Billionaires Are Tapping Skyrocketing Fortunes to Fund Record Giving
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Americans gave a record $471.4 billion to U.S. charities in 2020, much of it stemming from fortunes made in technology.
The philanthropic total — about 70% from individuals — was an estimated 3.8% higher than in 2019, after adjusting for inflation, according to an annual survey by Giving USA released Tuesday.
The biggest increase came from foundations, which made charitable donations of $88.6 billion — a 15.6% jump in 2020 — as the pandemic threw millions of people out of work. Individuals gave about $324.1 billion, a 1% increase. Corporate giving — which tends to track corporate earnings and wider economic growth or decline — was down an estimated 7.3%, to $16.9 billion.
"It was an unprecedented year in many ways," said Una Osili, associate dean for research and international programs at the Lilly Family School of Philanthropy. "By March, we had record unemployment, but as we moved toward the end of the year, it became one of the best periods on record for financial markets, and that has implications for charitable giving because people give when they feel financially secure."
One of the most notable bursts of giving came from MacKenzie Scott, the novelist and former wife of Amazon Inc. founder Jeff Bezos, who funneled $6 billion to a wide range of educational and community institutions. On Tuesday, she said she'd given away another $2.7 billion.
"We are all attempting to give away a fortune that was enabled by systems in need of change," she said.
In a post on Medium in July 2020, Scott had announced $1.7 billion in gifts to non-profits that included historically Black colleges and universities, as well as groups supporting racial equality, gender equality and economic mobility. Scott then asked a team of advisers to help her "accelerate immediate support to people suffering the economic effects of the crisis" and in December 2020, announced gifts of nearly $4.2 billion to 384 organizations.
Twitter Inc. co-founder and Square Inc. founder Jack Dorsey also made waves in the philanthropy world in 2020 when he pledged to put up to $1 billion of his Square stake into a limited liability corporation to fund global Covid-19 relief. More recently, Dorsey donated $2.9 million he raised by selling his first-ever tweet as a non-fungible token to GiveDirectly, a nonprofit that helps the world's poorest.
In 2021, the biggest impact in the world of philanthropy could stem from the impending divorce of Bill and Melinda Gates, depending on how the $50 billion Bill & Melinda Gates Foundation is affected. French Gates announced in 2020 that Pivotal Ventures, her investment and incubation company, would partner with Scott to launch the Equality Can't Wait Challenge, which will give a $30 million award to organizations coming up with ways to advance women's power by 2030.
Efforts are also underway in Congress to nudge the rich to provide cash to charities faster. Wealthy people often take advantage of a tax break that lets them put money into investment funds and push off decisions about where to eventually give the money. The tax breaks for using so-called donor-advised funds can equal as much as 57 cents on the dollar.