Over the past year, at a series of secret dinners held under a “cone of silence”, some of the world’s wealthiest people have been plotting a giant conspiracy that could, literally, change the world.
The men behind the conspiracy are America’s two richest individuals, Bill Gates and Warren Buffett, and the details of their plotting were revealed in a Fortune magazine cover story a few weeks ago.
The plot is big, but a simple one: to sign up the wealthiest people in America to legally pledge at least 50% of their net worth to charity during their lifetimes or at death. Gates and Buffett have already been leading the way, of course, by giving away most of their respective fortunes through Gates’s philanthropic foundation.
Today in Crikey, the Australian philanthropist Daniel Petre reflects on whether the 50% pledge could ever be achieved in Australia — and concludes that our richest people are so greedy and selfish that it couldn’t happen. That’s because our most consistently philanthropic, very rich families allocate less than 5% of their net worth to philanthropy and, on average, our wealthy appear to allocate around 1% of their net worth to philanthropy. Writes Petre:
We seem to see a donation of $5 million or $10 million from a billionaire, or one with many hundreds of millions, as something wonderfully generous and worthy of a national honour. Very simply a gift of $5 million from a billionaire is less in pro-rata terms than the average giving of a normal Australian on a normal average salary.
So either we stop lauding thanks for the crumbs offloaded by our most wealthy, or we start offering similar thanks to Mrs Smith whose $100 donation is a greater proportion of her net wealth.
The lucky country? Bah, humbug.
Spot on Crikey. Philanthropy has always been the first refuge of the scoundrel.
Billionaires’ fortunes are not their incomes. If their fortunes were passively invested, their dividends before personal income tax would be 4% per annum. If they donate 1% of their fortunes to charity each year, they would be donating 25% of their annual income before tax.
If Mrs Smith’s net wealth is $100,000 and she donates $100 to charity, the percentage is 0.1, one-tenth of your billionaire’s rate. If Mrs Smith’s income is $100,000 per annum and she donates her $100, it represents 0.1% of her income, much less than the billionaire’s 25%.
Your belief that billionaires should divest themselves of their assets is a separate matter.
As a moral insight, there’s a chap who’s a bit ahead of Petre on this one.
I was in a cafe the other day and Gina Rinehart took her cappucino back to the counter and demanded more milk. I mean really, what a tight wad. Then again the barista is probably lucky she didn’t gather another angry mob to rally out the front of the cafe.
Better still, let’s have less rich people!
I find philanthropy disgusting – anti-democratic and offensive. If they paid their workers properly and their fair share of tax they wouldn’t have the money in the first place – ordinary people would decide themselves how to spend the money, either in their own pocket or through their elected parliament, rather than letting a few unrepresentative individuals make decisions about how to allocate our common wealth.