The Giving Pledge

One of our roles at Northwood is to help clients work through their lifetime goals (what they will spend or give away during their lifetime) and legacy goals (what they will give away to other after they die). Many of these goals include a philanthropic element. Philanthropic aspirations can vary widely and we help families create a customized framework. This often requires multiple conversations or family meetings to get it off the ground because giving meaningfully is not an easy task. There is no one-size-fits-all approach.

We also have a number of clients that are foundations themselves, and it’s quite interesting to observe some of the successes and impact that these organizations have had over time.

One the resources I periodically look to for inspiration in the philanthropic area is the Giving Pledge. The Giving Pledge is an idea conceived by Bill Gates, Melinda French Gates, and Warren Buffet to encourage other billionaires to publicly pledge to give away more than half their wealth to philanthropy during their lifetime or at death. The purpose of the pledge is to inspire others to give back and make a substantial difference in our world and share ideas on how to do so. “Through individuals coming forward and being explicit and public about their intentions to give the majority of their wealth to philanthropy, the hope is that:

• The social norm that the wealthiest people are expected to give the majority of their wealth to philanthropy and charitable causes will be strengthened.

• Philanthropists committed to large scale, high impact giving will come together to exchange knowledge, experiences, and lessons learned from their philanthropy.

• Conversations, discussions, and action will be inspired, not just about how much to give but also for what purposes and to what ends.”

The pledge started in 2010 with 40 of America’s wealthiest families, and as of the end of 2022 there are now 236 pledgers from 28 countries (including Canada). Their individual causes are broad and diverse, and in some cases, as unconventional as the individual. Each member writes a pledge letter that is posted online, where they describe their inspirations and why they made the pledge, as well as their perspectives on philanthropy. Some of the letters are quite interesting. If you are interested in philanthropy, I highly recommend you visit the website simply to glean the perspectives of others attempting to make an impact. Below are a handful of excerpts from letters that might stimulate your interest:

”It is a privilege to be stewards of wealth in the service of society’s greatest challenges. We believe it is actually harder to give money away well than it is to generate it in the first place. We strive to be collaborative, responsive, and opportunistic in our approach to giving, while remaining realistic about the number of things we can truly improve through our support.”-- Beth and Seth Klarman

”Philanthropy is an unnatural act that must be learned and practiced.” – Peter B. Lewis

“My philanthropic strategy is also informed by my enduring belief in the power of new ideas. By dedicating resources that can help some of the world’s most creative thinkers accelerate discovery, I hope to serve as a catalyst for progress—in large part by encouraging closer collaboration and challenging conventional thinking. When smart people work together with vision and determination, there is little we can’t accomplish.” – Paul Allen

“….[T]his pledge does not leave me contributing the most precious asset, which is time. Many people, including -- I'm proud to say -- my three children, give extensively of their own time and talents to help others. Gifts of this kind often prove far more valuable than money. A struggling child, befriended and nurtured by a caring mentor, receives a gift whose value far exceeds what can be bestowed by a check.” – Warren Buffet

“While my motivations for giving are not driven by a profit motive, I am quite sure that I have earned financial returns from giving money away. Not directly by any means, but rather as a result of the people I have met, the ideas I have been exposed to, and the experiences I have had as a result of giving money away. A number of my closest friends, partners, and advisors I met through charitable giving. Their advice, judgment, and partnership have been invaluable in my business and in my life. Life becomes richer, the more one gives away.” – Bill Ackman

“Harriet and I never expected to become members of the Giving Pledge group but since our wealth – like all fortunes – rests so heavily on the intelligence, work and contributions of others it seems only right that we voluntarily give most of it to causes that help improve the lives of people we do not know.” – Michael Moritz and Harriet Heyman

“Philanthropists, at their best, try to address serious societal problems and occasionally come up with innovations that lead to enduring change. In the end, success requires much more than financial resources, although money is, of course, essential. Good ideas are just as important; otherwise one risks wasting both the funds and the opportunity. Effective philanthropy also requires patience - patience to deal with unexpected obstacles; patience to wait for the first, slight stirrings of change; and patience to listen to the insights and ideas of others.” – David Rockefeller

“…watching the product of one’s giving is one of life’s greatest pleasures, and those with the ability to do so should do what they can to experience that pleasure when they are around to see the benefits. They will never regret doing so.” – David Rubenstein

Our experience at Northwood is that is very hard to give away money well. We first help families think through their philanthropy strategy, setup the infrastructure to do so, and help them follow through on their strategy. Given that most of our families are philanthropic, we have been able to create a network to provide families avenues to give effectively. It is privilege to be a part of this important component in the lives of our client families.

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