Ethics @ Work

Accumulating wealth for the benefit of all

asher meir 88 (photo credit: )
asher meir 88
(photo credit: )
In recent years years, American billionaires Bill Gates and Warren Buffett have been urging their fellow billionaires in the United States to sign a pledge promising to give away or bequeath at least half their fortunes to charity. The project, known as the “Giving Pledge,” has made substantial headway, and a few days ago they announced that 40 of the US’s wealthiest people have signed on.
One interesting detail about the initiative is that there is no standard “giving pledge.” Each person is asked to compose an individual pledge describing his or her motivation for the pledge and intended manner of carrying it out.
Some of the statements are quite interesting and even inspirational.
Buffett writes modestly, but quite accurately: “More than 99 percent of my wealth will go to philanthropy during my lifetime or at death. Measured by dollars, this commitment is large. In a comparative sense, though, many individuals give more to others every day.
“Millions of people who regularly contribute to churches, schools and other organizations thereby relinquish the use of funds that would otherwise benefit their own families. The dollars these people drop into a collection plate or give to United Way mean forgone movies, dinners out or other personal pleasures. In contrast, my family and I will give up nothing we need or want by fulfilling this 99% pledge.”
Many surveys have shown that the poor contribute a larger fraction of their income to charity than the rich, though this tendency probably does not extend to the superrich.
Bill and Melinda Gates are very focused in their charitable goals: “We have committed the vast majority of our assets to the Bill & Melinda Gates Foundation to help stop preventable deaths such as these, and to tear down other barriers to health and education that prevent people from making the very most of their lives. Our animating principle is that all lives have equal value. Put another way, it means that we believe every child deserves the chance to grow up, to dream and do big things.”
It is worth noting what is and is not new about this initiative. One thing that is not new is that wealthy people give lots of money for charity.
Since you can’t take it with you, and since it is virtually impossible to actually spend great wealth, you have to give it away, either to your children or charity.
Some of the superrich don’t have children, others feel that at some level charity is more important than their children, and probably quite a few feel that their children are better off not having to figure out what to do with a 10-figure inheritance. I am guessing that the majority of the many billionaires who have not signed this initiative will also end up giving away most of their fortunes to charity.
It is also not entirely new that the wealthy are making an advanced commitment to giving and are being pressed to express their philosophy of giving. Steel magnate Andrew Carnegie was famous for his many statements of his philosophy of giving, the most famous of which was, “The man who dies thus rich dies disgraced.”
Encouraging charitable giving by personal example and lobbying is also not new; wealthy people have used this technique for millennia.
What is comparatively new about this initiative is the idea of networking among givers to decide on the most effective way of giving. In the past, lobbying was generally for a specific charity; a wealthy family would “adopt” a few charities and try to encourage others to give to these causes.
What the “giving pledge” is doing is soliciting an open-ended pledge and then bringing the givers together to consider ways of making the gifts effective. The Wall Street Journal reported that the signatories will be invited to special dinners that “will culminate with a daylong meeting where donors can swap project ideas and advice.”
I believe there are huge differences in the “social return” to various popular charities. Some are extremely effective, others extremely ineffective, still others are counterproductive. Coordination among givers could do wonders for reducing this gap.
Many wealthy people are extremely gifted, and all command extensive resources. If we add to this the benefits of networking and some minimal accountability of having to discuss your theories with others, there is great promise for greatly increasing the average effectiveness of giving.
One giver, Tom Steyer, is quoted in the Journal as saying one of Buffett’s goals is “to show how those who profit from capitalism can help improve society” and “reshaping the way people think about the private enterprise system.”
Changing points of view is valuable, but hopefully the initiative will also change the reality. Carnegie believed that wealth was to be amassed in the first place to benefit society by eventually giving it away. Perhaps people who adopt this point of view will also decide that accumulating wealth in the first place should also be done with an eye to benefiting others. Asher Meir is research director at the Business Ethics Center of Jerusalem, an independent institute in the Jerusalem College of Technology (Machon Lev).