Economy Original SP Staff

Report: ‘Giving Pledge’ Looks Philanthropic, Acts Plutocratic

Bill and Melinda Gates joined forces with Warren Buffett as the original pledge-funders a decade ago, and now some of the benefits for benefactors of the "Giving Pledge" are becoming clearer.
Facebook CEO Mark Zuckerberg speaks at Facebook’s Developer Conference on April 30, 2019. (Anthony Quintano / Flickr)(CC-BY-2.0)

So much for that “Giving Pledge.” Turns out that the group challenge very publicly launched in 2010 by a small army of extremely press-savvy billionaires—the likes of Bill Gates and Mark Zuckerberg among them—with the stated goal of shrinking their massive fortunes by the time they each expired isn’t quite as charitable as it was cracked up to be.  

In fact, according to a recent report by Business Insider’s Mattathias Schwartz, it’s something of an inversion of what its creators made it out to be, in that the people who stand to benefit the most are, thanks in part to the gymnastic leveraging of tax loopholes, just those same billionaire benefactors.

Here, Schwartz describes the plan’s most basic terms:

Death was the Giving Pledge deadline. You could give half your money away beforehand, or you could leave it to charity in your will. Zuckerberg, who at age 26 was among the second group of Giving Pledge signers, made clear that he did not intend to wait nearly that long.

“People wait until late in their career to give back,” Zuckerberg said in a Giving Pledge press release. “But why wait when there is so much to be done?”

In the decade since Bill and Melinda Gates joined forces with Warren Buffett as the original pledge-funders, and since their ranks swelled to include some 40 mega-rich families, much has indeed been done to set up and lay down foundations—but also to shore up participants’ prodigious resources and gain fame through on-brand displays of largesse while using their plan as a cover. This, as their time to complete their shared mission runs shorter and the income inequality gap yawns wider.

Take, once again, the Zuckerbergs as an example, per Schwartz’ analysis:

During its first five years, the Chan Zuckerberg Initiative handed out a total of $2.7 billion in grants — roughly 6% of their wealth at the time they made their pledge. By contrast, traditional private foundations are required by law to spend 5% of their assets each year. At their current rate of giving, the couple would make good on their promise only if they live past the age of 110. And that math doesn’t account for the skyrocketing price of Facebook’s stock, which nearly tripled during the initiative’s first five years.

Zuckerberg, of course, could decide to accelerate his philanthropy later in life and still live up to his commitment. But the Giving Pledge’s slow charitable roll is encouraged by the US tax system, which perversely rewards rich donors for their procrastination. By placing the money they’ve earmarked for charity into a variety of financial vehicles, Zuckerberg and other billionaires can warehouse the bulk of their wealth for years, use it to benefit their own interests, pass control of the vehicles to their children, and in some cases never have to give a dime to charity, all while enjoying a huge tax deduction.

That’s just one of many activating vignettes that make the machinations of those whose names wind up on buildings more intelligible to those who wind up working for them. Thematically speaking, this kind of thing has been going on for ages, with wealth-management pioneers such as Andrew Carnegie setting the mold for his successors. These days, one option for pulling off a colossal hustle in the name of philanthropy takes the form of the popular Donor-Advised Fund or DAF, a device that, as Schwartz notes, takes “only a few minutes to set up” and allows the ultra-flush to tuck away “hundreds of millions of dollars” that may or may not be used as intended. Or if it is, we may not find out in this lifetime.  

The whole piece is worth a read on Business Insider—that is, if you can get past the paywall. 

5 comments

  1. Thank you for these disclosures. Obviously, USian “charity” — like the so-called “social Services” and “peace initiatives” provided by USian governments — is but another of the innumerable Big Lies that further deepen our already abyssal ignorance in support of that ecogenocidal death-cult known euphemistically as Capitalism.

  2. Is anyone surprised that plutocrats use their money to benefit themselves? We had better get used to being serfs, those of us who are not already used to it. The plutocrats, nobles and the gentry have a firm grip on power and thus, our destinies. They will squeeze every paltry penny we earn from us hoping to ensnare us in debt and paying up to 20 to 25% interest to them. IF we are sometimes able to save a little money we get .02% or nothing for interest . They run off to China and Russia and every other place so they can make their non-taxed or low taxed untracked fortunes even as they track every penny of our insufficient wages and make sure all pennies are taxed. They take wages for meaningless so-called benefits that are little but profit making scams for themselves. They turn us against each other and blame China and Russia for our condition while they build more and bigger factories in their countries and beg to become their creditors and investors. They pass more laws every session domestically to privatize every human need – needs that are supposed to be paid for with our taxes, not to pay for their fortune seeking around the world. They shun and bad mouth nations that refuse to pass the same laws so they can do the same to their people. Most serfs could at least drink the water for free and grow most of their own food. Not so for most of us. Our only hope lies in the fact that our revolutions will have to come sooner than the serf’s of history did, or we won’t survive. I eagerly await the first food and water riots when the supply chain breaks or implodes. Already, housing is an issue because they want to own all of that need they can. Watch and learn. Did you know the Wall Street Journal has a weekly section called ‘Mansions’? Seriously. While you can hardly walk through any city park without seeing the homeless, this exists in America. There is a whole noble and gentry class out there working for the plutocrats.

  3. Americans who must work for a living must realize two things: 1) They are a member of the working class. They are not some temporarily dispossessed billionaire who just needs that promotion or that winning Lotto ticket to make it back.

    Having raised one’s awareness of one’s class status Americans should start exercising solidarity with others of their class by forming unions and recognizing the class structure of capitalist American society. Part of this recognition is to realize that we indeed are not “all in this together.” The capital class and their kindred the financiers have been working assiduously for decades to undermine the working class. I need not waste time and space going into all the tricks and contrivances the capitalists use to undermine the working class.

    Of course the tax laws favor the already rich as this article implies. Why because this is a country of, by and for the 1% capital class. And why is that so? Because the American working class is divided, demoralized and far too complacent.

    It’s past time the American working class made this a country for the workers and no longer a haven for the super-rich who milk the American working class for all they can get including the harm done by these manipulated tax laws.

  4. In the world of transparent journalism, staff writers have names, don’t they*?
    Or is this piece yet another, by an informed, unnamed source?
    Just wondering!

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