The New Forbes 400 Philanthropy Score: Measuring Billionaires' Generosity
For the first time, Forbes 400 members are ranked not just on their total wealth and on how self-made they are, but also on their generosity. Members of this elite club have been scored on a scale of 1 to 5, with 5 being the most philanthropic. List members about whom we could find no charitable giving information received an N.A. (not available).
To come up with the scores, we first estimated each list member’s total lifetime giving. A team of 32 Forbes journalists delved into public filings, from tax forms for private foundations to press releases, and reached out to 400 members and nonprofits as well. Next we looked at what percent of their fortune they had given away. We weighted these two factors equally and scored people accordingly.
Some individuals were then bumped up or down based on several other factors, including whether they had signed the Giving Pledge, whether they had pledged significant donations, how personally involved they were in their charitable giving and how quickly and effectively their private foundations distributed dollars. In a few instances, we also used some lifetime-giving information from Boca Raton-based firm SHOOK Research. We did not make a qualitative evaluation of the 400 members’ charitable gifts. We didn’t count pledges or announced gifts that have yet to be paid out. That’s why the world’s richest person Jeff Bezos is ranked a 2 out of 5 and not higher. Had the Amazon founder immediately distributed the $2 billion he pledged in September to help homeless families and start preschools, his score would have been a 4.
Only 29 of America’s 400 richest were given the highest possible score. To get to that recognition, a person had to give away at least $1 billion and/or 20% of their total net worth. There were 36 people, for instance, who gave away $1 billion who didn’t get the top score and another three who gave away less than $1 billion but still earned a score of 5. Notable top givers include Bill Gates, who has donated $35.8 billion to his charitable foundation, more than anyone else in the world; that figure is 27% of his fortune as of September 7, 2018, the day we locked in net worths for the Forbes 400. (To calculate giving as a percent of net worth, we added the value of the gift to the September 2018 net worth and then divided lifetime giving into that amount.)
In percentage terms, George Soros has donated more than any other Forbes 400 member. In 2017, Soros shifted $18 billion from his Soros Management Fund to his philanthropic network, Open Society Foundations. The move brought Soros’ lifetime giving to a total of $32 billion, or 79% of his wealth. Since its inception in 1993, Open Society Foundations distributed $14 billion to a variety of organizations, including UN Women, Planned Parenthood, Amnesty International, the Roma Education Fund, and the Civil Liberties Union for Europe. In April 2018, Soros, who fled his home country Hungary during World War II, launched a $10 million emergency assistance fund to help Rohingya Muslims fleeing Myanmar during an ethnic cleansing campaign.
Nike cofounder Phil Knight and former Microsoft chief executive Steve Ballmer each received a score of 4. Though each has given away more than $1 billion, those gifts were less than 20% of their net worth. In contrast, hedge fund manager Steve Mandel, whose lifetime giving Forbes estimates at $690 million, has donated more than 20% of his fortune to causes like reversing climate change and education equity. Three AirBnB cofounders—Joe Gebbia, Brian Chesky, Nathan Blecharczyk—received a 2; their publicly-disclosed giving so far is minimal, in large part because their company is private, but all three have signed the Giving Pledge and made clear they will be active philanthropists. Seventy-seven of the list members received a score of 1, including President Donald Trump, meaning they gave away less than $30 million or less than 1% of their fortune to date. In June, the New York attorney general filed a lawsuit against Trump, seeking $2.8 million plus penalties for allegedly using the foundation as a tool for his business and his presidential campaign. His lawyers say the case is politically motivated.
Some billionaires worked with Forbes; others refused to cooperate, citing privacy concerns and/or religious beliefs. Others disagreed with our efforts and our methodology. "The new philanthropy ranking is fundamentally flawed, in that it is biased in favor of those who make their gifts widely known, and against donors who choose to make their charitable contributions anonymously,” one current Forbes 400 member (who did not wish to be named) argued via email.
We acknowledge that some of our lifetime giving estimates may be low because of a lack of transparency, since it's possible to make charitable gifts anonymously. However, the spirit of the project harks back to an anecdote that Bill Gates shared at The Forbes 400 Summit on Philanthropy in 2014. “One of the [Middle Eastern magnates] mentioned that in the Qur’an, it actually says the reason to talk about your philanthropy is [that] it encourages other people to do the same,” he said. “In that case, you have an obligation to talk about your philanthropy.” We agree, and hope to spark more conversation about the nation’s richest and their commitment to the public good.
Courtesy : Forbes