Using Wealth for Good – or – One Hundred Seventy Thousand Points of Light

Using Wealth for Good – or – One Hundred Seventy Thousand Points of Light

In keeping with the challenge my family has laid down that “doing something is better than nothing,” here is my second “Big Idea” post.

My hypothesis: America can begin to solve big picture critical problems, right now, with the help of our 170,000 Points of Light, AKA, our wealthiest Americans.

For those of you too young to remember, the title is a play on George HW Bush’s famous “1000 Points of Light” speech from 1988.

“I believe I was right when I said, as President, there can be no definition of a successful life that does not include service to others. So I do that now, and I gain happiness.”

George H.W. Bush, writing in 1997, in  reference to his 1988 “1000 Points of Light” speech.

Statement 1. We have critical problems that threaten our future wellbeing: three examples

Americans share a portfolio of critical problems that threaten our current and future quality of life. A full treatment of these is far beyond the scope of this post, but in order to get the ball rolling,  I include three categories, and one example for each.

One. Environment: Deforestation contributes to rising carbon levels in the atmosphere. (see my recent post for more on this topic.[1]

Two. Child Hunger: Lunch Debt. The first time I heard the saying “There is no free lunch,” it was ascribed to Richard Nixon. In recent days, it is often ascribed to our Secretary of Education. Schools expect students to pay for their lunches; some poor students cannot pay. According to a recent American Bar Association article, “Lunch Shaming refers to the overt identification and stigmatization of any student who does not have money to buy a school meal.”[2]

Kids who seek to avoid lunch shaming go hungry.

Three. Economic Inequality: Potholes. Yes, potholes. According to a 2016 study published in the Insurance Journal, millions of people each year file claims for pothole damage. “…problems range from tire punctures and bent wheels, to more expensive suspension damage.” The average costs for pothole damage repairs was $306. [3]

$306?

The expense is not so bad if you have some cash, but for about 40 percent of adults in the US, it’s painful. According to the Federal Reserve’s Report on the Economic Well-Being of U.S. Households in 2017, 40% would not be able to pay an unexpected expense of $400, or would do so by selling something or borrowing money, [4]

Thus, potholes have a place in my Economic Inequality category.

Statement 2. We cannot wait for our government to fix things

Enough said. Let’s move on.

Statement 3. We need Money and a Practical plan to spend it on critical problems

3 A. Where can we get the Money?

Answer: From the top 0.1%, AKA our 170,000 Points of Light

A recent article in Bloomberg Business Week describes the work of two Berkeley economists whose research helps us understand the distribution of wealth in the United States. “The 0.1% of taxpayers – about 170,000 families in a country of 330 million people  – control 20% of American wealth, the highest share since 1929….”

Was this always the case? No. The economists’ research points to a swing that started in 1980, when “the top 0.1% controlled 7% of the nation’s wealth. By 2014, after a few decades of booming markets and stagnant wages, the top 0.1% had tripled its share, to 22%, a bit more wealth than the bottom 85% of the country controlled…while middle class Americans were burdened by job losses and debt, the rich had swiftly resumed their party.

“Wealth that had vanished from financial markets after Lehman’s collapse had reappeared, doubling and tripling the portfolios of well-off investors.” [5]

Do you remember the great sucking sound you heard in your head as the value of your 401K plummeted in 2008? Or how you felt when you got that letter saying your pension fund was suddenly in critical status?

Well, yeah. This explains a good bit of that. But, as the head of our trading desk at Bear Stearns used to say, “It is what it is.” Let’s move on.

I won’t go into tax havens or other wealth shelters employed by that top 0.1%. For now, it’s enough to say that most of this money is sidelined, and not circulating in our economy. In other words, it’s not helping.

There are exceptions.  Some  billionaires, inspired by their peers or just by good old-fashioned guilt, have signed up to give away at least half of their fortunes. The best-known platform for this is called the Giving Pledge,  www.givingpledge.org.   MacKenzie Bezos is a recent and high profile joiner, pledging $18 billion of her fortune to charity[6].

3 B. A practical plan: Common sense prioritization, assignments, accountability

The Giving Pledge is an important platform, but I see two flaws that make it not efficient for helping to address critical problems that threaten our future.

First, Giving Pledge benefactors can wait until they are dead to give away their money. And second, they don’t need to disclose the charity they are giving to.[7]

In light of the bind we find ourselves in, I suggest to the Giving Pledge folks that they change their bylines to identify and prioritize a portfolio of critical, big picture problems, and to require that pledgors:

  • Sign up to work on the portfolio now, while they are alive
  • Draw “giving assignments” from a lottery
  • Be accountable for monitoring efficient use of funds and results for their assignments

Here’s an example of how that would work using our three examples, above:

Environment: Deforestation. Billionaire “A” draws “Save a Rain Forest[Country X]” in the lottery.” Billionaire “A” works with the assigned charity to invest in a program like the one that’s been launched in Guyana[8].

Child Hunger: Lunch Debt. Billionaire “B” draws “Pay off Lunch Debt/Establish Lunch Fund[Region Z].” “B” works with an assigned charity with a well-developed program to end Lunch Shaming in that region.

Economic Inequality: Potholes. Billionaire “C” draws “Fix Potholes in [State[Y],”  and “C” makes sure the potholes get fixed.

The above examples are oversimplified, for sure, but you get the idea. And so, I hope, will our 170,000 points of light. Go, MacKenzie, go!

Conclusion

Here is a quote that MackKenzie referenced in discussing her pledge. Although the quote refers to the writing process, it is beautifully apropos to sharing wealth to address big picture, critical  problems, especially when government solutions are, at best, years away, and, at worst, far too late.

“The impulse to save something good for a better place later is the signal to spend it now…. Anything you do not give freely and abundantly becomes lost to you. You open your safe and find ashes.”

Annie Dillard. The Writing Life

References

[1] https://nancyturbe.com/anti-carbon-credits-anyone-or-billionaires-want-to-go-to-heaven-too/

[2]https://www.americanbar.org/groups/young_lawyers/publications/tyl/topics/access-to-education/incentives-behind-lunch-shaming/

[3]https://www.insurancejournal.com/magazines/mag-features/2016/03/21/401900.htm

[4]https://www.cnbc.com/2018/05/22/fed-survey-40-percent-of-adults-cant-cover-400-emergency-expense.html

[5] https://www.bloomberg.com/news/features/2019-05-23/the-wealth-detective-who-finds-the-hidden-money-of-the-super-rich

[6]https://www.npr.org/2019/05/28/727612204/mackenzie-bezos-pledges-to-give-more-than-half-of-her-billions-to-charity

[7] Ibid

[8] https://www.bloomberg.com/news/features/2019-05-16/guyana-is-making-money-off-rainforests-without-cutting-them-down

4 Replies to “Using Wealth for Good – or – One Hundred Seventy Thousand Points of Light”

  1. Great ideas! We must start somewhere to impact income inequality. The three areas referenced would make a tremendous positive impact on the lives of so many who need help.

  2. Great ideas, Nancy. Now we just need someone to do all of this advocacy so things can change in the right direction.

  3. Well thought out Nancy. I agree with your points of light and I’m always delighted to read your point of view!

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