How could giving away at least $115 billion to charity win anything but universal, flattering praise, especially in a post-recession age where many charities are in desperate need? Here’s how.
America’s two richest men, Bill Gates and Warren Buffett, plan to give away half of their fortunes (worth a combined US$90 billion), and last week announced they’ve convinced 38 other billionaires to do the same by signing what they’re calling the “Giving Pledge.” The list includes New York City Mayor Michael Bloomberg, media mogul Ted Turner, film director George Lucas and Oracle co-founder Larry Ellison.
Some critics, however, have questioned how effective donations are coming from the ultra-rich. Pablo Eisenberg, a senior fellow at the Georgetown Public Policy Institute, argues in an article for the Chronicle of Philanthropy that the Gates-Buffett effort could “intensify the inequities that exist both in the nonprofit world and in the rest of society.” The rich “give their biggest donations almost exclusively to universities and colleges, hospitals and medical centres, and arts institutions,” but rarely make large donations to “social service groups, grassroots organizations, or nonprofit groups that focus on the poor or minorities.” Many of those charities also aren’t equipped to handle big donations, note experts.
But it’s hard to fault the effort, which Gates and Buffett kicked off at a secretive dinner for billionaires last year. They personally made calls to almost 80 people from the Forbes 400 wealthiest Americans list to convince them to pledge. The combined $230 billion net worth of the 40 billionaires signed on to the pledge also sets a important example at a time when donation levels in both the U.S. and Canada have experienced sharp declines.
Buffett, fortunately, doesn’t appear to be listening to the critics. He has promised to continue trying to sign up his fellow billionaires, including those outside of the U.S. That could include a few more of Canada’s 55 billionaires (the lone Canadian on the list is Montreal-born Jeff Skoll). “Every saint has a past, every sinner has a future,” says Buffett. “We’ll keep on working.”