Here’s a paradox. Since 2010, more than 200 billionaires have signed the Giving Pledge, promising to give away most of their money in their lifetimes. Yet the same billionaires keep getting richer.
Michael Bloomberg, Mark Zuckerberg, Elon Musk and others cannot — or do not — give their money away fast enough.
Tesla customers will not be entirely surprised to hear Mr Musk is behind schedule. But what about 84-year-old corporate raider Carl Icahn? When he signed the pledge in 2010, he was worth $11bn — now he’s worth $20bn. Maybe someone needs to buy an activist stake in him, and put management on the correct course.
This week one pledge signatory upped the pace. MacKenzie Scott, the novelist former wife of Amazon founder Jeff Bezos, revealed she’s given away more than $4bn since July, mainly to groups tackling food insecurity and inequality. Even so, the pandemic surge in Amazon shares means her wealth has grown by about $25bn since last year’s divorce. She’d need to give away almost one Princeton endowment to get back to square one. At least she seems keen to do so.
I’m not sure about some others. Did they sign the pledge just to stop Mr Buffett nagging them? Some have wealth tied up in shares, but there are ways round that. Maybe they just haven’t got around to it. Or maybe some wealthy individuals don’t trust their children not to need billions of dollars in bailouts — an understandable stance if you’re Donald Trump.
Logistically, ridding yourself of billions is not easy, unless you try to build a high-speed railway from London to Manchester or launch a late centrist campaign for the Democratic presidential nomination (there’s always 2024, Mr Bloomberg). Andrew Carnegie complained that giving away money “involves harder work than ever acquisition of wealth did”.
But the slow pace is taking the shine off billionaire philanthropy. First, it shows just how unequal the economy is — reminiscent, indeed, of Carnegie’s era. Second, it raises the possibility that at least some giving pledges will be reneged upon: who knows what’s in these billionaires’ wills? Third, it would simply be more efficient to address racial injustice, environmental destruction and other problems now, before they get worse, rather than wait for a convenient time in the schedule.
Chuck Collins, an inequality expert at the Institute for Policy Studies think-tank, says a “wealth defence industry”, including asset managers and tax lawyers, have a vested interest in the rich not giving their money away outright. Instead, legacy foundations are created, often continuing the donor’s control and prestige.
But there is one shining example of wealth un-creation. Chuck Feeney, who co-founded Duty Free Shoppers Group, recently completed giving away nearly all of his $8bn. His “giving while living” showed the value of acting quickly: he gave to Vietnam’s health system, which has excelled during the pandemic.
Two things explain Mr Feeney’s success. First is his competitiveness. Second, more importantly, is his frugality. “I don’t dislike money, but there’s only so much money you can use,” he has said. He only owned one car, a second-hand Jaguar, and flew economy class. He kept just $2m for his and his wife’s retirement. (Warren Buffett has left each of his three children a $2bn foundation.)
Until billionaires realise they don’t need to keep $100m as insurance, let alone $1bn, their philanthropy will always have one foot on the brake. The virtue of philanthropy isn’t just about how much you say you’ll give — it’s about how fast you give it, and how much you hold back. Maybe Ms Scott can create a “Given Pledge” to nudge her fellow billionaires along. If not, I suppose we could start taxing them.
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