America is a very rich country, with some very rich citizens. Which made me wonder about the "filthy rich." They could give millions to charity but do they?
Take Larry Ellison. He made his money running Oracle software. Ellison is one of the most generous philanthropists, according to BusinessWeek's 2006 list, having donated $790 million to charity, but he still has nearly $20 billion left. He's spent millions on toys, like his 452-foot yacht, which cost about $200 million.
Ellison's donations of $790 million is a lot of money, but according to that same BusinessWeek list, it represents only four percent of his fortune. By comparison, Ted Turner has given 69 percent of his wealth to charity, and fellow billionaire Eli Broad has given 36 percent.
The Forbes 400
We know who the richest people in America are because of research done by Forbes Magazine. Each year they compile a list, called the Forbes 400. Even those at the bottom of the list this year were billionaires.
Matt Miller edits the list for Forbes, and he says that while some of the billionaires were angry at having their wealth made public, others love the attention:
"It's an ego trip," he explains. "It's a power thing, you know? Every single person on the list would never admit to liking it publicly. But every single one of 'em cares about what rank they are…[We] have 50 or 60 people who call up regularly every single year, saying 'You are absolutely wrong, and I am worth double what you say.'"
A few billionaires, like Ted Turner, admit to the competition.
Nine years ago I asked Ted Turner if the members of the Forbes 400 want to be higher on the list, and he responded "Of course they do!"
But shortly afterward, Turner did something that hurt his position on the list. He stood up at a United Nations function and announced that he'd donate $1 billion to the U.N. He said it was a challenge to other rich people to do the same.
Buffett and Gates Team Up
And last year, one of his fellow billionaires followed suit. The second richest man in the world, Warren Buffett, announced he's giving away nearly all of his money to the richest man in the world, Bill Gates.
Buffet gave $30 billion to Gates' Foundation, because, he said, Gates' work in Africa fighting AIDS and malaria, and his efforts in the U.S. to raise high school graduation rates, convinced Buffet that Gates was spending charity money wisely.
This is something new. The richest man in the world and second richest are now the biggest givers to charity, and publicizing it.
Now we don't know if Turner was Buffet's inspiration, but what is new today is that in addition to the famous list of richest people, there are now a few lists that rank the biggest givers to charity, including one in the online magazine Slate which Ted Turner told me was his idea:
"I said, well, you need to have a list of the biggest givers. Because, a lot of these rich people just wanted to be on some kind of list, you know? I think there's more prestige today in being on the list of the biggest givers, than on the list of the richest people."
Philanthropy, Not Charity
Ted Turner isn't the only billionaire moving down on the Forbes list. Eli Broad has made $6 billion building homes and selling insurance, but he's now "only" the 42nd richest person in America. Broad has given away more than $2 billion to education charities, art museums and bio-medical research. He told me that there's a difference between charity and philanthropy:
"I wouldn't call it charity," he said. "I'd call it philanthropy there's a difference. Charity, you just write checks. We try to create things that didn't exist before."
And charity is more efficient than government, he says, because when we are spending our own money, we stop spending when a project doesn't work.
"We look for results," said Broad. "If the results don't come in year two or three, we stop and look for other things that are going to be productive."
Broad's philanthropy appears to dwarf the gifts of many much richer people. It's their money, and they can spend it as they choose, but with so much need in the world, don't the rich have a moral obligation to give to others? Aren't you selfish if you spend all those billions money on yachts?
Dan Duncan, who is worth $7.5 billion, was on BusinessWeek's list of the most generous philanthropists. Still, he has only given away two percent of his net worth, which I suggest to him sounds "cheap."
Duncan answers, "If that was all that I ever wanted to give away, I would agree 100 percent, [but] if you're one of the gifted people that can actually make more money, people receiving it are better off if you keep it to get a lot more later on."
This excuse may sound self-serving, but it is actually very solid reasoning. If you are skilled at building companies, your talents may be wasted if you devote yourself to charity.
James Goodnight is worth $4.5 billion. He gives millions to some charities, but he is not on the list of most generous philanthropists. When I ask him, "Shouldn't you give more?" He answers, "I think I give enough."
Some of the richest Americans say they don't give because they can't trust that charities will use the money wisely. But Eli Broad still believes in the power of giving back, and hopes that he's setting an example for others:
"I hope that they'll want to emulate what I and others on the top of that list are doing. And I, I hope if they do it, they feel pretty good about it."
This report originally aired on December 1st, 2006.