Monday, August 9, 2010

The Giving Pledge

On the subject of giving, a long time ago author Andre Gide wrote these proving lines, “Complete possession is proved only by giving.  All you are unable to give possesses you.” Paul Simon later sang “Oh, and it's time to lend a hand to life, the greatest gift of all.”

Last week forty American billionaires including CNN founder Ted Turner, New York Mayor Michael Bloomberg, Oracle co-founder Larry Ellison and Hollywood director George Lucas as well as Warren Buffett and Bill and Melinda Gates publicly pledged the majority of their wealth to philanthropy.

The Giving Pledge according to the press release was initiated by Buffett and Gates as an effort to help address society’s most pressing problems by inviting the wealthiest American families and individuals to commit to giving more than half of their wealth to philanthropy or charitable causes.  At its core, the Giving Pledge is about asking wealthy families to have important conversations about their wealth and how it will be used.

The interesting feature is that this is a public declaration of intention.  A moral commitment to give, not a legal contract, and does not involve pooling money or supporting a particular set of causes or organizations.

"Everybody has their own interests," said New York Mayor Michael Bloomberg, who participated in a teleconference with Buffett as one of the individuals who has signed the giving pledge. "That's what's wonderful about private philanthropy.  If you want to do something for your children and show how much you love them, the single best thing – by far – is to support organizations that will create a better world for them and their children. And by giving, we inspire others to give of themselves, whether their money or their time.”

Ellison, known more for yacht racing than philanthropy, said he had intended for years to donate 95 percent of his wealth to charity. He has given hundreds of millions to medical research and education.

"Until now, I have done this giving quietly — because I have long believed that charitable giving is a personal and private matter," he wrote in a letter that was posted on givingpledge.org, the website for the effort. "So why am I going public now? Warren Buffett personally asked me to write this letter because he said I would be 'setting an example' and 'influencing others' to give. I hope he's right."

In similar letters, other donors talked about what they hoped their money could achieve. George B. Kaiser, chairman of BOK Financial Corp., said he is concerned that America is failing its social contract as a land of equal opportunity.

"It is the most fundamental principle in our founding documents and it is what originally distinguished us from the old Europe. Yet, we have failed in achieving that seminal goal; in fact, we have lost ground in recent years," he wrote.

It was clear from comments of Buffett and others that donors intend to send a message to future generations, including those around the world, to change the way people view wealth.

"If life happens to bless you with talent or treasure, you have a responsibility to use those gifts as well and as wisely as you possibly can," the Gateses wrote in their letter. "Now we hope to pass this example on to our own children."

Bloomberg, who has a fortune estimated by Forbes magazine at $18 billion, said he has changed his personal philosophy over the years from wanting to be more private about his giving toward trying to play a leadership role. He said his whole family is in tune with his giving plan.

"I've always thought your kids get more benefit out of your philanthropy than your will," he added.