Once upon a time, Warren Buffett was having a casual dinner with Bill and Melinda Gates up in Seattle. During this dinner, the topic of philanthropy came up. At some point, Warren asked the Gateses if they had ever considered giving away a portion of their humongous wealth to charity. And perhaps not a small portion. Shockingly, Buffett asked Bill and Melinda if they would ever consider giving at least half of their considerable fortune to charity. Can you imagine if someone asked you to give half your money away? Might be an unsettling proposition for most people, but not for Bill and Melinda Gates.
Very soon after this dinner, the Gates set out to launch the Bill and Melinda Gates Foundation. The Foundation, founded in 2000, is now one of the is one of the largest private philanthropic foundations in the world . The foundation's goals are driven by the interests and passions of the Gates family. The primary aims of the foundation today are to enhance healthcare and reduce extreme poverty globally, and in America, to expand educational opportunities and access to information technology. Gates, along with Buffett has become a model of giving for other billionaire philanthropists to follow. As of May 2013, Gates has donated $28 billion to the foundation and he plans on giving at least 99% of of wealth to charity before he dies.
Today, some of the world's wealthiest billionaires are also the most generous. In fact, they've made a sort of club out of giving their money away. Over the last several years, Buffet and Gates have embarked on a mission to recruit other billionaires to what is now called "The Giving Pledge campaign". Billionaires who sign the pledge agree to donate at least half their fortune to charity.
The Giving Pledge
In an article in Fortune magazine in June 2010, Warren Buffett laid out his plans for his Giving Pledge. The goal, as Buffett defined it for himself, is to give away about 4% of his shares in Berkshire Hathaway every year. Roughly 20% of his shares to date have been distributed to various charities and causes.
Buffett believes that once your family's basic needs are taken care of, a billionaire has an ethical obligation to use the leftover money to enriching society with charitable contributions. Buffett learned about the power of unconditional love from his father and he believes the world would be a better place if more people embraced this concept as well. He hopes that through The Giving Pledge, the wealthy giving away at least half of their fortunes will become the norm rather than the exception. After all, when you've got that much money, how much of it do you really need, and how much good can you do with the excess? It's a sound theory.
Bill and Melinda Gates were the first billionaires to sign up for The Giving Pledge. Since then, the Giving Pledge has grown to 122 participants (couples/families are counted as one in this number). Some of the participants in the Giving Pledge include:
- Sara Blakely (current net worth:$1 billion, Source: Spanx)
- Eli Broad ($6.9 billion, investments)
- Steve Case ($1.2 billion, AOL)
- John Doerr ($3.4 billion, venture capital)
- Barry Diller ( $2.4 billion, online media)
- Larry Ellison ($48 billion, Oracle)
- George Lucas ($4.9 billion, producer, director, Star Wars, etc)
- Michael Milken ($2.5 billion, investments)
- John Morgridge ($1B, billion former Chair, Cisco Systems)
- Ronald Perelman ($14B billion leverage buyouts)
- David Rockefeller ($2.9 billion, oil, banking)
- Sheryl Sandberg ($1 billion, Facebook)
- Ted Turner ($2.2billion, cable television)
- Mark Zuckerberg ($28.5 billion, Facebook) — He was only 26 years old at the time; has pledged $100M towards public schools.
Both T. Boone Pickens and Chuck Feeney have also taken The Giving Pledge, however, they have both given away enough of their wealth that they are, at least currently, no longer billionaires.
Who Isn't Getting An Inheritance
While part of the philosophy of The Giving Pledge is to take care of your family, it also says not to overdo it. Thus, a number of the wealthiest Americans have pledged to not leave huge fortunes to their children. Instead, they will be giving most of their money away to good causes.
Below is a list of 10 American billionaires (or former billionaires) who are not leaving a significant (or in some cases, any) inheritance to their children. People are listed in order of their Forbes ranking.
- Bill Gates ($76 billion, Microsoft) — The Bill and Melinda Gates Foundation was started by Gates and his wife in 1994 and was the model for The Giving Pledge
- Warren Buffett ($58.2 billion, Berkshire Hathaway) — In 2010, Buffett pledged to give away 99% of his wealth. By 2006, 83% was already pledged to the Bill and Melinda Gates Foundation.
- Michael Bloomberg ($33 billion, Bloomberg LP) — As New York City mayor, he earned a salary of $1. As a philanthropist, he gives to Johns Hopkins University, the Carnegie Corporation and other non-profits. He belongs to The Giving Pledge.
- Pierre Omidyar ($8.2 billion, Ebay) — He became a billionaire at age 31 when he changed the way we shop online, and has been donating to charity ever since, via mostly his Omidyar Network, which is a philanthropic investment firm. He joined The Giving Pledge in 2010. Omidyar and wife Pam make their charitable donation priorities fighting human trafficking.
- George Lucas ($4.9 billion, director, producer) – The legendary filmmaker plans to give most of his wealth away to education causes. He donated $175 million to his alma mater, the University of Southern California, in 2006. Lucas is also giving away the $4 billion he received when Disney bought Lucas Films. He joined The Giving Pledge in 2010.
- Bernard Marcus ($3.5 billion, Home Depot) — Marcus donated to the Georgia Aquarium and started the Marcus Foundation which supports education and handicapped causes. He joined The Giving Pledge in 2010.
- John Arnold $2.9 billion, hedge funds) — He retired in 2012 when he was about 40, with a fortune of $4B. Arnold and wife Laura have three children but are spending their lives giving away their wealth via their Arnold Foundation. They are participants in The Giving Pledge.
- Ted Turner ($2.2 billion, cable television) — Turner has five children from three marriages, none of whom will receive a large sum in inheritance. He's given billions to the United Nations Foundation and in 2010 said that he was down to about $1 million, from giving away money. He is a participant in The Giving Pledge.
- Chuck Feeney (co-founder of Duty-Free Shoppers Group airport shops) — Transferred his billions to his Atlantic Philanthropies foundation in the late 1980s. He is a member of The Giving Pledge.
- T. Boone Pickens (corporate raider, oil & gas, investments) — At some point in 2013, Pickens had a net worth of $1.4 billion, though in his Giving Pledge letter, he says that he's given away $800 million.
The "Philanthropy 50" list is issued annually by The Chronicle of Philanthropy. The 2014 list is the 14th annual list of the 50 most generous donors in America in 2013. The list is put together by disclosure from the donors and only includes new contributions or pledges made in the previous calendar year. So, while there are other people who donated very large amounts in 2013, they are not on the list because the contributions were accounted for in pledges made in prior years. Contributions to family foundations are also not included, which explains Bill and Melinda Gates not being on this list.
Following are the 10 most generous Americans in 2013 and how much they donated or pledged to charitable causes:
- Mark Zuckerberg and Priscilla Chan – $992.2 million
- George Mitchell – $750 million (bequest; passed away in Jul 2013)
- Philip and Penelope Knight – $500 million
- Michael Bloomberg– $452 million
- John and Laura Arnold – $296.2 million
- Charles Johnson – $250 million
- Pierre and Pam Omidyar – $225 million
- Irwin and Joan Jacobs – $221.1 million
- Sergey Brin and Anne Wojcicki – $219 million
- Jeffrey Carlton – $212 million (bequest; passed away in 2012)
The donors on the Top 50 list represented 17 U.S states and Washington D.C.
California accounted for 15 of the top donors donating just over $2.7 billion and New York 12, donating $1.58 billion. Other states/ districts covered, in decreasing total amount of donations, are: Texas, Oregon, Washington, Hawaii, South Dakota, District of Columbia, Connecticut, Massachusetts, Alabama, Nevada, Wisconsin, Georgia, Colorado, Pennsylvania and Indiana.
Mark Zuckerberg and Pricilla Chan made new donations or pledges that total nearly $1 billion in 2013. Zuckerberg is also the youngest ever billionaire on the top 50 donors list. Unfortunately, Zuckerberg is the exception when it comes to young billionaires. His peers are choosing, at least so far, to keep their money. The media age of the top 50 donors was 72.5.
REALLY Generous Billionaires
The billionaires (or former billionaires) that get to be designated as super generous are those who have given away at least $1 billion of their net worth over time. These are the top 10 people on that list and how much, as of mid-2012 they have donated of their personal fortunes:
- Bill Gates– $16 billion
- Warren Buffett – $17.25 billion
- George Soros – $8.5 billion
- Gordon Moore – $5 billion
- Eli Broad – $3.5 billion
- George Kaiser – $3.3 billion
- Michael Bloomberg – $2.8 billion
- James Stowers – $2 billion
- Herbert Sandler – $1.5 billion
- Ted Turner – $1.5 billion
Everyone on this list except for George Soros is a member of The Giving Pledge. James Stowers and Herbert Sandler have given away so much of their fortunes that they are no longer billionaires.
In a world that increasingly is driven towards making more and having more and outdoing your neighbors and peers, it is refreshing to see so many of the most wealthy Americans giving their money away to worthy causes.