Philanthrocapitalism_ How Giving Can Save the World - Matthew Bishop [7]
So we began our work in the same way anyone here would begin it. We asked: “How could the world let these children die?”
The answer is simple, and harsh. The market did not reward saving the lives of these children, and governments did not subsidize it. So the children died because their mothers and their fathers had no power in the market and no voice in the system.
But you and I have both.
We can make market forces work better for the poor if we can develop a more creative capitalism—if we can stretch the reach of market forces so that more people can make a profit, or at least make a living, serving people who are suffering from the worst inequities. We also can press governments around the world to spend taxpayer money in ways that better reflect the values of the people who pay the taxes.
If we can find approaches that meet the needs of the poor in ways that generate profits for business and votes for politicians, we will have found a sustainable way to reduce inequity in the world.
This task is open-ended. It can never be finished. But a conscious effort to answer this challenge will change the world.
The Gates Foundation follows a simple formula in investing its massive wealth to make the most of Bill and Melinda’s determination to reduce inequity: identify problems; find solutions; measure the impact of the work in human terms “so people can feel what saving a life means to the families affected” and share the successes and failures “so that others learn from your efforts.”
It’s a good game plan for all giving, though easier said than done. At a White House conference on philanthropy that Hillary and I sponsored in 2000, Bill Gates made a statement I’ll never forget: “It may be harder to give this money away than it was to make it.” Warren Buffett, America’s second-wealthiest man, solved the problem in a unique way: he decided to give the bulk of his fortune, some $30 billion, to the Gates Foundation. He is also giving sizable sums to the foundations of each of his children: Susie, Howard, and Peter, all of whom have their own admirable philanthropic activities. When I called Warren to congratulate him on his gift, I asked what had prompted him. With his no-nonsense Midwestern practicality he said, “I got rich because investors thought I could make more investing their money than they could. Bill and Melinda can spend my money better than I could.” Most people of Buffett’s wealth and stature would have established their own programs and funded applicants in their own names. It’s a real tribute to Buffett that after he saw all the good his friends were doing, he decided to maximize the good his money will do by entrusting it to them.
When I questioned Buffett further about why he decided to give almost all his money away, he said, “My gift is nothing. I can have everything I need with less than one percent of my wealth. I was born in the right country at the right time, and my work is disproportionately rewarded compared to teachers and soldiers. I’m just giving back surplus claims that have no value to me but can do a lot for others. The people I really admire are the small donors who give up a movie or a restaurant meal to help needier people.” If we all thought and acted like Buffett, we’d live in a very different world.
Another impressive example of giving similar to the Buffett model is the Robin Hood Foundation, founded in the late 1980s by hedge fund manager Paul Tudor Jones. It has raised more than $1 billion from wealthy donors who trust Robin Hood to spend their money to fight poverty in New York City. They have good reason to do so. First, the foundation has an impressive board, including GE CEO Jeffrey Immelt; Goldman Sachs chairman Lloyd Blankfein; Dirk Ziff, chairman of Ziff Brothers Investments; entertainment executives Harvey Weinstein and John Sykes; Tom Brokaw, Diane Sawyer, and Gwyneth Paltrow. Second, the board members completely cover administrative