The New Age of Philanthropy: How Billionaires Are Giving Back

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Over the past few decades, America's wealth has been consolidated in the hands of an ever-shrinking group of people. Today, in fact, almost 85% of the country's wealth is held by a mere 20% of its citizens. Yet for many of these super-wealthy Americans, philanthropy has become increasingly important.

Just as the first gilded age led men like Cornelius Vanderbilt and Andrew Carnegie to stunning acts of generosity, today's new gilded age is inspiring some of America's richest citizens to donate staggering sums of money.

But today's philanthropists are increasingly uncomfortable with the "write a check and forget about it" gift-giving model. From Bill Gates to Philip Berber, they are taking a more active role in the way their money is given and the ways in which it is spent.

Here's a glimpse at how some of America's most generous moguls are giving back.

Going Into the Philanthropy Business: Bill Gates and Warren Buffett

Once America's top tech magnate, Bill Gates has emerged as its foremost philanthropist. The Microsoft (MSFT) co-founder and his wife Melinda have pledged half of their $54 billion fortune to the Bill and Melinda Gates Foundation, which fights extreme poverty around the world and funds educational initiatives in the U.S. In many ways, the foundation reflects the business style that Gates has employed throughout his career: Led by an idiosyncratic-yet-logical list of guiding principles, it focuses on the transformative power of technology. And, like Microsoft, it also benefits from Gates' famously hands-on style: In 2006, he stepped down from his position at Microsoft to run the charity full-time.

The Gates Foundation has become the largest charitable foundation in the world, and one of the most transparent. Part of that is due to famed investor Warren Buffett, who pledged $37 billion to the group in 2006. Just as Gates' philanthropy reflects his professional style, so does Buffett's. As the famed investor announced, he was following the same strategy that informed his investing: "finding good organizations with talented managers and backing them." And, just as Berkshire-Hathaway (BRK.A) remains involved with the companies that it buys, Buffett is actively involving himself with the foundation and sits on its board of trustees.

Gates and Buffett have also taken a leadership role among large-scale philanthropists with their promotion of The Giving Pledge. A campaign to convince America's (and, eventually, the world's) wealthiest individuals to give half their money to charitable causes, the group has already received pledges from 59 of America's most famous moguls, including George Lucas, Larry Ellison, David Rockefeller and Ted Turner.

Streamlining Philanthropy: The Berber Family

In 2000, when Philip Berber sold his company, CyBerCorp, to Charles Schwab (SCHW) for $488 million, the Irish-born philanthropist and his wife set aside $100 million to fund their own charity, A Glimmer of Hope. Tasked with "lifting women and children out of extreme poverty in rural Ethiopia," the group has built almost 200 health clinics, dug thousands of wells, funded hundreds of education projects, and has extended millions of dollars in microloans.

Several other charities help the rural poor in Ethiopia, but the Berbers decided to launch their own group when they realized that overhead and salaries eat up a large portion of the funds that most charities collect. To streamline the donation process, A Glimmer of Hope's administration costs are entirely funded by the Berbers, and the group emphasizes that 100% of all gifts go directly toward helping Ethiopia's rural poor.

Going Into the Charity Business: Stanley and Fiona Druckenmiller

The Berbers aren't the only wealthy people who have turned philanthropy into a family business. Stanley Druckenmiller, founder of investment fund Duquesne Capital, used $705 million of his personal fortune to fund the Druckenmiller Foundation, a family-run charity that supports education, medical research and antipoverty causes. Among other gifts, the Druckenmillers have donated $146 million to fund a neuroscience institute at New York University's Langone Medical Center, and have given $25 million to the Harlem Children's Zone. In 2010, Druckenmiller closed his hedge fund and announced that he planned to devote his energies to running his charity.

Political Machine: The Koch Brothers

The sons of oilman Fred Koch, Charles and David Koch transformed Koch Industries from a $70 million company to one with $100 billion in revenue. Now ranked as the fifth and sixth wealthiest people in America, the Kochs have become quite active in philanthropy. David has given more than $600 million to arts, education and medical research charities. He is especially active in New York's cultural community, donating $100 million to the renovation of Lincoln Center and a further $10 million for the fountains at the Metropolitan Museum of Art.

Staunch libertarians, both brothers have contributed to a host of right-wing political groups, including the Cato Institute, which Charles founded, Americans for Prosperity, and George Mason University's Mercatus Center. In 1980, David ran for President on the Libertarian ticket; since then, the brothers have limited their political involvement to major financial gifts, often to small-government candidates, including Massachusetts Senatorial candidate Scott Brown and Wisconsin gubernatorial candidate Scott Walker. They also fund several organizations that work to block environmental legislation, a move that is hardly surprising, given Koch Industries' position as one of the top 10 air polluters in the United States, according to the Political Economy Research Institute.

Putting Your Money Where Your Name Is: Stephen A. Schwarzman

Sometimes, giving comes with strings attached. When hedge fund billionaire Stephen A. Schwarzman donated $100 million to the New York Public Library, the venerable institution rewarded him by renaming its main branch in his honor. In the process, they carved his name in five separate locations on the building. By comparison, the names of the library's three founders -- Samuel J. Tilden, John Jacob Astor and James Lenox -- are only featured once on the building.

Schwarzman, CEO of the Blackstone Group (BX), has had a fraught relationship with philanthropy. Despite his considerable wealth, he has had a hard time entering the social ranks of the super-wealthy. One reason may be the perception that his charitable offerings have often come with many conditions. Before the library gift, Schwarzman agreed to give $17 million to his alma mater, Yale, in return for which the university agreed to name a freshman dorm after him. Yale later refused the gift when Schwarzman refused to give the money outright, instead offering to give $17 million worth of shares in Blackstone.


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Arlan Berglas

The Billionaire Summit (http://www.aunitedworld.net/buffett/) in South Korea will be a video-teleconference with specific billionaire philanthropists during the World Peace One (http://www.youtube.com/watch?v=4EVjMbqP_ms) Showcase Events. WE are not asking these philanthropists for their money, only their advice on presenting this WE Consciousness (http://www.causes.com/causes/642429-we-consciousness?template=cause_mailer%2Fafter_join&causes_ref=email) to the world.

Thirty-eight US billionaires have pledged at least 50% of their wealth to charity through a campaign started by investor Warren Buffett and Microsoft founder Bill Gates. Here is a look at some of those who have signed up to "The Giving Pledge" (http://givingpledge.org/#enter) project.

December 24 2011 at 10:44 AM Report abuse rate up rate down Reply
Mrs Reed

Hello

May 13 2011 at 11:54 PM Report abuse rate up rate down Reply
Tony Marganian

http://www.youtube.com/watch?v=kANowb44vGc

March 29 2011 at 12:52 PM Report abuse rate up rate down Reply
Ed

We are frequently told more money is needed to solve the homeless problem. To the best of my knowledge this has not met with success, (or has there not been enough mney?) However, if money is the answer I wonder why some billionaire philanthropist has not stepped forward to solve the problem. Could it be they understand there is no financial or any other way to solve the problem? We are also frequently told that more money is needed to educate our unintelligent public school students. If this be true, I wonder why another one of these billionairre philanthropists has not stepped forward to make our public school students smart enough to read their diplomas and intelligent enough to make change for a dollar. But other than this, we strongly believe money is the answer to all our problems.

March 29 2011 at 10:07 AM Report abuse rate up rate down Reply
Jim

"There's an almost an instantaneously favorable gut response from people when you explain that they can revoke a company's charter, distribute their assets and put them out of business," says attorney Robert Benson, who petitioned California's attorney general . Spend it on Employees that make it first. then Give . That would make sense.

March 28 2011 at 8:42 PM Report abuse rate up rate down Reply
linmarco

This shouldn't be news. Unless they are in violation of the law, what people do with their money is their business. We have enough problems in our country facing
average Americans to occupy us for some to come. But there again the press knows how to stir the pot.

March 28 2011 at 1:58 PM Report abuse rate up rate down Reply
ajt1025

Why in the world would the Government Deruglate Oil?? All the politicians are in the pocketss of both the Congress and the Senate!! Where do you think all the big money comes form for them to spend $20,000,000.00 to run for an office that that only pays about $150.000.00 a year?? I am sure that the perks that they vote for themsleves are many that we the public don't even know about! It is ok for the Congress deruglated Electric, send our jobs to off shore companies, send billions of tax payers money to over 137 Coutries that most hate our guts?? The congress only knows how to tax and spend, but the sure don't spend it in America or the Amnericans that for sure!! When it comes to the people in this country we don't get anything but Lip Service for our politicias???? The Republicans blame the Democrates and vice versa??? But they still manage to pass a big with so much poke in it and don't forget the pay raises and perkes they give to themsleves?? Who in the hell do these people think they are?? All we hear abut is cuts in SS, Education, Parks Services, and the list goes one? I do believe that we need cut but lets start at the top not always the middle class. Cut housing, health care, welfare, and make these pepole work for once in three lives and not keep taking form the working people or the people that put there money into SS expecting it back when they retired, not have there money put into the General Fund for them to use as they like?? That started in with the EISENHOWER Adminastration back in the 50's and has not stopped to this day?? We don't get to fly all over the world for free and take staff with them, we have to stand in line and go thru and wait hours to get onto a plane?? YOur law not mine?? If we cut out the pentions for the politicians both State and Federal and the special heslth care they get. free hair cuts, and this list just gose on and on as well? Wake up America let us start something that will let the Congress we are tired of there lip service and want real action no more lip flapping!!!

March 28 2011 at 1:51 PM Report abuse +1 rate up rate down Reply
rgkarasiewicz

Wealthy people are not going to give away anything. They typically funnel a large part of their fortune through so called "foundations" which are nothing more than tax evasion schemes.

March 28 2011 at 11:59 AM Report abuse +1 rate up rate down Reply
wvcobra1

hahahaha just like GE !!!!!!

March 28 2011 at 11:05 AM Report abuse rate up rate down Reply
mornewz

Big fish eat the little fish. Pause. Big fish eat the little fish. ...

March 28 2011 at 7:55 AM Report abuse +1 rate up rate down Reply