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Newsweek
4 days ago
- Business
- Newsweek
These Billionaires Pledged To Give Away Their Wealth. Instead, Most Are Getting Wealthier
Advocates for ideas and draws conclusions based on the interpretation of facts and data. Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content. The Giving Pledge just turned 15. Bill Gates, Melinda French, and Warren Buffett founded the Pledge in August 2010 to boost charitable giving among billionaires. Pledgers agree to give away half or more of their wealth within their lifetimes, or upon their deaths. The effort was inspired by Duty Free Shoppers founder Chuck Feeney, the reluctant billionaire who advocated "giving while living." Feeney gave away over $8 billion before he died, relinquishing his billionaire status to live a more modest life. "[Feeney] told me we should encourage people not to give just 50 percent," Gates recounted, "but as much as possible during their lifetime." The Giving Pledge is the largest and most visible public commitment that billionaires have made to distribute their vast fortunes. Over 256 individuals, couples, and families have signed, including 194 from the United States. U.S. money is pictured. U.S. money is pictured. Getty Images Our tax code's charitable deductions effectively allow billionaires to "opt out" of taxes—ostensibly to give back through charity. In the absence of higher taxes on the wealthy that could fund a stronger social safety net, voluntary commitments like the Giving Pledge are important. But in an era of staggering wealth inequality—and tax avoidance—privately held fortunes are larger than anyone can fathom. And charitable contributions simply aren't keeping up with what could be raised from a fairer tax code. In our new report, The Giving Pledge at 15, we found that the explosive growth of Giving Pledgers' wealth is outpacing their giving. At this rate, the Giving Pledge appears to be mostly an empty promise. Along with our co-authors Helen Flannery and Dan Petegorsky, we analyzed the philanthropic records of the pledgers. Some are bold and direct, like MacKenzie Scott, who's vowed to "keep at it until the safe is empty." Others need to pick up the pace, like John Paul DeJoria, whose foundation has awarded $54 million since its inception eight years ago—a paltry sum compared to his roughly $3 billion fortune. And there are those who seem to cravenly intertwine personal benefit with philanthropy—like Elon Musk, who in 2021 enjoyed some fortuitously timely tax relief from a stock transfer to his foundation. Across nearly every example, there's proof that the Pledge is unfulfilled, unfulfillable, and not our ticket to a fairer, better future. If hundreds of billionaires pledge to give away half their wealth in their lifetimes, we should expect that some would have less wealth than when they took the Pledge. But when adjusted for inflation, the 32 original U.S. pledgers who are still billionaires have collectively gotten 166 percent wealthier since they signed on in 2010. (Mark Zuckerberg and Priscilla Chan's wealth has increased an inflation-adjusted 2,919 percent since 2010!) Only one couple in this group, Laura and John Arnold, has fulfilled their commitment, moving billions in their lifetime—mostly to their own foundation. But that raises another issue. By our count, 80 percent of Giving Pledge donations have gone to private foundations—and billions more to other intermediaries. Donors get an immediate tax deduction, but the funds can remain sidelined for generations before they're granted out to real working charities—if ever. Play this out another 15 years and we'll witness the rise of family-controlled dynastic foundations worth trillions. These foundations will wield tremendous power, especially as their windfalls contrast with catastrophic cuts to the social safety net like those in the GOP's Big Beautiful Bill. A select few families will essentially decide how publicly subsidized funds are spent, concentrating power over our politics and civil society and jeopardizing our democracy. At 15, the Giving Pledge must either go big or reconsider its value. One path forward is to encourage a "Feeney Giving Pledge," an augmented commitment for existing pledgers to pay their fair share of taxes, give more while alive, and empower organizations led by non-billionaires to solve the urgent problems of our day. Feeney's example echoed in Bill Gates's May announcement that he would donate 99 percent of his Microsoft stock to his foundation, which he's pledged to wind down and close within 20 years. This voluntary effort would pair nicely with structural reforms. We should tax billionaires at a fair rate. And taxpayer-subsidized foundations and donor-advised funds (DAFs) should be subject to stronger transparency rules—and required to grant out funds to real, working charities more quickly. If billionaires' best intentions can't deliver a fairer economy, then it's up to the rest of us not to count on them. Chuck Collins directs the Program on Inequality at the Institute for Policy Studies. Bella DeVaan is the associate director of the IPS Charity Reform Initiative. They're coauthors of the new IPS report The Giving Pledge at 15. The views expressed in this article are the writers' own.
Time Magazine
20-05-2025
- Business
- Time Magazine
Katherine Lorenz
Being an heir to a billion-dollar fortune certainly has its benefits. Surprisingly, perhaps, it can also come with big challenges, from the intricacies of figuring out how best to carry out a loved one's legacy to the infighting that can sometimes boil over in families when great wealth is passed down. The difficulties and delights of managing a big inheritance are something that Katherine Lorenz, granddaughter of Texas oilman George P. Mitchell, is very familiar with—and dedicated to helping her fellow heirs navigate. Lorenz is the leader of the Next Gen pack, officially known as the Giving Pledge Next Generation group, the heirs of the ultra-wealthy philanthropists who formally promised to donate the majority of their wealth to charitable causes in their lifetimes or their wills. Lorenz co-founded the group in 2014 with 24 members. Its ranks have now expanded to 300, ranging in age from 21 to 75, as the press of the challenges they're likely to face becomes more urgent. Dozens of the nearly 250 billionaires who signed the Giving Pledge have died before wrapping up their giving plans. And about 50 of the remaining Pledgers are over age 80. 'Giving away money is easy. Making an impact is hard.' Lorenz's goal is to provide heirs with resources to help them establish decisionmaking processes, reduce family arguments, and deal with emotionally fraught questions like how strictly they need to adhere to their loved one's giving strategies vs. their own ideas about how and where they can do the most good. Lorenz, who is president of the Cynthia and George Mitchell Foundation, the nonprofit that her grandparents established in 1978, says, 'Is this their foundation? Is it my foundation? Is it our foundation? Who gets to decide what's important? Carrying out someone else's legacy is not easy.' To help, the Next Gen group offers in-person training sessions, WhatsApp chats, and access to help, such as consultants who can offer advice about ways to divide donation pools that allow disagreeing heirs to fund different charities. Last year, for the first time, the Next Gen group also attended the Giving Pledgers' annual meeting. Such big multigenerational gatherings are helpful, says Lorenz, who previously served as a senior adviser for the National Center for Family Philanthropy and deputy director of the Institute for Philanthropy. 'When you hear from other families what's worked for them or what hasn't worked, you get ideas,' she says. Lorenz knows firsthand how challenging—and rewarding—inheriting the responsibility for fulfilling a pledge can be. She was steeped in her grandfathers' concerns about improving sustainability—Mitchell made his fortune by pioneering the shale-gas extraction method commonly known as fracking—and leaving a legacy for the greater good. He was deeply concerned n general about energy and environmental conservation. She recalls, 'Every time you saw him, he'd say, 'If you can't make the world work with 4 billion people, how are you going to make it work with 10 billion people? What are you going to do about it?'' Yet she also believes the Next Gen has to figure out how to forge their own giving path. Newbie philanthropists often start out by writing checks to their alma mater, Lorenz says. But as they begin to zero in on what causes they really care about and where their dollars will do the most good, donations often shift to organizations that have a more direct effect on a community, such as food banks, land trusts, or arts groups. 'Giving away money is easy,' says Lorenz. 'Making an impact is hard.' In addition to helping families increase the size and impact of their donations, Lorenz says her goal is to help heirs turn a legacy from a potentially stressful burden to a joyous activity that brings relatives together—an outcome with benefits beyond the family. She says, 'When you enjoy it more, you give more.'
