John Hoffmire: For the wealthy, tax it or give it away: If those are the choices, which is it?
Nati Harnik, Associated Press
I know that many will say: “But the choice is not whether wealth should be taxed or given away." Stay with me for a few paragraphs.
In 2006, Warren Buffet made the decision to gradually give away all of his Berkshire Hathaway stock, amounting to billions of dollars. Buffet says, “More than 99 percent of my wealth will go to philanthropy during my lifetime or at death. That 99 percent can have a huge effect on the health and welfare of others.” In 2009, Buffet and Bill and Melinda Gates formed the advocacy organization known as The Giving Pledge to encourage other wealthy individuals to grant 50 percent or more of their wealth to philanthropic causes. Today, more than a hundred billionaires and wealthy families have accepted The Giving Pledge challenge, committing to give away over half of their wealth.
After pledging much of his wealth to the Gates Foundation in 2006, Buffet began talks with Bill and Melinda about his personal pledge to philanthropy. The Gates loved Buffet’s commitment to helping others and these talks led to a series of meetings over the course of a couple of years. Among those who attended the meetings were some of America’s wealthiest individuals. Among them were Gerry and Marguerite Lenfest. After a number of years and much planning, Buffet and the Gates made The Wealth Pledge public through an announcement in the summer of 2010. They then began a nationwide and international campaign to encourage the world’s wealthiest to make the pledge of 50 percent or more of one’s wealth.
Signers of the pledge have come from various states across the country, including Jon and Karen Huntsman of Utah. The pledge has also been extended to individuals of several other countries.
The goal of making public the names of those who have signed The Giving Pledge is not to praise the rich but to encourage people to discuss in an open way the act of donating money, hoping to attract more people to philanthropic causes. Buffet states that the money from the world’s wealthiest is not the only commitment needed, but that contributions by all individuals are vital, no matter the size of their income. He explains that anybody who gives his or her time or money makes an incredible difference in the lives of others. He describes the sacrifice that it takes for people to donate to a good cause, saying, “Millions of people who regularly contribute to churches, schools, and other organizations thereby relinquish the use of funds that would otherwise benefit their own families.” Buffet believes that these sacrifices from families of backgrounds with modest incomes outweigh the millions of dollars that he gives away on a regular basis.
Perhaps the most important thing that we can give to our fellow human beings is our time. Buffet praises those who give time, the most important asset, to other people. “Many people, including — I’m proud to say — my three children, give extensively of their own time and talents to help others. A struggling child, befriended and nurtured by a caring mentor, receives a gift whose value far exceeds what can be bestowed by a check.”
Those of us who come from backgrounds of modest incomes can make a difference to the same causes supported by those who sign The Giving Pledge. We can all make a difference by giving our time and money to charitable causes.
John Hoffmire is director of the Impact Bond Fund at Saïd Business School at Oxford University and directs the School of Business and Poverty at the Wisconsin School of Business at UW-Madison. He runs Progress Through Business, a nonprofit group promoting economic development. Mario Alejandro Tom Steele, Hoffmire’s colleague at Progress Through Business, did the research for this article.