The (Super) Rich Are Cheapskates
Sunday’s Los Angeles Times Current section has a front page article titled “A Wealth of Cheapskates” by Gregg Easterbrook repeating a meme about the paucity of philanthropic donations among the super-rich which has been making the rounds in the last month or so.
Consider the numbers (which are based on current estimates in the recent Slate 60 index of the year’s leading philanthropic donors and the net-worth estimates in the Forbes 400). The 60 leading American donors gave away $51 billion in 2006, according to Slate. They were led by Buffett, whose spectacular $44-billion donation – mainly to the Bill & Melinda Gates Foundation, whose primary cause is healthcare in the developing world – was the largest gift anyone has ever given. These donors had an estimated combined net worth of $630 billion last year, meaning that they gave away 8% of their money, on average. Sounds magnanimous, until you consider that the Dow Jones industrial average rose 16% in 2006 – which suggests that, as a group, the leading donors contributed less than they gained.
Now subtract Buffett and his generous gift from the group, and the rest of them begin to look downright miserly, handing to others a mere $7 billion of a combined net worth of $584 billion – or just over 1%. Numbers from the philanthropy watch organization Giving USA show that Americans as a whole annually give away about 0.5% of their net worth. So, except for Buffett, society’s top givers donate to others at only a tad higher rate than the population as a whole. That’s, well, pathetic. And that’s just counting top givers, not the super-rich who give away little or nothing.
Microsoft mogul Paul Allen, net worth $16 billion, gave away $53 million in 2006, according to Slate – one-third of 1% of his fortune. Software magnate Lawrence Ellison, net worth $20 billion, gave away $100 million – half of 1%. Pierre Omidyar, founder of EBay, net worth $7.7 billion, gave away $67 million – less than 1%. Nike tycoon Philip Knight, net worth $7.9 billion, gave away $105 million – slightly more than 1%.
This is disturbing news, isn’t it? Mad Professah gives away around 2-3% of his “fortune” every year to non-profits like the Center for Health Justice, National Gay and Lesbian Task Force, The Williams Institute and Environment California. However, there’s no question that a billionaire’s largess would have a much greater philanthropic impact than my paltry pennies.
Another interesting fact that we know about philanthropy is that Southern California’s rich people give more of their fortunes than Northern California’s similarly situated residents.