The Giving Pledge which is initiated by Warren Buffett and Bill Gates has received significant attention recently. It's not only a publicity event for billionaires as it has achieved what was impossible in the past... Encouraging super wealthy people to give away their billion dollar fortunes. Praise should be given to Buffett and Gates. Being one of the richest people on earth is an achievement but pledging to give away most of their fortune away is perhaps their greatest achievement in life.
What motivates humans? According to psychologist Abraham Maslow, we are motivated to meet needs. In his hierarchy, foundational physiological needs include air, water, food and sleep. Once those needs are met, we are moved to seek out safety (shelter, employment, resources, etc.). In other words, once we have the basics to survive, we want money. Money allows us to provide for our families. It takes money to keep our loved ones secure and healthy.
The super rich that has put their name on The Giving Pledge list knows that money indeed moves the world. Without money, you really can't buy the basic necessities in life, like rice or bread. At least their donations will motivate people and move the world to provide for the hungry and needy.
But how much money is enough? Currently, there’s a huge wealth gap in the world. A very small percentage of people control a large percentage of the world’s wealth. This disparity has received a lot of attention in the last few years.
In 2010, Warren Buffet and Bill Gates came together to encourage rich people to commit to donating most of their wealth to charitable causes. This campaign was called the Giving Pledge and it was aimed towards the world’s billionaires.
To date, 122 billionaires across 11 countries have taken the pledge to give more than 50% of their wealth either during their lifetime or in their will. The pledgers have an estimated net worth of over $600 billion.
Although they only account for roughly 7-8% of the world’s billionaires, they will affect philanthropy in a big way. But where will the money go? Pledgers are likely to give in these two main areas.
Many billionaires prefer to donate closer to home, and education is a top cause. 105 of the Giving Pledge households are from the United States, and the American rich like to give to their Alma Maters.
In 2013, for example, Michael Bloomberg gave $350 million to John Hopkins University. In the same year, Charlie Munger, Vice-Chairman of Berkshire Hathaway Corporation, pledged $110 million to the University of Michigan. To be fair, interests vary widely. Mr. Bloomberg also gives to clean air programs and the arts.
The wealthy like to split their donations so that they are able to target multiple problem areas. But education tops the list for these well-heeled pledgers. Mark Zuckerberg's foundation, Startup: Education, attacks the education problem in a unique way by taking a “startup approach to building a better education system for all students.”
Investor Ronald Perelman aims his giving at hospitals and medical centers in New York, while Oracle’s Larry Ellison supports research on aging. Oil billionaire, Harold Hamm, is intent on eliminating diabetes in his lifetime. He supports this desire via the diabetes center at the University of Oklahoma. But some billionaires prefer to spread their wings by affecting worldwide efforts. Years ago, Warren Buffet gave generously to help fund the Bill & Melinda Gates Foundation. This foundation focuses heavily on extreme poverty and poor health in developing countries.
While education and health continue to be the most popular giving areas for the affluent, human services and the arts will also see their fair share of support. Bob Parsons, of GoDaddy fame, supports charities aimed at children.
Eli Broad, philanthropist and entrepreneur, has been a prominent name in the arts since 1973. He is on the board of the Museum of Contemporary Art in Los Angeles and is a big financial contributor. The list goes on and on.The industries represented by these interest areas are diverse, but technology services/software and banking/investment are likely to get just over 50% of the pledgers funds, according to Glasspockets.
Billionaires around the world want to stir up discussion and action around philanthropy. The Giving Pledge campaign is providing a way for them to address issues publicly with the hope of attracting more do-gooders around the globe.