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The Deeply Flawed "Giving Pledge"
In light of Mackenzie Bezos’ recent announcement, I found myself ruminating on the circular logic behind the idea of the Giving Pledge.
The Giving Pledge, in case you weren’t aware, is a pledge by billionaires to give away at least half their net worth in their lifetimes. In return, they get massive amounts of adoring positive press.
It is very difficult, upon reading news such as this, to not nod vigorously about the points Anand Giridharadas makes in his recent book. Points that both left and right should find agreeable. It is the mealy-mouthed, wishy-washy, going-to-Davos nonsense that just gets my goat.
Here is how it works:
You make your wealth. And yes, your hard work, ingenuity and talent are big contributors — I do not question that. I also do not question your motives and desires — my belief is that the vast majority of those who have signed the Giving Pledge truly wish to do good.
Your wealth just might benefit from a system that incorporates: (a) an unreasonable celebration of entrepreneurship; (b) institutional funding which helps concentrate wealth (more on this one of these days); (c) favorable tax laws; and (d) winner-take-all sector dynamics at a time of systemic change in human civilization
Then you “give back” via the Giving Pledge which appears to be a badge of honor that gives you a privileged position at Davos and/or other do-gooder conferences.
And if you are a US citizen, your giving is actually a gigantic tax deduction. There is a large industry devoted to maximizing the non-charitable benefits of charitable giving.
Nobody ever checks on how the whole Giving Pledge thing is going with any level of specificity. You can go to the web site, if you like — and if you have a jaundiced eye, the word “farce” may come to mind.
If your fortune is $37 billion and you really want to be “giving back”, perhaps you should:
Be putting up a scorecard showing your progress towards the Giving Pledge? See point above re web site — there is absolutely nothing anywhere about actual “performance” against the pledge.
Be giving away 99.7% of it, i.e. $36.9 billion? I grant $100m for you and yours — many generations of Bezoses (Bezii?) will do just fine on that.
Be giving to strengthen public and civic structures, rather than “create a foundation” (for which there is much previous in Seattle)? For example, why not give all of it to the Seattle municipal government for affordable housing, and have no say whatsoever in what happens after? What is the basis for thinking your judgement is better than theirs?
Jeff Bezos is not on the Giving Pledge web site. He appears to be in the “I’ll do whatever the eff I want, including but not limited to building space rockets, woohoo” camp. I actually respect that. There is a purity to it.
Or you could emulate Chuck Feeney who truly gave it all away. The details are in the public domain. I really respect that.
I’ve been thinking about “better ideas”, because it is easy to carp from the sidelines. So here is a straw man:
If you think things are fine, as perhaps Jeff Bezos does, no problem. Long live the free market, or at least the version of it in the US that is neither free nor a market but is what we’ve got. As I said there is a real purity to this stance — live long and prosper. If the rest of us disagree — we have recourse to democratic means to change tax rates. Here lets just note that The People appear to have opined on this matter repeatedly in their electoral choices.
If you think things are not quite right, and if you are not like Warren Buffett and Bill Gates who wring their hands about how the tax code benefits them and they really wish it didn’t but gosh they can’t do anything about it, then consider this simple variation of the giving pledge:
Set aside a chunk of your post-tax income each year and give it to an institutional cause that might have been supported by higher tax revenues. This could be a municipality, a governmental effort, a public utility, a public university.
Let your true tax rate, net of this giving, equal what you think is fair and appropriate (obviously some number higher than your ostensible tax rate — you could even get clever and benchmark to a documented tax regime from the past or proposed).
Have your accountant write a letter, that can be produced on demand, in which they represent that you have in fact paid this effective higher tax rate.
If you do this, you get to wear a t-shirt that says “I made the REAL giving pledge” and you will be welcomed by me with great pomp and circumstance to any coffee shop of your choosing, ideally within a 10 mile radius of downtown Burlingame, CA. We will call the coffee shop “Davos” for the occasion, and if you are under 40, I will procure a nifty pin that will name you a “Young Coffee Leader” that you can wear on ceremonial occasions.
Something along these lines may be a giving pledge we can all believe in.