Charity Instead of the IRS
Published in Frankfurter Rundschau
(Germany) on 5 August 2010
by Christoph Albrecht-Heider (link to
original)
American billionaires want to give away part of their assets. They could just give it to the government, but their concept of community doesn’t extend quite that far.
Of course, it’s preferable that billionaires donate a portion of their fortunes instead of squandering it or keeping it under the mattress. One may find occasional altruism and chronic craving in the same person, as personified in the example of Larry Ellison. The founder of the Oracle software firm is one of those who has answered the call put out by Bill Gates and Warren Buffett to give half their fortunes away to good causes. But Ellison also enjoys letting the world share in his egomaniacal spending habits — like when he buys fighter jets or takes on the enormous expense of funding a sailing team that eats up tens of millions of dollars annually.
Naturally, we don’t begrudge philanthropic organizations a single dollar they’ll get from the rich via the Gates-Buffett Giving Pledge. And, yes, the public request to give may even put pressure on various hedge fund managers as well. The Wall Street Journal, in any case, has published a list of names of those who have pledged, so comparisons with those who have not are inevitable.
Before anyone starts bowing down before these future donors, however, bear in mind that their heirs could easily live a life of total luxury even if they inherited just one-half of one percent of the family assets. According to the latest Forbes Magazine rankings, there are over 1,000 people worldwide with a net worth in excess of a billion dollars. The times in which kings and clergy squeezed the people for donations, and were thus able to amass personal fortunes, are long past. These days, one good idea in the world of the Internet or computers is enough to make one a Croesus in very short order.
Maybe the comparative simplicity with which the nouveau riche became wealthy is embarrassing to them; perhaps they suspect they are the reverse side of the poverty caused by the economic crisis; maybe some of them have figured out that the billionaires collectively could have easily saved many banks themselves and thus spared governments (and therefore the taxpayers) from having to go into debt for the foreseeable future to do so.
But if they did, they made those calculations just for fun, because nothing is more foreign to most wealthy people than the idea of giving the state even a bit of their wealth for better education or health care for everyone. There was already an anti-government tradition right where the Giving Pledge idea came into being; before anyone would give the government the money to found a museum, they would build one with their own money and name it after themselves.
The super-rich, like those in show business or professional sports, cast themselves in the role of generous people. Charity Lady has become a professional, or let’s say at the very least a vocational title for women who organize glamorous galas where the attendees then appear on the pages of society magazines. These elites could get together for no reason whatsoever, but it’s considered noble if they do so to help poor black kids.
A preferred method to make a name for oneself is the foundation. Turning to those, many rich people reduce their tax burden — taxes that benefit the community, and taxes the wealthy consider compulsory giving. Not that those patrons would only support projects out of pure vanity, but it’s typical that donations are generally larger in cases where donors have some influence over where the money goes. And nothing is more distasteful to them than putting more than is necessary in that big pot called the budget where they would just be anonymous taxpayers like the rest of us. But wealthy people who donate a great deal to charity in order to pay less in taxes aren’t living up to the social contract.
Ted Turner — he’s again one of the donors to this cause — did it differently twelve years ago. He gave the United Nations one billion dollars of his own money. It’s entirely possible that the U.N. didn’t spend every single Turner dollar wisely, but the former media magnate’s gesture was basically the right one.
Of course, it’s preferable that billionaires donate a portion of their fortunes instead of squandering it or keeping it under the mattress. One may find occasional altruism and chronic craving in the same person, as personified in the example of Larry Ellison. The founder of the Oracle software firm is one of those who has answered the call put out by Bill Gates and Warren Buffett to give half their fortunes away to good causes. But Ellison also enjoys letting the world share in his egomaniacal spending habits — like when he buys fighter jets or takes on the enormous expense of funding a sailing team that eats up tens of millions of dollars annually.
Naturally, we don’t begrudge philanthropic organizations a single dollar they’ll get from the rich via the Gates-Buffett Giving Pledge. And, yes, the public request to give may even put pressure on various hedge fund managers as well. The Wall Street Journal, in any case, has published a list of names of those who have pledged, so comparisons with those who have not are inevitable.
Before anyone starts bowing down before these future donors, however, bear in mind that their heirs could easily live a life of total luxury even if they inherited just one-half of one percent of the family assets. According to the latest Forbes Magazine rankings, there are over 1,000 people worldwide with a net worth in excess of a billion dollars. The times in which kings and clergy squeezed the people for donations, and were thus able to amass personal fortunes, are long past. These days, one good idea in the world of the Internet or computers is enough to make one a Croesus in very short order.
Maybe the comparative simplicity with which the nouveau riche became wealthy is embarrassing to them; perhaps they suspect they are the reverse side of the poverty caused by the economic crisis; maybe some of them have figured out that the billionaires collectively could have easily saved many banks themselves and thus spared governments (and therefore the taxpayers) from having to go into debt for the foreseeable future to do so.
But if they did, they made those calculations just for fun, because nothing is more foreign to most wealthy people than the idea of giving the state even a bit of their wealth for better education or health care for everyone. There was already an anti-government tradition right where the Giving Pledge idea came into being; before anyone would give the government the money to found a museum, they would build one with their own money and name it after themselves.
The super-rich, like those in show business or professional sports, cast themselves in the role of generous people. Charity Lady has become a professional, or let’s say at the very least a vocational title for women who organize glamorous galas where the attendees then appear on the pages of society magazines. These elites could get together for no reason whatsoever, but it’s considered noble if they do so to help poor black kids.
A preferred method to make a name for oneself is the foundation. Turning to those, many rich people reduce their tax burden — taxes that benefit the community, and taxes the wealthy consider compulsory giving. Not that those patrons would only support projects out of pure vanity, but it’s typical that donations are generally larger in cases where donors have some influence over where the money goes. And nothing is more distasteful to them than putting more than is necessary in that big pot called the budget where they would just be anonymous taxpayers like the rest of us. But wealthy people who donate a great deal to charity in order to pay less in taxes aren’t living up to the social contract.
Ted Turner — he’s again one of the donors to this cause — did it differently twelve years ago. He gave the United Nations one billion dollars of his own money. It’s entirely possible that the U.N. didn’t spend every single Turner dollar wisely, but the former media magnate’s gesture was basically the right one.
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