The wealthiest 400 Americans are estimated to be worth over $2 trillion. That's as much wealth as the bottom 50 per cent of American families combined. Redistribution of this wealth has the potential to transform society for the better. Welcome to the "Golden Age" of philanthropy.
In 2010, a "Giving Pledge" was announced, where billionaires agreed to give away one half of their wealth to charitable causes. Its major proponents were Bill and Melinda Gates, and Warren Buffett, three of the richest individuals in the world. By 2014, 127 signatories had pledged more than $0.5 trillion. To those billionaires who did not sign up (and were not actively involved in philanthropy), Warren Buffett wryly said, "maybe I should write a book on how to get by on $500 million. Because apparently there's a lot of people that don't really know how to do it".
Any initiative of this scale, and involving such an exclusive club, is open to criticism. There were those that pointed out that the limit of one half of wealth was chosen because of the tax deductions it offered. There were those who said that the pledge enabled billionaires to donate to private family-run foundations that were opaque and were slow to deploy funds. And because the US relies more heavily on philanthropy to support social problems than Europe, there were those who worried that large-scale donations blurred the line between private and political interests. It simply made already powerful business people even more powerful.
At a conference last week on business ethics hosted by Claremont Lincoln University, I asked why billionaires were waiting until they gained membership to this club in order to donate? What if philanthropy was built into the culture of business to begin with? This is what the current generation joining the workplace - the Millennials - are demanding. They want to work for companies with a conscience. By 2020, Millennials will make up 1 in 3 Americans. By 2025, they will account for three-quarters of the labour force (Winograd and Hais, 2014). They matter.
Nowhere is this more relevant than in San Francisco, where technology has created both winners and losers (see this great illustration by journalist and illustrator, Susie Cagle, for the facts). There are some signs that things are changing. Salesforce, a cloud computing company, operates a 1:1:1 model of philanthropy. 1% of its equity, 1% of its product and 1% of employee time are donated to charitable causes. So far, the company has given $68 million and individual employees have provided 680,000 hours in community service. This includes supporting skill development, like coding. At AirBnB, employees put their technological know-how towards solving social problems. In 2011, its engineers matched hosts who wanted to donate their places with those needing shelter after Hurricane Sandy. Both firms have seen rapid growth in market share and sales. More companies should follow such examples. Profit and philanthropy can go hand in hand. Social problems don't wait for tomorrow. Neither should philanthropy.