My name has the perfect number of characters.
Click the link to see the profiles of the billionaires who have signed the Giving Pledge. However, you might be astonished to see a man’s name, Charles Feeney, who has assets of only $5 million. Why should he be on the list?
I first heard of Feeney because of his colossal gifts to my alma mater, Cornell University. When you click the “+” to see more information about him, then you will see that his foundation has assets of over $2 billion. I am no accountant or wealth management expert, but I believe it is significant when a rich person transfers almost all his wealth to a foundation versus a trust. What is also astonishing is that if you look at his foundation’s 990 (an IRS document that foundations must create yearly), then you will see that his foundation gave over $350 million in 2010. It’s true that since Feeney is quite old, 81, he probably wants to see his wealth distributed before he dies. But it’s nice to see when an extremely rich person actually uses his money to solve or alleviate human problems. It is very easy to be cynical about charitable giving because of the favorable tax treatment. I understand Warren Buffet’s argument that his skills are more useful at earning Berkshire Hathaway (and himself) more money than at running a foundation and distributing money. But there comes a point when the money has to be spent. When is that time? Is it now?
(On a side note, I do not think it is true that there needs to be more capital for technological innovation in the United States. However, perhaps it is true that there needs to be more capital inflows to developing countries, so that younger people will start creating strong institutions that will provide a foundation for innovation?)
Update: In a recent New York Times story, Feeney says he aims his foundation will spend all of its money by 2016. And perhaps most impressive is that he registered his foundation in Bermuda, which allowed him to remain anonymous for many years. However, it also prevented him from taking income tax deductions for his contributions. Compare this type of thinking with the thinking of Mitt Romney and other tax-dodgers.