I’ve been thinking about the “Giving Pledge,” a campaign championed by Bill Gates and Warren Buffett. They're asking fellow members of the uber rich to pledge 50+ percent of their fortunes to charities—more money to philanthropy and less to family. Among the billionaires who have taken the “pledge” are Larry Ellison, Michael Bloomberg, Tom Monaghan, Oprah Winfrey, George Soros and other members from the who’s who of wealth.
These pledges are extraordinary acts of generosity.
Nobody is forcing Warren Buffett to give away 99 percent of his fortune. Nobody is forcing forty or so families to take the pledge. You can read their rationales on the Giving Pledge Website—it’s the kind of thinking that illustrates why they were able to build great fortunes in the first place.
But how will the Giving Pledge address our country’s greatest needs?
Like infrastructure…
Personally, I would be happy to rename the George Washington Bridge if somebody fixes the congestion between New York and New Jersey during rush hour. I doubt George would mind either. But to my knowledge, nobody is standing in line to donate a bridge at the cost of $6 or $7 billion.
Or protection…
Sometimes, governments write checks that no one else will. Is there a charity that underwrites police training? Or one that buys bullets for our soldiers in Iraq and Afghanistan? Or new computers for the Pentagon?
Outright gifts to a charity, no matter how well intentioned, may not pay for what we need most. And they definitely bite into the government’s tax revenues.
Fortune Magazine estimated that $600 billion will flow to charities, if every member of the Forbes 400 takes the Pledge. That’s a beautiful thing, right? But what about Uncle Sam and the US deficit? If estate taxes return to, say 40 percent, that $600 billion costs our government 240 billion in tax revenues—about 6.8 percent of total spending or 1.8 percent of our national debt.
Would you prefer someone to pay down $20 billion of the US debt or donate their fortune for the humane treatment of fire ants?
I know the preceding question sounds hyperbolic. And there are many reasons to wrest control from Uncle Sam for how money is spent. Some arguments include: “Government is inefficient.” “The families earned the money—they should control the disposition.” “Why should anybody be forced to flush money down a black hole?” "Gifts, from many different donors, will fund a broad range of social needs." I could go on. But I also remember how Leona Helmsley’s last wishes raised eyebrows a few years back.
Philanthropy, like anything else, needs a game plan.
Perhaps the government should increase the tax advantages of giving to target areas like education, alternative energy or that new bridge I mentioned earlier. The tax incentives would encourage money to flow where we need it the most.
Or perhaps it would be simpler for the US government to campaign for its share of philanthropic contributions. Click here to reduce the US government debt.
The New York Times describes my novels as “money porn,” “a red-hot franchise,” and “glittery thrillers about fiscal malfeasance.” Through fiction I explore the dark side of money and the motivations of those who have it, want more, and will steamroll anybody who gets in their way.
Mr. Vonnegut does a great job of pointing out what may not occur to all of us — that there is more than one way to look at just about any situation . Here we have extraordinary acts of generosity, which are presumably aimed at well-deserved recipients, and yet there are complications and flip sides that make one stop and think.
Thanks for a thoughtful post about The Giving Pledge. I think your analysis raises some interesting questions about the nature of philanthropy and how it best fits into the overall framework of improving society and addressing the most pressing needs of a country and its citizens.
According to The Giving Pledge website, the pledge itself is no more or less than a “moral commitment to give, not a legal contract. It does not involve pooling money or supporting a particular set of causes or organizations.” What it does is enshrine the commitment of donors to “give the majority of their wealth to the philanthropic causes and charitable organizations of their choice either during their lifetime or after their death.”
That leaves a wide interpretation of giving between, say, someone like George Lucas (“I believe in the artisan school of learning, through apprenticeships and Aristotelian questions and discussion…Ultimately, that is why I created Edutopia and the George Lucas Educational Foundation.”) and Barron Hilton (“Today we concentrate on a few strategic initiatives: Safe water development, homelessness, children, substance abuse and Catholic sisters. Other major programs include blindness prevention, hotel and restaurant management education, multiple sclerosis, disaster relief and recovery, and Catholic schools.”)
(FYI, the quotes are excerpts from donor letters at TheGivingPledge.org)
While each pledge commitment is laudatory in its own way, I’m afraid none of them will provide Norb with that new bridge he so dearly wants (nor indeed my lifelong dream of a Montreal without humungous potholes).
The weakness in The Giving Pledge is then perhaps the fact that it offers the best of intentions — without necessarily providing society with the best bang for its buck. Me? I’m all for the humane treatment of fire ants but I also want to see the deficit addressed and at least see some attempt (however small) to start paying down debt.
Generally wealthy individuals don’t like to be told what to do or who to give their money to. I respect that but any good entrepreneur also knows that a successful project must have an objective, a timeline, benchmarks, measurement and accountability.
The Giving Pledge should be no exception. It does indeed need a game plan.
The most astute comment I have read on the pledge website comes from Eli and Edythe Broad. Their letter states, in part, “Before we invest in something, we ask ourselves three questions that guide our decision:
1. Will this happen without us? If so, we don’t invest.
2. Will it make a difference 20 or 30 years from now?
3. Is the leadership in place to make it happen?
Philanthropy is hard work. Many people think it’s easy to give money away. But we are not giving money away. We want our wealth to make a measurable impact”
…all the best and I hope the editing is going well,
Andrew
Thanks, Andrew. I particularly like point 1 from the Broads. It begs the question whether government can pay down debt w/o them.
Best.
Thanks, Andrew. I particularly like point 1 from the Broads. It begs the question whether a government can pay down debt w/o them.
Best.