What Would You Do With An Extra $1,000,000,000?
About a year ago I watched “The Rockefellers“, a PBS documentary about the famous “rags-to-royal” American family. The documentary was fascinating, but something that stuck with me was what John D. Rockefeller Sr. did with all the money he accumulated.
In the late 1880′s if you had a lot of money and wanted to “give back” then you would support soup kitchens or homeless shelters, or give to churches. This is how charity worked back then. But when Rockefeller decided to begin giving back he had a small problem: how was he to give away hundreds of millions of dollars?
You may remember Brewster’s Millions, the movie where Richard Pryor plays Montgomery “Monty” Brewster and is tasked with spending $30 million in 30 days in order to test his value of money. Rockefeller had a similar task (although he certainly knew the value of his hard earned bucks). It’s like going into a dollar store and being told you have to spend $10,000 before you can leave. It would be a lot harder than you think.
Rockefeller, like Andrew Carnegie, disliked the idea of funding soup kitchens primarily because he saw it as a sort of band-aid approach to giving. Giving to those less fortunate was indeed a noble thing to do, but he felt that it did nothing to move humanity forward. Instead, Rockefeller took a page from Carnegie’s essay “The Gospel of Wealth” and formed The Rockefeller Foundation with his son, John D. Rockefeller Jr.
Together they gave large sums of money to support education, particularly to help start colleges for African Americans in the southern states, as well as to fund medical research. They gave $35 million to help jump start the University of Chicago. They restored Colonial Williamsburg and Versailles (yes, that Versailles). They donated tens of thousands of acres of land to create several national parks. They supported science, and built churches. To date their foundation has given away over $14 billion dollars, and still has around $4 billion in assets today.
Bill Gates and Warren Buffett both had the same problem as John D. Rockefeller Sr. After much research, Gates decided to model the Bill and Melinda Gates Foundation after the Carnegie Corporation and the Rockefeller Foundation. Buffett followed his lead and nearly doubled the size of the foundation when he pledged to donate $30 billion dollars worth of Berkshire Hathaway stock over the next few years, bringing the total endowment to nearly $70 billion.
Like Brewster, the Bill and Melinda Gates Foundation has a deadline. The foundation has to give away its last penny within 50 years of the death of the last living trustee. The foundation has three trustees: Bill Gates (currently 52 years old), Melinda Gates (44), and Warren Buffett (77).
The primary goals of the Bill and Melinda Gates Foundation are to improve health care and decrease extreme poverty around the globe, and to open up more opportunities for education in the U.S., especially with respect to technology.
John D. Rockefeller Jr. once wrote:
“I believe that every right implies a responsibility; every opportunity, an obligation; every possession, a duty”
It sounds almost like a quote out of Carnegie’s “The Gospel of Wealth” essay. Andrew Carnegie was convinced that successful wealthy entrepreneurs had a duty to dispense their wealth back into the public, preferably through calculated giving to worthy organizations. He felt that there was a responsibility to do good things with ones wealth, and that future generations who would inherit the wealth were prone to squandering it in less than noble ways. Soup kitchens did not qualify for Carnegie’s charity, nor those who couldn’t be bothered to help themselves. Carnegie funded more than 1,700 public libraries across the United States because he felt it could give less fortunate individuals a way to get ahead if they just were willing to put in the effort.
It is an interesting problem, to say the least. These men all used their creative abilities to amass enormous amounts of wealth, more than they could ever spend in a lifetime. (Andrew Carnegie tried to spend it all, and when he realized it was impossible he created the first philanthropic trust in the United States, the Carnegie Corporation so that it would be able to continue spending after his death.)
It got me to thinking about what I would want to focus on if I had the resources of Bill Gates or Warren Buffett. It seems that most of these efforts are focused on third world countries, which no doubt need the most help. But I think I would invest in science and education in the United States. It’s pretty clear that the U.S. has fallen behind in our science programs (stem cell research, anyone?). And the state of our public education system is a also serious problem, not just for the students, but also for the rest of us. After all, we have to live with the citizens those schools are producing (they will be our neighbors, our coworkers, and most importantly, they will be voters). It’s quite scary, really. I’m not sure the problem with the U.S. public education system can be completely solved, but I am sure it’s something that can be improved. I also believe it’s a problem where money can help a lot (almost certainly more than $1 billion though).
What issues would you focus on if you could start a foundation with $1 billion?
