Beware dynastic billionaires, Warren wants YOU… | FT Alphaville

Beware dynastic billionaires, Warren wants YOU…

With the latest outbreak of Buffett and Gates-inspired philanthropic good cheer, it’s almost getting to the point where any billionaire who is not giving away a chunk of his or her fortune will be portrayed as the ultimate Grinch.

As Bloomberg reports on Thursday:

Facebook Inc. founder Mark Zuckerberg and 16 other wealthy U.S. individuals and families agreed to give most of their fortunes to charity, joining a pledge started by billionaires Warren Buffett and Bill Gates. Investor Carl Icahn and AOL Inc. co-founder Steve Case will also participate in the Giving Pledge project, the group said today in a statement distributed by Business Wire.

Since Buffett, chairman of Berkshire Hathaway, and Gates, chairman of Microsoft, announced their initiative in June, a total of 57 participants have signed up, and they are now expanding the philanthropic effort by meeting with billionaires from other countries, according to a statement from Giving Pledge.
The price of joining this particular club is higher than that of almost any other — the founders are trying to persuade fellow billionaires to commit as much as half of their wealth to philanthropic causes, according to the foundation.
“Never”, the FT noted back in August, “has there been such an attempt by a group of the wealthiest people in the world to enrol their peers in such grand scale philanthropy”.
In the process of boosting their “Giving Pledge” efforts, Buffett and the Gateses are trying to export their model of “philanthrocapitalism” or “venture capital” to the world, the FT adds.
The mission to court billionaires beyond America has driven them on cold-calling missions around the world, undoubtedly making tycoons everywhere nervous of picking up the phone to answer calls from anyone calling themselves “Warren” or “Bill”.
Heirs to vast fortunes should be particularly nervous. As the Wall Street Journal explains, the Giving Pledge was born in part “from a dislike by Mr. Buffett for dynastic wealth”. It continues:

Mr. Buffett over the years has schooled Mr. Gates on philanthropy, giving him a copy of “The Gospel of Wealth,” in which steel tycoon Andrew Carnegie argued that fortunes were often wasted by heirs and thus should be put to charitable use.

After the initial Giving Pledge list came out, some critics decried it as a public-relations stunt, or the product of tax-breaks that were undermining the government’s ability to offer critical services, noted the Journal.
Regardless of whether it’s a stunt or not, billionaires the world over be warned: philanthropic giving has been hit hard by the weak economy, with donations in the US falling 3.6 per cent to $303.75bn last year, down from $315bn in 2008, according to Giving USA. In 2008, they were down 2 per cent.
Charity donations in other parts of the world barely come near US levels — with charitable donations in the US reaching 1.67 per cent of GDP in 2006 while France came in at a meagre 0.14 per cent, according to CharitiesHouse.
But Gates and Buffett are determined to fix that. And “dynastic” billionaires are particularly in their sights.