The Rise of the Mega Donors for Non-Profits

A noticeable trend in the nonprofit sector in recent years has been the rise of the mega donors or those super wealthy individuals who have pledged large amounts of money to the nonprofits.

Prominent among this category are Bill Gates, Warren Buffet, and Oprah Winfrey who have committed themselves to donating half of their wealth to foundations and causes that are social welfare oriented. This trend has implications for the way in which the nonprofits are funded and how they perform.

For instance, if these super rich individuals decide to give away half their wealth to nonprofits or foundations that they have themselves setup, it means that many worthy causes can be funded by them, which gives rise to the actualization of social welfare.

In other words, when the mega rich decide to donate, the result is that megabucks enter the picture leading to megaprojects in the nonprofit sector being funded.

A case in point is the Bill and Melinda Gates foundation that has taken upon itself the task of funding the healthcare services across the world including support for HIV/AIDS patients. Given the rather large amount of money that is needed for this particular cause, only extremely wealthy individuals like Bill Gates and Warren Buffet can rise to the occasion to help those HIV/AIDS patients in their hour of need.

Moreover, the fact that these foundations do a stellar job in developing countries means that the entrepreneurs and the business leaders in those countries follow the example of these super donors and this results in positive outcomes all round.

For instance, both Azim Premji and NR Narayana Murthy in India have given away a substantial portion of wealth to different foundations partly as a response to the good work that can be done with the money that they donate and partly as the result of following the example of other mega rich donors.

However, this is not to say that the entire process involved in this leads to benefits as the kind of money that is at stake means that nonprofits might be tempted to adopt lesser control and lesser oversight because of the large amounts of money involved.

Further, the kind of causes that these foundations support are largely mainstream ones and hence, the rise of the mega donors might result in crowding out smaller and lesser-known but equally important causes. This has happened in Africa where the singular obsession with HIV/AIDS has resulted in female education and female health related causes taking a backseat.

Indeed, when mega foundations get into the act, they often proceed according to corporatist principles, which mean that other nonprofits that are following a loose and a service-oriented model tend to be left out of the donor process.

Of course, even after accounting for the downsides, the fact remains that the donations by the super rich play an important role in furthering social welfare, as governments and other international bodies are unable to meet the costs of funding these initiatives.

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