Making it then giving it

Billionaires and millionaires are queuing up to publicly pledge their life savings to philanthropy in an initiative championed by Bill Gates and Warren Buffett.

Of course, the idea is not new, with entrepreneurs long following the edict of the richest man in history, Andrew Carnegie, who suggested that business people should devote the first part of their lives to creating wealth and the second part to distributing it to needy causes.

The difference this time? It’s public.

In announcing the initiative, Gates and Buffett also revealed they had persuaded 40 of the richest Americans to sign up to the campaign.

“Now, Bill and Melinda Gates and I are asking hundreds of rich Americans to pledge at least 50% of their wealth to charity,” Warren Buffett wrote in his letter to the campaign’s website.

“I think it is fitting that I reiterate my intentions and explain the thinking that lies behind them. First, my pledge: More than 99% of my wealth will go to philanthropy during my lifetime or at death. Measured by dollars, this commitment is large. In a comparative sense, though, many individuals give more to others every day.”

In some ways the campaign has served as a public announcement for work that has already taken place.

For example, Paul Allen has planned to give his considerable wealth to his family’s foundation for several years, but still signed up to the effort.

“Bill, Melinda and Warren have issued a worthy challenge to make our giving plans public, and I’m happy to add my name to the effort,” he added.

Larry Ellison, who made his fortune as the head of Oracle, is another example of the pledge crystallising work already done.

“Many years ago, I put virtually all of my assets into a trust with the intent of giving away at least 95% of my wealth to charitable causes,” he wrote.

“I have already given hundreds of millions of dollars to medical research and education and I will give billions more over time. 

“Until now, I have done this giving quietly because I have long believed that charitable giving is a personal and private matter. So why am I going public now?  Warren Buffett personally asked me to write this letter because he said I would be ‘setting an example’ and ‘influencing others’ to give. 

“I hope he’s right.”

Will it have an impact?

Online bookmakers are already inviting punters to place a bet on which wealthy individuals will join those already publicly committed – top candidates including hedge funder John Paulson and philanthropist George Soros.

Cynics are also lining up in the debate, suggesting the philanthropic pledges are being used for tax minimisation purposes and there is a lack of consultation with the public for the use of the funds, according to an article in the San Francisco Chronicle.

Regardless of the outcome, the public nature of the campaign has generated enormous public interest and provided tangible examples of private-public partnerships.

And according to New York mayor Michael Bloomberg, who has also publicly committed his wealth, the need for private individuals to contribute to the common good was paramount.

“I’ve seen just how needed – and how powerful – private donations are,” he said.

“Public-private partnerships are at the heart of our efforts to improve public health and safety, fight poverty, fix a once-broken school system, expand economic opportunity, promote the arts, protect our environment, and so much more.”

For more information visit givingpledge.org