Why Billionaires Hold Back: Insights from the Wealthy & Their Advisors
In an extraordinary twist of fate, Marie Dageville and her husband Benoit became billionaires almost overnight when his data cloud company, Snowflake, made its stunning debut on the stock market in September 2020. But instead of reveling in their newfound wealth, Marie—a former hospice nurse—embarked on a passionate mission to find meaningful ways to share their fortune with those in need.
“We have a responsibility to redistribute our excess,” she emphasized in a candid chat from their Silicon Valley home.
While many perceive philanthropy as a daunting challenge, Marie sees it as an exhilarating opportunity. Her mantra? Just dive in and start giving.
Since at least 1889, America’s wealthiest have been encouraging one another to give back. This movement kickstarted with Andrew Carnegie’s influential essay, “The Gospel of Wealth,” which passionately argued that the elite should share their fortunes during their lifetimes to combat escalating inequality.
An entire ecosystem of advisors, courses, and charitable vehicles has blossomed to facilitate these donations, significantly inspired by the Giving Pledge—a commitment led by the Bill and Melinda Gates Foundation. Since 2010, luminaries like Warren Buffett, Bill Gates, and Melinda French Gates have invited their billionaire peers to pledge half their wealth to charitable causes, resulting in 244 signatories so far.
Yet, what stands in the way of these affluent donors giving more and acting faster?
Overcoming Obstacles: Risks, Logistics, and Emotions
Philanthropy advisors identify a multitude of barriers—some structural, like selecting the right charities or advisors, while others are deeply emotional, including family dynamics and the desire to maintain a favorable image among peers.
“It’s a perfect storm of behavioral challenges,” notes Piyush Tantia, an innovation expert whose recent report, funded by the Gates Foundation, delves into what hinders affluent donors.
He explains that unlike everyday givers responding to a heartfelt plea, billionaires often agonize over their philanthropic choices. “We might think, ‘It’s just a hundred grand for a billionaire,’ but it doesn’t feel that way to them,” he explains. “So, it’s crucial to view philanthropy as a portfolio—different strategies working together for a larger impact.”
Marie Dageville found her stride by connecting with fellow Giving Pledge signatories, particularly one who encouraged her to make general operating grants. This approach allows organizations the freedom to allocate funds where they see fit. Marie believes in empowering nonprofits that are rooted in their communities to make the best decisions, and she isn’t deterred by fears of mismanagement.
“If you’re in a position to redistribute this wealth, remember: you either took risks or others took risks on you,” she challenges. “Why not take some risks in your philanthropy?”
Moreover, Marie insists that too much emphasis is placed on donor desires rather than recipient needs.
Collaborative Learning and Growth
Donors benefit immensely from honest conversations with one another, specialists assert. The Center for High Impact Philanthropy at the University of Pennsylvania hosts an academy where wealthy donors, their advisors, and foundation leaders come together to learn in collaborative cohorts.
Kat Rosqueta, the center’s executive director, cites MacKenzie Scott, the talented author and former spouse of Amazon founder Jeff Bezos, as an exemplar of swift action in philanthropy. “Must all ultra-wealthy individuals operate at a snail’s pace? Absolutely not!” she asserts.
Yet, many donors grapple with the challenge of making impactful changes when philanthropic funding pales in comparison to government budgets or the business sector.
Cara Bradley, deputy director of philanthropic partnerships at the Gates Foundation, emphasizes the heightened scrutiny billionaires face, which can paralyze their efforts. “They’ve committed to giving away a monumental amount of wealth, yet life gets in the way. Philanthropy is a serious endeavor,” she acknowledges.
Embracing Transparency: Setting New Norms
Conducting empirical research on billionaires isn’t easy, shares Deborah Small, a marketing professor at Yale. However, she observes that societal norms often favor anonymity in giving, which is mistakenly perceived as virtuous.
“Imagine the impact if everyone was transparent about their giving! It could establish a new social expectation,” she argues.
Jorge Pérez, a prominent real estate developer and early signer of the Giving Pledge, regularly engages his peers in discussions about accelerating their giving. “I think some have stopped answering my calls,” he laughs.
Jorge also involves his adult children in their philanthropic efforts, partnering with The Miami Foundation to leverage their expertise rather than launching independent organizations. Even before they joined the Giving Pledge, the Pérez couple was committed to supporting the arts and scholarships in Miami. In a landmark 2011 donation, they gifted their art collection—valued at $40 million—to the local museum, which was subsequently renamed the Pérez Art Museum Miami.
For Jorge, philanthropy is about creating sustainable societies and leaving a meaningful legacy. “I like to say that you give for selfish reasons; it makes you feel good. But in the end, it enhances the community you live in, fostering fairness, progress, and ultimately greater economic prosperity,” he insists.
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