How billionaires give their money away.

How billionaires give their money away.

How billionaires give their money away.

The thinking behind the news.
Nov. 15 2006 3:30 PM

The Philanthropist's Handbook

How billionaires give their money away.

The Slate 60 Conference on Innovative Philanthropy
The Slate 60 Conference on Innovative Philanthropy

We got the idea for the Slate 60 from Ted Turner, who in 1996 gave a now-famous interview in which he complained that the superrich were being corrupted by the Forbes 400 list. Turner, an impolitic billionaire who actually acknowledges such motivations as ego and one-upmanship, said the richest Americans weren't giving their money away because they feared falling lower on the net-worth rankings. He hoped the mega-wealthy could be induced to compete instead at giving away their fortunes.

Jacob Weisberg Jacob Weisberg

Jacob Weisberg is chairman and editor-in-chief of The Slate Group and author of The Bush Tragedy. Follow him on Twitter.

Ted Turner
Ted Turner

Turner followed up his suggestion the next year with what was then the largest gift ever, a billion dollars to support the work of the United Nations. Slate followed up by starting our annual list of the 60 largest charitable donations. This week, we tried to take the idea a bit further by gathering some of the country's leading givers in Little Rock, Ark., for the Slate 60 Conference on Innovative Philanthropy. The event, which was co-sponsored by the Clinton Foundation and the Clinton School of Public Service, marked the 10th year of our list.

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The growth in the scale and ambition of major charitable donations in the 10 years of the Slate 60 reflects that there are more people than ever before with more money than anyone could ever hope to spend. But it also suggests that what Turner proposed really has come to pass. Steve Case, the founder of AOL, said at the conference that he thought competition among nonprofits was now "much more intense" than competition among businesses. These days, billionaires try to outdo each other not just in how much they give away, but also in how smart and effective they can be in tackling a variety of problems. Case boasted about a program his foundation supports that can supply clean water to African villages for just $6 per person with pumps powered by children playing. Perhaps Richard Branson or Pierre Omidyar, the founder of eBay who has become a significant philanthropic innovator, can figure out a way to do it for $4 while recycling aluminum cans. As opposed to the race to build the world's longest private yacht, this is a clash of titans we can all applaud.

The new philanthropists have much in common. The ethic of the recent technology billionaires, as opposed to the great industrial tycoons, is to be partners rather than patrons. The modern philanthropist dislikes the term charity, preferring to speak about his social investments. His language is entrepreneurial, sprinkled with references to metrics, scalability, leverage, and venture philanthropy. The fashion these days is also to work globally rather than locally, to erect programs rather than edifices, and to focus on those who are absolutely worst off in the developing world, more than on those who are relatively impoverished at home. But these commonalities still leave plenty of ground for individual self-expression. Indeed, as Sebastian Mallaby wrote in Slate last week, when wildly successful businessmen start giving away their money, they usually reflect the same traits they exhibited in piling it up.

You could see the businessman behind the philanthropist in the remarks of many participants in the conference. The same sort of blinding flash that led Ted Turner to found CNN in 1980 prompted him to give a billion dollars to the United Nations in 1997. But in less flamboyant moments, Turner is also an institution builder. Much as he stuck with cable broadcasting through years of losses and skepticism, he has spent 10 years turning his U.N. whim into an organization.

Bill Gates Sr.
Bill Gates Sr.

Or consider the Gates Foundation, represented at the meeting by Bill Gates Sr., who subversively asserted that there's no difference between the new and old philanthropy. With $30 billion in assets, soon to be doubled by Warren Buffett, the Gates Foundation dominates the philanthropic market, much as Microsoft leads in software—though it likewise disclaims any suggestion that it has too much power. Reflecting its founder's drive and interests, the Gates Foundation has focused above all on global health, where it has tried to shape markets to produce new vaccines and treatments for diseases that afflict the world's poor. It is methodical, long-range in its thinking, and bent on winning, treating malaria the way its founder once treated Apple—as an enemy to be crushed. The Gates Foundation also follows Microsoft in its fear of growing stodgy and bureaucratic as it expands. Much as Microsoft wanted to avoid becoming IBM, the Gates Foundation—despite protests to the contrary—dreads turning into the Ford Foundation.

Just as Google defines itself in contrast to Microsoft, Google.org can be described principally by its difference from the Gates Foundation. With approximately one-thirtieth the assets of its predecessor, Google's philanthropic arm will probably never be bigger than Gates'. But it can try to change the rules of the game—as it did with its announcement in September that it will work on a for-profit basis, freeing it to lobby the government and pay a return to its shareholders if it succeeds in inventing a car that gets 500 miles per gallon. Google.org isn't very far along, but Larry Page's remarks at the conference suggested that its efforts will be characterized by his love of cool technology and taste for open collaboration. Page mentioned two ideas that fit this mold: an effort to comprehensively scan newspapers around the world to glean an earlier warning about pandemics, and translation software that would dramatically increase the small number of English-language books accessible in Arabic. Page and his partner, Sergey Brin, don't see much distinction between a technology business that contributes to society and philanthropy that might turn a profit.

Buffett, too, is giving it back the way he made it. Buffet's hallmarks are modesty and self-effacement. His business method is to search out value, empower the most-capable managers he can find, and invest with an eye to "forever." By delegating the dispersal of his fortune to the Gates Foundation, he has done precisely the same thing. Casting vanity aside, he looked at his options and concluded that the highest social returns would come from entrusting his wealth to the market leader. His major investment decision made, Buffett promptly receded as a philanthropist.

The same pattern applies to Bill Clinton, whose previous job was governing rather than building a business. Clinton, who gave an inspiring address at the conference, is a polymathic philanthropist, who wants to understand everything, convene everyone, and solve all of the world's problems at once. So far, he has taken on HIV/AIDS, climate change, childhood obesity, urban enterprise, tsunami relief, and Katrina recovery—not to mention spurring philanthropy on a range of other issues through the Clinton Global Initiative and supporting his presidential center and school of public service in Little Rock. It's exhausting just to think about what he has to do to raise money for all of these projects every year. Like Clinton the president, Clinton the philanthropist is trying to accomplish more than any single human possibly can. It seems safe to predict that he will, again, fail at much while accomplishing a great deal.