In the middle of the night, Larry Ellison’s sailing team negotiated the streets of New York to deliver the 25-metre BMW Oracle yacht to its pedestal at the base of Rockefeller Center. There, the challenger of record for the 2007 America’s Cup is on display through next week, a gleaming tribute to the Oracle founder’s nautical aspirations.
The yacht, one of two in the syndicate, had been racing at Valencia, in Spain, but made the 4,000-mile journey without much difficulty. The same cannot be said for Mr Ellison’s promised $115m (€91m, £65m) donation to Harvard University, which has yet to make the slightly shorter 3,000-mile trip from Palo Alto, California, to Cambridge, Massachusetts. This week, the head of the university’s Global Health Initiative – which had expected the money 10 months ago – said he had been forced to delay senior hires and lay off support staff.
Whether this declaration speeds or scuppers Mr Ellison’s largess remains to be seen. But the tempest between the world’s 15th richest man and the world’s richest university – his net worth is about two-thirds the size of Harvard’s $26bn endowment – belies the robustness of philanthropy in America.
“It’s an event, but it’s an aberration,” says Hank Goldstein, president and chief executive of the Oram Group, a philanthropic adviser. “The philanthropic economy is quite strong and very resilient.”
According to Giving USA’s annual survey, released this week, Americans approached a record level of generosity last year. Of the $260.28bn given to charity in 2005, 76.5 per cent of it came from individual donors. These people gave across the range of non-profit bodies, from museums to hospitals to religious organisations, with a heavy emphasis on disaster relief after the Asian tsunami and US hurricanes. In total, Americans gave away 2.2 per cent of their household income in 2005, slightly above the 40-year average of 2.1 per cent.
At the highest level of philanthropy is Bill Gates, who announced last week he would leave Microsoft in two years to devote himself fulltime to his foundation. Gordon Moore, the Intel founder, and Home Depot founder Bernie Marcus have used a good portion of their post-corporate lives giving away their money. And Sandy Weill, recently retired from Citigroup, has pledged to give away his $1bn fortune during his lifetime.
But the delay, at the very least, of Mr Ellison’s donation raises questions about the nature of the search for funds. Is the headline-grabbing donation still better than the thousands of more modest gifts, or is fitting in with a donor’s whims too much of a hassle?
“A headline gift stimulates other big gifts,” says Mr Goldstein. “It has a lot of influence and it motivates others.”
But megagifts are consistently bestowed on the same types of beneficiary. In 2005, the top 10 gifts by size – ranging from $400m to $100m – went to universities, museums and foundations. (This includes Mr Ellison’s gift at number eight, wedged between Josephine Ford’s estate giving $147m to the Detroit Museum of Fine Art and Jan Vilcek’s $105m gift to the New York University School of Medicine.)
This week’s Merrill Lynch report on the world’s wealthiest people showed that the rich give more in percentage terms to charity. Globally, people with more than $1m in liquid assets give 7 per cent of their net worth to charity, while those with more than $30m give 12 per cent.
“Ultra-high-net-worth individuals want to leave a legacy behind them,” says Benjamin Beauvalot at Cap Gemini, which compiled the data.
He adds that the percentages are probably higher for Americans, who give more to charity than other nationalities. “We’ve never seen such a trend in Europe or other countries. It’s just cultural,” he says.
A separate study by Giving USA found that the average American also gives steadily. Households with incomes below $100,000 a year – 90 per cent of the US – accounted for 60 per cent of all charitable dollars. Their gifts averaged $2,500 a year.
“Smaller, more modest donors, we see time and time again, are potentially very large donors at some point in the future,” says Richard Jolly, chairman of the Giving USA. “Organisations that are sensitive to that are paying attention to the more mid-level donor.”
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