What could be wrong with Bill Gates and Warren Buffett asking the super-rich to donate their wealth to charitable causes or foundations?
That’s the point of The Giving Pledge, an initiative Gates and Buffett officially launched last June, which set an original goal of raising something like $600 billion in charitable promises from the world’s estimated 800 or so billionaires. So far, something like 57 have made the pledge.
A lot is wrong with the Giving Pledge, says Pablo Eisenberg, a leading expert on public policy and philanthropy at Georgetown University. In an op-ed for On Philanthropy, Eisenberg specifically lists three things wrong with this approach:
- Wealthy donors tend to give their money to relatively well-off institutions like hospitals, research organizations and universities. They tend not to give to organizations directly targeting the poor, working at the grassroots level, doing activism or social services.
- Most of the donated money would go into philanthropic organizations or endowments that are not publicly accountable and are required to pay out only 5 percent of the principal annually while allowing donors to receive tax deductions for the entire amount — “At a time when we are not collecting sufficient taxes to pay for the cost of essential federal programs.”
- The consequence of the first two trends will translate into reduced services for the poor and fuel the growing gap between the rich and the poor.
Eisenberg also repeatedly takes the media to task for being simplistic cheerleaders about the Giving Pledge and for failing to examine it with a more skeptical eye:
The media, which has always treated the Gates’, Buffett, Soros and other billionaire philanthropists with kid gloves, never thought to ask about what this new money would support, or how it would do so … They never questioned whether the prospective, phenomenal growth of mega foundations, some possibly larger than Gates, might be a dangerous development for American democracy. They never asked whether these new funds would be publicly accountable, or merely managed, as with the Gates Foundation, by two or three family members, without any public discussion or political process.
That’s generally true. For my part, I’ve mostly only criticized the fact that few of the super-rich seem to want to even make a promise to someday give away half their wealth while failing to appreciate these other potential, unintended consequences.
Eisenberg does say the Giving Pledge appears well-intentioned, by the way.
And to be fair, there have been some in the media who have done stories critical of the Giving Pledge — often including, like this post, Eisenberg’s concerns.
Here’s one such article, a piece by Aaron Dorfman of the National Center for Responsive Philanthropy in the Huffington Post, that got a lot of attention a while ago.