Last week, 17 more billionaires signed on to the Giving Pledge and declared their intention to give away to charitable organizations at least 50 percent of their wealth. The initiative is being spearheaded by Buffett and Gates.
To call me cynical about the pledge would be an understatement.
I see it as a clever way for them to dodge estate taxes taxes (while whining about how they are undertaxed) and maintain their power … even from the grave.
I’d like to see how much money they’d throw in the pot if they had to do it with after-tax dollars. That would be a nice sincerity test.
I was surprised to see the Huffington Post raise some issues about the billionaires’ pledge …
Huff Post, Why We Should Dial Down Our Enthusiasm for the Giving Pledge, December 15, 2010
Last week, 17 more billionaires signed on to the Giving Pledge and declared their intention to give away to charitable organizations at least 50 percent of their wealth. The initiative is being spearheaded by Warren Buffett and Bill and Melinda Gates.
I applaud the Gates family and Mr. Buffett for being willing to challenge their peers and to lead by example. Their effort will surely lead to an increase in giving among billionaires and others. I do, however, have some concerns.
There are three important reasons to keep our enthusiasm for the Giving Pledge in check.
First, the pledge is likely to have an extremely small impact on total giving, especially in the first few years. The problem is, the money is going to trickle out over a very long period of time, and it will represent only a very small upward tick in total charitable giving. Billionaires who take the pledge commit to giving half their wealth to charity at some point during their lifetimes, or at their deaths. Some people on the list are quite elderly, but others are likely to spread their giving out over the next 50 years.
My guess is that most of the money will wind up in university or foundation endowments, with only about 5 percent of the asset base getting spent on charitable purposes each year in perpetuity. Clearly, the Giving Pledge will not be a major factor in sparking a much hoped-for rebound from the drop in giving that has decimated many nonprofits these last two years.
Second, little of the money is likely to benefit the most under-served populations. And third, giving by billionaires has typically been limited in its effectiveness and has dangerous implications for democratic decision-making.
Wealthy donors don’t tend to prioritize lower-income communities, communities of color or other marginalized groups as beneficiaries of their giving. Instead, they tend to give to nonprofits that they patronize, such as cultural institutions and their alma maters.
Wealthy donors give to places “where they spend their leisure time” and that only 10 percent of charitable contributions actually benefit the poor.
Third, giving by billionaires … has dangerous implications for democratic decision-making.
http://www.huffingtonpost.com/aaron-dorfman/the-giving-pledge_b_796159.html
English translation of “dangerous implications for democratic decision-making”: if people start making personal decisions about where their money should be directed -– partially subsidized by tax advantages—then the Feds have less money at their disposal to direct as they (the Feds) see fit.
Oh my …
The Homa Files 