"Rich men should be thankful for one inestimable boon. They have it in their power during their lives to busy themselves in organizing benefactions from which the masses of their fellows will derive lasting advantage, and thus dignify their own lives."
When industrialist Andrew Carnegie wrote those words in 1889, he believed that the rich had a moral obligation to give away their fortunes. The legendary steel tycoon asserted that all personal wealth beyond a family's needs should be regarded as a trust fund for the benefit of the community. Further, he believed that the money should be given during the benefactor's lifetime to ensure that it accomplished the maximum good.
Carnegie would surely have given an approving nod to the latest generation of philanthropists. Not since the Gilded Age, when harsh overlords such as Carnegie and John D. Rockefeller Sr. put millions of their dollars toward good works, has philanthropy been as bold and ambitious. The spectacular late-1990s runup in the stock market created a generation of newly super-rich executives and entrepreneurs worth hundreds of millions, if not billions, of dollars. Even after the sharp decline in the market, the ranks of the very wealthy have never been stronger--and many are now working almost as hard at giving their fortunes away as they did at amassing them. Since 1990, charitable donations by individuals have grown by half, from $110 billion to $164 billion in 2001. By harking back to the individualistic style of giving practiced by Carnegie, these donors are ushering in a new era of philanthropy.
This new philanthropy displays an impatient disdain for the cautious and unimaginative check-writing that dominated charitable giving for decades. So what does it look like?
-- It's more ambitious: Today's philanthropists are tackling giant issues, from remaking American education to curing cancer.
-- It's more strategic: Donors are taking the same systematic approach they used to compete in business, laying out detailed plans that get at the heart of systemic problems, not just symptoms.
-- It's more global: Just as business doesn't stop at national borders, neither does charitable giving. Donors from William H. Gates III to George Soros have sweeping international agendas.
-- It demands results: The new philanthropists attach a lot of strings. Recipients are often required to meet milestone goals, to invite foundation members onto their boards, and to produce measurable results--or risk losing their funding.
All of this requires a new level of involvement by donors. More than just ribbon-cutters, the new philanthropists are actively engaged in projects that become passions. John R. Alm is one example. The president of Coca-Cola Enterprises Inc. has taken an ambitious goal--providing ongoing, intensive support to at-risk kids in inner-city Los Angeles, from middle school through college--drawn up a plan, and now devotes a large portion of his time outside the office to making that plan work.
The start of this new era can be traced to late September, 1997, when cable-TV mogul Ted Turner anted up an historic $1 billion pledge to the U.N.--and challenged wealthy "skinflints" to do likewise. The nation's underachieving billionaires got an even bigger prodding two years later when the world's richest man, Bill Gates, pumped a staggering $16.5 billion into his foundation to help pay for a campaign to improve health care for the world's poor. Gates and his wife Melinda have since poured a total of $25.6 billion--some 60% of their current net worth--into their foundation, making it the world's largest. Their mission to bring vaccines to poor children in Africa and India is as strategic and sweeping as Carnegie's promise to build a library in every American town.
To track who's who in this new world, BusinessWeek has ranked 50 of the most generous donors in America. Using public records and interviews, we've tallied donations going back five years as well as total contributions and pledges. Then, because generosity is a relative term depending on the size of the pot, we've looked at total giving as a percentage of current net worth. Naturally, there are limitations to our methodology, the main one being that many wealthy donors prefer to give anonymously--and take great pains to make sure their gifts are never identified. What our ranking does show, though, is that many of the new philanthropists are willing to back their bold plans with substantial portions of their personal wealth. Together, this group has given $41 billion over the past five years.
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By John A. Byrne
With Julia Cosgrove, Brian Hindo, and Adam Dayan, in New York