What should billionaires focus their philanthropy on?

We often see billionaires donating money to charitable causes in this day and age. Bill and Melinda Gates have pledged to donate 95% of their wealth to charity. The Giving Pledge has seen 231 pledgers from 28 countries promise to give at least half of their net worth to philanthropy, either during their lifetime or death.

However, I think questions should be asked about how effective their donations are and whether they are placed in the right areas. Some argue that their philanthropy does not work in the way it is intended, so I wanted to look into that. At least one CEO has called out billionaire philanthropy as a scam and instead increased his employees’ pay.

What do they focus on?

According to Business Insider, the main focus of philanthropy by billionaires is education. It is followed by social services, arts & culture, healthcare & medical research, the environment, children, religious organizations, and public affairs. Food, agriculture, nutrition, housing, and shelter are among the lowest recipients of donations.

Now, education may seem like a noble endeavor. Everyone would agree that supporting education for everyone would be a good thing. However, these donations are not usually for all levels of education – a large number of these donations are going to elite colleges and universities. By directing funds to already wealthy colleges, they get to promote themselves. Having said that, Mackenzie Scott donated billions of dollars to colleges that traditionally serve people of color and underserved communities.

The second most funded area is social services, which is generally thought to include poverty reduction, crime prevention and unemployment programs. All these things are government responsibilities – and in fairness, so is education. What this shows is that the richest members in society would rather donate through their charitable trusts than pay taxes – Michael Dell even said so.

What it comes down to is that philanthropy is not a one-way street – it’s not just about the donation. It’s about promoting the individual as well. It’s about getting your name on a building at an Ivy League university so you can get your kids into that university later in life. It’s about funding research into a specific area of medicine so everyone associates a finding with you.

It is also why the arts is extremely popular to fund – people like TV, theatre, music, and the like. It’s soft power at a corporate level. If you are seen to fund something that people like, then you are a good person.

Quieter and more targeted philanthropy

There are plenty of wealthy people who take a quieter and more targeted approach to their philanthropic endeavors. Dolly Parton’s philanthropy has been specifically targeted to issues that she believes in – reading for children (Imagination Library), the protection of bald eagles and healthcare.

Similarly, some foundations only choose to fund one thing – public radio or public television is a prime example of this. When PBS broadcast Hamilton’s America, they listed a series of donors that fund the series called Great Performances. In the United States, this is quite common and PBS regularly seeks out tax-deductible gifts.

That’s not to say that billionaires do not believe in what they are funding – I am arguing that in many cases, they are chasing a tax break and a promotional high rather than seeking to do good.

The question then becomes:

What should they do with their money?

So what should billionaires do with their money?

Well, I think they could lobby for a fairer tax system. Obviously, that’s not going to happen because it will wind up taking more of their money – even if it’s their wealth rather than their income. However, encouraging such a thing may actually see legislatures across the world act, given their higher lobbying power. They already pump plenty of money into their public affairs.

Secondly, their companies could actually do the things they claim to support. They could act on worker’s rights, pay their employees more, develop and work with local labor unions, follow local laws and the like. The workers who died as a result of tornadoes tearing their warehouses and factories apart may still be alive today if they had been allowed to get home before the storm hit. Sadly, it is something we will never know.

Thirdly, they should start looking around them, at the world around them. Instead of shooting off into the stars, they can start thinking about the world we live on now.

Perhaps it is time they start solving some of the immediate problems we are facing, not generating more of them.

What do you think? How do you think billionaires should spent their money? Leave your thoughts in the comments below!