The Top Givers
Perhaps the only thing harder than building a great fortune is giving one away. At least that's the conclusion you might draw after looking at how hard the megagivers on our second annual ranking of top philanthropists work at the task. At No. 1 on our list, William H. Gates III and his wife, Melinda, are the reigning royalty of a new class of self-made superphilanthropists. Along with Michael and Susan Dell, PeopleSoft co-founder David Duffield and his wife, Cheryl, and eBay Inc. (EBAY )'s first president, Jeffrey S. Skoll, they're schooling society in the ways of conspicuous donation.
Combining their billions with their enormous personal capital, these benefactors are attacking some of the world's most intractable social problems, from poverty to public schools. And in a year when nonprofits have been savaged by drastic government budget cuts, their donations are helping to reinforce an unraveling safety net. The new philanthropists' demand for measurable results, efficiency, and transparency -- for bringing a businesslike rigor to philanthropy -- is already trickling down to the lowest levels of the nonprofit world.
The members of our elite roster are not just out front in terms of sheer amounts given; they're also leading the way to a new conception of responsible philanthropy. Today's top givers are inventing a new kind of "carpe diem giving." Instead of making promises to be fulfilled by bequest on their deaths, they're handing over the bulk of their fortunes during their lifetimes, when they can bring vast stores of money and talent to bear on the worst problems plaguing society.
Their hands-on philanthropy also allows them to better prepare their children for a life of privilege minus the psychological hex wealth can sometimes bring. Indeed, many of our big givers have decided to leave their offspring relatively small amounts in the belief that a life animated by work and a sense of purpose is ultimately a richer existence. In some cases, they don't even plan to leave a permanent foundation as a legacy, choosing instead to spend their charitable organizations out of existence -- or close to it -- to accomplish the maximum good during their lifetimes.
To find the 15 new entrants on this year's list and to compile the overall ranking of the biggest philanthropists, we combed through public records and conducted scores of interviews with foundation heads, community groups, nonprofit experts, and wealth watchers. To make the cut this year, candidates had to have given or pledged $95 million in the past five years -- $30 million more than last year. That bumped investors Ted Forstmann and Frederick Klingenstein and insurance moguls Arthur and Angela Williams off the list. Others from last year, including the first lady of McDonald's (MCD ) Corp., Joan B. Kroc, investor Leon Levy, oil heiress Audrey Jones Beck, and oil baron John Jackson, died.
Intriguingly, our research this year also turned up a handful of secret givers, philanthropists who believe in giving big for zero public recognition. They subscribe to the notion that having been blessed with great wealth, they should give something back -- without getting anything in return. Some, like Maurice "Chico" Sabbah and George Kaiser, are among our top 50 givers.
Others, such as Fred Eychaner and A. Jerrold Perenchio, are not, partly because there was not enough publicly available information with which to rank them. Then there's Charles F. Feeney, who managed to elude the charitable radar for more than a decade despite gifts that make him one of the top philanthropists of our time.
Many of the most dynamic givers on our list are drawn from those who made their fortunes in technology. Along with the Gateses and the Dells, other tech visionaries-turned-philanthropists include Philip R. Berber, founder of online-trading firm CyBerCorp Holdings Inc., (SCH ) and his wife, Donna, as well as Gateway Inc. (GTW ) co-founder Theodore W. Waitt and his wife, Joan. The Berbers and Waitts are new inductees, as is No. 38 Catherine Reynolds, the first self-made woman to appear in the ranking. Reynolds made her money in the student-loan business. Her big gifts to D.C. museums caused the Old Guard to suggest that she might be trying to buy her way into Washington society -- a notion she says she still can't understand.
Also making their debuts this year: No. 47 Haim Saban, an entertainment entrepreneur, and his wife, Cheryl, who recently challenged other Hollywood insiders to start ponying up blockbuster bucks; No. 42 Ira and Mary Lou Fulton, who donate half the profits from their company, Fulton Homes Inc., to education; and No. 41 Gary and Frances Comer. Gary, who founded Lands' End, was inspired to support global warming research after he was able to pilot his yacht across the Arctic without hitting ice.
This group exemplifies the new breed of fully engaged philanthropist. Many are giving away vast portions of their wealth early while they can still manage the process. Feeney, one of our stealth givers, has been honing this philosophy, which he calls "giving while living," for 25 years. Now, after a wealth-creation boom that made many an under-40 striver astonishingly rich, others are starting to follow his lead.
Today's big philanthropists are donating ever-larger sums at younger and younger ages. "The old model of an old guy on his deathbed leaving his estate to his foundation is over," says Rick Cohen, executive director of the National Committee for Responsive Philanthropy. "Now, people are setting up foundations in their 30s and 40s." Harvard University's senior philanthropic adviser, Charles W. Collier, adds: "In years past, everybody assumed foundations would go on for multiple generations. Today, I think the trend is definitely toward giving more in their lifetime."
"There's My Inheritance"
Why the rush to to give it all away? Probably the biggest reason is control. By giving now, philanthropists can make sure their gifts fund the causes they've chosen in the most efficient way possible, rather than trusting future foundation heads, who may be tempted to stray from the founder's mission. "Michael and I want to direct the majority of our funds during our lifetime to ensure that they are deployed in ways that are the most effective," says Susan Dell, who along with her husband is No. 6 in our ranking.
Then there's the compelling logic of attacking problems of human suffering now rather than later. Tomorrow will have its own crises -- and its own philanthropists. "You just never know how much time you are going to have," says Skoll. The 38-year-old recently accelerated his giving, which concentrates on supporting social entrepreneurship -- using business skills to solve social problems -- by an additional $200 million over the past 12 months. Or, as Berber, No. 45 on our list, put it: "Which is the greater blessing: becoming wealthy? Or getting to redistribute God's wealth for the well-being of others? It's very hard to do when you are six feet under."
With some of the world's most acute problems concentrated far beyond America's borders, it's no wonder so many philanthropists on our list are funneling their money to projects overseas. Berber, for example, focuses on supplying safe water, eradicating poverty, and providing education in Ethiopia. Jacqueline Novogratz, CEO of Acumen Fund, a nonprofit that helps match philanthropists with innovative groups in need of funding, points out that some 4 billion people around the world make $4 or less a day. Some 1.2 billion have no access to safe water. Fixing the water-supply problem alone could cut disease levels by up to 80%, says Novogratz. Addressing such problems is increasingly what the new brand of philanthropy is about. "Our biggest issue on earth has to be this increasing disparity of income between rich and poor," she says. "And if we don't find a way to narrow it, everybody will lose."
Along with solving social ills, there's another, more personal reason why the idea of donating during one's lifetime is taking hold: Many of philanthropy's biggest players carry a deep awareness of the voodoo of wealth -- the danger of hoarding it to create financial dynasties. The spectacle of high-profile trust battles like the one ravaging Chicago's Pritzker family or even the many tales of dilettante loafers leading a Born Rich existence terrifies many families.
Besides, most Americans still esteem above all else those who make it themselves. Inheritors can be robbed of the sense of having achieved anything on their own. "We didn't want to give it all to our kids and ruin them any more than we have," says American Century founder James E. Stowers, who with his wife, Virginia, is No. 5 on our list. "If the kids have so much money they don't even have a reason to get out of bed in the morning, we're hurting them." The Stowers are leaving most of their fortune to the Kansas City (Mo.) medical center they founded. When his children drive by, Stowers jokes, "they look at the building and say, 'There's my inheritance."'
More and more social research has revealed what a dangerous combination wealth and youth can be. A recent study by Columbia University, for example, found that rich kids suffer higher incidences of substance abuse, anxiety, and depression than their middle-class and even low-income peers. That's why many of the newly rich are choosing to leave their children, say, $10 million instead of $100 million -- enough to make them comfortable, but not so much that it hurts them.
The trend, says Harvard's Collier, is also being driven by the fact that, since the 1980s, there have been many more new wealth holders. "They are people who made their money themselves, who know the great pleasure and meaning of work," says Collier. "They don't want their kids to be spoiled by money." Reynolds, like many on our list, is intent on having her daughter make her own way, just as she did. "My concept with wealth is not to leave it to the next generation," says Reynolds. "I think you sort of take away the fire in the belly."
Instead, many are helping their children become involved in the family philanthropy, choosing that as a legacy instead of an exorbitant trust fund. Like many on our list, No. 33 Arthur M. Blank is leaving 95% of his estate to his foundation. "There's a great joy in doing the giving," he says. "That's where the money belongs."
Junior philanthropists include the Dells' four children, who once persuaded a car dealer to throw in eight free tires when they purchased a van for a youth group. The six children of our No. 43 giver, Ann Lurie, have rejected many of the symbols of wealth, with a few of them favoring wardrobes from thrift shops. "If you saw my children, you would think they needed to be fed or something," says Lurie, who has set up foundations in each of their names so they can contribute as they choose. "They want to be seen as making their way in the world."
Yes, there are holdouts, those who have made astronomical sums and have no intention of stopping long enough to give it away. Most famous is Warren E. Buffett, who at No. 26 draws wide-ranging criticism for his plan to leave his wealth, which will become the biggest single bequest in history, to his foundation after he dies, as opposed to giving it now. There are certainly good reasons to do it this way. The idea is that the wealth holder can do what he or she does best -- make money -- during his or her lifetime, leaving the philanthropy to heirs.
Others are stretching out their pledges because they simply don't have the financial firepower they once had. Some on our list were faced with having to postpone or renege on gifts altogether. Alberto W. Vilar, the once-high-flying investor whose wealth plunged in the tech crash, was forced to postpone a gift earlier this year to New York's Metropolitan Opera. Afterward, the opera-obsessed Vilar suffered the ultimate philanthropic indignity: The Met removed his prominently displayed name from its Lincoln Center theater. Vilar says he hasn't been back since.
But such instances are the exception. For the most part, our superphilanthropists provide powerful examples of the good that can come from redistributing fortunes back into society. For many, philanthropy becomes a second career -- and they bring to it the same discipline and talent they used to accumulate their fortunes in the first place.
By Michelle Conlin and Jessi Hempel
With David Polek and Todd Dayton in New York