The Giving Pledge: A new club for billionaires
The following script is from "The Giving Pledge" which aired on Nov. 17, 2013. The correspondent is Charlie Rose. Denise Schrier Cetta, producer.
Today, the wealthiest 400 Americans are worth over $2 trillion. Together, it's been reported they own as much wealth as the bottom half of American households combined.
While resentment towards the super rich grows, there may be a silver lining taking shape. It turns out a lot of those rich people are giving staggering sums of money away, in what is being called a golden age of philanthropy.
And this surge in generosity is not by accident. Much of it is the result of an ambitious and targeted campaign called "The Giving Pledge." It was started by an influential trio: Bill and Melinda Gates and Warren Buffett. We waited for the opportunity to get them together to learn more about their new club for billionaires. Membership comes with just two requirements: be worth at least a billion dollars and be willing to give half of that away.
Charlie Rose: Is it necessary to join the Giving Pledge that you promise 50 percent of your net worth?
Melinda Gates: Yes. In your lifetime or in your will.
Charlie Rose: Or in your will?
Warren Buffett: Right.
Charlie Rose: Are people shocked by that?
Warren Buffett: I don't think so.
Melinda Gates: We're asking them to be bold. We're asking them to step out and to do something big. But a lot of them were already on their way there and just hadn't put a numeric number behind it. And I think now also the Giving Pledge has gotten going, people know that's the expectation.
Warren Buffett: And we don't, we don't, we don't find a lot of people that say, "I want to join if it was 40 percent."
Charlie Rose: Some may say I'm happy to give much more than 50.
Warren Buffett: Oh, most of them. Most. My guess is that a very significant percentage of our members, I mean, way over half are going to give a lot more than half.
That's certainly true of the founders. The Gates have already committed to giving 95 percent of their wealth away. Warren Buffett - 99 percent.
They say that kind of extreme giving is needed because the rich have been getting so much richer. Tech innovations and rising global markets have produced vast fortunes not seen since the Industrial Revolution.
So what does Warren Buffett say to convince today's billionaires to give their fortunes away?
Warren Buffett: Incremental wealth, adding to the wealth they have now has no real utility to them. But that wealth has incredible utility to other people. It can educate children, it can vaccinate children. It can do all kinds of things.
Charlie Rose: There are others, and people that I know, say, "I want to give it to my children. That's what I want to do." What's wrong with that?
Warren Buffett: I don't really think that, as a society, we want to confer blessings on generation after generation who contribute nothing to society, simply because somebody in the far distant past happened to amass a great sum of wealth.
So far 115 billionaires have bought Buffett's argument and signed the Giving Pledge. Ages range from 27 to 98. Some inherited wealth, but most are self-made. Their businesses range from technology and social media... to pizza, hair care and home improvement. Combined pledges so far - over a half a trillion dollars.
Charlie Rose: What conditions are there? I mean, can they say, "Yes, I'm with you. I'm here. But I want to give it to this institution or that institution."
Warren Buffett: We don't care what institution they give it to.
Bill Gates: Yeah, in fact, we're not endorsing any flavor of philanthropy. We do think we're all gonna be smarter and do it better learning from each other. But there is no pooling of money. We celebrate the diversity of philanthropy.
Billionaires can be shy when it comes to talking about their money. But Warren Buffett helped convince seven who have signed the pledge to sit down with 60 Minutes.
They are investors Pete Peterson and Nicolas Berggruen, South African mining tycoon Patrice Motsepe and his wife Dr. Precious Moloi-Motsepe, entrepreneur Sara Blakely and AOL founder Steve Case, and his wife Jean.
Charlie Rose: When did you first hear of the Giving Pledge?
Jean Case: Melinda called and talked to us. But we had the benefit of knowing Bill and Melinda for a long time, going back to our technology roots.
Steve Case: We competed against them for many years.
Jean Case: We did.
Steve Case: And we're happy to finally join forces.
Charlie Rose: You wanted to be on their side.
Steve Case: Yeah, yeah, we wanted to be on the, aligned.
They've all signed the same pledge, and they bring the same brashness to their philanthropic ambition that helped them build financial empires.
Pete Peterson: Charlie this is a group made up largely of entrepreneurs. And they didn't make a billion dollars or five billion dollars by doing the ordinary. They did it by being bold.
That's certainly true for Sara Blakely.
Sara Blakely: Well, I made all the money by making other people's butts look a lot better.
Charlie Rose: I think you've missed me.
In 2000, she took $5,000 in savings and started the undergarment company Spanx. Now she wants her philanthropy to be as cutting edge as her billion dollar business.
Sara Blakely: I started my business with an invented product that didn't exist and shook up an industry. And I want to collaborate with people and increase my chances of coming up with an idea or something that will do that for my cause, which is helping women.
At 42, Blakely admits she's just beginning to figure out how she'll help women. At 83, Warren Buffett says he wants to stick with what he's good at - running his company Berkshire Hathaway -- so he's given the bulk of his fortune to the Bill and Melinda Gates Foundation so it can be used to reduce global poverty and disease.
As for the other pledgers, they're tackling an impressive array of causes: unemployment in South Africa, early detection and treatment of brain cancer, and some interests that take on a more political tone: tax reform in California and the national debt.
But as Bill Gates discovered when he left Microsoft, going from making money to giving it away, isn't always easy. An example of just one of the lessons he's learned: it doesn't matter how effective a vaccine is, if you don't package and deliver it the right way, it will not do any good.
Charlie Rose: I guess there's a learning process, too.
Melinda Gates: Absolutely.
Charlie Rose: Because you feel like, "how do you do this even if you're inclined to do it?"
Bill Gates: It's almost disconcerting to switch to an area where you're back at square zero a little bit. And the measurements aren't quite the same as in the business game. What you're trying to do, the need to take risk, try different things. And so you need encouragement.
That's why Buffett and the Gates invite pledgers once a year to exclusive resorts like Kiawah Island in South Carolina. Here billionaires attend sessions on how to give money away more effectively. Our cameras were not allowed in, but we were shown this day's agenda: it included lessons on how tools like technology can be used to transform failing schools and, with the government cutting funding on medical research, how can philanthropists step in and help spur new medical breakthroughs.
But we wondered, what else goes on behind closed doors?
Charlie Rose: Will there be a conversation here about failure?
Warren Buffett: Sure.
Jean Case: Yes, there most definitely will be.
Charlie Rose: What does that, how do you phrase that?
Warren Buffett: Well, if you bat a thousand, you're playing in the little leagues.
I mean the-- and the problems are major league.
Steve Case: The difference in the entrepreneurial world, when you launch a company, you have a particular idea, a particular product, a particular service, almost always you pivot, you shift. You-- the market reacts to your initial idea. You make some adjustments. It's only after making a few adjustments that you see the success. We need that same mentality in philanthropy, trying things, taking risks, recognizing the first try, maybe the second try, maybe the third try won't work. But if you stay at it and you're learning, you're talking to others, and you're learning together, eventually you'll break through and see the kind of impact you were hoping for.
Jeffrey Skoll, one of the first to sign the giving pledge, is using the billions he made as eBay's first president to fight what he calls global threats - not just one, but five problems he's convinced pose immediate danger to humanity: climate change, water security, pandemics, nuclear proliferation and the Middle East conflict.
Charlie Rose: I mean, is there some argument to make sometimes that-- that because people made a lotta money they may come to these problems with a certain arrogance, like, "I know everything there is to know. I'm so-- smart guy. Let me tell you what to do."
Jeffrey Skoll: I think we all have a danger...
Charlie Rose: Arrogance...
Jeffrey Skoll: ...of feeling like we know the answers. And the reality is we don't.
But that doesn't keep Skoll from trying. In addition to his more traditional charitable giving, in 2004 he started the for profit media company Participant, to make movies that promote his philanthropic goals.
Charlie Rose: And the purpose of the movies is what? Awareness is one.
Jeffrey Skoll: To create entertainment that inspires and compels social change. And so whether that is climate change or dolphin hunting in Japan or dealing with drug sentencing laws, every film we do has a purpose and it has a social action campaign associated with the movie. And we try to get people involved in the issues of the movie, to try to make a difference in those issues.
But the problem with all of this may be that it shows how quickly charity can cross over into advocacy.
Take the 2011 movie "Contagion." Skoll took what he'd learned through his charitable work in pandemics and funded a movie to warn people that a virus could kill billions.
[Jude Law in "Contagion": On day one there were two people, and then four, and then 16. In three months, it's a billion. That's where we're headed.]
Charlie Rose: And what did the movie accomplish for you?
Jeffrey Skoll: In many ways, it put pandemics back on the map, that the public realized how important our public health organizations are, for example. A number of politicians that had seen the movie who were ready to vote on cuts to funding to the CDC recognized that that would be a bad idea.
Randall Lane: The public has a right to know who owns the world.
Randall Lane, the editor of the business magazine Forbes, says billionaires like Skoll have become so influential he's devoting the next issue to philanthropy.
Randall Lane: Government is showing, you know, over the past couple decades that it can no longer solve the great problems of the day. Now these philanthropists who have incredible wealth, the problem-solving brainpower, and also the name and the influence to be able to open doors are uniquely qualified right now to solve the huge problems.
But that does raise the question: do these billionaires have too much power?
Charlie Rose: There's some people who say big philanthropy is not such a good idea, meaning that somehow you have enormous power and you're not elected and, and that that may not be such a good idea to have people with enormous wealth to have so much influence.
Warren Buffett: Well, would they prefer dynastic wealth? Pass it on. Or would they prefer, you know, obscenely high living? There's a couple other ways to get rid of money, but I-- I-- I-- think it's better if you're helping other people, using a good bit of it for helping other people.
Charlie Rose: OK, so there's no instance in which somebody could say, "Look, I mean, we got too many people of huge wealth who are having too much influence."
Jean Case: Well, Charlie. Think about Bill and polio, for instance. Bill and Melinda's work in polio. I mean, they're coming close to eradicating polio on the face of the Earth. I think when we have a couple of examples like that, people will see, that's not power being used for personal purposes. That's really leveraging everything you have to change the world to make it better.
But as Warren Buffett is finding out, not every billionaire feels that way.
Warren Buffett: I've got I've gotten a lot of yeses when I've called people. But I've gotten a lot of nos, too. And I am tempted, because I've been calling people with a billion dollars or more, I've been tempted to think that if they can't sign up for 50 percent, maybe I should write a book on how to get by on $500 million. Because apparently there's a lot of people that don't really know how to do it.
