The 40 super-rich aren’t necessarily giving away half of their wealth

August 6, 2010

superrichUSETHISIt must be sweet to be super-rich and also bathed in public adulation, as were the 40 super-rich people who just pledged to give away at least half their wealth. This was prominent news around the country, and most coverage was sheer hero worship.

What the coverage missed and should have reflected is disdain. The super-rich being showered with praise — such as John Doerr, Paul Allen, David Rubenstein — haven’t necessarily given away half of their wealth. They only said they planned to make fantastic donations in the future. The media coverage suggests something important has happened. All that’s happened is promises.

Congress plans to cut the deficit. Practically everyone plans to lose weight. FORTY PEOPLE ANNOUNCE THEY WILL LOSE WEIGHT IN A FEW YEARS would not make any front page. Yet the super-rich — who already enjoy too much of what society has to offer — are now warmly being praised for the trivial act of saying they might do something admirable at an unspecified future date.

If a super-rich person intends to give away half of his or her wealth, why not simply do it right now? Announcing you plan to do something admirable — rather than just doing it — is self-flattery, amplified by media hype.

Those signing the Giving Pledge got to pat themselves on the backs and get to pretend to be splendid benefactors. But their bank accounts appear to remain under lock and key.

The CEO of Oracle Corporation Larry Ellison, for instance, announced Wednesday his “intent” is to give away 95 percent of his net worth, adding he has already actually given away “hundreds of millions” of dollars. Giving away “hundreds of millions” would be highly admirable for a person whose net worth was $1 billion or less. Is it admirable in his case?

Forbes says Ellison’s net worth is $28 billion. That may not be correct, but it’s probably the right range. If Ellison has actually given away $500 million, that suggests he has parted with about 2 percent of his net worth. For a very rich man to have given away about 2 percent of his money does not make him deserving of praise. If Ellison actually gave away 95 percent, he’d become my hero. If he actually gave away 95 percent — $26.6 billion — Ellison would also still be a billionaire, retaining $1.4 billion. That’s more than what any one person requires. So why doesn’t he just give the money away now?

Perhaps Ellison simply calculates that by announcing his “intent” to engage in significant philanthropy in the indefinite future, he can enjoy the benefits of public adulation while keeping most of his wealth for himself. But until such time as he actually gives away 95 percent, what is there about him to admire?

Bill Gates has given away about $28 billion, a significant sum, yet should he be praised? Forbes puts his net worth (after the donations) at $53 billion. Let’s assume again it’s the right basic range. If so, Gates has kept for himself almost $2 for every $1 he’s donated to others. That’s not generosity. That’s glorified selfishness.

Yesterday, the Wall Street Journal ran a lavishly complimentary piece about several super-rich types involved in the announcement. Read carefully. Barron Hilton told the Journal he “pledged” $1.2 billion to the Conrad Hilton Foundation, Pete Peterson said he “pledged” $1 billion to his foundation. The Journal reported that New York mayor Michael Bloomberg and oil tycoon Boone Pickens “had previously stated their plans to give away the majority of their wealth but said calling attention to their plans will encourage others to follow suit.”

Why all this emphasis on plans, rather than just part with the dough?

Perhaps because many of the rich want the laudatory press, combined with no obligation to follow through. Development officers of universities, museums, dance companies and other worthy organizations know it is common for a wealthy person theatrically to announce a dramatic pledge, then bask in warm publicity, then never actually come through with all (or even any of) the gift.

Gates has often said he will give away more in the future, why doesn’t he do so immediately? I don’t mean in a crazed manner: rather, by donating to the endowments of his foundation and to the endowments of other philanthropies, research projects and schools.

If Forbes is correct and Gates is worth $53 billion, he could give away 95 percent, about $50 billion — in the process thanking the world that made him super-rich — yet still have $3 billion left for himself. Gates would need to spend $411,000 per day each day for 20 years to blow through $3 billion. Even with his house, he could squeak by on $3 billion. Yet Gates hoards vast sums that no one in his family ever will need.

Even the wonderful Warren Buffett, who in 2006 pledged stock then worth $30 billion to the Gates Foundation, hasn’t actually given many of the shares. Because Buffett is a man of high integrity, I feel confident his will is written to ensure the full gift happens. But the rest of this cast of characters — I wouldn’t trust them any farther than I could throw them.

This week’s announcement by the super-rich may be little more than a public-relations stunt. And note it is timed to political debate on increasing taxes at the very top. Why, don’t tax these noble rich people who plan to give away so much!

It is repellent that the Giving Pledge signatories continue to keep for themselves extreme amounts of money, when there is so much need, and much good that money can accomplish. And it is yet another media malfunction that people who did nothing more than claim they plan to act benevolently were exalted as if they had.

35 comments

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I agree with your sentiment that giving should be increased across the board. If this were the case we could solve many of the problems of the world at large. However, saying that someone who donates 33% of their net worth is selfish is a bit of a stretch of logic to say the least. Knowing your love for minute measurements, at what percentage point does one tip from selfish to reasonable to generous? All in all I am a huge fan of your work this one just seems a bit off base on a few of the nit pickings.

Posted by MattAtCap | Report as abusive

If you make over $5 million per year, you should pay a 60% federal tax rate

http://storyburn.com

Posted by STORYBURNhere | Report as abusive

Why don’t you go make a couple billion dollars and give it all away?

Posted by Rockland | Report as abusive

Well, isn’t it more productive to milk the cow than to kill it once for meat?

If the super-rich stay rich, and continue to donate, then isn’t it better that they keep money to make money with?

Posted by Jarlent | Report as abusive

“Gates has kept for himself almost $2 for every $1 he’s donated to others. That’s not generosity. That’s glorified selfishness.”

Ummm… wow. Crazy talk. Nice.

Posted by hmm | Report as abusive

These foundations are just tax shelters

Posted by diddums | Report as abusive

LOL. their giving away SOME of THEIR OWN money, which is better than none.
They are the ones that made it their own money. (well most of them) why should they be obliged to give it ALL away.

its their choice, its their money. Be thankful that they pledged to give some away to begin with, don’t give them crap because their only giving away $1 billion of their $10 billion bank account, if you had $1000 would you give away $999? or if you personally had $1 billion or 53 billion even, would YOU pledge to give away 95% of it?

Didn’t think so.

Sure most of them are in it for the publicity, if ANY of them actually give away their own money. Thank them. don’t hound them and say they didn’t give away enough?!?!?!? that’s ridiculous!

Glad i don’t live in your country, i would feel ashamed of my Greed…. lmao.

Posted by DNAS | Report as abusive

Here is the thing, when someone is that rich to begin with it is hard to imagine they have a habit of giving away things… they were rich because they know now to make accumulate it. So I doubt that it is within their nature to give their hard-earned cash just like that. It is like asking lions to eat salads… so it’s not surprising that poor people naturally develop longer and longer necks overtime as an adaptation to waiting for mannas from the richest’s heaven :)

Posted by phanthanhgian | Report as abusive

Logically, the best time for them to give away half (or even all) their money is in their wills, after they’re dead. While they’re alive, their fortunes continue to grow through investment, and it’s reasonable to suppose that they are better at making that money grow than, say, the trustees of Oxfam or Worldvision, who have different skill sets and many other demands on them.

Leaving money in a bequest maximises its utility to the charity, as well as ensuring that you’re never embarrassed by having given away too much (as well as encouraging one’s children to seek gainful employment). Of course, best of all would be to do that and not tell anyone, but I guess these people also feel the need to set an example.

Posted by Ian_Kemmish | Report as abusive

The man gave away $28billion and you’re calling him selfish?

Whens the last time you gave away $28billion? Never? How about a $1million? Still a No? how about $10,000? I’m assuming thats still a no. How about you donate just $1000?I’m willing to bet that your possessions and assets would be worth atleast $10000, but you wouldn’t be willing to sell just 10% of it would you? let alone a third.

Posted by Kiuas | Report as abusive

Thank you, Reuters! I work for one of the people making this pledge and I can assure you that their interests are with public relations and NOT helping the little people. I’ve been grinding my teeth every time I hear people talk about what a great philanthropist the person is.

Posted by Williamfree | Report as abusive

Mr. Greg, you are an idiot.

Giving away dollars in the magnitude these people are dealing with is complicated. There are investments to be liquidated, tax consequences to be considered and (Oh yes) figuring out how to make a contribution that is wisely used.

Of course they could just give the money to the Federal Government. The Feds certainly know how to dispose of large sums of money efficiently, unfortunately they haven’t figured out the wisely part.

Posted by rcbroun | Report as abusive

Sure sounds good but not gonna happen.

Posted by Tim1964 | Report as abusive

Gregg is a dimwit. He thinks that the billionaires will just start writing checks and transfering their billions.If they do that the economy can grind to a halt. It has to be gradual and could takes decades or forever, as the donations are still being investment.
The guy Gregg is a “tabula rasa” when it comes to investment.Or could he just be another Rebublican propagandist.

Posted by bally_1 | Report as abusive

Hey what are you talking about? I don’t see anyone that just donates half of their fortune. If you think being rich is something bad then America is not a place for you. Saying that someone is going to donate money should be something cherished. And why do you think this is a public-relations stunt? There not going to become any richer by announcing there going to donate money.

Posted by benjamins | Report as abusive

Undoubtedly, one of the most retarded articles I have ever read.

Everyone does things for a selfish reason. Even the ‘true’ philanthropists as you may define them. If they don’t have self publicity at the core, then they have feeling of moral superiority, or appeasing a higher power, or repentance, or self-satisfaction on doing something noble etc. Take your pick. In the end it’s all self centered. However, what counts is – do their actions benefit others or not?

So stop bitching about the publicity mileage these donors are deriving out of their actions. And focus on the possibility of good that their pledges have. And while you are at it, compare that to what possibility your own philanthropy holds. And then STFU.

Posted by Estival | Report as abusive

The donors are to be commended for their wisdom and they should not hold back. Philanthropy of this magnitude constitutes an important and unique pillar of this nation. Its strength is admired around the world. It serves as a role model for other countries and has sown the seeds for countless remarkable undertakings overseas, the investment of which subsequently benefited this country as well.

Funds from the Rockefeller Institute helped create Germany’s most eminent research establishment, the Max Planck Society. Two years ago, the Society founded its first research institute in Florida, injecting welcome jobs into a distressed local economy.

Read more here:
http://brainmindinst.blogspot.com/2009/0 1/fundamental-research-progress-renewal. html

Posted by PeterMelzer | Report as abusive

I am not sure if you people are jealous you didn’t get a dime or if you are mooches. Either way stop asking for a handout, get job, or create something for the good of mankind.

Posted by BugCatcher | Report as abusive

It is amazing that people think that raising taxes on the rich is a good idea. Yes, let’s take money away from successful business men who end up creating jobs and innovation for our country and give that money to the government because they would do a much better job of spending and distributing that money. If the government was capable to make money they wouldn’t need to take it from others! Seeing the track record of our $13 trillion dollar in debt government I wouldn’t trust them with a dime! I am glad these men will give in their own time and to what they feel is right after all someone who has made billions of dollars is probably going to do a little better distributing their own money to what they feel is right than the useless government who would just waste it by giving it to criminals, the lazy, foreign countries, and stuff we don’t need at all like Hillary Clinton did recently by spending $5.4 million on sets of crystal for USA embassy’s. Cut taxes and Cut government spending!

Posted by Indiaproud1 | Report as abusive

I have a great plan. Let’s make it *expected* when a billionaire proposes giving away half her wealth, that she be reviled in public.

That’s a *great* incentive structure, Greggy.

Posted by GuySrinivasan | Report as abusive

Why do so many people worship vanity? It is just money not your life. Half the time, these people share tremendous responsibilities for why money has become the centerpiece and main focus of most of our lives. If they wish to aid humanity for what they are partly responsible for, just do it without announcing your intentions, or better still be inconspicuous about flaunting your fortune. You do more harm to the society by the complexes and neurosis that you create than the solutions you offer and engage. Unless, if you not only want us to thank you, but worship you for your disingenuous gifts, as well. It is like a thief that wants you to thank and reward her for returning the property she looted from you! Just do it or shut the hell up. What you can do for humanity from here to time immemorial, cannot be enough to reverse the damages done by the likes of you, douches! By the way, my bank account is **** **** **7755, in case anyone is feeling generous enough to reward my outlandish comment …my rent was due!

Posted by Banned | Report as abusive

Easterbrook, I dare say that you’re beginning to strike me as a closet Marxist socialist. “..when there is so much need..” indeed.

Why do you have retirement savings?(bet you do…) Many don’t, you don’t deserve to have a retirement account if people are hungry(or too stupid to have one of their own), do you?

Of course, the answer to all our ills is to make all the super-smart successful people, suddenly poor. Answer to everything is redistribution. It’s only fair right?

oh and only have 12 gauges to flail around to end arguments…but not to shoot.

Posted by dzoo35 | Report as abusive

[...] on the Gang of 40 and why their sharing some of their wealth is not good [...]

C’mon, Gregg. These cats don’t have multi-billions lying around in cash. Their net worth is in their companies. They cannot just liquidate, that’d destroy the companies that are proving employment for thousands of folks.
Yes, they can give more, but don’t pretend they can give such huge percentages to charity directly.

Posted by nadie | Report as abusive

It’s great that someone finally points out the obvious. But aren’t we a bit too much into self glorifying giving anyways. I mean, if your going to give or help just do it. Why does everyone else need to know. But Gregg, haven’t your media colleges created this media circus. Don’t you just love fostering this class warfare, doom and gloom and tension. Maybe it just might foster the revolution the media is salivating for. Physician heal thyself. Secondly your immediate digression into what the wealthy should do with their money is pathetic. Everyone is an expert on what others should or shouldn’t be doing. If we would focus on ourselves things would get better. This constant blaming the wealthy and pointing fingers of shame is so grade school. Everyone wants someone else to be punished. As far as the comment the money should go to the government; we don’t serve our government, our government serves us. We don’t need to give the government our money to spread. The government needs to help us help each other!!!! The point is, it’s not about giving or doing, it’s about the basics of caring about others as much or more then ourselves. If your one pointing and everyone else, your just as bad the one your pointing at. You need to point in the mirror. And yes that includes me. I guess the wise sayings apply, “Take the log out of your own eye so you can see clearly to take the speck out of your neighbors eye.

Posted by ovitech | Report as abusive

In a truly free market economy, the accumulation of such vast wealth to a few individuals would never happen. The “windfall” to a few usually means the majority of us didn’t really earn what we should have or we as consumers paid a helluva a lot more than what we would have if it were a truly competitive,free market economy. So for those who want to kiss the feet of “royalty”. Have at it. I’m not one of them. Good article.

Posted by armoderate | Report as abusive

Mark 12: 41 – 44…..Jesus sat down opposite the place where the offerings wer put and watched the crowd putting their money into the temple treasury. Many rich people threw in large amounts. But a poor widow came and put in two very small copper coins, worth only a fraction of a penny. Calling his disciples to him, Jesus said, “I tell you the truth, this poor widow has put more into the treasury than all the others. THEY ALL GAVE OUT OF THEIR WEALTH; BUT SHE, OUT OF HER POVERTY, PUT IN EVERYTHING – ALL SHE HAD TO LIVE ON.”

Well done Gregg..your article is good…Also do what you say.

Posted by Thinkone | Report as abusive

Net worth isn’t the amount you have availible in the bank. It includes stocks, investments, assests, and expected returns.

Most of those things can’t just be given away.

Posted by drewbie | Report as abusive

Mr Bugcatcher. i think your a little bit off on what we’re saying here.
No one is asking for a hand out..
The author of this article is ridiculing the said Billionaire’s because they have yet to give away ALL the money they said they would.
Point of the matter is, they ARE going to pledge it.
Just because its been delayed, and because they didnt hand out they pledged at the same time, according to Greggy here, makes them bad people.

The Moral of the Story BugCatcher. is that they dont have to give ANYTHING. but because they pledged to do so and have not pulled through 100% so far, they get beat down upon by people such as this “Reporter”.
Which isnt right. its THEIR money. let them do w/e the hell they want with it.
No one said they HAD to pledge. but they are.
so sit the eff back Greggy boy, might want to wait a little longer before giving the pledgers crap for not giving aaway THEIR MONEY. Not the countries, not your gov’t's, THEIRS.
Read my previous post. you will understand.

Posted by DNAS | Report as abusive

Why not just get rid of money and share the worlds resources so we can ALL live in abundance replacing the monetary system that creates dept, war, famine, politics and the devastation of our planet with a resource based economy like the Venus Project is proposing? Read this link for full details: http://www.thevenusproject.com/a-new-soc ial-design/resource-based-economy

Posted by 3956 | Report as abusive

Why not just get rid of money and share the worlds resources so we can ALL live in abundance replacing the monetary system that creates dept, war, famine, politics and the devastation of our planet with a resource based economy like the Venus Project is proposing? Read this link for full details: http://www.thevenusproject.com/a-new-soc ial-design/resource-based-economy

Posted by 3956 | Report as abusive

boom chica wowow

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