How does one measure generosity? It's a challenge, especially when many of the country's most charitable donors work hard to keep their gifts under wraps. Public information is often outdated and rarely comprehensive. And stocks move regularly, causing large pledges and gifts to shift in value substantially over time.
To compile BusinessWeek's annual ranking of the country's most generous philanthropists, we relied heavily on news reports of publicly announced gifts, press releases, foundation filings, and interviews. In particular, we made great use of The Chronicle of Philanthropy, Charity Navigator, the Forbes 400, and GuideStar's online database. We ranked the Top 50 by what they've pledged and given in the past five years. We also estimated their total contributions and presented these figures as a percentage of each candidate's current net worth, for another way of measuring generosity.
We chose to count pledges because we believe gifts alone don't adequately reflect a philanthropic culture in which donors often make sweeping multiyear promises that inspire their peers to greater charitable endeavors. But pledges proved difficult to value. In many cases, the gift amount had changed since the pledge was made. For example, Eli Lilly & Co. (LLY ) heiress Ruth Lilly's $100 million pledge to Poetry magazine was worth roughly 25% less by the time her bank cashed in the promised shares of Lilly stock. For consistency, we counted all pledges at their value at the time they were announced.
In some cases, philanthropists, perhaps most notably investor Alberto W. Vilar, held off on making payments on their pledges after the economy fell into recession. However, we chose to discount only those pledges that had been formally reneged upon. Among these was Netscape Communications Corp. co-founder James H. Clark's 1999 pledge of $150 million to Stanford University. He withdrew $60 million of it in 2001 in protest of President George W. Bush's restrictive policy on stem-cell research.
By Jessi Hempel in New York