How The Chronicle’s Survey of Last Year’s Top Donors Was Compiled

The Chronicle‘s sixth annual list of the nation’s biggest donors is based on gifts and pledges of

cash and stock to charitable institutions, as well as donations of artworks and land for which it was possible to find a solid estimate of the value. The Chronicle publishes the list in conjunction with the online magazine Slate, which began publishing such rankings in 1996.

As a starting point, The Chronicle used information it has published in the last year; it also conducted original research on wealthy people and their donations.

Although The Chronicle attempted to compile all information about sizeable contributions made by individuals in 2005, not all donors disclose information about their gifts publicly and they are not required by law to do so.

Gifts that donors made from their family foundations were not counted, to avoid including donations twice — when the donor gave money to a foundation and when the donor decided on a beneficiary for that money.

What Was Counted

The Chronicle counted only those gifts donors made to groups classified as charities or foundations under Section 501(c)(3) of the Internal Revenue Code. Donors are not allowed to claim charitable deductions for gifts to other types of tax-exempt groups.

Gifts to other groups were not counted, even if they were made to help others.

For example, the newspaper did not include one such group, the Safety Net, in Walnut Creek, Calif., which is a limited liability partnership. Safety Net was created last year by David and Cheryl Duffield, No. 12 on the list, with a $10-million donation to provide financial help to PeopleSoft employees who lost their jobs when the company, which Mr. Duffield founded, was absorbed by the Oracle Corporation following a hostile takeover bid in late 2004.

In another case, The Chronicle decided to count a donation that was made to a museum, even though the Internal Revenue Service does not consider it a charitable gift. Paul G. Allen (No. 24), the co-founder of Microsoft, donated SpaceShipOne to the National Air and Space Museum, in Washington. He spent about $25-million to develop the spacecraft, but because it was designed for a commercial purpose initially, he cannot write it off as a donation.

Some donors were left off the list because they made anonymous contributions to donor-advised funds. Such funds allow donors to contribute assets to a special account, take a tax deduction for the gift, and then designate where they want the money to go. The donations can be made immediately or in the months or years after the deposit is made.

For example, last year a donor contributed more than $40-million to his fund at the Vanguard Charitable Endowment Program, in Malvern, Pa., says Benjamin Pierce, the fund’s executive director. The gift was one of several multimillion-dollar anonymous gifts to donor-advised funds at Vanguard.

Eventually, some of these donors might step forward and make a big gift, and join the list of 60 top donors, says Mr. Pierce.

“What some people are doing is building a pot to make that potentially large one-time gift in the future for a dorm or an endowed chair at a university, or a wing at a hospital,” he says.

However, not all contributions to donor-advised funds were made anonymously. Donald Jonas, co-founder of Lechters, a now-defunct chain of housewares stores, and his wife, Barbara (tied for No. 26), gave artworks that later sold for $40.6-million to their account at the Jewish Communal Fund, in New York.

Hurricane Katrina

Several of the donors on the list channeled donations to help victims of Hurricane Katrina.

The biggest sums were given by the energy investor Boone Pickens (No. 5), who donated $7-million to the American Red Cross, and by Mr. Allen, who gave $1-million to his foundation so it could award $500,000 to the American Red Cross, and grants totaling $500,000 to Gulf Coast charities that are helping to rebuild flood-damaged regions.

Lorry I. Lokey, the founder and chairman of Business Wire (No. 25), directed $10,000 out of each of the four university donations he made last year to help students who transferred to those universities because their own institutions were damaged by Hurricanes Katrina and Rita.

Mr. Lokey and Theodore (Ted) Stanley, the founder and chairman of MBI, a Norwalk, Conn., company that develops and markets collectible items, and his wife, Vada (No. 20), said the Katrina Emergency Tax Relief Act that Congress passed in September enabled them to pay off past pledges in 2005, which was sooner than they had planned.

The law allowed donors who made cash gifts to charities — whether the group supported hurricane relief or not — between August 28 and December 31, 2005, to take a tax deduction of up to 100 percent of their income, compared with the 50-percent annual limit usually in effect.

Gifts of Art

Several significant art collections were donated to museums last year but their donors were not included on The Chronicle’s list because the museums refused to disclose estimates of the artworks’ dollar value and another reliable, independent source to appraise the pieces could not be found.

John Friede, a New York businessman, and his wife, Marcia, promised to donate their collection of New Guinea art, which includes thousands of carved figures, masks, and shields to the de Young Museum, in San Francisco. The New York Times estimates the collection’s worth at $100-million.

Meanwhile James W. and Frances G. McGlothlin, who are on the list at No. 36 because they made a $30-million pledge to the Virginia Museum of Fine Arts, in Richmond, promised to bequeath to the museum their art collection, which includes works by George Bellows, Mary Cassatt, John Singer Sargent, and others. When the museum announced the gift, it said the cash and art combined were worth $100-million.

Also not on the list is the film producer Ray Stark, who died in 2004. He bequeathed a collection of sculptures by Alexander Calder, Henry Moore, and other 20th-century artists to the J. Paul Getty Museum, in Los Angeles, which announced the bequest in 2005. The collection is worth nearly $75-million, reports The New York Times. And Edward R. Broida, a Los Angeles real-estate developer, donated 174 pieces from his collection of paintings, drawings, and prints, worth roughly $50-million, according to The New York Times, and 62 modern and contemporary works to the National Gallery of Art, in Washington.

The Chronicle‘s list of the biggest donors of 2005 was compiled by Maria Di Mento. She was assisted by Candie Jones, Sun Jung Kim, Nicole Lewis, Caroline Preston, Elizabeth Schwinn, Ian Wilhelm, and Grant Williams.