How much do we really know about how the ultrarich give their money away?
It’s surprisingly hard to say. This week, the Chronicle of Philanthropy published its annual ranking of the top 50 donors from 2022, a list it compiles by asking nonprofits what gifts they received and philanthropists what gifts they gave. It’s a list dominated by Silicon Valley billionaires with sprinklings of Wall Street investors, real estate magnates, media moguls, and heirs and heiresses of industry, who gave hundreds of millions (and in a few cases, billions) to private foundations, universities, and medical centers.
Despite its best efforts, however, the publication can’t create a comprehensive list; if a donor declines to disclose what they gave, it’s extremely difficult to find that information. Tax records, where tax-exempt nonprofits disclose how they spent their money, might not become public for a year or longer. Increasingly, too, the nation’s richest folks are adopting forms of mega-giving that aren’t required to be disclosed at all.
For example, among the notable names missing on the Chronicle’s list were novelist MacKenzie Scott, who has given away at least $14 billion since 2019, and Melinda French-Gates, who continues to run the Gates Foundation together with ex-husband Bill as well as her own philanthropic ventures. They were left off the list of big givers not because they didn’t make any donations, necessarily, but because their representatives declined to share information with the Chronicle. And neither billionaire uses a traditional philanthropic foundation for their giving, which would be required to file yearly disclosures as a tax-exempt nonprofit. Scott uses a mix of consultants and donor-advised funds, in which a third party — such as a public charity — manages and grants the money donors entrust them with. The fund will have to disclose where grants went, but they won’t have to disclose which people contributed the money. French-Gates has a philanthropic LLC, which are not tax-exempt and do not have to report on their tax returns where the money goes.
Chronicle of Philanthropy senior reporter Maria Di Mento, who compiles the annual list, told Vox by email that she wasn’t surprised by Gates’s and Scott’s reticence to reveal how much they had given this year and where it went. It’s not uncommon for donors to not want to share details, and Scott in particular is famously uncommunicative with the press about her giving. But Di Mento added that she hoped that in the future, they’d be willing to disclose more details.
Even when billionaires do disclose their gifts, a degree of opaqueness persists around their philanthropic efforts. How much did they give, and what was their motivation? Did the giving do any good? One example: Elon Musk, who was second on last year’s list but nowhere in the top 50 this year, was added to the ranking in a post-publication update on Wednesday after a surprise SEC filing that became public Tuesday night revealed that he had donated almost $2 billion worth of Tesla stock to charity in 2022. Which charity? We simply don’t know. His reps hadn’t said a peep when the Chronicle had reached out for its reporting.
The last time Musk made a hefty donation, of $5.7 billion worth of shares in 2021, it aroused a flurry of speculation around where the money went, with theories ranging from a donor-advised fund to the UN World Food Program. Bloomberg reported a year later, using public tax records, that it had gone to his private foundation, which distributed just $160 million of its total $9.4 billion in assets in 2022.
Vox spoke with Benjamin Soskis, a historian and senior research associate at the Urban Institute’s Center for Nonprofits and Philanthropy, about the tensions over transparency in philanthropy, and the role of lists in encouraging the very wealthy to give. The conversation has been lightly edited for clarity.
Billionaires tend to be pretty private people. But when it comes to their philanthropy, do they have any obligation to be more transparent? Why should it matter that they want to be so anonymous and private about what they do with their own money?
There’s definitely long traditions of valuing anonymous giving. Large-scale philanthropy is increasingly growing — maybe it used to be a million dollars, now it’s something much larger than that.
At a certain point, philanthropy becomes a public act because of the power that the giver holds, and because of the ways in which philanthropy has long been invoked to legitimize the current distribution of wealth. And it’s really valuable for people to know, as a signaling act, what major donors are doing. What causes are neglected, what does the landscape of civil society look like now? In fact, there’s a history of donors who had deep commitments to privacy, realizing that publicity was a burden that they had to assume despite personal preferences because of how much additional value it could add. The most famous example here is a guy named Chuck Feeney, who was one of the major players in duty-free sales, and he founded a philanthropy called Atlantic Philanthropies. For a long time it was one of the largest philanthropies in the country, and it was entirely anonymous. And Feeney basically came to the conclusion that he needed to be public in order to help other donors figure out where to give and, you know, have the public hold him to account.
Philanthropy is a combination of public and private, in its essence. I think anyone who says it’s entirely public isn’t capturing its full nature. But anyone who says that philanthropy is entirely private is missing something pretty key: That tussle between how much accountability the public can demand, and how much discretion a donor can claim is one of the definitional tensions of the current moment.
It’s sort of an eternal tension in philanthropy.
It’s both eternal and getting far more profound, because we’re in a period in which individual mega-donations are assuming such a larger place in the philanthropic landscape. These questions of privacy just mattered much less when legacy foundations — the Rockefeller Foundation and the Ford Foundation — were the largest donors. When you have fantastic wealth being created by relatively young people who have decades in front of them as philanthropists, I think there are more demands for [accountability].
Do philanthropy lists ... matter? Do they matter to the public? To the billionaire philanthropists? What purpose do they serve?
Philanthropy lists, as a genre, date back to the first Gilded Age. We had the first real explosion of individual wealth, and the first real focus of public scrutiny on philanthropy to charitable institutions. You first started seeing them in a period where there was increased attention on philanthropy, and you saw it as a tool both of publicity but also of accountability. There were efforts to track who of the wealthiest citizens were giving enough, or the most.
It was a very primitive genre back then, and they really didn’t take off until a century later, at the start of what we could call the “Second Gilded Age.” The creation myth — I’m using that term not because I don’t think it’s true, but because it really encapsulates the purpose — was that Maureen Dowd was interviewing Ted Turner for a column. Turner was talking about why he hadn’t given enough; his own philanthropy was pretty limited. He basically said he was nervous that if he gave a lot of money, he would slide down the Forbes’ ranking of the richest people. He kind of recognized that for the fantastically wealthy, status really did matter. What we [needed was] a kind of counter list: To harness that sense of competitive status, we should create a list of the biggest donors. Maybe that would basically help some of the folks who aren’t giving because they’re worried about their status in terms of their wealth, transfer to a sense of their status as benefactors. He claimed that Bill Gates and Warren Buffett — this was before the Giving Pledge, before the major Gates Foundation gifts — had admitted that if this was around, they would start giving more. You can even see, potentially, that this was the seed of the Giving Pledge.
This was 1996 — very soon afterward, a number of media publications started doing just that. Slate came out with its list later in the year. And that Slate list eventually was transferred to the Chronicle of Philanthropy, which now compiles the major list of donors of any given year. A whole host of other publications started doing it in that period, too.
Among all the philanthropy rankings we have today, what kind of importance does the Chronicle’s list have?
If you didn’t know anything about philanthropy, you would think that it’s pretty easy to figure out who the biggest donors in any given year are. Many, many of these donations are heralded with big media campaigns. The problem is, there’s a real range of comfort with publicity among the very wealthy, and for all the donors who are very transparent and really court publicity, there are others who do so selectively or not at all. So it takes an enormous amount of effort to systematically try to assess who really is getting the most money in any given year. For a long time, there just wasn’t a huge amount of media interest in that, and the Chronicle kind of carried that burden for quite a while now.
What’s interesting is the range of different approaches to giving lists. Recently, a couple of publications, most notably Forbes, have reimagined the list. Forbes only counts money that gets out the door to operating charities. It doesn’t count money given to foundations and money given to donor-advised funds, it only counts when that money actually gets out the door to charities. Other publications have also started ranking in terms of percentage of wealth, and this is another normative argument, which is basically saying we shouldn’t necessarily applaud rich people for giving a lot of money if that gift represents a relatively small part of their wealth.
Billionaires these days make a lot of pledges about giving most of their wealth away. We just saw Jeff Bezos make this pledge last year. What role do such pledges play in how we think about and talk about philanthropists?
The pledge, I think, is a real sore point in philanthropy lists. A pledge often maximizes publicity, right? You get these giant headlines, and then it sort of disappears. You minimize accountability, because the actual details of the pledge come out in bits and spurts over the next couple of years. Depending on how it’s counted, you can get yourself ranked very, very high on the list. But if part of the point is not just the amount, but to figure out how much good it’s doing it, where’s the money going to, that can take years and years to come out. And at that point, maybe people are paying less attention.
The pledge can be a really important tool to gain attention to help inspire others. That is literally the idea behind the Giving Pledge, and that’s something that a whole bunch of donors have really championed. But it also suggests that some of these mega-donors are exploiting a flaw in the system, because they get all this attention, and then there’s no requirement that the pledge is accompanied by any detailed accounting of exactly how they plan to spend the money.
The last time Musk donated a lot of money, there was so much speculation about where that money might have gone. And it took a while to find out where.
Yeah, I would say we don’t really have good answers to those questions and might not for quite a while. [Private foundations are required to make a minimum 5 percent payout every year, but that includes administrative costs of running the foundation.] You could give a relatively small amount, with huge amounts still remaining, without a good sense of what a funder’s priorities are. That gets to another issue. The philanthropy lists are really helping to highlight and to focus on how important donor transparency really is. You can counterpose Musk with someone like MacKenzie Scott. The other really striking element of the Chronicle’s list is that Scott isn’t on it. She would be very near the top if she was, and the reason is that she doesn’t release information about her giving to the Chronicle. She very famously has struggled with how public she should make her giving. For a while, she considered not releasing any information about who is receiving her money or the amounts that they’re receiving because she wanted to draw attention away from her and toward the grantees, who would have discretion about releasing that information. It’s sort of, you know, a complete rejection of the whole project of the philanthropy list.
[Scott] relented and actually released a pretty impressive list of all her donations on her website, but fundamentally, a lot of the questions about transparency are still discretionary.
One famous example of philanthropic pledges and claims is Trump, who boasted about how generous he was with his charity work. Then former Washington Post journalist David Farenthold investigated, and it turned out a lot of Trump’s claims were exaggerated [and self-enriching]. So what’s the right way for the media to approach pledges and headlines about giving? Does it need to be adversarial?
Trump is, like all things, a real outlier in certain respects. But in the same way that we talked about the pledge exploiting a kind of vulnerability in media coverage of philanthropy, Trump very clearly understood that for the most part, you can — up until recently, at least — make some of these claims about pledges and charitable intent and call yourself a philanthropist. And there just wasn’t a huge amount of scrutiny on those claims. I think Trump sparked a wave of journalistic scrutiny to address that vulnerability.
Right now there’s an uneasy kind of compromise between the interests of the donor and publicity, and the interest of the public and accountability. I think what we want to do is draw more donors into the realm of making donations that are publicly accountable. And part of the deal is, you do get some credit — there is going to be some credit that accrues to you as a donor. But the flip side of that deal is there’s going to be scrutiny.
Why is there so much secrecy around philanthropy? Simply because they can be secretive because we don’t have better disclosure laws?
Bringing philanthropy into the public was a pretty massive undertaking 50 years ago that culminated in this Tax Reform Act of 1969. It finally required annual public reports — it wasn’t easy to get foundations to do that, and many resisted after the fact. I think there’s a general presumption that philanthropy is a private act that’s been around for at least a century if not much longer. Counterposing that has been this insistence that it’s also a public one that demands scrutiny and public accountability. I think there is a healthy sense in which many donors actually do want to engage with the public. If you look through the Chronicle list, you’ll see many of them have very clear public identities as philanthropists. Even someone like Bezos went from considering philanthropy as a private vocation to tweeting about it and Instagramming it. There’s definitely a shift — but it hasn’t been absolute.