The Billionaires’ Club: The Giving Pledge and What It Means for Your Nonprofit
Looking back at 2010, the biggest story in philanthropy this year was the Giving Pledge, a call to arms by Bill and Melinda Gates and Warren E. Buffett in which America’s wealthiest individuals were asked to give half of their fortunes to charity.
The response has actually been quite impressive—the Pledge has secured commitments from 40 of the wealthiest Americans, totaling some $600 billion.
The Pledge has also sparked a debate about giving from such incredibly wealth individuals and its place in the nonprofit sector.
The purpose of this eBulletin is to provide an overview of this debate and offer some advice as to what nonprofits can expect in the coming months from a fundraising perspective.
According to a November 12 article in the Foundation Center’s Philanthropy News Digest:
“Critics of the pledge include those who are concerned it will only serve as a reminder of the growing concentration of wealth in society, while others, like Pablo Eisenberg, a senior fellow at Georgetown University’s Center for Public and Nonprofit Leadership, question how any additional philanthropic dollars generated by the campaign will be spent. Although Eisenberg acknowledged that the pledge is likely to inspire more giving among the rich and super-rich, he also expressed concern that it would ‘increase the number of mega-foundations, and I worry that will hurt our democracy because of the influence these institutions will exert.’
Despite such criticism, Bill Gates himself is optimistic that the campaign will not only help increase philanthropic giving in the U.S., and around the world, it will also improve the practice of philanthropy and help address income inequality by serving as a tool for the redistribution of wealth in society. ‘We will never be able to measure how much the group gets people to do more giving or do it in a better way,’ Gates told the Times via e-mail. ‘However, I think the impact is likely to be quite positive.’”
OK, maybe your nonprofit is not first in line when Bill Gates opens up his wallet. Don’t worry—you’re not alone. If your organization is like many other small-mid-sized nonprofits, you rely on support from regional foundations, from government, and from individuals whose means are a bit more modest than Gates, Buffett, et al (and, really, whose aren’t?)
What should all of this mean to you? What can your organization expect in the months to come?
First, the Pledge should be welcomed—not only for the money it will generate directly—but also for the ripple-effect it is likely to have. For instance, as the New York Times reports, Marc Benioff, the billionaire founder of SalesForce.com, was not asked to sign the pledge, but he was inspired by the pledge and has made a $100 million gift to the Children’s Hospital at the University of California, San Francisco.
Second, there are a couple of reasons why you should be optimistic during the next few months, as well as in the year ahead. Charitable contributions generally increase around this time of year. This is because individual donors often feel more charitable during the holiday season and will often substitute a present under the tree for a donation to a favorite charity, and also because an end-of-year charitable contribution is an added bonus in terms of tax deductions. In broader terms, if you look back at the Great Depression of the 1930s and other economic recessions, you will see that, when times are tough, the nonprofit sector has historically risen to the occasion and helped those in need. According to a 2005 paper from the National Bureau of Economic Research, charitable giving by religious organizations appears to have risen during the Great Depression.
Please feel free to contact Elliott & Davis, PC with all of your questions about nonprofit law.
Elliott & Davis is a full service law firm with expertise in the areas of nonprofit law, civil litigation, corporate law, real estate law, estates & trust, immigration law, entertainment law, civil rights law and domestic relations law. For more information about these or any of our other practice areas, please visit our website at: www.elliott-davis.com.
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