This weekend Tim Cook announced that he would be giving away his fortune. As the head of Apple, that’s a lot to give away, but he’s not the first extremely wealthy individual to make that choice. A few years ago Warren Buffett declared that he planned to give away 99% of his wealth, and he invited others in his position to do likewise on a website called The Giving Pledge.
I wrote about The Giving Pledge when it launched, with Buffett’s letter the only entry at the time. There are now over 100, including some well known names – Ted Turner, George Lucas, Elon Musk, Mark Zuckerberg.
I often hear cynical comments about this. “They can afford to do it” is one, or suggestions that if they’re really so generous they wouldn’t have amassed so much in the first place. Or perhaps it’s the declaring it that people object to – although the reason for doing so, as Buffett said, is to encourage philanthropy and the list of signatories reflects that.
I think rich people giving their fortunes away is to be celebrated. There’s nothing wrong with wealth, if it is honestly gained and used well. It’s wealth at the expense of others and wealth hoarded that’s the problem. If you consider your wealth to be a resource at the disposal of others, you can do an immense amount of good in the world.
There’s another reason why we should encourage philanthropy – if we believe in a more equal world, giving is just about the only form of global redistribution open to us. Projects like Oxfam’s ‘Even it Up‘ campaign do a fine job of highlighting inequality, but solutions tend to cluster around holding back executive pay or closing tax loopholes, and that doesn’t get us very far when it comes to billionaires. Tax is only raised at the national level, and besides the pittance that goes out in foreign aid, it is also spent nationally. Even if billionaires paid a higher level of tax and didn’t wriggle out of it, it wouldn’t magically reach the poorest in the world. The tax from America’s 422 billionaires is spent in America, and the tax from Pakistan’s 1 billionaire is presumably spent in Pakistan.
It is highly unlikely that we are going to devise an international wealth tax, despite the occasional call for it. It seems decades away to me. That means we don’t have any formal mechanism for redistributing wealth from rich individuals, unless it is voluntary. Since a goodly number of people do want to give their money away, shouldn’t we talk more about philanthropy?
It’s not a perfect mechanism, of course. As the development world has discovered with the Bill and Melinda Gates Foundation, major philanthropists can wield an unhealthy amount of power. There’s the risk that the agenda gets rewritten around the particular interests of big donors, rather than the evidence base. As we saw with the Gates’ ‘reinvent the toilet’ competition, or One Laptop Per Child, the Silicon Valley philanthropists are drawn to technological solutions. Sometimes targets are too narrow, aimed too exclusively on a specific and glamorous goal. For example, there has been a rush of money towards finding a cure for Ebola, and not enough spent on supporting medical services in the Ebola areas, or investing in long-term health provision for poor communities. Everyone wants to say they funded the miracle cure, rather than paying the wages of nurses. Then there’s the risk of dependency, or the danger that by championing philanthropy, we ignore the injustices of a system that makes the rich richer far faster than the poor get less poor.
These are all legitimate concerns, but sound to me like an argument for intelligent and accountable philanthropy, rather than scepticism. After all, what else do we suggest the Gates, Mr Buffett or Tim Cook do with it all?