Twenty-five years ago, when Steve Hilton was an entry-level guy working in the file room at his family's foundation, he sometimes had to explain his place within the family legacy.
His grandfather Conrad, the son of an immigrant shopkeeper, turned a single 40-room hotel in Cisco, Texas, into an international empire – the ur -American tale of self-made wealth. His father, Barron, expanded the family business even more, eventually selling the hotel conglomerate in 2007.
But both these Hiltons gave away the vast majority of their fortunes, putting their billions into a charitable trust charged to "relieve the suffering, the distressed, and the destitute."
"When I first started, and people said, 'What do you do?' I would say, 'Well, I work for a foundation,' " says the younger Mr. Hilton, now the president and chief executive officer of the Conrad N. Hilton Foundation, the 25th largest charitable trust in the world. "And they would say, 'Oh, you're in construction?' I'd say, 'No, we give money to charitable groups.' And then there'd be a long pause. Then they'd say, 'You don't do that full time do you?' "
Today, however, from icons of pop culture to titans of American business, the act of giving away money, even in staggering sums, is gaining a new cultural momentum. Call it a new form of noblesse oblige, complete with modern media hype and celebrity cachet: It's the rich and the famous now who lead the entreaties to give.
But even the well-publicized efforts of superstars like Bono and Angelina Jolie cannot compare with the potentially globe-changing quest of Warren Buffett and Bill Gates, the two richest men in America. For over a year now, in a new voluntary, ad-hoc association called the Giving Pledge, these self-made mega-billionaires have been urging their peers to donate at least half their fortunes for the common good.
They are asking the über-rich in America – as well as around the world – to stand up publicly and commit hundreds of millions, if not tens of billions, of dollars to the charities of their choice. The Giving Pledge, they say, is neither an effort to pool resources nor a call to raise funds for a cause. It is simply a moral commitment to give.
"With wealth comes responsibility to help make the world a better place," says media mogul Ted Turner in an e-mail from Nigeria, where he is surveying efforts to fight disease. "I believe anyone who is fortunate enough to achieve financial success has a moral obligation to use that money for the greater good. America is the world's most generous nation on both a government and individual level. But I believe that we have not yet lived up to our responsibility and can kick it up a notch."
At the same time, however, these efforts may represent a particularly American vision of the common good – one that includes proclaiming a cause with all the moral fervor of an evangelist. It's a vision that highlights stark differences between this country and much of the rest of the world.
"We're hoping that America, which is already the most generous society on earth, becomes even more generous over time," said Mr. Buffett in a conference call with reporters in August. "And the norm in this society, probably kicked off to a significant extent by Rockefeller and Carnegie, has moved toward more generosity, up and down, by the rich, the poor, and the in between."
Consciously placing their efforts within this peculiarly American tradition of wealth redistribution, Buffett and Mr. Gates could very well revolutionize the intricate and complex world of global philanthropy – begun, in many ways, by those early 20th-century business behemoths. It could help infuse billions more into a worldwide charitable ecosystem in which thousands of charities and nongovernmental organizations scramble for the funds they need to do their work.
So far, both Buffett and Gates have backed their bullhorns with their own billions. Buffett, chairman and chief executive officer of Berkshire Hathaway, the Nebraska holdings conglomerate, has pledged to give away 99 percent of his current $45 billion fortune (much of it to the Bill & Melinda Gates Foundation), and the Gateses have pledged to donate the "vast majority" of their $54 billion net worth.
In 1998, Ted Turner, who has signed the Giving Pledge, had already given a $1 billion gift to establish the United Nations Foundation, a private charity devoted to supporting United Nations causes and activities, like the current effort to vaccinate children in Nigeria.
Similarly, most of the 40 billionaires who have signed the Giving Pledge have already been active in philanthropy. And while a few have promised to significantly increase their donations to reach the 50 percent mark, the initiative may not lead to an immediate jump in total giving. In today's harsh economic climate, Americans as a whole gave about $304 billion to charity in 2009, down from $315 billion in 2008, according to the Giving USA Foundation and the Center on Philanthropy at Indiana University.
Still, the stature of Buffett and Gates in the world of commerce is such that their challenge could have an enormous effect on philanthropy in the years ahead.
"I think there is a certain amount of peer pressure when you do have people of great wealth who are very visible in their giving," says Hilton, who disburses the proceeds of the family's nearly $2 billion foundation, including the $1.5 million Hilton Humanitarian Prize, one of the largest annual prizes of any sort. "Specifically, when you look at what Warren Buffett and Bill Gates have been doing, because they are at the top of their game in the business world and are looked up to by hundreds of millions of people ... there's no doubt in my mind that that has great influence on everyone, especially those who are in their same peer group." (Hilton's father, Barron, is a signatory to the Giving Pledge, though he, too, had already promised most of his $2.5 billion fortune to the Hilton Foundation.)
Still, many on the Forbes 400 list of the richest Americans have given Buffett's cold calls the quick brushoff. And as he and Gates take their cause around the globe, the responses have been less than wildly enthusiastic. In September, they visited China in an effort to begin, at the very least, a conversation about philanthropy with the ever-growing number of Chinese billionaires. According to press descriptions, the Chinese were curious, but tepid.
Mexican tycoon Carlos Slim Helu, currently the world's richest man, has said he believes creating jobs, not charitable giving, is the best way to eradicate poverty. In Europe, billionaires have balked, too.
"In this case, 40 superwealthy people want to decide what their money will be used for," Peter Krämer, a Hamburg shipping magnate and philanthropist, told the German magazine Der Spiegel. "That runs counter to the democratically legitimate state. In the end, the billionaires are indulging in hobbies that might be in the common good, but are very personal."
So larger social questions remain. Should these billionaires have the power to pick and choose whom to help? Or is it the government's role to ensure a more equitable distribution of such enormous wealth? Some worry this effort may signal a new era of modern Medicis, in which the richest families, often behind the veil of privacy, direct most efforts for the common good.
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The antecedents of the Giving Pledge, as Buffett pointed out, have deep historical roots in this country. But even before Carnegie and Rockefeller, the impulse to give away money had been woven into the social fabric of the nation. When Alexis de Tocqueville observed the peculiar traits of an emerging American society in the 1830s, he noticed how Americans struggled to find a balance between their unprecedented commitment to individual liberty and the needs of the common good.
It's a struggle that continues, in many ways, to define American political discourse to this day – although Tocqueville sought to probe a deeper, more fundamental feature of the young nation's psyche, one that went beyond questions of government alone. What he found – and admired – was a unique commitment to what he called "voluntary associations."
"Americans of all ages, all conditions, and all dispositions constantly form associations," he wrote. "The Americans make associations to give entertainments, to found seminaries, to build inns, to construct churches, to diffuse books, to send missionaries to the antipodes; in this manner they found hospitals, prisons, and schools." Rooted in a deep ambivalence about the sweeping power of government, this voluntary tradition of providing for civic needs and causes has long distinguished American democracy from its European counterparts.
While the next century did see the United States develop systems of public education and various forms of public assistance, as well as public safety nets such as Social Security and Medicare, its citizens have maintained a robust tradition of private giving, whether it be pocket change for bake sales or King Tut-size contributions to a new museum wing.
"I've interviewed Europeans and Americans on this, and Europeans will say philanthropy is an American thing, Americans write big checks," says Michal Ann Strahilevitz, a marketing professor and philanthropy expert at Golden Gate University in San Francisco. "So Europeans don't write the checks, they don't need that ego part, they say. They just vote in a way that encourages a system in which the poor aren't so poor."
Modern American philanthropy began to appear at the end of the 19th century, when new industries took root in a mostly agrarian nation. This gave rise to an unprecedented class of megawealthy industrialists. Andrew Carnegie, the simple bobbin factory worker who eventually built the most profitable enterprise in the world with U.S. Steel, wrote his famous essay, "The Gospel of Wealth," in 1889.
He assailed ostentatious living and the hoarding of fortunes by those with newfound riches, railing against the possible rise of a permanent aristocratic class through inheritance.
"By taxing estates heavily at death, the State marks its condemnation of the selfish millionaire's unworthy life," he wrote. He was also one of the first to call for a progressive income tax on the wealthy. (For this reason, Buffett, Gates, and a host of others in the billionaire club have spoken out against repeal of the so-called "death tax.")
And yet, Carnegie insisted it is the wealthy themselves who are best equipped to distribute their wealth for the common good. Along with Rockefeller, he established one of the first large-scale bequests to support important civic causes. He established the Carnegie Foundation in 1905, devoting it early on to education.
The Rockefeller Foundation, however, began to define a new era in private philanthropy. Its accomplishments over the next few decades would literally change the world, not only with the breadth and depth of its scope, but its success. They funded countless projects that contributed to Nobel Prizes, revolutionized agriculture, and generated advances in public health.
With its stunning successes in both business and philanthropy, the Rockefeller Foundation was a natural expression of a peculiar American tradition of voluntary associations to promote the public welfare, as well as a model, perhaps, for the most successful kind of altruism. In theory, at least, who better to run massive charity efforts than those who have demonstrated the know-how to run the world's most impressive businesses?
"We don't even have to pay them," says Brett Wilmot, an ethics expert at Villanova University in Philadelphia. "Not only are they giving us their money, but also we're not paying for their expertise."
But underlying the benevolence and business acumen lie questions that have persisted since the Medicis helped spawn the Italian Renaissance: Are the super-rich the best to control who should get the money – and will their involvement really result in more giving?
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Years before Buffett and Gates began the Giving Pledge, scholar Jeffrey Sachs, director of The Earth Institute and professor at Columbia University in New York, had already suggested the world's billionaires pool their wealth for the common good. About 1,000 billionaires exist in the world today, with a combined wealth of over $3.5 trillion.
Dr. Sachs suggests that if they pool half this money and contribute just the interest gained on it every year – none of the principal – there would be more than enough to fund the basic needs of humanity: efforts to end disease pandemics, to provide clean water for most human beings, and to jump-start sustainable agriculture for billions of the world's poor.
But Sachs, who is also a special adviser to UN Secretary-General Ban Ki-moon, points out that funding for efforts like the UN's Millennium Development Goals, which he helped put together, are way behind. These eight goals, agreed to by the world's governments and leading development institutions, range from providing universal primary education to halving extreme poverty – all by the target date of 2015. But right now, the (voluntary) contributions member nations had agreed to have slowed.
Even so, he believes that foundations with massive endowments and world-class expertise can help supplement such efforts. The Bill & Melinda Gates Foundation has already been a major partner.
"My message has been ... that these are achievable goals, and, indeed, there are many demonstration projects on how they can be achieved," says Sachs. "But they require a scaling-up of resources from the rich world in general to enable the poorest people in the world to gain access to the crucial breakthrough technologies, whether it's bed nets or vaccines or antiretroviral drugs and so forth."
Though Gates and Buffett have only convinced a fraction of the world's billionaires to commit to the Giving Pledge so far, experts say even a relatively modest expansion in the number of wealthy who give, or in the amount they donate, could have a transforming effect.
To shake loose more money, Buffett and Gates, besides their stature and salesmanship, bring one other important tool to the task: recognition. Studies conducted by Golden Gate University's Ms. Strahilevitz show that when people know that other people are aware of their giving, their donations rise as much as fourfold. "We all want to believe that we're good, and we all want others to think that we're good," she says.
Yet money isn't going to magically fall into the tin cups of the world simply because two titans of capitalism command it. The tentative response so far from European elites is a reminder that not every culture shares American values of philanthropy, and some in the donor community worry that the Giving Pledge could, in the end, even depress giving: Smaller contributors may decide that the billionaires are going to fund the necessary projects, so they don't need to.
"Then we give up our collective responsibility to address these things, because, well, Bill Gates is going to take care of them, or Warren Buffett," says Mr. Wilmot.
This raises even larger questions about the nature of social obligation. The American model of voluntary associations and its 20th-century tradition of massive charitable foundations makes some worry that the general welfare of society hinges too much on the individual values of a few.
By all accounts, most of the current signatories to the Giving Pledge do express a strong commitment to the common good. Yet many are also understandably adamant that they be free to give to projects of their choice.
As Bruce Bickel, senior vice president of PNC Wealth Management and director of its private foundation management services, describes it this way: "Our role is to crawl inside that family's mind and heart, find out what their beliefs and values are, what legacy they want to perpetuate, and then help them come up with a way to live out those beliefs and values by giving grants away to organizations that we've identified."
Many of the 27 family foundations he helps run focus mostly on "survival grants" – assistance with health care, housing, and disaster relief – as well as education and research.
But ethicists like Wilmot suggest that what's beneficial for a society should be decided more collectively. While he recognizes the need for billionaire elites like Buffett and Gates to focus their wealth and skill in the pursuit of the common good, the "social contract" should not rely simply on noblesse oblige. "In the end, we're a society, and there are common goods we need to promote," he says.
Maybe so. But as Mr. Turner was scurrying around Africa recently, talking to heads of state and the needy about projects to support, he wasn't focused on grandiloquent arguments about the nature of philanthropy. He was trying to help eradicate polio.
"I believe that my contributions of more than $1.3 billion to various causes over the years is the best investment I've ever made," he said in an e-mail, adding: "We need a long-term plan for humanity. We need to make sure that future generations inherit a better world."
