The Ultra-Rich Give Differently From You and Me
By DAVID CAY JOHNSTON
Philanthropy, like foie gras, is an acquired taste. And Warren Buffett embraced charity with extraordinary gusto last week, announcing that he would give away 85 percent of his $44 billion fortune.
His megagifts, like many of his investments, buck the popular trend. Giving by the richest Americans has fallen in recent years, with the biggest declines at the very top, based on deductions Americans take on their tax returns. Among Americans who at death left a taxable fortune of $20 million or more, the average charitable bequest fell by $2 million, or 9 percent, from 1995 to 2004.
Almost alone among rich Americans, Mr. Buffett has argued that estate taxes should be increased, not eliminated. Mr. Buffett says the estate tax helps build a vibrant economy of innovators and strivers — a true meritocracy — and that repealing it would risk a stunted economy controlled by aristocratic inheritors. Repealing the estate tax, he has said, would be the economic equivalent of "choosing the 2020 Olympic team by picking the eldest sons of the gold-medal winners in the 2000 Olympics."
Bill Gates, a founder of Microsoft and close friend of Mr. Buffett, has not taken a public position on the estate tax, but his father leads the movement to keep it. Few ultrarich families agree, and 18 have spent $500 million since 1994 lobbying for estate tax repeal, according to disclosure records examined by Public Citizen and United for a Fair Economy, which want to keep the tax.
How do they give compared with the Gates and Buffett families? In some prominent cases, not nearly as generously. The Walton family owns Wal-Mart stock worth more than $90 billion, more than twice the value of the Gates family's Microsoft stock. But the Bill and Melinda Gates Foundation is 35 times larger than the Walton Family Foundation, tax records show.
The Mars family, known for its candy company, has an estimated net worth of $12 billion. The Mars Foundation gave away $795,000 in 2004 — 97 grants averaging $8,200 each. The Walton Foundation gave away 127 times as much, the Gates Foundation more than 1,900 times. "The Waltons have said they will increase their charitable giving in the future," said Jay Allen, a family spokesman. The Mars Foundation said the family did not comment on such matters.
Of course, until last week, Mr. Buffett was not known for his giving, either.
<http://www.nytimes.com/2006/07/02/weekinreview/02johnson.html?_r=1&oref=slogin>
Carl