Rich & Richer: Golden Age of Philanthropy

Big Names, Bigger Fortunes

These numbers could shift if the wealthy continue to give more while they are alive rather than wait as the founder of Wal-Mart, Sam Walton, did, until after his death. Last month, after his wife Helen Robson Walton died, the Walton family said much of her fortune will pass over a period of years to charity. It is unclear what the value of that donation will be, however, it has the potential to become one of the largest charitable foundations in the U.S., trailing only the Gates Foundation.

With the Buffet donation, the Gates Foundation, which now is the world’s largest grant-making foundation with a $33 billion warchest as of the end of 2006, will likely double the $1.3 billion in annual grants it awards. This money is being put to work to reduce poverty, disease and premature death in the developing world as well as improving access to education in the U.S.

While it remains to be seen whether the Gates Foundation will one day be linked to the eradication of malaria in the same way John D. Rockefeller has been linked to the vaccine for yellow fever, it's clearly equally ambitious.

The Buffet gift alone is more than double the lifetime total of legendary philanthropists Andrew Carnegie and John D. Rockefeller, when combined and adjusted for more than a century of inflation. Bill and Melinda Gates’ gifts are not far behind.

“They will have less bricks and mortar with the Gates name on them, but they will have given away a heck of a lot more money,” said Arthur Brooks, director of the nonprofit studies program at Syracuse University and author of the book on the subject of giving.

Today Vs. Yesteryear

While Buffet and Gates are in a class of their own, there are plenty of other wealthy individuals who have also made an impact with their donations. Examples include Intel Co-Founder Gordon Moore who has formed a $5 billion foundation to focus on science and environmental conservation to Los Angeles insurance and home-building magnate Eli Broad, whose $2.25 billion foundation supports education and other causes.

“People with significant wealth don’t think it is an optional activity,” said Melissa Berman, chief executive of Rockefeller Philanthropy Advisors, which assists wealthy individuals in developing and managing their charitable giving.

Unlike Carnegie, who answered the call of charity late in life, today’s philanthropists are beginning to make their donations at younger ages, Berman said.

“They are looking for a level of involvement and commitment earlier in their lives and at a much more intense level,” Berman said. She added, that many look to involve their families in the running of the foundation so that it becomes woven into the fabric of their lives.

These donors also are concentrating their resources and placing bigger bets on the causes they care about in an attempt to achieve lasting results. The idea is to ensure that there are sufficient resources to tackle a problem, rather than let money trickle in over time.

For those who are on the receiving end of these funds, there is greater pressure to show results. Many of the new philanthropists tend to apply business models to their giving and they want to see measurable results come from the money they are donating.

Christina Cheddar Berk is a News Editor at CNBC.com. She can be reached at