Money

Giving away billions as fast as they can

Warren Buffett and Bill Gates speak at Columbia University
Spencer Platt | Getty Images
Warren Buffett and Bill Gates speak at Columbia University

Step aside, Rockefeller. Move over, Carnegie. Out of the way, Ford.

For the better part of a century, a few Gilded Age names dominated the ranks of big philanthropy.

No longer.

In a matter of years, a new crop of ultra-wealthy Americans has eclipsed the old guard of philanthropic titans. With names like Soros, Gates, Bloomberg, Mercer, Koch and Zuckerberg, these new megadonors are upending long-established norms in the staid world of big philanthropy.

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They have accumulated vast fortunes early in their lives. They are spending it faster and writing bigger checks. And they are increasingly willing to take on hot-button social and political issues — on the right and left — that thrust them into the center of contentious debates.

Plenty of billionaires are still buying sports teams, building yachts and donating to museums and hospitals. But many new philanthropists appear less interested in naming a business school after themselves than in changing the world.

"They have a problem-solving mentality rather than a stewardship mentality," said David Callahan, founder of the website Inside Philanthropy and author of "The Givers," a book about today's major donors. "They are not saving their money for a rainy day. They want to have impact now."

George Soros, the hedge fund billionaire and Democratic donor, recently made public the transfer of some $18 billion to his Open Society Foundations, a sprawling effort to promote democracy and combat intolerance around the world. The gift, which essentially endowed Open Society in perpetuity, made it the second largest foundation by assets in the country. The only philanthropy with more resources is the Bill and Melinda Gates Foundation.

"We're seeing a real changing of the guard," said Mr. Callahan. "The top foundations, especially measured by annual giving, are more and more piloted by people who are alive."

Having made billions and shaped the world with their companies, this new guard is setting lofty goals as they prepare to give their fortunes away. Take the Chan Zuckerberg Initiative, established by the Facebook co-founder Mark Zuckerberg and his wife Priscilla Chan. It is not looking to merely improve health in the developing world. One of its aspirations is to help "cure, prevent, or manage all diseases by the end of the century."

That may sound like good news all around. If a handful of billionaires want to spend their fortunes saving lives, why not simply applaud them? But as their ambitions grow, so too does their influence, meaning that for better or worse, a few billionaires are wielding considerable influence over everything from medical research to social policy to politics.

"This isn't the government collecting taxes and deciding which social problems it wants to solve through a democratic process," said Eileen Heisman, chief executive of the National Philanthropic Trust, a nonprofit that works with foundations. "This is a small group of people, who have made way more money than they need, deciding what issues they care about. That affects us all."

Ideas and ideals

In 2015, at the ripe old age of 31, Mr. Zuckerberg made a momentous decision. He and Ms. Chan had just welcomed their first daughter into the world. Soon after, they pledged to give away 99 percent of their Facebook shares, then valued at some $45 billion, in their lifetime. "Our society has an obligation to invest now to improve the lives of all those coming into this world, not just those already here," they wrote in a letter addressed to their daughter, posted on Facebook.

Nearly two years later, the Chan Zuckerberg Initiative is taking shape. Structured as a limited liability corporation rather than a traditional foundation, a move the founders say give them more flexibility, the organization is focused on three main areas: science, education and justice.

Already, the couple has committed more than half a billion dollars to create a nonprofit research center giving unrestricted funding to physicians, scientists and engineers from top California universities. They support an effort to map and identify all the cells in a healthy human body. And late last year, they pledged to spend $3 billion on preventing, curing and managing "all disease by the end of the century."

In considering how to deploy his billions, Mr. Zuckerberg was no doubt inspired by his friend and mentor, the Microsoft co-founder Mr. Gates. Since its founding 2000, the Gates Foundation has established itself as a force without peer in big philanthropy. Not only does it have the largest endowment of any foundation, some $40 billion, but it also spends more each year, nearly $5.5 billion in 2016 alone.

The Gates's efforts are sprawling, spanning the globe and crossing fields. Their foundation funds efforts to reduce tobacco use, combat H.I.V. and improve education in Washington state. It has spent billions to reduce the spread of infectious diseases and malaria. And its efforts have already helped a coalition of world health organizations all but eradicate polio.

Mr. Soros's foundation differs in important ways. Rather than try to solve discrete problems like disease, Open Society aims to promote values like democracy, tolerance and inclusion, which Mr. Soros, a Holocaust survivor, holds dear. In practice, this means that his money is less likely to fund early stage medical research, and more likely to help refugees displaced by conflict.

But while the issues they address are distinct, the broad outline of these billionaires' efforts have much in common: shaping the world in their moral image. "It is not called the Soros Foundation," said Patrick Gaspard, the incoming president of the Open Society Foundations. "George approaches this philanthropic effort without an eye toward the preservation of his reputation and legacy, but with a fierce determination around the protection of these ideas and ideals."

Big foundations have been making an impact since long before Mr. Gates came around, of course. In 1943, for example, the Rockefeller Foundation began working with the Mexican government in hopes of improving the country's agricultural industry. That work spurred the "Green Revolution," which has boosted crop yields across the developing world. The Ford Foundation helped establish the microfinance industry, partnering with Muhammad Yunus to launch the Grameen Bank.

And in recent years, some older foundations have refocused their effortson tackling big issues.

Today, the Ford Foundation is focused on reducing inequality, and the John D. and Catherine T. MacArthur Foundation is focusing on "big bets" including combating climate change. But those legacy foundations are now largely guided by stewards, not the billionaires with their names on the door. Mr. Gates, Mr. Zuckerberg, Mr. Bloomberg and Mr. Soros are personally engaged in their foundations, and willing to court controversy.

Polarized politics

When news of Mr. Soros's $18 billion transfer of wealth to the Open Society Foundations was announced, reaction from conservatives was swift and predictable. Fox News called him an "Uber-liberal billionaire." Breitbart News said the gift "makes his organization the biggest player on the American political scene," adding that "the foundation's work has supported dogmatic, aggressive left-wing groups that disrupt liberal democracy and stifle opposing voices."

Mr. Soros became a lightning rod for conservative criticism largely because of his own political contributions rather than his foundation's spending. He was a major donor to Hillary Clinton, and spent millions of dollars on efforts to defeat Donald J. Trump in last year's presidential election.

Yet he is equally reviled in certain circles for his philanthropic work. Since the 1990s, Mr. Soros has used the Open Society Foundations to advance causes that are deeply unpopular with many Republicans, including loosening drug laws, promoting gay rights and calling attention to abuses by the police.

Mr. Gaspard of the Open Society Foundations asserts that Mr. Soros is not courting controversy. Rather, he said, Mr. Soros is simply on the right side of history. "The rights of the Jewish community in 1937 in Berlin may have been deemed controversial by some in that society, but we all appreciate today the inherent value in that fight," he said. "The same is true today, when we are involved in safe needle transfers for drug addicts, or when we're engaged in supporting the rights of sex workers in Johannesburg, or the Rohingya in Myanmar."

Michael Bloomberg, the former New York mayor, is also no stranger to criticism. The purpose of his foundation, Bloomberg Philanthropies, is to "ensure better, longer lives for the greatest number of people." In practice, this has meant Mr. Bloomberg spending hundreds of millions of dollars on issues including gun control and obesity prevention, drawing the ire of Republicans who oppose what they see as excessive regulation.

Even the Gates Foundation, which is "dedicated to improving the quality of life for individuals around the world," sometimes finds itself drawn into the culture wars. Global Justice Now, an advocacy organization based in London, said in a report that the Gates Foundation is "not a neutral, charitable strategy for which the world should be thankful" but "a specific ideological strategy that promotes neo-liberal economic policies."

This isn't the first time philanthropy has been politicized. A century ago, Julius Rosenwald, a part owner of Sears Roebuck & Company, emerged as a champion of African Americans. Mr. Rosenwald, a Jewish businessman from Chicago, befriended the black educator Booker T. Washington and began funding the construction of schools for African Americans across the Jim Crow South. When the Ku Klux Klan burned down his schools, he simply rebuilt them. In doing so, Mr. Rosenwald made enemies.

"Julius Rosenwald was the first social justice philanthropist," said Darren Walker, president of the Ford Foundation. "He upset all of the powers in the South."

That, in Mr. Walker's estimation, was a good thing. And today, Mr. Walker is encouraging donors to find their inner Julius Rosenwald. "Philanthropy should not be an expression of only one's wealth and power," he said. "It also needs to be an expression of humility and an expression of skepticism about some of the very systems and structures that produced one's wealth. What I hope for is that more philanthropists in this generation understand the difference between generosity and justice."

There are equally powerful forces flexing their financial muscles on both sides of the political spectrum. And, like Mr. Soros, conservatives are using both foundations and political donations to achieve their goals.

Though the brothers Charles and David Koch are best known for their work supporting Republicans, they also fund a network of philanthropies that support efforts to, among other things, questionclimate change and encourage conservative thinking on college campuses. The Mercer Family Foundation, run by Rebekah Mercer, a prominent supporter of President Trump, has bankrolled conservative think tanks including the Heritage Foundation and the Heartland Institute.

"The wealthy have become more polarized along with the rest of America," said Mr. Callahan. "You have more liberal, progressive wealthy people than ever before. Meanwhile, you have lots of conservative rich people. There's this escalating arms race among mega donors."

Impatient optimists

John D. MacArthur made a fortune in the insurance business. But when he set up his foundation near the end of his life in the 1970s, he didn't have strong views on what purpose it should serve. "I figured out how to make the money," he reportedly saidto one of his foundation's original trustees. "You fellows will have to figure out how to spend it."

For the most part, previous generations of billionaires only got serious about giving away their fortunes late in life and that has been changing. "What we're seeing these days is people make so much money with an I.P.O. that being a philanthropist becomes an essential part of your identity in your late 20s," said Benjamin Soskis, who studies the history of philanthropy at the Urban Institute, a think tank in Washington.

So little time, and so much money to dispose of — that is the dilemma for today's mega philanthropists. Mr. Zuckerberg and Ms. Chan say they are committed to giving away their fortune in their lifetime, which is why they are beginning at such a young age. "Giving, like anything else, takes practice to do effectively," Mr. Zuckerberg wrote on Facebook. "So if we want to be good at it in 10-15 years, we should start now."

By starting sooner, Mr. Zuckerberg said his money should go further. "Any good we do will hopefully compound over time," he wrote. "If we can help children get a better education now then they can grow up and help others too in the time we might have otherwise waited to get started."

Mr. Gates and the billionaire investor Warren Buffett launched the Giving Pledge, which asks wealthy people to commit to donating at least half of their fortunes to philanthropic causes during their lifetimes or upon their death. They want their fellow billionaires to act with urgency. On their own website, the Gates' describes themselves as "impatient optimists."

In June, Jeff Bezos, the founder of Amazon.com who, with a net worth of $84 billion or so, briefly supplanted Bill Gates as the richest person in the world this year, asked the public for some advice. "I'm thinking I want much of my philanthropic activity to be helping people in the here and now — short term — at the intersection of urgent need and lasting impact," Mr. Bezos wrote on Twitter. "If you have ideas, just reply to this tweet."

More than 48,000 replies flooded in. Mr. Bezos has not announced what he will do with his many billions, but his request for proposals was a reminder that there are untold fortunes that remain uncommitted to philanthropic causes. Nearly 200 people with a combined worth approaching $1 trillion have signed the Giving Pledge. New billionaires are beginning to ramp up their giving. Laurene Powell Jobs, the widow of Apple co-founder Steve Jobs, recently founded the Emerson Collective, which is putting money toward issues including education and immigration.

And as more people commit their fortunes to philanthropy, there will be many more organizations like the Open Society Foundations, and they may be with us for a long time. "The sun never sets on George Soros's philanthropic empire, and the money is never going to run out," said Mr. Callahan. "His money could still be affecting public policy 300 years from now."

It is the dawn of a new era of big philanthropy. As wealth is rapidly created and concentrated, new mega foundations are being born, each reflecting its founder's priorities. And much as Mr. Soros, Mr. Gates, Mr. Zuckerberg and the others in their cohort have eclipsed the titans of the Gilded Age, they are likely to one day be overtaken by an even newer crop of immensely wealthy and impatient optimists.

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This article originally appeared on The New York Times.