Nearly every day, I come across a billionaire I’ve never heard of who’s engaged in serious philanthropy. But for every one of these donors, there are a couple other billionaires whose giving is paltry, or even non-existent.
Just yesterday, we wrote about Richard Hayne, the retail magnate, who is worth $1.5 billion and interested enough in philanthropy to have made some multi-million dollar gifts and set up a foundation. But that foundation gave away exactly $0 in 2012. I see people like Hayne all the time.
At a higher level of wealth, we wrote earlier this year about the most generous and least generoustech leaders, and looked at how people like Jeff Bezos, Larry Ellison, and Steve Ballmer rank as some of the richest men in the world who are nonetheless very small players in philanthropy.
So why do so many billionaires give away so little money compared to their capacity? Here are nine reasons gleaned from our travels—or, as some might argue, nine excuses.
1. They Are Too Busy
People running big companies or hedge funds spend a lot of time feeling overwhelmed, and have a hard enough time catching a family dinner with their kids or getting to the gym. Finding the bandwidth to decide how to give away serious money may feel like just one thing too many.
2. They Don’t Want to Screw Up
While writing checks doesn’t sound very hard, the “masters of the universe” types are not the sort to take a casual approach. They got where they are by excelling and controlling, and they hate the idea of investing without due diligence in strategies that turn out to be half-baked. They’ve all heard stories of people who thrown money down the drain through their giving and looked stupid.
3. There’s Always Later
Anyway, what’s the rush? There’s always time in the future to give away money, and many of today’s stingiest billionaires plan to do exactly that. For example, Larry Ellison has pledged 95 percent of his wealth to philanthropy. Google co-founder Larry Page isn’t known to be backing many causes now, but keeps piling up money in his foundation. And so on.
4. They’re Overwhelmed by Choices
Even those people who are hankering to give more sooner may feel overwhelmed by choices. When Google’s Craig Silverstein first embarked on his personal philanthropic journey, he says he was initially “paralyzed by too many options.” Every philanthropist knows they need to focus and be strategic, but where and how, and tapping whose expertise?
5. They Don’t Want to be Hassled for Money
The super rich are asked for money all the time, and not just by anybody: by former college classmates, colleagues, close friends of relatives, ex lovers, total strangers, and on and on. Saying no is hard, and the moment they become known for philanthropy, the requests multiply exponentially. It’s enough to make some billionaires keep the door closed altogether.
6. Their Assets are Tied up
If most of your wealth is in shares of the company you founded, you need to sell stock to give big, which can reduce your control and also be intrepreted as a vote of no-confidence in your company. If you’re in finance, your money may be in long-term positions that you want to hold.
7. They Are Waiting to Get Richer
Another reason to put off philanthropy is that today’s assets will likely be worth more in coming years. So if the goal is to give away maximum wealth, an argument could be made for letting wealth grow and giving later rather than sooner.
8. It’s Scary to Part With Money
There’s a long history of mega rich people going broke when a perfect storm gathered and wiped them out, and retaining all assets is a hedge against that fate. At a more basic level, it’s just scary to watch your net worth decline, no matter how much money you have.
9. They Don’t Care About Others
And then there’s the last reason: A plain lack of empathy, which is unusal in humans, but holds for some sliver of the population. If experts are right that 5 percent of the population are sociopaths, maybe that figure also holds for billionaires. But seriously: If you live in an insulated bubble of wealth, you may not appreciate just how great people’s needs are. Or, if you subscribe to a libertarian worldview, you may be against extending a helping hand on principle. And certainly there are wealthy people who fall into both categories.
Bonus Reason: They Haven’t Been Asked in the Right Way
This last one comes from Rhodri Davis of the Charities Aid Foundation, who Tweeted in response to this article that the “most important reason” for non-giving is that wealthy people “haven’t been asked for the right thing at the right time by the right person!”
Rhodri makes a great point, and I can think of a lot of examples where low-level donors greatly upped their giving after hearing pitches for causes that really excited them. And one dream of fundraisers is finding those dormant donors with enormous capacity who can give in a big way once they’re hooked.
To build on Rhodri’s point, many wealthy people haven’t been exposed to, or engaged in, philanthropic causes to the point that they ever hear such pitches or find themselves open to them.