The most exclusive subset of the world's wealthy may be this one: those living philanthropists who have already given away $1 billion or more.business Updated: Aug 27, 2009 17:27 IST
The most exclusive subset of the world's wealthy may be this one: those living philanthropists who have already given away $1 billion or more. For the first time ever, Forbes has put together a list of the world's billion-dollar donors. Of the 793 billionaires in the world, only 11 made it into this group.
Three others including SAP ( SAP - news - people ) co-founder Dietmar Hopp, mutual fund guru James Stowers and former banking billionaire Herbert Sandler qualified for this top givers club though their donations helped knock them out of the ranks of the world's wealthiest. "I'm surprised there aren't more," says Sandler, "It's a shame there aren't a lot more."
Leading the elite group by almost an order of magnitude is Microsoft ( MSFT - news - people ) co-founder Bill Gates, who has cut checks worth $28 billion during his lifetime. Most of his money has flowed through his family's Bill & Melinda Gates Foundation. Gates' impassioned speeches and brand of high-profile international-scale, hands-on giving--mostly to fight disease and eradicate poverty in developing countries--have influenced many others to accelerate their giving.
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Among those inspired is Gates' bridge buddy Warren Buffett who announced in June 2006 that, rather than start his own foundation, he'd transfer $30 billion in stock over 20 years into the Gates foundation. Buffett, who has given $6.4 billion so far, has said that the death of his wife Susan and the Gates' early success made him rethink his earlier plan to wait until after his own death to give away money. "How can we do the most good for the most people?" Buffett asked while announcing the historic gift.
Based on our rankings, Buffett is the fourth most generous donor in the world. In second place is hedge fund manager George Soros, who has given out $7.2 billion to such diverse causes as clean-needle clinics in California and scientific research in Russia. Also high on the list is Intel ( INTC - news - people ) founder Gordon Moore, who has given away a total of $6.8 billion mostly to his and his wife Betty's foundation, which backs environmental causes, including saving rain forests in South America and supporting marine ecosystems.
Scholars of philanthropy have noticed some interesting patterns about these super-philanthropists. Inherited wealth more often stays horded. "People who make their own money, entrepreneurs, are the most generous," says Leslie Lenkowsky, a professor at Indiana University's Center on Philanthropy. "They understand they've been very fortunate, and their good fortune in society depended on the schools they attended and their communities."
All but one of Forbes' billion-dollar givers are self-made, including New York's Mayor Michael Bloomberg and Hong Kong's richest person, Li Ka-shing, who dropped out of school at age 15. Five of these billion-dollar donors made their fortunes in technology including Gates, Moore, Michael Dell and two founders of German software outfit SAP. The only silver spoon among the super generous is Swiss billionaire Stephen Schmidheiny, who donated his company, Grupo Nueva, to a trust that distributes its profits to social causes in Latin America.
Still even these mega-generous are a bit less generous now that the markets have fallen. That is partly explained by the fact that a good portion of these donations are given in the form of stocks, many of which have lost value. The wealthy also have more incentive to give during up markets as it is one way to get a tax deduction on hefty gains. In 2006, the year Buffett started his Gates donations, the U.S. recorded a record 22 gifts of at least $100 million, according to the Chronicle of Philanthropy's database. Since then, the number of those high-value gifts has fallen by a third.
Giving USA, an annual survey that measures total giving, has recorded a 2% drop-off during the current recession. Buffett, who donates Berkshire Hathaway ( BRK - news - people ) shares once a year, donated shares worth $1.25 billion in July, $500 million less than last year and 2007 and $350 million less than in 2006. "That should bounce back in the next year or so, much like giving did after the 1973 to 1975 downturn, says Lenkowsky.
Another phenomenon that can't be missed about the super generous is the predominance of Americans. Ten of the 14 are from the U.S., even though only 45% of the world's billionaires reside here. The U.S. has a storied history of generous philanthropists including notable figures such as Andrew Carnegie and David Rockefeller. The same is not true in many parts of the world. Says Peter Fuchs, head of Viva Trust, Schmidheiny's foundation, "One of the big advantages of the U.S. is its great philanthropists. Latin America does not have the institutions to support philanthropic giving. It is very difficult to change mindsets."
Hong Kong's Li, who is the only Asian to qualify for this list, has been outspoken on the topic. "In Asia, our traditional values encourage and even demand that wealth and means pass through lineage ... I urge and hope to persuade you that if we are in a position to do so, that we transcend this traditional belief," Li said in a 2006 speech, "Even if our government structure is not yet geared towards supporting a culture of giving, we must in our hearts see building society as a duty in line with supporting our children."
There is some evidence that international neighbors are catching on in places like China, but there are few, if any, who are close to Li's league.
Our methodology doesn't make it easy to qualify. To calculate this list, Forbes honed in on individuals, not large, extended families. We scoured our database on billionaires and contacted not-for-profit directors, foundation experts, economists and billionaires themselves. Only gifts, not pledges, that have been paid out during the person's lifetime were counted, and details of each of those gifts had to be disclosed. William Barron Hilton, for example, has pledged over $1 billion to his foundation, but most of that total will transfer from his estate when he dies, so he was not counted in this list. Nor is Mexico's Carlos Slim Helú, who founded Fundacion Carlos Slim with a reported endowment of $4.5 billion but whose office did not provide details or dates of the giving, explaining that they were confidential.
Forbes valued the donations at the time they were made using historical exchange rates where appropriate. We did not adjust for inflation. As a result some philanthropists whose giving, when adjusted, exceeds $1 billion also missed out including SAP co-founder Hans Plattner who gave $900 million in 1998, equivalent to $1.3 billion today, and Microsoft co-founder Paul Allen, who has given $900 million during his lifetime, worth more than $1 billion today.