What the Super-Rich Are Spending Their Fortunes On Now

Billionaires are giving in big numbers again, reflecting a strong stock market and rising confidence among the super rich

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Romeo Ranoco / Reuters

The super rich are feeling more generous, according to new research on charitable giving. That’s good news for nonprofits. But it’s yet another sign that the divide between the wealthy and everyone else grows larger by the day.

The 10 largest publicly announced charitable donations of 2013 totaled $3.4 billion, reports the Chronicle of Philanthropy. That’s down from $5 billion in 2012, a year skewed by a special $3 billion gift from Warren Buffett to his children’s foundations. The biggest gift of 2013 was from Facebook founder Mark Zuckerberg and his wife Priscilla Chan: $992 million of Facebook stock to the Silicon Valley Community Foundation. It was the first time the largest single charitable donation came from someone under the age of 30.

In general, big gifts were up: 15 gifts were $100 million or more, up from 11 in 2012, according to the report. At the more, uh, pedestrian level of gifts equaling $1 million or more, total donations came to $9.6 billion in 2013, up from $6.1 billion the year before. These numbers fall just short of peak giving in 2007, the year before the Great Recession. Then, the biggest gifts totaled $4.1 billion and, like 2013, all were at least $100 million.

The surge in giving by the super wealthy is at odds with trends among Americans further down the income spectrum. “Donations from the affluent and those who have middle incomes remains sluggish,” says Stacy Palmer, editor of the Chronicle. Individual giving grew only 3.9% in 2012, the most recent data available from Giving USA. Palmer believes individual giving will be flat in 2013 and won’t recover to pre-recession levels for several more years.

Giving is closely linked to the economy. These trends suggest that many middle income Americans continue to struggle while the economy of the super rich has recovered nicely, perhaps most evident in record stock prices. Rounding out the largest charitable donations:

  • Phil (Nike chairman) and Penelope Knight, a $500 million pledge to Oregon Health & Science University Foundation, for cancer research.
  • Michael Bloomberg (former New York mayor), a $350 million pledge to the Johns Hopkins University for an effort to promote cross-disciplinary work and for student financial aid.
  • Charles Johnson (financier) a $250 million pledge to Yale University, for residential college buildings.
  • Stephen Ross (real estate developer), a $200 million pledge to University of Michigan for athletics and the business school.
  • Muriel Block (real estate heiress), a $160 million bequest to Albert Einstein College of Medicine of Yeshiva University
  • John Arrillaga (real estate developer), a $151 million pledge to Stanford University.
  • Irwin Jacobs (Qualcomm cofounder) and wife Joan, a $133 million pledge to the Jacobs Technion-Cornell Innovation Institute at Cornell NYC Tech.
  • Charles Munger (vice-chairman of Berkshire Hathaway), a $100 million pledge to University of Michigan, for student housing.
  • David Koch (Koch Industries), a $100 million pledge to New York-Presbyterian Hospital, for a new ambulatory care center.
  • Frank McCourt (real estate developer), a $100 million pledge to Georgetown University, to create the McCourt School of Public Policy.
  • Ronald Perelman (investor), a $100 million pledge to Columbia University Business School, for a new building.
  • · T. Denny Sanford (chairman of United National), a $100 million pledge to University of California at San Diego, for a new stem cell center.
  • Stephen Schwarzman (financier), a $100 million pledge to Tsinghua University, for scholarships for graduate students around the world.
  • Deborah Joy Simon (real estate heiress), a $100 million pledge to Mercersburg Academy, for financial and academic programs.
2 comments
KevinG.O'Neill
KevinG.O'Neill

Hey Dan.  A few problems come to mind with your various capitalist "Giving Trees", much as I applaud the enormous individual successes and good will delineated:  1st: Peak-capitalism profit piles –or any excess profits– should primarily be injected back into research and the creative startup engines of the system or the system will lose essential fuel and viability, right?  Not to mention so many jobs in our disappearing middle class.  2nd: Skill-sets associated with massive accumulations of capital have a weak association with solving intractable societal problems so why should we want their owners to be primary "deciders" on issues impacting so many of us?  3rd: The headline suggests your story will explain what the wealthy are spending their money on. To focus on growth in charitable giving and what this means is a narrow sliver of this.  Did you write that headline?  What the wealthy spend money on is irrelevant anyway compared to the important problems unnaturally bloating many of them in the first place – except for all their money greasing political skids so conducive to their über status quo.  Time® we all MoveToAmend!  ~k

DavidHill1
DavidHill1

What they give is absolute chicken-feed and where the top 100 richest people last year made $240 billion and which could have wiped out poverty 4-times over according to Oxfam.


Indeed as we move away from the season of goodwill to all again and enter normality in the New Year the question that has to be asked is, has things really got better generally for the people of the world? For some it certainly has according to the ‘Global Wealth Report 2013’ released late last year by Credit Suisse and where a mere 0.7% of the world’s adult population controlled 41% of the world’s total wealth and the top 10% owned 86% of all global wealth. In stark contrast 50% of the world’s adult population only owned 1% of the world’s wealth. Indeed added to these wealth statistics the recent report by Oxfam that I mentioned above, ‘The cost of inequality: how wealth and income extremes hurt us all’ also states that the wealth made by the world’s richest 100 adults last year could have ended poverty four-times over. Therefore comprehending these vast figures in inequality a further question has to be asked, has capitalism and its big brother globalisation in reality done anything for around 90% of the world’s population? I would say in my humble opinion based upon the above figures that it appears very little.


http://worldinnovationfoundation.blogspot.co.uk/2014/01/global-poverty-and-inequality-are.html


Dr David Hill
World Innovation Foundation