I don’t have much to say (in writing) about the tragedy we are witnessing in the Middle East, not to mention Ukraine, or Lewiston, Maine, other than we are at the brink of electing an autocratic gun-loving felon as our next President, while otherwise caring foundation trustees, executives, and the ultra-rich stand on the sidelines rather than supporting underfunded nonprofit efforts to save our democracy. Who controls the Presidency, Senate, House and Supreme Court will be decided in almost exactly one year–will we funders help insure that the electorate is well informed, that they have the right to vote, and that their vote is counted? The early returns from nonprofits suggests “no.”
Today is Halloween (Happy Halloween), when according to History.com, Americans will spend over $500 million on costumes for their pets. That money could instead help get a lot of people to the polls next November. Nonetheless, this holiday should provide a much-needed break from the barrage of bad news that includes now having an election-denying anti-everything-worth-believing-in Speaker of the House of Representatives.
In the spirit of the day I’d like to offer up a Halloween Which: which of these two lifestyle choices do you most admire?
Option One. Earlier in the month the Washington Post published an article, Servants seem out of touch. Enter the billionaire’s battalion of experts that gave us another glimpse of the ultra-rich lifestyle: “At the $100 million homes of these masters of the universe, vast teams of niche connoisseurs make sure that the right furnishings are in the lounge, the right cars are in the garage, the right toys are on the yacht, the right wines are in the cellar and the right works of art are on the walls….’Pro-natalists’ tap matchmakers to secure high-IQ partners to produce elite super children for a world they agree is doomed to societal and environmental collapse.” And so on and so on. (For more about the so ons, read Jackpot.)
Option Two. Charles F. Feeney died October 9 at the age of 92. Feeney made billions as the pioneer of duty-free shops, and lived the Option One lifestyle during the early years of his wealth. But then he decided to give it all up ($8 billion in total), put his company into the Atlantic Philanthropies foundation, and lived for the rest of his life as someone concerned about every penny he spent. Warren Buffett noted: “No one in that category—certainly including me—except Chuck has given away sums which required that they change their own personal living standard.” {Although for sure others of lesser means have.}
He not only exemplified, but promoted “giving while living,” making Atlantic Philanthropies the largest foundation in history to spend down its entire endowment. And most of that giving was done anonymously. As the New York Times points out, “his name appeared on none of the 1,000 buildings on five continents that he gave $2.7 billion to fund.” A man without an edifice complex!
So what is your choice: option 1 or option 2? For sure, billionaires overwhelmingly have chosen option 1. Of the 730 U.S. billionaires, only about 200 have signed the Giving Pledge, which in itself is a low bar, calling for giving away just half of one’s wealth. And though originally intended to encourage “giving while living,” the pledge now allows giving from the grave (very Halloweenish). If Warren Buffet wanted to emulate Feeney, he would have to give away about $30 billion per year, given his wealth of $110 billion and taking into account annual income. Bill Gates, also with about $110 billion, likely would have to give away approximately $15 billion per year based on his age. That’s not counting the $60 billion in the Gates Foundation. And neither would have to give up their climate impacting private planes (actually, Gates himself has four private jets). Much the same could be said of all billionaires, pledgers or not–it’s time to ramp up their charitable giving.
Foundations could emulate Atlantic Philanthropies spend out, or at least distribute more. I was recently at a meeting with the CEO of a billion-dollar foundation, obviously one of the good ones, with impressive foundation priorities and funding program. But–and this is a big “but”–the foundation is a 5-percenter. When the law regulating private foundations was enacted, Congress established a 5% minimum payout to make sure that when the ultra-rich established their foundations that at least some minimal amount would actually make it to nonprofits. As has been reported over and over again, that minimum has been translated by the vast majority of the foundation community–particularly the largest establishment foundations–as a maximum, doling out just at or slightly above 5 percent (including their charitable expenses).
What if this CEO and Board simply doubled the size of the grants the foundation has made to each and every one of their grantees? On the face of it this seems naïve and simplistic. But is it? The foundation has already selected what it thinks are the best grantees to advance their objectives. It is hard to believe that any one of the grantees couldn’t put more money to good use.
In Poverty, By America, author Matthew Desmond drives home the point that consumerism has a large responsibility for forcing people to exist with less than a living wage. We shop for products at the lowest possible cost and businesses respond by squeezing employee salaries. Aren’t foundations doing the same thing with their nonprofit grantees, asking them to do more with less? Based on historical investment returns, doubling down–moving to a 10% payout–would still allow a foundation to continue grant making for 40 or more years, a reasonable lifetime.
When Feeney signed the Giving Pledge in 2011, he wrote, “I cannot think of a more personally rewarding and appropriate use of wealth than to give while one is living–to personally devote oneself to meaningful efforts to improve the human condition.”
Whether one is a wealthy individual or manages a wealthy foundation, my wish is that we heed Feeney’s words: “The need is now. Why wait?”