I’m sure many of you have seen anecdotal evidence of this in your lives, but here it is, spelled out:
With the battle over whether to extend the Bush tax cuts for the wealthy shaping up as the major political event of the fall, opponents of repeal were handed a bounteous gift this summer when Bill Gates, Warren Buffett and 38 others announced that they formed a pact to give at least half their wealth to charity. After all, what better illustration could there be of the great social good that wealthy people can do when the government lets them keep their hard-earned dollars to spend as they please?
The problem is that the exceptional philanthropy of the superwealthy few doesn’t apply to the many more people defined as rich in the current debate over the Bush tax cuts — individuals earning over $200,000 and couples with revenues over $250,000. For decades, surveys have shown that upper-income Americans don’t give away as much of their money as they might and are particularly undistinguished as givers when compared with the poor, who are strikingly generous. A number of other studies have shown that lower-income Americans give proportionally more of their incomes to charity than do upper-income Americans. In 2001, Independent Sector, a nonprofit organization focused on charitable giving, found that households earning less than $25,000 a year gave away an average of 4.2 percent of their incomes; those with earnings of more than $75,000 gave away 2.7 percent.
More on that Gates-Buffett Giving Pledge:
Bill Gates and Warren Buffett announced today that 40 signers, including at least 30 billionaires and other wealthy families, had officially made the Giving Pledge–a promise to give away more than half their fortunes.
…Some people may write off the pledge as a gimmick aimed at simply improving the PR of the super-rich, which could certainly use some improving. But the list could become a strong financial force for philanthropy, if for no other reason than peer pressure, publicity and the inspiring example of others.
America’s rich have been searching for new status symbols in the wake of the Great Recession. Yachts, private jets, seaside mansions are so 2007. But being wealthy enough and generous enough to get on the Giving Pledge list may quickly become the ultimate badge of status–both in the U.S. and abroad.
The billionaire’s pledge is undeniably a good thing, and Buffet and Gates are setting an excellent example and saving lives. Still, for the 40+ signers, you have to ask yourself if being left with a few hundred million or even a few billion dollars after you’ve given away half your fortune should be considered a sacrifice in any meaningful sense of that word.