In 2010, Bill Gates, Melinda French Gates and Warren Buffett launched The Giving Pledge, a voluntary commitment in which signatories promise to give at least half of their wealth to charity, either while living or upon death.
Since then, we’ve tracked new signatories, but we’ve also questioned the pledge’s utility in actually galvanizing the ultra-rich to give a lot more. We’ve observed that billionaires remain a mostly stingy bunch even as their power grows. All the while, they’ve kept getting richer, leaving us to wonder if relying on deliverance from a couple of hundred unelected billionaires was the best way to run a country and to think about philanthropy’s future, even if such a state of play seems increasingly inevitable in a new Gilded Age.
Now, as the Giving Pledge celebrates its 15th anniversary, the Institute for Policy Studies (IPS) has published an eye-opening report on what it has — and hasn’t — accomplished.
The folks at IPS pull few punches. “The Pledge,” reads “The Giving Pledge at 15,” “is unfulfilled, unfulfillable, and not our ticket to a fairer, better future.” The authors found that a mere eight of the 22 deceased signatories fulfilled their pledge, and only one, Chuck Feeney, gave his entire fortune away before he died. Meanwhile, when adjusted for inflation, living billionaires who signed the original pledge are collectively an estimated 166% wealthier compared to 2010.
Bear in mind as well that the pledge considers contributions to private foundations and donor-advised funds to be “giving” — a common outlook throughout the philanthrosphere. But foundations are required to disburse only 5% of qualifying distributions, including grants, on an annual basis, and DAF holders don’t have to transfer money to a working nonprofit — ever. As a result, even if it’s technically reserved for the benefit of society, a lot of that money gets holed up in grantmaking no-man’s land for decades, if not until the end of time.
IPS found that the original 2010 pledgers have given approximately $206 billion to charity to date. In what is the report’s most depressing finding — if you’re inclined to think about “giving” as moving money to actual working charities — 80% of that amount (roughly $164 billion) has flowed to private foundations, while another estimated $5 billion “likely went” to DAFs.
“Our two clearest findings of this report are that the pledger cohort is only getting wealthier and that what they do give away overwhelmingly lands in private foundations and intermediaries that they control,” said Bella DeVaan, the report’s co-author and associate director of the Charity Reform Initiative at IPS. “This means wealth is accumulating too quickly to be given away, imperiling the basic fulfillment of the pledge, and creates a pretty significant lag time in how those gifts ultimately reach working charities and direct service groups.”
Debating what constitutes a “good billionaire”
DeVaan cited two impetuses for the new study. First, “we felt enough time has elapsed to get a good sense of how effectively signatories have been fulfilling their promise, or at the very least, communicating their priorities/philosophies to the public.”
IPS was also struck by the symbolic resonance of Bill Gates’ announcement that he’ll be committing the vast majority of his wealth to the Gates Foundation and spending it down in the next two decades. DeVaan called the move “a pretty remarkable reclamation of the spirit of the Giving Pledge, particularly as the “good billionaire” archetype for America’s wealthiest, established by Gates and Buffett and many industrialist-philanthropists before them, has been troubled by new tech scions who clearly conceive of a different relationship between their wealth and their obligation to the public.”
All criticism of Gates and the Gates Foundation aside, the Giving Pledge could really live up to its promise if signatories actually followed his spend-down example — not to mention that of Warren Buffett, whose current plan is to have his children spend down his centibillionaire fortune shortly after he passes. “Nothing will go to endowments; I want the money spent on current needs,” Buffett wrote in his pledge letter.
But billionaires aren’t a monolithic bunch. Some of them, DeVaan noted, “are less interested in the kind of traditional and c3-entrenched ‘good’ reputation that Gates and Buffett have established.” Meanwhile, others have opined that their business ventures “are philanthropy.” Fifteen — or five! — years from now, we may look back on the pledge as a quaint relic from a bygone era when billionaires-turned-trillionaires actually cared to give.
Of course, billionaires who do care about their public personas often get a nice PR boost when they join the ranks of the Giving Pledgers. But pledges “are not the same as concrete commitments,” DeVaan said. “Similar to how ultra-wealthy givers get a tax break up front before their donations reach working charities, pledges confer reputational benefits before reputational benefits are actually deserved.”
IPS believes that a more meaningful fulfillment of the Giving Pledge shouldn’t involve simply shifting assets into a foundation or other intermediary, but actually giving up control over their wealth. “A pledger’s capstone achievement probably shouldn’t look like a perpetual foundation that gives a single-digit percentage of its wealth away in grants each year and keeps control over giving within subsequent generations of one family,” DeVaan said.
The IPS report names signatories who aren’t honoring the spirit of the pledge
The report also calls out some billionaires by name: individuals like Larry Ellison, Diane von Furstenberg and her husband Barry Diller, and John and Anne Doerr, who “need to pick up the pace,” according to IPS, since their rapidly expanding wealth isn’t translating into commensurate public giving.
The report also names signatories like Carl Icahn, Elon Musk and Paul Singer, who engage in “questionable fulfillment strategies,” like shunting money into DAFs to meet the 5% foundation payout. More encouragingly, it praises “bold and direct givers” honoring the spirit of the pledge, like Mark Benioff, Buffett, MacKenzie Scott, David Rubenstein and Ted Turner. It also notes that Laura and John Arnold are the only set of living 2010 pledgers who have technically fulfilled their pledge, as they have given away $4.76 billion, the majority of their wealth, mostly to their foundation.
But the most inspiring pledger of them all is Chuck Feeney, who gave pretty much his entire $8 billion fortune away before he died in 2023.
IPS proposes a “Feeney Giving Pledge” in which pledgers would commit to pay their fair share of taxes, give the vast majority of their money away while alive and empower organizations led by nonbillionaires to solve urgent problems of the day. The public, in turn, could ramp up pressure to get more billionaires to sign on, creating a virtuous cycle that ensures money makes its way to working nonprofits.
Even if the Feeney Giving Pledge were to materialize, however, IPS doesn’t think billionaires should be let off the hook. “We believe it needs to be accompanied by tax reform and structural charity reform, regardless,” DeVaan said.
A call for structural charity and tax reform
IPS makes a compelling case that the Giving Pledge is, at the very best, a mixed bag. But is it a performative charade?
“We definitely believe that, in the absence of stronger federal regulation, the Giving Pledge is better than nothing,” DeVaan said. “Our billionaires could promise nothing, and just invest in their own insulation and luxury. Its net value to society has been billions of dollars directed to medical and climate research, education access and public services.”
That brings us to the key question that lies at the heart of any discussion about billionaire giving. IPS notes that the 110 U.S.-based Giving Pledgers who are still billionaires have a combined wealth of $1.7 trillion. Let’s say they give away half of that amount over the next five years. That’s great on one hand, but do we want individuals who constitute 0.00003% of the U.S. population wielding $850 billion to reshape society?
Well, it depends.
I suspect many readers would, if begrudgingly, sign up for billionaires plugging federal funding gaps and setting up besieged nonprofits with endowments so they’ll be less reliant on both public and private giving. However, this presupposes that billionaires will back causes that align with the interests of working and middle-class people and not seek to dismantle the very social safety net that advocates are hoping philanthropy will preserve.
While DeVaan recognizes the danger of “flooding the zone with billionaire philanthropy,” IPS’ research suggests that when billionaires directly fund charities, they tend to prefer those of the staid but agreeable “eds and meds” variety. Things get trickier once we recognize what billionaires don’t normally fund — “the kind of robust direct services or people power-building groups that,” as DeVaan notes, “would heal inequalities that necessitate philanthropy in the first place.”
Given billionaires’ penchant for self-preservation, it’s a fair bet that only carrots and sticks will make them part with a percentage of their riches. The nonprofit ecosystem would rejoice if Feeney Giving Pledgers vowed to stop shoveling money into entities that only dispense it in a trickle, if at all, but it also needs Congress to chip away at the accumulated dynastic wealth that makes organizations reliant on those same families to begin with.
“The fact that the social safety net is under attack means that philanthropy may well need to replace state capacity, which is an indignity we shouldn’t have to suffer,” DeVaan said. “That’s why we assert that the most urgent corrective measure for the problems ‘The Giving Pledge at 15’ illustrates is to more fairly tax wealth and income in this country.”
