Philanthropy Now

Some of the world’s richest people are turning their backs on charitable foundations that live forever, writes Nick Ferguson

As billionaires get younger, the nature of philanthropy is changing. From Silicon Valley to Shenzhen, wealthy people who have achieved extraordinary success in a very short period of time sometimes have similar expectations for their charitable efforts. They want results and are willing to spend their wealth in their lifetime to achieve them.

Microsoft founder Bill Gates, perhaps the world’s most famous rich person, has committed to do exactly this. Rather than ensuring his name will live on forever in the name of a worthy charity, Gates and his wife, Melinda, have created a foundation that will spend down their entire fortune within 20 years of their deaths.

And they want others to do the same. Through their Giving Pledge, they have encouraged other wealthy individuals to make similarly big bets within their lifetimes through a promise to give more than half of their wealth to charitable causes.

More than 150 individuals and families have taken the pledge so far, including billionaire investor Warren Buffett, Tesla’s Elon Musk, Facebook’s Mark Zuckerberg and Bloomberg founder Michael Bloomberg.

“These new-style donors think of projects— multifaceted, multipronged efforts that involve significant capital—so they are more likely to invest capital, not just income,” says Melissa Berman, president and CEO of Rockefeller Philanthropy Advisors, in a report on how long foundations should last. “Many of these newer donors also have a lot of confidence. They’ve made a fortune and they believe that the next generation will make its own.”

This is not the typical model. Traditionally, philanthropists have taken the long view. Some of the biggest charitable foundations in the world were established many decades ago by legendary tycoons who cared more about establishing a legacy. John D Rockefeller established his foundation in 1913 with the goal of “promoting the well-being of humanity throughout the world.” That’s not a project with an expiry date.

“John D Rockefeller was very precise in not only defining our mission, but also being clear that this should always be our North Star,” according to Rajiv Shah, president of the Rockefeller Foundation.

Other famous names such as Ford, Kellogg and Carnegie are all attached to multibillion-dollar foundations that are charged with managing their