A little noticed piece of news emerged in the world of philanthropy this week. A dozen new billionaires signed onto the Buffett-Gates Giving Pledge. The Pledge, established in 2010 by Warren Buffett and Bill Gates, encourages the world's wealthiest individuals to give at least half of their wealth to charity rather than passing it on to their children. With the addition of these signatories, 105 billionaires have now committed a total of $500 billion to philanthropy.
This news is important for a few key reasons. First, Gates and Buffett have done a great job of engaging people around the world to donate their wealth to charity. Most people never thought the Pledge would succeed given the entrenched tradition of passing wealth along to one's children. Even in a country like the U.S. that prides itself upon equality of opportunity, inheritances have historically comprised about 20-50% of wealth accumulation--a troubling tradition that stifles ambition and innovation. The fact that 105 billionaires have signed on, including the latest Pledgers who represent 8 different countries, is an encouraging indicator that the culture of wealth is shifting.
As we look to the future, we have reason to hope that this increased commitment to charitable giving will become the social norm both in the U.S. and abroad. Imagine a society in which extreme giving is the new status symbol for the wealthy. The Pledge could evolve into a giving competition and eventually a Global Philanthropy Award on par with the Nobel Prize.
In the same way that the Nobel Prize awards cultural and scientific advances, this competition would award those making the most profound contributions to humanity--with projects ranging from addressing hunger in Africa, to developing an HIV vaccine, to housing the homeless in our local communities. We've already seen the concept take shape through the X Prize, which promotes technological innovations for the benefit of humanity. This model of incentivizing philanthropy through competition and peer pressure has proven successful. If we can leverage it further, we stand to change the landscape of philanthropy worldwide.
Though it remains to be seen how each additional Pledger will allocate their contribution, this growing commitment to philanthropy is positive. We are moving in the right direction. By upping the stakes, we can further accelerate progress and unlock the potential of the world's elite, from Seattle to Moscow. It's no longer a question of whether or not others will sign the Pledge, but rather who will be the next to step forward. Billionaires, you're up.