Friday 08 Oct 2021 | 01:30 | SYDNEY
Friday 08 Oct 2021 | 01:30 | SYDNEY

The billionaires' pledge to charity

5 August 2010 17:23

Once again, Bill Gates is behind a major charitable initiative that shows the potential to dramatically change the world. 'The Giving Pledge', brainchild of Bill Gates and Warren Buffett, aims to convince billionaires to give at least half of their fortune to charity.

Starting in the US, already 40 of the wealthiest families and individuals have made the pledge. If all 400 billionaires in the US come on board, this would amount to some US$600 billion, according to estimates by Forbes Magazine. Just imagine what would happen if all the world's billionaires made the same pledge. A quick calculation of the total fortune of the top 100 in the Forbes billionaire list amounts to some US$1.4 trillion. Halve that, and you've got US$721.7 billion.

Calculating these numbers is a very interesting exercise, especially in the light of the replenishment of the Global Fund to fight AIDS, Tuberculosis and Malaria later this year. The Global Fund needs some US$20 billion to scale up its operations so that by 2015 we can:

  • Eliminate malaria as a public health problem in most malaria-endemic countries.
  • Prevent millions of new HIV infections.
  • Dramatically reduce deaths from AIDS.
  • Virtually eliminate transmission of HIV from mother to child.
  • Contain the threat of multidrug-resistant TB.
  • Achieve significant declines in TB prevalence and mortality.
  • Further strengthen health systems.

Now, imagine 'The Giving Pledge' actually secures US$600 billion. That would mean a potential to fund 30 organisations similar to the Global Fund. This makes the achievement of the Millennium Development Goals a great deal more realistic.

Yet, there are of course a couple of caveats here. First, Gates and Buffett will have to make the case to their fellow billionaires and convince them to make the pledge – something it appears they have already been pretty successful at. Second, and probably more difficult, is the step from getting people to pledge money to actually writing the cheque.

Moreover, there will be many practical issues: who will manage the funds, and how will charities be selected to receive the money? Much of the estimated fortune of the world's wealthiest is not sitting on a savings account but tied up in assets, which will also create headaches. Finally, how will this impact the aid budgets and commitments of countries? Will states become complacent since we'll have the rich to fix the world?

Disclosure: The Lowy Institute hosts Pacific Friends of the Global Fund, which was established with a funding grant of the Bill & Melinda Gates Foundation.

Photo by Flickr user itspaulkelly, used under a Creative Commons license.