The wealthiest Americans are making a major difference in solving public problems such as health and education through philanthropy, says Steve Forbes, chairman of Forbes Media.
"More than ever, individuals are funding solutions, not stop-gaps. What sparked such a sharp shift? The free markets," he writes in
The Washington Post.
"The past two decades have spawned a new wave of billionaires who have taken up the banner of social justice, sparking a golden age of philanthropy not seen since the days of Rockefeller, Carnegie and Morgan."
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A Boston College study found the 0.22 percent of families with incomes of $1 million or more accounted for 13 percent of U.S. charitable donations, Forbes notes.
"This new crop of philanthropists made their millions through business sense, entrepreneurship and capitalism," he writes. "And now, they've turned those same tools to helping others. The result is a shift toward low-cost, high-impact solutions that address the root of social ills."
Forbes cites the work of Microsoft co-founder Bill Gates and his Bill and Melinda Gates Foundation as an example. Gates "helped pioneer catalytic philanthropy — the use of free markets and capitalistic principles to address issues that otherwise go largely unaddressed," Forbes says.
He also offers praise for the Giving Pledge, launched by Gates and Warren Buffett in 2010.
More than 125 wealthy individuals and families have signed on to donate most of their wealth to charity.
"This has helped fuel a market whose dividends don't fund stockholders, but rather causes," Forbes writes.
Total charitable donations rose 4.4 percent to an estimated $335.2 billion in the United States last year from 2012, according to the Giving USA Foundation,
Forbes contributor Tom Watson reports.
Many sectors are benefiting from the increase in generosity, says Una Osili, research director at Indiana University's Lilly Family School of Philanthropy. "Giving to education, health and environmental and animal welfare organizations, in particular, have shown robust patterns in recent years," she says, according to Watson.
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