People who reach billionaire status start to focus on how to put large portions of their money to charitable uses — or at least they should, in the opinion of Bill Gates and Warren Buffett. The pair believes so strongly in this principle that they formed the Giving Pledge five years ago. The organization is devoted to addressing societal problems by urging the very wealthy to give away at least half of their fortunes to philanthropic efforts, either during their lifetime or outlined in their will.
The focus was on billionaires (or those who would be prior to giving) within the U.S., but the effort has become global. Over the last few weeks, sixteen more people have joined the group, including the Scottish oil magnate Ian Wood and Turkish billionaire Hamdi Ulukaya, the founder of Chobani yogurt.
According to the Giving Pledge website, there are 137 current individual or family pledges encompassing 203 individuals, ten of whom have passed away since the pledge was made. Aside from Gates and Buffett, there are many other well-known names on the list, such as Ted Turner, Michael Bloomberg, Elon Musk, Richard Branson, George Lucas, Larry Ellison, T. Boone Pickens, and Mark Zuckerberg.
However, most people on the list are not widely known to the public and acquired their wealth from an interesting variety of sources. The current pledgers' list may be found here under the "Pledger Profiles" tab, along with a link to the pledge letters (if available), usually describing their intentions and the nature of their foundations or donations.
Pledgers make public statements that explain their decisions and intentions to pledge, then meet annually to discuss ideas on how to further their philanthropic efforts. The Giving Pledge is careful to note that they do not pool money or support any one cause or organization over another. The point is for the billionaires to freely discuss their causes and make their own connections to fulfill their pledge obligations. Money is not collected by the Giving Pledge or distributed through them toward any organization.
As with a telethon, the pledge is just that — a pledge. There is no legally binding element to the Giving Pledge; it is explicitly listed as a moral commitment. Given that, how can anyone be sure the promises are fulfilled? We cannot be entirely sure, as estate law and the regulations surrounding charitable donations often throttle public disclosure efforts.
Gates and Buffett have certainly led by example so far, with more than $46 billion going to the Gates Foundation alone. On Monday, Buffett increased his contribution by a record $2.84 billion of Berkshire Hathaway stock. (For context, the estimated combined net worth of Gates and Buffett is near $156 billion according to Bloomberg). For those who are not willing (or able by law) to disclose their giving, it is nearly impossible to verify the pledge, even for those who have passed away.
Brendan Coffey of Bloomberg News reported that the fulfillment of the pledge varies widely among the ten pledgers who have passed away, and some are still ensnared in the settlement of estates and the directives left within wills. Consider that at billionaire levels of wealth, the estate tax lops 40% off of the top. With trusts and other wealth-protecting legal measures, sometimes the question becomes "giving half of what?"
We can complain about pledge fulfillment amounts, but billionaires do not have to give anything at all. We think it is better to focus on the positive and note that the Giving Foundation has raised the profile of philanthropy, and it has almost certainly left charitable giving better off than before the initiative started. In fact, we pledge to take the pledge as soon as we achieve billionaire status.