August 2020 marks the tenth anniversary of the Giving Pledge, an initiative cofounded by Bill Gates and Warren Buffett to boost giving by America’s billionaire class. Signers promised to give at least half of their net worth to charity, either while living or upon their death.
The Giving Pledge went public on August 4, 2010, with an initial 40 signers, all from the United States. At that time, there were 403 US billionaires. Now, 10 years later, the US has at least (the number fluctuates) 614 billionaires and dozens more of them have taken the Pledge. Since 2010, over 210 individuals and couples have signed on, and the group has expanded to include international pledgers.
The Giving Pledge, however, has a conundrum—the pace of billionaire wealth increases exceeds the flow of gifts. Many pledges will now likely be fulfilled by bequests to private family foundations, creating a new generation of family foundations that extends private power and influence in the name of generosity.
While Giving Away Half Their Wealth, Their Assets Doubled
The Giving Pledge is a positive statement by a significant portion of US billionaires that they intend to share their wealth. But the wealth of the billionaire class is growing so fast—even during the current pandemic—that it has outpaced giving. If pledgers want to make their promises real, they will have to dramatically accelerate their giving just to keep up with their asset growth.
The cohort of 62 US giving pledgers who were billionaires in 2010 have seen their wealth almost double over the past decade, even after adjusting for inflation. Their combined assets increased from $376 billion in 2010 to $734 billion in 2020 (as of July 18, 2020), according to our Institute for Policy Studies analysis.
Nine giving pledge members have seen their wealth more than triple over the past decade, including Mark Zuckerberg (1,783 percent), John Doerr (416 percent), Marc Benioff (400 percent), Bernie and Billie Marcus (311 percent), Ken Langone (288 percent), Ray Dalio (280 percent), Arthur Blank (277 percent), Stephen Schwarzman (245 percent), and Scott Cook and Signe Ostby (221 percent).
The 100 living US pledgers who were billionaires on March 18, 2020 had a combined wealth of $758 billion on that date, according to Forbes’ annual Billionaires Survey. Since then, during the worst four months of the pandemic, their collective wealth has increased by $214 billion, or 28 percent.
The Giving Pledge is a Case Study in Top-Heavy Philanthropy
The Giving Pledge is a reflection of the “top-heavy” giving trends resulting from four decades of wealth inequality. In a new report we co-authored, Gilded Giving 2020: How Wealth Inequality Distorts Philanthropy and Imperils Democracy, we document how the giving sector now mirrors the larger income and wealth inequality trends ravaging all aspects of society.
In 2019, almost $450 billion was donated to charities, up 4.2 percent over the previous year, according to Giving USA. But this upward trend, as NPQ has often noted, masks a growing imbalance in who gives.
Donations from small donors have been on a 20-year downward trend as low- and middle-income donors feel the squeeze from stagnant wages, declining savings and homeownership, the Great Recession of 2008, and now the pandemic. Between 2000 and 2016 (most recent data), the percentage of households giving to charity has dropped from 66 percent to 53 percent.
Meanwhile, almost all the growth in charitable giving has come from wealthy donors. A third of all charitable deductions are now claimed by households making over $1 million, with 52 percent claimed by households with over $200,000 annual income.
Moving the Money
For their commitments to be meaningful, some giving pledgers need to dramatically pick up the pace—or their promise may be viewed only as a publicity stunt.
For example, Spanx founder and billionaire Sara Blakely signed the Pledge in 2013. Blakely had already established the Spanx by Sara Blakely Foundation in 2006 to focus on women’s issues, but she has given less than $150,000 of her own assets to the foundation or other charities so far.
Billionaires like Blakely can take inspiration from some who have fulfilled their pledges to the point where they are no longer billionaires. Chuck Feeney, one of the original Giving Pledge members, gave away $8 billion over 22 years in an effective and focused manner through his Atlantic Philanthropies foundation. After reading Laura Garrett’s book, The Coming Plague, Atlantic made substantial investments in helping Vietnam develop a resilient public health system, which has served as a global leader in the response to the COVID-19 pandemic.