The Billionaire Pledge: Gates and Buffett Urge Ultrarich to Give Away 50% or More

Bill Gates and Warren Buffett have been leaders by example to others of extreme wealth since they committed major parts of their fortune and energy to changing the world while they were still alive. With the just-launched Giving Pledge, they're making that leadership explicit and asking other billionaires to commit at least half of their wealth to philanthropic causes.

Bill & Melinda Gates have been philanthropic leaders for years. Their foundation was first formed in 1994, but has grown into the largest private foundation in the world largely in the last half decade or so. The turning point event was a gift by Warren Buffett worth approximately $30 billion in June 2006. The gift coincided with Bill Gates shift from his role at Microsoft to full-time leadership of the foundation.

According to an extensive Forbes piece published today, the immediate origins of the Giving Pledge came at a clandestine billionaire meeting a few months ago, at which the Gates and Buffett convened some of the more philanthropically active wealth in the country: David Rockefeller played host and the event included people like Ted Turner, Eli and Edyth Broad, and yes, Oprah. The conversation was ultimately focused on how to increase giving among the rich, and while many ideas emerged, the only consensus was that it would take lots of engagement and lots of work.

Over the course of the next few months, meetings were held in secret around the world getting the ultra-wealthy -- the targets of this cohort were and are, at first, the Fortune 400 -- to increase their giving. At these meetings, the idea of pledging some percentage of net worth was floated and not shot down.

The Giving Pledge has set the bar at asking people to pledge to give away 50% of their net worth to philanthropic causes. The Gates and Buffett seem to think that number should be even higher, but made the decision to set it at a level that they thought they could pull people in with.

What to make of this?

1. Peer Leadership Matters. This is a fundamentally good thing that could only come about because of the leadership of the Gates and Buffett. The importance of peer leadership in philanthropy -- when it is billionaires or citizen donors -- can literally not be overstated. Getting every person of the Fortune 400 list to not only think about philanthropy but have very distinct examples of leaders who are, literally, putting their money where their mouth is, could mark a huge shift in the philanthropy of the rich.

2. We need to up the pressure and decrease the challenge of supporting high impact organizations. The biggest thing that worries me about this is that the institutions that have traditionally been the refuge of rich philanthropic dollars -- universities, symphonies, etc. -- are all well and good but only a tiny, fractional slice of what we need resources for. In fact, I think it's pretty fair to argue that this massive influx of dollars will only do what it is meant to if there are good resources to help new philanthropists to direct their dollars to high impact problems and organizations that can leverage their wealth, connections, and ideas. Basically, this can't just be a beauty pageant. Gates' hyper-involved approach to his giving is a good omen on this front.

3. Philanthropy is fundamentally NOT the same as social entrepreneurship. Ultimately, I'm incredibly excited about the leadership the Gates and Buffetts are showing on ths. But man, I would be lying if there wasn't a part of me that thinks the media around this conversation feels a little social change 1.0. I want these billionaires committed to the movement to change the world for good, but the broader societal conversation we have to be having can't just be about "giving back." It has to be about the very nature of wealth creation, and the opportunity for the proto-Gateses and Buffetts of the world to build lives of meaning, value, and yes material wealth with a more integrated approach to social change from day one.

To put it more bluntly, the risk here is that this new philanthropic commitment simply amplifies and reiterates the 20th century wealth narrative that says, effectively, "make money how and wherever, then eventually turn your attention to giving it away."

I simply think that we've turned a point in society where even great later-in-life philanthropy can't be the only way that people think about their social commitment. We have to initiate a new way of doing business, and we have to think in new ways about how to create organizations that can actually address the problems we face.

The good news? I think many of these billionaires either get this already, or if they don't know yet, will be excited to discover that a whole new generation of entrepreneurs is thinking more expansively about their social impact than ever before.

That's what gets me excited this movement. The model of success is shifting from a mindset of "make tons, figure out good later" to "create immense value -- social and otherwise -- from day one." That's why this generation's entrepreneurial leaders are people like Ryan Allis, who at 25 has built a company with tens of millions in revenue with an embedded culture of social committment and who is beginning to invest in east African companies, people like Matt Flannery, Jessica Jackley, and Premal Shah at Kiva, who have built a nonprofit that has enabled literally hundreds of millions of dollars of value creation in five years, and people like Warren Buffett's grandson Howard, who -- with a whole world of opportunities in front of him -- has chosen to commit himself entirely to making the US government's first experiment with social innovation funding and support actually work.

So here's my challenge: let's make the Giving Pledge step one. Let's not only up the bar on what the ultra wealthy give, let's give them the tools to supercharge the movements that are springing up all around to shift our entire society's conception of and approach to creating social change. And then lets extend those commitments and support to everyone, because ultimately everyone is what it will take.

Learn more about the Giving Pledge here.