The "Giving Pledge", the push by Bill Gates and Warren Buffett to convince billionaires around the globe to dedicate half their wealth to philanthropy, has hardly been a secret effort—but now that its surfaced on 60 Minutes its gained an even higher profile. There are some obvious reasons that one might be concerned about the idea –but, it turns out, theyre not the right ones. Still, there are reasons why those serious about effective philanthropy should be worried about the model Gates and Buffet promoted on CBS.
First, the wrong reasons to be concerned. Some will see the Giving Pledge signatories as seeking only to launder their reputations. To be sure, its better to be viewed as a philanthropist in some quarters than as a capitalist—but Gates, Buffet and their colleagues actually put themselves in the crosshairs of critics through their giving—and risk damage to their reputations. Then theres the view that thered be no need for philanthropy at all if the rich paid their "fair share" of taxes. The rich already do so—disproportionately, in fact. (The top one percent pay some 36 percent of all federal income taxes.) The entire endowment of the Gates Foundation, for instance—the worlds largest institution of its kind—is but $40 billion—far less than the Department of Health and Human Services annual budget alone. Nor is there all that much reason to be concerned that Gates, Buffet and 90-plus others who‘ve taken the pledge are non-elected leaders shaping the world by their whims.
The track record of big philanthropy, since its advent a century ago in the hands of Andrew Carnegie and John D. Rockefeller, has been, on balance, one marked by the sort of constructive imagination one is not likely to find in government, which must deal more with the problems of the here and now. From Carnegies libraries (there were more than 1,000), Rockefellers founding of the University of Chicago to, yes, the Gates push to disseminate polio vaccine widely in the developing world, big philanthropy has much to show for its investments. Even its push toward the liberal left in recent years—as led by the Ford Foundation and George Soros Open Society Foundation—has been balanced by competitors in the marketplace of ideas.
If there is reason to worry about the principles underlying the Giving Pledge, its a message that might be considered inadvertent: that "scale" is what matters in philanthropic giving—and that such broad impact requires big money. As a charming, avuncular Warren Buffet put it to 60 Minutes Charlie Rose," I am tempted, because Ive been calling people with a billion dollars or more, to think that if they cant sign up for 50 percent, maybe I should write a book on how to get by on $500 million. Because apparently theres a lot of people that dont really know how to do it."
This implies, though its clearly not Buffets intention, that one needs that half a billion or more if one is to have any hope of making a difference—indeed, that effective, impactful philanthropy is best considered the province of the super-rich with smart staffs filled with well-educated program officers. To understand whats wrong with sending such a message, consider the contrast between the Gates Foundation—with more than 1000 employees—and the philanthropy of another technology billionaire, Peter Thiel, co-founder of Pay Pal, whose Thiel Foundation has virtually no staff at all. Thiel continues to focus most of his energy on new investments in technology start-ups—and, to be sure, theres a good discussion to be had as to whether there are more potential benefits for more people to be realized through for-profit business. But hes established a fascinating record of relatively small but highly-imaginative philanthropy. His is a kind of giving which avoids the Gates-style partnerships with public school systems, U.N. organizations and governments themselves in favor of more go-it-alone ideas which have had uncanny influence.
Two of Thiels initiatives are particularly notable. His 2010 offer—ironically featured at the time on 60 Minutes—to pay promising college students a $100,000 Thiel Fellowship to leave school to start for-profit or non-profit organizations of their own, not only has sparked a surge of demand from those willing to do so but its also led to widespread public reflection as to whether the cost of a college education is really worth it. Colleges and universities find themselves under fire for their spiraling costs—and the norm of a diploma as the prerequisite for employment is, as a result, changing. Thiel has had similar success in another effort related only by its imaginativeness. He was an early investor in the B612 Foundation, established in 2002 to fund research to protect the Earth from asteroid strikes. In the wake of the this years explosion of a small asteroid over Chelyabinsk, Russia, Thiel has proved prescient—more prescient than NASA, which, influenced by a political environment that might have scoffed at such research, had not made it a priority.
The point here is that effective philanthropy need not be mega-philanthropy—and the Giving Pledge risks sending that message. As Ive argued in my Encounter book Philanthropy Under Fire, the most effective philanthropy is that which influences norms of behavior. As important and well-intentioned as is the Bill and Melinda Gates Foundation support for the Common Core curriculum, for instance, parents helping their children do their homework could matter just as much or more. Indeed, some of the most notable philanthropy on the part of Giving Pledge signatories has shared Peter Thiels knack for combining tangible effort with broader influence through discussion—buzz, if you will. Sudanese-British mobile communications billionaire Mo Ibrahims prize–$200,000 per year for life—for democratically-elected African leaders who actually leave office at the end of their terms, has, since its advent in 2006, coincided with an upsurge of democracy on that continent. The Ibrahim Foundation has brilliantly reinforced its importance by not awarding it when no deserving recipient could be found.
Even those who are not billionaires at all should avoid taking from the Giving Pledge the view that their own small donations—or, even more significantly, modest local organizations they help start or staff themselves—might not wind up having wide influence and impact. I think here of the Boston-based Beacon Hill Village, started on a shoestring in 2006 and dedicated to the belief that the elderly might be better off "aging in place", with the help of volunteer-based services. In the time since, the concept has spread widely—not through billions and not through government but through local imitation. Many similar organizations can be found here, on the home page of the Manhattan Institutes social entrepreneurship initiative.
Effective philanthropy certainly takes giving—but does not require billions.
Original Source: http://www.forbes.com/sites/howardhusock/2013/11/19/700/