‘No-strings giving’ is transforming how the rich give
The Economist called it “philanthrocapitalism". Two decades on, however, it has become clear that all this paperwork puts the brakes on giving. The 400 richest Americans have given away just 6% of their combined fortunes, according to Forbes.
At the last count in 2022, almost $1.2trn was sitting in American private foundations and $230bn in donor-advised funds, a sort of savings account for philanthropists. Money is being earmarked for do-goodery. But it is not getting to worthy causes fast enough.
Fortunately, however, a new generation of donors is once again shaking up the world of big philanthropy, as we explore in our Special Report this week. A series of crises, from the covid-19 pandemic to the wars in Ukraine and the Middle East, has led some donors to get money to the needy quickly. Leading the charge is MacKenzie Scott, who came into a tidy fortune in 2019 after her divorce from Jeff Bezos, the founder of Amazon.
She has outsourced the grunt work of philanthropy to advisers, simplified the process of giving and is dishing out billions of dollars a year with few conditions. This “no-strings giving" is upending megadonors’ long-held assumptions. It offers lessons for those struggling to get money out of the door.
One is the recognition that philanthropists do not have to do everything themselves. Megadonors no longer need to endure the hassle of setting up a foundation and hiring staff. One upside of a decades-long trend for businesslike philanthropy is that legions of consultants have emerged to help donors draw up a strategy and conduct due diligence on potential recipients.
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