"I've long stated that I enjoy making money, and I enjoy giving it away," stated T. Boone Pickens, the oilman and investor. "I like making money more, but giving it away is a close second. To date, I've given away nearly $800 million to a wide-range of charitable organizations, and I look forward to the day I hit the $1 billion mark."
Pickens, along with other billionaires and ultra-high-net-worth families, including Bill and Melinda Gates, Warren Buffett, David Rockefeller, John Bogle, Mark Zuckerberg and George Lucas, have agreed to conspicuously make large charitable donations during their lifetimes instead of waiting for the majority of their contributions to trigger at their deaths and the settlements of their estates. They've also offered some insight in how they view inherited wealth—especially if they built their financial empires from modest beginnings.
One interesting point many of the contributors make is that they've been active in giving for decades already; they just may not have been so public about it. Part of the push to join The Giving Pledge is to influence others in a position to give (at any level) to help today rather than decades hence. Started by Buffet and the Gateses, The Giving Pledge invites America's (and the world's) wealthiest families to commit to giving the majority of their assets to philanthropy in a very public way to inspire others. How and what each family contributes is their decision. The Pledge is not collecting for any cause.
Advisors to affluent families have often used anecdotes about well-known individuals as a more memorable and persuasive way to discuss different aspects of financial planning.
What Drives Them to Give
The reasons these very wealthy people engage in philanthropic activities can originate in the circumstances of how they grew up, examples of charity by their parents, or the discovery of a passion in adulthood. Carl Icahn, for example, a product of the New York City public school system, focuses on improving educational opportunities, including those of the city's children from high poverty and crime areas through the construction of public charter schools in the Bronx.
Peter G. Peterson's parents came to the United States from Greece with third grade educations and no English language skills. The future chairman and co-founder of private equity investment house The Blackstone Group and a CEO of Lehman in the 1970s and 1980s benefited from their drive to save enough to open and operate a restaurant for 25 years, and to put away money to invest in their children's education. "Throughout this period," says Peterson, "[my father] always sent money to his desperately poor family in Greece and fed countless numbers of hungry poor who came knocking on the back door of his restaurant. Above all else, he wanted to save so as to invest in his children's education." Today, his foundation works on large issues, such as the proliferation of nuclear weapons and the costs of health care and its impact on the economy.
By contrast, David Rockefeller grew up in a family that had practiced large philanthropy for generations. One part of its giving has been institution based: the University of Chicago, Rockefeller University and the Museum of Modern Art in New York. The Rockefeller Brothers Fund addresses such challenges as health, sustainable development and the environment in New York City, Western Balkans, and Southern China.
For Warren Buffett, the drive to give back seems in part due to what he views as the chance circumstances of his wealth. "My wealth has come from a combination of living in America, some lucky genes and compound interest," says Buffet. "Both my children and I won what I call the ovarian lottery. (For starters, the odds against my 1930 birth taking place in the U.S. were at least 30 to 1. My being male and white also removed huge obstacles that a majority of Americans then faced.) My luck was accentuated by my living in a market system that sometimes produces distorted results, though overall it serves our country well. I've worked in an economy that rewards someone who saves the lives of others on a battlefield with a medal, rewards a great teacher with thank-you notes from parents, but rewards those who can detect the mispricing of securities with sums reaching into the billions. In short, fate's distribution of long straws is wildly capricious."
