How to be a Philanthropist – Part 2: A Look at Some Numbers

Harry Shannon

This post follows up Part 1 –  An 11 Step Guide.

Recently, MacKenzie Bezos, newly divorced from Amazon’s Jeff Bezos, promised to give at least half her $36.6 billion fortune to charity.  In what must be the understatement of the year, she noted “I have a disproportionate amount of money to share.”

Bezos had just signed the Giving Pledge.  This is an effort started by Bill Gates and Warren Buffett aimed at encouraging billionaires to donate at least half their money to philanthropic causes or to charity.  As of May 2019, 204 people have pledged.  They have certainly been generous in the amounts they are giving away.

But just how self-sacrificing are Bezos and the other Giving Pledge signatories? 

I’ll take MacKenzie Bezos at her word, and accept that she’ll give away more than half her money, say, $26.6 billion.  She’ll be left with $10 billion.  That’s $10,000,000,000.  It’s hard to understand just how much this is with all those zeros. 

I’ll break it down.  Suppose that Bezos gets no interest on the money; she puts it under her mattress (a very, very large mattress).  She’s now 49; if she lives to 100, that’s another 51 years.

Starting with $10 billion means she’d have about $537,000 to spend EVERY DAY of her life from now on.    

The median household income in the US is $61,400.  Half the households in the US would need nearly 9 years (in many cases much longer) to earn as much as Bezos would have every day for doing nothing.

Even if she keeps ‘only’ $1 billion, she’d have $53,700 every day.  That’s assuming she gets no interest on it.  If she invested her money at just 2% a year, the investment income alone would be even more – $55,000 a day.  She could have that and keep the $1 billion intact!

Something to think about when you hear people complain about a wealth tax.  Especially if it’s billionaires who haven’t signed the Giving Pledge.