The Giving Pledge: Some Eastern Reflections

The Giving Pledge has seemingly taken the philanthropy world by storm! On 4th August 2010, Bill Gates and Warren Buffett announced that 40, including at least 30 billionaires and other wealthy families, had officially made the Giving Pledge!

While many reviewed and offered views/comments on the quantitative aspects of these pledges, Ellen Remmer, President and CEO of The Philanthropic Initiative (TPI) in a blog article Personal Dreams Go Public touches upon the heart of the matter.  Ellen reviewing the letters that were up on the giving pledge website reflects…

The letters are really quite lovely, mostly very personal, some stunningly inspiring and all amazingly public.  The themes that are interwoven throughout the letters are ones that TPI has come to know well over our 21 years of working with wealthy donors on philanthropy. They speak to the power of parents especially (although religion and personal experience crop up too) in shaping an individuals’ fundamental values and motivation to give.  The themes of gratitude, good fortune and luck for having been born to the right family with good parents, and for being in the right place at the right time in their business echo throughout  – a message my own father delivered continuously to me!  A few touch on legacy and how philanthropy is a far better gift to their children than too large an inheritance that they haven’t earned.  Many talk about the deep fulfillment they reap from giving, far beyond their wildest expectations. And a number of pledges acclaim and define the importance of focus, strategy and big bold ambition.

The Giving Pledge has provided much fodder for dialogue and debate the last few weeks. While many have applauded Bill Gates and Warren Buffet for their efforts to centre stage philanthropy among peer groups, others have alluded to some self serving intent.  Peter Wilby in the Guardian remarks:

Salute Gates, whose foundation has already saved perhaps five million lives through the development and delivery of vaccines against diseases such as TB. Salute Buffett who says his children won’t inherit “a significant proportion” of his wealth. The filthy rich, or some of them, have shown they have a heart. But let’s be clear. Money paid to charity is exempt from tax; the US treasury already loses at least $40bn (£25bn) a year from tax breaks for donations.

Questions have been raised about the thinking and methodology.  Slavoj Zizek, the philosopher voiced concern over the real effect of philanthrocapitalism, raising questions about the real stability and efficacy of such a program. How big of a difference can it really make?

It’s well-known that throwing money at problems doesn’t fix them. As the Financial Times points out, many charities simply aren’t equipped to handle huge donations, and without any clear charitable strategy of the pledge, some needy organizations could get lost in the mix.

Closer home, I have been studying with interest reactions as Bill Gates and Warren Buffet made their way east to China.

While much has been written in the recent past on the growth of wealth in Asia, philanthropic giving by Asians have not made headlines as they have in the west.  There was therefore a “wait and watch” on who would respond to the clarion call in China and indeed who would pledge their wealth. But all seems to have been encouraging and the Financial Times on 30th September 2010 reported:

Bill Gates and Warren Buffett have passed the China test, or at least endured it. On Wednesday they held a dinner to talk philanthropy with Chinese billionaires – and, in spite of unwillingness to participate in a shake-down, around 50 attendees turned up and some made “very generous” donations.

Suitably encouraged, the do-gooding duo has repeated its next stop – India. But, for Gates and Buffett, what’s intriguing is how concentrated Indian wealth is: the 100 richest Indians hold $300bn, compared to $314bn held by the top 400 Chinese, according to Forbes’s new figures. So a few deluxe dinners and a few elbows in the ribs might go a long way!

As Bill Gates and Warren Buffet plan on further journeys into invincible Asia, time for some reflection on some of the ground realities.

The three biggest challenges facing philanthropy in Asia today is lack of inspiring leadership, knowledge and trust.  On a more practical (execution) front – issues of professional management, strategic planning, ability to scale, and efficacy are all matters to consider when one thinks about large scale pledges.

The Gates-Buffet combine provide more than adequately on the leadership front at least in their context. No matter what the critic and skeptic says they leveraged to bring on board – 30 billionaires on a common platform and pledge their wealth to philanthropic causes. Now, we can argue on whether peer pressure is a good thing or bad thing, but that aside it remains laudable an effort.  In most emerging economies in Asia that leadership is missing. India & China have some examples to share of family and corporate philanthropy; Indonesia has others; Singapore and Japan are seeing a rise in dollar billionaires who are charting new philanthropic journeys.

On the knowledge front, the duo campaign and inspire in a land where there is sufficient information, data and statistics available for donors to make informed choices (and pledges). Leading foundations in the United States – Ford, Mott, Hewlett, Atlantic Philanthropies have invested serious philanthropic dollars to ensure professional research and surveys are undertaken and shared publicly. The last ‘Giving Survey’ in India was done over a decade or more ago. Sri Lanka has a more recent survey and there are other surveys such as the CAF Giving Index (2010) and the recent Bain research in India which are based on a very small sample size to draw any definitive conclusions on the status of giving in India.

Despite the presence and growth of the non-profit sector and intermediaries who provide certification after applying global due diligence standards, the issue of mistrust overshadows and acts as a serious impediment to giving in a larger Asian context. Most Asians and Indians prefer to do it themselves, than to rely on advisors or intermediaries. So charitable trusts are set up, family members are co-opted and senior management of companies if it is a corporate foundation. No right or wrong there – after all Bill Gates too gives the largest part of his philanthropic dollars through Bill & Melinda Gates Foundation with Melinda and William Gates Sr as co-chairs and Warren Buffet as Trustee.  However, the Gates Foundation over the years has seen a large and growing presence of professional staff and leaders who manage their grants and priority areas. On the other hand, a family foundation of repute in Asia recently shared the difficulty they faced to hand over professional management of their foundation to experienced professionals.

Then there are issues of “culture” and “practice”!

The “Culture of Giving” is not alien to Asians. It is just extremely private. When Sudha Narayana Murthy (wife of Infosys Chairman – N. R. Narayana Murthy) was asked for an opinion on the Giving Pledge and whether India’s wealthy would follow suit, her response basically implied it was a “personal and private” matter. There are numerous philanthropists in India, indeed Asia who have given for generations, but will not go public with the figures or activities.

The practice of modern day philanthropists or social venture philanthropists is to give to organisations and causes that can demonstrate a clear social return on investments and can achieve scale impacting millions vs thousands.  They must also be cost-effective. There are few organisations that can deliver on this aspiration. In Asia, where there is desperate poverty and significant wealth, serious venture philanthropists and ultra-high net-worth individuals start up foundations as they do businesses and apply metrics they would apply to their own enterprises. More importantly, they focus on the economic engines that seek to solve for issues such as unemployment, income generation, and providing market linkages.

In the Asian context therefore pledging one’s wealth to public charities or causes will take awhile coming, if at all. Philanthropy is a deep personal act and the journey that a serious philanthropist undertakes to use private wealth for public good is a challenging one.  It takes more than an evolved mind. It will take serious WILL and Leadership. Knowledge and information will need to be credible and reliable to attract philanthropists and investors. Above all, organisations will need to demonstrate more than passion! The responsibility of policy makers and researchers is manifold. In building the brand, both in India or China, we have harped too long on economic development! Question is less and less about 8% or 9% growth. It is on those we leave behind; it is on equitable, sustainable development.  It is about addressing those issues that are fundamental to our future.

H. Peter Karoff, Founder of The Philanthropic Initiative who has helped and advised individuals and families for over two decades in charting philanthropic journeys had some interesting perspectives to share on the Giving Pledge. This would be valuable in any context in Asia or other regions…

The biggest factor, and the one that TPI and our clients have been challenged by for twenty years, is how difficult it is to give away money well. To achieve real impact on major social issues, or even on individual lives, is both an art and a science, and it does not come easily. One of TPI’s early mentors, Mike Sviridoff who was Vice President of the Ford Foundation, and founder of LISC (Local Initiatives Support Corporation), one of the most successful nonprofit organizations in America, was fond of saying – finger wagging – “Social change is incremental at best,” and Mike was right. Smart donors quickly learn that is so, and satisfaction from giving is often elusive. One really needs to have some evidence that you are making a difference in order to sustain that giving.

I worry that when the billionaires gather under the inspiring leadership of Mr. and Mrs. Gates and Mr. Buffett, and get excited about the romantic notion of ramping up their giving, they will not stay the course. The best piece of advice I can think of, one based on TPI’s work with 300+ very wealthy individuals and families, is for those involved to invest the time in a considered process of discovery, both personal and programmatic. That process begins with the articulation of values and passions, which are the underlying, and sustaining, motivation for philanthropy. The next step in the process is to become a listener and a learner which creates the context to approach the issue or issues of interest, and out of which can come your operating guidelines (see The Gates Foundation’s Operating Guidelines).  The final step is the work itself based on research, strategy and evaluation.

If these simple steps are followed, then I think the opportunity to significantly increase the amount of smart philanthropy is very great indeed.

About the Author

Priya Viswanath is an independent consultant and author based in New Delhi, India. This article was originally posted on the Sept-Oct newsletter of the Centre for Advancement of Philanthropy (CAP), Mumbai. Priya can be reached at priyakviswanath@gmail.com. 

Leave a Reply

Your email address will not be published. Required fields are marked *