When Centre College in Kentucky declared in July that it had received a $250 million donation from its former trustee chair, Houston entrepreneur Robert Brockman, via a trust created by his father, it garnered national headlines. As one of the largest-ever gifts to higher education, it would almost double the tiny school’s endowment. A related announcement in September was less heralded: The gift, made in stock, as part of a recapitalisation that never happened, had been withdrawn.
Centre College’s example, while extreme, isn’t unusual. Philanthropists who make pledges during boom times sometimes renege when markets tank; others pull back based on preconditions such as milestones or matches. The large majority of donors deliver on their word, but many a high-profile, big-money promise dribbles in over time frames that can exceed a decade. And while the rich and famous often give generously to their foundations, those foundations need deploy only 5 percent of the total each year, shrinking the effect.
In order to separate words and actual deeds, Forbes, in partnership with the Philanthropic Research Institute, decided to rank which Americans gave the most in the last calendar year—not money pledged but actual cash deployed in the field. “Givers now want to see an impact while they’re still alive,” says PRI founder RJ Shook, a former Wall Street entrepreneur. The Philanthropic 50 was winnowed from a short list of 1,620 people, most of whom showed up in PRI’s proprietary database that denoted the 50,000-plus largest individual donations to recipients for 2012.
Forty of the Philanthropic 50 are also on the Forbes Billionaires list, led by those at the very top: Bill and Melinda Gates and Warren Buffett, the founders of the Giving Pledge, who took the top two spots. Each put almost $2 billion toward philanthropic work in 2012—the year’s only ten-digit givers—with Gates edging Buffett by a mere $35 million. While it doesn’t count in our rankings, our list also attempts to estimate lifetime giving, with the Gateses and Buffett both giving away at least $25 billion apiece through the end of last year.
That latter number for Buffett will grow rapidly. He has committed that his entire Berkshire Hathaway holding, north of $58 billion, will be donated before or at his death, with a further mandate that it will be put to use within 10 years of the latter. Add in his selfless giving model—he outsources to the Gates Foundation, his name on nary a building or endowment—and Omaha’s Oracle proved an easy choice for the inaugural Forbes 400 Lifetime Achievement Award for Philanthropy, presented to him by Bono at a dinner at the Forbes 400 Summit on Philanthropy in June.
“The truth is I have never given a penny away that had any utility to me,” Buffett told the 150-plus billionaires and near-billionaires, who gathered at the United Nations Delegates Dining Room. “I am very grateful for this award, I accept this award. But I’d like to accept it not only for myself but for those millions of people who really give away money that’s important to them because they see somebody else where they think they can do more good.”
Buffett concluded with a message for those who haven’t yet taken his Giving Pledge, a commitment by billionaires to give away at least half of their fortune during their lives or when they pass: “If you have trouble living on $500 million, I’m gonna put out a book, How to Live on $500 Million. Think about whether the other $500 million might do more for humanity than it will for you and your family.”
A principle on which most of our Philanthropic 50 seem to be acting in real time.
BONO’S ODE TO WARREN BUFFETT
(This story appears in the 13 December, 2013 issue of Forbes India. To visit our Archives, click here.)