With this announcement, Allen joins a short list of billionaires—including Eli and Edythe Broad, John and Ann Doerr—who have accepted the Gateses and Buffet’s philanthropic challenge, the Giving Pledge, which we previously covered.
According to Forbes, Allen is the 37th richest person in the world, with an estimated fortune of $37.5 billion. If every member of the Fortune 400 took the pledge, roughly $600 billion would become available for non-profits.
This may sound like a wonderful development, but senior fellow at the Georgetown Public Policy Institute Pablo Eisenberg threw a little cold water on the celebration. He argued that there are several major issues that we must address in order to deem this veritable deluge of charitable donations as a net success. He stressed that philanthropists need to enhance the quality of their charitable giving, not just the quantity.
Furthermore, he cautioned that the concentration of philanthropic power in the hands of these well-to-do few could create an oligarchic system of giving, where needs are largely determined by wealthy foundations. This, he reasoned, could increase inequality and redirect charity towards grantmaking interests disproportionately held by elites such as “universities and colleges, hospitals and medical centers, and arts institutions.”
To remedy this and other concerns, he revives an idea first proposed by Roger Colinvaux, associate professor at Catholic University of America’s Columbus School of Law. Colinvaux proposes an alternative based in incentives engineering—rather than peer pressure—that would amend tax codes and incentives to give in order to “spur contributions to antipoverty and social-change organizations.”
Eisenberg and Colinvaux’s concerns ultimately turn on a key question—should extremely wealthy individuals’ private charitable donations be accountable to the government, to ensure that they are made in the public’s best interest?
There is no clear answer, but as more billionaires and others take the Giving Pledge, this question has become central to the smart giving crowd.