High-Net-Worth Individuals Gave $5.8 Billion to COVID-19 Philanthropy in 2020

Philanthropy is a top hobby for wealthy individuals, and while there is always a need for giving, philanthropy has taken on a new importance over the past 18 months. 

High-net-worth individuals play an outsized role in philanthropy and continue to do so amid the COVID-19 pandemic. Globally, they donated $5.8 billion in direct response to COVID-19 in 2020, accounting for 27% of all COVID-19 philanthropy, according to the Center for Disaster Philanthropy.

There's more to the story of how high-net-worth individuals responded to the pandemic through philanthropy, so read on for additional insights.

Note: in this article, we'll use the following definitions:

• High-net-worth (HNW) individuals: those with a net worth over $5 million.
• Very-high-net-worth (VHNW) individuals: those with a net worth between $5 and $30 million.
• Ultra-high-net-worth (UHNW) individuals: those with a net worth over $30 million.

Key findings

• High-net-worth individuals gave $5.8 billion in philanthropic funding for COVID-19 in 2020 -- 27% of all COVID-19 philanthropy that year. 
• In 2020, ultra-high-net-worth individuals gave, on average, over $2 million each to COVID-19- and social-justice-related causes. Overall, they were most likely to support educational initiatives in those areas. 
• Five donors made philanthropic donations of over $1 billion in 2020: Jeff Bezos, MacKenzie Scott, Michael Bloomberg, Philip and Penelope Knight, and Jack Dorsey. Scott was responsible for nearly all of the $968 million of COVID-19 philanthropy that high-net-worth individuals designated for BIPOC communities
• Google was the sole corporation to give more than $1 billion in COVID-19-related philanthropy.
• The Bill & Melinda Gates Foundation, The Rockefeller Foundation, and Jack Dorsey's Start Small LLC each gave $1 billion toward COVID-19 philanthropy in 2020. 

High-net-worth individuals gave $5.8 billion worth of COVID-19-related philanthropic funding in 2020

HNW individuals made $5.8 billion in COVID-19-related philanthropic donations in 2020, according to data collected from the Center for Disaster Philanthropy. That amounted to 27% of philanthropic funding for COVID-19 among major donor groups.

Only corporations and corporate foundations combined gave more with roughly $9.4 billion, worth about 44% of donations among major donors. 

Two other data points suggest that high-net-worth donors are powerhouse givers. While they were responsible for over a quarter of donations by value among major donor groups, HNW individuals composed just 4% of donors among major donor groups and distributed only 1% of gifts given, which are defined by the Center for Disaster Philanthropy as publicly announced donations above $50,000. 

Philanthropic funding for COVID-19 by donor type: 2020

The average annual giving in 2020 from ultra-high-net-worth individuals to COVID-19-related causes or social justice-related causes was over $2 million

Ultra-high-net-worth philanthropists that gave to COVID-19-related causes or social justice-related causes between January through October 2020 gave, on average, over $2 million, per data collected by Wealth-X. 

Wealth-X (2020). "COVID-19 Philanthropy: Spotlight on Major Giving in 2020."

Ultra-high-net-worth donors were most likely to give to educational causes in their area of giving, as well as healthcare and medical research, social services, and arts and culture. Unsurprisingly, all areas that have been impacted by the pandemic. 

Percentage of philanthropists who contributed to specific sectors

Five donors gave philanthropic awards of over $1 billion in 2020

Among the high-net-worth philanthropic community, five donors stood out by giving over $1 billion in 2020: Jeff Bezos, MacKenzie Scott, Michael Bloomberg, Philip and Penelope Knight, and Jack Dorsey. 

They focused on a variety of causes:

• Jeff Bezos made headlines by pledging $10 billion to establish the Bezos Earth Fund and $100 million to Feeding America's COVID-19 Response Fund. 
• MacKenzie Scott donated over $5 billion to a variety of charities and causes, from COVID-19 relief and education with a focus on historically black colleges to social justice and gender equity. 
• Michael Bloomberg devoted funds to COVID-19 relief and the pandemic's impact on existing inequalities. 
• The Knights gave to their own foundation and the University of Oregon. 
• Jack Dorsey seeded his own foundation, Start Small LLC, with roughly $1 billion.

MacKenzie Scott was responsible for nearly all of the $968 million of COVID-19 philanthropy that high-net-worth individuals designated for BIPOC communities

MacKenzie Scott accounted for almost all of the $968 million in specific COVID-19 philanthropic contributions that high-net-worth individuals gave to black, indigenous, and other people of color communities, per the Center for Disaster Philanthropy. 

The pandemic not only exacerbated many inequalities that minority groups face -- it occurred as social and racial justice movements picked up steam across the United States.

The only other high-net-worth donor to designate COVID-19 philanthropy specifically to BIPOC communities was Colin Kapernick, according to the Center for Disaster Philanthropy. 

Scott and Kapernick were responsible for 44% of COVID-19 philanthropy that specifically designated funds for BIPOC communities, more than any other major donor type. 

Overall, major donors designated nearly $1.5 billion for BIPOC communities, 35% of all COVID-19 philanthropy. 

COVID-19 philanthropy specifically for BIPOC communities

Google was the only corporation to give more than $1 billion in COVID-19-related philanthropy

Corporations are significant players in COVID-19 philanthropy, although only Google gave more than $1 billion in 2020. 

ByteDance, the Chinese company behind TikTok, gave $436.8 million while the Wells Fargo & Company Contributions Program gave $400 million.

Seven of the top ten corporate donors are headquartered in the United States. The top corporate donors outside the United States were ByteDance, along with Itau Unibanco, the largest bank in South America, located in Brazil, and Royal Holding Al Mada, a private investment fund controlled by the Morrocan royal family. 

Philanthropic funding for COVID-19: Top corporate donors

Two independent foundations gave $1 billion to COVID-19 philanthropic efforts: The Bill & Melinda Gates Foundation and The Rockefeller Foundation

Some high-net-worth individuals and families opt to funnel their philanthropy through their own foundations, two of which gave over $1 billion in COVID-19 philanthropy: The Bill & Melinda Gates Foundation and The Rockefeller Foundation.

Independent foundations by total COVID-19 funding: 2020

Jack Dorsey's Start Small LLC received the most COVID-19 philanthropic funding in 2020: $1 billion

Start Small, the philanthropic foundation spun up by Jack Dorsey, received $1 billion from the co-founder of Twitter and Square to put toward COVID-19-related causes, making it the top recipient of COVID-19 philanthropy in 2020. 

The donation from Dorsey was worth roughly one-fifth of his net worth at the time and stands out as among the largest donations from an individual in response to the pandemic.

Dorsey's approach has turned some heads both because of the magnitude of money available to be dispersed through Start Small as well as the speed, transparency, and relatively little bureaucracy associated with the foundation. 

Other top recipients include the Gavi Alliance, which aims to make vaccines more available in low-income countries, the COVID-19 Therapeutics Accelerator, which is working on making new, accessible therapeutics to fight COVID-19, and Feeding America, a network of food banks in the United States that received $100 million from Jeff Bezos in 2020. 

Top recipients of COVID-19 philanthropic funding: 2020

The role of high-net-worth donors in philanthropy

Philanthropy today has taken on a new importance. In many areas, and in light of a decline in corporate giving and donations from non-high-net-worth, high-net-worth individuals have stepped up. 

With more giving comes more scrutiny, and there's a growing conversation about the effects that philanthropy driven by fewer and fewer donors may have on the independence of charitable organizations that rely on those donations. More attention is being paid to which causes are receiving funding from high-net-worth individuals, how those causes are selected, and whether they reduce inequality or tackle the root causes of the problems they seek to address.

Some high-net-worth individuals, like Jack Dorsey and MacKenzie Scott, have been explicit in shaping their charitable efforts to respond to critiques of the now outsized role that high-net-worth individuals play in philanthropy. 

Regardless of the debate over high-net-worth giving, at the end of the day, studies have found that most charity is driven by altruism-that people are simply driven to help those in need regardless of what they get in return. 

Studies have also found that financial constraints are the primary barrier to giving. 

By making the world smarter, happier, and richer, The Motley Fool hopes to enable more individuals to give back. The Motley Fool Foundation, a new public charity with the goal of unlocking financial freedom for all, will launch later this year, and extend The Motley Fool's long tradition of giving.

Sources

• The Atlantic (2018). "Against Big Philanthropy."
• The Center for Disaster Philanthropy (2021). "Philanthropy and COVID-19: Measuring one year of giving."
• The Chronicle of Philanthropy (2021). "The Philanthropy 50."
• The Conversation (2017). "5 reasons why people give their money away – plus 1 why they don't."
• The Financial Times (2018). "Is wealthy philanthropy doing more harm than good?"
• MacKenzie Scott (2021). "Seeding by Ceding."
• Michael & Susan Dell Foundation (2021). "Dell Foundation Covid-19 Projects."
• The New York Times (2020). "Jack Dorsey Vows to Donate $1 Billion to Fight the Coronavirus."
• Wealth-X (2020). "COVID-19 Philanthropy: Spotlight on Major Giving in 2020."
• Wealth-X (2021). "Interests, Passions and Hobbies of the Wealthy in 2021."