Bill Gates and Warren Buffett recently pledged to join 40 of America’s wealthiest people in donating at least half of their riches to charity. For Gates and Buffett alone, such a pledge will translate into at least $115 billion in charity.
This sounds wonderful on the surface, but philanthropist Kimberly O. Dennis is a bit skeptical. In last week’s Wall Street Journal, Dennis argued that “the wealthy may help humanity more as businessmen and women than as philanthropists.”
As Dennis explains:
What are the chances, after all, that the two forces behind the Giving Pledge will contribute anywhere near as much to the betterment of society through their charity as they have through their business pursuits? In building Microsoft, Bill Gates changed the way the world creates and shares knowledge. Warren Buffett’s investments have birthed and grown innumerable profitable enterprises, making capital markets work more efficiently and enriching many in the process.
In the end, Dennis’ criticism seems to serve as a simple reminder of which approach is most promising when it comes to bringing about transformative change.
While businesses may do more for the public good than they’re given credit for, philanthropies may do less. Think about it for a moment: Can you point to a single charitable accomplishment that has been as transformative as, say, the cell phone or the birth-control pill?
On this last question there is bound to be disagreement, particularly because we all view value differently. For one person the birth control pill is extremely important. For another, feeding one hungry mouth is more worthwhile.
But if we just stick to some of the “mainstream” stuff, I think we can all see what Dennis is pointing to. For example, Andrew Carnegie’s contribution of 1,679 libraries certainly provides a great image of effective, philanthropic success (in my opinion). John D. Rockefeller’s success in scientific research provides another.
But are we really to say that Carnegie’s steel innovations and Rockefeller’s oil pipelines were less “transformative” than their construction of city libraries and ivory towers? Which efforts provided more jobs? Which efforts allowed families to travel easier, buy goods cheaper, and spend more time with each other?
Don’t get me wrong. I’m not saying philanthropy is bad, or even that it should be avoided, but I do think it’s important to recognize that charity is not necessarily better than business.
Both Gates and Buffett have certainly done their fair share of innovating and investing on behalf of society, but when such large amounts of cash are moving out of the “business world,” we should all take note of the unseen industries and livelihoods that are being sacrificed as a result.
What are your thoughts?