Philanthropy at It’s Finest

Beverly Hills 90210 is a world away from Ouyen (Victoria) 3490.

Still, as I was growing up in a small country town in Victoria, I dreamt about what it would be like to live the life that was embodied in my favourite trashy teenage television show.

Los Angeles, California, was where things were really happening – yet the closest I got was Hollywood on the Gold Coast, after a 17-hour drive in the back of our family Falcon.

I must be getting older, because I now look back on my childhood with a sense of pride, and America is possibly the last place I want to visit, let alone live.

I also now understand that the Hollywood version of happiness is about as real as the trust fund my father jokingly told me was waiting for me when I turned 18.

Cultural conditioning

Still, as America’s global image sinks to record lows, according to a report released last month by the Pew Global Project, the land of liberty has some cultural conditioning that the rest of the world should heed.

Much emphasis is placed on the “only in America” stories, but less is said about the way much of its vast wealth is spent.

One of the great positives to emerge from the dream is philanthropy, long a focal point of US business life.

Feeling charitable

In the US it is commonplace for business people to be recognised firstly for the charities they support, and then as CEO of company XYZ.

Dr Michael Liffman, director of the Asia-Pacific Centre for Philanthropy and Social Investment at Swinburne University, says: “In the US, the cultural conditioning is that successful people have an obligation to give back to society.”

It’s therefore not surprising that the 20 wealthiest Americans have, over time, given away about 15 per cent of their wealth.

According to Liffman, however, Australia’s wealthiest people don’t even come close to this figure.

This culture is best embodied in the two richest men on the planet – Bill Gates and Warren Buffett – now also known as the two biggest donors to charity the world has seen.

Last month, US investment legend Buffett announced that he was giving $50 billion of his $60 billion fortune to the Bill and Melinda Gates Foundation.

The foundation’s website,, has a downloadable webcast of Warren Buffett and Bill Gates discussing the aims of the foundation.

High hopes

The foundation has set ambitious goals. In regards to health it is putting its money towards not only finding a cure for AIDS, but the top 20 diseases across the world.

The foundation is also alleviating poverty in some of the poorest countries by its microcredit initiatives, whereby small loans, often of just a hundred dollars, are made to (predominantly) women to start a business that will lift them and their family’s lot in life.

You could take the cynical view that the mega-wealthy can easily afford to donate much of their wealth to charity – after all, you can spend only so much in one lifetime.

]Despite being the biggest benefactor, Buffett still has $10 billion left over to buy the groceries and pay the gas bill.

The men behind the money

While much of the media attention focuses on the great amounts of money that Gates and Buffett have donated, I am more interested in scratching below the surface to see what drives these men.

Despite their enormous wealth, Gates and Buffett have led relatively unpretentious lives.

Buffett still lives in the house he bought in Nebraska for $42,000 and pays himself a salary of $135,000 a year. Gates has been quoted as saying that he hasn’t missed a day of work in the past 15 years.

This certainly goes against the grain of how many of us believe the wealthy live their lives.

Maybe there is something we can learn from these two self-made billionaires.

The real reason behind their generous donations is that they aren’t leaving their wealth to their children.

Both men have openly stated that they will not burden their offspring with great amounts of wealth.

Buffett said in an interview with Fortune magazine that his children would inherit “enough money so that they would feel they could do anything, but not so much that they could do nothing”.

Buffett’s daughter, Susan, has said that this equates to him paying for her university education and a couple of grand each Christmas.

She has also noted that “if I write my dad a cheque for $20, he cashes it”.

In the interview on the Gates foundation website, Buffett says: “I love it when I’m around the country club, and I hear people talking about the debilitating effects of a welfare cycle of handouts, while at the same time, they leave their kids a lifetime and beyond supply of food
stamps. Instead of having a welfare officer, they have a trust officer. Instead of food stamps, they have stocks and bonds.”

Perhaps this explains hotel heiress Paris Hilton’s lifestyle, who last month hit the headlines for “forgetting” about a children’s charity she previously promised to help.

Hilton will at some point inherit her share of the family’s billion-dollar bounty, and presumably until that time she will continue being famous for, well, being famous.

Secrets to success

In 1998 Buffett and Gates stood before 350 business students at the University of Washington to share their philosophies on success.

Both men spoke about their passion for what they do, and how that hard work had been responsible for their success.

Buffett in particular said that his success as an investor can be attributed directly to investing in the right people.

Perhaps this explains why he didn’t create a foundation using his own name to bestow his wealth for future generations, but rather invested in the right people, so as to ensure that the fruits of his fortune were allocated to those most in need.

We’ve all no doubt met people in life whose family wealth has influenced their outlook and lifestyle.

It’s only human to be a little green with envy about the lucky hand they’ve been dealt, but in many cases it takes away more than it gives.

In Australia, much like America, anyone, regardless of race, sex, religion or family background, can make it to the top. But the icing on the cake, as Buffett and Gates know only too well, is being able to say you achieved it on your own terms.

Tread your own path!

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