It is evident that the US economic downturn, which began in 2007, had a significant impact on the number of donations of a million dollars or more in recent years. While these lingering effects are still evident in the smaller number of gifts, the jump in their value is encouraging. We believe these larger gifts suggest improving confidence among these donors in the economy.

Data on million dollar donations in the USA has been collected for more than a decade[1]. Given the relative openness and transparency of such information, we are able to put together a clear picture of the nature and scale of high-net-worth giving.

Below are a few observations about recent developments in the US philanthropy landscape. 

Mission-related investing

What does it mean to align assets to mission?

Both in the USA and in the UK, foundations with endowments are starting to think more about how they can best align their assets with their mission. Some adopt the practice of responsible investment, which takes environmental, social, governance and ethical considerations into account when investing the endowment. They may also incorporate impact investing (investing in businesses or funds that produce a financial as well as a social and/or financial return).

Social and mission-related investing are becoming increasingly common in the non-profit world[2].While developing the skills and mindset to engage in these investments may be a challenge for charities new to this area, the benefits of having greater opportunities to leverage assets to achieve their mission, as well as generate financial return, cannot be ignored.

Dana Pancrazi of the F.B. Heron Foundation, who was interviewed for this report, notes: “As a sector, one of the best things we [foundations] can do is be clearer about what the fiduciary duty of the board is. Most boards think of duty of care and duty of loyalty. In the tax-exempt environment you also have the challenge of ‘obedience to mission’ and there’s case law on this. How does a board think about its duty? Is the duty to mission just for the programme budget? I think that’s an interesting question.”

Public-private partnerships

What is the relationship between philanthropy and the government?

As this report tracked donations of a million dollars or more during the year that the US government shut down, it also shone a light on the relationship between philanthropy and government.

A particularly high profile donation during the government shutdown was made by John and Laura Arnold, who made a personal gift of $10m to Head Start. In a statement about their decision to donate, they remarked[3][4]: "Our representatives' inability to resolve their differences has caused severe disruptions in the lives of many low-income Americans. We believe that it is especially unfair that young children from underprivileged communities and working families pay the price for the legislature's collective failures. In an effort to address this injustice, we will help keep the doors open at Head Start programmes across the country this month.”

There were also examples of other donations made to various parks/parks associations and museums, such as the Smithsonian.

In addition to ‘stepping up’ at a time when the government shut down, there are many other examples of philanthropists joining forces with the public sector to provide help in times of economic and social need. Perhaps the most prominent is in Detroit, where a group of foundations have committed significant resources to improve the bankrupt city’s situation, literally helping to ‘keep the lights on’5.

A further recent example of philanthropists pledging to support public institutions is that of Mark Zuckerberg and his wife Priscilla Chan. In 2014 they announced that $120m of their previous gifts to the Silicon Valley Community Foundation would be dedicated to improving the San Francisco Bay Area’s public school system.


What is the history of philanthropy in the USA?

Philanthropy in the USA dates back to the country’s colonial period, and was influenced by the Puritan beliefs of its earliest founders. The first major bequest in US history was in the 17th century from John Harvard to what is now Harvard University. From that time on, the USA has been known for its large numbers of associations and other non-profit organisations.

Today, philanthropy in the USA is encouraged by a number of factors, including the tax code, as gifts to charitable organisations are usually tax-deductible. The USA also has a strong culture of publicity surrounding charitable giving. Whether by individuals, foundations or corporations, such giving is often high-profile and can serve to build the reputation of the donor. Indeed, it is the norm to be open about one’s giving at all levels of the wealth spectrum. Philanthropy is also well documented, for example in the Chronicle of Philanthropy.

Giving by Americans has remained broadly consistent over the past decade, at around 2% of GDP, though it does fluctuate depending on the state of the economy.

It is important to note that the USA is not a welfare state. Compared to countries such as the UK, the government does not provide the same degree of social services. This significantly influences the scale and nature of philanthropy (as does tax policy), and shapes the way in which donors think about their giving relative to the work of government.

While philanthropy in the USA has undergone many changes through its history, the sector remains strong and is receiving ever-greater attention. Philanthropy by wealthy individuals and families is widespread; indeed, nearly every high-net-worth household in the USA contributes to the non-profit sector.

[1] Indiana University Lilly Family School of Philanthropy, Million Dollar List, 2000-2014.

[2] R Cohen, Put your Money where your Mission is, Non-Profit Quarterly (NPQ), 2013

[3] J Schwarz, $10m gift to help Head Start through shutdown, New York Times, 2013

[4] A Navarro, Billionaire John Arnold steps in with $10m to keep Head Start going during government shutdown, Forbes, 2013

[5] LE Whyte, Philanthropy keeps the lights on in Detroit, Philanthropy Roundtable, 2014