Billionaires think outside of the box on philanthropy

Pittsburgh Post-Gazette / Tuesday, February 6, 2001
By: Ron Kampeas (The Associated Press)

They are the new philanthropists: billionaires who make giving personal.

Moguls including Bill Gates, Ted Turner and George Soros represent an increasing trend to give away money the way they made it - on their own - bypassing traditional charities that are feeling the pinch. "It's the control factor," said Kathleen Kelly, a University of Southwestern Louisiana expert on charity. "They think: 'By establishing a foundation, it gives me the longevity on influencing how the money is spent;' I would also suspect there is a factor of ' no one is doing it right, the way I would do it.' "The Chronicle of Philanthropy has detailed the rise of billionaire initiated foundations through the 1990's on its "Philanthropy 400" list. "There have been criticisms," said Chronicle Editor Stacy Palmer. "A lot of recent giving has not beeen focused on the very poor; the arts have suffered."

Education, the leading charitable money getter last year, is the favored cause of last year's biggest giver, Microsoft boss Bill Gates. Education earned $12.7 billion in charity last year, according to the Chronicle - twice what was earned by the second-leading charitable cause, the poor.

Gates, whose foundation's disbursement of $995 million last year placed him $850 million ahead of his nearest rival, has emphasized hightech education. In 1999, he pledged $1 billion over 20 years to minority scholarships, with a focus on engineering, science, math, computer science and library science.

Paul Schervish, a sociology professor at Boston College, suggested that it was in the nature of the mogul to want to nudge the world toward his image.

"The psychological confidence that has them see themselves as world builders, allows them to believe that what in most cases would take a social movement to achieve, they can achieve single-handedly," said Schervish, who heads the Social Welfare Research Institute.

It's also a product of the times, he said: "This generation of moguls has been brought up with the post - World War II mentality that establishment spending is inherently undisciplined, whether it is government or charities doling out the cash."

"This is an era of not wanting to throw money after a problem, but to be more effective by leaveraging it," he said. That's reflected in the rapid rise of "donor-advised" charities, where donors direct exactly how their funds are spent, by 231 percent, according to the chronicle.

High-profile giving comes with high - profile attention - some that alleviates images of the moguls as uncaring. But not all the attention is good.

Soros was insulted by anti-globalization activists and called him "monster" last week.

Adam Eidinger a leading Washington anti-globalization activist, said Soros brought the same undemocratic tendencies to the way he spent his money as to the way he earns it - currency speculation.

"We don't like the idea that these unelected people have so much power, not just in influencing politics, but setting the tone for economic decisions," said Eidinger, who once worked for Soros and admires much of the work he does.

Eidinger said he was disillusioned when he saw Soros freespeech promotion in Serbia developed into the promotion of free trade.

"I don't believe it's intentional, but there is a pattern of Soros supporting democratic activist who believe in American-style free market reforms," he said.

Soros has said he makes apologies for political givings saying his wealth allows him to fund causes others would rather avoid.

There also is criticism about spending within a charitable discipline, such as health care. The emphasis on AIDS research - Bill Gates pledged $100 million last week - exasperates developing world medical professional who say that malaria is equally a threat, although it is not as noticed in the West. Apparently heeding such complaints, Gates recently dedicated $40 million to research on the "poor people's disease."

Questioning how dollars are spent is a natural for the left - but the right is no slouch either.

The Weekly Spectator, which used charitable funding from conservative billionaire Richard Mellon Scaife to investigate former President Bill Clinton, gripes that Gates is misspending his education money on what it calls race-based programs.

The billionaire givers are even swipping at each other. Ted Turner and Gates are in the habit of challenging one another to spend more on favored causes.

Such sniping is inevitable, billionaire watchers say, but obscures the real point, that the most important trend the big givers are setting is giving itself.

"Bill Gates and Ted Turner are both men of extraordinary vision," said Larry Gelbrandt, a senior media analyst with Paul Kagan Associates in Carmel, Califronia. "Because their business force them to think in global ways, they come view the world in a far less ethnocentric way."