We make a living by what we get; we make a life by what we give. —Winston Churchill
My childhood attic bedroom had a skylight over my bed and a view of the North Star in winter. It was a good place for an imaginative girl to fall asleep. My mother, Àgústa Ingimundardóttir, had no time for stars and imagination, so when she opened the skylight window, it was to feed the birds. “It’s going to be a cold night for them tonight,” she might say as she stepped off the chair. She didn’t have money to give, but she had breadcrumbs. Her actions pleased the starlings and crows.
Generosity takes many forms. Spending time with a bedridden friend or taking the time to cook for the homeless are forms of generosity. But what about the world’s billionaires?
In 2010, Warren Buffett with Melinda and Bill Gates launched the Giving Pledge to encourage extremely wealthy people to commit more than half of their wealth during their lifetime or in their will for the common good. “The pledge is a moral commitment to give, not a legal contract.” At the end of 2020, there were 2,775 billionaires in the world. The wealth accumulation in the hands of a few continues. “A staggering 86% are richer than a year ago,” according to Forbes Magazine in 2021.
Warren Buffett: “I don’t really think that, as a society, we want to confer blessings on generation after generation who contribute nothing to society, simply because somebody in the far distant past happened to amass a great sum of wealth.”
Professor Tom Coupé, from the Free University Brussels, set out to learn if generous individuals had common traits that could predict their “giving quotient.” Professor Coupé found three factors that affect generosity.
First, a self-made billionaire is three to four times more likely to sign than those who inherited their wealth. Jim, Alice, and Rob Walton are the 16, 17, and 18th wealthiest people in the world– inherited wealth. They have not signed the Giving Pledge.
Second, billionaires with lots of billions are more likely to sign the Giving Pledge than the less wealthy billionaires who may only have 4 billion. Four billion dollars is written: $4,000,000,000.00. That’s a lot of zeros.
In an interview on NPR, Coupé said: “Self-made billionaires are more likely to have private jets or expensive art collections or yachts. So maybe self-made billionaires just spend [and give] more money in general.”
Third, billionaires whose fortunes come from the technology/telecommunications industry are about twice as likely to announce that they will give away at least half of their fortune, compared to billionaires from other sectors. Also, older billionaires and those who have children are more likely to sign.
In conclusion, Coupé writes: “… my research also has serious implications. The fact that inherited billionaires are much less charitable than the self-made billionaires… once the self-made billionaires pass their wealth on to their children, it will become much more difficult to turn this massive wealth into charity.” With massive wealth in the hands of billionaires who don’t value generosity (or earned the money themselves), this has implications for how estate taxes are best structured.
Ten years after the Giving Pledge was created, bloomberg.com looked at the estates of ten Pledgers who’d died. Most had not fulfilled the spirit of their commitment. The Chronicle of Philanthropy concluded that the Pledge hasn’t “turbocharged philanthropy,” as the founders intended. It appears that being a member of a billionaire club was irresistible, but the giving was optional.