When Warren Buffett was in his 20s, he studied biographies of America's historical business titans, from J.P. Morgan to John D. Rockefeller to Andrew Carnegie.
He was primarily drawn, of course, by their ability to accumulate vast fortunes. But he was also intrigued by the way the tycoons became philanthropists. Rockefeller and his son, John Rockefeller Jr., used their millions to cure disease, launch the green revolution in global agriculture and fund countless arts and cultural programs. Carnegie founded the nation's first library system and a famed concert hall, living true to his famous dictum that "the man who thus dies rich, dies disgraced."
"One way or another, we form ideas about what we're going to do if we turn out to be wealthy," Buffett says. "For me it was in my 20s, reading what those other people had done."
In the past year, Buffett has carried his philanthropy to a new extreme and, in the process, sparked a revolution in the world of giving. Through his launch of the Giving Pledge in June 2010, a joint venture with his partner-in-patronage Bill Gates, Buffett has unlocked billions of dollars for philanthropic causes. The Pledge has touched off a national debate about how much is "enough" when it comes to giving, and created the most powerful movement in American philanthropy since Andrew Carnegie released his famous "Gospel of Wealth" treatise in 1889.
The Pledge itself is radical in its simplicity. Its signers have to be billionaires. And they have to promise to give at least half of their fortune to charity during their lifetimes.
So far, 69 billionaires have signed the pledge, representing more than $150 billion in philanthropy. That number is "far more" than he and Gates expected, Buffett says. The signers are wildly diverse in their politics and causes—ranging from fighting cancer and funding Jewish schools to housing orphans in Africa and helping farmers in Appalachia. Still, they are united in their mission: to inspire the world's wealthy to give a larger percentage of their wealth to charity. It is the world's largest fund-raiser.
Buffett says that while many of the givers had already committed to give half of their fortune away, others were inspired for the first time to promise a specific number. And a few decided to make their first gifts ever. Facebook billionaire Mark Zuckerberg hadn't announced any real philanthropic plans before signing the Pledge last December. He announced his signing with a gift of $100 million to the public school system in Newark, New Jersey, which plans to use the money to create innovative new programs and incentives for teachers. "People wait until late in their career to give back," Zuckerberg said in a statement. "But why wait when there is so much to be done?"
Buffett says the true success of the Pledge will be revealed over time, when a future Warren Buffett reads the moving online letters from the Pledge signers and decides to follow in their footsteps. "What I'm hoping is that young people 20, 30, 50 years from now might be influenced by these letters," he says. "The hope is that our larger population ends up giving a larger proportion of their income to fund philanthropy."
Over time, Buffett and Gates want nothing less than to increase the overall giving rate in America. That won't be easy. While it may be painless for a billionaire to give away half his fortune—as Buffett says, "I haven't met anyone who can't live on $500 million"—many are reluctant to promise a number in writing. What if their business declines? What if their kids object? What if they prefer to spend their time building their business rather than giving to charity?
In his discussions with fellow billionaires, Buffett tells them that that there is no benefit in postponing a charitable promise: "My argument to these guys who said they weren't ready was, 'You're thinking more clearly at 70 years old then when you're 95, with Anna Nicole Smith sitting on your lap.' "
One man who was convinced was Joe Mansueto. The 55-year-old billionaire founder of Morningstar, the Chicago-based investment-research company, was always planning to give away some of his fortune to charity. Yet he didn't know how much he would give or when. "I'm so focused on building Morningstar that I figured philanthropy would come later in life," he says. Then one afternoon, in August 2010, he received a phone call from Buffett. "He told me that if enough people sign the Pledge, we could really have an effect on giving in our society over time," Mansueto recalls.
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