It was announced that 17 additional families have committed to return the majority of their wealth to charitable causes by taking the Giving Pledge. The announcement followed the news in August that a group of 40 families had taken the pledge, a long-term charitable project launched by Warren Buffett and Bill and Melinda Gates.
"People wait until late in their career to give back. But why wait when there is so much to be done?" "With a generation of younger folks who have thrived on the success of their companies, there is a big opportunity for many of us to give back earlier in our lifetime and see the impact of our philanthropic efforts."
As always seem to be the case in the nonprofit world, some "experts" offered a vague, odd criticism. From their perch on college campuses and at obscure NGOs, some said that maybe the Giving Pledge wouldn't motivate all potential philanthropists to get involved.
Others said that some of the people on the list had already said they were donating their money (something which everyone involved in the Giving Pledge proactively pointed out some time ago).
Others offered a half-baked and half-hearted criticism that the money being donated wouldn't be accountably tracked -- as if it were being accountably tracked before it were donated?
As someone who works closely with philanthropists every day, I can clearly say that the Giving Pledge is going to have a huge impact. Here are 10 reasons why:
- Peer pressure matters. High net worth individuals care what their friends think, and emulate their friends.
- Most high net worth individuals do not incorporate philanthropy into their lives in a meaningful way. Philanthropy is not buying a table at a party or bidding in auction. Those things are helpful to nonprofits, but serious philanthropists design serious, deep strategies.
- If philanthropy is cool, more people will want to do it. People buy art because it is cool. We can do the same thing for philanthropy.
- High net worth individuals look up to Bill and Melinda Gates and Warren Buffet. These are three of the most admired people in the business world. By having created the Giving Pledge, they have sent a message that people in their target audience will listen to.
- Positive PR for philanthropists is a positive thing for the world. We should heap praise on people who donate their time and money to the world's most pressing problems. That means more people will do it. It's always been odd to me that it is commonly accepted that an athlete should be worshiped by society for throwing a ball, but when philanthropists receive praise, that is seem as unseemly!
- If more high net worth individuals get involved in philanthropy, the nonprofit space will improve in quality. The sad reality is that many nonprofits do not perform well. Business thinking can help many of them improve their results, and smart donors will insist on smart strategies.
- By creating a list, the Giving Pledge creates a permanent commitment among those who take the pledge. Twenty years from now, the people who signed the list will still be focused on philanthropy.
- The children of these philanthropists will likely inherit their tradition of philanthropy. The inter-generational impact of this commitment will be exponential.
- People who aren't billionaires can make the same commitment. It was smart for the Giving Pledge to start with billionaires, but huge sums of philanthropic capital exist among those who might not have billions, but have hundreds of millions.
- The nonprofit sector can begin to count on sustainable funding from those who take the Giving Pledge. A major problem in the nonprofit world is the inability to predict sustainable revenue. As the participants in the Giving Pledge speak more publicly about their plans, this problem can be mitigated.
Congratulations to all of those who have taken the Giving Pledge, and to Warren Buffet and Bill and Melinda Gates who have set an example that all philanthropists should follow.