So who are they, these men (and a handful of women) who have signed the Giving Pledge? A few are household words, at least as famous as the three people—Bill and Melinda Gates and Warren Buffett—who initiated this project. There are the rock stars of the business world, Richard Branson and Ted Turner; Facebook’s Mark Zuckerberg; politicians Michael Bloomberg and Jon Huntsman. Others may not be global brands, but the names of the companies they’ve founded are—eBay (Pierre Omidyar), AOL (Steve Case), Oracle (Larry Ellison)—or, because their names are stamped on hospitals and research institutes and school buildings, are famous for their philanthropy rather than for the sources of their wealth. And, except to close readers of the financial pages, a surprisingly large number are relatively obscure. Thus reviewing the Giving Pledge letters is sometimes, to paraphrase the book title, like meeting the billionaire—or hedge-fund manager—next door.
One general characterization, however, is that the fortunes of most of them—particularly the newly-minted billionaires—mirror the economy. The great wealth that was created 150 years ago by the likes of Andrew Carnegie and John D. Rockefeller, captains of industry who are the forebears of today’s benefactors, came from building—or extracting—tangible things like steel or railroads or oil. By contrast, much of the money represented by our Giving Pledge letter writers comes from intangibles—for example, computer technology that provides the market data that feed the investment companies that trade in financial instruments that are many times removed from the actual objects of such transactions.
Thus it is that we find dozens of the princes of Silicon Valley and its satellites (Zuckerberg and Facebook cofounder Dustin Moskovitz, Gates and Microsoft cofounder Paul Allen, Netflix founder Reed Hastings, retired Cisco chairman John Morgridge) mingling with managers of hedge funds and private equity firms. In this company, longtime bold-face names like Carl Icahn and Michael Milken look almost old-school, and individuals who actually manufacture products—Sara Blakely of Spanx, David Green of Hobby Lobby—seem positively quaint.
But in another respect, today’s billionaires bear a fundamental resemblance to their 19th-century predecessors: Many have made a lot of money in sometimes dubious ways. Today’s robber barons aren’t literally breaking heads to bust unions—like Carnegie and his henchman (and art patron) Henry Clay Frick in the Homestead Steel Strike of 1892—but many have left considerable damage in their wake. If he didn’t match John D. Rockefeller’s ruthless monopolistic behavior (and success) in the creation of Standard Oil, Gates himself was repeatedly accused of having engaged in unlawful anticompetitive practices to promote the supremacy of Microsoft. George Mitchell, who died last year, leaving behind a foundation that gives heavily to support work in environmental sustainability, is credited with pioneering the economic extraction of shale gas—in other words, fracking. Herbert and Marion Sandler, generous underwriters of investigative journalism at ProPublica, were listed among the “25 People to Blame for the Financial Crisis” by Time Magazine for their role in marketing high-risk mortgages at the height of the housing bubble—and pocketing more than $2 billion through the sale of their bank before the market collapsed.
And while the operations of private equity firms are typically less transparent—and therefore not open to scrutiny—one thing is clear: Managers owe their immense personal fortunes in part to a highly controversial tax break called “carried interest,” which allows them to save billions and billions of dollars that would otherwise go to Uncle Sam. (Even Peter Peterson, a beneficiary of this treatment and, as he expounds in his Giving Pledge letter, an advocate for fiscal conservatism, has stated that he “can’t justify that.”)
Nor is it only America’s billionaire-philanthropists who have contributed to society’s problems. Vladimir Potanin, the fourth richest man in Russia and a leading patron of the arts, owes his wealth to the controversial “loans-for-shares” program he devised, under which banks such as his financed the privatization of large state-owned companies at bargain-basement prices. It was good for oligarchs like Potanin, not so good for the Russian public.
Indeed, Peter Buffett, Warren’s son and co-chairman of the NoVo Foundation, which was funded by his father, has suggested that philanthropists are their own chief beneficiaries. “As more lives and communities are destroyed by the system that creates vast amounts of wealth for the few, the more heroic it sounds to ‘give back’,” Buffett wrote last year in a widely-discussed op-ed piece in The New York Times. “It’s what I would call ‘conscience laundering’—feeling better about accumulating more than any one person could possibly need to live on by sprinkling a little around as an act of charity. But this just keeps the existing structure of inequality in place. The rich sleep better at night, while others get just enough to keep the pot from boiling over. Nearly every time someone feels better by doing good, on the other side of the world (or street), someone else is further locked into a system that will not allow the true flourishing of his or her nature or the opportunity to live a joyful and fulfilled life.” Harsh words, indeed—but are they fair? Net-net, as many of our billionaires might say, are they leaving the world a better or a worse place? It’s unarguable that many of the signers of the Giving Pledge are contributing significantly to the widening gap between the top 1 percent and everybody else, even while they write checks to their favorite charities. But at the same time, many of those checks surely help unlock people from the very system that Peter Buffett bemoans. At its best, thoughtful, high-quality giving—from the 2,500 libraries funded by Andrew Carnegie worldwide to the year-round preschools for poor children from birth to age five, complete with family support services and medical care, underwritten by Tulsa oilman George Kaiser—can be liberating: It informs, educates and helps prepare people who aspire to that “joyful and fulfilled life.” It’s clear from their letters that many of the Giving Pledge signers share Carnegie’s view that the very rich, through judicious giving, are the best people to address what he optimistically called “the temporary unequal distribution of wealth.” That sort of arrogance is a frequent companion to great riches. Only time will tell whether it’s deserved.