January 2, 2022
As the year was ending, with my in-box overloaded with yearend requests for donations, an e-mail arrived from the Chronicle of Philanthropy that caught my eye. Not because they had a clever way of asking for a donation, but because they had just published their contribution to the genre of “best of” lists, 2021’s The Biggest Gifts by Individuals and Foundations.
It highlighted eleven individuals and foundations that had made the largest single donations last year, beginning with a $15 billion donation from Bill and Melinda French Gates. This handful of donations totaled $18.141 BILLION. Looking further into the Chronicle’s database we can find another 20 individuals (or their foundations) that made single gifts of at least $100 million each.
Think about 21 individual men and women (or their foundations) that have amassed enough wealth give away more than $20 billion in just 21 acts in just one year.
To put the immenseness of their wealth in context, consider that the total is larger than the national economies of almost 100 independent nations, including Georgia $16.2B, Albania $17.1B, Nicaragua $12.3B, Somalia, 5.4 NS Grenada $1B. The Gates’ single gift was larger than more than 80 of those nations.
Each of these gifts is an example of the ethic that Bill Gates and Warren Buffet championed when they encouraged their wealthy colleagues to join them in a public commitment to philanthropy. The Giving Pledge issued as a challenge to those with wealth was, they said, “inspired by the example set by millions of people at all income levels who give generously…to help shift the social norms of philanthropy among the world’s wealthiest and inspire people to give more…”
The Chronicles has highlighted these as worthy of note because they are supposedly acts of great charity, but are they really? Do they represent giving something away and making a personal sacrifice? .
Of all the needs and causes in a COVID ravaged world, in a world with growing hunger, in a world with a growing wealth gap that leaves more and more people behind, Mr. Gates and Ms. French selected one cause of greatest need, the Bill and Melinda Gates Trust, which was established to manage the assets donated to support the work of their Foundation.
That is not a typo; their headline-making gift was to increase their trust, which ended 2020 with net assets of $45,396,621,499 by another $15 billion.
Gift or donation implies giving something away. Is it a gift if you give something additional to something else you control? Mr. Gates, Ms. French, and Warren Buffet, as trustees, retain control of how their funds are utilized. So, is it a gift when they move investments from one place to another and retain control?
Is it self-sacrifice, commonly defined as the “sacrifice of one’s personal interests or well-being for the sake of others or for a cause or the sacrifice of what commonly constitutes the happiness of life for the sake of duty or other high motive…”, when Mr. Gates’ fortune grew by more than $30B between March 2020 and October 2021?
Gates and French are not anomalies; rather, they represent the noblesse oblige our modern gilded age of great wealth run rampant. Tax laws provide incentives for giving away money to organizations that can justify tax deductibility. But the wealthy have many vehicles for “giving” their money away in ways that still allow them to benefit from those funds and control them, as Gates and French have done with their money.
For many of this super-rich, there is benefit in building (or rebuilding) their reputation and in creating their own programs and monuments. For example, Phillip Knight, Nike founder, used a portion of his $61B fortune (which grew by $24.5B) to give another $.5B to the Phil and Penny Knight Campus for Accelerating Scientific Impact. Denny Sandford, who built his fortune in marketing high-interest, subprime credit cards marketed to people with low credit scores, made two separate gifts totaling $.65B to his namesake Sanford Health.
Together, these gifts represent a set of priorities that seem out of sync with the urgent needs of our nation and world. And each represents a very personal take on how to take invest for maximum societal impact.
Among these large gifts, only the one made by the world’s richest man Elon Musk was directed to the environmental crisis. And that went to supporting an effort to stimulate research interest in a controversial approach to slowing global warming that Mr. Musk has an interest in- carbon capture. Only two gifts went toward efforts related to poverty and urban decline, issues that affect communities across the nation. But 13 donors saw a university as the most pressing need and 6 saw a hospital or medical center as needing their large donations.
This is the reality of modern philanthropy. Men and women with immense wealth are empowered and incentivized to use their resources only as they see fit as they invest in our overall society. No need for any checks and balances.; no need for community input. No need to meet any requirements to be supportive of national needs and priorities. They just need a qualified tax-exempt organization to serve as a recipient. And if there is not an organization that meets their taste, one that will do exactly what the donor wants and will them the status and control they require, no problem. It is easy to just start one of their own.
The work that these donations will eventually support may prove to be incredibly significant. New disease cures may emerge; more students may be able to afford college; carbon capture may be the silver bullet needed to keep our world from becoming uninhabitable. But is the best way to get where we need to go by using our resources in this haphazard and undemocratic way? If mistakes are to be made, would it not be better if they were our collective missteps?
The rich are indeed different. Their philanthropy comes at no genuine cost. They are not debating between a gift and their next meal or their children’s college tuition. They are just using funds they have harvested from a nation that has given up fairly taxing them.
If you have great wealth, the tax deductions will be there. The self-aggrandizement will be there. The autonomy and control will be there. And the headlines will follow.
And all that comes without any need for self-sacrifice.
Ah, to be wealthy in these United States!