Every year, Forbes magazine releases a list of America’s biggest givers. In 2023, 25 individuals or pairs made the list, including Google co-founder Sergey Brin and Mark Zuckerberg and his wife, Priscilla Chan. These individuals collectively gave away a whopping $196 billion of lifetime giving, which is bigger than the GDP of most countries.
This giant pile of money has done a lot of good, but it hides a more complicated and problematic story of billionaire philanthropy in America. The Forbes list ranks the biggest givers by how much they’ve given over a lifetime, from biggest to smallest, and only measures dollars given to charitable recipients. It excludes money parked in a foundation and money pledged but not paid out.
Warren Buffett and Bill and Melinda French Gates are standouts. This chart measures the givers’ current net worth and adds their philanthropic giving to that, resulting in the percentage of their net worth they’ve given away. Forbes puts Buffett’s current net worth at $106 billion and he’s given away $51.5 billion in his life, which puts him at 33%. Bill and Melinda French Gates, who are divorced but still do philanthropic work together, have a collective net worth of $109 billion and have given $38.4 billion away.
Most of this group’s donations go to poverty and public health around the world and education in the US. Together, Buffett and the Gates’ created the Giving Pledge, a promise by the world’s wealthiest individuals and families to dedicate a majority of their wealth to charitable causes, over 50%. 13 givers have signed it, including Facebook co-founder Dustin Moskovitz and his wife, Carrie Tuna, Jeff Bezos’ ex-wife, Mackenzie Scott, and Michael Bloomberg.
Only two of them have made it over the 50% line. The banker T. Denny Sanford has given 53% of his net worth away and Duty Free Shoppers founder Chuck Feeney has given almost every last penny of his fortune away. George Soros hasn’t signed the Giving Pledge, but he has given 73% of his wealth away.
The eBay founder and his wife, Jeff Bezos, go in the least flattering zone of the chart—the highest net worth but the lowest proportion of it given away. Bezos has a net worth of $117 billion and has given $2.7 billion in philanthropic giving, which is only 2.3% of his wealth over his lifetime. That’s about as much as what Americans, on average, give as a proportion of their disposable income per year: about 2%.
Bezos’ money has gone to various causes like fighting climate change, education, and he even gave $100 million directly to Dolly Parton. His philanthropic reputation is that he doesn’t have one.
This chart helps us see who the real standout givers are—those who give most of their wealth away and those who hold onto their enormous fortunes, even if a certain individual is very generous. If overall, this class of people continues to accumulate more and more money, it begs the question: “What are we doing wrong here and how do we reverse this?” The Institute for Policy Studies has referred to this as “top heavy philanthropy,” where individual wealthy donors make up a large portion of charitable giving. Since 2011, mega gifts of $1 million or more from single donors have been increasing. If a small institution relies heavily on one large philanthropist and that donor eventually takes their money away, the institution is in trouble.
Analysis of charitable tax deductions by household income level since the early 90s shows that in 1993, 77% of charitable deductions were taken by households making less than $200,000. However, today that number has almost flipped: households making more than $1 million are now taking the most charitable deductions. This means that a few people are deciding which causes merit philanthropic money and how these causes should be solved.
Ultra wealthy donors tend to give to different causes than the rest of us. An analysis of the Chronicle of Philanthropy’s top 50 donors shows that they give to education more than the causes non-wealthy donors give to, such as health, religion, the environment, and international affairs. For example, a billionaire might give $500 million to their alma mater for a new building on campus, or another might give $750 million in one single donation to charter schools in 20 US cities.
Donors can also give through private foundations, which offer large tax benefits immediately. However, the foundation only has to give money to actual charities at a rate of 5% a year, meaning money can stockpile and donors can reap the tax benefits while charities may only get a trickle over time.
Donor advised funds are even more secretive, with no reporting or payout requirements, and they have been rising in popularity. As of 2020, this figure was $160 billion, yet it is difficult to tell whether the money is going somewhere good or just lowering the donor’s tax bill.
The Gates Foundation has a lot of power when it comes to global public health, as they have been credited for improving vaccine access for preventable diseases for very young children and have been the largest private donor to the World Health Organization. However, there is criticism that this is undemocratic. Former Enron executive John Arnold and his wife, Laura, have been advocating for reform of donor advised funds by lobbying Congress to require them to distribute funds within 15 years or for donors to only get a tax deduction upon distribution to charities. Others advocate increasing the annual payout requirements of foundations from 5% to 10%. While these types of reforms may be seen as small fixes to the system, it is worth noting that if our country didn’t have such drastic wealth inequality, we wouldn’t have to rely on the charitable whims of billionaires to begin with.