Yahoo Finance Why the rent is due for rich people in the time of coronavirus
If you were a billionaire, how much money would you give to fight COVID-19?
For 600 or so Americans that’s a real question.
Last week I wrote about what CEOs and other business leaders were doing, and should be doing during the coronavirus crisis. This week I’m turning my attention to the richest Americans.
What are the wealthy doing? What should they be doing?
First of all a word about that F. Scott Fitzgerald line, “let me tell you about the very rich, they are different from you and me…” Sorry Scotty but that’s wrong. I know a fair number of very rich people and in fact they’re very much like you and me; some good, some bad, some boastful, others quite modest.
So when it comes to pitching in during the pandemic, there’s a range of behavior and responses by the wealthy, just like with you, your family and your friends. For every Dolly Parton giving $1 million to Vanderbilt to fight coronavirus, there’s a Leona Helmsley type—the late miserly hotelier and convicted tax cheat who upon her death left $12 million to her Maltese dog, Trouble.
Happily right now there are more Dollys than Leonas.
“We see reports of extremely wealthy people making really substantial dollar commitments to this problem and that’s exciting, heartwarming and really important,” says Dr. Harvey Fineberg, president of the Gordon and Betty Moore Foundation—which has a $6.4 billion endowment. (Gordon Moore was the co-founder of Intel who conceived Moore's law.)
“I think every citizen needs to help out,” Blackstone CEO Steve Schwarzman, whose firm has donated $15 million to fight coronavirus, told me. “If you have more resources, then you help out more.”
Looking out across the country, I see a few predictables hunkered down in their million-dollar yachts and bunkers, but also shining examples of altruism.
In fact some billionaires have been out front. First and foremost is Bill Gates, who famously warned about pandemics in a TED Talk in 2015 (29 million views), and has given more money—through the Bill and Melinda Gates Foundation, with its $46 billion endowment—to fight infectious diseases than all of his billionaire brethren combined. On top of that, Gates recently pledged $125 million specifically to fight the coronavirus.
It’s natural to look at other tech billionaires too, as that’s where the money is these days and because medicine and science are adjacent or a part of the Silicon Valley mindset. Gates’ old Microsoft running mate, Steve Ballmer, is ponying up ($25 million), so too is Michael Dell ($100 million.)
But as for the Google guys, Larry Page and Sergey Brin, crickets. And Larry Ellison? The billionaire Oracle founder, who recently held a fundraiser for President Trump, has been busy selling the president on chloroquine and hydroxychloroquine, malaria drugs unproven to be effective against coronavirus. Maybe these folks are contributing, maybe not (more on that below.)
Meanwhile, the world’s richest man, Jeff Bezos, has been writing checks too—though not to President Trump of course. Bezos has donated $100 million to Feeding America—the largest single gift in the history of the organization. And Bezos’s Blue Origin space company is making face masks. Amazon is benefiting, unintentionally of course, from the crisis, as more and more shelter-at-homers shop there. And the company has faced criticism for how it treats some of its workers during all this.
So is Bezos just practicing high-priced PR? To a degree sure, but does that even matter?
“I would caution people in criticizing motivation for giving at a time like this,” says Alexandra Graddy-Reed, assistant professor of public policy at the University of Southern California who focuses on philanthropy. “People who don’t traditionally give are giving big donations. With wealthy people, we’re seeing large donations and hopefully they’re making a difference to the economy and health system. This is a capitalist society and it’s wealthy people’s money to decide what to do with. If we want that money, we should tax it rather than criticize what they do with it.”
‘Unprecedented times which call for extraordinary action’
Maybe the most-eye catching move not just in Silicon Valley, but in all of businessdom is Twitter and Square CEO Jack Dorsey’s $1 billion pledge to fight coronavirus. That billion, a grant of Dorsey’s Square stock, constitutes some 28% of his net worth. Graddy-Reed says that’s an almost unheard of proportion of wealth given and notes that Dorsey hasn’t been particularly philanthropic until now. Yahoo Finance’s Melody Hahm notes that “after the pandemic subsides, [Dorsey’s gift] will prioritize girl’s health and education and [universal basic income.]” So as Graddy-Reed says, perhaps this crisis has in fact “motivated some to come onto the stage.”
Laurene Powell Jobs, along with Leonardo DiCaprio, Apple and the Ford Foundation have launched a fundraising page to raise $15 million for World Central Kitchen and Feeding America. The founders put in $12 million. “We are in the midst of a national emergency, and it is vital we prioritize the most urgent needs,” says Powell Jobs in a statement.
It’s not clear how much Powell Jobs is personally donating, which reminds me of a conversation I had with her late husband Steve Jobs. I asked Steve why he wasn’t more philanthropic. “How do you know I’m not,” he asked me back. “I haven’t seen anything to suggest you are,” I told him. “How do you know I’m not doing it anonymously,” he asked. “Are you,” I asked him? “I’m not going to tell you,” he replied.
And that’s the thing. It’s always tricky to get a perfect picture of philanthropy. Just because there’s no press release doesn’t mean a billionaire isn’t giving. Having said that, most people want credit for their largess. You need only look at any nonprofit donation list of donors to see how many choose to remain anonymous. It’s almost always less than 10%.
So I don’t really know about Warren Buffett. I didn’t hear back from his office on this one, though remember the third richest man in America has pledged to give away nearly all his $75 billion to the Gates Foundation. Plus, Buffett and the Gates have convinced 209 of the richest people on the planet to join the Giving Pledge, a commitment to give away most of their money to philanthropy.
And I don’t really know about America’s richest family either. The Walton’s, whose patriarch Sam founded Walmart, sent us this statement: “At the Walton Family Foundation, our priority is our grantees. We are working to address immediate needs along with the impacts on their work in K-12 education, the environment and in our Home Region.”
Still, we can look to countless other tangible and joyful actions.
There’s Tyler Perry buying groceries for thousands of seniors in Atlanta and New Orleans. Basketball players Kevin Love and rookie Zion Williamson supporting arena workers who’ve lost their jobs or hours by the NBA season being canceled.
And who doesn’t love Robert Kraft sending the Patriots Boeing 767 to China to bring back 1.2 million N95 masks, some of which he even donated to Boston’s archrival, New York City. Truly awesome Robert. (The only thing better for New Yorkers would be if Bill Belichick himself handed out the masks.)
And then there’s the normally tight-lipped private equity billionaire Leon Black, rightfully downright chatty about his $20 million contribution to launch a program called “NYC Healthcare Heroes,” which will provide food, cleaning supplies, and personal care products for over 100,000 healthcare workers in New York City.
“Debra [Black’s wife] and I have long been committed to philanthropy and support a number of medical institutions in New York and across the U.S.,” Black told us. “On an even more personal note, a family member tested positive for COVID and has been on a ventilator for the last two weeks receiving magnificent care from the great team at Weill Cornell. And one of my children’s closest friends is a doctor on the front lines at Elmhurst Hospital. We are New Yorkers, we see what is happening, and we are in awe of the heroic health care professionals among us.”
What does he think of recent philanthropic efforts made by other wealthy people like Jack Dorsey and Bill Gates?
“Great! Terrific!,” Black said. “We’re certainly in unprecedented times which call for extraordinary action. It’s wonderful to see how people across the country are stepping up and doing what they can to support others. That comes in a number of forms – by cheering publicly for health care heroes on a daily basis, caring for sick family or friends, grocery shopping for people in their communities who are at-risk or by donating any sum of money to a worthy cause.”
That’s lovely Leon.
“There’s a lot of good will and people being committed to being flexible,” says Amir Pasic, dean of the Indiana University Lilly Family School of Philanthropy. “Whether it’s enough, I think time will tell. Right now we’re seeing nimbleness that is impressive.”
For now, most of the giving has gone to health care and health care workers etc. Already though there are huge new needs where the wealthy can help; police, firefighters, restaurant, hotel and airline workers, summer program camps, and on and on. There’s much more to do.
For those of you reading this who’re rich—and maybe even not so rich—and haven’t seen fit to contribute, billionaire John Paul DeJoria, co-founder of Paul Mitchell Products and Patrón Spirits has a word for you:
“Don't be a tightwad,” he says. “If you've got something, give back. Pay a little bit of rent for being on this planet Earth and all the good fortune that God sent your way because you have extra money.”
That’s about right JP. The rent is due.
Clarification: A prior version of this story included $200 million in grants provided by Amazon CEO Jeff Bezos in a roundup of donations made in response to the coronavirus outbreak. Amazon later told us the grants, totaling $197 million given by the Bezos Day One Fund, predate the outbreak — as half were distributed in 2018 and the other half in 2019. Amazon included the donations in a list provided to Yahoo Finance of philanthropic endeavors undertaken by Bezos, since the grants went to organizations fighting homelessness and hunger, two issues exacerbated by the coronavirus outbreak.
This article was featured in a Saturday edition of the Morning Brief on April 11, 2020. Get the Morning Brief sent directly to your inbox every Monday to Friday by 6:30 a.m. ET. Subscribe
Andy Serwer is editor-in-chief of Yahoo Finance. Follow him on Twitter: @serwer.
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