As Andrew Carnegie put it: "Surplus wealth is a sacred trust which its possessor is bound to administer in his lifetime for the good of the community." Let's look more closely at what it takes to be a Great Giver.
Great Givers Give Big
There are two elements here. Great Givers don't spread the peanut butter too thin—they regularly give big, transformative gifts that can create real change for both institutions and issues. They focus on a few big ideas—and a few big leaders—and get behind them. And, equally important, Great Givers have resolved to give away the majority of their wealth.
Andrew Carnegie also said: "Put all your eggs in one basket and then watch the basket." My favorite illustration of that wisdom from this year's Slate 60 is the Terwilliger family donation of $100 million to Habitat for Humanity International to support home development and home improvement in struggling regions around the world and here at home. Seventy percent of the gift must be spent within five years for microfinancing to support housing for the poor. The other 30 percent will fund an endowment for Habitat for Humanity International. Great Givers give it away the same way they accumulated it: investing capital when they see an opportunity to create great returns, taking some risk when the upside warrants it, supporting the baseline institution when that is the best goal. Terwilliger's gift—and the urgency he attached to distributing the bulk of it—reflects his deep appreciation of the fact that not all philanthropic money should be patient money. Approximately 70 percent of foundations with more than $250 million in assets exist "in perpetuity"—doling out a minimal percentage of their endowments year after year while protecting the principal. What corporation would corral most of its assets and sit on them rather than trying to ensure that future executives and directors will be able to invest them when and where they can with an eye for pursuing the greatest return?
Warren Buffett (who topped this list in 2006 with a gift of 10 million shares of Berkshire Hathaway stock that is likely to hold the "biggest gift" title for some time) likes to remind folks who praise his giving that he hasn't missed a meal, delayed a vacation, or denied himself any earthly pleasures while still giving big. In tax year 2007, Americans with incomes greater than $1 million gave away 4 percent of their income in charitable contributions. Note that is 4 percent of their current income—not 4 percent of their accumulated wealth. High-net-worth households—those with liquid assets of $1 million or more or earning more than $200,000 annually—gave 7.4 percent of their income to charity in 2005.
Great Givers Give Now
Only those who are active, engaged givers in their lifetimes make my list of Great Givers. Certainly we owe thanks to those who, after a lifetime of accumulating wealth, leave a good chunk of it to charity. A dozen of the Slate 60 donations are generous bequests. Individuals with estates in excess of $100 million gave nearly four times as much at death as they did in the last decade of their lives. Where's the sense in that? Take the cautionary tale of Leona Helmsley. Ridiculed in life as stingy, she left almost her entire fortune to her foundation. For a while there was a real dog fight (pun intended) about her intention, and even with that issue resolved (a judge ruled the Helmsley funds do not have to go to animal welfare) her trustees are left with scant direction on what Harry and Leona's intentions were. Contrast that with Charles "Chuck" Feeney who in 1980s, while still in his 50s, transferred the billions in wealth he made as a partner in a chain of duty free shops to create Atlantic Philanthropies. Over the past 25 years that gift resulted in over $4 billion of grants focused on Atlantic's mission of making great change in the lives of disadvantaged and vulnerable people.
I have to ask the 60- or 70-year-old wealthy Americans: What are you waiting for? Witness Pierre and Pam Omidyar, who—still in their 40s—make their seventh appearance on this list with their gift to the Community Foundation in Hawaii. I have watched the Omidyars (Pierre co-founded of eBay) shape, tune, and revise their strategy to use their wealth for the greatest good. Pierre is widely quoted as citing the best piece of philanthropic advice he ever got was "Don't set up a foundation." And indeed the Omidyars are giving away their money in various ways: market incentives, philanthropic gifts, often under the umbrella of the Omidyar Network.
The very wealthy should be able to give away at least 5 percent of their "surplus" wealth per year and more when a promising cause or opportunity presents itself. New examples are emerging of bold givers who don't just tithe based on current income but who invest the bulk of their wealth in philanthropy. These include not just ultra-wealthy families like the Gateses or the Buffetts, but Great Givers like Tom White who, now in his 80s, has already given away almost all of his wealth. In 1987, White backed the founding of Partners in Health, led by Paul Farmer and his partners working in Haiti to improve health care. Today PIH operates in the Caribbean, Latin America, Africa, Russia, and the United States, and is one of the leading health providers in Haiti, working feverishly to serve the health needs of hundreds of thousands of Haitians after the devastating earthquake. Bootstrapped by one man's wealth, today PIH has a broad base of donors, taking in $23 million in private donations the first week after the Haiti quake.
Giving while living seems the only rational thing to do: It allows the generous wealthy to apply the smarts and skills that helped them build their wealth to returning it to society in the smartest way possible. It allows the wealthy to use the media spotlight to draw attention to the organizations and causes they believe in, which invariably need the attention as much as they need the philanthropic dollars. When Eli Broad says that our education system needs to be fixed, and then over one decade he and his wife Edye invest more than $400 million into public education reform, politicians, other philanthropists and myriad captains of commerce sit up and listen.
With George Soros devoting his reputation, wealth, and time to accelerating the emergence of open societies around the world, or underscoring the urgency of climate change with this year's gift of $100 million to the Fund for Policy Reform, the causes he focuses on are more likely to succeed because Soros gave his time and influence in addition to his money. That can be done only by the living.
Finally, Great Givers Create Great Social Impact
Religion, arts, and higher education represent the lion's share of giving in this country. But wealth generation and distribution, nationally and globally, is far from ideal. Great Givers know they can right the balance just a bit by focusing on improving opportunity for the poor or others who suffer from injustice. More than half of the giving represented by this year's Slate 60 goes to private foundations that will distribute the funds for charitable purposes. But historically, most foundation gifts in the United States do not focus on addressing inequity. (The Foundation Center's most recent roundup estimates that 25 percent of foundation giving was tightly focused on the economically disadvantaged.) Many of the Slate 60 foundations lead the way: Soros' Open Society Institute made a $50 million challenge grant to the Robin Hood Foundation in New York to benefit the poor and to prod other wealthy donors. The Stryker gift to the Arcus Foundation helps to fight injustice for gay, lesbian, and transgender citizens. The Golisano Foundation supports services for the developmentally disabled; Oprah Winfrey's foundation focuses on programs for women and children in need; and the Gates Foundation spends its considerable funds to address inequities in health, development, and education.