The Megagift Plunge

Giving by top U.S. donors is down, leaving many charities anxious about long-term effects

The poor economy slowed giving by the nation’s biggest donors last year, and many charities fear that

the number of multimillion-dollar gifts could drop even more if the nation’s financial health doesn’t rebound soon, a Chronicle survey shows.

A troubling sign of the slowdown: a growing tendency among donors to make long-term pledges rather than outright cash gifts. Some donors also are delaying payments on previous pledges, and fund raisers see an increasing reluctance among wealthy people to make new giving commitments of any sort.

The Chronicle‘s third annual survey of America’s most-generous donors shows that gifts and pledges by the 60 largest contributors in 2002 totaled $4.6-billion, compared with $12.7-billion in 2001. The median giving total, including pledges, among donors was $25-million in 2002 and 2001. Pledges last year totaled $2.1-billion, compared with $1.5-billion the year before.

Groups of all kinds, from educational institutions to arts organizations, are feeling the deceleration in million-dollar giving, including pledges.

At New York’s Metropolitan Museum of Art, Emily K. Rafferty, senior vice president for external affairs, says that while she expects big donors to honor their existing pledges, they will probably cut back on new giving commitments in coming months. “Even if the market turned around tomorrow,” she says, “the impact of the decline is going to be felt for a long time.”

Annenberg Tops the List

The museum was the beneficiary of the largest gift from the biggest donor on the list. Walter H. Annenberg, who died in October at age 94, left his collection of 19th- and early-20th-century Impressionist and Post-Impressionist paintings to the museum. Experts are still estimating the value of the art, but foundation officials say it is worth at least $1-billion. Mr. Annenberg, who made his fortune in publishing, also gave at least $375-million to his foundation. The exact amount of his bequest is still uncertain because the stocks and other assets won’t be valued until his estate is settled. Mr. Annenberg’s donations were the only ones in this year’s list that totaled $1-billion or more.

Second on the list is Ruth Lilly, an heiress to the Eli Lilly and Company pharmaceutical fortune, who pledged a total of $520-million to several arts groups, including $100-million to Poetry magazine, a small but highly regarded monthly publication with a circulation of less than 10,000, whose assets have occasionally fallen as low as $100. Before the gift, the group had less than $1-million in its endowment.

Thomas S. Monaghan, founder of the Domino’s Pizza chain, ranks third on the list. He pledged $220-million to build a Catholic university near Naples, Fla. Fourth is David Geffen, a co-founder of DreamWorks SKG movie studios, whose recent productions include A Beautiful Mind, Catch Me if You Can, and Shrek. Mr. Geffen pledged $200-million to the School of Medicine at the University of California at Los Angeles. Eli and Edythe Broad, who made their money in finance and real estate, are fifth, with gifts and pledges totaling $203-million to their foundations.

While many donors on the list are little known outside their professional circles, some are big names, and their gifts have unusual purposes. Alfred B. Ford, the great-grandson of Henry Ford, gave $10-million to the Temple of the Vedic Planetarium, a house of worship to be built in Mayapur, India, under the auspices of the International Society for Krishna Consciousness, a religious sect to which he has belonged for more than two decades.

The movie director Steven Spielberg and his wife, the actress Kate Capshaw, bought eight acres of open land in Brentwood, Calif., that was slated to be developed commercially, and gave it to the Sullivan Canyon Preservation Association. The gift allows residents of the Los Angeles suburb to continue exercising their horses on the property, according to news accounts.

Also on the list: Andrew J. Whittaker Jr., who won $170-million in the Powerball lottery in December and pledged to give $10.3-million of it to charity.

eBay Connections

Four donors on the list made their money through eBay, the online auction and trading site. Pierre Omidyar, founder and chairman of eBay, and his wife, Pam, committed $48-million to charity last year. Meg Whitman, president of eBay, pledged $30-million to Princeton University to build a residential college. And eBay’s former president, Jeffrey S. Skoll, gave $20.8-million to the fund he established in 1999 at the Community Foundation Silicon Valley. The fund gives money to programs focusing on education, philanthropy and the nonprofit world, technology, and development of small businesses. The Omidyars, who are both 35, and Mr. Skoll, who is 38, are the only donors on the list under 40.

Arts Organizations

As with previous rankings of the big donors, educational and medical institutions were the most prevalent beneficiaries, but 12 arts groups besides the Metropolitan Museum of Art also attracted large gifts in 2002. Among the most notable such donations was a $120-million gift to the San Diego Symphony by Irwin Jacobs, founder of Qualcomm, a telecommunications company, and his wife, Joan.

Among other donations to the arts:

• William Winspear, founder of a building-supply manufacturer, and his wife, Margot, pledged $42-million over eight years to help build an opera house in Dallas. The Winspears’ pledge, which amounted to nearly one-fifth of the cost of the proposed Dallas Center for the Performing Arts, “gave the campaign a tremendous boost,” says William H. Lively, president of the center’s foundation, because other donors were reluctant to make financial commitments for the new center until a significant amount had been raised.
• The financier Robert Wilson paid $5.5-million of a previous $50-million pledge to the World Monuments Fund, which has helped restore or preserve sites that include stone carvings on Easter Island, the stone lions in front of the New York City Public Library, and adobe churches in New Mexico. Mr. Wilson had pledged to match donations made from other sources.
• Jack C. Taylor, founder of Enterprise Rent-a-Car and a Navy pilot in World War II, gave $10-million to the Naval Aviation Museum Foundation, in Pensacola, Fla. The money will help build a new school, the National Flight Academy, that will emphasize math and science as it applies to aviation.
• The banker Wanda Bass gave 105 Steinway pianos valued at $2.1-million to Oklahoma City University’s School of Music, in addition to $8-million for a building to hold them.

Billion-Dollar Gifts Scarce

A lack of gifts at the very top of the scale — megagifts worth $1-billion or more — accounted for the $8.1-billion decline in donations and pledges last year compared with 2001. Last year, no living donor made such a large donation. Mr. Annenberg’s gift was a bequest from a will he wrote in 1997 and revised in 2000.

While contributions of more than $1-billion have always been rare, only one year in the past six has gone by without such a huge gift: In 1998, the highest gift was $300-million, given by Martha R. Ingram, chairman of a Nashville consumer-products company.

In 2001, three multibillion-dollar donations were on the Chronicle list: a $5.8-billion donation from Gordon and Betty Moore to their San Francisco foundation; a $2-billion gift from Bill Gates and his wife, Melinda, to their family foundation; and a $1.12-billion donation from James and Virginia Stowers to the Stowers Institute for Medical Research.

Outside the rarefied world of billion-dollar gifts, last year’s large donations were in line with those of prior years. Gifts smaller than $1-billion totaled $3.7-billion last year, compared with $3.8-billion in 2001. And the median gift in the top 10 was $203-million last year, in the range of what it has been since 1997. The 10th slot — a $100-million pledge by Alfred and Norma Lerner to the Cleveland Clinic Foundation — was also in line with gifts by the No. 10-ranked donors of past years.

Past Commitments

Still, many charity officials say that even their most generous donors have been reluctant to make new commitments, especially long-term ones, and some major donors have not made payments on past giving commitments.

For example, William T. Coleman III, founder of the software company BEA Systems, and his wife, Claudia, made no payments last year on a $250-million pledge made in 2001 to the Coleman Institute for Cognitive Disabilities, says Enid M. Ablowitz, director of advancement for the institute, which is based at the University of Colorado. The gift was contingent on BEA’s stock price being $61 or more per share. The price has fallen to $10.60 this month. The Colemans, who paid $10-million on the pledge in 2001, will continue their payments when the stock returns to its $61 level, Ms. Ablowitz says. In the meantime, they have made other gifts to ensure that the institute can meet its operating and research expenses, she says.

Alberto Vilar, a financier who invested heavily in Internet stocks, has fallen behind on pledges to the Washington Opera, according to a spokesman for the group. The New York Times reported that he has also delayed payments to other opera and classical-music groups, including the Los Angeles Opera and the Metropolitan Opera, in New York. Mr. Vilar did not respond to calls seeking comment on his giving.

Daniel Reagan, executive director of development at the University of Notre Dame, in South Bend, Ind., acknowledges that the weak economy has led some donors to be less generous than they might have been. Yet, he adds, the university hasn’t experienced a decline in very large gifts. “We’re actually a little surprised,” Mr. Reagan says, noting that three anonymous benefactors each gave nearly $10-million in recent months.

Marjory Kaplan, executive director of the Jewish Community Foundation, in San Diego, says that the foundation’s grants doubled over the past year, and its assets have risen by $5-million, to $130-million. “People are continuing to put money into their funds, in addition to continuing heavy grant activity. People still have appreciated stock, and we’re getting a little real estate. We have a more diversified economy than in prior down periods,” she says.

At Princeton University, a similar sense of hopefulness prevails.

“We have worked with some of our donors to extend pledge payments due to the economy,” says Brian J. McDonald, vice president for development at Princeton. Still, he says, he is optimistic about receiving more multimillion-dollar gifts and pledges in the coming year.

“People who are very wealthy, but not as wealthy as they were on paper, just will need a little time to digest the change in the marketplace,” Mr. McDonald says. “I expect gifts of $50-million or more will continue to be made as more very wealthy donors realize they have these assets to give away.”

Debra E. Blum and Elizabeth Greene contributed to this article.

Big Donors in 2002: Who’s Previously Made the List

MADE THE LIST FIVE OTHER TIMES
Peter B. Lewis (1996, 1998, 1999, 2000, 2001)
Robert Edward (Ted) Turner (1997, 1998, 1999, 2000, 2001)

MADE THE LIST THREE OTHER TIMES
Paul G. Allen (1996, 1997, 1998)
Eli and Edythe L. Broad (1998, 2000, 2001)
David and Cheryl Duffield (1997, 1998, 2001)
Jeffrey S. Skoll (1999, 2000, 2001)

MADE THE LIST TWO OTHER TIMES
Sidney Kimmel (1996, 2001)
Alfred and Norma Lerner (1996, 1997)
Leon Levy (1996, 2001)
Lorry I. Lokey (2000, 2001)
Sanford I. and Joan Weill (1998, 2001)

MADE THE LIST ONCE BEFORE
Walter H. Annenberg (1998)
Arthur M. Blank (1999)
Doris and Jay Christopher (1999)
Lawrence J. Ellison (2000)
Edward L. Gaylord (2000)
Herbert and Florence Irving (1996)
John A. (Jack) Jackson (2001)
Irwin and Joan Jacobs (1998)
H.F. (Gerry) Lenfest (2000)
Joe R. and Teresa Lozano Long (1999)
Ann Lurie (2000)
Thomas S. Monaghan (1999)
William F. Scandling (1996)
Thomas M. Siebel (2000)

Note: Based on the lists produced by The Chronicle and by Slate magazine.