Since billionaires Bill Gates and Warren Buffett created the Giving Pledge some five years ago, those who have made the pledge have gotten a good bit of attention from the media. To date, 193 people have made the promise to give away at least half of their wealth in life or in death. In fact, another 16 people made the pledge this week, including yogurt king Hamdi Ulukaya and Scots oilman Ian Wood.
Of note, making the pledge typically results in positive press coverage, video testimonials from Bill Gates as well as invitations to annual conferences with fellow billionaires.
However, most people don’t know that the pledge is subjective and not binding. Those who sign the giving pledge are not legally obligated to donate any money, and some have failed to give away anywhere close to half even when they died. Experts note that non-profit regulations and estate laws can prevent public disclosures, and pledge takers are never required to prove anything.
Giving pledge is a moral pledge
The supporting information about the Giving Pledge emphasizes that it is solely a moral pledge. This means Giving Pledge signers cannot be sued for failing to give, according to David Scott Sloan, national head of the estate law practice at Holland & Knight.
“When I give money to charity and I pledge to pay it over five years, I actually sign a contract,” Sloan noted. “These are all people who sign lots of pledges like that and wanted, I’m sure, to make it very clear it’s a moral direction as opposed to a legal direction.”
Statement from Giving Pledge coordinator
“It’s really thinking about how iconic figures providing inspiration and support can inspire and serve as a model for society,” commented Robert Rosen, the Giving Pledge coordinator as Director of Philanthropic Partnerships for the Bill & Melinda Gates Foundation. “We aren’t looking to add any additional complexity,” Rosen continued.
Rosen says the idea behind this long-term project is to reset levels of giving. “The conversation continues to evolve with what’s expected and what becomes the norm of generosity, both in terms of the impact and the impact it has — that’s our true north star,” he noted. “People do it in different ways and at different times because it’s such a personal decision.”
Mixed results so far
Bloomberg notes that public disclosures of lifetime and estate giving of the 10 billionaires who took the pledge and have passed on show that the pledge is not always honored. Only two of the 10 have given away more than $1 billion, and they both committed to donate the money before the Giving Pledge was launched.