Is Warren Buffett and Bill Gates’ Giving Pledge initiative only a publicity stunt? Apparently, a lot of people think so. Others even called it the “work of socialists.”
Most of the criticisms directed at the initiative, which seeks to encourage U.S. billionaires to pledge at least half of their wealth to charity, came as comments to the June 16 cover story of Fortune magazine where Buffett and Gates explained the idea behind the Giving Pledge.
The comments are unwarranted and the criticism is not “very persuasive,” argues Ravi Nagarajan, a writer and private investor who owns shares in Buffett’s Berkshire Hathaway.
“The Giving Pledge is obviously not a publicity stunt,” Nagarajan writes in an opinion piece published on Seeking Alpha. “Both Mr. Gates and Mr. Buffett have spent many years thinking very carefully about philanthropy and how to intelligently deploy their wealth for the benefit of mankind.”
He adds that while publicity stunts lack substance, the Giving Pledge is a product of serious consideration and thought. He also defends the initiative from accusations that it is a ploy to shame billionaires who are not on the list. He pointed out that one of Buffett’s longtime business partners, Charlie Munger, is one of those who did not sign on.
On criticisms that the Giving Pledge is the work of socialists, Nagarajan says:
“The concept is entirely the opposite and is profoundly anti-government in the sense that it encourages the wealthy to take responsibility for the disposition of their wealth personally rather than allow the government to tax their estates at death and decide on how over half of it should be distributed.”
Nagarajan also answers critics who argue that billionaires should use their money to create new jobs by establishing new businesses instead of pouring money into charity. He explains that while this concept has its appeal, billionaires are likely to turn to philanthropy at a certain point. Philanthropy has long been a feature of U.S. history, he says.
“Given the fact that there are plenty of individuals who fall through the cracks of a market economy, there is nothing wrong with looking to philanthropy to improve conditions,” Nagarajan argues. “In fact, relying more on philanthropy and less on bureaucratic government efforts is an inherently conservative approach to addressing poverty and human suffering.”