April 17, 2003

Most Big Gifts Benefit a Handful of Large Charities, Study Finds

By ELIZABETH SCHWINN
The Chronicle of Philanthropy

Big gifts from wealthy donors and foundations are made primarily to a small group of very large charities, with the result that many causes -- and almost all small and regional groups -- are cut off from a substantial source of funds, according to a new study.

From 1995 to 2000, 502 donors made gifts of $10-million or more that totaled $29.3-billion, according to the study by the Institute for Jewish and Community Research in San Francisco. Of that total, four of every five dollars went to fewer than 500 arts, education, and health institutions.

"Megagifts matter a lot," says Gary A. Tobin, president of the institute and an author of the report on the study's results. "The magnitude of this giving is such that major areas of society can be seriously influenced." Such gifts also increase the credibility of an organization and encourage other donors to make gifts of a similar size, Mr. Tobin says.

Forty-three percent of the money donated in gifts of at least $10-million went to colleges and universities, a total of $16.6-billion.

Next on the list were hospitals and other health organizations, which received 12 percent of that money in the last half of the 1990s. They were followed by museums, symphonies, and other arts organizations, which received 10 percent of the money.

The concentration of big gifts in a narrow segment of the charitable world means that other areas, including the environment, human services, and groups that serve minorities, among others, are shortchanged, Mr. Tobin says. He suggests that nonprofit leaders, policy makers, and others debate whether this distribution of gifts is appropriate, and whether anything could be done to encourage wealthy donors to distribute their gifts more broadly among different types and sizes of charities.

Mr. Tobin speculates that donors may be more inclined to give to large, prestigious organizations because they feel assured that their money will be used for its intended purpose, and because those institutions have sophisticated fund-raising offices that specifically seek big gifts.

Jewish Donors

One-fourth of the big-gift donors in the survey were Jewish, and they gave a total of $5.3-billion, according to the study. The figures suggest that Jewish donors may be more generous than the average donor, since Jews make up only 2.5 percent of the United States population, said Mr. Tobin.

For Jewish donors, the concentration of dollars in higher education was even more pronounced than for donors in general. Nearly half of the big-gift money from Jewish donors went to colleges and universities, and accounted for 180 of the 188 megagifts from Jews.

Wealthy Jewish donors gave a greater percentage of their money to the arts than the average donor -- 21 percent -- but only 6 percent to health. Jews also gave 14 percent of their dollars to benefit public and social causes.

Only 6 percent of the money from Jewish donors went to Jewish causes.

The list, compiled from news accounts and other sources, represents all of the large gifts known to have been paid or pledged by individuals, including bequests, as well as foundation grants. The authors caution that some gifts may have been omitted because donors and beneficiaries are not required to report such gifts publicly, though foundations must list the grants on their informational tax returns. Gifts to grant-making institutions such as Jewish federations were excluded.

Other authors of the study are Alexander C. Karp, chief executive officer of the Jewish Philanthropy Partnership, a consulting company that advises Jewish donors, and Jeffrey R. Solomon, executive director of the Charles and Andrea Bronfman Philanthropies.

Copies of a report on the study, "Mega-Gifts in American Philanthropy," can be obtained free from the institute. Download the PDF.

For Further Information, Contact IJCR

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