The ennobling pursuit by the rich and famous of philanthropy is in the news. But what is it?
Sam Bankman Fried, the American bitcoin wunderkind was one of many leaders in the new philanthropy movement called “Effective Altruism”(EA).
EA supporters favor investing in technology and finance instead of working hard for charity. and giving the money away to charity. Bankman-Fried, a 30-year-old cryptocurrency exchange, went bankrupt in the beginning of this month.
His wealth vanished overnight. He was worth $10.5bn or PS8.68bn in digital code, but that’s just on paper. They are now $8bn out of pocket, and they don’t seem to be congratulating their altruism.
Amazon founder Jeff Bezos made the announcement that he would give “most” of his fortune to charity in his lifetime. It is an unusual gesture for someone who is worth $117.5bn (according to Forbes). The same source claims that he has already made $2.4 billion in his working career.
It’s unclear what Bezos plans to do in order to fulfill his promise. He has not signed The Giving Pledge, an initiative by Warren Buffet and Bill Gates to persuade other super-rich to give most of their assets away to charity.
Kritikers have pointed out that Bezos’s wealth is directly related to his tax records. Amazon UK pays taxes on its profits but does not pay tax on sales. Amazon handed over PS492m last year in direct taxation for Customs and Revenue, based on an incredible PS20.63bn.
Amazon employees across the globe protested on Black Friday against low wages and poor working conditions.
Bezos, Bankman-Fried, and Bezos received a lot attention for making statements about philanthropy. This is in stark contrast to the awkward silence surrounding the topic on this side.
British people don’t want to discuss their charity work. We like to think so.
The UK has seen a new breed of philanthropists in recent years: the activist athlete or musician. In 2021 , Marcus Rashford won the Sunday Times Giving List for his campaign against hunger. This year’s top donors were Lewis Hamilton (racing driver), Mo Salah (footballer) and Stormzy (rapper).
Different attitudes towards philanthropy can be explained in different countries by cultural and tax factors. According to the National Philanthropic Trus, the US gave $484.85 billion to charity in 2021.
Charities Aid Foundation reports that PS10.7bn was donated by Britons. The US has about five times the US’s population, but the Americans give 45x as much.
Dr Beth Breeze is the director of the Centre for Philanthropy, University of Kent. She says that Americans expect rich people to give money away.
She believes that “success” is measured not only by the amount of money one makes, but also how open-handed they give away.
“It’s all about being both rich and philanthropic. Bill Gates, who has topped both lists over many years, is an example of this. There is no such expectation in the UK. Although philanthropic individuals may be praised, non-philanthropic wealthy aren’t often subject to any social pressure to follow in the footsteps of their more generous peers.
According to Dr Breeze USA fundraising is one of the most successful in the world. Highly skilled campaigners build long-term relationships and make large donations to the country.
Bezos lives in an environment that expects him to give. She adds that his ex-wife MacKenzie Scott has become the most beloved contemporary philanthropist.
“The only surprise here is that he hasn’t vowed to give it away sooner than this combination of factors.”
- Sir Chris Hohn is a hedge fund manager who gives away hundreds of millions for the environment and children’s health
- Alan Parker, a businessman focuses also on the safety of children and the environment.
- Sir Paul Marshall, investor, gives to inner city education and social equality
- Lord Edmiston was a motor-entrepreneur who founded a huge Christian charity
- Lewis Hamilton, the racing driver, gives away tens of million to improve youth opportunities
Source: Sunday Times Giving List
American philanthropy has the largest number of beneficiaries for the church, which is a reflection of the founding fathers’ insistence on independent religious communities. According to the NPT in 2021, 27% of donations went to faith organizations.
The US has strong beliefs in small government. Comparable to Europe’s spending and taxes, the US has low taxes. The tradition of “noblesse oblige”, the act of giving thanks to America’s richest dynasties, has helped offset this. Art is an excellent example. Without private donations, the US’s great museums and galleries would be almost empty. The UK has a tradition where the wealthy leave their photos to the nation in order to avoid death duties.
However, you don’t have a need to go back very far into British history in order to find philanthropic patterns that are at least as important for shaping society as the gifting of billionaires in modern America.
Instead of tech tycoons handing out their largesse to themselves, it was Britain’s pioneers of industrial revolution who signed the checks. They did so with self-consciously divine motives similar to those of American benefactors.
Titus Salt, one of the greatest textile barons in history, built homes and schools to house the workers at his Yorkshire mills. His new city was named after him, Saltaire. He declared it to be alcohol-free. This aligned with his nonconformist beliefs and meant that there would be fewer days lost to alcohol-related illnesses or injuries.
The Lever Brothers were manufacturing soap powder in Merseyside and followed Salt’s example. The Levers built a garden village for their workers. They called it Port Sunlight to reflect the harsh local climate. Although a pub was allowed among the Port Sunlight houses tied, it was strictly alcohol-free.
Jonathan Ruffer (71), a religious-minded City Trader who has spent millions on his native North-east England with his own money, is a throwback at those God-fearing Victorian grandees.
Ruffer is also the investor in Kynren, an extraordinary pageant of British history. The event is staged on the grounds of Ruffer’s home, which was once the palace of the Bishops of Auckland. According to some reports, Ruffer’s generosity has been worth PS50,000 per day for the poor community of Bishop Auckland.
There is not much to connect the mutton-chopped scions who built places such as Saltaire and Bournville with Silicon Valley’s tech bros.
But, creating state of the art accommodation for the workers and surrounding them with recreational facilities, while refusing to drink, isn’t Silicon Valley’s strategy.