83. Warren Buffett's Giving Pledge

Welcome back to Spend Donate Invest! This is a podcast exploring the topic of whether we can reflect our activism, our beliefs, our societal values in what we’re doing with our money on a daily basis.

Today we’re going to be talking about The Giving Pledge which has been around for about 10, 15 years. So this is how it works:

If you are a billionaire, you can sign The Giving Pledge, which states your intention to give at least half of your net worth away, either when you pass away, or while you’re alive. It was started by a group of billionaire friends Warren Buffett, Melinda French Gates, and Bill Gates. And the first year that it kicked off, around 40 billionaires took the pledge.

What’s really clever about The Giving Pledge is that it creates status around philanthropy. It is not a legally binding contract, it is a public declaration. Like when Michael Scott walks into the office and says “I declare bankruptcy!” It is not a legally binding contract. Like the ice bucket challenge that took over social media a few years ago, there’s no follow up to see if anyone actually donated any money.

Nowadays, there are 241 people who have signed the pledge. The youngest are in their 30s and the oldest are in their 90s. Most of the pledgers are in the United States, but there number of billionaires signing up in other countries is growing. They meet once a year to talk about best practices in giving. Boy would I love to go to that meeting. Someone invite me please. I have some things to say! Spoiler I’m going to tell them to stop taking advantage of loopholes and to just pay taxes.

The 241 people who have signed the pledge are encouraged to write a public letter explaining why they want to do this. And if you go to The Giving Pledge website you can see who these pledgers are and read those letters. I spent hours reading them, I just could not look away. My favorite quote was from one billionaire who called the program “competitive philanthropy” which, I will leave to the philosophers to unpack.

You’ve probably heard of a lot of the pledgers. For example, I saw Anne Wojcicki on there, the founder of 23andMe. Chris Sacca the guy on Shark Tank. MacKenzie Scott. She probably wrote my favorite letter, she had a beautiful analogy about not saving your precious ideas for later, share them now. Robert F. Smith is on there, he’s the billionaire who surprised all the graduates at Morehouse that he was helping to pay their student loans, HRH Prince Alwaleed Bin Talal Bin Abdulaziz AlSaud is on there, he is a Saudi royal who seems to go in and out of favor, but wow if you want to read a dramatic wikipedia page, google Kingdom Holding Company. Elon Musk is on there, Diane von Furstenberg, Larry Ellison, George Lucas and Mellody Hobson, and Mark Zuckerberg and Priscilla Chan. I’ll leave a link to the Giving Pledge so you can see the members and read their letters. You can sort them by geography and by the year they took the pledge. There’s absolutely zero information about whether or not they have started their giving yet or even where they are sending the money.

The Future of the Giving Pledge

Earlier I quoted one of the billionaire’s pledge letters who used the term “competitive philanthropy.” In that same letter, the billionaire says it is brilliant to “direct the same competitive instincts that these driven people employed to achieve the pinnacle of financial and social success.” To me this concept that billionaires are the richest because they were the smartest and worked the hardest just feels very dated. And I don’t just mean because it doesn’t acknowledge their privileges. It also fails to acknowledge the exploitation along the way. I think that the more updated thinking about billionaires is that somewhere along the way, the planet and our people were exploited for this type of wealth accumulation to occur. And so I just don’t know if our current and future billionaires and trillionaires will be as proud to advertise their wealth, even if it is in the context of giving some of it away. I don’t know, I’m curious to hear your thoughts on this as well. Is the need to show off, so deeply embedded in the human psyche that it will continue on, or, is there a point at which our cultural norms will shift?

Even if it does become more shameful to be so so rich while others are literally in poverty, I don’t think it will discourage the money hungry among us to try to get richer. But I do wonder if it will hurt initiatives like the Giving Pledge. I wonder if there will be a time that when billionaires expect to be applauded for giving away their wealth, if instead it will turn the spotlight towards them, exposing them to unwanted scrutiny.

Probably the most obvious critique of the Giving Pledge is that it isn’t binding at all. There’s no enforcement. There isn’t even any definition given in terms of what it means to give your money away. There are many wealthy American families that have squirreled their money in foundations and funds that are just another flavor of wealth hoarding.

Bill Gates has more money now than he did when he signed this pledge. This is true of most of the people who have signed the pledge. I have heard it said that the people who have signed the pledge have given away about 1% of their money. That’s a lot less than the 50%+ that they pledged to! And when you ask them why they say oh it is so hard to be able to make sure you’re really making a difference, they don't have measurements to be able to tell me how much impact their work is making. And yet, you find that these same people are putting money into stuff that of course isn’t measurable, like donating to their ivy league institutions, to their college football teams, etc. We’ve talked about it before on this show, it’s interesting that suddenly when it comes to nonprofit type of work, suddenly everyone’s got the magnifying glass and wants to know where each penny goes. There’s more skepticism of waste and fraud in the nonprofit and government sector, and as someone who has absolutely worked in the private sector (both within companies who are publicly traded and those who are privately owned) and the public sector (both within nonprofits as well as government work), let me tell you something, there’s waste, fraud and abuse on all sides, at every organization. There’s sometimes an assumption that because a for profit company is trying to make money, they will weed out waste and fraud, and it’s just not true. And I know that these billionaires, who have often made their money speculatively, in the stock market, by making risky investments, I don’t quite buy the argument that they find it too risky to invest in eradicating homelessness. Or hunger. Or racial injustice. Or gender equity. Or climate solutions.

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That’s all for now, I hope you enjoyed today’s episode. Let’s talk again soon!

Links
https://givingpledge.org/