The rich are making the richest cause groups richer–or at least extremely well funded. That’s the takeaway from a new report by the Chronicle of Philanthropy, which found that the 100 highest-funded nonprofits in America drew 11% of all cash and stock donated to charity last year. That accounts for about $47 billion in contributions. But the real problem is not just that the biggest charities are vacuuming up the cash, it’s where that cash comes from: a few wealthy individuals.
“Institution that are powered by the wealthy are the ones that did very well,” says Chronicle of Philanthropy editor Stacey Palmer, who called the continued decline of groups backed by middle class givers somewhat expected–but still startling.
Some of those folks might not be donating anymore because money is tight or they don’t trust cause groups. But Palmer points out that there’s a potentially more disruptive force at work: “It could be the charities are turning middle-class donors off with all this focus on the wealthy,’ she says. “What differences does my $10 make if you’re receiving all these million-dollar gifts that people are getting all the attention for?”
The Chronicle‘s analysis compares how giving among top groups shifted over the last decade. Overall, nearly half of the most heavily backed institutions were colleges and hospitals, places that typically benefit from major gifts. Contributions to that sector rose an average of 44% over the last decade, including a 202% increase at Mayo, 100% increase for University of Notre Dame, and 77% increase for University of Nebraska.
In comparison, the rest of the top nonprofits experienced an average growth of less than 4%. Groups that typically rely on lots of smaller gifts fared particularly poorly. Funding for the Jewish Federations of North America, for instance, dropped 41% while there was a 28% decrease at United Way Worldwide. Another organization that took a big hit was the American Cancer Society, whose funding levels decreased 34%, perhaps because there’s a growing number of specialized health-related organizations that people are donating to instead.
Another trend is that major donors themselves are seizing control of cause work by starting their own philanthropies. The Chan Zuckerberg Biohub, a healthcare initiative started by tech power couple Mark Zuckerberg and Priscilla Chan, received $580 million in 2017. Imagine if that money was spread around elsewhere. The Obama Foundation’s efforts to increase civic participation received more than $232 million.
Americans gave a record $410 billion in 2017, but obviously not everyone’s interests continue to be well represented. “One of the things that middle class donors tend to support are local causes and social services groups that benefit the community,” Palmer says. “So that’s where the biggest losses are probably coming from.”
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