely successful in business; 25 made their money in companies they founded, and three others--Michael Eisner, Roberto Goizueta, and William Schreyer--got rich running large public corporations. Before he died in October, Goizueta gave $38 million in Coca-Cola stock to his Atlanta foundation. Eisner, along with his wife, Jane, started a foundation with $89 million in Disney stock. Schreyer, former chairman of Merrill Lynch, chose to give $30 million to his alma mater, Penn State.
The top spots on the FORTUNE 40 are dominated by some of the most creative philanthropists in recent memory. Turner, not yet 60, has given away nearly a third of his net worth in a single bequest. He is now in a position to monitor closely the results of his U.N. contribution, another new paradigm in giving: philanthropy as venture capital. George Soros, Bill Gates, and the Eisners are also giving generously during their lifetimes and getting personally involved in the causes they support. Even 89-year-old Kathryn Albertson, whose late husband, Joe, began Albertson's grocery stores, has followed the pattern. She made a $660 million gift to the family foundation to support one specific mission: improving education in her home state of Idaho by providing $35 million a year to the public schools.
Whatever the donors' chosen charities, by now you are likely agog at the size of their gifts. But take a moment to put the sums in perspective. Although the FORTUNE 40 disbursed $3.5 billion last year, that's a piddling 2% of the $150.7 billion donated to charity in 1996 (the last year for which data are available). Nearly half of the $150 billion went to religious organizations, and most of it came from ordinary people. Moreover, the options available to those with moderate means have exploded in the past five years. Community foundations and charitable gift funds allow donors to contribute more thoughtfully and at the same time to benefit from tax deductions.
Despite last year's record donations, investor and philanthropist Claude Rosenberg believes there is a large, untapped giving potential in America, particularly among the affluent. In his book, Wealthy and Wise, for example, he calculates that a person with investments of $1 million and a salary of $140,000 could give away $17,700--over $11,000 more than the average donation to charity reported to the IRS at that level--and still end the year with $1.07 million, assuming a 9.5% total return on the assets.
A downturn in the economy could signal the end of both conspicuous philanthropy and conspicuous consumption. And yet, in good times and in bad, the philanthropic instinct remains strong in folks who are so inclined. Data collected in Giving USA, the annual report on philanthropy, show only slight declines in charitable contributions during the four recessions since 1969. Trends may come and go, but it seems safe to say that philanthropy will outlast cigar bars.