I’m at the stage in my life where I think a lot about aging and weather. When did these otherwise neutral nouns both become pejorative terms (“looks like we’re gonna have some weather”) where we require an adverb (“aging well”) to soften their meaning?
A few weeks ago, I attended the USC School of Gerontology retreat. My dinner partner one evening was a philanthropist who is investing in a process to reverse aging (a project not related to the School) so that we live longer. Choosing not to make some Ponce de Leon jokes (it has always seemed a bit ironic to me that anyone would think the fountain of youth could be found in Florida), and putting aside the elitism of the quest, I asked why anyone would want to get younger. Wouldn’t a healthy 80 or 90 years be sufficient?
Amplification of this question came from an unexpected source two weeks ago with the publication of The Philanthropy 50 (“CoP50”), a list of the largest donors of 2022. You may recall that in my December letter I predicted (#6) for 2023 that “The Chronicle of Philanthropy discontinues its Philanthropy 50 list that glorifies billionaire philanthropists.” I was wrong. They’ve done it again by focusing on dollar amounts given. But at least they have begun to address the two major criticisms of the list, which are: first, in judging how philanthropic one is, what really matters is the percentage of giving, not the gross amount one gives; and second, gifts to private foundations and donor-advised funds (“PFDs), vehicles for hoarding wealth rather than going to nonprofits, should not count.
While the ranking is still based on gross amounts, there are charts that show, at least for the donors who are also on the Forbes 400 list (the richest people in the U.S.), the percentage of giving; and for a select few, the CoP50 shows how much of a donor’s charitable giving went to their private foundations and DAFs. While the CoP50 does not include MacKenzie Scott (she didn’t respond to the Chronicle’s questionnaire), it does include Bill Gates’ $5 billion, virtually all of which went to his private foundation.
The overall picture is staggeringly…awful. While the $16 billion total given by the top 50 donors sounds like a big number, if you net out gifts to their PFDs, the number drops to $8 billion. Fourteen of the approximately 200 billionaire signers of the Giving Pledge (to give at least half their money away) earned a spot on the list. Hey you other 180 guys: If not now, when?
Only 20 of the Forbes 400 richest people in America have made the list. They represent and extraordinary $900 billion in wealth but gave, net of PFDs, a meager $5 billion, less than 0.6%. By contrast, the Charitable Commitment calls for a minimum charitable contribution for billionaires of 2.8%. At that level these 20 billionaires alone would be giving more than $25 billion to nonprofits!
But the one observation that really surprised me is that none of the donors on the CoP 50 are under 40 and only five are under 50. This contrasts with the U.S. having 10 billionaires under 40 and at least 50 billionaires under age 50.
Kim Kardashian, age 42, worth nearly $2 billion, can’t make the list by donating $40 million (2%)? Lynsi Snyder, the In-N-Out Burger granddaughter, who became a billionaire through inheritance at age 35 (now 40), might use some of her $4 billion to promote healthy food, no? Kudos (relatively) to the Airbnb guys, Joe Gebbia (age 41, $6.5b) and his business partner Brian Chesky (age 41, $7.5b), who each gave around 1% of their wealth, but where are the crypto guys Brian Armstrong (age 39, $2b) and Gary Wang (age 29, $4.2b) or the Snapchat duo Evan Spiegel (age 32, $2.7b) and Bobby Murphy (age 34, $2.5b)? (See Youngest billionaires in America.)
Are these “young” billionaires too busy making money to pay attention to philanthropy? Are their eyes fixated on an even bigger yacht? Are they too engrossed by algorithms to see the need to support nonprofits?
Apparently, when these ultra-rich are younger, scrappier, willing to take risks in their businesses, they don’t give money away. Instead, they use those talents to make more money. Then they get older and do give money away–to universities and hospitals. Blah. As Phil Buchanan, president of the Center for Effective Philanthropy was quoted in the Chronicle’s review of their CoP50, “The default setting for the biggest donors still seems to be to steer away from addressing some of the thorniest societal challenges….” Yes, there are exceptions, but the fact remains that aging matters. And of course, so does size: The pull of safe philanthropy is exacerbated by the enormous wealth accumulated by the ultra-rich and foundations which has made them too big to take risks. The result is that the bulk of philanthropy ends up licking the envelope, not pushing it.
I wonder if aging is taking its toll on me as well. When I was younger, I chaired a different foundation that was considered among the most progressive. We were alongside a small handful of philanthropists directing money to community organizing, the social movements of the 70s and 80s, socially responsible investing and program related investments (precursors to ESG and impact investing). Now, as I’ve taken on the role of philanthropy critic, I find myself middle-of-the-road. I advocate for a 10% payout for foundations and donor-advised funds while – even worse – some of my peers are calling for 5- or 15-year term limits for them (a la the ACE Act). I call for changing the charitable deduction, to move the benefits from the ultra-rich to the middle class, while others call for eliminating it altogether (see the last paragraph of Jeff Cain’s terrific opinion piece, The Rise and Decline of Big Philanthropy in America). I want to reduce excessive wealth with taxes while my younger friends have suggested to me an outright ban on wealth hoarding (a la Thomas Paine).
It is axiomatic that younger people are the hope for social change, but with few exceptions (and there are notable exceptions) they don’t have the power or resources to be successful. We don’t need to live longer, as my dinner partner suggested. We just need to reverse the process at birth: Born old and rich, then as ultra-rich get younger they get in touch with their riskier selves to give the money away, then party, then die. In this scenario we can expect to see philanthropy supporting at scale the kind of changes this country really needs, whether it be reducing wealth inequality, protecting democracy, eliminating BIPOC injustice or simply saving the planet. While we’re at it, let’s throw in universal healthcare and early childhood opportunity, and a ban on guns. Until then, I’ll just try to weather aging.