Is the Giving Pledge Living Up to Its Potential?

A new study evaluating the Giving Pledge’s effectiveness says the 15-year-old effort — started by Bill Gates, Melinda French Gates, and Warren Buffett — to push the world’s wealthiest to give away at least half of their fortunes has largely failed. The report calls the realization of the Giving Pledge “weak” and “unfulfillable.”

While those may sound like fighting words, Chuck Collins, one of the authors of “The Giving Pledge at 15,” published by the Institute for Policy Studies, a progressive think tank, said that doesn’t mean the effort should shut down. Instead, he says, he would like Giving Pledge officials to examine how the pledge can live up to its potential, when the fortunes of the ultra-wealthy have soared. Nearly one-third of the 57 original U.S. Giving Pledgers who are still billionaires have collectively gotten 283 percent wealthier since they signed, the report finds.

“You would think 15 years later that some of the people who have taken a pledge to give away at least half their wealth would have less wealth, but their wealth is accelerating and growing faster than they’re giving it away,” Collins said. “That’s not the fault of the billionaires; that’s just the kind of way the economy is organized right now.”

Collins says if the wealth of Giving Pledge signers — such as Jeff Bezos or Mark Zuckerberg — continues to grow at the current pace, in 10 years the country will see a rise in vast, dynastic family foundations rather than more money going to those most in need.

“We’re not going to see billions flowing to working charities. We’re just going to see huge amounts of money parked in family-controlled foundations,” Collins said.

In response to a request for comment about the report’s findings, a Giving Pledge spokeswoman said, “The Giving Pledge has helped create new norms of generosity and grown into a connected and active global learning community. It has sparked tremendous giving and collaboration, mobilizing billions toward global challenges. Each signatory pursues their philanthropy individually and brings their own approach. What unites the community is a shared promise and a commitment to creating an impact.”

Among the Institute for Policy Study’s findings:

• In 2010, the effort’s first year, 57 U.S. individuals, couples, and families signed the Giving Pledge, making up about 14 percent of all 404 known U.S. billionaires at that time. If all living 2010 signers who are still billionaires fulfilled their pledges today, they would direct an additional $370 billion to charity.
• Today there are 256 signers, including 194 from the United States, according to the study. Of those, 110 are still billionaires and have a combined wealth of $1.7 trillion. Together, they account for nearly 13 percent of the total 876 billionaires in the United States.
• The original 57 signers have given an estimated $201 billion to charity to date. Almost 80 percent of original signers’ charitable gifts have gone toward their foundations, and about 2.5 percent of their donations have gone to donor-advised funds, providing tax reductions before any of their money reaches working charities.
• Among the original Giving Pledge signers, only John and Laura Arnold have fulfilled their commitment, giving away nearly $4.8 billion, mostly to the Laura and John Arnold Foundation.
• Only eight of the 22 deceased Giving Pledge signers fulfilled their pledges, giving away 50 percent or more of their fortunes to charity. Those eight include Charles Feeney, Jim and Virginia Stowers, Barron Hilton, Lorry Lokey, Herb and Marion Sandler, Victoria Sant, Ted and Vada Stanley, and Boone Pickens.

Gates, French Gates, and Buffett were already multi-billionaires when they established the pledge and remain among the world’s wealthiest people today. Forbes pegs Gates’s net worth at about $117 billion, French Gates’s at roughly $30 billion, and Buffett’s at nearly $143 billion. All three signed the pledge in 2010, and in recent years Gates and Buffet have promised to give almost all of their wealth to charity, with Gates announcing earlier this year that he plans to give 99 percent of his remaining fortune to the Gates Foundation.

In 2010, Gates told the Chronicle that the Giving Pledge was meant to get billionaires to think about giving most of their money to charity during their lifetimes rather than waiting until they are close to death, as was the case with previous generations.

Gates said the three founders also wanted to spur their wealthy peers to talk about their philosophy of giving publicly, hence the Giving Pledge letters each participant was asked to write.

Collins said the Giving Pledge’s ability to get ultra-wealthy donors to make public statements about their giving philosophies and to learn from one another is where the pledge has been useful to the philanthropy world.

“It’s set a bar for engaging billionaire donors,” says Collins, who gave his inheritance to charity in 1986 and recommends accelerated, big giving. “Maybe they [can] create a segment of the bold, give-while-you’re-alive, meet-the-urgent-problems-of-our-day group instead of creating these Godzilla foundations that will be walking the earth 20 years from now.”

To learn more about America’s wealthiest philanthropists, including how much the Giving Pledge’s founders and some of its other signers have given to charity, see the Chronicle’s annual the Philanthropy 50 report on the most generous U.S. donor. And check out our database of gifts of $1 million or more to see who else is giving big to charity.