It’s surprisingly hard to give away billions of dollars
Even billionaires who want to give all their money away keep accumulating more. Here’s why.
David Callahan caused a stir with a piece last week at Inside Philanthropy, which pointed out that the wealthiest people in the world are sitting on $4 trillion, and accumulating money much faster than they give it away.
“[Bill] Gates was worth $54 billion in 2010, the year the Giving Pledge debuted; he’s worth $97 billion today. [Warren] Buffett’s wealth has also nearly doubled, to $90 billion, despite annual transfers of Berkshire Hathaway stock to the Gates Foundation and the four foundations controlled by his three children,” Callahan wrote.
With some billionaires, there’s a simple explanation for why they don’t give away more money: They don’t really feel like it.
But that doesn’t seem like a fully satisfying explanation when it comes to Gates, Buffett, or other billionaires who’ve pledged to give away their wealth before they die. I want to speak up in their partial defense here: It’s actually shockingly challenging to effectively give away vast sums of money, especially at the rates billionaires would need to give to keep up with their recent gains on the stock market.
Philanthropy is harder than you think
It can strain credulity that it’s really that challenging to give away money. But when you look at the track record of many poorly planned, failed philanthropy projects, it gets clearer.
This year, the data came out from a $575 million multi-year project to improve schools, spearheaded by more than $200 million from the Gates Foundation — and the expensive intervention didn’t improve student outcomes at all. Mark Zuckerberg spent $100 million to improve schools and saw some modest gains — but they were small and accompanied by outrage and local backlash. (My colleague Dylan Matthews has pleaded for philanthropists to stay out of education, where their track records are particularly disappointing.)
The charity evaluator GiveWell, which researches promising interventions, found that these failures aren’t the exception, but the norm. “We think that charities can easily fail to have impact, even when they’re doing exactly what they say they are,” they write. “[M]any of the problems charities aim to address are extremely difficult problems that foundations, governments and experts have struggled with for decades. Many well-funded, well-executed, logical programs haven’t had the desired results.”
GiveWell recounts what went wrong with one intervention that didn’t live up to expectations: PlayPumps, a merry-go-round that was also supposed to pump water and which replaced CONTINUE READING: Billionaire philanthropists like Gates and Buffett keep accumulating more wealth - Vox
