How to fix the billionaires' "Giving Pledge."

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Aug. 18 2010 2:28 PM

How To Fix the Billionaires' "Giving Pledge"

Show us the money—and put it to work now!

Bill Gates and Warren Buffet. Click image to expand.

An angelic choir of media approbation has greeted Warren Buffett and Bill Gates' "Giving Pledge." The pledge they have set out to get the superrich of the nation to sign. The pledge where billionaires commit to give away the majority of their wealth to charity. Sometime. At some point, maybe after they're dead and declining stock values and greedy heirs and legatees have taken their share.

Which is why, to make the "Giving Pledge" more than a vague promise to do good, billionaires should be asked to put an audited 50 percent of their net worth on the table for charitable use now, when it can make a difference to people starving today, not later, after they've worked up a heart attack from their third wife on their fourth yacht. Look at how the Forbes list changes, how many billionaires lose their fortunes and drop off it from year to year. Gates and Buffett are right to use the Forbes list as a symbolic target, but let's get these big-talking "givers" to give now, when they've still got it.

I don't want to be too cynical about billionaires right off the bat, but there's a lot of wiggle room in that pledge. The text of the pledge obligates the pledger to give the majority of his wealth, a number that is not audited (and would obviously be minimized with taxes in mind, especially after death). In addition, the pledge just vaguely talks about giving, rather than specifying what it's most important to give money to.

But hey, why be cynical? After all, we know from recent experience we can always trust billionaires not to hide their assets and to be extremely scrupulous about their disposition. Oh, and yes, the definition of "charity": unspecified. (Would tips to struggling pole dancers count as anti-poverty work?)

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There's no doubt that the billionaires pledge is a beautiful idea, and Gates and Buffett deserve at least some of the sainthood the media has conferred on them. They've just announced they've already signed up 40 billionaires, including New York Mayor Michael Bloomberg, Star Wars' George Lucas, and Oracle's Larry Ellison. Even so, there has been little scrutiny amid the adulation of what the "Giving Pledge" really means. In fact, it may require more than warm and fuzzy words, gauzy and fluffy sentiments, to extract the cold hard cash.

There has been a lot of billionaire self-congratulation (Mayor Bloomberg, I'm looking at you), and Gates and Buffett themselves have already shown exemplary generosity. But it's worth pressing the rest of the world's billionaires, many of whom have declared that they already give munificently to their "private charitable trusts" (not exactly transparent institutions) and thus that they've basically pretty much fulfilled their pledge obligations already.

And I think I can speak for the rest of the world when I say: Dudes, the "pledge" is nice and all, but show us the money if you want the credit. And show it to us now, before you die, not in some distant future when a lot of poor and diseased people will themselves have died for lack of timely aid. 

And as self-appointed representative of the neediest potential beneficiaries of the "Giving Pledge," the billion or so stricken with hunger, poverty, and disease in the world, I think I know a better way to save them sustainably than the well-meaning but nebulous Buffett-Gates plan.  A way that puts cash on the table and then gets it to the people and places that most need it most efficiently and synergistically. 

First though, for those of you not familiar with the Billionaire's "Giving Pledge," it was first unveiled June 16 in Fortune, supposedly dreamed up a year or so earlier. As Fortune put it:

Buffett and Gates and his wife, Melinda, set the goal: They are driving to get the super-rich, starting with the Forbes list of the 400 wealthiest Americans, to pledge—literally pledge—at least 50% of their net worth to charity during their lifetimes or at death.

I think everyone would feel more trusting about the pledge if the givers didn't just pledge half their net worth but publicly named that net worth and allowed a Gates- and Buffett-appointed auditor to see if it was realistic. Otherwise, some people might want to inflate their worth for bragging purposes or deflate it for tax purposes. There's an old New York street saying: "Money talks, bullshit walks." Let's see what the money says when it talks.

Furthermore, there's a lot of incentive for them to spend what they have on luxuries and babes while there's a breath left in their body. After they're dead, why should they care how much is left behind and who gets it? They get the private islands and the flattering approbation of the world for their exemplary generosity. Then they die. 

It's an indication that benevolent billionaires like Buffett and Gates can let their own lofty and idealistic visions obscure the dark, sordid underbelly of your average billionaire's behavior. Do I need to repeat the line from Balzac? "Behind every great fortune there lies a great crime."

And who's going to say no to Buffett and Gates with their combined fortunes behind them, enough to intimidate even the most brazen 10-figure billionaire? What do they have to lose? It's an incentive to spend everything they have when they're alive and leave the rest for the lawyers to dole out to Buffett and Gates when they're dead.

Besides, look at all the perks: All signatories will be invited to attend three or four dinners this fall, Buffett told the Wall Street Journal. Note the awesome "three or four" (italics mine). I bet the food is gonna be great!  I sure hope those famished billionaires get that fourth gratis dinner. Plus, I understand they all get to wear little halos made of pipe cleaners on their heads. No, really, I'm all for it and applaud it, I do!  I just think they haven't figured out how to actually extract cash from these guys, cash that will go to the right places. Not some wing of an art gallery that gets named after them and allows them to hype the value of their collection.

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