In September 2020, Benoit Dageville’s data cloud startup, Snowflake, went public, making him and his wife instantly billionaires. Following that transformative experience, Marie, a former hospice nurse, decided to learn how to quickly donate her newfound wealth.
In an interview with The Associated Press from her Silicon Valley home, she stated, “We need to redistribute what we have that is too much.”
Giving up large sums of money is difficult, according to many, but Dageville doesn’t think so. “Just get started,” she says.
Since at least 1889, when Andrew Carnegie released an essay titled The Gospel of Wealth, America’s wealthiest individuals have encouraged one another to donate more of their fortune. He maintained that in order to mitigate the effects of rising inequality, the wealthiest people should donate their fortunes during their lifetimes.
The Giving Pledge, an effort run by the Bill & Melinda Gates Foundation, has partially spurred the growth of an entire industry of counselors, courses, and charitable giving vehicles to help enable gifts from the wealthy. In 2010, Melinda French Gates, Bill Gates, and Warren Buffett asked other billionaires to pledge in their wills or during their lifetimes to donate half of their wealth. 244 people have signed up thus far.
What, therefore, prevents the wealthiest individuals from giving more and more quickly?
Risk, practicality, and psychological obstacles
According to philanthropy experts, some of the answers are structural, such as identifying the appropriate consultants and vehicles, while others are emotional and psychological, such as attempting to be liked by their peers or bargaining with family members.
According to Piyush Tantia, chief innovation officer of ideas42, who recently participated in a Gates Foundation-funded project examining the behavioral barriers that impede the most generous donors, it’s like a huge, perfect storm.
He notes that the wealthiest donors ultimately consider where to contribute far more than regular donors, who might give in response to a friend or family member’s request.
We may believe, It is a billionaire. A hundred thousand dollars? Who cares? “They return within the next fifteen minutes,” he stated. However, it doesn’t feel that way.
He suggests considering charity as a portfolio, where various risk levels and approaches should ideally complement one another. In this manner, the overall influence is more important than the results of any one grant.
Speaking with other Giving Pledge signatories, particularly one who encouraged her to make general operating grants—which allow the organization to decide how to use the money itself—was beneficial, according to Marie Dageville. She said she is not constrained by a fear that the funds may be misused and that she trusts NGOs in the areas they serve to know how best to use them.
“You took risks, or someone took risks on you,” she added, “if you are in the position where you are now able to redistribute this fortune.” So why are you unable to take some chances in your charitable endeavors?
Additionally, Dageville believes that the needs of the beneficiaries are not given enough attention, instead of the desires of the givers.
Pushing one another and sharing knowledge
Advisors have discovered that candid and private discussions among contributors also aid in their progress. Very wealthy contributors, their advisors, and foundation heads gather in cohorts to study from the Center for High Impact Philanthropy at the University of Pennsylvania.
“Donors like MacKenzie Scott, the author and now billionaire ex-wife of Amazon founder Jeff Bezos, show it’s possible to move quickly,” said Kat Rosqueta, executive director of the center.
Does MacKenzie Scott have to move faster than all the ultra-high net worth funders? “No,” she said.
However, she added that because charitable money is so small in comparison to government spending or company spending, donors may find it difficult to comprehend how they might make a difference.
“The scrutiny of billionaire philanthropy also means that they feel a huge responsibility to use their funds as best as possible,” said Cara Bradley, deputy director of philanthropic partnerships at the Gates Foundation.
They have made a sincere commitment to attempting to distribute this enormous riches. People may then become stuck as a result of life being hectic. This is challenging. According to her, philanthropy is a genuine undertaking.
Openness inspires others.
According to Deborah Small, a professor of marketing at Yale School of Management, conducting empirical study on billionaires is equally challenging. However, she asserted that existing societal conventions generally favor anonymity in charitable giving, which is viewed as more moral as the giver’s kindness goes unnoticed.
According to her, if everyone was transparent about it, it would be better for causes and philanthropy overall because it would establish the societal norm that this is what society expects.
In 2012, Jorge P. Rez, the founder and CEO of Related Group, a real estate development company, joined the Giving Pledge early with his wife, Darlene. “I often talk to my peers about giving more and faster,” Prez said in an interview with The Associated Press.
He remarked, “I think people have stopped taking my calls.”
Additionally, he has involved his grown children in charitable endeavors, a large portion of which are carried out through The Miami Foundation. Instead of establishing their own organizations, he said, they chose to use the foundation’s experience to expedite the assessment of possible grantees.
The Prezes, who are located in Miami, were strong advocates for scholarships and the arts even before they joined the Giving Pledge. The art museum, which was renamed the Prez Art Museum Miami after the gift, received a $40 million donation from the couple in 2011 together with their art collection.
Prez stated that he donates because he want to leave a legacy and because he believes that very unequal societies cannot be sustained.
He stated, “I keep selling the idea that you’re giving for very selfish reasons.” It makes you feel wonderful, to start. But two, especially in the city, state, or nation where you will reside, this will ultimately have a significant impact on making our society more equitable, better, and forward-thinking, and it will most likely result in increased economic prosperity.
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The Bill & Melinda Gates Foundation provides funding to the Associated Press for news coverage in Africa.
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