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Giving it all away


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Business Spotlight - epaper ⋅ Ausgabe 12/2022 vom 23.11.2022

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Artikelbild für den Artikel "Giving it all away" aus der Ausgabe 12/2022 von Business Spotlight. Dieses epaper sofort kaufen oder online lesen mit der Zeitschriften-Flatrate United Kiosk NEWS.

Bildquelle: Business Spotlight, Ausgabe 12/2022

There are more than 2,500 billionaires in the world. Most of them live in the United States and, together, they’re worth almost $13 trillion. At the top of the rich list are Elon Musk and Jeff Bezos. Much has been made of the fact that their donations to charity add up to less than one per cent of their total wealth. Others, such as Warren Buffett and MacKenzie Scott, are celebrated for their philanthropy. But how exactly do billionaires give away their fortunes?

The socialist: Yvon Chouinard

In 2022, Patagonia founder Yvon Chouinard announced he was giving away all his money and his company. “We are going to give away the maximum amount of money to people who are actively working on saving this planet,” he said, setting up the social welfare organization Holdfast Collective, which received 98 per cent of Patagonia’s stock. The organization will support causes that fight against ...

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In 2022, Patagonia founder Yvon Chouinard announced he was giving away all his money and his company. “We are going to give away the maximum amount of money to people who are actively working on saving this planet,” he said, setting up the social welfare organization Holdfast Collective, which received 98 per cent of Patagonia’s stock. The organization will support causes that fight against climate change.

Patagonia has always had a strong environmental focus. In 2012, it became the first “benefit corporation” in California: a legal structure that lets the company follow social and environmental interests as well as the financial interests of shareholders.

Chouinard himself is quite a character: a rock climber, he lived out of his car (eating cat food from tins) in the 1960s. Still today, he does not own a computer or mobile phone.

The chequebook philanthropist: MacKenzie Scott

In 2019, after her divorce from Amazon founder, Jeff Bezos, MacKenzie Scott became the world’s fourth-richest woman, with a $38 billion settlement. She promised to donate most of her wealth, and, by 2022, had given about $12 billion to various causes. Rather than create a foundation, Scott runs a “shoestring operation”, as Forbes defined it, giving her wealth away arbitrarily.

She’s giving faster than any billionaire ever, with no-stringsattached gifts to Planned Parenthood (a reproductive healthcare provider, including abortion clinics), Habitat for Humanity International and Ukraine aid organizations, among many others. She has received praise for her low-cost model: she doesn’t ask charities to provide strategies or reporting data, which small non-profits don’t have the resources to offer. Jonathan Reckford, from Habitat for Humanity, says: “One of the challenges for the social sector is that every donor has their own set of requirements, which is expensive and complicated.”

However, Scott has been criticized for a lack of transparency about her donations: she has no website and provides no reports. Sometimes, she publishes details of donations on the blogging site Medium, but this doesn’t show the full picture. Scott has recently reacted to the criticism and is creating a database with further information.

The partner: Warren Buffett

If you’re extremely rich, and one of your best friends has a foundation you believe in, why not put your money in it? US investor Warren Buffett is one of America’s greatest philanthropists and regularly donates to the Bill & Melinda Gates Foundation. With a focus on poverty and healthcare, the foundation has funded Covid-19 research, worked to eradicate polio and invested millions in developing a malaria vaccine. By the time he resigned as a trustee of the foundation, in 2021, Buffett had contributed more than $30 billion, saying simply: “Society has a use for my money. I don’t.”

The Bill & Melinda Gates Foundation was founded in 2000, and by 2020, was the second-largest foundation in the world, in part, thanks to Buffett’s generous philanthropy.

THE GIVING PLEDGE

Created in 2010 by Bill Gates and Warren Buffett, the Giving Pledge is a campaign to encourage very rich people to give at least half of their wealth to good causes during their lifetime or after they die. Currently, over 200 people from 28 countries have joined, including Elon Musk, Mark Zuckerberg and Sheryl Sandberg.

The founder: Robert Bosch

Established in 1964, the Robert Bosch Foundation is one of Europe’s largest foundations associated with a private company. Since its launch, over €2 billion has funded charitable work. Robert Bosch himself was passionate about social issues. Among the first German industrialists to introduce the eight-hour workday, he supported education for his employees and gave large sums to Stuttgart’s University of Applied Sciences. Dr Bernhard Straub, CEO of the Robert Bosch Foundation, told Business Spotlight: “Before Robert Bosch’s death in 1942, he stated that philanthropic commitment should be continued.”

Foundations like the Robert Bosch Foundation are funded by company dividends. Straub says: “Bosch saw it as his responsibility to make a positive contribution to society as an entrepreneur and to contribute to ‘alleviating all kinds of hardship’, as he put it. I do wish that entrepreneurship was understood in this spirit

more. Fortunately, there are companies that are socially committed beyond their role in the economy. They don’t always have to establish a foundation, but they can initiate corporate social responsibility activities, for example, or make donations to organizations. The Bosch company also supports social initiatives independently of the Robert Bosch Foundation.”

The billionaire who wasn’t: Chuck Feeney

A quiet, unassuming man, Chuck Feeney made his billions selling alcohol and cigars in airport duty-free shops. He also had good business instincts, investing in successful tech start-ups — including Facebook and Alibaba.

Pioneering the “giving-while-living” idea, Feeney donated almost everything he had, giving $8 billion to various causes, starting in 1982. He was left with

$2 million, a comfortable amount but much less than the billions he had controlled. Feeney had always lived simply, flying only coach until he was 75. His favourite restaurant was a Manhattan Irish pub. His donations came with one condition: beneficiaries may not publicize Feeney’s involvement.

DONOR-ADVISED FUNDS

• One of the fastest-growing methods of giving to charity in the US is through donoradvised funds (DAFs).

• These accounts are managed by a non-profit organization for the purpose of giving to charity.

• Donors get tax deductions for their contributions, making it a simple, attractive way to give.

• However, while donors receive tax advantages immediately, it can take some time for the money to reach those in need.

The rest of us

Today, there are more philanthropists than ever, but they’ve been criticized for lacking coordination and clear goals at a time when inequality is rising. Marlene Engelhorn, a student in Vienna, inherited millions from her grandmother in September 2022. She started a group called Tax Me Now, saying governments should tax wealth and distribute it democratically. “There’s no need for another foundation,” she told The New York Times. “What’s really needed is structural change.”

Philosopher William MacAskill, co-founder of the Giving What We Can community, writes in his book Doing Good Better: “How can we ensure that, when we try to help others, we do so as effectively as possible?”

Giving What We Can believes we can’t wait for billionaires to solve poverty. Its website says: “If you are reading this now as a reasonably well-off citizen of a developed country, ... this means that your quality of life is already drastically better than that of most people on the planet. If we truly want to address global income inequality, then we also have a moral imperative to act now.”