As originally published on recode.net
Giving Pledge is the brainchild of some of the most prominent elders of Silicon Valley — people like Bill Gates, Pierre Omidyar, and Larry Ellison — who made billions of dollars in the first wave of tech giants only then to pledge to give most of it away.
Silicon Valley, though, thrives on disruption. And in an age when billionaires are on the ropes — and when tech leaders are reckoning with their corporate and personal responsibilities — there is new movement behind the scenes in tech to broaden the conversation that Gates began nearly a decade ago.
That’s the backdrop for efforts gaining steam like the Founders Pledge, which on Monday shared with Recode that it had amassed $1 billion in commitments. That milestone reflects both its recent momentum and also (in tech-speak) the strength of an incumbent like the Giving Pledge, which is expected to route close to $500 billion in commitments to philanthropy.
Rivals to the Giving Pledge — including a separate effort spearheaded by Salesforce founder Marc Benioff — are, in ways, trying to both disrupt it and replicate it simultaneously.
“They sort of made the market of pledges of this kind, and started challenging the wealthiest of the wealthy to do more than token philanthropy — to really put their name and reputation on the line,” David Goldberg, the head of Founders Pledge, said in an interview. “Founders Pledge is a way to hold their future selves to account.”
To be clear, the Founders Pledge has not signed up brand names like Warren Buffett or Mark Zuckerberg. Its highest-profile commitments are from people like Miguel McKelvey, a cofounder of WeWork; Niklas Adalberth, the founder of Klarna; and Jose Neves, the founder of Farfetch. But it’s trying to appeal to a younger, less-endowed class of the aspiring rich — and focusing exclusively on tech.
Founders Pledge signer Jose Neves, the founder of Farfetch. Bennett Raglin/Getty Images for Fast Company
In fact, not only do you have to not be a billionaire to sign the Founders Pledge like you must with the Giving Pledge, you don’t even have to be a millionaire. Or even have a likely company exit. Or even have company revenue. Or anything, really. (Okay, you generally need to be the company’s founder.)
All it asks is that you commit to a future gift. It’s a percentage of your profits — a minimum of 2 percent of your personal proceeds — which leaves open the possibility that you could be giving away hundreds of millions of dollars if you build a unicorn company or, more likely, a big fat zero.
That also makes the effort much more accessible. About 1,500 people have signed the Founders Pledge — eight times the number who have signed the Giving Pledge — which has led to about $360 million in commitments that have been fulfilled, according to the organization.
The big idea here: What if there were a way for today’s younger aspiring tech billionaires to publicly affirm their willingness to donate some of their personal fortunes — but to do so before they really have the money to make good on the promise?
In 2019, billionaires find themself in a philanthropic bind
critics generally admit that the Giving Pledge has shifted the conversation around philanthropy, bestowing some social stature around large donations (even if not quite stigmatizing the act of passing along inheritances). Since 2010, 190 billionaires have signed the Giving Pledge, committing to give away at least half of their assets.
But the easiest-to-convince pledgers signed up, as you’d expect, early on: 122 people committed in the first four years, but only 65 over the next five years (three have signed up so far in 2019). And while adding roughly 15 people a year might sound like a lot, only about 7 percent of the world’s billionaires have affixed their name to a document; the Giving Pledge particularly has work to do overseas.
The most prominent snub is the world’s wealthiest person, Jeff Bezos, whose omission fits with his historically paltry giving to charity (although he has recently tried to atone for that). Some of the wealthiest people in tech remain conspicuously absent from the Giving Pledge rolls: Google founders Larry Page and Sergey Brin, Steve Ballmer, and Michael Dell, who are each worth tens of billions of dollars.
And the on-the-rise set? The 40-and-under leaders of the next generation of iconic tech companies? People like Evan Spiegel, Adam Neumann, or Ben Silbermann are also no-shows.
Rob Rosen, who oversees philanthropic efforts like the Giving Pledge from his perch at the Gates Foundation, argues that it still appeals to today’s younger tech entrepreneurs, naming recent additions like Brian Armstrong, the founder of Coinbase; Garrett Camp, the co-founder of Uber; and especially citing the trio of 30-something Airbnb founders who announced together in 2016 that they would join the effort.
Rosen said it felt it had “strong representation” from the tech community, with his team pointing to 46 couples that it says signed the pledge from that sector.
The broader challenge for the Giving Pledge — and, to be fair, for all philanthropic efforts — is that newly rich CEOs are often less than eager to want to commit to giving away half their net worth. Who knows what life could bring? So they tend to set up family offices, preserving their options; maybe they’ll begin to think more seriously about philanthropy as they get older, when the money appears less “spendable,” so to speak.
But a big push in the philanthropy world is to encourage lifetime giving so that the principals can be hands-on with their charitable efforts rather than passing those duties to offspring. More time to give also means more time to improve as philanthropists. That’s why younger entrepreneurs can have such a big impact if they commit early.
That’s essentially the premise of the Founders Pledge — but committing even earlier. People who experiment with philanthropy only when they become billionaires, Goldberg says, are going to have some pretty painful experiences.
“When you’re a billionaire, those mistakes are at a different scale than when you’re just Joe on the street,” Goldberg said.
Neither Rosen nor Goldberg considers the other a rival — you could certainly sign both pledges, or maybe you’d graduate to the Giving Pledge once a few more millions hit your bank account.
“One of the goals of the pledge is to put the conversation on the table of what’s even possible,” said Rosen. “Tech has historically been quite innovative in doing this, so it’s not surprising that you’re seeing some traction.”
One reason why rivals’ efforts are gaining traction? Well, the problem with megadonors committing $5 billion to the Giving Pledge in 2019, for instance, is that they still might have $5 billion more in assets that they’re not committing to the Giving Pledge.
And being a billionaire is not particularly popular right now. Some Giving Pledge signers these days, such as hedge funder Paul Tudor Jones, are barely publicizing when they sign it lest they remind people of their massive net worths during a time when voices on the left are pounding billionaires for personifying American income inequality.
Rosen said his donors are as aware as ever about how their wealth is perceived, but that when it comes to the new dialogue about bllionaires, “net-net, I don’t think it’s had an impact.”
Another big difference between the two: The Giving Pledge, as its critics point out, has no teeth but is merely a public affirmation. Founders Pledge is a binding document; it can recoup the money if the signatory renegs.
The Founders Pledge, which is headquartered in London and at first hooked European founders, clearly is getting beat in Silicon Valley. So, last month, it opened an office in San Francisco, and Goldberg visits the Bay Area once or twice a quarter for dinners with prospective pledgers. He says his program has merely been a “beta test” until now.
What Goldberg has been hearing from Silicon Valley millionaires during that beta: Show me the numbers, not the narrative.
“Our members were increasingly frustrated with being told stories,” Goldberg said. “The same way we invest money — we’re hyper-rational and utilitarian in a certain respect — I’d rather achieve more return than less,” he said. “They want to be as rational with their philanthropy as they are with their investments.”
And just like Silicon Valley investors claim to offers startups more than money, almost all Silicon Valley-focused philanthropic efforts claim to be more than soliciting money: They offer a “network.” They help you think “long term” and are “patient.” They are a “partner” that wants to be part of a “movement.”
Can’t all the Pledges get along?
third pledge effort that has adopted some of this VC-style messaging — and seen some of this traction — too: Pledge 1%, which asks tech companies to promise to donate 1 percent of their company equity, time, product, or profit to philanthropic efforts. If that sounds like a rather loose way for a corporation to satisfy a philanthropic commitment, that’s intentional. It’s also, like the Giving Pledge, not binding in any way, and it’s pretty difficult to track. (How do you define “time,” really?)
More than 8,500 companies have signed this classic initiative in corporate and social responsibility, which Pledge 1% says has led to over $500 million in philanthropy.
Amy Lesnick, the Pledge 1% CEO, said she considered the two other efforts not competitive because she is focused on signing up a company rather than a billionaire.But her organization is still competing for the mindshare of a company founder — who might be a Giving Pledge-eligible billionaire, too — who is trying to weigh his personal and professional charitable obligations.
Lesnick still stressed ways in which her organization differs from the other pledge drives trying to remake tech philanthropy.
“I think that Pledge 1% has a reach and accessibility that is infinitely broader,” Lesnick told Recode in an interview. “We are not just saying, ‘Hey, I’m going to look at who are going to be the companies that are going file for IPO in the next 12 months — and we are only going to talk to them.’”
To be sure, there is a world in which all three of these programs patch together to make a philanthropic quilt. Maybe a young entrepreneur signs the Founders Pledge, setting a standard for her personal philanthropy, and then Pledge 1% to set a standard for her company’s philanthropy. And when she really makes it big — becoming a bona fide billionaire — she signs the Giving Pledge.
For instance, Benioff, the Salesforce founder behind the Pledge 1% initiative, has signed the Giving Pledge as well. But Benioff is perhaps Silicon Valley’s most omnipresent (and, yes, abrasive) advocate for philanthropy. And given Benioff’s own words in the past about Silicon Valley billionaires, it probably wouldn’t surprise him to learn that they’re not jumping to participate in all three programs simultaneously.
“Not all of them are giving money away. A lot of them are just hoarding it,” he told the Guardian last year. “They’re keeping it. That’s just who they are and how they look at their money.”
