Forbes: For the ﬁrst time the phrase ‘this panel needs no introduction’ is actually true. The big question: Do people who’ve been successful have a moral obligation to give? Is it an emotional decision—‘I can do good’—or an intellectual decision—‘I feel an obligation to do good’?
Melinda Gates: It’s both, but I won’t say the emotional piece is because I have an obligation. Any time you give, it has to be from your heart. One of the amazing things about philanthropy, at least for us, is getting out into the world and talking to people. And you realise how similar people are in terms of what they want and their needs. So, for me, it’s a heart tug that I feel and that I carry every time I come back home, be it Seattle or New York.
But then it’s your intellectual head that you have to put on, which says, ‘Okay, so I met that one person’ or ‘that one family’ or ‘that group of villagers’, but how do I impact tens of millions? How do I use this money that’s at our disposal to have the very biggest impact?
I agree. My theory is, number one, you should give money because when you give money, it’s selfish. Nobody who gives away money says, ‘I feel terrible about myself. I hate myself for giving away that money.’ You feel better about yourself, and when you feel better about yourself, you’re going to live longer, because your emotional health will be better.
Second, you might actually help somebody. You never know. All the times you try to do something, it doesn’t always work. But sometimes you might actually help people. And it’s a natural human instinct to help other people. And third, you might get to heaven more quickly. Now, I can’t prove that, but why would we take a chance?
You can only do three things with money. You can give it to your children, you can give it to your executor to give away or you can give it away while you’re alive. And my theory is, it’s much better to give it away while you’re alive. How much can you give to your children before you completely spoil and ruin them? Very few people who inherit gigantic sums have gone on to change the world for the better. Generally, the people who’ve changed the world for the better are people who made it on their own and ultimately didn’t want to just distribute wealth to somebody else. If you can give away as much money as you can while you’re alive, you’ll realise the beneﬁts that I just mentioned, you’ll feel much better about yourself—and your children will feel much better about you.
And there are three different ways to give. One is to give money, write a cheque, which is important. Two is to give your time and really focus on the issue with passion. And three, essentially, is to give your reputation, leverage your network and try to plug people together. Initially, [my wife] Jean and I did some startups. We gave a fair amount of money away. Then we started investing in kind of what we thought of as not startups but speed-ups, organisations like Habitat for Humanity and Special Olympics, trying to expand their efforts.
For probably seven or eight years, we actually didn’t have a website, which is odd given all the money came from the internet. We thought it would be better just to kind of quietly do it. But then we realised we really weren’t using our most unique and precious assets, which are the ability to connect people together, build collaborations, shine a spotlight on issues. Which really led us to commit to the Giving Pledge. It wasn’t so much making a public commitment—it was more trying to leverage everybody’s expertise and create a network effect around the givers.FORBES: Melinda, you talked about giving around something you’re per- sonally passionate about. You and Bill have given to a lot of things, such as vaccines, that are very abstract and far away from us. How do you get people excited about things like that?
The best thing is to en- courage people to get out and see the things. If you get somebody to go to Af- rica and see the beauty and yet also get a glimpse of what happens to children, that malaria’s this awful thing, not just in terms of deaths but the number of kids who are permanently damaged, never able to learn—they’ve had either malnutrition or malaria—it really draws you in. There’s no substitute for actually going and seeing it.
Same thing with schools. If you go to an inner-city school and see some of the pathologies that can develop in terms of how there’s security [checks] and people aren’t really going to the classes much, and then you go to a place a few blocks away that’s, say, a charter school run on a different basis, and you see that contrast, you really want all the kids to have what you see at the second place.
So I think you’ve got to have genuine experiences. That’s kind of the retail end. And then you, a little bit, step back and say, ‘Okay, what is it about that system? Why isn’t the combination of the market plus government able to solve that?’ Who’s really studying how you reward teachers? Who’s really studying why they’re good? What is the institu- tional framework that would change that? That involves working with ex- perts, doing a lot of thinking. But it’s got to be that kind of retail experience that creates this dedication.
I’m not sure whether it’s intellectual or emotional, but when I was born in 1930, the odds were 40-to-1 against me being born in the United States as opposed to someplace else. I was a male. The odds were even money on that. So now I’m down to 80-to-1.
You don’t want to bet on 80-to-1 shots normally, but I got lucky. As Bill says, if I’d been born a few thousand years ago I’d have been some animal’s lunch, because I’d have gone around saying, ‘Well, I allocate capital,’ you know, and the animal would say, ‘They’re the kind that tastes the best.’ I can’t run fast. And I can’t climb trees. And so here I am, by pure, pure luck, born at the right time, the right gender as it turned out, compared to my sisters who were just as smart or smarter than I am, in the right place and in a system where allocating capital pays off like crazy.
I don’t feel guilty about that. I do feel grateful about it. I’ve got a whole bunch of stock certiﬁcates sitting in a box. They’ve been down there for 40 years. I haven’t even looked at them for years. You know, I could go down there and fondle them occasionally, but that’s about all they’re good for. I mean, they have no utility to me. They have all kinds of utility to the people that Bill and Melinda are talking about. Incredible utility. And what can they do for me? They can’t do anything in a practical manner. And so, it just seems so obvious to get them where they’re useful.
FORBES: Who has had an epiphany moment regarding philanthropy on a massive scale?
I can’t remember back that far. I can’t remember what we had for lunch. (Laughter)MELINDA GATES:
I’ll tell just one story. Bill and I had already decided after we were engaged that the money that had come from Microsoft would go back to society. That was a given. We both came from families that believed in that and believed in volunteerism and civic work.
On our ﬁrst trip to Africa, a few months before we were to be married in the autumn of 1993, we went to see the animals, and the safari. We had a group with us. We had an amazing trip. We didn’t go to see the poverty. But you can’t but help be in Africa, see the people and say, ‘Well, what’s going on here? Why is it that the women are the ones that we saw doing so much work, carrying loads on their heads, a baby on the back and a baby in their belly? And the people with shoes on, smoking cigarettes, were men.’ We just kept asking ourselves, ‘Well, what’s going on here?’
That started us. For us as a couple, it’s been not only an intellectual jour- ney but a really fulﬁlling journey in terms of what we learn together.LEON BLACK:
My wife was diagnosed with melanoma cancer ﬁve years ago. It was a misdiagnosis where a recurring plantar’s wart on her foot for ﬁve years turned out to be a stage two melanoma. That was very scary and a wake-up call. She’s ﬁne, which is the great news, but even better than that, we took a page out of Michael Milken’s approach and what he’s done with prostate cancer, where he’s been able to reduce morbidity rates in prostate cancer almost in half over the last 20 years, and say, ‘Maybe we can make a difference in starting a melanoma research alliance and empower the best and the brightest, on the condition that they collabo- rate, that they work with each other, that they share their research.’
Fast-forward to a kind of Who’s Who scientiﬁc advisory board, getting it out on a global basis to make a difference. We’ve gotten 30 or so young investigators involved. This was a ﬁeld where, really, nothing had happened for 40 years. That was the frightening thing we learnt when my wife was originally diagnosed. And now this is one of the areas that is most hotly pursued. That was our personal moment.STEVE CASE:
We’re giving, all of us, because we want to have an impact. We want to change the world. And how do you have the maximum impact, ideally, with the most modest investment? That’s what we are, whether you’re an investor or an entrepreneur starting a company: How do you take a little bit of resources and have the broadest possible impact? So, looking for ways to get leverage and maximise the impact is not about the input of writing the cheque. It’s about the output, what actually happens.
We’ve all learnt that it’s hard. It takes a lot of work. But if all you do is write the cheque and then ﬁgure you’re done, it’s actually kind of like investing in a company. A venture capitalist writes the cheque, but then the real value they provide is the expertise they help to guide that investment, the network that surrounds those entrepreneurs in terms of people they can bring into the organisation. Trying to take those same lessons and apply them to this role, I think, is very important.DAVID RUBENSTEIN:
Most of the people who got into The Forbes 400 got there by having an idea and pursuing that idea as long as they could. And it created great wealth for them. They didn’t really care about making the money so much as pursuing the idea.
I think, in Bill’s case, you were interested in proving that the software you could develop was the best software in the world. And so the same principle really applies in philanthropy. You have to have an idea of something you want to do, and you put into it the same passion.
And I want to agree with Steve. The ancient word philan, for philanthropy, as the Greeks invented it, had nothing to do with giving away money. Philan-thropy means love of humanity, love of people. For the ancient Greeks that meant giving your time or your energy and your money. Everybody doesn’t have the ability to be in The Forbes 400 and give away large sums of money. Most people in the United States really only have the ability to give away their time and their energy and their ideas—some money but not nearly the kind of money we’re talking about represented here.
So, I really hope that the philanthropy movement, which Warren, Bill and Melinda have really helped develop as a global phenomenon, is seen not just as wealthy people giving away money but wealthy people giving away their time, their energy and their ideas and encouraging other people to give away whatever they can—ideas, energy or time.
FORBES: To the extent there’s an obligation to give back, is there also an obligation to do so publicly—to show that those who’ve achieved incredible success give back to society?
To get the maximum leverage, the maximum network effect, some of that is doing it publicly and trying to get other people to rally around your cause. The idea of the Giving Pledge and making a public commitment, we thought, would motivate others, not just the wealthy.
FORBES: Where did the 50 percent number in the Giving Pledge come from?
I said zero, and Bill said a hundred, so we compromised. It came out of the air. But I would bet that most of the people who’ve joined the Giving Pledge will not only give more than 50 percent, I think they’ll give appreciably more than 50 percent. And they’re doing it. You have to have a cutoff point, but I don’t think we’ve reduced anybody’s expectations by using that number.MELINDA GATES:
I want to go back to the public-versus-private idea. Bill was already very visible because of the business. But for me it would’ve been nice to just kind of be private. Early on, we were doing a lot of things behind the scenes pri- vately. I liked to ﬂy under the radar screen. It was nice when we could go into countries and, you know, the government didn’t know we were there, so I could go see projects on the ground very anonymously.
But what I’ve learnt is that your voice in these things matter. If you’re going to galvanise people around a particular issue that you care about, if you want to galvanise governments to give money around big causes or other philanthropists to come together around the cause that you care deeply about, you’ve got to be more public about it and you’ve got to use your voice. And one of the knock-on effects is that you do end up inspiring other people.WARREN BUFFETT:
It’s a fundamental premise of the Giving Pledge: It’s important for people to declare themselves. A wide spectrum of people, different ages and interests, everything else, are explaining why, to them, it’s important that they give half or more. Are all going to hit with a given reader? No. But a few will. And that’s what counts.BILL GATES:
In dinners around the United States and in China and India and other places, this topic has come up a number of times. Perhaps the most interesting was when I was in the Middle East, actually in Jeddah. There was a wealthy group really struggling with it. But one of them mentioned that in the Koran it actually says the reason to talk about your philanthropy is if it encourages other people to do the same. And, in that case, you have an obligation to talk about your philanthropy.
It’s a tricky thing. Are you trying to get credit for it? Or are you just trying to be able to share what’s worked and what’s not worked? It’s been fantastic where you can get groups together who can talk about what makes it fun, what makes it not be fun. Should you have staff? How do you involve colleagues and children? Being off by yourself, that’s one option. But I don’t think you’ll learn quite as much or enjoy it quite as much if you can’t ﬁnd a group of fellow travellers.STEVE CASE:
This issue was a big topic at this last Giving Pledge meeting: How do you inﬂuence others beyond what you’re doing, particularly governments? You could start with a premise of you could do what you’re doing on your own. That’s great. You could say, ‘Let’s network that together with other givers and have more impact.’ That’s great. You could then go another level and say, ‘How do you interact with companies and create public/private partnerships that really integrate what you care about and do what maybe hundreds of companies are doing on—on a global basis?’ That has even more impact. And then the ﬁnal step is, how do you integrate governments and leverage what they’re doing or inﬂuence what they’re doing?
Do the risky things in this world. And then, when you’re looking to scale them, plug into governments. That gives you even more impact. Having a big impact on these big issues requires stepping out of your comfort zone and trying to create that network effect.FORBES: Five of the people on this panel are Giving Pledge signers: What has surprised you guys most when talking with each other?
I think we’ve had more success than we anticipated. I don’t know whether Bill and Melinda would agree with that.BILL GATES:
I think that the fact that people really want to have a frank discussion and they have such great stories about what’s brought them to give, it kind of reinspires everybody when you get together.WARREN BUFFETT:
I’ll tell you one surprise. I’ve been with Bill and Melinda in Beijing and then again in Delhi. And it was amazing to me. We had about 50 people, I would say, at both of those dinners. They have the same concerns. They obviously have some different views from their culture and some different attitudes about what the government should do and that sort of thing. But there are a lot of common characteristics between the billionaires in Beijing and Delhi and New York.MELINDA GATES:
That generation, the generation that makes the wealth—we’re seeing a lot of movement in the tech sector in India—they’re very energised to not only give money back but to do what you’re hearing so many of the people in the room talk about today, which is to use their brains against something that they see in their country that needs change.
You really make sure you get to that ﬁrst generation of wealth before it’s handed down to the next generation, because sometimes the second generation feels like, ‘Well, I’ve got to hang on to it. It was given to me. And I’ve got to pass it along.’ But the ﬁrst generation says, ‘Hey, we made it, and it’s ours to give away as well.’ That’s a common theme we’re seeing across the world.
That’s true in the United States, too. In talking to people, if they inherited it themselves, they feel they’re breaking a covenant to some extent if they don’t continue that policy. That’s not universal. But I can understand that. That’s a very understandable human reaction. But I try to talk them out of it.
Many people who are in the 1 percent are very afraid of being identiﬁed as having an enormous amount of wealth, and they don’t want the publicity associated, perhaps, with announcing they’re giving it away. But I think that’s a false concern. Because of The Forbes 400, people know who the wealthy people are. And I do think that those people who have the wealth are almost certainly going to give it away anyway, because there’s not many other things you can do with it. I don’t think you can give that much of it to your children.
The greatest impact of the Giving Pledge will actually be outside the United States in time, because other people still look to it as a leader, as a moral leader in certain ways and as a leader in philanthropy. I believe other parts of the world will see that what we’ve done here has helped make the United States a better place and to make the lives of people better.
The thing that’s most surprised me is that people come up and thank you, dramatically. You build a company, and you’ve made a lot of success in business—nobody ever came up and said thank you for doing that. When you give away money, people come up to you and say, ‘Well, it’s great. You’re a patriot.’
And I say, ‘Well, no, a patriot is somebody that went in the military, somebody who is a policeman, a ﬁreman, a teacher. Giving away money to help the federal govern- ment is not necessarily a patriotic thing.’ But people think that you’re doing patriotic things. And it makes you feel good, even though the truth is you’re not any more patriotic than anybody else.
And I’ve been surprised at how much attention some modest gifts get. You can give a relatively modest amount to certain causes, and people get enormously excited about it. Sometimes you can give away hundreds of millions of dollars or billions of dollars, and you sometimes don’t get the attention because people can’t grasp the enormity of what you’re doing. In some cases, you’re changing the face of Africa, but you probably don’t get the same impact as if you gave a lesser sum to some institution in the United States that everybody knows.STEVE CASE:
David gave money to the Smithsonian National Zoo to promote panda sex. That got a lot of attention.DAVID RUBENSTEIN:
Panda conservation!STEVE CASE:
I have a question for Bill and Melinda. I think what Warren did, giving away such a signiﬁcant amount to the Gates Foundation, with essentially no strings attached, no naming rights—he didn’t say, ‘Oh, rename it the Gates & Buffett Foundation’—was really an unbelievable charitable gift. I think it inspired everybody.
One piece of it that I think got some people concerned, and I understand why he did it, was 10 years after your death it all has to be given away.WARREN BUFFETT:
How much of a burden does that create—that amount of dollars being deployed that quickly? Do you worry about that? Do you try to make sure to keep him healthy?BILL GATES:
We tried to switch him from Coke to Diet Coke, but that’s not working.WARREN BUFFETT:
Diet Cherry Coke.BILL GATES:
We’ve had so much time to learn about various things, it won’t be a problem at all. Those dollars will have just as much impact as the other things we’ve given. But it’s fascinating. Our time frame is more like 20 or 30 years after we pass away. You’d call that a pretty small different point of view. There are other people who believe in perpetuity. And that’s perfectly ﬁne. You know, there were some historical foundations like Rockefeller that’s sort of perpetual. And there are some that aren’t as well known that spent their money. The more you think about it, having a ﬁnite limit makes sense. Because you can really go after a particular thing and count on the rich people of the future to understand better what problems need to be addressed and exactly who should go after those problems.MELINDA GATES:
Warren has inﬂuenced us hugely in our giving. Originally, when we set our will up, we said, ‘Okay, the foundation would live, you know, 50 years beyond the last of us.’ We’ve recently moved that into 25 years.
Warren’s thinking about, ‘Don’t leave it to your children.’ That inﬂuenced us hugely. Take big risks. As he says, ‘Swing for the fences. Don’t go for the easy pitches.’ I mean, that rings in your ears, particularly when you’re going to do something that takes some guts, right? He’s just been an unbelievable inspiration to us and continues to be in this philanthropy.FORBES: How do you maintain your enthusiasm given the inevitable challenges and setbacks you face?
Well, if you take ﬁve different items that might affect the lives of millions of people, and one of them’s going to succeed, you should not get discouraged at all about the other four. With the bigger money, you should be doing things that can change lots of lives. And you should be doing things that have some real chance of failing. If they’re easy, let somebody else do them—or they’ve probably already been done. So failure is not failure.
If you’re Alex Rodriguez, and he bats .350, you can say, ‘Well, he didn’t hit .650, but .350 is terriﬁc.’ It’s the same way in philanthropy. You should not get discouraged about the fact that one out of ﬁve, two out of ﬁve or maybe four out of ﬁve don’t work out the way you want it. If one out of ﬁve does, and you change millions of lives, you should feel very good about what you’ve done.
Building the businesses that led to the success that gives you the opportunity to give back, there were struggles as well. There are very few overnight successes. That persistence, that perseverance, I think, is an important skill set in anything you do.
We also know the difference between success and failure sometimes is inches. And just staying with it and having that perseverance and not giving up, and being fearless, is the difference between success and failure in anything you do.LEON BLACK:
I would go a step further. People are on The Forbes 400 because they are tenacious problem-solvers. They had challenges, they had goals, and none of those goals were achieved easily. It took them years to get to where they got to. And I would just say in the ﬁeld of philanthropy, it’s a broader canvas of a problem-solving challenge, whether it has to do with ﬁghting poverty or disease or improving education. It’s almost as if so much of what came before is the experience and the education for all of us to then be able to paint on that broader canvas.
And the rewards with this other canvas are so much more refreshing. Much of the world that I’ve lived in the last 30 years is the world of Wall Street, of ﬁnance. The goal has been to make money. And when you deal with teachers and scientists, you’re dealing with so many brilliant young people, where money is just foreign. It doesn’t matter. I ﬁnd this unbelievably refreshing to see this type of brainpower out there and the dedication.
I tell students all the time, ‘You have to ignore what your parents want you to do. Because if you do just what your parents want you to do, you’re going to be miserable in life. Find something that you’re passionate about that you want to do, because only if you ﬁnd something you really love will you be successful.’
And the same is true in philan-thropy. If you ﬁnd something that you’re doing because it’s socially acceptable, you’re never really going to enjoy it. Just as you experiment with many different jobs until you ﬁnd something you love, experiment with philanthropy. Find something you really love, where you think that you’re making the difference and your existence on the face of the earth is justiﬁed by your doing something that’s really made the world a better place for some other people. Meet the New Pledgers
Seagram spirits heir Charles Bronfman, with a personal fortune worth $2 billion, has been giving away largescale money for years. His Andrea & Charles Bronfman Philanthropies, founded with his late wife in 1986, has granted some $325 million to 1,700 organisations, notably Birthright Israel, a programme that has sent 330,000 young Jews on cultural trips to Israel. While he has no plans to change the pattern of his giving, he is changing its visibility, becoming one of 10 new tycoons who, with the release of this issue, have publicly signed on to the Giving Pledge. “Philanthropy is not just a game that rich folks play,” says Bronfman. “It’s something that we all do with deep passion, trying to do, in our own niches, something to change the world.”
Warren Buffett and Bill and Melinda Gates launched the Giving Pledge in June 2010, and this billionaires club has one simple rule: Publicly commit to give away at least 50 percent of your wealth, either during your lifetime or at death, along with a letter explaining why you’re doing it. Forty tycoons joined immediately, and the new pledgers bring the total to 91. These most recent 10 alone (collective net worth: $18.4 billion) have now committed at least $9.2 billion to charity. “We have not made that many phone calls,” says Buffett. “And people have stepped forward that I didn’t know at all before.”
“I think it sends a signal,” says Nicolas Berggruen, N o. 206 on The Forbes 400 and an early Pledge signatory. “It encourages others to focus on doing good.” Berggruen spends the bulk of his time gathering academics and politicians to work on global governance problems.
As the ranks of pledgers have expanded, so has the opportunity for them to learn from each other. The group now meets annually: Thirty-ﬁve got together in Santa Barbara in May and focussed on ‘impact investing’, creating public good via their for-proﬁt endeavours. The small staff of the Giving Pledge, housed at the Bill & Melinda Gates Foundation, facilitates connections between pledgers who have similar interests.
“If I learn one thing by joining,” says Manoj Bhargava, the $1.5 billion net worth founder of 5-hour Energy, also a new pledger, “it’s worth it.” Bhargava, like Bronfman, has already been giving away his money, having pledged 45 percent of his company to aid ‘human suffering’ in his native India. Rather than launch new efforts, a staff of 20 based in the town where Bhargava was born scouts out charitable organisations already doing good work and funds them.
Bhargava, who kept a low proﬁle until Forbes outed him as a billionaire earlier this year, says his whole goal in signing the Giving Pledge—and in talking to Forbes in the ﬁrst place—was to make his giving go more smoothly. “In India when I was doing charity, all of a sudden, because I had such a low proﬁle, people thought I was some sort of criminal, some kind of money-launderer.” Since debuting as a billionaire and signing the Giving Pledge, Bhargava has eliminated that problem—and gained some weighty brethren. “We’ll probably end up doing something with Bill [Gates] in India,” he says. “We’re talking about that.” —Erin Carlyle
(This article is excerpted from the latest Forbes India 07 December, 2012 issue which is now available at news stands and book stores. You can buy our tablet version from Magzter.com)