Philanthropy in the News

MacKenzie Scott, the Giving Pledge, and Rival Discourses of Billionaire Philanthropy

Editors’ Note: Hans Peter Schmitz, George E. Mitchell, and Elena M. McCollim introduce their research on the Giving Pledge, and analyze how one of its most prominent signatories, MacKenzie Scott, poses a challenge to the discourse surrounding philanthropy it most often advances.

During the Covid-19 pandemic, MacKenzie Scott accompanied three rounds of billion-dollar donations to hundreds of organizations with separate announcements elaborating on her philanthropic approach. Money was disbursed without a cumbersome grant application process and with a note to recipient organizations that “encouraged them to spend it however they choose.” In addition, Scott’s posts evolved from elaborating on her giving rationale to critiquing an economic system undermining the success of organizations she gave money to. “Me, Dan [Jewett, Scott’s husband], a constellation of researchers and administrators and advisors — we are all attempting to give away a fortune that was enabled by systems in need of change.” With this statement, Scott positions herself as an outlier among billionaires who often reject criticisms of their wealth and insist that organized philanthropy is an appropriate way for them to contribute to the public good.

One way to understand this position is through an analysis of the Giving Pledge, a voluntary and public commitment by billionaire philanthropists to give away at least half of their wealth during their lifetimes. As a signatory of the Pledge, Scott and Jewett ask their fellow pledgers  not just to substantially increase their giving, but also to recognize that philanthropy alone is not a sufficient answer to addressing wealth inequality. Taking a closer look at the Giving Pledge, in particular its membership and the letters submitted as part of the pledge commitment, can provide us with an even keener sense of this challenge.  

This post does so by drawing on two recent articles published in Voluntas and Society where we took a more detailed look at the Giving Pledge, including who has joined it, how these individuals and couples make sense of their philanthropic actions, and how its impact could be assessed. We collected demographic information about the pledgers, performed a textual content analysis of the letters submitted, and then analyzed the data with statistical modeling.

This research challenges some of the past research about wealthy donors which have tended to speak in a language of individual motives when presenting empirical evidence derived from surveys or documents. We depart from this conventional approach and view the letters not as a means to understand psychological motives, but as documents establishing a collective discourse among these philanthropists directed at the public as well as at fellow billionaires. This change of perspective shifts attention away from speculating about the ‘true’ intentions of these donors. Instead, the analysis focuses on how the Giving Pledge serves as a significant site of defining the nature and purpose of billionaire philanthropy. This emphasis on collective sense-making, rather than surmised individual thinking, provides new insights about the role and nature of high-net-worth philanthropy.    

The Giving Pledge population and letters

The Giving Pledge was created in 2010 by Bill and Melinda Gates in collaboration with Warren Buffett and is open to those with a net worth of at least US-$1bn (including past donations). Bill Gates has claimed that he was inspired by the example of Chuck Feeney, who is widely credited with leading the modern Giving While Living movement. After more than a decade of existence, the Giving Pledge currently has 222 members (as of June 2021) promising to give away at least half of their wealth during their lifetimes. Pledgers are asked to submit a letter and picture for display on the Giving pledge website.

Members of the Giving Pledge are overwhelmingly male and white. Among single pledgers, there are ten single women compared to 80 single men. Among the 132 couples, there are eleven instances of both partners pledging, but with only the male represented in a picture on the Giving Pledge website. Most pledgers (186, 84%) are categorized by Forbes magazine as self-made billionaires, while 169 pledgers (76%) are U.S. citizens. The tech billionaires among the pledgers are significantly younger and wealthier compared to those active in finance or other industries. There are currently 199 letters available (as of June 2021), which collectively cover a range of topics, including praise for the Giving Pledge founders, statements on why the individual or couple joined the Giving Pledge, explanations for being philanthropically active, accounts of specific philanthropic activities, family and personal history, and descriptions of giving strategies.

A discourse of billionaire philanthropy

In our research, we focused primarily on the types of philanthropic activities and explanations for giving discussed in the letters. Education and health dominate the causes mentioned across letters. There is a clear sense that pledgers believe in the transformative role their philanthropy can play in these areas. Almost half of the letters mention investments in education, while close to a third highlight health (research or services). Other causes receive substantially fewer mentions. This stands in contrast to MacKenzie Scott’s emphasis on social justice causes as well as her investments, in the latest round, in organizations focused on supporting the nonprofit sector. These results also align with prior research on wealthy donors by the Bridgespan Group, which demonstrates significant gaps between the aspirations of wealthy donors and the actual causes funded. In a study titled Four Pathways to Greater Giving, the authors find that “the great majority of wealthy Americans’ philanthropic giving goes to large institutions—such as universities, hospitals, and cultural institutions— that are vital to a healthy society, but may not make progress against donors’ stated priorities.”

Apart from causes mentioned, many letters highlight explanations about why these individuals and couples are philanthropically active. Using a type of statistical modeling called latent class analysis, our research not only identified different explanations for giving, but also discovered patterns in pledgers’ explanations. Specifically, the discourse established by the Giving Pledge letters reveals two distinct rationales offered by the collective of pledgers. The dominant one appearing in 87% of letters is ‘social-normative’ and combines an expressed gratitude and desire to give back with references to family upbringing as a socializing force. This rationale emphasizes the connection of the pledger to his or her broader community. The much less prevalent ‘personal-consequentialist’ rationale found in 13% of the letters emphasizes three separate explanations: concerns about a large inheritance harming offspring, experiences of personal fulfillment and gratification as a result of giving, and an acknowledgment of having excess wealth with no better use.

Most frequently found across letters is the idea of wanting to make a difference, which appears almost equally across the ‘social-normative’ and ‘personal-consequentialist’ rationales. The general idea of ‘making a difference’ reflects a general belief that philanthropic activities advance the public good in some form. What is much less prevalent across the letters are specific references to social justice or the need to address wealth inequality, prominent themes in Scott’s writings. Also absent from the letters are any references to tax benefits or any expected positive publicity. The dominance of the ‘social-normative’ rationale suggests that most pledgers would like to be viewed as benevolent altruists acting on a perceived obligation to give back to society. The ‘personal-consequentialist’ rationale may serve more as an appeal to fellow billionaires to embrace philanthropy and join the Giving Pledge. Since the letters are public and engage various audiences, they may not primarily reveal true psychological motives, but rather can be considered part of constructing a discourse about billionaire philanthropy and its rationales. 

In sum, a significant majority of letters states that philanthropy is the ‘right thing to do’ (the ‘social-normative rationale’) and claims that pledgers are acting appropriately by returning to society what they received in benefits and education often decades earlier in their lives. A minority of letters considers philanthropy to be the ‘best thing to do’ (the ‘personal-consequentialist rationale’) considering the various options for disposing of one’s extensive wealth. Prior studies of wealthy donors have found very similar sets of explanations for giving, but often interpreted these as evidence for underlying altruistic or other motives.

Is the Giving Pledge a success?

The Giving Pledge letters and their contents are important artifacts helpful for better understanding the rationales and justifications for billionaire philanthropy. However, critics or defenders of this type of philanthropy may not change their minds by reading the pledge letters. For defenders of billionaire philanthropy, the Giving Pledge is a success because it has reinforced Andrew Carnegie’s idea of returning a significant part of wealth to society through philanthropy. The Giving Pledge has also experienced a steady growth of new pledgers and has expanded its international reach over time. An average of 16 pledgers have joined annually since 2010.

For many critics, the problem with the Giving Pledge is that it is not addressing the root causes of rampant wealth inequality across the globe. During the COVID-19 pandemic, the number of known billionaires jumped by 660 to a total 2,755. Only 8 per cent of these billionaires have joined the Giving Pledge. Moreover, a pledge is not the same as actually delivering on your promises. If all current pledgers donate at least half of their wealth, then their combined wealth of well over US-$1 trillion would generate at least US-$500 to 600 billion in philanthropic dollars. This may seem impressive, but a decade after its creation it remains difficult to know if any increased philanthropic investment has resulted from this initiative. One reason is that many of the pledgers, including the founders, were already committed to giving away substantial parts of their wealth prior to joining the pledge. Based on current evidence available, the Pledge has primarily generated and promoted increased media attention and publicity for its members, while falling short of substantially increasing the disbursement of high-net-worth philanthropy.

Finally, even if pledgers dedicate their wealth to philanthropy, it does not necessarily mean that it reaches their preferred causes during their lifetimes. The Giving Pledge does not track if and how signatories meet their commitment. Pledgers can transfer their assets to a number of philanthropic vehicles, including family foundations (with a required 5% annual payout rate), a donor-advised fund (DAF), or a limited liability company (LLC). The growth of DAFs and LLCs raises here important questions about transparency and the decreasing ability of journalists and researchers to track independently the giving of the wealthy. This lack of transparency about when and how philanthropic funds are disbursed stands in tension with the very public nature of the Giving Pledge itself.   

MacKenzie Scott’s grant activities in 2020 and 2021 can then be understood as a challenge to some of the limited ambitions of the Giving Pledge. As others have argued before, by giving away billions in an unbureaucratic fashion, she has challenged a few (although certainly not all) norms of the sector, including the idea of donor control over grants and outcomes and the claim that successful philanthropy requires creating a new infrastructure in the form of foundations or another philanthropic vehicles. Rhetorically, her statements also reflect a more critical perspective on the sources of billionaire wealth than the discourse established across the Giving Pledge letters. In contrast to the idea of ‘philantrocapitalism’ and the belief that business principles and technology are the answer to long-standing social problems, Scott’s approach suggests a shift of emphasis away from the donor toward the recipients and their intentions. Rather than emphasizing the Giving Pledge letters’ dominant ideas of ‘giving back’ and personally ‘making a difference,’ Scott and her husband want “to de-emphasize privileged voices and cede focus to others.” In the short term, at least, and somewhat paradoxically, this has gotten Scott a lot of attention. In the long term, the question is if her approach will gain more traction by highlighting practices not commonly covered by prior Giving Pledge signatories. This includes Scott’s more explicit references to racial and social justice, her preference for a diminished institutional presence of the wealthy donor, and her faster pace of distributing resources to organizations and causes—particularly to those under-supported by traditional philanthropy.

-Hans Schmitz, George E. Mitchell, and Elena M. McCollim

Hans Peter Schmitz teaches nonprofit and leadership courses at the University of San Diego. He recently co-authored “Transnational Advocacy in the Digital Era: New Forms of Networked Power” in the journal International Studies Quarterly (2020). George E. Mitchell is an associate professor at the Marxe School, Baruch College, City University of New York and co-author of Between Power and Irrelevance. The Future of Transnational NGOs (Oxford UP, 2020). Elena McCollim is a grants manager for a behavioral health services nonprofit organization, and also serves as an adjunct associate professor at the University of Maryland Global Campus. Her research interests are in large-scale philanthropy and critical philanthropy studies, as well as in downward accountability of international nongovernmental organizations.

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