Benevolent billionaires - why do they do it?
Self-interest is at the heart of many a philanthropist's motivation, according to Aussie entrepreneur Dick Smith. Illustration: Matt Davidson
They have been hailed as the billion-dollar givers by Forbes in a new list of the world's most benevolent billionaires, but what inspires super-rich people to give most of their money away? Is it guilt, glory or simply the joy of giving?
Topping the 23-strong list is Microsoft founder Bill Gates, who according to Forbes has so far given nearly half of his $US66 billion ($A63.5 billion) fortune away. His outlook on life seems to be a motivating factor.
“We are impatient optimists by nature: we see the glass as 'half full' and are motivated to confront problems that others consider impossible to solve,” his foundation website states.
Others, including US magnate Warren Buffett, who has donated $17 billion to date, and Rams Home Loans founder John Kinghorn, who has donated $300 million, have said they don't want to leave their children disablingly rich.
Given the flak Australia's jet set often cop for being less charitable than their overseas counterparts, the issue of motivation is key.
Australian millionaire entrepreneur and noted philanthropist Dick Smith says that for him it's the feel-good factor.
“I give out of self-interest. It makes me feel good,” he says. “My giving is totally selfish, and I've never claimed anything else. I think it generates karma, and if you feel OK within yourself, that allows you to be successful.”
He's not alone in enjoying the buzz of benevolence. For the past year or so a mysterious British millionaire has been shelling out £1000 ($A1500) a day to random people on the street to spend on something “good” and documenting the results at the website we-are-lucky.com.
Even toddlers think giving is pleasurable, according to a recent study published in the online journal PLoS One. It found children under two were happier when giving treats to others than they were receiving treats themselves.
Scientists have found time and again that altruism triggers the pleasure centres of the brain, but the mechanisms are mysterious and multifaceted, according to Stanford University's Centre for Compassion and Altruism Research.
DNA is thought to play a part. Earlier this year, US researchers linked generous and civic-minded personality traits to receptor genes for the hormones oxytocin and vasopressin in a study published in Psychological Science.
However, Dr Anthony Grant, director of the Coaching Psychology Unit at the University of Sydney, says stage of life is also an important factor.
Most business high-flyers work very hard to make lots of money in the initial stages of their career and at that time accumulating personal wealth is an important goal in itself, says Grant, who has coached a number of Australia's corporate leaders.
He says that once people reach a household income of about $150,000, however, the happiness that money alone can bring starts to level off.
“At that point, it's easy to get deluded by traps like having the latest iPad mini or Mercedes," he says. "But money is only a pathway goal, so when you focus on only that you neglect higher order values that give meaning to those goals.”
If wealthy people continue down that road, says Grant, they can get disenchanted and disaffected, and start to wonder why they endured all the turmoil and difficulty along the way.
Then they discover that giving away money offers new meaning and purpose to their struggle.
“That's why rich people often give away lots of money at the end of their career,” he says.
This doesn't apply only to the wealthy. One US man took this to extremes and has been living without money for more than a decade. In 2000, Daniel Suelo, aged 39, dumped his last $30 in a phone booth. He now lives currency-free in the Utah wilderness.
According to Suelo's blog, his mission is to stay free from the illusion of money. “Wild nature, outside commercial civilisation, runs on gift economy: freely give, freely receive,” he writes.
Dick Smith feels that many of Australia's richest people remain stuck in the illusion. He says that these days most thumb their nose at philanthropy.
He says that as the gap between rich and poor widens, those at the wealthiest end of that spectrum are obliged to give back – and they should do so publicly.
“If you are fulfilling an obligation, it shouldn't be a secret,” he says.
In countries such as the US, Smith says, high-net-worth people who don't give back become social pariahs. Rich Australians, on the other hand, seem to get away with it.
“I know wealthy people worth hundreds of millions who proudly say they give nothing to charity,” he says. “Here it's all about showing off - running a bigger company, having a bigger boat or owning a bigger waterfront."
A few years ago, Queensland University of Technology released a report that found a “sizeable proportion” of wealthy Australians gave little, if anything, to charitable causes.
It also found that Australia's affluent, on average, gave at a lower level than their counterparts in comparably affluent countries such as Britain, Canada and the US.
The latest numbers seem to support this. There were no Australians, for instance, on Forbes' billion-dollar givers list. Australia's mega-rich, it seems, are more likely to be found on the more modest million-dollar givers list.
FR&C, an Australian firm specialising in prospect and donor research and consulting, lists 200 individuals and families who have publicly disclosed Australian donations of more than $1 million.
According to the FR&C list, fewer than 10 Australians have given away more than $100 million.
A US citizen – duty-free shopping billionaire Chuck Feeney – tops this list. He has donated $500 million in Australia through his private foundation, Atlantic Philanthropies.