PODCAST: The Giving Pledge Is Failing, and the Numbers Prove It
In an interview as part of Vox’s Today, Explained podcast episode “The World’s Stingiest Trillionaire,” Bella DeVaan, director of the Charity Reform Initiative at the Institute for Policy Studies, breaks down the findings of IPS’s landmark study on the Giving Pledge — and delivers a damning verdict on billionaire philanthropy in the age of Elon Musk.
The Giving Pledge, founded in 2010 by Bill Gates, Melinda French Gates, and Warren Buffett, asked billionaires to commit to giving away the majority of their wealth before or upon their death. More than 250 people have signed on. Elon Musk is one of them.
The results, Bella explains, tell a very different story than the pledge’s founders promised.
“We feel like there’s a significant body of evidence that the pledge is unfulfilled and unfulfillable,” she says. Of the 32 original signers who are still billionaires, they had “collectively gotten 283% wealthier — or 166% adjusting for inflation — since they signed onto the pledge, and only one couple in the group fulfilled their pledge.”
Even the most generous pledger falls short, Bella notes: “I think Mackenzie Scott — she’s given away $26 billion. I think she’s only decreased her wealth by around less than $6 billion since her separation from Jeff Bezos. So if that’s what the most generous philanthropist is struggling to keep up with, everybody else is faring far worse.”
Another key finding of the IPS study: around 80% of all gifts from pledgers flow into private foundations that the donors themselves control. “That’s what it looks like when you can make a donation that seems like you’re parting ways with your wealth and delivering some kind of benefit to the public, but actually that money doesn’t reach public charities or public works or on-the-ground aid until it leaves the foundation — and there’s a significant lag time in there.”
The median foundation payout rate among living pledgers was just 9.2% per year, while the general public subsidizes those donations at up to 73 cents per dollar. “You’re asking the public to shoulder that money,” Bella says, “and that money is trickling out back to the public. It’s not keeping pace.”
On what a real solution would look like, Bella is direct: “The number one most meaningful intervention is to figure out how to tax wealth, figure out how to restructure our economy so that people can’t accumulate these fortunes in the first place — over which they can exercise such plutocratic control.” In the meantime, she calls for sweeping transparency reforms to prevent donors from using foundations and donor-advised funds to “conduct dark money giving or play shell games to change the timing of tax benefits.”
She closes with a broader cultural indictment: “Regular people are as generous as they can be. We see this in remittances, in small donations to your local food bank, to your religious institution. Everyday people are as generous as they can be, and I think that our ultra wealthy people need to take after them more.”
Listen to the interview below:
