Friday, June 18, 2010
Fortune reports that a May 2009 dinner of billionaires Bill Gates and Warren Buffett launched a campaign to encourage the richest Americans to give away at least 50 percent of their net worth. Based on the wealth guestimates for the members of the Forbes 400 list (all billionaires), full participation would result in $600 billion of donations. This is essentially double the total annual estimated giving by all Americans. Attendees at the initial dinner included Oprah Winfrey, Ted Turner, Michael Bloomberg, and George Soros. Gates and Buffett did not suggest any particular target for this giving, other than charitable causes generally.
The possibility of such generosity raises a number of interesting issues. Will the pattern of giving usually attributed to the wealthy, such as favoring institutions of higher education and the arts over other types of charities, also hold true for this super-rich group? Will they tend to create endowments, thereby reducing the increase in annual charitable expenditures to perhaps only 5 percent of the amount given, or follow in Warren Buffett's footsteps by requiring quick expenditure of their gifts? Will such a surge in giving, if it materializes, lead to greater or reduced calls for tightening the definition of what qualifies as "charitable" for federal tax purposes? Based just on the hundreds of comments already posted on the Fortune story that appeared a little more than 48 hours ago, people are certainly interested in what will happen if this effort is successful.