Showing posts with label charity. Show all posts
Showing posts with label charity. Show all posts

Thursday, August 12, 2010

Is it bad if Bill Gates gives away half of his estate?

That's the question I tackle with Ben Boychuk in our column for Scripps Howard News Service. You already got an early version of my take on this blog, so I'll give the floor to Ben.

The problem here isn't charity. The problem is Bill Gates and Warren Buffett.

Americans tend to disdain the gaudy rich and ostentatious displays of wealth. Gates and Buffett are what might be called ostentatious donors. Through his family foundation, Gates has donated tens of billions of dollars to causes ranging from education reform to vaccinations for poor women in third world countries. Buffett has given $8 billion alone to the Bill and Melinda Gates Foundation.

Have they helped people? Probably. Have they shaped public policy? Almost certainly. The question is whether those billions have shaped policy for the better.

To the extent Gates and Buffett have pushed for reforms that expand the scope and reach of national governments, that's not positive change. Gates and Buffett both have used their power and fortunes to advocate, among other things, greater federal say over corporate governance, choice in health care, and public education.

Americans may or may not agree with Gates and Buffett. I don't. Happily, Americans remain free to support charitable causes that advocate other points of view.

And the fact is, Americans are amazingly generous with their time and money. Despite the recession and high unemployment, Americans in 2009 gave more than $303.75 billion to charitable causes, according to Grenzenbach Glier and Associates, a consulting firm specializing in nonprofit philanthropy.

Self-described conservatives are especially giving. Arthur Brooks, who is now the president of the American Enterprise Institute, published a terrific book in 2006 called "Who Really Cares." In that book, Brooks provided data showing conservative families in 2000 gave about 30 percent more money per year than liberal-headed families on average, while earning 6 percent less income.

Brooks is careful to say it's not simply a matter of conservatives being more generous than liberals. Religion, family, source of income and beliefs about the role of government all influence how people give. But clearly charitable giving is not a "bottomless pit." At its best, it can be an investment in life-saving work or world changing ideas.

I think it's somewhat funny that Ben suggests the root of the complaint against Buffett and Gates is -- partly -- that they're "ostentatious givers." Step on a university campus sometime and you'll have a difficult time making your way around without seeing any number of buildings named for the donors. Is it ostentatious? Darn tootin'. I'm OK with that: vanity philanthropy is still philanthropy, at the end of the day.

The other part of the complaint, I suppose, is that Gates and Buffett tend towards the liberal side of things and put their money to use accordingly. I guess I have a similar complaint about the Koch Brothers. But I don't think -- and wouldn't be silly enough to say -- that David Koch's funding of the New York City Ballet somehow is a betrayal of capitalism.

To be fair, I don't think Ben would say that either. This'll probably sound condescending, but he's smarter and more generous of spirit than a lot of the people he's putatively called upon to defend in this week's column. He's better than they deserve.

Monday, August 9, 2010

Conservatives Against Philanthropy: Are Bill Gates and Warren Buffett Socialists?

They're wearing red. That can't be a coincidence.
I confess I don't get this reaction to the June story in Fortune about how Bill Gates and Warren Buffett are trying to persuade other billionaires to leave half their estates to charity:

As it turns out, however, the writer, senior editor-at-large Carol Loomis, struck a raw nerve with Fortune readers. Most were outraged – regarding the philanthropy plan as grandstanding that would do nothing to create jobs or to address horrific problems, including runaway government spending, the spiraling deficit, and the near-comatose state of the economy. As Fortune notes in its July 26 issue, “When Carol Loomis reported on Warren Buffett and Bill and Melinda Gates’ plan to pledge half of their wealth away, the comments – nearly 500 of them – came in fast and, literally, furious.”

According to Fortune’s own tally, the comments ran 2-to-1 against Buffett and Gates. The included 36 percent of who readers described the philanthropy plan as “a publicity stunt/dangerous/the work of socialists” and another 26 percent who said the money that Buffett, Gates, and the other billiionaires were proposing to spend on charity should be spent in other ways – to pay off the U.S. debt, to help individuals, or reinvested in the creation of new businesses and job opportunities.

Any number of readers wrote in to urge Buffett and Gates to remember that they were supposed to be capitalists. As one put it, “For all their vast wealth, these people don’t have a clue about how economies flourish and fail. Don’t GIVE your money away. That’s called putting it in a bottomless pit. INVEST IT. Create some badly needed jobs by creating something called BUSINESSES with that capital.”

This is why I'm confused: Conservatives have typically sought to defuse allegations that they're heartless moneygrubbers by saying that they're not against helping poor or needy people, exactly -- they just think it's the job of communities and churches and private charity, not the state. But if they're now so critical of private individuals actually giving their money to charity, what's left?

Is the Ayn Randization of the business community becoming complete? Is the only virtue to build yourself and your profit? Is altruism morally suspect in this universe?

A conservative friend suggests that some of the response is less "anti-charity" than a reaction against the kinds of charity Gates and Buffett are supporting. (Buffet has, quietly, used his philathropical reach to try to expand access to abortion.) And their efforts do seem aimed at more than feeding the hungry and healing the sick -- they want to use their billions to transform societies. From the Fortune article, a description of a dinner where several billionaires told their stories of philathropy:

The charitable causes discussed in those stories covered the spectrum: education, again and again; culture; hospitals and health; the environment; public policy; the poor generally. Bill Gates, who found the whole event "amazing," regarded the range of causes as admirable: "The diversity of American giving," he says, "is part of its beauty."

But it's not as though Gates or Buffett have the power to compel other rich people to give to charity -- much less determine which philanthropies those rich people choose to fund. So statism -- usually the bugaboo of capitalist-conservatives -- seems to be absent from the equation. How the effort equates to "socialism," I'm at a loss to understand.

As it happens, today's New York Times has a front-page story about India -- that economic up-and-comer whose growth sometimes seems to come at the expense of America's -- and the debate there over whether the poor have a right to eat. Even with the availability of more good-paying jobs than ever before, there are still many, many Indians in poverty: 421 million. Which happens to be more people than exist in the United States, rich or poor.

The point here is not to disparage capitalism. It may have some warts, but it has also created more wealth -- and lifted more people out of poverty -- than any other force in history. So Gates and Buffett's critics are right to an extent: Start some businesses and put some people to work! You know what? That can easily be done with the billions of dollars each man will still have, even after their sizable philanthropic donations. It's not an either-or question.

The critics seem more than a little  foolish when they suggest that two self-made billionaires don't understand economics. They're also guilty of narrow thinking. As India shows -- and American history demonstrates -- there are places the market cannot reach and people the market cannot help, even in the most vibrant of economies. (There are places it probably shouldn't reach, but that's another discussion.) Conservatives usually seem to know this, which is why they've advocated private charity as a solution to such ills. To see them now sneer at altruism is weird and a little unsettling.