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