Why the Rich Aren’t Good at Giving

Three quarters of mega gifts go to charities that do comparatively little good and are laced with personal benefits, one expert finds.

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Philanthropy can be a difficult subject. The simple view is that any giving is a laudable sacrifice. But there is a more complex view that weighs a charity’s mission and the giver’s self-interest before assigning praise or gratitude.

It’s this more complex view that leads Eric Friedman, author of Reinventing Philanthropy: A Framework for More Effective Giving, to take issue with how the rich tend to donate. By his reckoning, three quarters of wealthy people give to causes that do comparatively little good and are laced with personal benefits.

The Chronicle of Philanthropy publishes an annual list of charitable gifts of $1 million or more. In 2012, there were 95 such gifts and 73 fell into a dubious category. The 2013 list is due in February and is expected to reflect the same trends. On the most recent list:

  • 21 gifts of $1 million or more (22%) went to the arts, museums, sports, or historic preservation, or to foundations with a significant emphasis on these areas.
  • 37 gifts of $1 million or more (39%) went to colleges and universities.
  • 15 gifts of $1 million or more (16%) went to health-related charities and hospitals in the developed world.

Where are the mega gifts for mosquito nets to prevent malaria in the less developed world, or to provide clean water, or to perform basic and yet life altering medical procedures?  Where are the mega gifts to prevent disease, promote sustainability and fund small businesses in poverty-stricken regions?

As Friedman notes: billionaire David Koch donated $65 million to the New York Metropolitan Museum of Art, financing a renovation of the outdoor plaza around the museum; he gave $35 million to the National Museum of Natural History for a dinosaur exhibit hall. “It goes way back,” Koch told The Washington Post. “I went to my first dinosaur hall with my father and twin brother…I was blown away by the dinosaurs.”

Well, great. That’s generous, for sure, and many people will enjoy the space that such gifts create. But they don’t solve or even address any big important problems. Friedman finds similar fault with gifts to universities, which fund wings with donor names on them or programs that have special meaning to the benefactor. With a $30 billion endowment, does Harvard really need more donations while so many young people are stuck with student loans they cannot repay?

Likewise, he notes, the health issues and hospitals that get mega donations are for developed-world treatments and cures, and causes close to the giver’s heart. Most people in the world have no insurance or access to such treatments and will never benefit.

This is an interesting take on philanthropy. Certainly, the world’s most pressing problems do not afflict people who have the most money to give. It’s possible they need to widen their scope to feel a palpable sense of need. But, as I have written in the past, without an emotional response or a name on a building, would people give as generously? Shouldn’t giving bring us joy, even if it comes at the cost of some efficiency? Should we really abandon the arts, and Harvard, until everyone has a mosquito net? In my simple view, all giving is good regardless of motive. But a little more attention to what matters most probably makes sense.

7 comments
JackieRice
JackieRice

it's a shame... to contribute to elite, it's like lobbying, catering to your own interests and the middle and poor class which mainly funds services in this country do not get to make decisions that affect their daily lives... I would hardly expect those whom have been allowed to generate such wealth (much of it is luck, connections, family money, etc..) to donate to causes that could make real change.  But I thought if you research and ask directly where the money is going, you'd have a better chance of helping out during a third world country's crisis?  There are organizations specifically designed for humanitarian aid to these nations.  I would imagine it's illegal to pocket the cash you know...

RB1
RB1

Seems Time has chose to bury this article in their site. Must be it made some very wealthy people uncomfortable. I'm not just talking about the wealthy contributors but also the wealthy college and hospital administrators, arts councils, and non profit administrators. I would like to have seen this article placed front and center, so as to awaken those in these positions to recognize that their greed to acquire money for their personal agendas are transparent.  I would hope that the wealthy that contribute may see an awkward pattern in their rationale towards contributing to improve the world.

As far as preserving the arts, lets be realistic. The endowments that are currently in-place throughout this nation could maintain the GROWTH of the Arts for decades to come! The majority of the world's population is in dire need of help, now!

Its time for a new standard of what the government classifies as a true non-profit organization.  The tax dodging predators have crushed enough good willed contributors and needy reciptients!  Its time for change in what and who qualifies for these taxation breaks.

Sean
Sean

So you're against preserving the arts in this country? Because without those kinds of gifts, good bye museums, symphonies, etc. even faster than is going on how. While it isn't fair to tax a middle class family with two kids in college to pay for rich people to go to the opera, we'd also be diminished if the opera ceased to exist. Seems like that's a good use of philanthropic dollars. 


The big issue with colleges isn't the money they get from donors but the money they get from government. That's what allows them to keep jacking the tuition to pay for more and more elaborate facilities and bloated staffs.


All of the funds available to colleges would be better allocated if they had to price their product based on the ability of the consumers to pay.

cdnlegacybldr
cdnlegacybldr

Charities have it completely backwards.  In order to create capital for charity, it is first important to assure individuals that their retirement goals and objectives, and that their continuing goals and objectives for the present and their future generations have been met.  Only then will they be prepared to psychologically address that there is extra and then discuss where that extra should go. Charlie 'Tremendous' Jones once said, "great people give not how to learn how to get but to learn how to give more." ever think that maybe the arts and universities are doing a much better job of connecting?  We desire to separate the leaders with vision from the rest.  A journey of a thousand miles begins with a single step but it takes visionary leadership.  It takes courage to step out of the comfort zones of the well established status quo and challenge their supporters and advocates to think about a future greater than the past filled which with opportunity.  Individuals can incorporate a personal giving pledge by simply being good stewards, building a legacy and becoming a great ancestor www.canadianlegacybuilder.ca/giving_tuesday_addresses_need

BFox1991
BFox1991

I agree with your points, but it brings to mind a conversation I had with a wealthy individual the other day while we were waiting for our coffee at Starbucks. This man mentioned how he used to donate over 80% of his charitable donations to underdeveloped worlds and homeless people. He said it made him feel great, that was until he began to feel taken advantage of and saw very little results from his donations. People were using his money for evil rather than advancement, they used him as a crutch and he could not take it any longer. With that being said, do you think people are acting selfishly or do you think they are using money in a manner that seems effective to them? Obviously this is speculation, but I wonder if there would be a difference if the world had better institutions in place throughout the underdeveloped worlds.

RB1
RB1

After just reading about the 85 superior human beings that own as much as 3.5 billion people combined, this article of news is far from surprising!  I'm not a church going person but this sure reflects many of the characteristics described in the "Book of Revelations." Mega-wealth sure turns people into total idiots! 

kevinplata24
kevinplata24

I completely agree, sometimes I feel that people fight for the wrong reasons. All this lies with selfish reasons, for which we give. As the author has said, it's not from a perspective that Harvard or museums or art should be overlooked or are unnecessary causes, but is rather, there are other problems that could mitigate or even solve with the aid . Aid should be first for humanity, art can wait. What type of living being can appreciate the beauty in superficial things while its congener is hovering between life and death from entirely preventable causes?