The world’s richest are setting new benchmarks of ‘giving’. It not only makes them a good samaritan but also adds to their bottomlines at the same time. Meet philanthrocapitalists...
On a trip to France, millionaire Jervis Pendelton sees an 18- year-old school girl in an orphanage. He is mesmerised by her, and decides to sponsor her college education in England. However, there are two conditions attached to it. First, Jerusha (the girl) should never be told who her benefactor is and second, she must write him a letter every month, to which she should not expect any reply. Jerusha catches a glimpse of the shadow of Pendelton and jokingly calls him “Daddy Long-legs.” After three years, he goes to visit her at a dance, not telling her who he is. They fall in love; but she is confused and knows not what to do. She turns to her only friend “Daddy Long Legs” for help and writes to him about her problem. As expected, after all twists and turns, she finally marries him and they live happily ever after. Pendelton was the secret benefactor of the very popular 1912 book (and movie too) “Daddy Long-Legs” by an American writer Jean Webstar. But in real life too, there are a whole lot of anonymous donors who have been trying to change society and our world.
He is about 76 years old, wears a $15 watch, a pair of $9 spectacles and dresses very simply (almost shabbily). There’s nothing extraordinary about this man, except that he lavishes hundreds of millions of dollars on universities, hospitals and the likes, but won’t allow even a small plaque identifying him as a donor. A lot of you reading this piece might have sometime or the other dropped into a Duty Free store at airports for some last minute shopping before catching a flight home. The man I am talking about is the one who started DFS (Duty Free Shoppers), and made pots of money. Well, that may not be noteworthy, as a lot of people have made a lot of money with ingenious ideas. However, what’s awe-inspiring about this man is the fact that he gave it all away without letting anyone know about it. Chuck Feeney set up a foundation, and even declined to name it after him, and gave all his earnings to it. He called it “The Atlantic Philanthropies” and registered it in Bermuda just so that he could avoid US disclosure laws. The book titled The Billionaire Who Wasn’t: How Chuck Feeney Secretly Made and Gave Away a Fortune tells about this man’s vision, mission and his greatness. Recently he instructed his board to pay out every penny of his foundation by 2016 so that when he dies, he knows that every penny he ever earned had been put to good use.
The new face of giving
Chuck Feeney donated secretly, but today a whole lot of rich and powerful people are realising the power of giving. Capitalism is metamorphing into a new form. It’s now hip to be a philanthrocapitalist. If capitalism meant only the fittest could survive, then philanthrocapitalism makes the system work even in favour of the weak and less advantaged.
From the richest man in the world, to the second richest, everybody is giving. Bill Gates, Warren Buffett, Jeff Skoll, Bill Clinton are doing their bit to change the world and make it a happy place. Today, it’s not good enough to just be a successful entrepreneur, you need to become a socially conscious entrepreneur too, to be called completely successful. ‘Giving’ is not a new phenomena in the business world. In 1889 Andrew Carnegie wrote: “The man who dies thus rich dies disgraced.” Not surprising then, that the world’s two richest men, Bill Gates and Warren Buffett have formed one of the biggest philanthropic foundations globally. The Bill and Melinda Gates Foundation is worth 40 times the annual budget of the World Health Organisation. It is so powerful and huge that The Economist dubbed this phenomena as “Billanthrophy”. The man has changed the world’s perception and attitude towards giving. Warren Buffett had always been a wise and careful investor and now after joining hands with Bill Gates he has shown how to use business principles while doing philanthropy too! He says joining hands with Gates saved him the trouble of making sure his money was being used productively – Gates would ensure that for him. Buffett has handed out the task of managing his funds to managers. He has truly managed to turn philanthropy into a value investment.
The business of giving
“Giving” is actually a good business strategy. When you give people the power to earn their livelihood you actually increase the market size. After all only when they earn do they buy and slowly the whole market size grows. Everytime you give, you contribute toward creating new markets and increasing existing ones. According to Buffett, if you contribute toward (say) increasing life expectancies, it means you give people more time to increase their wealth and consume more! It’s finally simple common sense. Every businessman wants to increase his market share and this is one way of doing it. Slow yes, but sure!
Not just individuals, nations too need to give. In March 1997 a joint poll by The Washington Post, Harvard University and Kaiser Family Foundation asked Americans which area did they think the government spent the highest in – medicare, military or social security? The response was most surprising. Over 64% believed that it was “foreign-aid.” They thought 20% of the budget went toward foreign-aid and America was the most generous nation. The truth is far more shocking. The United States contributes a meager 0.16% of its Gross National Income and ranks second-to-last in giving (Italy being last). No wonder someone correctly labeled them as the world’s-most-generous-misers. When you have the ability to give maximum, you should use it, for that gives you the ability to truly make a difference in today’s world. For many rich entrepreneurs (and even others), retirement has now taken a new meaning. While working, they changed the business world and after retirement, they are changing the world as a whole. Bono, the singer with his “RED” campaign, Bill Gates with his “Creative Capitalism” are all doing their bit. George Kaiser’s family fled from the Nazis in Germany and today his foundation helps fight child poverty and serves as a benefactor to over 5,000 Jewish people. Michael Dell started with $1,000 at age 19, created a $20 billion empire by 40 and gave away more than $1.2 billion toward education and child development. J. K. Rowling has a yearly budget of £5.1 million to help children and single parent families. Oprah Winfrey gives $50 million to educate women and families; Paul Newman, the Hollywood actor with the most beautiful blue eyes has donated over $90 million to charity. Yes people are giving, but each of us should give, for in simple business terms too, it’s worth it and the old adage does ring true – when you give you receive satisfaction, recognition, reputation, goodwill and above all, in the long run, a bigger market!
Give by choice or get by chance or snatch!
Sometime life does try to strike a balance. It creates a millionaire by chance. The ‘Slumdog Millionaire’ who through sheer luck becomes one (by wining the show Kaun Banega Crorepati) – Yes, this is the story of a movie about to be released for the general audience. And going by reviews it seems to have plucked at the heartstrings of many with its story of a young boy Jamal, living in the slums of Mumbai, who goes on to win the show and is about to become a crorepati. But then, he’s suddenly suspected of cheating. What happens next? Well, you need to watch the film for that. But going by the response, the world sure loves a slumdog millionaire story, in the same way possibly that they love the Robinhood story, who steals from the rich & gives to the poor. Whether he is for real or just a legend; whether someone will actually become a millionaire on TV or not, we don’t know. But yes, if you don’t give enough, a Robin Hood comes along or someone receives by chance. And when you give by choice you do more good. Like this professional blackjack player in Las Vegas who in August this year made an offer to help a family in financial need by using his gambling skills to win a fortune in a casino. You could register at robinhood702.com and hope you are selected or you could wait for someone like Larry Stewart, the millionaire who used to roam the streets in December giving money to people who needed and was often referred to as the Secret Santa Clause. Christmas is round the corner and it’s a season of giving. So give like all these people. Give for hope, for humanity and let our children believe that Santa Clause is really for real!
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