Quantcast

Elite Daily

The Psychology Of Giving: Why The Super-Rich Are Willing To Give Away So Much Money

Since the recession in 2008, the wealthy have been treated to their fair share of scrutiny and collective admonishment.

After all, greed, corruption, income inequality and an inequity of influence in government, which unfairly favored the elite, helped ignite the Occupy Wall Street movement in New York's Zuccotti Park more than two years ago.

In the time that has followed, we've seen similar movements spread across the globe, accompanied by headlines in the press suggesting that money gluttons at the top of the economic hierarchy are responsible for all of society's ails.

Those headlines are relatively easily written and often even easier to justify. Just last week, I joined the fray when I wrote an article discussing how 85 of the richest people in the world have a combined wealth equivalent to the roughly 3.5 billion people who comprise the poorest on the globe. That's just about half of the world's total population.

Ironically enough, we posted that article with an image of Bill Gates accompanying it; the smug smile adorning his face a perfect symbol of the uncaring elite, whose selfish ways have facilitated this massive disparity in equity between the classes to grow and flourish.

That article received hundreds of likes and shares on Facebook and was retweeted dozens of times.

Two days later, I authored another article examining a letter written by Gates, entitled “3 Myths that Block Progress for the Poor,” in which he explains how he believes extreme global poverty can be entirely eradicated by 2035.

Further, he announced that he intends to dedicate the resources from his massive philanthropy, the Bill & Melinda Gates Foundation, to see his vision come to fruition.

That article was liked 10 times on Facebook.

This is unsurprising, as it is much easier to vilify than to praise the super-rich. It is true that many of these people warrant some admonishment for their ways. And it's easier and more satisfying to assume that they more closely resemble Jordan Belfort than Mother Teresa.

But there is a growing list of billionaires who are drawn to philanthropy more by the psychology of giving and the intrinsic value it offers than by the lure of charitable tax deductions.

This list is not metaphorical. It actually exists, and Gates is on it, alongside more than 120 other billionaire benefactors, all of whom have pledged to donate more than half of their entire fortunes to charity after they die.

These people are not in the business of creating generations of heirs and heiresses. Rather, they hope to use the immense fortunes they have amassed to benefit the greater society — a society that helped make it possible for them to achieve such financial windfalls.

The Giving Pledge, started by Gates and Berkshire Hathaway's Founder Warren Buffet, has the stated goal of encouraging “a commitment by the world's wealthiest individuals and families to dedicate the majority of their wealth to philanthropy.”

Buffet takes it one step further, stating in his pledge that “were we to use more than 1 percent of my claim checks (Berkshire Hathaway stock certificates) on ourselves, neither our happiness nor our well-being would be enhanced. In contrast, that remaining 99 percent can have a huge effect on the health and welfare of others.”

How can people so driven by profits be so willing to give away their hard-earned fortunes? The notion seems to defy the psychology of charity, and there are scientific studies that suggest this giving movement is inherently paradoxical.

In a study commissioned at Berkeley, psychologists Paul Piff and Dacher Keltner conducted several studies that looked at how social class influences our empathy and feelings towards others.

The research found that as people climb the social ladder, their compassion for others declines and they are less likely to seek to help others.

But many of the billionaires who ascribed their John Hancock to the pledge aren't waiting until their deaths to part with their riches.

In fact, many of them aren't even limiting themselves to charitable donations, but are basing the business models for their companies on helping to compel society forward, striving to allocate their resources to the betterment of society.

One of those individuals is Tesla and SpaceX CEO Elon Musk, who is guided in business by the idea that he can help society move forward with as much inclusion across social and economic demographics as possible.

The PayPal founder hopes to someday make space travel a reality for ordinary citizens, create an electrical grid that can be entirely generated by solar panels and end our reliance on fossil fuels by making electric cars cool and affordable.

These are his private sector ventures. On the philanthropic side, he created The Musk Foundation, which further focuses on renewable energy research, pediatric research and science and engineering education.

Musk is but one example of many.

But if the Berkeley study suggests that the wealthy and elite are less disposed to being charitable, why then, are the members of The Giving Pledge fraternity so inclined to help so many people?

Perhaps that answer can be found in their proven ability to think holistically and on such a grand scale, creating products and enterprises that benefit many, rather than the few.

These individuals are able to defy the well-established psychological tenants of giving. Studies have shown time and time again that individuals are more likely give to charity when they are shown the face of an individual that they can help, and are less likely to give that donation when they are told that their contribution will benefit the lives of, say, 100 faceless individuals.

Mother Teresa offered sage words that encapsulated that point, saying, “If I look at the mass, I will never act. If I look at the one, I will.”

She described this axiom as “scope insensitivity.” While this truism rings true for the majority, those who have joined the movement to give up their fortunes can take the same psychology to encourage the average person to help one starving child in Africa and apply it to the masses. They do so in the same way they built business empires by catering to multitudes.

These individuals do not warrant inclusion in the same class as Jordan Belfort, Bernie Madoff and Allen Stanford, rather deserving to be held in considerably higher esteem — for wealth on its own should not be judged. Instead, how that wealth is applied and used should guide our feelings on it.

Top Photo Credit: Getty Images

Subscribe to Elite Daily's official newsletter, The Edge, for more stories you don't want to miss.

Aaron Kaufman

Subscriber

Originally from Washington, D.C., Aaron started his career working at the intersection of business, journalism and politics after graduating from Kent State University in 2010. Prior to joining Elite Daily, Aaron spent time at Bloomberg BNA and ...
Originally from Washington, D.C., Aaron started his career working at the intersection of business, journalism and politics after graduating from Kent State University in 2010. Prior to joining Elite Daily, Aaron spent time at Bloomberg BNA and ...

Why Guys Need To Go On More Man Dates

Comments