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Doug's Mailbag: Charity for Charity's Sake?

Here's your thoughts on billionares, like Gates and Allen, giving away chuncks of their wealth to chariatable causes:

"Is this true charity, or just a way for successful business people to feel better about themselves?"

Neither, thanks to Obama. Being successful business people, investing, job creation and doing something that actually has a role in stimulating the economy doesn't pay anymore. You might as well give your extra cash to the charity of your choice rather than the government.
-Anonymous

Considering what the Bill and Melinda Gates Foundation has done so far, and the fact that Paul Allen has parted with a billion dollars, the motivation of the act truly doesn't matter if there is good work being done. I mean, I can donate a hundred dollars to a local charity and believe that I've made a small contribution to some good cause, but a billion dollars? The impact that gifts on that scale can make are sufficient that the personal intent of the donor stops being relevant.

If wealthy individuals like that were putting all their money into funding museums, symphony orchestras, endowing country clubs or some other similar thing, there could be room to criticize them. But given the causes that these resources are being directed to, there's very little that can be said against this.

I hope others in similar circumstances get this bug. It sets an example that a lot of us could benefit from, in our own spending habits.
-Dennis

You asked what lurks within the hearts and minds of wealthy people who give huge gifts to charitable causes. I think you are asking the wrong people. You should ask the givers, not the bystanders. However, since you asked your readers, I will try to rise to the challenge:

  1. Our government is so clueless with such a complicated tax system that the wealthy can actually save money by giving it away. Ask a CPA/tax attorney how. I don't know how.
  2. Government intrusion into the private sector skews professional judgment about proper investment strategies. Government encourages irrational decisions. This is to be expected because the government is considered by many people to be the champion of irrational decision-making.
  3. Too much wealth is personally embarrassing to an individual with any kind of moral values. The antidote for embarrassment is to contribute to an alleged honorable cause.
  4. They feel guilty because they sense that they earned their wealth through dishonorable means.  Guilt remission is obtained via a charitable "sin offering."
  5. They hate their beneficiaries, or love them enough not to entrap them into their financial fate. Therefore, they want to minimize the worth of their inheritance by giving away their assets before their death.
  6. They think their spouse is a gold digger. They want to minimize their spouse's access to their money. Since there was no prenuptial agreement, the only way to deny access is to give it away before the spouse can file for divorce.
  7. They are bored and need something useful to do.
  8. They realize that they are mortal and cannot take their wealth with them. They also believe that they will be judged based upon what they did for others, not for how successful they were. They are working on their "final exam" with their religious maker.

-Roger

 I hate to be a cynic, but the only other motive is tax avoidance.
-Anonymous

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Posted by Doug Barney on August 04, 2010


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