“I’m not doing my philanthropic work out of any kind of guilt. I’m doing it because I can afford to do it, and I believe in it.”George Soros
Charitable giving is an important practice in American society. According to the National Philanthropic Trust, in 2019 it accounted for a staggering $449.64 billion, and 69 percent of that amount came from individuals as opposed to foundations and corporations.
Many of us give to charitable causes that are close to our hearts, like cancer or another illness that we’ve had lived experience with or that a loved one may have battled. We also give to organizations that help our immediate community, such as the local food bank or women’s shelter.
As was shown in the 2020 presidential campaign, $5, $10, and $100 gifts can drive progress through the cumulative sum of grassroots fundraising. But the impact of principal gift philanthropy is staggering, as MacKenzie Scott recently showed with $4.2 billion of contributions to almost 400 nonprofit groups. There are a number of wealthy philanthropists that contribute to various causes. Here are some of the ways their gifts make a difference:
A portion of funds donated to many charitable organizations support research endeavors. A nonprofit might conduct this research to find out more about the needs of the population they serve, for example. It may also give grants to universities or hospitals to find cures or treatments for particular diseases. Certainly, institutions with research departments may receive donations directly from benefactors or the general public to carry out critical work.
Research is very costly, especially when it involves medical trials. The beauty of having a donor who is able to give outright, or bequeath through estate planning, a large amount of money is that more research can be undertaken and studies can proceed much more quickly. Furthermore, the philanthropist might be committed to finding a cure for an illness or making a similar significant impact.
In this case, research dollars might continue to flow as progress is made through clinical trials. Take, for instance, the amazing influence of individuals like the late Christopher Reeve, who gave $138 million to laboratories worldwide to study spinal cord injury.
More and more these days it seems that we hear about millionaires and billionaires giving away large financial gifts in the name of worthy causes. Last year, the two biggest benevolent gifts were each over $1 billion. Indian tech entrepreneur Azim Premji transferred $7.6 billion in stock from his IT company to The Azim Premji Foundation—his charitable organization that’s focused on education.
Warren Buffet is probably one of the most well-known billionaires on the planet. He continued his charitable efforts in 2019 by dividing $3.6 billion in stock options between foundations run by his children. One was named for his wife and another is operated by two other notable philanthropists, Bill and Melinda Gates.
This kind of large-scale giving brings with it significant publicity and goodwill. It’s also a terrific way to leave a legacy and make sure that one’s name is remembered for generations to come. Hopefully, efforts of this magnitude will inspire other wealthy individuals to follow suit.
Moreover, there are several related interesting developments when it comes to large-scale philanthropy. One is an encouragement for other wealthy individuals to donate a significant portion of their net worth. To date, 14 billionaires have signed a pledge drafted by Warren Buffet and Bill Gates to give away half of their fortunes.
Stories are coming to light of other billionaires who are on a mission to donate most of their money before they die. Chuck Feeney is one example. At 89 years of age, he has recently signed away almost all of his $8 billion.
Charitable gifts in the order of tens of millions have the impact of shining a light on the organizations and the causes they support. Such acts create financial capacity for change as well as increase public awareness. Social inequities, economic disparities, and disease profiles are revealed in detail. Additionally, the good works that charities and foundations are doing to make life better for so many of the world’s citizens is held up.
This attention can meaningfully assist the organizations receiving the donations, not just in the moment but long-term as well. By raising the profile of universities, colleges, hospitals, nonprofits, and other institutions, significant financial gifts often make it easier for these organizations to fundraise in the future.
In addition, it can change people’s perceptions and even influence their behavior. Consider the impact Mothers Against Drunk Driving has had over an arc of decades. A charitable enterprise can capitalize on its new-found visibility with ongoing public communication and media events. People love to hear personal stories of individuals that charities help and see data that illustrates the impact a nonprofit is having.
Major philanthropic gifts might edge society just a little closer to reversing climate change or finding a cure for a disease like cancer. The personal influence and celebrity that the giver brings can make such a gift even more valuable.