Are the following five people really the most secretive megadonors in the United States? In all likelihood, no.
That distinction probably belongs to names we have yet to learn — just like no one knew who Chuck Feeney was for years, or that Nat Simons and Laura Baxter-Simons were granting millions of dollars through the Sea Change Foundation.
But the following names do represent an off-the-radar and apparently growing corner of foundation grantmaking by the 0.01%. And they’re just a sampling: Over the last few years, I’ve profiled billionaire after billionaire with billion-dollar-plus private foundations — i.e., institutions rivaling many of the nation’s most storied philanthropies in size — that keep philanthropy watchers, nonprofits and their fellow funders in the dark by sending nearly all of their yearly payout to donor-advised funds.
These new mega-philanthropies are effectively directing the bulk of their grants into a black box, sidestepping the requirement that their foundations disclose their grantees, and, if they wish, also avoiding the provision that private foundations distribute at least 5% of their assets annually. Individual DAF accounts, hosted by 501(c)(3) sponsor organizations, face neither of these requirements, yet foundations can meet their payout requirement by donating to them.
In other words, DAFs seem to be increasingly popular with certain high-flying foundations of the Forbes-list set, such as the institutions of centibillionaires like Nvidia cofounder Jensen Huang (whose foundation recently sent 83% of its grant dollars to a DAF) and Google cofounder Larry Page (whose operation sent 99.9%).
These New Gilded Age billionaires can get their tax breaks, abide by the letter of the law and preserve their privacy simply by directing their foundation payout to these accounts. It’s completely up to them whether those DAFs can then serve as waystations for their foundation dollars on the way to chosen nonprofits, or as parking lots until these donors get around to choosing recipients.
“This sort of transfer shouldn’t count as charity,” wrote Helen Flannery, research director for the Charity Reform Initiative at the Institute for Policy Studies, in a blog post last month announcing that private foundation transfers to DAFs topped $3.2 billion in 2022, a nearly 19% increase from the year before. Philanthropy reform advocates at IPS and elsewhere continue to call for the “DAF loophole” to close.
Granted, these transfers may be made for other reasons, like preserving stock holdings or using DAF sponsors’ back-end services, but the DAF accounts they feed function as black boxes regardless of the purpose — and few of these grantmakers are volunteering any information about where the money’s ending up.
Is this much ado about nothing? Jack Salmon argued last year in a Philanthropy Roundtable blog post that the amount currently in DAFs is minor compared to the vast sums within foundations — and that gifts to DAFs represent a “tiny fraction” of overall foundation giving.
Yet it’s hard to ignore the fact that the grantmaking giants listed below – funded by some of the nation’s richest and most influential people – send nearly all of their dollars to DAFs, and those awards add up, with annual grantmaking totals that often dwarf the amounts spent on big state governor’s races or statehouse lobbying.
Below, I’ve listed five megadonors whose foundations not only awarded 80% or more of their grant dollars to a donor-advised fund in 2022, but have $1 billion or more in assets, which puts them among the 200 largest philanthropies in the nation, or in the 0.01% of institutional philanthropy.
Time will tell whether these five are exceptional cases, or — like billionaire megadonors’ adoption of similarly opaque LLCs as grantmaking vehicles — the vanguard of a trend we’ll keep seeing more of in the coming years.
Jensen Huang: 83%
The Nvidia cofounder’s wealth and his foundation’s endowment are experiencing a meteoric rise. The chipmaker’s stock gains have made him a centibillionaire this year and have turned his foundation into one of the 20 largest in the United States. But so far, his philanthropy’s public profile (and its transparency) does not live up to its potential grantmaking power.
In 2022, the Jen-Hsun & Lori Huang Foundation — which has no website or other public presence — sent $55 million to a DAF, accounting for 83% of its payout that year. It sent a similar share the year before, with what’s left mainly going to universities, including the couple’s alma mater, Oregon State University. But its rapid recent growth to something on the order of $8 billion in assets means the foundation will have to get even more money out the door than usual over the next few years. With a founder boasting a fortune currently estimated at $112 billion, the philanthropy could grow still more in the years to come.
Related: AI Has Made Nvidia’s Founder a Centibillionaire. What Will That Mean for His Philanthropy?
Duan Yongping: 89%
This Chinese-born tech entrepreneur and investor is not a household name in the United States, and he’s not listed on Forbes’ Billionaires list. But he does head one of the country’s largest foundations. The H&H Evergreen Foundation’s endowment topped $4.2 billion last year, and has likely risen further this year.
The Menlo Park, California-based foundation only began using a DAF in the last few years, including when it sent nearly $161 million to a Schwab Charitable account in 2022, accounting for 89.3% of payout that year. The foundation, like its reportedly “reclusive” founder, prefers to operate off the radar. But its growing assets may make that increasingly untenable.
Related: Another Tech-Fueled, Multibillion-Dollar Foundation. Have You Even Heard of It?
Paul Singer: 90%
The founder of Elliott Investment Management is often in the news, whether for hosting Supreme Court Justice Samuel Alito on his private jet or funding a Wall Street brand of MAGA policy. He’s also known as a major philanthropist, particularly for his donations to Jewish organizations, but most of his foundation grantmaking is actually unknown.
The Paul E. Singer Foundation has long been highlighted, particularly by the Institute for Policy Studies and Bloomberg, for sending most of its grant dollars to DAFs. Take 2022: It sent $68 million to an account at the National Philanthropic Trust, accounting for 89.7% of the foundation’s payout that year. With just over $1 billion in assets, the foundation is a sizable force, and its 79-year-old head has around $6 billion more that could go to philanthropy. But for now, it’s also a nearly silent force.
Steve Mandel, Jr.: 96%
The Zoom Foundation was exhibit A in Bloomberg’s 2022 investigation into how hedge fund managers can win tax breaks without immediately handing over their money. Mandel’s $1.2 billion foundation can invest its endowment (i.e., his contributions) back into his hedge fund, Lone Pine Capital. Zoom (which is unrelated to the video platform) can then meet the required 5% payout by sending money to a DAF.
Mandel, Jr., who has an estimated wealth of $2.5 billion, and his wife, Susan, have put nearly every grant dollar from their foundation into a DAF in recent years. In 2022, they sent $58 million to a DAF, accounting for 95.9% of that year’s payout. Some share of that appears to land with working charities. Digital breadcrumbs suggest they are making a wide range of contributions with those dollars. But any money not spent will be held until the couple decides to distribute it.
Related: This Hedge Fund Billionaire’s Foundation Is a Black Box. Here’s What We Know About His Giving
Larry Page: 99.9%
Every year, Larry Page’s foundation cuts a $1,000 check to the American Cancer Society. But every other dollar from the Carl Victor Page Memorial Foundation — named for the Google cofounder’s father — goes to a DAF. In 2022, it sent $276 million to the DAF manager National Philanthropic Trust, accounting for 99.9% of its payout.
The foundation’s endowment is primarily made up of Google stock, which means it nearly doubled in value amid the company’s pandemic-era gains and clocked in at $5 billion in 2022, according to its latest IRS filing. As a result, the foundation’s required payout has been pushed steadily upward, and may grow higher still. After all, Page reportedly has a $157 billion fortune. But whether his current or future charitable dollars are reaching charities, and if so which ones, is not clear.
