Fifteen Years Into the Famous Giving Pledge

By Carolyn Karr

Remember Warren Buffet’s highly-publicized Giving Pledge? The billionaire challenged others to promise to donate at least half of their wealth during their lives or upon their deaths.

Fifteen years later, philanthropy reform leader Chuck Collins and the Institute for Policy Studies found that only one living Pledger — Laura and John Arnold — has fulfilled the Pledge. And, of the 256 billionaire individuals and families who signed the Pledge, only four are now worth less than $1 billion due to charitable giving. Their conclusion? The “Pledge is unfulfilled, unfulfillable, and not our ticket to a fairer, better future.”

So how did this big, uplifting idea flop so badly?

The Giving Pledge was inspired by Chuck Feeney (DutyFree) who gave his $8 billion fortune to charity before he died. Bill Gates and Warren Buffett initiated the Giving Pledge in 2010 as a way to increase charitable giving by U.S. billionaires.

In addition to the disappointing numbers, those who have given away substantial amounts have channeled most of that money to foundations or donor-advised funds (DAFs) rather than to active nonprofits. There it often lies dormant indefinitely—never reaching the causes and beneficiaries that the charitable tax deduction was intended to help.

Meanwhile, the public isn’t clear that such donations are subsidized through tax deductions at a rate of up to 74 cents per dollar donated.

While the Pledge may have been designed to diminish dramatic disparities in wealth, the chasm between income groups remains firmly intact. The recently passed tax law, (Trump’s Big Bill) provides massive tax cuts for the wealthiest Americans, making matters worse by further concentrating power over political and social policy in the same miniscule yet hugely influential group.

In addition to the generosity of the Arnolds, one bright spot is Bill Gates’s promise to spend down his foundation’s entire endowment over the next 20 years, although we wait to see how much is simply distributed to other foundations and DAFs. Alas, few other billionaires are doing likewise.

As the report recommends, rather than waiting for billionaires to give away their wealth voluntarily, we should adopt popular, common-sense, nonpartisan policy measures to direct billions of dollars into charitable gifts. And the most important way to fulfill the Pledge’s intent of re-distributing wealth would be to tax wealth at a fair rates.