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The Business of Giving

Exploring philanthropy, non-profits and socially motivated business, from the Gates Foundation to your donation. A fresh look at the economy of good intentions.

August 12, 2010 at 11:49 AM

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The inspiration behind the billionaire pledge: Bolder Giving

Posted by Kristi Heim

How much money is enough? Is a system that produces so many billionaires a fair one? Is it a good idea to ask billionaires to contribute their fortunes to charity? If they do, are the results going to be positive?

So far, 40 billionaires have responded to the challenge by Warren Buffett and Bill and Melinda Gates to donate at least half of their money to philanthropy. But "The Giving Pledge" has also inspired some deeper questions about the role of wealth in society.

New research reported by the Wall Street Journal finds that the top 5 percent of Americans by income are responsible for nearly as much consumer spending as the bottom 80 percent.

The U.S. hasn't seen such a high concentration of wealth since the 1920s, with a relatively small number of individuals at the top who have personal control of huge assets.

"It creates an opportunity for people of wealth to think about how much to keep and how much to give," said Jason Franklin, executive director of the group Bolder Giving and a lecturer on public administration at New York University. The new Gilded Age points to both "possibility in philanthropy and an indicator of inequality," he said.

Bolder Giving, founded by the Boston couple Anne and Christopher Ellinger, aims to get people across the economic spectrum to think about how to donate a higher percentage of their assets and how to become effective philanthropists who can inspire and collaborate with others.

Even with economic inequality of nearly historic proportions, average charitable giving in the U.S. has remained between 2 and 3 percent of income, the group says. Our "intense consumer culture urges people to accumulate more and spend more."

At the same time, society is in a period of great flux where a sense of energy and optimism mixes with heightened concern, Franklin said.

"We're in a volatile moment where it seems each time we turn around we're facing major concerns from the oil spill to the economy," he said. "It feels like we're really on the brink of change that could be positive, but we could also be on the brink of things changing negatively."

In early May, the small three-year-old organization got a call from the Gates Foundation "out of the blue" with an offer to support its work. "That's a call every non-profit dreams of," Franklin said. Six weeks later Bolder Giving received a $675,000 grant from the foundation to expand its reach. Melinda Gates has credited the group's work in talking about the impetus for The Giving Pledge.

Reaction to the Giving Pledge in some parts of the world, such as Germany, has been critical. Millionaires there said charity by the rich shouldn't be seen as a replacement for basic functions of government, according to an article by Der Spiegel.

"Forty superwealthy people want to decide what their money will be used for," said shipping magnate Peter Krämer. "That runs counter to the democratically legitimate state."

Franklin agrees there is a larger question about the implications for civil society and decision making. "Philanthropy is almost always motivated by the desire to help or give back," he said, though "it is giving back on an individual basis rather than collectively."


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