March 20, 2008

60 Donors Equals $11 Billion

The stakes are rising. The 2007 Slate 60 list of largest charitable donors recorded total contributions of $11.6 billion, more than double the $4.3 billion just two years ago.

Leading the list were the $4 billion bequest by New York hotelier Leona Helmsley to the Leona M. and Harry B. Helmsley Charitable Trust, which had previously seen very little activity, and hotelier Barron Hilton's gift of $1.2 billion to the Conrad N. Hilton Foundation.

The latest total marked a steep falloff from 2006, when the numbers were skewed by investor Warren E. Buffet's $43.5 billion gift to the Bill and Melinda Gates Foundation, but it still set benchmarks in other ways.

In 2007, the Slate 60 (actually 66 due to a 10-way tie at bottom of the list with $30 million donations) had 24 people who gave at least $100 million, compared to 21 the previous year and a range of two to 15 such gifts annually during the previous decade. The latest median rose to $75 million from $60 million in 2006 and $15 million in 1996, the year the list was launched.

"Wealth is building, so the amounts of the top gifts are going to be larger over time," said Eugene R. Tempel, the executive director of Indiana University's Center on Philanthropy, which compiled the list in conjunction with the online magazine Slate. "You can see a close relationship between the rise in the stock market and increases in gifts."

For that reason, he expects the numbers on next year's list could "very likely" decline as the stock market switched from bull to bear starting late last year in conjunction with the general economy tipping downward.

In addition, the rising influence of family foundations continued to be seen. Although universities, medical institutions and arts groups and museums continued to receive most of the largest gifts, five of the 10 top donors gave some or all money to their own foundations.

"The traditional model was to create a foundation late in life more or less as an estate planning tool," said Steven Lawrence, senior director of research at the Foundation Center in New York. "The recent trend has been for relatively younger donors to donate substantial resources to philanthropic purposes."

The creation of the Bill and Medlina Gates Foundation in 2000 has played a role in driving that shift, he said, by "giving the donors the feeling once again that they can tackle a big issue." Some of that outlook had been dampened following the failures of the Great Society programs in the 1960s, Lawrence added.

While attracting headlines for her $12 million bequest to her dog, Trouble, Leona Helmsley's longer-lasting impact will be the $4 billion she left to fund the Helmsley Trust when she died last August 20. According to her long-time spokesman Howard Rubenstein, the trust is now in the organizing phase and he declined to comment on what causes it will support. Likewise, he declined to reveal the five directors who are mapping out the strategy.

The organization's federal Form 990 for the year ended March 31, 2006, the most recent available, showed assets of $36.4 million and a single donation of $5 million to the New York chapter of the American Red Cross for Hurricane Katrina relief efforts. The trust also donated $5 million to the New York Fire Department after the Sept. 11, 2001 terror attacks.

Hilton's contribution highlighted another motivation behind a family foundation: putting the younger generations to useful work. The majority of the foundation's board is Hilton family members, while the president and CEO is Barron Hilton's son, Stephen M. Hilton.

Barron Hilton's $1.2 billion contribution came from the proceeds of his stock when Hilton Hotels Corp. was sold last year, boosting the foundation's assets to $4.5 billion. In addition, he pledged 97 percent of his estate, currently valued at $2.3 billion, to the foundation upon his death.
The foundation makes more than half of its donations outside the U.S., for projects such as clean water and sewage systems in developing countries.

***

This article is from NPT Instant Fundraising, a publication of The NonProfit Times.

Subscribe to The NPT Instant Fundraising eNewsletter or any of our other enewsletters and get the latest news and ideas related to fundraising delivered to your inbox.