The fact that billionaires are giving away their wealth to charity is not creating much impression among the sceptics.
CHINA was shocked when real estate magnate Yu Peng Nian, 89, gave away his whole fortune to his Yu Pengnian Foundation last year.
Coming from a poor background, Yu had no qualms about leaving his children nothing. When asked why, he only said that if they were capable, they would have made their own money.
Similarly, one of Taiwan’s richest men, and apparently most generous, tech tycoon Terry Gou, 57, has pledged to turn over his massive wealth to charity before he dies.
Only last week, Malaysia’s own billionaire Tan Sri Vincent Tan, chairman and chief executive of Berjaya Corporation, pledged to donate half his wealth (worth RM3.8bil) to charity, saying, “When you are wealthy, you can afford to give back to society.”
Interestingly, he also said that he hoped to inspire more wealthy Malaysians to donate their fortune to charity.
This surprised, not to mention angered, many ordinary Malaysians who can only imagine that much money.
One shop owner in Cheras who only wants to be known as Makcik Mah says: “Really, the rich need to be inspired to help others?”
Perhaps, our rich can take a leaf out of Microsoft founder Bill Gates’ bankbook: after giving away US$30bil through the Gates Foundation in an effort to combat disease, hunger and other global problems, he still came in second in Forbes’ latest list of the world’s billionaires at a worth value of US$56bil.
When Sunday Star asked around about how Malaysian billionaires can give back to society, there are many like security guard Ahmad Izuan Ahmad, 44, who says, “I know where they can donate their money – me, my foundation.”
Although not entirely convinced by the philanthropy of most multimillionaires, 20-something writer Smita Elena says it is still a good thing when the Vincent Tans of the world give up some of their capital.
“Charity is the big guy buying off the small guy. Indeed, it serves to strengthen modern capitalism by making tycoons look good and by ever so slightly ameliorating the conditions of the poor,” she quips.
“Still, it’s much better to hear about Vincent Tan’s pledge than about a millionaire super club for consumerism, where rich kids buy helicopters and the like.”
Smita believes that the super wealthy should not do whatever they want with their money.
“I’d think, for starters, they could stop using their capital to exploit others! Then they should feel bad for being such greedy fat cats and give away ALL their money and declare themselves bankrupt and go live in an ashram and spend their remaining days in service to the poor.”
For the millionaires “who need persuading” to give away their bounty, she asks them to read what Andrew Carnegie has to say on the matter: “Mainly that nobody should die rich! And then they can go fund either a library or a university,” she says.
For Sen Tyng Chai, a researcher at Universiti Putra Malaysia, education is also the best charity for the wealthy to consider.
“For example, university endowments are rare in Malaysia and few donations are ever made for local research and development. We do have some private scholarships but more could be done in the area of education, apart from philanthropic work towards peace, social justice and social entrepreneurship,” he says.
Sen adds that it would be more meaningful if the act of giving is planned carefully so that the donated wealth is well spent to generate returns beneficial to society as a whole, rather than fuelling dependency or a false sense of entitlement.
“Sometimes it is not necessary to throw away huge amounts of money to ‘give back’ to society. Creating employment opportunities for marginalised communities or disadvantaged groups, making more environmental-friendly changes to their business processes or incorporating CSR policies and strategies are but some examples of how millionaires/billionaires and their corporations can contribute to the nation’s development.”
One possibility, he suggests, is to set up a charity to provide counselling, support and information to help people deal with gambling addiction or gambling problems.
Social media consultant Zain H.D. agrees, saying that instead of simply “donating” their money, the wealthy should contribute to infrastructure and development for all.
“A lot of poor people can raise the same amount one rich man has, but they don’t have the accessibility (or) consensus to build on something larger, like a school or telco grids in rural areas.”
He believes that the rich should either help the poor who are not able to help themselves, or specifically help those where there are multiple returns or impact to the whole society.
“It’s not just about utilising resources but also matching those to get the best outcome,” he notes.
Trainer Angela Kryss thinks it should not be about the amount of money given away but about how timely the help is.
“What’s the point of doing charity when charity comes too late, or the millions/billions amassed so far have already done damage – probably more damage than what the millions and billions can do in terms of the charities it’s going to support.
“Giving away 50% of a lot is not a big act of charity. Giving away 50% of the little of whatever you have is worth much more and is a much bigger act of kindness and caring.”
As she points out, ordinary people – and even poor people – give money to charities or to people in need, and this sort of help means much more because it’s always as an immediate and constant response to the need.
For the millionaires looking for a cause, she proposes the development of entrepreneurial skills for the poor.
“The rich should also support healthy competition in the market so that there will never be a situation where there’s a need for millionaires and billionaires to donate their money to get tax refunds. By paying their taxes in full and not try to get out of it, there will be better public goods, services and facilities.”
Social activist Hasbeemasputra is more sceptical. He believes donations by the rich and corporations are a sham.
“They will get tax rebates for some, if not all, of their charitable donations, which means we, the people, end up footing the bill. The money creation and supply mechanism as it exists in our current infinite growth paradigm is nothing more than a Ponzi scheme, only benefiting the power elite of our society.”
He cites the Ronald McDonald House Charities (RMHC) or the Ronald McDonald’s Children’s Charity (RMCC) as examples.
“McDonald’s has donation collection boxes at all their counters where people drop in their loose change. The money is channelled to RMHC, an independent charity which supposedly aims to provide free ‘home away from home’ accommodation at hospitals across the UK, enabling families to stay close to their child and maintain a degree of normal family life (as described on http://www.rmhc.org.uk/).”
He alleges that by funnelling this money (which wasn’t even theirs to begin with) to RMCH, McDonald’s is entitled to tax rebates. In some countries, the rebates can be up to equal the value of the donation, which means that for every $1 they donate to RMCH, they get $1 in tax rebates.
If multimillionaires are serious about helping society, he says, they can look into funding empowerment programmes that wean people off dependence on “the System” or, as he puts it, “Teach the people how to fish instead of giving them fish.”
As postgraduate student Jenny sees it, there will be no need for philanthropy if there is a more equal distribution of wealth.
“Doesn’t it make sense to say that there wouldn’t be a need for charity if wealth was more equally shared in the first place? The government plays a huge role in ensuring that there isn’t the very rich versus the very poor,” she says.
A world with extreme wealth in the hands of a few while the majority struggle to make ends meet is an untenable scenario to maintain in the long run, she opines, citing the Pareto economic principle (also known as the 80-20 rule, the law of the vital few, and the principle of factor sparsity).
“I remember an economist who said that if you envision this situation like a champagne glass but without the base, the rich sitting on top in the mouth of the glass (hoarding the bulk of the world’s wealth) and the not-so-rich squished into the handle part of the glass (sharing the remainder of the world’s wealth), and there is no base at the bottom, you can see that the glass is balancing precariously and can topple over any time.
“This is how the world is today – and the financial crash in the US two years ago is symptomatic of this situation.”
Did you find this article insightful?