By Ian Wylie
Financial Times Published: August 9 2010 23:35 | Last updated: August 9 2010 23:35
The cold call asking you to pledge money to a charity is an uncomfortable conversation at the best of times. But what if the person on the other end of the line happens to be the third-richest man in the world?
It seems Warren Buffett, who has been calling up fellow American billionaires to ask them to donate at least half their wealth to charitable causes, also knows an evasive answer when he hears one. “Sometimes they’re just trying to get you off the phone,” he said last week. “A few people had dynastic ideas about wealth because they had inherited their wealth themselves. And then there were others who said they had a plane to catch.”
But, like the best charity street “chuggers”, Mr Buffett – who has already pledged to give away 99 per cent of his $47bn fortune – and his “Giving Pledge” partners Bill and Melinda Gates plan to keep asking, working their way through the Forbes 400 rich list.
Never has there been such an attempt by a group of the wealthiest people in the world to enrol their peers in such grand scale philanthropy. And in the process Buffett and the Gateses are trying to export their model of “philanthrocapitalism” or “venture capital” to the world.
Mr Gates has previously estimated that just 15 per cent of the super-wealthy give away large chunks of their fortunes, but he thinks this could rise to 70 per cent. After just two months of calls, some 40 billionaires have signed the pledge, including George Lucas, Barry Diller, Michael Bloomberg, Larry Ellison, Pierre Omidyar and Jeffrey Skoll. The pledge is not binding, but a moral commitment to donate more than 50 per cent of their wealth. It does not in volve pooling money or supporting one single cause or organisation. Charitable causes supported by these early signatories range from HIV programmes and the arts to brain research and Middle East peace.
Yet philanthrocapitalism has come under fire from critics who say billionaires are simply buying power and control. Financial Times columnist Christopher Caldwell has warned of their “disruptive effects on democracy”. An editorial in The Lancet in May 2009 expressed “serious anxiety about the transparency of the [Gates] Foundation’s operation” and questioned its “whimsical governance”.
Moreover, donating billions is not as straightforward as it might seem. Many charities are incapable of absorbing large sums of money, and some billionaires’ assets are illiquid.
However, for supporters of philanthrocapitalism, it is the influence and networks as well as the funds that billionaires have at their disposal that make their commitment so important. “What’s remarkable increasingly about billionaire families is that they have not only significant financial resources, but the access, opportunities, relationships and connections to have tremendous impact in very perplexing problems,” says Melissa Berman, chief executive of Rockefeller Philanthropy Advisors.
Most of the 40 who have signed up to the pledge are already generous givers – yet the pledge is significant, says Michael Green, co-author of Philanthrocapitalism: How The Rich Can Save The World. “To have brought in people like Larry Ellison – who has blown hot and cold on philanthropy over the years – to make public his intention to give away 95 per cent of his wealth, is a big step change,” says Mr Green. “It raises the bar in that super-rich category where the question now is, are you going to sign the Gates/Buffett pledge?”
The timing is significant, as the worlds of business and finance struggle to redeem their reputations. According to one of the pledge signatories, investment banker Tom Steyer, the initiative is “changing the face of American business . . . to my mind it transforms the image of private enterprise from an old-fashioned extractive model where people are taking resources out of the system for their benefit and their families to a more regenerative model of capitalism where they are putting resources back into society.”
Also, in the current climate of budget cuts, indebted governments will be more likely to welcome wealthy philanthropists who share Mr Gates’ and Mr Buffett’s belief in co-funding and leverage – a conviction that, as Mr Buffett puts it, “private philanthropy can make the subsequent expenditure of public monies more effective”. The Gates Foundation, for example, has granted more than $650m in the past couple of years to schools, public agencies and other groups that align with its main education priorities.
Philanthropists using their money as risk capital to help governments spend money better is an emerging theme, says Mr Green: “The most striking thing Gates said when we interviewed him for the book was that the Gates Foundation is ‘just a tiny organisation’. He recognised that to tackle the problems he wants to tackle he can’t do it on his own. He wants to lever government money, and here in the UK there’s scope in this idea of ‘big society’ for that kind of partnership working.”
The pledge is a nudge too for donors to consider giving the money away during their lifetime – “spend down” their endowments within a specified timeframe to meet current needs, rather than have them dribble out grants from a foundation once they are dead. Unlike the philanthropists of former times, many new billionaires are young enough to take a more active role.
The initiative is also an attempt to apply a network effect to philanthropy. The more common it becomes, the more the wealthy will seek to do it, as they share experiences, plot strategies and exchange ideas.
“It’s not just about people pledging success – it is also about inspiring more families to talk about giving and philanthropy,” says Patty Stonesifer, former CEO of the Gates Foundation, who currently advises Bill and Melinda Gates and was present at the May 2009 dinner in New York where the idea of the pledge was hatched.
The agenda includes educating the super-rich on the Buffett/Gates model of “high-engagement philanthropy” and “results-oriented giving”, where the efficiency of the business world is injected into aid – where philanthropists “invest” their donations and use venture capital strategies and research tools and techniques to manage the performance of their “portfolios”.
According to Mr Buffett, pledge signatories will be invited to an annual summit to “spend a day talking about various problems of philanthropy and how better to do it”. And last month the Bill & Melinda Gates Foundation made a $3.7m grant to RPA to publish donor education resources on its website for would-be philanthropists in the US and beyond.
Mr Buffett and Mr Gates are taking their model of philanthropy on the road. The pair will travel to China at the end of next month to meet some of its wealthiest business people, followed by a similar trip next March to India, which Mr Gates has already predicted will become second only to the US in its high-end philanthropy.
“Bill, Melinda and Warren started this pledge effort here in the US, in part because they realise that to be successful in any other country the effort will need to be led by local leaders,” says Ms Stonesifer. “That said, the basic idea – that those with great wealth can and should devote that wealth to efforts to leave the world a better place – has resonance around the globe.”
It seems that as Mr Buffett and Mr Gates – the Rockefeller and Carnegie of their day – spin their Rolodexes for yet another cold call, their mood is one of unstoppable momentum
The report is notable for its extreme ‘cherry picking’ of data with which to make the assessment. It uses one data set from a summary report (not the original science report) for the GBRMPA Marine Monitoring Program from 2007/2008 (Prange et al Reef Water Quality Protection Plan Marine Monitoring Program: 2007/2008 Summary Report pp18-19). Note the Croplife report was very recently released in 2010. The data used is from the use of passive samplers only which are generally deployed only in non-flood conditions and represents the ‘low’ concentration end of pesticide detections in contrast to samples taken in the wet season which are generally much higher (as you might expect).
The Climate Variability and Change Group at the Centre for Australian Weather and Climate Research (CAWCR) has released a series of important tools for tracking and projecting thermal stress and coral bleaching months ahead of their appearance on coral reefs. After receiving an e-mail from Dr Claire Spillman, I immediately downloaded into my Google Earth and was impressed by the depth of information available on a geographic basis through these tools. To view please see: 
