In praise of profligate spending

Professor Brooks (see "…or your money cheerfully refunded!", below) also expresses concern about your ability to control expenditure of your charitable gifts after you die, noting that the Ford Foundation supports social justice projects that would cause Henry Ford to spin in his grave.  (Frankly, I’m just as happy to disrupt the eternal rest of the man most responsible for distributing the Jew-hating tract The Protocols of the Learned Elders of Zion; but I appreciate that rule-making has to be neutral and apply to friend and foe alike.) 

Warren Buffett has chosen one method, turning his fortune over to a like-minded but much younger man; the transfer from Buffett to Gates is actually an enactment in miniature (okay, not so miniature) of the huge Greatest-Generation-to-Boomer transfer of wealth now taking place throughout American society.  (No wonder the estate tax suddenly seems so burdensome!)  But if you don’t trust your children, or don’t have any, or have sought professional management and an independent Board of Directors for your foundation, your money is indeed out of your control from beyond the grave.  What to do, what to do?

Here Mr. Brooks and I agree: give it all away while you’re alive, or establish a foundation that will spend down its principal and go out of business shortly after your death.  Maybe as a by-product of tax planning, through which we defer giving our money to the government, there’s entirely too much deferral of giving among the wealthy.  The very existence of foundations tests our patience: we wouldn’t think much of a person who could give a dollar but gives a nickel instead, and that’s what the 5% expenditure rule permits foundations to do.

Some years ago I attended the annual Ronald McDonald Children’s Charities benefit.  The affair took place at a hotel near O’Hare Airport because there was no hotel in the city large enough to accommodate it.  Everything was donated by McDonald’s suppliers, from the contents of the breadbasket to the after-dinner chocolates, and it was all top-shelf.  But the most powerful moment of the evening belonged to Joan Kroc.  She always announced her gift to the Charities at the benefit: the previous year she’d given $5 million, and rumor had it she intended to announce a 5-year gift tonight.  At a table of charity executives, the parlor game was guessing the size of her gift: what, she’d go from $5 million for a year to $6?  And that would mean $30 million?  But when Mrs. Kroc stood up before that roomful of people holding a little sheet of notebook paper with her remarks scribbled on it by hand, what she said was, "I was going to make a five-year gift but then I thought, ‘The need is now,’ so tonight I’m giving the Charities $50 million."

You could feel the whole room rock back on its heels.  I’ve obviously been in the nonprofit sector too long, because I started to cry, it was so amazing.  And what I took from that evening was: The need is now.  Foundations, get busy.

Advertisements

Tags:


%d bloggers like this: