Last week another 17 families announced they were taking the Giving Pledge and committing to giving the “majority of their wealth to philanthropy.” This follows an earlier announcement in August when a group of 40 families took the pledge, a long-term charitable project launched by Warren Buffett and Bill and Melinda Gates. Thanks to Darin McKeever of the Gates Foundation for pointing out the website for the Giving Pledge – www.givingpledge.org – which has copies of the letters that each of the families has written. Check it out; it makes for some fascinating reading.
Among the more interesting pieces is that of Warren Buffett. Here’s my favorite quote from his letter: “I’ve worked in an economy that rewards someone who saves the lives of others on a battlefield with a medal, rewards a great teacher with thank-you notes from parents, but rewards those who can detect the mispricing of securities with sums reaching into the billions. In short, fate’s distribution of long straws is wildly capricious.”
And a few more excerpts from his letter:
Millions of people who regularly contribute to churches, schools, and other organizations thereby relinquish the use of funds that would otherwise benefit their own families. The dollars these people drop into a collection plate or give to United Way mean forgone movies, dinners out, or other personal pleasures. In contrast, my family and I will give up nothing we need or want by fulfilling this 99% pledge.
Moreover, this pledge does not leave me contributing the most precious asset, which is time. Many people, including — I’m proud to say — my three children, give extensively of their own time and talents to help others. Gifts of this kind often prove far more valuable than money. A struggling child, befriended and nurtured by a caring mentor, receives a gift whose value far exceeds what can be bestowed by a check. My sister, Doris, extends significant person-to-person help daily. I’ve done little of this.
Some material things make my life more enjoyable; many, however, would not. I like having an expensive private plane, but owning a half-dozen homes would be a burden. Too often, a vast collection of possessions ends up possessing its owner. The asset I most value, aside from health, is interesting, diverse, and long-standing friends.
My wealth has come from a combination of living in America, some lucky genes, and compound interest. Both my children and I won what I call the ovarian lottery. (For starters, the odds against my 1930 birth taking place in the U.S. were at least 30 to 1. My being male and white also removed huge obstacles that a majority of Americans then faced.) My luck was accentuated by my living in a market system that sometimes produces distorted results, though overall it serves our country well.
The reaction of my family and me to our extraordinary good fortune is not guilt, but rather gratitude. Were we to use more than 1% of my claim checks on ourselves, neither our happiness nor our well-being would be enhanced. In contrast, that remaining 99% can have a huge effect on the health and welfare of others.
I think Mr. Buffet’s comments are honorable, and as I’ve mentioned before, I think the Giving Pledge is a great thing for the nonprofit sector. It increases public attention of the vital work the nonprofit sector provides and the need for financial support. By increasing visibility, the Pledge helps to encourage people to think more about philanthropy and their own giving commitments. I like the fact that Mr. Buffet’s priorities are applicable to all of us – not just the super rich.
However, I can’t stress enough how important it is for these donors – for all donors – to take a few minutes to think about priorities and goals before they give. Asking a few questions before investing can ensure that the billions being donated are going to the most effective nonprofits – which can in turn make the sector that much more successful.
The preceding is a guest post by Bob Ottenhoff, Chief Executive of the Center for Disaster Philanthropy. With an entrepreneurial spirit, strong technology focus, and a quest to make an impact in the world, Bob has the ability to take an organization and lead it into strong performance, sustainability, and industry leadership.