The Giving Pledge: Adverse, unintended and uncharitable consequences

What could be wrong with Bill Gates and Warren Buffett asking the super-rich to donate their wealth to charitable causes or foundations?

Andrew Carnegie: "He who dies rich dies in disgrace"

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:

  1. 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.
  2. 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.”
  3. 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.

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About Author

Tom Paulson

Tom Paulson is founder and lead journalist at Humanosphere. Prior to operating this online news site, he reported on science,  medicine, health policy, aid and development for the Seattle Post-Intelligencer. Contact him at tom[at]humanosphere.org, follow him on Twitter @tompaulson and/or send a comment below.

  • Philippeboucher2

    Frankly I prefer Bill Gates Sr approach that is to tax the rich more so that the money can be redistributed to what needs to be funded. In fact the Gates Foundation should put such tax reform at the core of its agenda as it often remarks that despite its wealth it cannot do it alone, it needs the governments etc.
    This only means that “public money” (ie taxes) are necessary to solve most societal problems. Asking the super-rich to voluntarily give back some of the fortune they amassed (partially because of very lax tax laws) will not do the trick. In a way it only distracts from the more radical tax reform that is needed.
    I wish Humanosphere would ask the Gates, Sr and Jr what they think about the tax debate and what they intend to do here after the defeat of I1098. Are they calling it quit or -like Tim Eyman- is Bill Gates Sr going to come back with a better initiative, that would -for instance- make a necessary distinction between the bottom rich (200K) and the middle rich (1 million+) and the super-rich (10 million+). The key article about that was in the New Yorker.

    • http://humanosphere.kplu.org Tom Paulson

      Thanks Philippe,

      These are great suggestions and questions. I know that Bill Gates Sr. has already made public his belief that the very wealthy should pay more in taxes. His argument is that the super-rich — like his son and daughter-in-law — have benefited greatly from the social and economic circumstances that have allowed them to accumulate great wealth. And so, says Bill Sr., they have a greater obligation to give back both in terms of taxes and as private philanthropists. The younger Bill Gates has not been as outspoken, or clear, on where he stands on this issue.

  • Philippeboucher2

    here is the link to the August 16, 2010 article by James Surowiecki in the New Yorker, titled Soak the very, very rich
    http://www.newyorker.com/talk/financial/2010/08/16/100816ta_talk_surowiecki
    Why should someone making 200K be in the same bracket as someone making 20 or 200 millions?
    Surowiecki explains that perfectly and that’s probably one reason why I1098 did not work. The other being it takes more than one try to make such a change happen. Let us keep trying…

  • Kempjoseph77

     I think it’s weird how rich people give so much. What are they trying
    to prove? Ethical philosophers point out that true giving arises
    because we actually WANT to give. Not because someone like Bill Gates
    tells us that we should.

    Bill Gates is an odd one to be talking
    about charitable giving. As far as I can determine, he is a spiteful,
    twisted, vindictive man  – a bully, in other words. He treats his
    workers at Microsoft like garbage. How you treat your subordinates says a
    lot about your character. Here is a sample of some of Bill Gates’
    comments made to his underlings:

    “That the dumbest f**king idea I’ve ever heard here at Microsoft.”

    “Why don’t you give up your options and join the Peace Corps?”

    “Do you ASPIRE to be an idiot?”

    And
    (one of my personal favorites) “A**holes! You’re all a bunch of f***ing
    a**holes!” (- Said to workers while throwing pens at them – no
    exaggeration.)

    Workers at Microsoft often live in fear of Gates’
    acidic management style. When he is displeased with someone’s ideas (as
    he frequently is), he will bully them until come up with something else, or until they quit.

    Given
    this unpleasant character, it amazes me that Gates seems so obsessed
    with giving. But perhaps this is not so surprising. He obviously can’t
    charm us with his personality. So he’s trying to charm us with his money
    instead. He’s trying to buy himself a charitable reputation. And why
    not? He buys everything else. Why not a new reputation, too?

    Pope
    John Paul II, a superb rational-analytical philosopher in his own
    right,  warned about the addictive nature of philanthropy. Yes,
    addictive. The rich can easily develop an unhealthy addiction/obsession
    to giving. Instead of giving because they actually care about their
    fellow human beings, the rich often end up giving just to feel that
    self-centered, special rush: “Look, I’m rich, see how much I can give,
    aren’t I special? Don’t I feel good about myself?”

    And while it’s
    important to feel good about yourself, it is ethically ugly to do so by
    getting your high each time you give, like taking some kind of pleasure
    drug. Any moral motivations -like caring for your fellow man – go right
    out the window. It has been proven that human beings can become addicted
    to pretty much anything. Why not giving, too?

    Many rich people
    indeed seem more obsessed with the ACT of giving, rather than with where
    their money actually goes, or who it benefits – just so long as they
    GIVE.

    Instead of contributing to essential (unglamorous) causes,
    like curing diarrhea in the Third World, most rich people contribute to
    feel-good causes, like saving wildlife, saving the whales, preserving
    wetlands – which wouldn’t be a problem, ordinarily. But the unglamorous
    causes often go unaddressed.

    And no wonder. Few billionaires want
    their names to be associated with diarrhea in the Third World. How
    would that look on a billboard? Wouldn’t feel too good. Which indicates
    very clearly that most billionaires are in the giving game just for the
    “feel-good nature” of it. It is hard to estimate how much unaddressed
    addiction may exist in this area.

    Stephen Spielberg once said that he recommends any newly-rich
    people to get into philanthropy as soon as possible. “The more you give,
    the more you want to give!” he jubilantly says.

    Sounds
    suspiciously like the slogan of a drug addict: “The more (crack) you do,
    the more you WANT to do.” No doubt Spielberg would never have been so
    open had he known he was describing an actual addiction.

    Nowadays,
    Bill Gates is spearheading a movement to get OTHER rich people to
    “give,” as he has. He is not satisfied with merely giving of his own
    money. Now he is acting as the morally-superior guardian angel, trying
    to persuade all those other reluctant, morally deficient billionaires to
    give, too. Must make him feel pretty good to be the one steering the
    boat, living vicariously through all those other people’s giving.

    Must feel pretty darn good.

  • mugabson

    I am sincerely grateful for the good works you have done for the world

    and all that you are continuing to do, and I take this honor to write

    to you and I am sorry for troubling you at the same time.

    I am Johnson Mugabo, male by sex at the age of 23years. I am an

    African from Uganda in Kampala.

    I sat for my High School exams in the year 2011 and I was admitted at

    Makerere University in Uganda for Bachelor of Urban and Regional

    Planning. I have still been unable to join yet, due to shortage of

    financial assistance inform of tuition fees which is around $ 520 per

    semester or $900 per academic year and it covers both tuition and

    functional fees payable to the University.

    I humbly and greatly seek for your assistance and able to provide the

    necessary proof that will be required of me.

    May you please direct me on what to do or whom to contact.

    Thank you for your response.

    I am greatly sorry for troubling you.
    mugabson@gmail.com is my e-mail address.

  • sabiha

    Thank u 4 taking the time 2 read thisletter and i hope it finds u well. I am now in serious money prob.My father has died in 2006.After that my mother and brother are sufferings from serious poerty.They have not enough food to mouth.My father could not left enough property 4 us.I am only the earning person of the family.But foolishly i have got married soon. After being married i couln’t help my mother and bro. B ‘cos my husbend is from a too much needy family. His father is very much poor.My husband has 2 help my father in law always stheir needs.Thats why my husband cant help me to fullfil my costs and my children’s needs.I have 2 bear bear everything myself.So i am in trouble now. I cant help my mother and brother also. My mother is seriously ill.My brother has attacked paralysis a few years ago. For that he could not complete his education and can’t do any hard work. That’s why he is unable 2 earn money. I am doing a little job.But i can’t solve my so many needs and problems by my little earning money. I cant help myself and my mother and brother. Belive me i am telling the real truths.I am not saying false. I am in need of money 2 solve my so many problems. So pls pls pls help me. If anybody help me God will do good for him. I want to keep my children’s, mother and brother happy, smiley and good all time. But i have not ability.. Please contact me immediately. And pls help me soon. Thank u in advance. Contact me in my mail: shuchimoni_bau@yahoo.com.

  • W.Ranjith De Silva

    Do a good deed in
    this festive season in the name of Jesus to save a life of cancer patient in
    3rd world country, then you will be blessed!

    Financial Help Needed for Cancer patient in Sri Lanka

    I am W. R. De Silva from Sri
    Lanka and my beloved wife 55 years old, since last 8 months she had pain in her
    stomach and went to many doctors, many X-rays’

    And Scans were taken and lot
    of medicine given nothing answered. Recent Scan found something inside the
    stomach and immediately did a operation and found something big as an Egg and
    was removed and send for biopsy and later it says …”Cancer” and advice to get
    “Chemotherapy” before it get spread. If it get spread only once could be
    operated and then have to close rectum and hang colostomy. So I went to the Government Cancer Hospital to
    get Chemotherapy I had to register her with copies of her reports and be on the
    waiting list to get the therapy done free of charge.

    Few days later I got a date
    18th July 2014 which is too long. To get the same Therapy in Private hospital
    will cost me Rs. 950,000/= which I cannot afford to save the life of my beloved
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    At the next operation will
    have to use Colostomy where

    Per day will cost about Rs.
    2500/= a day for colostomy bags. Under these circumstances I am in very bad
    financial situation and as a result both children could not continue their
    higher studies in University and they decided to work and do part time studies
    without troubling me. If any one can help me financially will be highly appreciated.
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    My Name; W.R.De Silva-
    Account Nu; NRFC-1974535 of Bank of Ceylon (swift-
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    Dehiwala-10350, Sri Lanka.
    If you send via Western Union you can send me
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    To 0094777240124 or E-mail; yuboo@outlook.com

    In case if you
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