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Newsweek
3 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.
Mint
05-08-2025
- Business
- Mint
Some billionaires pledged to give away much of their wealth. Why they haven't.
Since signing the Giving Pledge in 2010, Houston billionaires John and Laura Arnold have given away nearly $5 billion to charitable causes. According to the Charity Reform Initiative of the Institute for Policy Studies, a nonprofit that advocates for changes to the tax code to encourage more direct giving, the Arnolds are the only original signers to have fulfilled the pledge. That is, the Arnolds have given away more than half of their wealth during their lifetime—a core pledge principle. A spokeswoman for Arnold Ventures, the couple's philanthropic vehicle, didn't return a request for comment. The Giving Pledge was created by Bill Gates and his former wife, Melinda French Gates, and Warren Buffett in 2010 to encourage those with extreme wealth to part with at least half of it during their lives or via their estates after they die. The Giving Pledge was founded with 40 members in 2010, expanding to nearly 60 that year. As of May, there were 255 signatories, including 191 from the U.S., according to the Giving Pledge. In a new report, titled 'The Giving Pledge at 15," the Charity Reform Initiative of the Institute for Policy Studies makes a case for why the pledge is 'unfulfilled, unfulfillable, and not our ticket to a fairer, better future." Critics of the report, however, say its analysis distorts the giving of those who have signed the pledge. Charity Reform Initiative's key criticism is that the wealthy rely on private foundations and donor-advised funds, or DAFs, vehicles that provide philanthropists with tax breaks before any dollars reach charitable organizations. Philanthropists also use limited liability corporations, which have fewer tax advantages but give donors more flexibility in where to deploy dollars. The group advocates for reform of the Giving Pledge alongside 'meaningful policy change" that would move money out of foundations and DAFs more quickly and would increase transparency and accountability. To track pledger giving, the report's researchers looked at Internal Revenue Service filings from foundations, sources such as a data base compiled by Altrata's Wealth-X, Forbes rankings, the Chronicle of Philanthropy, and public media reports. In a statement, a spokesperson for the Giving Pledge—which doesn't have a formal oversight body—said the pledge 'has helped create new norms of generosity and grown into a connected and active global learning community." The Charity Reform Initiative report 'raises important questions that aim to encourage greater giving," but the spokesperson said its 'reliance on incomplete data, and its exclusion of significant forms of charitable giving—such as gifts made to foundations and other intermediaries—paints a misleading picture of the impact and intent of Giving Pledge signatories and the spirit and intent of the Giving Pledge." The changes Charity Reform Initiative seeks include renaming the pledge in honor of the late Chuck Feeney—an original signer, who co-founded Duty Free Shoppers Group. Through Atlantic Philanthropies, Feeney's private foundation, the philanthropist gave away his entire fortune of $8 billion over 22 years before he died in 2023. A 'Feeney Giving Pledge," would 'call for Pledgers to pay their fair share of taxes, give money away while alive, and empower organizations led by non-billionaires to solve the urgent problems of our day," the report said. The initiative praises the example of Gates' recent promise to give away most of his wealth and to close his foundation—a total estimated at $200 billion—within 20 years. Also receiving praise is MacKenzie Scott, the former wife of founder Jeff Bezos who has given away more than $19 billion of an original $38 billion settlement she received through her divorce. At the same time, the report calls out billionaires such as venture capitalist Marc Andreessen (who hasn't signed the pledge) for blurring the boundary between his business goals and philanthropy, and Elon Musk (who signed it in 2012) for gifts that primarily offer him tax advantages and anonymity. Andreessen couldn't be reached for comment; Musk didn't respond to a request for comment. The anonymity of Musk's giving occurs because he channels foundation grants through DAFs, which, unlike private foundations, aren't required to disclose grant recipients. Scott is a big user of DAFs too, according to the report, although she keeps a running, detailed list of her donations at Yield Giving, an LLC she set up to manage her philanthropy. The crux of Charity Reform Initiative's argument is that philanthropy in the U.S. is structured to provide the wealthy with generous tax benefits that don't filter through to the individuals and causes in most need of their generosity. According to the group's estimates, about 80% of an estimated $206 billion gifted by the original group of pledgers went first to private foundations. Another $5 billion, the group estimates, probably went to DAFs. But critics of the new report say many wealthy philanthropists use their foundations to make substantive charitable gifts. Though the default has been for wealthy individuals to set up foundations to exist in perpetuity, Bank of America has been facilitating more conversations among those who want to spend down their fortunes when they are alive, according to Dianne Chipps Bailey, national philanthropic strategy executive at Bank of America. Also, a 2024 report from the Donor-Advised Fund Research Collaborative concluded 54% of DAFs granted at least half of their assets to nonprofits within three years. Foundations are required by law to distribute 5% of assets a year to charities, which can include gifts to DAFs. One reason a lot of wealth doesn't reach nonprofits in need isn't about tax structures—it's about donors who lack confidence in their ability to effectively give, Bailey says. A 2023 biennial study from the bank and Indiana University's Lilly Family School of Philanthropy found less than 5% of affluent Americans rate themselves as expert in charitable giving, Bailey says. 'This perception around a lack of confidence is a major barrier." By contrast, the small percentage who do have a philanthropy budget, and monitor the impact of their giving, are more likely to perceive their gifts are having the intended impact and they give more, she says. One way donors are overcoming their lack of confidence is by joining with other philanthropists in giving circles or donor collaboratives such as Women Moving Millions, a group of about 400 that commit to donating $1 million over 10 years to benefit women and girls. Another issue for the Charity Reform Initiative? Of the original U.S. signers of the pledge, 32 who are still billionaires are 283% wealthier since they signed (or 166% wealthier if adjusted for inflation), the report said. The authors argue that most billionaires are unlikely to sign a 'Feeney Giving Pledge," and they make a case for policy change that would ensure that dollars move more quickly out of tax-privileged vehicles to the nonprofits that need funding. They also argue that wealthy individuals should be taxed at 'a fair rate to prevent these fortunes from accumulating in the first place." The Bridgespan Group, which works with wealthy donors and foundations, published research this past November on approaches to philanthropy taken by Giving Pledgers. It found that about half of the 25 'most generous givers" in the U.S. have already donated more than 20% of their wealth, and that the most generous are choosing to use a mix of vehicles to get funding to nonprofits.
