“Investigating Differences in Charitable Motivations of the Ultra-Wealthy”

An Honors Thesis
by

Brittany M. Kach

California, Pennsylvania
2020

Brittany Kach
Business Administration: Accounting
Advisor: Dr. Chicarelli
Second Reader: Dr. Murray
HAB Member: Dr. Hettler
Librarian: Monica Ruane Rogers
Keywords: charitable motivations, donations, philanthropy, ultra-wealthy, billionaires

DIFFERENCES IN CHARITABLE MOTIVATIONS
Table of Contents
Introduction ....................................................................................................................... 1
Literature Review ............................................................................................................. 2
Methodology .................................................................................................................... 10
Data and Analysis ........................................................................................................... 14
Discussion......................................................................................................................... 18
Conclusion ....................................................................................................................... 22
References ........................................................................................................................ 23
Appendix .......................................................................................................................... 26

DIFFERENCES IN CHARITABLE MOTIVATIONS
Abstract
This study aims to discover whether there is a difference in philanthropy between
billionaires who made their own wealth and billionaires who inherited their wealth by
testing the applicability of an earlier statistical model from previous research. Two
samples of billionaires from the 2019 Forbes 400 list were used, one sample of the top
100 and another of a random 100. Forbes’s self-made scores were used to measure the
degree to which each billionaire made their own wealth. Two different variables in
separate tests were used to measure philanthropy: Forbes’s philanthropy score and impact
investor designation. ANOVA and Pearson’s r statistic tests were used. Only the top 100
sample when using philanthropy score to measure philanthropy showed a difference in
charitable giving between billionaires with inherited wealth and those with self-made
wealth. As a secondary finding, the results indicated that the billionaires in the top 100
sample were more philanthropic than the billionaires in the random sample. This study
has implications for future research on factors that influence the charitability of
billionaires, including source of wealth and political and social costs. Research on
charitable motivations of ultra-wealthy individuals is important because it helps not-forprofit organizations understand how to appeal to these individuals for donations.

DIFFERENCES IN CHARITABLE MOTIVATIONS

1

Introduction
An ultra-high net-worth individual (IHNWI), or ultra-wealthy for short, is an
individual who possesses assets of at least $30 million (Kenton, 2019). These individuals
on average donate $25 million to charity during their lifetimes (Kenton, 2019). While for
many of these individuals, especially those qualifying as billionaires, $25 million may
only be a fraction of their total wealth, it would be a groundbreaking amount to a not-forprofit organization. Thus, it is important for not-for-profits to understand how to target
these individuals for donations.
Categorizing ultra-wealthy individuals can be helpful for understanding their
motivations to donate to charity, as not every ultra-wealthy individual is the same. One
way to categorize these individuals is by the source of their wealth. The Forbes 400 list of
wealthiest Americans is made up entirely of ultra-wealthy individuals, as each person on
the list is a billionaire (Kroll & Dolan, 2019). Forbes assigns these billionaires rankings
to indicate the degree to which they made their own wealth (the self-made score) and
how philanthropic they are (the philanthropy score). Using the 2014 Forbes 400 list,
Columbia Southern University and University of Phoenix professor J. Phillip Harris
studied the relationship between these two scores and found that self-made billionaires
are more likely to donate to charity than billionaires who inherited their wealth (Harris,
2016). The current study examines the charitability of billionaires from the 2019 Forbes
400 list and discusses how the results align with prior literature.

DIFFERENCES IN CHARITABLE MOTIVATIONS

2

Literature Review
Charity as a Means to Ameliorate Wealth Inequality
Charity is seen by many as a means of ameliorating the issue of wealth inequality.
Dees (2012) explains, “By encouraging charity, societies draw on private resources in a
voluntary way, making those resources more productive for the common wealth. Since
resources and capabilities are not evenly distributed, it can be a net gain to society when
those with more share with those who have less” (p. 323). The status of wealth inequality
in the United States is especially distressing; in 2018, the wealthiest 10% of Americans
held about 70% of total household wealth in America, while the bottom 50% of
Americans shared about 1% of wealth (da Costa, 2019). Much of the severity of this gap
may be linked to the fact that the United States has far more billionaires than any other
country; a rounded average from the 2001, 2002, and 2003 Forbes 400 lists shows that
the United States had about 230 billionaires during this period, while Germany, the
country with the second most billionaires, had only 32 (Neumayer, 2004). As of October
2019, Forbes reported that America’s number of billionaires had climbed to 621 (Kroll &
Dolan, 2019).
For these ultra-wealthy Americans, charity presents itself as a way to redistribute
a small portion of their wealth to those Americans in the bottom 50%, without having to
relinquish their status as the wealthiest. Neumayer (2004) found that a greater guarantee
of private property is positively correlated with the ability to accumulate a massive
amount of wealth, while a communist or socialist dictatorship is negatively correlated
with this ability. However, government intervention, such as through social and welfare
programs, does not have a significant effect on the ability to accumulate wealth. Forbes

DIFFERENCES IN CHARITABLE MOTIVATIONS

3

reported that 66.5% of American billionaires qualify as self-made (Forbes Press Releases,
2019), so it is possible that many current billionaires had to rely on government-led social
programs for financial assistance before they built their wealth. Thus, charity presents a
way for U.S. billionaires to support programs that may have at one point supported them,
and possibly even to support the development of future billionaires.
The Wealthy’s Dominance of Philanthropy
The wealthy disproportionately influence charity. Families who have wealth
totaling one million dollars or more make up only 7% of households in the world but
represent 50% of charitable contributions nationwide (Havens, O’Herlihy, & Schervish,
2006). The wealthy not only influence charity through overall amounts given “but also
because their public status makes their behavior an example for others to follow” (Coupe
& Monteiro, 2016, p. 751). For example, Microsoft founder and billionaire Bill Gates has
been heavily involved in education reform and other philanthropic causes through the Bill
and Melinda Gates Foundation (Bosworth, 2011).
The philanthropy of the wealthy has been a target of criticism. The wealthy’s
giving patterns have been called “lumpy,” referring to the tendency of the wealthy to
donate large but infrequent sums. Havens, O’Herlihy, and Schervish (2006) explain that
“their donations are often large enough to add a noticeable amount to the total charitable
donations for the year, bulging the distributions of giving by income, wealth, and other
demographic characteristics” (p. 563). These sporadic donations can lead some to the
conclusion that the wealthy donate more so for recognition of their apparent generosity,
with less concern for the actual philanthropic efforts their donation will support. Dees
(2012) expands on this criticism, explaining how oftentimes charity actually prolongs the

DIFFERENCES IN CHARITABLE MOTIVATIONS

4

issues it purportedly aims to resolve by “hurting or demeaning those it was intended to
serve, robbing them of dignity or making them dependent in unhealthy ways” (p. 328).
Dees cites, among others, food relief in southern Sudan which removed Sudan farmers’
incentive to work, and the Muscular Dystrophy Association which was criticized by
people with muscular dystrophy for its framing of them “as objects of pity” (p. 329).
Dees also argues that philanthropists may be motivated to perpetuate the problems they
aim to solve for the purpose of maintaining a philanthropic image. He cites Christopher
Hitchens’ criticism of Mother Teresa, whom he believed “help[ed] the poor to accept
their lot” rather than relieving their suffering. This notion is revealed in Mother Teresa’s
comment: “I think it is very beautiful for the poor to accept their lot, to share it with the
passion of Christ. I think the world I being much helped by the suffering of poor people”
(Dees, 2012, p. 327). Dees extends this concept of perpetuating social issues for the
benefit of one’s image to wealthy philanthropists who donate in “lumps” to maintain their
appearance of generosity without solving the problem enough that their charity is no
longer needed.
Bosworth (2011) also criticizes the philanthropic efforts of the wealthy, pointing
out how wealthy leaders who have proven to be successful in the business world are often
allowed to become leaders in the philanthropic sphere without being held to the same
standards as in the for-profit sphere. Bosworth cites Bill Gates and the Bill and Melinda
Gates Foundation (BMGF) as an example of the detriment of billionaires dominating
philanthropy. For one, Bosworth mentions how the BMGF’s dominance in the areas of
malaria research and education reform stifled philanthropic efforts from other
organizations and suppressed diversity of research and ideas. Bosworth also explains how

DIFFERENCES IN CHARITABLE MOTIVATIONS

5

“the BMGF’s performance as an effective agent of social betterment has been mixed at
best,” citing the dismal results of its small school and charter school projects (p. 386).
Bosworth concludes that wealthy philanthropists often fail in their efforts because “they
refuse to review the broader social impact of the economic system that has been
providing their own excessive compensation” and attempt to solve social ills using the
same capitalist system that caused them (p. 387). In Bill Gate’s case, this refers to his
refusal to acknowledge poverty as one of the biggest causes of poor academic
performance. Barwise and Liebow (2019) argue that philanthropy led by the rich leads to
unintended consequences, with decisions that affect many being left in the hands of the
wealthy few.
Tax benefits can also motivate wealthy philanthropists in ways that distract from
their philanthropic motivations. Barwise and Liebow (2019) note that Michael
Bloomberg’s $1.8 billion donation to Johns Hopkins University resulted in federal tax
savings of $600 million. The authors argue that the huge tax savings caused by sizable
charitable donations such as this significantly diminish federal and state governments’ tax
revenues and thus their ability to improve social issues (Barwise & Liebow, 2019).
Duquette (2019) discusses tax motivations of the wealthy and their consequences in his
analysis of the history of the U.S. charitable contribution deduction. He argues that the
charitable deduction was created to disproportionally benefit wealthy Americans to
encourage them to fund public services; this ultimately benefitted the federal government,
as it saved money on services that were being financed by the rich. However, Duquette
argues that this motive is no longer relevant, as philanthropy today is characterized by

DIFFERENCES IN CHARITABLE MOTIVATIONS
“foundations with ulterior motives of corporate control and tax avoidance” (2019, p.
578).
While the charity of the wealthy has been the target of much criticism, they
continue to be responsible for the majority of charitable giving nationwide. In a nation
like the United States, which boasts over 600 billionaires and an ever-widening wealth
gap, it is increasingly important for non-profit organizations to understand how to target
wealthy donors.
Charitable Motivations of the Ultra-Wealthy
As previously discussed, charity is a way for wealthy people to redistribute their
wealth and possibly to support philanthropic programs that once supported them. A
survey completed by Indiana University, in a study of the wealthiest three percent of
Americans, identified additional common motivations for donating, with the top three
being “to meet critical needs,” “to give back to society,” and “to give to those less
fortunate” (“Giving back” major motivation for wealthy donors, 2007). Although these
reasons are likely to be common among anyone who donates to charity, the charitable
behavior of the wealthy has been found to differ from the majority in terms of what
causes they donate to. While religion is the cause that receives the most donations
overall, the causes that the wealthy favor are education, human services, and arts and
culture, in that order (Havens, O’Herlihy, & Schervish, 2006). The fact that education
takes priority among rich philanthropists aligns with the idea that the wealthy donate to
programs that they themselves have benefitted from, as “in almost all cases, wealth
holders have derived a great deal of their wealth from their education” (Havens,
O’Herlihy, & Schervish, 2006, p. 560).

6

DIFFERENCES IN CHARITABLE MOTIVATIONS

7

Differences in Giving Due to Source of Wealth
Wealth composition has been identified as an influence of charitable behavior.
James and Baker (2012), using data from the U.S. 2006 Health and Retirement Study,
found that “as the share of net worth held in homeownership is higher, the propensity to
give is lower” (p. 28). This shows that while the amount of wealth has the greatest
influence, there are other factors that also affect a person’s likelihood to donate, such as
the source and composition of wealth. Havens, O’Herlihy, and Schervish (2006) explain
that “decades of research indicate that higher levels of charitable giving are positively
associated with…higher proportion of earned wealth versus inherited wealth” (p. 545),
citing a study that found that donors are up to six times more likely to donate earned
wealth over inherited wealth. Similarly, a preliminary study from Indiana University
surveyed the year 2000 giving of over 7,300 family units and tentatively confirmed that
non-inherited wealth is much more likely to be donated to charity than inherited wealth
(Steinberg, Wilhelm, Rooney, & Brown, 2002).
The influence of the source of wealth on likelihood to donate is especially
important when considering billionaires, as these ultra-wealthy individuals make up the
majority of donations worldwide. A study completed in 2015 by Coupe and Monteiro
compared the donation patterns of billionaires who inherited their wealth and billionaires
who made their own wealth, using Forbes’ classification system to distinguish between
the billionaires’ sources of wealth. In particular, the researchers examined whether each
billionaire had signed the Giving Pledge, a pledge to donate at least 50% of one’s wealth
during one’s life; whether each billionaire appeared on the Philanthropy 50 list, a list of
people who donated the most to charity in a given year; and whether each billionaire

DIFFERENCES IN CHARITABLE MOTIVATIONS

8

appeared on the Million Dollar List, a list of people who have donated at least $1 million
since 2000. Coupe and Monteiro concluded that self-made billionaires are not only more
likely to donate than billionaires with inherited wealth, but they also donate more money
on average. These results stood true even after the researchers controlled for various
factors that influence charitability, such as marriage status or age. The researchers also
concluded that possible reasons for this difference in charitability are that self-made
billionaires are more likely to have interpersonal connections that facilitate donating, and
they are more likely to spend on big ticket items in general, such as yachts or expensive
art.
Harris (2016) came to a similar conclusion while analyzing data from Forbes
about the philanthropy of billionaires. Harris analyzed the top 100 individuals from the
2014 Forbes 400 list of wealthiest Americans. Using data from Forbes, Harris compared
the differences in philanthropy between self-made billionaires and billionaires with
inherited health. The researcher concluded that self-made billionaires did donate more
than billionaires with inherited wealth. This difference could be explained by the
hypothesis that billionaires are motivated to give back to causes that they have personally
benefitted from; in his conclusion, Harris theorizes that “often [self-made] entrepreneurs
give more to social causes because they come from deprived or disadvantaged
conditions” (2016, p. 59).
Coupe and Monteiro (2016) note that even while billionaires are responsible for
the majority of overall giving, there is not enough literature examining their charitable
behavior, as most studies have focused on charitable behavior of a smaller magnitude.

DIFFERENCES IN CHARITABLE MOTIVATIONS
Harris (2016) also notes that the link between entrepreneurship, something many selfmade billionaires have engaged in, and philanthropy needs further researched.

9

DIFFERENCES IN CHARITABLE MOTIVATIONS

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Methodology
This study uses the 2019 Forbes 400 list of richest Americans (Kroll & Dolan,
2019) to compare charitable giving between billionaires considered by Forbes to have
self-made wealth and those considered to have inherited wealth. Consistent with prior
literature, the top 100 wealthiest billionaires on the Forbes 400 list were chosen as the
sample. Additionally, for purposes of comparison, a second sample was chosen using
Excel’s random number generator. 47 billionaires were excluded because their
philanthropic data was not available on the Forbes website. To measure source of wealth,
Forbes’ self-made score was used, which is a score from 1 to 10 based on the billionaires’
upbringings (Kroll, 2018). Table 1 shows Forbes’ breakdown of the self-made scores.
Table 1
Forbes' Self-Made Scores
Score
1
2
3

4

5

6

7

Explanation
Inherited fortune but not
working to increase it
Inherited fortune and has a
role managing it
Inherited fortune and
helping to increase it
marginally
Inherited fortune and
increasing it in a
meaningful way
Inherited small or mediumsize business and made it
into a ten-digit fortune
Hired or hands-off investor
who didn’t create the
business
Self-made who got a head
start from wealthy parents
and moneyed background

Example
Pauline MacMillan Keinath
Laurene Powell Jobs
Penny Pritzker

Henry Ross Perot Jr.

George Kaiser

Meg Whitman

Chase Coleman

DIFFERENCES IN CHARITABLE MOTIVATIONS
8

9

10

Self-made who came from
a middle- or upper-middleclass background
Self-made who came from
a largely working-class
background; rose from little
or nothing
Self-made who not only
grew up poor but also
overcame significant
obstacles

11
Mark Zuckerberg

Haim Saban

Oprah Winfrey

Forbes presents two measurements of the philanthropy of billionaires. This study
included both of these measures to determine if any significant difference exists between
the two. The first measurement is designation as an impact investor, which Forbes uses to
denote investments that “not only make money but have a measurable, positive social or
environmental impact” (Forbes Wealth Team, 2018). The second source is philanthropy
score, a ranking from 1 to 5 based on each billionaire’s lifetime giving amount and
percentage given of total wealth (Cam, 2018). This score was not introduced until 2018,
so Harris (2016) could not have included it in his study, but it was used for this study
because it represents a more comprehensive view of philanthropic giving than the impact
investor designation.
The philanthropy scores were determined to have a normal, bell-shaped
distribution in both sets of data, as shown in Figures 1 and 2. Normal distribution was not
tested for impact investor status, as there were only two groups for this variable: a
billionaire could either be an impact investor or not.
The randomly chosen sample and the sample of the top 100 billionaires both had
similar distributions of self-made and inherited billionaires. The random sample
contained 68% self-made and 32% inherited, while the top 100 sample contained 70%

DIFFERENCES IN CHARITABLE MOTIVATIONS

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self-made and 30% inherited. These distributions are similar to the distribution of the
entire list, which is 66.5% self-made and 33.5% inherited (Forbes Press Releases, 2019).
The average philanthropy score for the entire list is 2.65. The random sample had a
similar average philanthropy score of 2.68, while the top 100 sample had a higher
average of 3.17. The average net worth of the entire list is $7.4 billion (Kroll & Dolan,
2019). Similarly, the average net worth of the random sample is $7.3 billion, while the
average net worth of the top 100 sample is $18 billion. Full samples are available in the
Appendix.
Figure 1
Random 100 Histogram of Philanthropy Scores

Philanthropy Scores (Random 100)
Frequency

40
30

20
10

Frequency

0
1

2

3

4

5

More

Bins

Figure 2
Top 100 Histogram of Philanthropy Scores

Philanthropy Scores (Top 100)
Frequency

40
30
20
10

Frequency

0
1

2

3

4
Bins

5

More

DIFFERENCES IN CHARITABLE MOTIVATIONS

13

SPSS was used for all statistical analysis. First, each sample was tested using
ANOVA. Self-made score was used as the independent variable. In the first test,
philanthropy score was used as the dependent variable, with impact investor status as the
dependent variable in the second run. The null hypothesis was that there is no difference
in philanthropy between self-made and inherited billionaires. The alternative hypothesis
was that there is a difference in philanthropy between self-made and inherited
billionaires. Pearson’s r was also run with each sample. The following recommendations
were used to interpret the Pearson correlation coefficients (Laerd Statistics).
Table 2
Guidelines for Interpreting Pearson Correlation Coefficient

DIFFERENCES IN CHARITABLE MOTIVATIONS

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Data and Analysis
Random Sample Results
Philanthropy Score
Table 3
ANOVA Results for Random Sample Using Philanthropy Score as Dependent Variable
ANOVA
Philanthropy_Score
Sum of Squares
Between Groups

df

Mean Square

F

14.480

9

1.609

Within Groups

109.280

90

1.214

Total

123.760

99

Sig.

1.325

.235

Table 4
Pearson’s r Results for Random Sample Using Philanthropy Score
Correlations
Philanthropy_Sc Self_Made_Scor
ore
Philanthropy_Score

Pearson Correlation

e
1

Sig. (2-tailed)
Sum of Squares and Cross-

.136
.177

123.760

42.320

1.250

.427

N

100

100

Pearson Correlation

.136

1

Sig. (2-tailed)

.177

products
Covariance

Self_Made_Score

Sum of Squares and Cross-

42.320

780.990

Covariance

.427

7.889

N

100

100

products

A 95% confidence interval was used for ANOVA, consistent with prior literature
(Harris, 2016). ANOVA returned a significance of 0.235, indicating that the null

DIFFERENCES IN CHARITABLE MOTIVATIONS

15

hypothesis cannot be rejected. The Pearson correlation coefficient of 0.136 indicates no
significant correlation between the two variables.
Impact Investor Status
Table 5
ANOVA Results for Random Sample Using Impact Investor Status as Dependent Variable
ANOVA
Impact_Investor
Sum of Squares
Between Groups

df

Mean Square

F

.694

9

.077

Within Groups

6.666

90

.074

Total

7.360

99

Sig.

1.042

.414

Table 6
Pearson’s r Results for Random Sample Using Impact Investor Status
Correlations
Self_Made_Scor
e
Self_Made_Score

Pearson Correlation

Impact_Investor
1

Sig. (2-tailed)
Sum of Squares and Cross-

-.067
.508

780.990

-5.080

7.889

-.051

100

100

-.067

1

products
Covariance
N
Impact_Investor

Pearson Correlation
Sig. (2-tailed)
Sum of Squares and Cross-

.508
-5.080

7.360

-.051

.074

100

100

products
Covariance
N

Using impact investor status to measure philanthropy returned similar results as using
philanthropy score. A significance of 0.414 indicates that the null hypothesis cannot be

DIFFERENCES IN CHARITABLE MOTIVATIONS

16

rejected. A Pearson correlation coefficient of -0.067 indicates no significant correlation
between the variables.
Top 100 Sample Results
Philanthropy Score
Table 7
ANOVA Results for Top 100 Sample Using Philanthropy Score as Dependent Variable
ANOVA
Philanthropy_Score
Sum of Squares
Between Groups

df

Mean Square

25.996

9

2.888

Within Groups

126.114

90

1.401

Total

152.110

99

F

Sig.

2.061

.041

Table 8
Pearson’s r Results for Top 100 Sample Using Philanthropy Score
Correlations
Philanthropy_Sc Self_Made_Scor
ore
Philanthropy_Score

Pearson Correlation

e
1

Sig. (2-tailed)
Sum of Squares and Cross-

.346**
.000

152.110

119.970

1.536

1.212

100

100

.346**

1

products
Covariance
N
Self_Made_Score

Pearson Correlation
Sig. (2-tailed)
Sum of Squares and Cross-

.000
119.970

788.190

1.212

7.962

100

100

products
Covariance
N
**. Correlation is significant at the 0.01 level (2-tailed).

DIFFERENCES IN CHARITABLE MOTIVATIONS

17

ANOVA returned a significance of 0.041. Because this number is less than 0.05, this
indicates that in this sample, the null hypothesis can be rejected. A Pearson’s correlation
coefficient of 0.345 indicates a moderate positive correlation between the variables.
Impact Investor Status
Table 9
ANOVA Results for Top 100 Sample Using Impact Investor Status as Dependent Variable
ANOVA
Impact_Investor
Sum of Squares
Between Groups

df

Mean Square

2.007

9

.223

Within Groups

13.383

90

.149

Total

15.390

99

F

Sig.

1.500

.160

Table 10
Pearson’s r Results for Top 100 Sample Using Impact Investor Status
Correlations
Self_Made_Scor
Impact_Investor
Impact_Investor

Pearson Correlation

1

Sig. (2-tailed)
N
Self_Made_Score

Pearson Correlation

e
-.065
.518

100

100

-.065

1

Sig. (2-tailed)

.518

N

100

100

The significance of 0.160 indicates that the null hypothesis cannot be rejected for the
ANOVA test. The Pearson correlation coefficient of -0.065 indicates no significant
correlation between the variables.

DIFFERENCES IN CHARITABLE MOTIVATIONS

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Discussion
The statistical findings reveal that, when using a random sample from the 2019
Forbes 400, there is no significant difference in charitable giving between billionaires
who made their own wealth and those who inherited their wealth. When using a sample
of the top 100 billionaires from the Forbes list, there is a moderate difference in
charitable giving between these two types of billionaires. However, this difference only
exists when utilizing Forbes’ philanthropy score to measure charitable giving, rather than
utilizing impact investor status. The philanthropy score can be considered a more
comprehensive measurement of charitable giving, as it considers both lifetime giving and
giving in proportion to overall wealth (Cam, 2018). Thus, the finding from Harris (2016)
that self-made wealth has a stronger link to inherited wealth only holds true in 2019
under certain sampling constraints.
This study reveals another interesting issue concerning the charitable giving of the
ultra-wealthy when considering the differences between the sample of the 100 wealthiest
individuals and the random sample. As discussed in the methodology section, both
samples had similar distributions of billionaires with self-made wealth and those with
inherited wealth. However, while each sample had a normal distribution of philanthropy
scores, each sample skewed slightly in opposite directions. There are more billionaires
who earned philanthropy scores of 4 and 5, the two highest possible scores, in the top 100
sample than in the random sample. In the top 100 sample, 40% of the billionaires fall into
these top two categories, while only 20% of the random sample do. Additionally, only 27
billionaires received the highest philanthropy score of 5 in the entire Forbes 400 list. 63%
of these 27 billionaires are present in the top 100 sample, while only 30% are in the

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random sample. This could imply that, even while both samples had similar distributions
of self-made scores and both had normal distributions of philanthropy scores, the random
sample may not be an accurate representative of the group as a whole. However, this
difference could imply that billionaires are more likely to donate when they have more
wealth.
This finding has interesting implications for the study of charitable giving of the
ultra-wealthy. It is possible that billionaires in the top 100 of the Forbes 400 list donate
more because they are the most visible to the public and thus are subject to more scrutiny
for their possession of massive wealth. This motivation is comparable to the accounting
theory of political cost. The political cost theory hypothesizes that “managers of
corporations exposed to regulatory attention have incentives to manage earnings (e.g., by
manipulating accounting accruals) in order to reduce the likelihood and/or the amount of
these political costs,” political costs being “government-imposed wealth transfers” such
as taxes (Makar, Alam, & Pearson, 1996, p. 35). Similarly, ultra-wealthy individuals who
are exposed to a great deal of attention may be motivated to avoid costs associated with
their wealth, including political costs that could reduce their wealth or social costs that
could impact their reputation. The social costs associated with possessing extreme wealth
and the subsequent attempts of the ultra-wealthy to justify possession of their wealth have
been examined by other researchers. Through interviews of over 100 wealthy American
philanthropists, Odendahl (1990) found that wealthy individuals are hesitant to discuss
their wealth and often refer to their lifestyles as “comfortable” or “normal.” Additionally,
many of the wealthy philanthropists viewed charity as an obligation. In a more recent
study, Sherman (2017) interviewed dozens of wealthy individuals, who she describes as

DIFFERENCES IN CHARITABLE MOTIVATIONS

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“express[ing] a deep ambivalence about identifying as affluent” (para. 6). Sherman notes
that “wealthy people must appear to be worthy of their privilege for that privilege to be
seen as legitimate” (para. 19), including how much they donate to charity, but she notes
that these judgements ultimately distract us from the systematic issues that allow certain
individuals to accumulate more wealth than they could spend in a lifetime. Thus, the
ultra-wealthy may feel obligated to engage in philanthropy to justify their massive wealth
to the public.
Others have noted that the ultra-wealthy may donate to align themselves with a
certain public image, which would be especially appropriate for billionaires in the top
100 who are most visible to the public. Currid-Halkett (2017), professor of public policy
at the University of Southern California, coins the phrase “inconspicuous consumption”
to contrast with Thorstein Veblen’s “conspicuous consumption” and to refer to the way in
which the modern wealthy showcase their wealth through intangible purchases such as
education, healthcare, and philanthropy. She argues that Veblen’s concept of
“conspicuous consumption,” coined in 1899, is outdated due to the increased accessibility
of consumer goods. Thus, for the most publicly visible wealthy individuals, charitable
donations can be a way to publicly display their fortunes while simultaneously, as
discussed by Odendahl and Sherman, ameliorate guilt associated with the possession of
great wealth. Ariely, Bracha, and Meier (2007) found that image motivation trumps even
monetary motivation in charitable decisions, while Whillans, Caruso, and Dunn (2017)
found that wealthy individuals respond better to charitable requests that emphasize
individual impact rather than community impact. Thus, the most visible wealthy
individuals may be motivated to donate more than less visible wealthy individuals

DIFFERENCES IN CHARITABLE MOTIVATIONS

21

because donating establishes their own public image as a philanthropist. Much of the
philanthropy of the wealthy aims to make up for shortcomings in governmental
programs. Burak (2017) points out that becoming involved in public policy would be a
more effective way for such philanthropists to create change, but this strategy would not
provide the same image enhancement that donations offer. Dees (2012) notes that the
wealthy may be motivated to donate enough that they will be recognized for their
contribution, but not enough to remove the need for continued donations and thus
continued recognition of the donator. Supporting this, Harbaugh (1998) found that, in a
study of publicly available records of donations from charities, donors are inclined to
donate at or slightly above the minimum amount necessary to qualify for a certain
category.

DIFFERENCES IN CHARITABLE MOTIVATIONS

22

Conclusion
The things that motivate ultra-wealthy individuals are difficult to determine.
Direct surveys and interviews may not fully reveal them, as the wealthy may be hesitant
to admit to less-than-altruistic motivations. The motivations behind why the wealthy
donate are likely not tied to only a few easily identifiable factors. This study speculates
on the importance of a few different possible motivations of the wealthy to donate,
including a desire to give back to programs that they have personally benefitted from (in
the case of self-made billionaires) and desire to enhance their image or avoid certain
political or social costs. The finding that billionaires in the top 100 of the Forbes 400
were more philanthropic than billionaires in the random sample has implications for
future research. Future research focusing on the impact of fame or visibility to the public
may be useful for not-for-profit organizations as they strategize who and how to target for
donations. This study also raises the question of the effectiveness of donations from
wealthy private citizens compared to tax-raised money. One limitation of this study is
that it assumes that Forbes’s data is accurate and reliable. Future research could test for
differences in philanthropy between billionaires with self-made and inherited wealth
using different data to measure the individuals’ philanthropy and degree to which they
made their own wealth. Another limitation of this study is that it did not control for
demographic variables that may have impacted charitable giving, such as age or marital
status. Future studies could analyze this data using a regression-based model in order to
control for these types of variables. Overall, this study raises several interesting questions
about the charitable behavior of billionaires that have implications for future research.

DIFFERENCES IN CHARITABLE MOTIVATIONS

23

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DIFFERENCES IN CHARITABLE MOTIVATIONS

26

Appendix
Random Sample
Name
Larry Page
Jim Walton
Alice Walton
Rob Walton
Michael Dell
Jacqueline Mars
Laurene Powell Jobs & family
Elon Musk
Steve Cohen
Donald Newhouse
Philip Anschutz
Thomas Frist, Jr. & family
John Menard, Jr.
Stewart and Lynda Resnick
George Soros
Micky Arison
Shahid Khan
Richard Kinder
David Green & family
James Goodnight
Edward Johnson, III.
J. Christopher Reyes
Jude Reyes
Patrick Soon-Shiong
Marc Benioff
Katharine Rayner
Margaretta Taylor
Milane Frantz
John Overdeck
David Siegel
Tom Gores
David Sun
John Tu
Bruce Kovner
Henry Samueli
Chase Coleman, III.

Philanthropy
Score
4
4
3
1
4
1
5
3
3
2
5
2
1
3
5
3
2
3
4
3
3
3
3
3
4
3
3
2
3
2
3
2
2
4
3
2

Self-Made
Score
8
2
1
4
8
2
2
8
8
5
5
7
9
8
10
5
10
8
10
8
5
8
8
9
8
1
1
1
8
8
8
10
9
9
9
7

Impact
Investor*
0
1
1
0
1
0
1
0
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0

DIFFERENCES IN CHARITABLE MOTIVATIONS
Mitchell Rales
Julian Robertson, Jr.
Nathan Blecharczyk
Barry Diller
Jack Dorsey
John Paulson
Eric Smidt
Rupert Johnson, Jr.
Ken Langone
Gwendolyn Sontheim Meyer
Thomas Pritzker
Jerry Speyer
Jon Stryker
H. Fisk Johnson
S. Curtis Johnson
Joe Mansueto
Min Kao & family
Donald Sterling
David Bonderman
Marian Ilitch
Bobby Murphy
Meg Whitman
Jonathan Gray
Randall Rollins
John Sall
Lynsi Snyder
Mary Alice Dorrance Malone
Lynn Schusterman
Charles Simonyi
Arturo Moreno
Romesh T. Wadhwani
Noam Gottesman
David Rubenstein
Richard Sands
Steve Wynn
Thai Lee
Jimmy Haslam
Michael Rubin
Ty Warner
Mortimer Zuckerman
Bennett Dorrance

5
5
2
3
3
4
2
3
4
1
2
3
4
2
2
2
2
1
2
3
2
3
3
2
3
1
1
5
3
2
3
3
4
2
2
1
2
1
3
4
2

7
8
8
9
8
9
10
4
9
1
4
8
1
3
1
8
8
8
7
9
8
6
6
3
8
3
2
1
6
8
8
7
9
4
8
9
3
8
10
8
2

27
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0

DIFFERENCES IN CHARITABLE MOTIVATIONS
Eric Lefkofsky
Daniel Loeb
Alan Trefler
Edward DeBartolo, Jr.
Phil Ruffin
Oprah Winfrey
Norman Braman
Daniel Pritzker
Warren Stephens
David Walentas
George Bishop
Doris Fisher
T. Denny Sanford
Evan Williams
Lee Bass
Ben Chestnut
H. Ross Perot, Jr.
Jeffrey Gundlach
Chris Larsen
Chad Richison
Julio Mario Santo Domingo, III.
Ted Turner
Elaine Wynn

3
3
2
3
1
4
3
2
1
2
1
3
5
3
2
1
2
2
2
1
1
5
3

28

8
7
8
5
8
10
9
1
4
10
7
7
9
9
4
8
4
8
8
9
1
5
8

0
0
0
0
0
0
0
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0

*0 indicates no Impact Investor designation. 1 indicates Impact Investor designation.

Top 100 Sample
Name
Jeff Bezos
Bill Gates
Warren Buffett
Mark Zuckerberg
Larry Ellison
Larry Page
Sergey Brin
Michael Bloomberg
Steve Ballmer
Jim Walton
Alice Walton
Rob Walton

Philanthropy
Score
2
5
5
5
4
4
4
5
4
4
3
1

Self-Made
Score
8
8
8
8
9
8
9
8
6
2
1
4

Impact
Investor*
0
1
0
1
0
0
0
0
1
1
1
0

DIFFERENCES IN CHARITABLE MOTIVATIONS
Charles Koch
Phil Knight & family
Sheldon Adelson
Michael Dell
Jacqueline Mars
John Mars
Jim Simons
Laurene Powell Jobs & family
Elon Musk
Rupert Murdoch & family
Leonard Lauder
Ray Dalio
Len Blavatnik
Lukas Walton
Stephen Schwarzman
Carl Icahn
Donald Bren
Eric Schmidt
Abigail Johnson
Steve Cohen
Pierre Omidyar
Donald Newhouse
Ken Griffin
David Tepper
Dustin Moskovitz
Philip Anschutz
Thomas Frist, Jr. & family
John Menard, Jr.
Charles Ergen
David Duffield
Gordon Moore
Jan Koum
Andrew Beal
Stanley Kroenke
Jim Kennedy
Blair Parry-Okeden
Hank & Doug Meijer
Stewart and Lynda Resnick
Harold Hamm & family
Jerry Jones
George Soros

4
4
4
4
1
2
5
5
3
1
4
4
3
2
3
4
4
3
3
3
5
2
4
3
5
5
2
1
3
4
5
5
1
1
4
3
3
3
2
2
5

5
8
10
8
2
2
8
2
8
5
5
8
9
1
8
9
8
6
3
8
8
5
8
8
8
5
7
9
8
8
8
10
8
6
4
1
3
8
10
8
10

29
0
0
0
1
0
0
0
1
0
0
0
1
0
1
0
0
0
1
0
0
1
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1

DIFFERENCES IN CHARITABLE MOTIVATIONS
Christy Walton
Micky Arison
David Geffen
Shahid Khan
Tom & Judy Love
Leon Black
Ronald Perelman
Charles Schwab
Stephen Ross
John Doerr
Richard Kinder
Ann Walton Kroenke
David Green & family
John Malone
David Shaw
James Goodnight
Herbert Kohler, Jr. & family
Diane Hendricks
Edward Johnson, III.
George Kaiser
Robert Kraft
Steven Rales
Eli Broad
Jim Davis & family
Nancy Walton Laurie
J. Christopher Reyes
Jude Reyes
John A. Sobrato & family
Patrick Soon-Shiong
Israel Englander
Marc Benioff
Daniel Gilbert
James Chambers
Bernard Marcus
Robert Pera
Katharine Rayner
Margaretta Taylor
Dannine Avara
Scott Duncan
Milane Frantz
Ralph Lauren

1
3
5
2
1
3
3
3
4
2
3
1
4
3
2
3
1
2
3
5
4
3
5
3
1
3
3
4
3
3
4
4
3
5
1
3
3
2
2
2
3

1
5
9
10
9
8
7
8
8
8
8
1
10
8
8
8
4
9
5
5
8
7
9
8
1
8
8
7
9
9
8
8
1
10
8
1
1
1
1
1
9

30
1
0
0
0
0
0
0
0
0
1
0
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
0
1
1
0
0
0
0
0
0
0
0
0

DIFFERENCES IN CHARITABLE MOTIVATIONS
Dennis Washington
Randa Duncan Williams
George Lucas
John Overdeck
George Roberts
David Siegel

4
2
5
3
3
2

10
3
8
8
8
8

31
0
0
0
0
1
0

*0 indicates no Impact Investor designation. 1 indicates Impact Investor designation.