Small Town has seen some great demonstrations of generosity lately, particularly people giving generously to strangers in need. A homeless family of seven has been showered with gifts, allowing them to move out of the homeless shelter and into a rental home of their own. And a twelve-year-old girl with cystic fibrosis who wanted to raise $10,000 for Cystic Fibrosis Foundation brought in three times that amount just with local events. With those stories in mind, here is my opinion column in today's edition—you can learn more about The Giving Pledge here.
Some of America’s wealthiest people have made a pledge, The Giving Pledge, and they have written letters stating they intend to give the majority of their net worth to charity during their lifetime or after death. The signers are free to give to any causes of their choosing, their pledge is not legally binding and no one with any authority will hold them accountable if they fall short of the mark.
Some of the names on the list are immediately recognizable even to those of us who don’t follow the world of high finance. Not surprisingly, T. Boone Pickens, David Rockefeller, Warren Buffett and Bill and Melinda Gates have signed. Other billionaires who aren’t quite household names have also signed, like the Oshers, the Arnolds and the Lenfests.
The majority of the people on this list already give generously to their favorite causes, pouring money into the arts, sciences, education and medical research. Pickens has given hundreds of millions to colleges, Ted Turner has pledged $1 billion to his United Nations Foundation and the Gates family began the largest private foundation in the world.
So, why would the super-rich, about 10 percent of America’s billionaires, go public with a pledge now even though they have been generous philanthropists for years? According to The Giving Pledge founders, they’ve signed on to inspire generosity among the wealthiest Americans. They say, “The goal is to talk about giving in an open way and create an atmosphere that can draw more people into philanthropy.”
Americans aren’t exactly a stingy lot. In fact, as a percentage of our GDP, we give more to charity than do people of any other nation. The Giving USA Foundation tracks our charitable giving each year and reports that Americans donated more than $303 billion to charity in 2009, down just 3.6 percent from the year before despite a deeply sagging economy. Individuals apart from foundations or corporations gave the bulk of that amount, and people across the economic spectrum were generous relative to their means.
Non-profit organizations have had to adjust to a downturn in donations since the beginning of the recession, but money is still coming in. Last year, we contributed more than $100 billion to religious organizations, more than $40 billion to our favorite education-related causes; and billions more to health, arts and humanities, environmental groups and international aid. On top of that, our non-cash donations amounted to billions more.
When a family worth $50 billion gives away the majority of their assets, they’re still billionaires. Not to belittle their generosity, which is commendable, but their philanthropy has caused them little sacrifice. They can still afford the stateliest homes, the most prestigious universities for their children and the finest luxuries.
In contrast, when a family living on $52,000 a year gives even 2.7 percent, the average rate for this income bracket, they likely cut elsewhere in their budget to do it. And when the nation’s working poor contribute more than 4.3 percent, which they do year after year, they do so at great sacrifice. The fact that Americans who live modestly still consistently give to charities even during hard times suggests we already have an atmosphere of philanthropy.
Can we give more than we do? Of course we can, judging by the billions we also spend on purchases like electronics, pet food and movie rentals. On average, we spend $110 billion a year on fast food alone, so despite a general purse-string tightening of late, there seems to be room for a little more generosity in the budget.
Larry Ellison, CEO of Oracle, is one of the billionaires who signed The Giving Pledge. In his letter of intent, he wrote, “Warren Buffett personally asked me to write this letter because he said I would be ‘setting an example’ and ‘influencing others’ to give. I hope he’s right.”
I hope he’s right, too. I’m all for increasing generosity across the board, but I believe we have plenty of examples of charitable giving already, quiet and generous Americans who give every single year without a public pledge, the ones who have been sacrificially creating an atmosphere of philanthropy all along.