The number of donors giving away so-called “megagifts”–philanthropy’s term for charitable contributions of $100 million or more–didn’t rise substantially in 2016, according to a new report by Chronicle of Philanthropy that tracks publicly announced awards. But something did change in the world of megagifting, that could mean very interesting things for the world of philanthropy: The value of many contributions–and in some cases their associated risk–did.
Spending more on big ideas that might fail but could make a huge difference if they succeed has been a concept that major donors shortchanged for a long time. But that appears to be slowly changing.
Last year, 18 different donors gave enough to be considered megagifters, and 12 of those ponied up far more than the $100 million barrier it takes to earn that designation. That’s twice as many as in 2015, according to Chronicle research. Bridgespan has reported that donors often consider making social change a priority, but their wallets don’t follow their hearts–they want something safer. Only 20% of those in the wealthiest ranks place “big bets” on things beyond institutional giving to higher education and medical research. But this year one-third of those extra-enormous allowances went to social change issues.
Just a year ago, the future of change-making looked pretty unremarkable. As usual, many of the gifts on the Chronicle’s public announcement list were earmarked toward traditional places. Chronicle reporter Maria DiMento, who leads that research, describes the altruistic atmosphere of the last several years as “cautious.” “We are seeing a lot of people give to big types of medical research, and biomedical research,” she says, noting that diseases which affect many people, like Alzheimer’s and cancer, have become usual targets because they’ve touched the lives of so many people, probably including donors.
Megagifters often give heavily to their alma matters, too (which often already have huge sums at their disposal). As Bridgespan partner William Foster pointed out in a piece for Forbes, 2015 saw handsome allocations from hedge fund titan John Paulson to Harvard, and Blackstone Group CEO Stephen Schwarzman to Yale. “Conventional wisdom has long held that donations to universities virtually guarantee praise, publicity, and a physical symbol, like a new building, of the donor’s generosity. It is thought to be about as safe a bet as one could make–the philanthropic equivalent of a slam dunk,” wrote Foster.
But that’s changing. In 2016, as the Forbes story notes, Nike cofounder Phil Knight’s $400 million donation to Stanford, where he earned his MBA, drew criticism, best summed up by a tweet–in this instance, toward Paulson’s similar gift–from none other than Malcolm Gladwell: “It came down to helping the poor or giving the world’s richest university $400 million it doesn’t need. Wise choice John!” Months later Knight gave another $500 million to University of Oregon, where he ran track under the fabled coach who became his business partner.
But Gladwell’s criticism is tame compared to the Gawker send up of DreamWorks founder and billionaire David Geffen. (Headline: “David Geffen: America’s Worse Philanthropist?”) The now-defunct news site flayed Geffen for dropping first one megagift on UCLA, and then another that ensured his name would be prominently featured atop Lincoln Center after its renovation. Apparently undeterred, Geffen gave $100 million to renovate and expand New York’s Museum of Modern Art this year.
Still, Foster tells Co.Exist he sees room for hope, noting that average number of outsized megagifts toward social change on the Chronicle’s list definitely exceeds the industry norm. That includes $500 million toward an eponymous public policy think tank from the Nicolas Berggruen Charitable Trust, and two $300 million range offerings from Bloomberg Philanthropies toward the Campaign for Tobacco-Free Kids, and for John Hopkins University to explicitly help solve a variety of public health issues, respectively. The Steve and Alexandra Cohen Foundation spent $275 million to start the Cohen Veterans Network for mental-health services. (Big givers may still like to have their name in lights, but their goals appear to be expanding.)
In fact, the entire sector may be in the midst of a sea change. According to Bridgespan’s research, at the higher levels of the donation spectrum America’s richest donors appear to be acting more aggressively than ever before. While the number of big bets being placed overall has grown by 50% over the last 15 years, the number placed toward social change has tripled for gifts past the $25 million or more mark.
Foster sees four reasons for the shift. “It’s the truest desire of donors. Their peers have kind of shown it’s possible and not crazy. Social entrepreneurs and nonprofit leaders are getting more sophisticated about what it takes to create compelling investments or opportunities for philanthropy. And there is beginning to be some increase in the public scrutiny of gifts to the wealthiest and most established institutions than there was in the past,” he says.
Here’s a separate analysis of which recent large but risky donations may be most likely to pay off.