Skip to main content

The Globe and Mail

It’s not always easy to give away gobs of cash. Just ask Mark Zuckerberg

"Welcome to the era of 'super-citizens,'" David Callahan writes in The Givers: Wealth, Power, and Philanthropy in a New Gilded Age.

Among them are media mogul Barry Diller and his fashion designer wife, Diane von Furstenberg, who donated money that created a new island park in Manhattan. Another is Michael Bloomberg, who is using his wealth to fight coal plants and support public art and other causes.

In his book, Mr. Callahan writes about how high-level philanthropy is being wielded on social, political, health and environmental concerns in the United States and around the world.

Story continues below advertisement

He holds up Bill and Melinda Gates as an example. Worth nearly $80-billion, they have pledged to give away most of their fortune, and they have encouraged their peers to follow suit. George Lucas, Richard Branson and Warren Buffett are among 170 people who have joined the Giving Pledge, with Mr. Buffett as co-founder, vowing to give away at least half of their wealth.

Mr. Callahan is co-founder of the public-policy think tank Demos and the founder and editor of Inside Philanthropy, a website that profiles donors and foundations and presents awards to top philanthropists.

In The Givers, he explores what motivates wealthy people to give away vast amounts of money to stop climate change, improve education and cure diseases. He spoke from his home in Los Angeles.

What makes this a new gilded age?

The tremendous expansion of the number of rich people over the past 30 years is remarkable. In 1982, there were only 13 billionaires in the United States and the wealthiest person had a net worth of $2-billion. Now there are more than 500 billionaires and the richest person is worth almost $90-billion.

The net worth of the Forbes 400 has exploded by more than 2,000 per cent since that time. It's similar to the late 1800s-early-1900s, with a huge expansion of wealth concentrated in very few hands in the United States and globally.

The first gilded age led to a progressive era with more social activism and political reform. Will that happen again?

Story continues below advertisement

We have seen some pushback against rising inequality. With Barack Obama's presidency there was a redistribution agenda, with raising taxes on the rich and passing the Affordable Care Act, which was financed in large part by taxes on the wealthy. And there were social movements like Occupy Wall Street and Bernie Sanders's presidential candidacy.

On the right there was a different type of populist backlash – but also somewhat related to inequality – with people really concerned about the "coastal elite" and the affluent classes having too much power in society.

Do you see any ulterior motives to the Giving Pledge and other types of large-scale philanthropy?

By and large I don't think so. Occasionally you'll find philanthropy where there is a conflict of interest, with somebody using their wealth to advance an idea that's going to help their business. But more generally these people are interested in solving problems and improving society in some way, whether it's fixing education or solving climate change.

But they have power. I see them as rational actors who are doing what I would do if I had their resources.

In the book you mention Facebook co-founder and CEO Mark Zuckerberg's efforts to improve public schools. What did he learn from this venture?

Story continues below advertisement

His first major effort in education was a $100-million gift to the Newark, N.J., school system, which had some of the worst schools in the country. That didn't go so well, in part because there wasn't enough buy-in from the community and people felt like this was a top-down effort that was imposed upon them.

He and his wife, Priscilla Chan, seem to have learned that they need to be more inclusive and make sure that key stakeholders are engaged in the process. His next major venture in education was to give $120-million to the schools in the San Francisco Bay area where he lives, and that effort was done in a much more inclusive way with more participation by the key stakeholders.

It's not easy to give away lots of money, is it?

No, it's not easy, and people make mistakes, there's trial and error. It's good to be willing to take risks. Philanthropy has been called "society's risk capital" because they can take risks, in contrast to politicians, who worry that they could be voted out of office. Nobody can vote Mark Zuckerberg out of office.

You mention that some philanthropists regret not giving away their money sooner.

There's a lot of debate within philanthropy, whether it's better to give your money away while you're still alive, or leave a foundation that exists in perpetuity. Notable philanthropists like Charles Feeney, who created the Atlantic Philanthropies, recently finished giving away $8-billion; he's still alive.

We still have the Rockefeller Foundation that started a century ago, and the Carnegie Corporation; both are still making a lot of grants. Bill Gates's plan is to try to give away as much as he can while he's still alive.

Do Wall Street and tech-boom philanthropists give in different ways?

I'd be wary of generalizing, but in the tech industry you make your money by coming up with a new idea that disrupts everything. The Google guys got rich by coming up with a better way to search the Internet, Mark Zuckerberg got rich by coming up with a way to connect people worldwide. When these people turn to philanthropy, they tend to have that mindset of looking for a breakthrough solution that will disrupt existing ways of doing business, which is what Mark Zuckerberg sought to do in the Newark school system.

On Wall Street you make your money by having a top portfolio that you manage, often more conservatively. The tech philanthropists tend to be some of the most ambitious and interesting philanthropists of our time.

Does money equal power?

The power of private philanthropy is growing at a time when government has fewer resources to solve problems. Government spending is under a lot of pressure because of aging populations. It's a shift in power from one side to the other.

This interview has been edited and condensed.

Video: Money Monitor: Tax benefits of giving money to heirs while alive (The Canadian Press)
Report an error
Comments

The Globe invites you to share your views. Please stay on topic and be respectful to everyone. For more information on our commenting policies and how our community-based moderation works, please read our Community Guidelines and our Terms and Conditions.

We’ve made some technical updates to our commenting software. If you are experiencing any issues posting comments, simply log out and log back in.

Discussion loading… ✨

Combined Shape Created with Sketch.

Combined Shape Created with Sketch.

Thank you!

You are now subscribed to the newsletter at

You can unsubscribe from this newsletter or Globe promotions at any time by clicking the link at the bottom of the newsletter, or by emailing us at privacy@globeandmail.com.