Stock Boom Benefits Charities
It is a sign of the economic times. Some charitable organizations have so much money they can't give it away fast enough.
CBS News Correspondent Jerry Bowen reports.
It's a most unusual consequence of the booming stock market - not all the new millionaires but all the newly enriched philanthropic foundations.
There's no richer foundation in America than the Bill and Melinda Gates Foundation, a worldwide philanthropy saluted by Nobel laureate Nelson Mandela and bankrolled by massive infusions of Microsoft stock.
"Just a year ago, I had a small team above a pizza restaurant, and Bill Gates Sr., the father of Bill Gates that runs Microsoft, was doing a large amount of the grant making above the basement of his family home," says Patty Stonesifer of the Bill and Melinda Gates Foundation.
But after only one year and $15 billion in donations later, Stonesifer heads a $17 billion foundation providing vaccine to developing nations; computers and Internet connections to libraries in the United States and Canada; and scholarships for minority students.
Stonesifer, who made her own personal fortune as one of the early Microsoft team members, says that giving away the boss' money is hard work.
"I certainly spend a lot of nights and a lot of early morning hours puzzling over exactly what choices we should make. How do we take this incredible gift and insure that we're using it wisely?" asks Stonesifer.
Nonprofit foundations face tax penalties if they fail to give away at least 5 percent of their assets each year. That is a real challenge for the Gates foundation.
"They need to give away nearly a billion dollars a year to meet the minimum payout requirement," says Mark Kramer of the Center for Effective Philanthropy.
"And that's really about $5 million a day, every working day, all year. It's not easy to figure out what to do with that money," he adds.
And the Gates foundation is not alone. The Annie E. Casey Foundation is suddenly flush with an infusion of cash. You many know the Caseys better for the family business they started: United Parcel Service.
"As a result of the IPO of United Parcel Service and the success of that, our endowment effectively doubled overnight," says Douglas Nelson, president of the Casey foundation.
It doubled to $3.4 billion, which demands an annual giveaway of $170 million. This means more money for the daycare centers and other charities funded by the Casey foundation.
"On the one hand, there's the dilemma of how do you give away these large sums effectively. And on the other hand, these sums are really very small relative to the problems we're trying to redress in society," Kramer says.
The sums are growing by the billions, it seems, every time the opening bell rings.
Here are links to the foundations' Web pages:
Bill and Melinda Gates Foundation
The Annie E. Casey Foundation