A philanthropic family on balance is going to feel better about themselves and their progeny than a family that has been hanging on to every single penny. --- Warren Buffett
What we give depends on what we have and how much we care.
We often become more philanthropic as we age. What if figured out our plans for giving now? This doesn't mean you must give now (though you could).
If you don't have the amount you want to give, you then have an opportunity to save. You can also look at nonfinancial gifts.
Financial GiftsLet's start with these. What's a reasonable amount to give? The answers will vary.
Bill, Melinda and Warren want other US billionaires to donate at least 50% of their net worth while alive or upon death. That amounts to $600 billion dollars. A billionaire can easily donate 50% today and still live in comfort since they'd have at least $500 million left. Setting this relatively low bar helps encourage participation. Later, the amounts donated could increase.
My hope for this is that it takes on this momentum not only with the billionaires but that it expands out. I do think there's a crowd mentality. It becomes the right thing to do. And so, more will because others are doing it. --- Melinda Gates
The pledges will show on the Giving Pledge website but there's no binding legal commitment to follow through. Here's a video summary. You'll find links to more details at the bottom of this post.
Warren is donating 99% of his net worth. Bill and Melinda are donating 95%. We're not billionaires but can also be philanthropic.
A Simple Formula
No one ever said to me, 'We gave more than we should have.'How do you figure out how much to give? This formula has three steps
--- Bill Gates
- Figure out how much you and your spouse need for the rest of your lives.
- Figure out how much you want to leave to your heirs. ("A very rich person should leave his kids enough to do anything, but not enough to do nothing." --- Warren Buffett)
- Donate the rest.
Nonfinancial GiftsYou don't have to give money. You can donate something more personal and precious your time and attention. You have as much as any billionaire.
- The $600 Billion Challenge (Fortune, June 16, 2010)
- Billionaire peer pressure: behind the Buffett-Gates challenge (Fortune, June 16, 2010)
- Charlie Rose interview with Bill, Melinda, Warren (June 16, 2010, 54 minute video)
- My Philanthropic Pledge by Warren Buffett (June 16, 2010)
- Warren Buffett gives it away (Fortune, July 13, 2006)
- The Giving Pledge website for billionaires (givingpledge.org)
- The three key questions for your charitable giving
- Donating: do the reasons matter?
- The four steps in wealth management
- Give your greatest gift
- Your life expectancy exceeds 1 billion seconds
- Should you leave it all to the children (Fortune, September 1986)
- How to leverage your philanthropic giving
Podcast 72 (3:38)
direct download | Internet Archive page
PS Leveraging lets you donate more. We'll look at how next time.