A Little Perspective on A Lot of Money

Corporate Wealth and Its Role in American Philanthropy

Let's face it: The sector of American society that nonprofits most disdain is corporations. The big boys are all about making lots of money. They do lots of nasty things in the process...cut down trees, sell cigarettes, pay poverty-level wages, send jobs overseas. Corporations make the rich richer, passing their profits to shareholders, while the common man employee is left with his financial problems of health, childcare, transportation, housing; then nonprofits and government get to deal with the fallout. As a group, corporations give less than one percent of their profits to charity. WE have little in common with THEM.

So we badmouth the corporates. We ignore them, we launch protests against them, we try to shut them down. We even say we won't take their tainted money.

But we still NEED MONEY. So we go to the foundations. And where do foundations get their money? From rich people, of course! And where do rich people get their money?

Ahhhh, now we have a problem. Because no matter inheritance, marriage/divorce, court settlement or even lottery winnings, the source of all money is ultimately the same. Foundations and their rich benefactors - actually all American citizens (relatively speaking) - have built their affluence on the creation of wealth via corporate endeavor.

Whether you find this economic reality heartwarming or deplorable, I think it's fun to explore how people put themselves in the position of giving away thousands, millions, even billions of dollars every year, and in perpetuity.

What are the fountainheads of the largest philanthropic institutions in America? There presently are 43 grant-making foundations with more than $1 billion in assets. We'll look at the top 12, all with assets in excess of $4 billion (figures are rounded and based on 2003 reports):

1 - Bill and Melinda Gates Foundation, formed in Washington State in 2000 and with current assets of $27 billion. Source of funds: Bill and Melinda Gates, with profits derived from Microsoft Corporation, technology. (Note: Forbes Magazine estimates that Microsoft Founder Bill Gates has, to date, given away 37% of his fortune.)

2 - Lilly Endowment, formed in Indiana in 1968 and with current assets of $11 billion. Source of funds: Eli Lilly and Company, pharmaceuticals.

3 - The Ford Foundation, formed in New York in 1936 and with current assets of $10 billion. Source of funds: Henry and Edsel Ford, with profits derived from The Ford Motor Company, automobiles.

4 - J. Paul Getty Trust, formed in California in 1953 and with current assets of $9 billion. Source of funds: J. Paul Getty, with profits derived from oil interests.

5 - The Robert Wood Johnson Foundation, formed in New Jersey in 1972 and with current assets of $8 billion. Source of funds: Robert Wood Johnson, with profits derived from Johnson and Johnson Company, health and medical care products.

6 - The William and Flora Hewlett Foundation, formed in California in 1966 and with current assets of $6 billion. Source of funds: William and Flora Hewlett and their eldest son, Walter B. Hewlett, with profits derived from Hewlett-Packard Company, technology.

7 - The David and Lucile Packard Foundation, formed in California in 1964 and with current assets of $6 billion. Source of funds: David and Lucile Packard, with profits from Hewlett-Packard Company, technology.

8 - W.K. Kellogg Foundation, formed in Michigan in 1930 and with current assets of $6 billion. Source of funds: W.K. Kellogg, with profits derived from the Kellogg Company, cereal.

9 - Gordon and Betty Moore Foundation, formed in California in 2000 and with current assets of $5 billion. Source of funds: Gordon and Betty Moore, with profits derived from Intel Corporation, technology (founded by Gordon Moore).

10 - The Andrew W. Mellon Foundation, formed in New York and with current assets of $5 billion. Source of funds: 1969 consolidation of the Avalon Foundation (formed by daughter Ailsa Mellon Bruce in 1940) and Old Dominion Foundation (formed by son Paul Mellon in 1941), with profits derived from banking and business, including such companies as ALCOA and Gulf Oil. (Note: By 1914, Andrew Mellon was one of the richest men in the U.S. as an industry contemporary of Ford, Carnegie, Rockefeller, Morgan and Frick.)

11 - The John D. and Catherine T. MacArthur Foundation, formed in Illinois in 1978 and with current assets of $4.5 billion. Source of funds: John and Catherine MacArthur, with profits derived from Bankers Life and Casualty Company of Chicago, insurance. (Note: At the time of his death in 1978, John MacArthur was one of the three wealthiest men in America and sole owner of the nation's largest privately-held insurance company.)

12 - The Pew Charitable Trusts, formed in Pennsylvania in 1948 and with current assets of $4 billion. Source of funds: two sons and two daughters of Joseph N. Pew, with profits derived from the company their father founded, Sun Oil Company.