How the Wealthy Give

List of generous donors in 2005 includes some little-known names

America’s most-generous donors contributed a total of $4.3-billion to charity last year, a sharp drop from 2004, when the top donors gave more than $10-billion, a new Chronicle

survey has found. For the first time since 1998, no gifts of $1-billion or more were donated to charitable causes.

The median amount the donors on the list gave in 2005, including pledges, was $32.5-million, meaning that half gave more and half gave less. In 2004, the median was $40.8-million. On this year’s list of big donors, higher education received by far the largest share of gifts — 44 — than any other category, followed by 18 gifts to hospitals and medical centers.

The Chronicle annually ranks the 60 donors who give the most money to charitable causes; for the 2005 list, 63 donors were included because of ties.

The largest donation in 2005 was a $404-million bequest from Cordelia Scaife May, who inherited her money from the

Mellon banking fortune. Mrs. May donated the bulk of her gift to her foundation, the Colcom Foundation, in Pittsburgh, which supports the environment and stricter immigration limits in the United States, among other causes.

Bill Gates, the chairman of software manufacturer Microsoft, and his wife, Melinda, took the No. 2 spot, with a $320-million payment of their 2004 pledge of $3.35-billion to their foundation. Last year the Gateses ranked first on the list.

The donors who placed third and fourth on the list chose to support nonprofit organizations they had created.

At No. 3 were Eli and Edythe L. Broad, who made their money in finance and real estate. They pledged $300-million, one-third of which went to Harvard University to support a biomedical-research center they had established with a gift of the same size in 2003.

Nearly two-thirds of the money went to augment the Broad Foundations, which support education, science, and the arts nationally, as well as civic projects in their native Los Angeles.

George Soros, the international financier, ranked No. 4 after he donated money to two groups he founded. Last year he donated $230.1-million to the endowment and business school at Central European University, a graduate school in Budapest. He also gave $10-million to the Open Society Institute-Baltimore, an offshoot of his New York organization. (He did not disclose how much money he put into the rest of his Open Society Network, which each year gives millions of dollars in grants.)

Boone Pickens, the oilman, was No. 5, with donations of $229.2-million, including a $165-million pledge to Oklahoma State University.

‘Money in the Woodwork’

The flat stock market and skepticism about how much additional money charities with large endowments need for their work were among the key reasons that 2005 was not as strong a year for megagifts, say advisers to the wealthy.

“Last year the market ended within 1 percent of where it began,” says Gary L. Rathbun, president of Private Wealth Consultants, a company in Toledo, Ohio, that helps affluent people manage their investments. “People are a little gun-shy about their wealth.”

Other experts said charities needed to do more to approach big donors with big ideas.

“There remains a tremendous amount of money in the woodwork that could be philanthropic,” says H. Peter Karoff, founder of the Philanthropic Initiative, a group in Boston that provides advice to donors. “People continue to hold back — one reason, not being sure how they can make a difference.”

Still, the amount of money given by the nation’s wealthiest Americans was significant even if total contributions did not measure up to previous years.

“Americans were incredibly generous,” says David L. Giunta, president of the Fidelity Charitable Gift Fund, in Boston, a company that offers charitable-giving services. But, he notes, “we are certainly not back in the roaring late 90s.”

However, 2006 is already shaping up to be a stronger year for giving. Last week, representatives of the estate of Jim Joseph, a California real-estate developer, announced that he had bequeathed more than $500-million to his foundation, in San Francisco, which supports Jewish causes.

Capital-Campaign Success

Charity fund raisers are upbeat about their potential to continue tapping the country’s wealth and report success in raising large gifts for their institutions.

For example, the Juilliard School, in New York, has raised $218-million in a capital campaign designed to raise $300-million with the help of a $25-million pledge from Bruce Kovner (tied for No. 47).

Like Mr. Kovner, a hedge-fund manager who has served on the Juilliard board since 1995, many large donors have had long relationships with the performing-arts school, says Anthony J. Newman, its vice president of development and public affairs. Mr. Newman credits those ties as well as the stable stock market for the school’s edging closer to the campaign goal. When the campaign opened in 1999, Juilliard expected to raise $100-million over five years. But as the campaign showed signs of success, the institution twice raised its goal, and now plans to raise $300-million by 2009.

“While there may not have been a dramatic upsurge in the market, there was no dispiriting downturn, either,” he says. “That has made fund raising a more productive venture.”

Other fund raisers say a donor’s age, rather than the economy, is the deciding factor for big gifts. At the Maine Coast Heritage Trust, in Topsham, Jonathan Labaree, the trust’s director of development, says personal decisions often drive the group’s gifts of $1-million or more.

“These are people who are pretty wealthy no matter what,” he says. “They are making decisions based on their own timetable.”

The group received a $3.5-million bequest last year from Josephine F. Ford (No. 13), whose family spent summers on Mount Desert Island, off the coast of Maine.

J. William Diederich (tied for No. 57), who along with his wife, Mary, donated $20-million worth of stock to Marquette University, in Milwaukee, was among the donors who counted age as a factor in bestowing a large gift last year.

“I’m 76 years old, and when you get to be this old you start thinking about estate planning,” he says. “You either give the money away while you are alive or Uncle Sam takes it from you when you die.” Mr. Diederich was among 17 donors on the list who were age 75 and older, a steep increase from 2004, when only nine donors were in this category.

Mr. Diederich, who retired from Landmark Communications, in Norfolk, Va., helped start the Weather Channel. He graduated from Marquette in 1951 and later from Harvard Business School. He decided the donation would pack a bigger punch at Marquette, where it ranks as the university’s largest gift and will be used to enhance programs at its College of Communication.

Mr. Diederich declined to pass the large sum to his 13 children and 20 grandchildren.

“Most of them are more or less successful so they don’t really need a big windfall from us,” he says. “I don’t think it would do them any good, from a lifestyle standpoint, to have a lot of money at their disposal and then it gets spent on things I never would have spent it on, like fancy cars and boats.”

Little for Hurricane Relief

Hurricane Katrina did not prompt a huge outpouring of gifts from the nation’s biggest donors. The biggest gift came from Mr. Pickens, who donated $7-million to the American Red Cross, mostly for Hurricane Katrina relief.

Eugene R. Tempel, executive director of the Center on Philanthropy at Indiana University, in Indianapolis, said it was not surprising that so few of the country’s biggest donors made big gifts to relief efforts.

“When people make $5-, $10-, $20-million gifts, they tend to want those gifts to be more permanent,” he says. “Disaster relief is for taking care of pain and suffering right now, and the money gets spent. A donor’s gift almost evaporates into thin air in front of them because sometimes the need is so large and it’s hard to see where $20-million went.”

However, Mr. Tempel says, he expects some large gifts in coming years will aid the rebuilding projects of large cultural institutions, universities, and hospitals in the storm-damaged region. “That’s a permanent kind of investment,” he says.

But some charity officials say they haven’t received big gifts for hurricane-relief efforts because they haven’t been asking. Habitat for Humanity International, a group that builds homes for low-income people, with headquarters in Americus, Ga., had almost no track record of soliciting gifts of a million dollars or more from individuals or in raising money for disaster relief. As a result, Habitat officials spent the months following last August’s storm devising a plan to build thousands of houses for Gulf Coast victims and developing a process to determine who would be eligible for help before they approached donors with deep pockets for support, says Mark Crozet, senior vice president of development at the charity.

“If someone is going to give us $10- or $100-million, we want to be able to say more to them than just, ‘We are going to build lots of houses with your money,’” he says. “We will soon have the capacity to use those kinds of gifts — up to now we haven’t.”

More immediately, a tax measure spurred by Hurricane Katrina has helped charities beyond the Gulf Coast log large gifts last year. After Katrina hit, Congress passed a law that increased the percentage of income that wealthy donors could deduct on their tax returns for gifts made in the last four months of the year.

The University of Texas Southwestern Medical Center at Dallas received a $10-million gift on December 28, timed to take advantage of the tax break, says Kern Wildenthal, the group’s president. “It shows that tax policy does influence giving behavior,” he says.

Lorry I. Lokey (No. 25), founder of Business Wire, a company that distributes news releases, also credits the tax measure with spurring some of his gifts last year, particularly gifts he made to pay off pledges, including half of his $10-million gift to Stanford. The gift was a final payment on a $20-million pledge for a science building.

Repeating Support

Last year the Dallas medical center also received a $50-million gift from Harold C. and Annette Simmons (No. 17) for cancer research and care.

In 1988 Mr. Simmons had donated $41-million to the charity for cancer and arthritis research. At the time, he was asked why he was giving support to fight those two diseases. “His entire answer was, ‘Well, I have arthritis, and I don’t want to get cancer,’” says Dr. Wildenthal.

Like Mr. Simmons, many donors on the list made large gifts to institutions they had previously supported. Among them:

• David Rockefeller (No. 6), the former chairman of Chase Manhattan Bank, made two $100-million pledges last year. One benefited the Museum of Modern Art, in New York, where he is chairman emeritus. Before the recent pledge, Mr. Rockefeller had already contributed more than $120-million to the museum. He also pledged $100-million to Rockefeller University, in New York, to which he had previously donated a total of $66.5-million.
• Barbara Barrow Jacobs (tied for No. 26), who died last year, gave Indiana University at Bloomington $40.6-million for the School of Music, which was then renamed for her late husband, David H. Jacobs, an owner of the Cleveland Indians baseball team and a developer of shopping centers. Ms. Jacobs had previously given the university $8-million to help pay salaries of faculty members as well as provide money for research and library acquisitions, among other things. The Jacobses both graduated from the university in 1948.

Of the 11 bequests on this year’s list, seven came from women.

A gift of $25-million from Madeleine T. Schneider (tied for No. 30) to the Findlay-Hancock County Community Foundation, in Findlay, Ohio, has already started to benefit residents of the community where she grew up. The foundation made its first grant from the funds for $31,500 to the Hancock County Agency on Aging, for a program supporting advocates and guardians for elderly people without relatives.

Leonie Faroll (No. 33) spent most of her life in New York, but she chose to earmark the bulk of her estate, nearly $29-million, for Wellesley College, in Massachusetts. Her gift is believed to be the largest bequest to a women’s college.

Ms. Faroll, who never married and managed her own inherited wealth, had an unusual idea for the gift to her alma mater. Instead of earmarking the money for a more traditional use, such as hiring additional faculty members or student scholarships, she stipulated that a large portion of her gift help maintain and improve the college’s power plant, which she asked to be named after her parents.

“Her feeling was there are lots of people out there who support those other needs of the college,” says David Blinder, vice president for resources and public affairs at Wellesley. “There was something in her perspective about the importance of infrastructure and utilities in making a good community.”

The gift will also be used for renovations to the college’s science center and support for a new building that houses work space for electricians, carpenters, and other skilled-trades employees.

Some fund raisers say they expect women to play a bigger role in charitable giving in coming years.

“Women live longer than men, so they often have the money,” says Patricia P. Jackson, vice president for advancement at Smith College, in Northampton, Mass.

Two billion-dollar-plus bequests have come from women in recent history. Susan T. Buffett, the wife of the investor Warren E. Buffett, left an estimated $2.4-billion to the Buffett Foundation, in Omaha, after she died in 2004. And Joan B. Kroc, the McDonald’s heiress, bequeathed $1.9-billion to charities in 2003, with the largest share benefiting the Salvation Army, in Alexandria, Va.

Higher Education Benefits

Of the gifts that went to higher education last year, the largest number of donors, four, gave to Stanford University, in California, including a $30-million pledge from Robert M. and Anne T. Bass (tied for No. 36) for its business school. Such gifts are one reason Stanford raised more than any other college or university last year.

But many public universities — one of which logged the second-largest group of donors — are quickly catching up to the fund-raising prowess of their private counterparts. A community college in Utah made this year’s list of beneficiaries as well.

The University of Maryland at College Park received three $30-million pledges last year — from three of its alumni, Robert E. Fischell (No. 32), Robert H. Smith (No. 34), and A. James Clark (tied for No. 36).

“State funding for public higher education is on the decline,” says Brodie Remington, Maryland’s vice president for university relations. “If we are to be a top-quality university, which is absolutely our goal, and continue to have affordable access, the difference is going to be philanthropic support.” The gifts will help form a new bioengineering department and augment several existing programs.

Twenty-two donors have made the list of top 60 donors at least once before, counting appearances on the lists published jointly by The Chronicle and the online magazine Slate since 2000, as well as the lists that were compiled by Slate alone from 1996 to 1999.

Among the new faces: Larry H. and Gail Miller (No. 52), who pledged $22.6-million to Salt Lake Community College for its new police training center and other projects. The Millers own the Utah Jazz basketball team and local auto dealerships.

A few donors directed their philanthropy toward causes not embraced by many others on the list.

For instance, animal-welfare issues appealed to two donors on the list last year.

David Duffield and his wife, Cheryl (No. 12), donated $93-million to Maddie’s Fund, a foundation they established in 1999 to discourage animal shelters from euthanizing healthy cats and dogs. The foundation is now worth $293-million.

Mr. Duffield is the founder of PeopleSoft, the computer-software company.

Geoffrey Beene (tied for No. 57), the fashion designer who died in 2004, bequeathed $10-million to the American Society for the Prevention of Cruelty to Animals and $10-million to the Animal Medical Center, both in New York.

Sources of Wealth

Money made from finance, followed by real estate, proved the most common sources of wealth among donors last year.

One of the 10 real-estate moguls on the list, William J. Godfrey (tied for No. 47), pledged land valued at $25-million to Indiana University at Bloomington for its Kelley School of Business.

Now Mr. Godfrey is president of a real-estate company in Hilton Head, S.C., but when he attended Indiana University as a scholarship student in the 1960s, he didn’t have a penny, says Curt Simic, president of the Indiana University Foundation. The university provided him with “housing as well as tuition and fees,” says Mr. Simic. “He never forgot it.”

Edward M. Warner (tied for No. 45) also received financial aid at Colorado State University, in Fort Collins, where he has fond memories of calling his professors by their first names and hanging out with them on weekends when he was a student in the 1960s.

Last year, he pledged $26-million for the College of Natural Resources, the university’s largest gift. Nearly a third of the donation will support a new natural-resources conservation center there.

Mr. Warner, who started the Expedition Oil Company, in Denver, hopes the gift will make the college the premier institution of its kind in the country, as well as a pioneer in helping private and public landowners work together in conservation efforts.

At the event announcing his gift last year, somebody called him an altruist, Mr. Warner recalled. “I said, ‘Nonsense, I’m an investor.’ It’s totally selfish on my part,” he says. “I am not guilty about the wealth I’ve created. Actually, I’m quite proud of it. I’m using it to build something that is important to me and to inspire others to do the same thing.”

Noelle Barton and Candie Jones contributed to this article.