A Window into the Hearts and Minds of Billionaire Donors
Yves here. It is disappointing but far from surprising that this piece on billionaire giving has all the objectivity of an authorized biography. First, there’s no consideration of self interest beyond image burnishing and ego gratification. But one of the world’s most famous donors seeks explicit commercial quid pro quos from some of his potential recipients (I have this from an impeccable source but have been sworn to secrecy on the details). The article does at the end ‘fess up that some donors admit to wanting to remake the world along their preferred lines, but curiously does not consider that other may believe that being so open about their ambitions could undermine their efforts.
One must note that billionaires are keen to keep their wealth-sharing to voluntary efforts, as opposed to, say, supporting extremely high estate taxes beyond a threshold.
By Hans Peter Schmitz, Associate Professor, University of San Diego. Originally published at The Conversation
This push to give money to support everything from food banksto vaccine research comes a decade after the Giving Pledge, a voluntary effort to give away at least half of an immense fortune during the signatory’s lifetime, first launched.
When signatories join the Giving Pledge, they can voluntarily submit a letter explaining their commitment to philanthropy that’s posted on the internet. Together with my colleagues and fellow philanthropy scholars Elena McCollim and George E. Mitchell, I analyzed these letters to better understand how billionaires make sense of their generosity.
10 Years Old
Following the Great Recession, Microsoft co-founder Bill Gates and his wife Melinda Gates teamed up with investor Warren Buffett and a few of their wealthy friends to hatch this plan to increase giving among billionaires.
By March 2020, 120 couples, 78 single men and 11 single women had signed on. The members of the Giving Pledge represent about 10% of the more than 2,000 known billionaires in the world. To be eligible to join, an individual or a couple must have a combined net worth of US$1 billion, including assets they already donated.
Five of the 10 richest men in the United States have joined the Giving Pledge. Besides Gates and Buffett, that includes Facebook co-founder Mark Zuckerberg, Oracle co-founder Larry Ellison and the entrepreneur and politician Michael Bloomberg. Taken together, the current combined wealth of those five fortunesadds up to about $385 billion. The total wealth of everyone who signed the pledge in its first decade was at least an estimated $1.14 trillion as of the end of 2019, according to Forbes Magazine.
Insight into How the Wealthy Explain Their Giving
The letters are typically fairly short and addressed to Buffett or Gates. Many describe why the donors engage in philanthropy and identify a few favorite causes. We found that 187 of the 209 signatories have submitted them.
You cannot assume that the letters contain the true motives for making this pledge, but these missives do open a window into why these billionaires believe they should give away so much of their wealth. None referred to a desire to become more famous, for example, or openly acknowledged any sense of guilt. Yet those feelings might contribute to the personal motivation these rich people have to join the Giving Pledge.
In reviewing the letters, we found 10 distinct explanations for giving. The top five appeared in at least 20% of the letters, while the remaining five were in 10% or fewer.
A desire to be seen as grateful and altruistic dominated many of these accounts, with more than a third describing a drive to make a difference.
“Helping disadvantaged groups live decent lives in the process of creating wealth has been my personal credo,” wrote Dong Fangjun, a Chinese investor who now funds efforts to clean up China’s polluted countryside.
The second most common reason was a desire to give back.
“I have so much gratitude for being a woman in America,” wrote Sara Blakely, the founder of the Spanx undergarment company and a supporter of several women’s causes. “I never lose sight that I was born in the right country, at the right time.”
The letters also highlighted the joy of giving.
“I get tremendous pleasure from helping others,” wrote Bill Ackman, an investor and hedge fund manager who funds a wide range of arts, social justice and other kinds of nonprofits. “It’s what makes my life worth living.”
The life lessons taught by parents were another common reason these major donors say they became interested in giving.
“From as far back as I can remember, my parents taught me the importance of giving back, whether we had a little or a lot,” wrote Jim Pattison, a Canadian businessman who supports a wide range of nonprofits, including hospitals.
‘Noblesse Oblige’ and Other Less Common Motives
Many of the letters conveyed a sense of “noblesse oblige,” a French term for the idea that being wealthy creates a duty to give.
“I strongly believe that those of us, who are privileged to have wealth, should contribute significantly to try and create a better world for the millions who are far less privileged,” wrote Azim Premji, a tech industry leader who has become India’s biggest philanthropist.
Among the five least common explanations our team identified were references to principles of justice, concerns about the downside of immense inheritances, having no other use for vast wealth, religious beliefs and a sense that luck played a big role in becoming rich.
Some of the younger donors described themselves as being only stewards of their wealth. In this view, principles of justice and equality demand that the wealthy share generously.
For example, Jeff Lawson, a co-founder of LinkedIn, and his wife Erica Lawson included a quote by Bryan Stevenson, the founder of the Equal Justice Initiative: “The opposite of poverty is not wealth; the opposite of poverty is justice.”
About a tenth of the letters cited concerns over the possible harm a large inheritance could do to their own kids and grandchildren.
“We all know second- and third-generation wealth where the recipients were actually born on third base but think and act like they hit a triple,” wrote John W. “Jay” Jordan II, an American investor with three children and two stepchildren and one of the biggest donors ever to the University of Notre Dame, his alma mater.
Some pledgers said they see nothing better to do with their excessive wealth. The late real estate investors Herb and Marion Sandler, whose fortune launched the investigative news outlet Pro Publica, put it this way: “How many residences, automobiles, airplanes and other luxury items can one acquire and use?”
Religion and spirituality play a surprisingly minor role, with some exceptions.
“We were both raised in the Church, and a key theme of the Bible is the importance, the necessity, of giving,” explained Paul Tudor Jones, a hedge fund manager, and his wife Sonia Jones. The couple has made education and inequality high priorities in their giving.
Finally, a few of these big donors attributed their eagerness to give away much of their money to being aware of their good fortune. “To be repeatedly in the right place at the right time, that is the mother of all luck,” wrote Mo Ibrahim, the Sudanese telecommunications entrepreneur who invests in improving African leadership and governance.
Out To Change the World
But what sets these donors truly apart from the rest of us is what we philanthropy scholars call “hyperagency” – the desire to singlehandedly change the world in accordance with their ideas and dreams.
For example, Patrick Soon-Shiong, the surgeon and entrepreneur who owns the Los Angeles Times, the San Diego Union-Tribune and the Los Angeles Lakers, and his wife Michele B. Chan, made an ambitious statement in their letter: “Our passion, our mission is to transform health and health care, in America and beyond.”
In other words, Giving Pledge letters harbor contradictions with their messages about both ambition and humility. Many of the wealthy people who embraced this campaign have seen themselves as uniquely capable of changing the world. At the same time, they would like others to see them as modest, grateful and selfless.