Big Time Charity

There is recently an interest in large scale philanthropy.  The charge is being led by The Gates family, Warren Buffet and many others.  It may have begun in 1997 with Ted Turner’s billion dollar pledge to the UN.

The December 2 issue of Forbes has an article about the top 50 donors.  You can find it here.

Before you go further, notice that if you had donated $50 million in 2012, you would occupy 32nd place.  For $20 million you don’t make the list.  These people are serious donors and have serious wealth with which to support their positions.

What is it about people with great wealth and charity?  What motivates them?  There are many factors but the ones I see are these:

  • They have come to the conclusion that you can live as well with $1 billion as you can with $10 billion.  So when the impact of more money on their life is near zero, the value to society is greater.  Therefore give it away.
  • People of great wealth mostly did not get money by accident.  They understand money and how to use it.  They know how the money is used and they can have an immediate impact because they are careful of both the purpose and the implementation.
  • People with great wealth do charitable things mostly for reasons other than money.  They play for success.  For people of wealth achievement is the measure.  Money is not.  Minimizing polio and malaria in the third world would bring more satisfaction to Bill Gates than keeping $5 billion.
  • These people can provide the little extra that drives an otherwise viable project a little faster or a little more completely.
  • Most of these people and their foundations make little effort to ameliorate problems.  They work on solving problems.
  • People with “extra money” have seen that governments are, at best, inept as project managers.  They think they are better at all of the selecting, the analysis and the design of tactics.  Rather than wait around they are just doing it.

There seem to be themes in their efforts.

  1. Medical care.  Especially in the third world.
  2. Education.  Especially in the United States.

The education in the United states seems odd at first glance.  Nonetheless there are some fascinating things on the go.  The Gates foundation is a big supporter of the Khan Academy.  A fascinating and modern way to teach.  Take a look here and make sure your children and grandchildren know about it.  There is a fascinating TED Talk too.  Watch this if you want to see the future of education.  20 minutes.

Another interesting one is The Robin Hood Foundation.  Fixing schools one at a time.  Why.  The founders  see the US as in the bottom quartile for quality of education.  Also from Forbes 

Obviously few of us can contribute large money, but all of us can contribute something.  Choose you charities with care.  Solving problems eliminates problems.  Dealing with the symptoms does not.  If anything dealing with the symptoms make the problem grow rather than shrink.

As the end of the year approaches and many are planning to catch up on their donations, think it through more thoroughly.  All of us can help a little and if we do it thoughtfully, we can collectively make a big difference.  Talk to a financial adviser about how leverage your gifts.  You might be surprised what you can do.

Don Shaughnessy is a retired partner in an international accounting firm and is presently with The Protectors Group, a large personal insurance, employee benefits and investment agency in Peterborough Ontario.  |  Twitter @DonShaughnessy  |  Follow by email at moneyFYI

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